A High Order Backlog Level Gives GEA High Visibility in 2023 Revenue

Strong order growth and pricing supported GEA's nearly 9% organic revenue growth for 2022, well above the 3%-4% rate we would expect its market to grow at on a midcycle level. Notable 2022 revenue drivers included automated milking equipment, new food machinery (for alternative proteins), and service revenue. The business also saw several large orders during the year. Generally, this is a signal that the market is closer to peak cycle with larger orders contributing to a higher portion of the order book during peak times. For 2023, management expects organic revenue growth above 5%. Although this figure would also be above the average midcycle level, the guidance looks achievable given the usually high degree of visibility that the company's high order backlog is providing for 2023 revenue. Roughly three quarters of the 2023 expected machinery revenue is already in the order backlog. We maintain our wide moat rating. Shares are trading in line with our EUR 43 fair value estimate.