Gea sidesteps crisis in machinery sector
Machinery manufacturer Gea, which specialises in the food and pharmaceutical industries, stands out amid the current crisis in the sector with its ambitious medium-term goals. The company announced at its recent capital markets day that it aims for organic revenue growth of over 5% annually up to 2030. It expects to achieve an EBITDA margin of 17% to 19% of revenue, significantly higher than the 14.4% recorded in 2023.
In the current fiscal year, the Düsseldorf-based company, which employs nearly 19,000 people worldwide, anticipates an increase in its EBITDA margin to up to 15.2%, alongside revenue growth of 2% to 4%. In contrast, the entire German machinery sector is facing a projected revenue decline of 4%, according to the Machinery and Equipment Manufacturers Association (VDMA). The industry has been struggling with a global demand weakness for some time, and reported an 11% drop in orders during the first seven months of this year, following a 12% decline in the previous year.
Gea's stock has been in demand lately, and has risen by over 18% this year. According to analysts at Jefferies, Gea's medium-term targets exceed consensus expectations. However a J.P. Morgan analyst has described the company outlook as „ambitious“.
Hope for decarbonisation in the food industry
The food industry involves many energy-intensive processes, such as heating, cooling, and drying. Gea sees significant opportunities for decarbonisation in this area, and has established itself as a „pioneer in sustainability“, according to CEO Stefan Klebert.
The company also aims to benefit from the increasing importance of alternative proteins, which market researchers expect to grow due to the rising global population. Gea sees strong potential to apply its expertise from traditional food production to the manufacturing of protein-rich products based on plants, cells, or insects. Among its clients in this field is the Finnish food tech startup Solar Foods, which converts carbon dioxide into a protein-rich powder for human consumption, and recently went public. In April, Solar Foods launched a demo plant in Vantaa near Helsinki, equipped with bioreactors from Gea.
Starting in 2030, Gea anticipates an annual order intake of at least 400 million euros in this business segment. But the company has slightly revised this goal, which was initially set for 2026. In 2023, the order intake in this sector amounted to 78 million euros, while the total group orders reached 5.5 billion euros.
