GEA's Second Quarter Shows Continued Demand Momentum Across Most End Markets

Orders for farming technology equipment, as well as strength across most other end markets, fed GEA's group demand in the second quarter, with operating leverage and restructuring measures supporting the company's EBITDA before restructuring margin. Group book/bill remained above 1 times at 1.1, lower than 1.37 in the first quarter, but still indicating strong demand. Current favorable order demand drove 9% organic revenue, while EBITDA before restructuring margin came in 10 basis points lower than last year at 13.2%. We consider this a solid result considering inflationary pressures across industrials. Operating leverage, service revenue growth, and the company's efforts to rightsize its global manufacturing footprint were likely positive margin offsets to the cost increases. We maintain our wide moat rating. The shares offer attractive upside against our EUR 43 per-share fair value estimate.