GEA raises outlook for 2023 following strong first quarter
(Image source: GEA Group Aktiengesellschaft)
At the same time, GEA aims to further increase the EBITDA margin before restructuring expenses to at least 14.0 percent (previously: more than 13.8 percent). GEA now expects ROCE to be more than 32.0 percent at constant exchange rates (previously: at least 29.0 percent).
We have made a very good start to 2023. Our products, solutions and services are in high demand – especially in the food, beverage and pharmaceutical industries. One of our key success drivers is the fact that our customers are increasingly looking for solutions to save energy and conserve resources. Drawing on our strength, we look to the future with confidence and are able to raise our outlook for the full year."- Stefan Klebert, CEO
Order intake rises to a new record level
In the first quarter of 2023, order intake rose by 2.4 percent (organic: 3.9 percent) to a record level of EUR 1,581 million (Q1 2022: EUR 1,544 million). Among the factors contributing to this increase were five large orders (each with a volume of more than EUR 15 million), amounting to a total of EUR 126 million. With double-digit growth, the new food, beverage and dairy farming customer industries made a particularly significant contribution to the record figure.
Revenue improved by 12.8 percent in the reporting period (organic: 13.9 percent) to EUR 1,271 million (Q1 2022: EUR 1,126 million). All divisions contributed, mostly posting double-digit increases. Among the customer industries, notably dairy farming, dairy processing, food and chemicals performed positively. The renewable resources business similarly recorded significant revenue growth. In the first quarter of 2023, the share of service revenue increased from 36.2 percent to 36.6 percent.
All divisions record significantly improved earnings
EBITDA before restructuring expenses increased by a considerable 24.3 percent to EUR 171.8 million (Q1 2022: EUR 138.2 million). The corresponding EBITDA margin improved significantly by 1.2 percentage points to 13.5 percent (Q1 2022: 12.3 percent). This positive development was due in particular to high volumes in the new machinery business and an increased service share. All divisions increased their EBITDA margin before restructuring expenses compared with the prior-year quarter, in some instances substantially.
Profit for the period went up by 13.2 percent in the first three months to EUR 81.7 million (Q1 2022: EUR 72.2 million). Earnings per share rose correspondingly from EUR 0.41 to EUR 0.47. Earnings per share before restructuring expenses came to EUR 0.54 in the first quarter, compared with EUR 0.43 in the prior-year quarter.
Net liquidity fell from EUR 412 million to EUR 274 million in the first quarter due to the share buyback program in 2022. Net working capital as a percentage of revenue increased marginally to 6.9 percent (Q1 2022: 6.1 percent).
As a result of the rise in inventories and trade receivables, capital employed (average of the last four quarters) rose slightly to EUR 1,699 million (Q1 2022: EUR 1,580 million). However, the return on capital employed (ROCE) improved from 29.3 percent to 33.1 percent thanks to the substantially improved EBIT before restructuring expenses.
Outlook for 2023 raised following strong first quarter
Following a strong first quarter, GEA has raised its outlook for fiscal year 2023. Revenue is now forecast to grow on an organic basis by more than 8.0 percent (previously: more than 5.0 percent). EBITDA before restructuring expenses at constant exchange rates is expected to be at the upper part of the range between EUR 730 million and 790 million (previously: range between EUR 730 million and 790 million). At the same time, GEA aims to further increase the EBITDA margin before restructuring expenses to at least 14.0 percent (previously: more than 13.8 percent). GEA now expects ROCE to be more than 32.0 percent at constant exchange rates (previously: at least 29.0 percent).
Source: GEA Group Aktiengesellschaft