GEA Earnings: Order Intake Below Midcycle Levels, but Margins and Revenue Growth Exceed Expectations

The quarter was a mixed bag for GEA as organic growth was 2.4%, below the 3%-4% rate we would expect its market to grow at on a midcycle level. The company performed well in other areas, however. Organic revenue grew at 9.4% with especially strong growth in Latin America and the chemical segment. Management confirmed it expects 2023 organic revenue growth above 8%. As we discussed earlier in the year, guidance looks achievable given the usually high degree of visibility that the company's high order backlog is providing for 2023 revenue. Order backlog rose 2.9% from the previous year, a continued strength for the company providing increased visibility for the second half of 2023 and early 2024. While the book-to-bill ratio fell to 1.03 from 1.1 a year ago, it remains above 1.0, indicating strong demand.