GERMANY – GEA Group, one of the leading suppliers of technology for the food processing industry has reported a 2% decline in revenue in the first half of the year to EUR 2.258 million from EUR 2.305 million achieved in the same period of the previous year.
According to the company, with the exception of the Separation & Flow Technologies division, all its divisions recorded declines in revenue.
The decline in revenue is attributed to order intake falling by 9.8% to EUR 1.034 million in the second quarter as a result of the COVID-19 pandemic.
Despite of that, order intake grew by 3.3 percent to EUR 2.411 million in the first six months of the year from EUR 2.333 million of the corresponding period last year, boosted by good performance in the first quarter.
Even with the fall in revenue, GEA achieved a marked year-on-year improvement in EBITDA before restructuring measures in the quarter under review.
EBITDA before restructuring measures grew by a substantial 32.0 percent to EUR 245.4 million in the first half year, and in the second quarter it grew by 26.2 percent to EUR 140.4 million.
The positive trend was driven not only by substantial improvements in margins and the rapid implementation of various restructuring measures, but also by reduced travel expenses and lower special items compared to the previous year.
The company also posted a marked year-on-year improvement in several other financial indicators, including ROCE (return on capital employed), net working capital, net liquidity and cash flow.
“In a very challenging macroeconomic environment, GEA closed the quarter on a positive footing. In particular, the trend in earnings and ROCE underscores how successful the measures introduced last year to improve efficiency have been,” said Stefan Klebert, CEO of GEA Group AG.
ROCE rose to 14.8 percent from previous years 10.5 percent. Net working capital fell significantly, to EUR 630.2 million.
Cash flow from operating activities since the start of the year amounted to EUR 220.7 million.
The Group still expects revenue for 2020 to be slightly lower from previous years EUR 4.880 million.
As regards EBITDA before restructuring measures, the Group now expects to come in at minimum the upper end of the previous range of EUR 430 to 480 million.
GEA anticipates that ROCE will now be within a corridor of 12.0 to14.0 percent rather than the former one of 9.0 to11.0 percent (previous year: 10.6 percent).
“The second half of 2020 is set to remain challenging. GEA is well placed with its focus on stable end markets such as food, beverages and pharmaceuticals, and our efficiency measures are producing results.
“That is why we have raised our forecast for 2020 in part and remain confident that we will reach our medium-term financial targets,” said Stefan.
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