Outlook and Objectives
In their “World Economic Outlook” (October 2013), the experts at the International Monetary Fund (IMF) again lowered the 2014 growth forecasts for the global economy that they made in July by 0.2 percentage points to 3.6 percent, due to the developments described in the chapter entitled “Economic Environment” (see page 4). The IMF is observing even more serious infrastructure problems, increasing capacity bottlenecks, and a decline in foreign demand in the developing and emerging economies. The IMF estimates that this group of countries will still grow by 5.1 percent next year, down 0.4 percentage points on the figures forecast in July. By contrast, the outlook for the industrialized nations in 2014 remained unchanged, although the estimate for the U.S.A. was reduced by 0.2 percentage points to 2.6 percent. Germany is expected to see growth of 1.4 percent in the same period (previously 1.3 percent).
On October 17, the German Engineering Federation (VDMA) published its forecast for German engineering output in 2014. The Federation expects real growth of approximately 3 percent in the coming year.
GEA Group business
Despite the IMF’s repeated downward revision of its economic forecasts for 2013, we are expecting moderate organic revenue growth for the Group as a whole in the current fiscal year. This growth is being driven by our five future core segments, which are expected to have average organic revenue growth of over 5 percent.
With respect to our cash flow drivers – i.e., the net amount of EBITDA, the change in working capital, and capital expenditure – we are now aiming for a ratio to revenue of around 9.0 percent in 2013 (after 6.4 percent in the previous year), rather than the previous expectation of at least 8.0 percent.
Assuming constant currency exchange rates as in FY 2012 we are aiming for an earning target (EBITDA) of around EUR 700 million (previous year: approximately EUR 600 million). This figure does not include costs relating to the strategy and portfolio project in the low tens of millions resulting in particular from the decision on this project announced on June 20, 2013.
Düsseldorf, October 31, 2013
GEA Group Aktiengesellschaft
The Executive Board