DÜSSELDORF (dpa-AFX) - Strong business with manufacturers of beverages, food and pharmaceuticals has given plant manufacturer Gea a strong start to the year. The management board led by Stefan Klebert is now setting the bar higher for 2023 and hopes to achieve even stronger sales growth on its own. Operating profit and margins are also expected to rise somewhat further than previously targeted, as the MDax group announced in Düsseldorf on Friday. In the first quarter, Gea did exceed the expectations of industry experts. However, according to analyst Sebastian Kuenne of RBC, the raised forecast is already market consensus. The Gea share was therefore initially down on the stock exchange.

In early trading, the stock lost almost four percent at times to 41.04 euros, following on from the already weaker previous day. Since the high for the year in March, when the share price climbed to 44.52 euros, its highest level since the beginning of 2022, several attempts on the way back up have already failed. The year to date is nevertheless positive for the Gea share with around eight percent.

Meanwhile, analysts at investment house Jefferies spoke of an unexpectedly strong quarter for Gea. Order intake, sales and operating profit had beaten market expectations - these should now rise. The experts also took a positive view of the fact that Gea had already raised its own targets at such an early stage in the year. "This is unusual for this conservative management team."

For example, Gea's order situation has been strong for some time. Among other things, the company has benefited from the fact that business from key customers such as food and beverage manufacturers has been strong, even in recent times of crisis. This benefited Gea during the pandemic, for example, but also last year after the start of the Russian war of aggression in Ukraine. In addition, food manufacturers, pharmaceutical companies and other customer groups have more incentive to invest in more modern, economical equipment in light of high energy prices.

In the first quarter, several major orders in particular drove order intake to a record level of almost 1.6 billion euros. Most business areas were up year-on-year.

Sales at the start of the year rose 12.8 percent year-on-year to around 1.3 billion euros. On its own, the increase amounted to 13.9 percent, which is well above Gea's previous target of at least five percent for the year as a whole. In 2023, the Group therefore now believes it can achieve organic growth of more than eight percent according to the increased forecast.

The Management Board is also becoming more confident about day-to-day earnings: adjusted for the costs of the Group's restructuring, earnings before interest, taxes, depreciation and amortization (adjusted Ebitda) are now expected to reach the upper end of the still specified range of 730 to 790 million euros. Before the publication of the current figures, the market was already expecting just under 780 million euros. The corresponding margin is expected to rise to at least 14 percent - instead of more than 13.8 percent as previously thought.

Industry expert Sebastian Kuenne of Canadian bank RBC also spoke of good results that were somewhat better than expected in all respects. The raised forecast was, however, expected. He referred to the company's recent statements on the weakening problems in the supply chains.

Like many other companies, Gea had suffered from a general shortage of components, especially last year. As a result, it was often not possible to deliver machines that were almost ready. This problem had continued to some extent in the spring of 2023, according to earlier statements by Group CEO Klebert. But in general, supply chains around the world are now running more smoothly again.

As a result, the Group was able to further increase its operating profit in the past quarter, even more significantly than sales: the figure rose by a good 24 percent to 172 million euros. According to the Group, this was mainly due to strong new business and the growing proportion of lucrative services. Below the line, Gea posted a profit of almost 82 million euros, an increase of a good 13 percent./tav/stw/mis