Corporate press release
GEA delivers very good first-quarter results in a challenging year
15 May 2020
With the coronavirus crisis affecting operating business only to a very minor extent in the first quarter of 2020, technology group GEA began the current financial year with significant increases in both order intake and EBITDA before restructuring measures. These positive developments were achieved largely due to the new group organization introduced in January as well as to operational improvements resulting from measures introduced last year to increase efficiency in the group.
At EUR 1.38 billion, order intake in the first quarter increased by 16.0 percent year on year, setting a new GEA record for first quarter in a financial year. Nearly all divisions posted gains in order intake. Five large orders with a total value of around EUR 140 million – three of them in the dairy processing sector – contributed significantly to the increase. With a 3.5 percent increase to EUR 1.09 billion, revenue also exceeded the prior-year figure. This resulted in a book-to-bill ratio (the ratio of order intake to revenue) of 1.26 for the first three months of 2020, compared to a figure of 1.12 a year earlier. The share contributed by the important service business increased from 32.7 to 34.3 percent.
In the first quarter, EBITDA before restructuring measures stood at EUR 105 million – an increase of 40.7 percent. This significant increase was primarily the result of substantial operational improvements in the Liquid & Powder Technologies and Refrigeration Technologies divisions. Despite lower revenue, the Farm Technologies division also posted higher earnings – largely due to new machinery business with improved margins and a higher share of service business.
ROCE (return on capital employed) rose to 12.3 percent (previous year: 12.0 percent). Net working capital stood at EUR 720 million as of March 31, 2020. Expressed as a ratio to revenue, last year’s figure of 17.2 percent was therefore cut significantly to 14.6 percent. The group’s net financial position improved greatly from a net debt of EUR 155 million in the previous year to net liquidity of EUR 10 million in the quarter under review.
“GEA had a very good start to the 2020 financial year. Even if the duration and, thus, the financial implications of COVID-19 remain difficult to predict, we confirm our outlook for 2020. Even in the current crisis, our customers are working at capacity, especially in the food and pharmaceutical sectors. And, as a reliable partner, we’re on hand to provide them with all the support they need. Especially in these challenging times, GEA stands to benefit from its robust, forward-thinking business model. In addition, the measures we introduced last year mean we’re now much better placed to deal with the challenges posed by COVID-19. That said, COVID-19 will undoubtedly have negative consequences for GEA too. Our job is to manage them throughout the course of the remaining year. But GEA is not dealing with a long-term problem here,” said Stefan Klebert, CEO of GEA Group Aktiengesellschaft.
As announced at the start of April, due to COVID-19, GEA has rescheduled the Annual General Meeting originally due to be held in Düsseldorf on April 30, 2020. The new date is November 26, 2020. The company’s proposed dividend of EUR 0.85 per share remains unchanged. Thanks to its robust operating position, on May 6, 2020 – the original dividend date – GEA paid shareholders the maximum possible advance payment of EUR 0.42 per share permitted by law.
IFRS Key Figures of GEA
| (EUR million) | Q1 2020 | Q1 2019 | Change in % |
|---|---|---|---|
| Results of operations | |||
| Order intake | 1,376.7 | 1,186.3 | 16.0 |
| Book-to-bill ratio | 1.26 | 1.12 | – |
| Order backlog | 2,628.7 | 2,550.7 | 3.1 |
| Revenue | 1,093.8 | 1,057.3 | 3.5 |
| EBITDA before restructuring measures | 105.0 | 74.6 | 40.7 |
| as % of revenue | 9.6 | 7.1 | – |
| EBITDA | 96.9 | 69.3 | 39.8 |
| EBIT before restructuring measures | 56.4 | 27.0 | > 100 |
| as % of revenue | 5.2 | 2.6 | – |
| EBIT | 48.2 | 21.7 | > 100 |
| EBT1 | 41.7 | 25.7 | 62.4 |
| Profit for the period1 | 29.8 | 30.2 | –1.2 |
| ROCE in %2 | 12.3 | 12.0 | – |
| Net assets | |||
| Net working capital (reporting date) | 719.9 | 833.2 | –13.6 |
| as % of revenue (LTM) | 14.6 | 17.2 | – |
| Capital employed (reporting date) | 2,169.4 | 2,687.5 | –19.3 |
| Equity | 2,111.4 | 2,486.2 | –15.1 |
| Equity ratio in % | 37.3 | 41.7 | – |
| Leverage3 | –0.0 x | 0.4 x | – |
| Net liquidity (+)/Net debt (-) | 10.1 | –155.3 | – |
| Financial position | |||
| Cash flow from operating activities | 23.3 | –39.0 | – |
| Cash flow from investing activities | –14.2 | –25.2 | 43.8 |
| Free cash flow | 9.1 | –64.2 | – |
| GEA Shares | |||
| Earnings per share (EUR)1 | 0.17 | 0.17 | –1.2 |
| Weighted average number of shares outstanding (million) | 180.5 | 180.5 | – |
| Market capitalization (EUR billion; reporting date) | 3.4 | 4.2 | –19.8 |
| Employees (FTE; reporting date) | 18,392 | 18,718 | –1.7 |
| Total workforce (FTE; reporting date) | 19,952 | 20,643 | –3.3 |
1) 2019 incl. interest income of EUR 26 million due to adjustment of the interest calculation method used to measure provisions for Environmental protection and mining. The interest income is omitted in the amount of EUR 10 million the result from continuing operations and EUR 16 million on the result from discontinued operations.
2) Capital employed excluding goodwill from the acquisition of the former GEA AG by former Metallgesellschaft AG in 1999 (average of the last 4 quarters).
3) Total net debt/cons. EBITDA based on frozen GAAP (covenant concept).
Media Relations
GEA Group Aktiengesellschaft
Peter-Müller-Str. 12
40468
Düsseldorf
Germany
+49 211 9136-0
About GEA
GEA is one of the world’s largest suppliers of systems and components to the food, beverage and pharmaceutical industries. The international technology group, founded in 1881, focuses on machinery and plants, as well as advanced process technology, components and comprehensive services.
