GEA Group sales markets continue to grow
· Orders rise by 12% and revenue up 24% in 2007
· EBIT increases 49% to EUR 267.6 million
· Consolidated earnings grow to EUR 245.5 million
Bochum, October 31, 2007 - GEA Group Aktiengesellschaft reported 2007 Q3 earnings before interest and tax (EBIT) of EUR 107.7 million, representing a rise of 44.5 percent relative to 2006 Q3 (EUR 74.5 million). The EBIT margin rose from 6.9 to 8.0 percent. The cumulative EBIT of the GEA Group rose 49.1 percent, from EUR 179.5 million to EUR 267.6 million. The EBIT margin of the first three quarters improved from 6.1 percent in 2006 to 7.3 percent in 2007. Third-quarter consolidated earnings in 2007 of EUR 1,352 million represented a 25.5 percent rise compared with the prior year period (EUR 1,077 million). Cumulative revenue grew 24.2 percent, from EUR 2,948 million to EUR 3,661 million. In the third quarter, GEA Group earnings before tax (EBT) rose by EUR 28.8 million, or 45.1 percent, to EUR 92.6 million, and cumulatively by EUR 77.4 million, or 52.1 percent, to EUR 225.8 million. The deterioration in the net financial result is mainly due to the change in the Group's financing structure following the sale of the industrial-scale plant construction business. As announced, the reduction of the domestic corporate tax rates by around 10 percent to below 30 percent necessitated an adjustment to the deferred tax assets totaling EUR 67 million in the third quarter. Including earnings from the discontinued business operations, consolidated earnings in the third quarter amounted to EUR 184.3 million (previous year: EUR -142.4 million), and cumulatively stood at EUR 245.5 million (previous year: EUR -146.5 million).
"The most important sales markets for the GEA Group - the food and beverages industry, pharmaceuticals, energy, and chemical/petrochemicals - continue to grow as they are driven primarily by global population growth and rising household incomes, particularly in developing countries. Rising demand for energy, drugs, and processed foodstuffs leads to growing demand for process technology. GEA Group, which enjoys a particularly broad presence in this area, is a beneficiary of this development," as Jürg Oleas, Chairman of the Executive Board of GEA Group Aktiengesellschaft, stated.
With a look on 2007, the Executive Board anticipates rising incoming orders in all divisions except Energy Technology. In view of a decline in demand due to an overall high level of utilization of available capacities, a temporary decline in orders for Energy Technology should be anticipated. Excluding this effect, a rise in orders in the core divisions and Gas Cleaning of over 15 percent can be assumed. The company continues to expect revenue growth of over 15 percent, and a margin improvement in the core business of over 60 basis points for the full 2007 financial year. The positive expectations for 2008 and 2009 have once again improved slightly due to the quality of the new orders received, and the overall positive prospects for mechanical engineering. This should make it possible to realize major progress towards achieving the margin target in 2008. Organic revenue growth should be between 5 and 10 percent per year in 2008 at 2009. The aim is to continue to utilize the financial scope for maneuver to pursue an active acquisition policy. The company is targeting a gearing level of 50 to 60 percent (ratio of net debt to equity). GEA Group will also actively pursue its aim of buying back its own shares and subsequent cancellation. Around 6.2 million treasury shares that GEA Group previously held were cancelled in July 2007. A further 452,999 shares were repurchased in September and will be cancelled before the end of the 2007 financial year.
Key performance indicators for Q3 2007 (EUR million)
GEA Group Aktiengesellschaft is an international technology group that focuses on specialty mechanical engineering, especially process engineering and equipment. The company reported sales of EUR 4.3 billion in 2006 and employed more than 19,200 people as at September 30, 2007. The GEA Group is one of the world's market and technology leaders in 90 percent of its businesses and is listed in Germany's MDAX index (G1A, WKN 660200).