GEA Group Aktiengesellschaft (ETR:G1A) executives used the company’s full-year 2025 earnings call to highlight a year of raised guidance, record profitability and cash generation, and what CEO Stefan Klebert called a “big year” marked by the company’s entry into Germany’s DAX index.
Klebert said GEA achieved all targets set after the company raised its 2025 outlook in summer, and in some cases exceeded them. He also pointed to a major contract signed in July with Baladna to build what he described as the world’s largest integrated dairy farm and milk powder facility in Algeria. The project was booked in the fourth quarter and split into two large orders, one each for Liquid & Powder Technologies and Farm Technologies, according to CFO Alexander Kocherscheidt.
Full-year 2025: Higher orders, record profitability, bigger dividend
Profitability improved further. EBITDA before restructuring expenses increased 8.4% year-over-year to €907 million, and the EBITDA margin rose to 16.5% from 15.4% in 2024, exceeding the raised guidance range of 16.2% to 16.4%, according to Klebert. Return on capital employed (ROCE) increased to 36.2%, within the guided range of 34% to 38%.
The company also emphasized the ongoing shift toward services. The service sales share rose to 40% from 38.9% in 2024. Klebert said service sales were €2.2 billion in 2025 and grew organically by 6.8%, describing service as a “real success story” with the service share rising from 32% in 2019 to 40% in 2025.
GEA plans to propose a dividend increase of €0.15 to €1.30 per share, Klebert said.
Sustainability and “Mission 30” growth drivers
Management also highlighted sustainability progress and “Mission 30,” GEA’s strategy framework after earlier hitting “Mission 26” targets ahead of schedule. Klebert said the company reduced Scope 1 and 2 emissions by 62% compared with 2019, surpassing its 2026 target of a 60% reduction a year early. He added that Scope 3 emissions were down 38% and that the company is “very well on track” toward its 2030 target.
On growth drivers, Klebert said the share of sustainable solution sales rose to 45.7% in 2025 from 31.6% in 2024, including 42.3% EU Taxonomy-aligned sales. He also cited progress in other strategic areas:
- New Food: Order intake “almost doubled” to roughly €70 million in 2025 after a weak 2024, though Klebert said development has been slower than expected. He noted improving customer discussions and cited Solar Foods’ pilot facility producing 160 tons of Solein annually, with the customer now designing a 6,400-ton industrial-scale facility; GEA has an exclusive agreement to negotiate process equipment supply.
- Growth verticals: While overall order intake grew close to 7% in 2025, the “growth verticals” grew more than 30%, led by automated milking systems and engineering solutions to decarbonize food and beverage, Klebert said.
- Digital: Digital sales were roughly €80 million in 2025, up from more than €70 million in 2024. GEA has connected 11,000 machines to its cloud, with a 2030 target of connecting more than 35,000 suitable machines.
- Vitality index: The share of sales from products less than five years old increased to 19.2% in 2025 from 16.4% in 2024.
Klebert also compared GEA’s recent performance to the broader German mechanical engineering sector, citing the German Engineering Federation’s data indicating industry orders fell by 6% on average per year over the last four years. Over the same period, he said GEA grew organic order intake by 5.5% per year.
Fourth quarter: Record order intake and strong cash conversion
Kocherscheidt said GEA “accelerated” in the fourth quarter, delivering record order intake, strong sales growth, and another margin increase. Order intake rose 14.4% to a record €1.8 billion, with organic growth of 17.9%. The quarter included nine large orders above €15 million totaling €414 million, up from seven totaling €230 million in the prior year quarter.
Organic sales grew 7.2% in the quarter, driven by both new machines and services. Organic new machine growth accelerated to 8.4%, while service grew 5.3% organically, extending what management described as a 21-quarter growth trajectory. EBITDA before restructuring expenses increased by €22 million to €261 million, and the margin rose 0.9 percentage points to 16.7%, driven by higher volume, slightly better gross margin, and stable operating costs.
Cash flow was a central highlight. Net working capital fell sharply to €175 million at year-end from €466 million at the end of Q3, driven by higher trade payables and contract liabilities tied to large order volume and lower inventories, the CFO said. The net working capital to sales ratio ended at 3.2%, which he called a record low and below the guided 7% to 9% corridor, though he noted the rolling four-quarter ratio was closer to the corridor except at year-end.
Free cash flow in Q4 reached €470 million, which Kocherscheidt described as a new quarterly record. He said 180% of EBITDA before restructuring was converted into free cash flow during the quarter. The company’s net debt position of €36 million at the end of Q3 swung to a net cash position of €379 million at year-end. Full-year free cash flow was €512 million and the cash conversion ratio was 59%, “very close” to GEA’s 2030 target of more than 60%, he said.
2026 outlook: Faster growth and incremental margin gains
For 2026, GEA guided for organic sales growth of 5% to 7%, an acceleration from 3.7% in 2025, supported by the invoiceable order backlog, service strength, and order intake momentum, Klebert said. The company ended 2025 with an order backlog of €3.3 billion, nearly 7% higher year-over-year, and said more than €2.7 billion—over 80%—is expected to convert into 2026 sales.
GEA guided for an EBITDA margin before restructuring expenses of 16.6% to 17.2% (up from 16.5% in 2025) and reiterated a ROCE range of 34% to 38%. Klebert said personnel costs are expected to rise around 3% globally and the company intends to offset inflation through pricing. He also said G&A should contribute positively due to expected savings from the new organization, while R&D spending is planned to increase slightly in 2026.
Management indicated the quarter-by-quarter pattern could resemble 2025, with organic sales growth below the 5% to 7% range in Q1 and acceleration later in the year, given the timing of large orders booked in the second half of 2025, particularly Q4.
On the call, Klebert also addressed military confrontations in the Middle East, saying the events are not expected to have a material direct impact on business. He said the region accounted for roughly 3% of 2025 order intake, GEA has no production sites or important suppliers there, and had around 70 employees in the region at year-end. He added that indirect effects on supply chains, oil prices, freight costs, and delays are harder to assess but are expected to be limited.
GEA also discussed its new organizational structure effective Jan. 1, 2026, including a smaller executive board and elimination of the regional matrix organization. Klebert said the changes are intended to speed decision-making, bring the company closer to customers, and reduce costs. The company said it expects 2026 to be the last year it reports EBITDA before restructuring expenses, with Kocherscheidt stating restructuring expenses are expected to decline versus 2025 and that the company does not expect larger multi-year projects that would continue restructuring charges beyond that.
During Q&A, executives said they remain open to “meaningful” M&A if pricing is right, while also noting there is “no need” to pursue deals that are too risky. Klebert added that if acquisitions do not materialize for an extended period, the company could consider share buybacks again.
About GEA Group Aktiengesellschaft (ETR:G1A)
GEA Group Aktiengesellschaft engages in the development and production of systems and components to the food, beverage, and pharmaceutical industries. It operates through Separation & Flow Technologies, Liquid & Power Technologies, Food & Health Technologies, Farm Technologies, and Heating & Refrigeration Technologies segments. The Separation & Flow Technologies segment manufacture process-related components and machinery including notably separators, decanters, homogenizers, valves, and pumps.
