FRANKFURT (Reuters) - German food processing machinery company GEA Group, which is facing calls for change from activist investor Elliott, scrapped its mid-term targets and said operating income would decline this year.
Stefan Klebert is due to take over from long-serving GEA chief executive Juerg Oleas this month after calls from Elliott for a change in strategy at the maker of machines used to make milk products, instant coffee and chicken nuggets.
GEA said its 2019 operating earnings before interest, taxes, depreciation and amortization (EBITDA) would decline to between 440 million and 480 million euros ($500-$546 million) down from an expected 515-520 million euros for 2018.
It said in a statement on Wednesday that deteriorating macroeconomic conditions, increased price pressure as well as rising personnel and IT infrastructure costs were to blame.
“In view of these developments, GEA considers its mid-term guidance from March 2018 no longer valid,” GEA said.
In March last year, it had predicting annual revenue growth of 3.5-4.5 percent through 2022, among other goals.
GEA is struggling to win back investor support after cutting its profit targets in 2016 and 2017.
Reporting by Ludwig Burger; Editing by Alexander Smith