On the occasion of this year's Capital Markets Day, GEA for the first time published detailed financial targets set until 2020.
• Future average organic growth in sales of 4-6%
• Operating EBIT margin between 13% and 16% from 2017 onwards
• Increase in the dividend payout ratio to 40-50%
• Preliminary order intake in Q3 2014: on par with the previous year at EUR 1,165m
• Preliminary sales in Q3 2014: up 5% on the previous year at EUR 1,147m
On the occasion of this year's Capital Markets Day, GEA for the first time published detailed financial targets set until 2020. During this period, the Company intends to achieve a 4% to 6% average annual organic growth in sales. Once the full benefits of the savings generated in connection with the Group's restructuring that was decided in August of this year are realized, GEA aims at attaining an operating EBIT margin of between 13% and 16% from 2017 onwards. Accordingly, the Company seeks to achieve a cash flow driver margin of 12% to 15% as well as a ROCE of between 20% and 25% from this point onwards.
Regarding the use of the proceeds from the divestiture of Heat Exchangers that are expected to be transferred before long, the Executive Board reaffirmed its intention to undertake acquisitions in order to strengthen the Group's portfolio by adding applications in the food processing technology sector, and its aim to reduce debt levels in the near future. Furthermore, GEA has decided to sustainably raise its target dividend payout ratio from one third to a level of between 40% and 50%.
"In view of minimum annual savings of EUR 100m from the forthcoming group restructuring process that are expected to materialize as of 2017, we have set ourselves new ambitious medium-term growth and earnings targets. These objectives underline our focus on GEA's sustainable value enhancement“, observed Jürg Oleas, CEO of GEA Group. "Certainly, the planned increase in the dividend payout ratio to between 40% and 50% of our net income will be attractive to our shareholders. Thus, from now on, our shareholders will receive a much higher share of GEA's profits than ever before.“
In addition, GEA also published selected preliminary financial figures for the third quarter 2014. Order intake of EUR 1,165m was on par with the prior-year level. During the same period, sales were up 5% at EUR 1,147m. GEA's guidance for business development in 2014 was confirmed one more time.