GEA boosts EBIT margin significantly in 2011

10-Feb-2012 - Germany

GEA Group’s order intake rose 23 percent to EUR 5,610 million in fiscal year 2011. Excluding the new GEA Convenience-Food Technologies segment, the year on year increase would have been 15 percent. It should be highlighted that the fourth quarter saw the highest order intake in the fiscal year. The group’s full-year revenue also grew by 23 percent to EUR 5,417 million. Excluding the new segment, revenue would have increased by only 15 percent.

Operating profit, meaning EBIT before the effects of purchase price allocations, increased again in the past fiscal year, rising approximately 43 percent to EUR 525 million. Factors contributing to this success were the selective intake of orders along with positive restructuring effects achieved in recent years. The corresponding EBIT margin for the group was lifted by around 140 basis points to 9.7 percent. Excluding the new GEA Convenience-Food Technologies segment, the operating EBIT margin reached even 10.0 percent, compared with 8.3 percent in the previous year. The group’s operating EBIT increased by EUR 64 million (approximately 44 percent) in the fourth quarter of 2011, while the adjusted EBIT margin rose by approximately 160 basis points to 12.7 percent. Once again, discontinued operations did not affect GEA Group’s profit for the period.

Net liquidity as of December 31, 2010 (EUR +105 million) turned into net debt of EUR 673 million in September 2011, primarily as a result of acquisitions. Positive earnings contributions and strict liquidity management cut net debt by EUR 286 million to EUR 387 million in the fourth quarter. The ratio of working capital to revenue was 10.7 percent as of the reporting date (previous year: 10.1 percent) and 12.7 percent on average for the year (previous year: 12.4 percent).

“We are pleased that, despite the turbulence on the global financial markets, GEA continued to see dynamic demand and closed the fiscal year on an extremely high note. The volume growth and our profitability in particular clearly exceeded our earlier expectations. Fiscal year 2011 was characterized by the best operating profit and the largest acquisition volume in over 10 years,” said Jürg Oleas, CEO of GEA Group Aktiengesellschaft, adding: “Given these encouraging figures, the Executive Board and Supervisory Board will be proposing a dividend of 55 cents to the Annual General Meeting, up from 40 cents in the previous year. We have decided also to pay out around EUR 5 million to our employees below the top management level as a special allowance in recognition of their outstanding performance.”

For the current fiscal year 2012, GEA expects that demand in its sales markets will match the high levels seen in 2011. Based on this assumption, the Company anticipates a rise in order intake by up to 5 percent. Revenue should increase by at least 5 percent. With regard to price quality, GEA expects the market environment to be unchanged as against 2011. On this basis, the EBIT margin should rise slightly compared to the previous year.

All figures for 2011 are preliminary and have not yet been audited.

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