GEA Group (G1A) Q2 2024 earnings summary

Executive summary

• EBITDA margin before restructuring expenses rose to 15.2% from 14.3% year-over-year, with strong service business expansion and improved cash generation.

• Organic sales grew 1.6% in Q2 2024, despite a reported decline of 1.4% due to negative currency effects; service sales share increased to 38.9%.

• Order intake declined 6.7% year-over-year, but remained above previous troughs; SFT and HRT divisions saw growth, while others declined.

• Net liquidity at €32 million, down from €65 million year-over-year, mainly due to share buybacks and dividend payments.

• Recognized for sustainability, ranking 33rd globally and 3rd in Germany by TIME and Statista; credit ratings improved by Fitch and Moody’s.

Financial highlights

• EBITDA before restructuring expenses increased by 4.7% year-over-year to €201 million; EBIT up 2.5% to €151 million.

• Free cash flow for Q2 2024 was €83 million, with H1 free cash flow positive at €25.8 million, reversing prior negative trends.

• Net working capital to sales ratio at 9.1%, within the guided 8%-10% corridor.

• Gross margin improved to 36.1% in Q2 2024 (from 34.0%).

• Earnings per share in H1 2024: €1.12 (up from €1.04); before restructuring: €1.25 (up from €1.17).

Outlook and guidance

• Full-year 2024 EBITDA margin guidance raised to 14.9%-15.2%; ROCE guidance increased to 32%-35%.

• Organic sales/revenue growth guidance for 2024 confirmed at 2%-4%.

• H2 2024 order intake expected to exceed both H1 2024 and H2 2023.

• CapEx guidance for 2024 reiterated at €260 million, with normalization expected in 2025.

• Division-level guidance: SFT and FT at -2.0% to +2.0%, LPT at +2.0% to +6.0%, FHT at +5.0% to +8.0%, HRT unchanged.