GEA Releases Preliminary Third Quarter Figures
According to preliminary figures, the positive trend compared with the same period last year in order intake (approx. EUR 1,180 million, plus 12 percent), revenue (approx. EUR 1,180 million, plus 4 percent) and operating EBITDA (approx. EUR 135 million; plus 12 percent) has persisted throughout the third quarter of 2018. However, earnings development, in particular in the customer industry Dairy Processing, falls short of the company s own expectations.
For this reason, the Executive Board currently expects revenue of approx. EUR 4,800 million (or approx. EUR 4,950 million on constant exchange rates) and operating EBITDA of approx. EUR 540 million (or approx. EUR 550 million on constant exchange rates) for the 2018 fiscal year. This corresponds to an operating EBITDA margin of approx. 11.3 percent (or approx. 11.1 percent on constant exchange rates).
Following this development, the Executive Board adjusts its outlook, which is based on constant exchange rates. For the current fiscal year, the Executive Board expects revenue to grow approx. 7.5 percent. Now, the operating EBITDA margin is anticipated to amount to approx. 11.1 percent while the Executive Board projects an operating cash flow driver margin of approx. 8.5 percent. All other assumptions remain unchanged as outlined in the 2017 Annual Report and the 2018 Half-Yearly Financial Report.
"All in all, demand for our products and applications has continued to show a positive trend in the quarter just ended, with GEA being basically well positioned in a challenging overall environment. GEA however sees growing economic imponderables as well as a rising number of trade constraints," comments Jürg Oleas, CEO of GEA Group Aktiengesellschaft.
"Our gross margin remains under pressure. It is true that the pricing initiatives taken in many areas are beginning to take effect, but not to the extent expected. In addition, there are mix effects, i.e., revenue continues to show above-average growth in lower-margin product groups with the new machine business currently growing at a faster pace than the higher-margin service business. Furthermore, notably the customer industry Dairy Processing does not live up to our earnings expectations," concludes Jürg Oleas.
Source: GEA Group Aktiengesellschaft