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GEA releases preliminary third quarter figures and adjusts outlook for the 2018 fiscal year

Published by , Assistant Editor
World Fertilizer,

According to preliminary figures, the positive trend compared with the same period last year in order intake (approx. €1.18 million, plus 12%), revenue (approx. €1.18 million, plus 4 percent), and operating EBITDA (approx. EUR 135 million; plus 12%) has persisted throughout the 3Q18.

However, earnings development falls short of the company’s own expectations.

For this reason, the Executive Board currently expects revenue of approx. €4.8 million (or approx. €4.95 million on constant exchange rates) and operating EBITDA of approx. €540 million (or approx. €550 million on constant exchange rates) for the 2018 fiscal year. This corresponds to an operating EBITDA margin of approx. 11.3% (or approx. 11.1% 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%. Now, the operating EBITDA margin is anticipated to amount to approx. 11.1%, while the Executive Board projects an operating cash flow driver margin of approx. 8.5%. 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," said Jürg Oleas, CEO of GEA Group Aktiengesellschaft. "GEA, however, sees growing economic imponderables as well as a rising number of trade constraints. 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.”

Results of the third quarter will be published on October 29th, 2018.

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