Outlook 2020

Earnings burden from COVID-19, medium-term targets confirmed

Despite the ongoing positive effect of global megatrends, GEA expects demand in its sales markets to stagnate or even slow down slightly during the current 2020 fiscal year as a result of an economic situation that continues to be tense.

All told, with the investment appetite of customers expected to stagnate or fall slightly, GEA is anticipating consolidated revenue to drop slightly in 2020. Due to this negative revenue development, the group assumes that – despite the initiated restructuring measures – a slight decline in EBITDA before restructuring measures can be expected at this time. Accordingly, return on capital is expected to be in the range of 9.0 to 11.0 percent. Despite the current challenges posed by the coronavirus, the company remains very confident about future growth prospects based on the optimization measures initiated and the still attractive end markets. With regard to the distribution ratio, our objective is still to distribute between 40 and 50 percent of net income to our shareholders.

Outlook* fiscal year 2020

Expectations for 2020 2019
Revenue development slightly declining EUR 4,880 million
EBITDA before restructuring measures EUR 430 – 480 million EUR 479 million
ROCE 9.0 – 11.0 % 10.6 %

*For revenue, “slight” indicates a change of up to +/- 5%, while a change of more than +/- 5% is referred to as “significant.” For earnings figures, “slight” indicates a change of up to +/- 10%, while a change of more than +/- 10% is deemed “significant.” GEA defines changes in ROCE of up to +/- 3%p as “slight” and changes in excess of +/- 3 %p as “significant.”

This outlook is based on constant exchange rates and on the assumptions mentioned above, particularly on the forecast that demand in GEA’s sales markets is likely to stagnate or even slow down somewhat in 2020 due to continuing tensions afflicting the economy. Potential acquisitions and divestments in 2020 have not been factored into the outlook.

The principal uncertainty in the outlook for 2020 concerns the possible impact on GEA’s business activity and impact of the coronavirus, which is spreading rapidly at the present time. As the situation was evolving very quickly during the preparation of this annual report, it is difficult to predict the consequences, particularly those outside China. For instance, GEA in China is witnessing a noticeable decline in service business due to the severe travel restrictions imposed on service technicians, and this is likely to continue up to the end of the second quarter of 2020. Also, the first cases of illness in Europe lend weight to the assumption that here too, GEA’s business can expect further repercussions from the spread of COVID-19. Given these external factors, GEA has decided to issue a more cautious outlook that includes the most likely impacts foreseeable as of the preparation of the report. Due to the potential for delays in production – but also given the possibility of a slump in demand – revenue growth is subdued. Due to this negative revenue development, the group assumes that – despite the initiated restructuring measures – a slight earnings decline can be expected at this time.


In 2020, GEA is looking to forge ahead with various divestment initiatives. Chief among these are transactions initiated in 2019 either as part of portfolio measures aimed at improving margins, or by restructuring programs. The strategy of acquiring companies that enable GEA to strengthen its focus on the areas of food, beverages and pharmaceuticals still fundamentally applies.


The Executive Board and Supervisory Board will propose to the Annual General Meeting an unchanged dividend of EUR 0.85 per share for 2019. This means that the total dividend payout will again amount to some EUR 153.4 million based on the number of dividend-bearing shares in circulation as of March 12, 2020.

Medium-term financial targets to 2022

In autumn 2019, GEA presented new, medium-term financial targets for the period up to the end of fiscal year 2022, according to which consolidated revenues are expected to grow by 2-3 percent a year on average. The EBITDA margin before restructuring expenses, which was 9.8 percent in 2019, is projected to increase to a target range of 11.5-13.5 percent. Furthermore, GEA plans to elevate capex to a target corridor of 2.5-3.5 percent of revenue between the years 2020 and 2022. Most of the augmented capital expenditure will be channeled into improving the production network and implementing a standardized ERP system. The objective is to reduce net working capital intensity to between 12.0 and 14.0 percent by 2022.

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