The Düsseldorf-headquartered mechanical engineering group GEA recorded two-digit growth rates in terms of both order intake and revenue in the first quarter and therefore raises its outlook to an increase in order intake in 2012 by at least 5 percent.
At today’s Annual General Meeting the company announced that the brisk order intake in the prior quarter continued in the first quarter of fiscal 2012, attaining EUR 1,545 million on a preliminary basis, and this corresponds to a year-on-year up of 24 percent and a further boost in comparison with the very good fourth quarter 2011. Given the positive order intake trend of the past quarters, the preliminary revenue level of the group rose 22 percent as against the prior-year period, to EUR 1,264 million. With respect to the preliminary result before purchase price allocation, the company forecasts an increase of about 20 percent from the respective prior-year mark for the first quarter 2012, without considering the new GEA Food Solutions Segment.
“We owe the gratifying development of our order intake to worldwide continuing vigorous demand for food process engineering in the first place, and this is specifically reflected in the excellent order intake of our GEA Process Engineering Segment. On this basis we are lifting the outlook regarding order intake. For the full 2012 fiscal year we are now planning an increase by at least 5 percent”, affirmed Jürg Oleas, CEO of GEA Group Aktiengesellschaft.
In the GEA Food Solutions Segment, which proceeded from the CFS acquisition made in early 2011 and was previously named GEA Convenience-Food Technologies, the group plans to exploit the business potential even better in future. The new name was given to express more precisely the business activity of the segment. In February 2012, the Segment Management was replaced with experienced GEA staff. Following a detailed analysis of the business, the company decided to review the appraisal of the operations. As a consequence of this revised assessment, one-off effects totaling presumably around EUR 35 million will burden the result of the segment and hence of the group in the first quarter. But the facts having led to this revision will only be cash-effective to a small extent. In view of the anticipated continuing favorable business prospects, according to present assessments this situation will not imply the need for goodwill impairment.
As a result of inefficiencies in implementing the realignment of the production structure already initiated before the date of acquisition as well as the not yet fully leveraged business potential in the service sector, the Food Solutions Segment will recognize an operating loss of presumably up to EUR 10 million in the first quarter. Action plans to counter this development are being established right now to ensure that they will take effect still in the course of the fiscal year. For the full year 2012 the company plans to achieve a positive operating EBIT margin in the Food Solutions Segment.
For the current fiscal year 2012, GEA continues to assume that demand of its outlet markets will slightly exceed the high level of 2011. With this proviso, the company expects to achieve an increase in order intake of not less than 5 percent. Revenue is also to rise at least 5 percent. In terms of price quality, GEA anticipates that the market environment will remain the same as in 2011 in this respect. With the exclusion of the mentioned one-off effects at GEA Food Solutions, the company maintains its plan to reach an operating EBIT margin at least at the prior-year level which was 9.7 percent before purchase price allocation effects for the group as a whole including the new GEA Food Solutions Segment.
The company will publish the detailed figures relating to the course of the first quarter on May 8, 2012