E_mg_GB_03_vorne-29_3_04

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PERFORMANCE OF THE SUBGROUPS
The performance of the subgroups varied in 2003. While the industrial plant engineering companies
incurred heavy losses, the performance of GEA and Dynamit Nobel was relatively robust.
Overall, the subgroups’ performance was hit by the continued ailing state of the economy and
the adverse currency effects of the strong euro (especially against the U.S. dollar).
Robust performance by GEA despite the impact of the economy and exchange rates
GEA recorded lower new orders and sales in 2003. The main reason for this was the movements in
the euro exchange rate against the currencies of major export markets. This was particularly true of
the U.S. dollar and dollar-bloc currencies. Outside the United States, GEA’s sales grew by approximately
five percent.
At the beginning of the year under review, the structural organization of the GEA Group was streamlined
further and the liquid-processing business was split up. Since then, the components business
has been managed by the Process-Engineering Components division, and liquid engineering has been
run by the Process Engineering division.
The new Process Engineering Components division consists of the former Thermal Technology
division, the components business of the former Liquid Processing division, and the homogenizer
business. As expected, levels of new orders and sales declined slightly on a comparable basis, as
the secondary energy market – which had been extraordinarily strong in previous years – weakened.
By contrast, business in plate heat exchangers and homogenizers grew encouragingly.
The Energy Technology business, particularly in the field of power plant cooling, continued to contract
as expected. This was mainly due to the weakness of the U.S. market. Following the process
of consolidation among competitors, the pressure on prices – even in growth markets – intensified
significantly. The Energy Technology division achieved a few notable successes in southern Europe.
The process cooler business grew despite the weak U.S. market. This was due, among other things,
to the high levels of capital spending on natural gas, which is becoming increasingly important in
the global mix of primary fossil fuels. The Energy Technology division managed to achieve strong
double-digit growth in its services business.
The Air Treatment division, which only operates in Europe, had to defend its market position in a
chronically difficult market environment. Lack of activity in commercial building construction caused
volumes to contract in Austria and, especially, Germany. By contrast, the Air Treatment business
achieved growth in France and Belgium. The central and east European marketing companies offered
a mixed picture. While business in Hungary and Poland contracted slightly, there were positive
signs in Croatia, Lithuania, Slovakia, Slovenia, the Czech Republic, and Ukraine. The announced
restructuring of production capacities was completed by the end of the year.