GEA group’s annual results reveal key market challenges
The GEA equipment and systems group has released its 2020 performance figures, recording revenues of €4.6 billion in 2020, against €4.83 the previous year, as the business came to terms with the ongoing pandemic, reports Neill Barston.
Profits for the period were €96.8 million, global conditions impacted on its order intake, which was recorded at €4.7 billion compared to €4.8 billion for 2019, as the business projected an improving financial picture.
Despite describing the past year as offering ‘a highly challenging environment’ the company, which produces a number of machinery lines used across confectionery and bakery markets, highlighted encouraging figures for its EBITDA performance, registering €532 million (before restructuring) for 2020, up from 374 the previous year.
“GEA came through a challenging 2020 very well. We delivered on our promises and in some cases even exceeded them,” said Stefan Klebert, CEO GEA Group AG. “We increased profitability beyond our own ambitious expectations and sustainably improved key financial performance indicators. Despite the Covid-19 pandemic some of these already meet the mid-term 2022 financial targets we were aiming for. This proves, first and foremost, the stability of GEA’s business model and, secondly, how early and effectively we implemented the right measures.”
Alongside the short-term measures to manage the impact of the Covid-19 pandemic, the company said that it was the efficiency improvement projects launched in 2019 and their systematic implementation that made the most decisive contribution to GEA’s positive performance in 2020. This included among others a reduction of roughly 800 FTEs in the workforce – including temporary workers – at the end of year 2020 relative to the headcount as of June 30, 2019 and procurement process optimisation. GEA implemented additional strategic projects in the reporting year including the optimisation of the production network and selling three subsidiaries: GEA Bock, Japy and Royal De Boer.
As the company noted Due to the pandemic, the Group order intake of EUR 4,703 million in 2020 was 4.6 percent below the 2019 level (EUR 4,931 million). After adjusting for currency effects, the decrease was 2.2 percent. The company recorded shortfalls primarily in the Food and Beverage project business. By contrast, the trend in the Pharma, Chemical, Dairy Processing and Dairy Farming customer industries was positive.
Furthermore, GEA explained that it stands by its dedication to climate action and sustainability, especially amid the pandemic, which saw a number of activities across its business.
The company added: “As a global industrial technology leader committed to “engineering for a better world”, GEA takes its global responsibilities seriously. This was confirmed in 2020 when the company was again awarded an “A-” score for its climate protection activities by CDP (formerly Carbon Disclosure Project), which rigorously ranks companies on their environmental performance. And for the first time, GEA was rated for its actions on water security, earning an “A” score from CDP. Going forward, we will provide further transparency related to its sustainability commitments. To this end, the Company has again increased the level of information provided in its sustainability report, which will be released today as a stand-alone report for the first time.”