DGAP-News: GEA Group Aktiengesellschaft / Key word(s): 9-month figures GEA Group Aktiengesellschaft: GEA maintains stable earnings margin despite economic slowdown (news with additional features) 28.10.2015 / 07:30 --------------------------------------------------------------------- GEA maintains stable earnings margin despite economic slowdown Düsseldorf, October 28, 2015 - In the third quarter of 2015, the global economic slowdown had a negative impact on GEA's performance too, with group revenue 3.4 percent below the previous year's level. In the first nine months of the current fiscal year, however, revenue increased by 1.5 percent. Revenue in the Business Area Equipment grew by 0.9 percent during this period, while the Business Area Solutions posted growth of 1.9 percent. Service business generated growth in the region of 11 percent and now constitutes around 30 percent of overall revenue. EBITDA in the third quarter fell to EUR 110 million, largely due to high non-recurring expenses and the lower revenue. Adjusted for non-recurring items totaling EUR 33 million, operating EBITDA amounted to EUR 144 million. The corresponding operating EBITDA margin remained at the previous year's level of 13.0 percent. By contrast, at EUR 381 million for the first nine months of the current fiscal year, operating EBITDA was above the previous year's level. The operating EBITDA margin rose to 11.7 percent, largely thanks to measures to improve efficiency already implemented. Adjusted for non-recurring items, the cash flow driver margin for the last 12 months amounted to 10.7 percent at the end of the reporting period. Towards the end of the third quarter, GEA succeeded in securing various major orders. Due to project scheduling, however, these orders will no longer affect fiscal year 2015. "Unfortunately, the economic downturn left its mark on many areas in the course of the last quarter. In particular, the weakness of the milk markets and the postponement of several larger orders had a significant impact on our figures; this explains why we reduced our revenue forecast for the current fiscal year. That said, our strategic decision to introduce flatter hierarchies is to make the Group more cost-effective proved to be the correct move," says Jürg Oleas, Chairman of the Executive Board of GEA, in his appraisal of the current situation. "Thanks to a raft of measures to improve efficiency initiated or already implemented, we can corroborate our earnings forecast and even raise our expectations in terms of the relevant cash flow drivers. We are abiding by the previously advised dividend of at least EUR 0.70 per share." GEA is still on schedule to implement its new group structure, developed as part of the "Fit for 2020" program. Several key milestones affecting Germany, the country with the most GEA employees, have been reached. Outside Germany, implementation is also progressing according to plan. By the end of the quarter under review, the workforce had been reduced by approximately 300 full-time equivalents as a result of the program. Against a backdrop of ongoing weakness in the global economy - particularly in the emerging economies, including China - and a further reduction in IWF expectations for economic growth this year, GEA has reduced its growth target for revenue for the end of the quarter under review. The Group is now looking at a moderate decline in organic revenue (assuming unchanged exchange rates against 2014 and not including acquisition effects). The current forecast with regard to organic revenue implies moderate growth in reported revenue figures. We are still targeting operating EBITDA for fiscal year 2015 in the range of EUR 590 to EUR 640 million. Already implemented measures to improve the earnings situation, however, coupled with a reduction in the investment volume have now prompted the Group to raise its expectations for the cash flow driver margin slightly. Excluding the effects of acquisitions and non-recurring items, GEA is now expecting a value of between 9.5 and 10.0 percent in 2015, calculated as a ratio to revenue. GEA Group: Key IFRS figures (EUR million) Q3 2015 Q3 2014 Order Intake 1,068.3 1,167.9 Revenue 1,106.6 1,146.0 Operating EBITDA 1) 143.7 149.0 as % of revenue 13.0 13.0 Operating EBIT 1) 122.6 130.2 as % of revenue 11.1 11.4 EBIT 83.1 115.4 Working capital intensity in % 2) 12.6 12.1 Net liquidity (+)/Net debt (-) 603.2 -356.3 Cash flow driver margin 3) 6.2 8.8 ROCE in % (goodwill adjusted) 4) 14.5 23.2 Full-time equivalents (reporting date) 18,000 18,281 Earnings per share (EUR) 0.86 0.39 1) Before effects of purchase price allocations and before one-offs 2) Average of the past 12m 2) Cash flow driver = EBITDA - Capital expenditure - Change in Working Capital (average of the past 12 months) 4) Capital employed (average of the past 12 months) excluding goodwill from the acquisition of the former GEA AG by the former Metallgesellschaft AG in 1999 About GEA GEA is one of the largest suppliers for the food processing industry and a wide range of process industries that generated consolidated revenues of approximately EUR 4.5 billion in 2014. As an international technology group, the Company focuses on process technology and components for sophisticated production processes in various end-user markets. The Group generates more than 70 percent of its revenue in the food sector that enjoys long-term sustainable growth. As of September 30, 2015, the Company employed 18,000 people worldwide. GEA is a market and technology leader in its business areas. The Company is listed in Germany's MDAX (G1A, WKN 660 200). In addition, GEA's share is a constituent of the MSCI Global Sustainability Indexes. Further information is available on the Internet at www.gea.com. If you do not want to receive any further information from GEA, please send an email to [email protected]. Contact: GEA Group Aktiengesellschaft Phone +49 (0)211 9136 1492 Fax +49 (0)211 9136 31087 www.gea.com +++++ Additional features: Document: http://n.equitystory.com/c/fncls.ssp?u=ITKXWBWGCG Document title: GEA Q3 report 2015 --------------------------------------------------------------------- 28.10.2015 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: GEA Group Aktiengesellschaft Peter-Müller-Straße 12 40468 Düsseldorf Germany Phone: +49 (0)211 9136-0 Fax: +49 (0)211 9136-31087 E-mail: [email protected] Internet: www.gea.com ISIN: DE0006602006 WKN: 660200 Indices: MDAX Listed: Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Munich; Regulated Unofficial Market in Hanover, Stuttgart End of News DGAP News Service --------------------------------------------------------------------- 406057 28.10.2015