GEA: ‘We were unable to escape the effects of a renewed decline in some of our markets’
The company claimed its order intake declined slightly due to the limited number of major orders, but the basic business saw stable growth thanks to its “Fit for 2020” program.
'China was almost flat'
Speaking about the renewed decline, Marc Poenitz, head, corporate communications, GEA Group, told FoodProductionDaily, it continued to be concerned about the marine, oil and gas business, but those account for no more than 4% of its order intake.
“Compared to our Q4 results, four regions, accounting for about two thirds of our sales, contributed to organic growth, notably: Western Europe, North America, Eastern Europe and Africa, while all others declined. China was almost flat,” he said.
“Order intake in Q2 2015 dropped by 2% to €1.149m, which mostly comes from the fact that our Business Area Solutions saw less large orders (less than €15m) than the previous year.
“In Q2, the group won two large orders in the Middle East and Asia, together worth over €55m. Compared to the previous year’s quarter, the group booked four large orders with a volume of €123m. This is the only reason why our order intake was down year on year.
Poenitz added, while the general geopolitical climate has not been the friendliest one to encourage decision-making when it comes to large capex, it would not want to read a trend into this quarter’s weaker occurrence of large orders but rather consider this a normal consequence of ‘large order lumpiness’.
'Often, it is a question of timing whether you get the order'
“There has always been quite some variation in large order intake over the quarters. Often, it is only a question of timing whether you get the order at the end of one or the beginning of the next quarter,” he said.
GEA found targeted measures are paying off and it further increased profitability as part of its “Fit for 2020” program. For example, it reduced its workforce by around 300 employees since the beginning of the year and both operating EBITDA and operating EBITDA margin hit all-time highs for a second quarter.
GEA’s new group structure became effective as of June 8, 2015, for two Business Areas (BA); Equipment and Solutions.
BA Equipment brings together all activities related to standardized and customer-specific equipment offerings, while BA Solutions largely consists of customer-specific and modular solutions and projects. This mainly includes the design and development of processing technology for the dairy industry, food, brewing and pharma.
The structure brings together customer-centric sales and services under the umbrella of a single country organization. The countries are grouped together in newly defined regions and are reported in line with these.
Three acquisitions in 2015
The company also acquired three companies in the past quarter, two of which are complete; the acquisition of Italian company Comas, on June 19, 2015, which manufactures machinery and equipment for the bakery industry. Comas will join the BA Solutions division to form the Application Center Bakery.
On the same date, GEA completed the acquisition of CMT, a supplier of machinery and integrated process lines for pasta filata cheeses (fresh mozzarella and pizza cheese).
On June 20, 2015, it acquired Hilge, supplier of hygienic pumps that specializes in stainless steel pumps for the food and beverage industries. The plan is to integrate Hilge’s business into the BA Equipment division. The transaction is currently subject to antitrust approval.
