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GEA Group Aktiengesellschaft
Oberhausen, April 16, 2015
Check against delivery.
Annual General Meeting Fiscal Year 2014
engineering for a better world
Agenda
2 Annual General Meeting Fiscal Year 2014
1 Highlights FY 2014
2 Financial Year 2014
3 Agenda
5 Outlook FY 2015
4 GEA 2020
engineering for a better world
GEA achieved FY 2014 targets
3 Annual General Meeting Fiscal Year 2014
Revenue (EURm)
Operating EBITDA (EURm)
Cash Flow Driver (EURm)
414 406
GJ 2013 GJ 2014
530 596 591
-5
FY 2013 organicchange
FY 2014adjusted
FX effect FY 2014reported
D +5,6%
9.6% 9.0%
4,320 4,562 4,516
-47
FY 2013 organicchange
FY 2014adjusted
FX effect FY 2014reported
D +12%
Organic sales growth:
approximately 5%
Target
Operating EBITDA:
EUR 550-590m
Target
Cash Flow Driver
Margin: 9.0% - 9.5%
Target
engineering for a better world
Highlights 2014 (1/2)
4 Annual General Meeting Fiscal Year 2014
• Organic sales growth +5.6% yoy
• Operating margins at new record levels
Strong Operating Results
• Turn from net debt position in 2013 into net cash position of EUR 900m
• Debt reduction of around EUR 500m until end of January 2015
• Improvement of credit rating to now “Baa2” (Moody’s) and “BBB” (Fitch), both with “stable outlook”
Sound Improvement of Financial Situation
• Change in dividend policy by raising payout ratio to a range of 40% to 50% of net income
• Priority on bolt-on M&A following clear criteria and strategic vision
New Capital Allocation Plans
engineering for a better world
Highlights 2014 (2/2)
5 Annual General Meeting Fiscal Year 2014
• GEA to be the first choice for our customers in the relevant industry
• Sales exposure 2020: 75% to 80% coming from Food Industry
• 4% to 6% CAGR organic sales growth (FY 2014 – FY 2020)
• 13% to 16% Operating EBIT-Margin (FY 2017 – FY 2020)
Strategy “GEA 2020” with clear growth and profitability targets
• Purchase agreement signed in April 2014 with economic effect to January 1, 2014
• Based on Enterprise Value of approx. EUR 1.3bn (around 11x EV/EBIT)
• Conclusion of sale in October 2014
• Cash proceeds of approx. EUR 1.1bn
Sale of Segment Heat Exchangers concluded
• Cost savings of at least EUR 100m p.a.
• New organizational set-up offers further potential to increase efficiency
Future organizational set-up “Fit for 2020”
engineering for a better world
Agenda
6 Annual General Meeting Fiscal Year 2014
1 Highlights FY 2014
2 Financial Year 2014
3 Agenda
5 Outlook FY 2015
4 GEA 2020
engineering for a better world
Revenue*
7 Annual General Meeting Fiscal Year 2014
(EUR million)
4,320 4,516
2013 2014
D +4.5%
* only continued operations
Organic revenue growth +5.6%
All segments on record level
engineering for a better world
* only continued operations
Revenue* by customer industry
8 Annual General Meeting Fiscal Year 2014
14%
24%
22%
12%
12%
16%
Dairy Farming
Dairy Processing
Food
Beverages
Pharma/Chemical
Other Industries
Revenue 2014
EUR 4,516 million
Food and
Beverages:
72%
Others:
28%
engineering for a better world
Regional revenue1 split
9 Annual General Meeting Fiscal Year 2014
37%
25%
17%
8%
6%
3% 3%
Western Europe
Asia/Pacific
North America
Eastern Europe
Latin America
Middle East
Africa
Revenue 2014
4,516 Mio. EUR
Emerging markets2
exposure:
37% D abs. org.: -3%*)
Top-3-Countries
1 only continued operations; 2 according to the definition of emerging/developing economies by International Monetary Funddenen 17 für GEA relevant sind
China
9% D abs. org.: -2%
USA
16% D abs. org.: +6%
Germany
9% D abs. org.: +12%
engineering for a better world
Development service business*
10 Annual General Meeting Fiscal Year 2014
1,153 1,225
2013 2014
D +6.3%
* only continued operations
Change in service revenue FY 2014 yoy: +7.6% (organic) to a total of EUR 1,225 million
Share of service revenue FY 2014: 27.1% (2013: 26.7%)
(EUR million)
engineering for a better world
Operating EBITDA*
11 Annual General Meeting Fiscal Year 2014
(EUR million)
530 591
2013 2014
D +11.4%
* only continued operations and before purchase price allocation and non-recurring items
Improvement of 11.4% particularly due to volume effects and efficiency increase
Very strong growth at GEA Farm Technologies and GEA Refrigeration Technologies
engineering for a better world
Development operating EBITDA-Margin1
12 Annual General Meeting Fiscal Year 2014
2,963 3,828 4,142 4,320
4,516
10.5%
12.3% 11.9% 12.3% 13.1%
0%
2%
4%
6%
8%
10%
12%
14%
0
1.000
2.000
3.000
4.000
5.000
6.000
2010 2011 2012 2013 2014
Revenue Operating EBITDA-Margin
2
1 only continued operations; 2 before purchase price allocation and restructuring; 3 before purchase price allocation ; 4 before purchase price allocation and non-recurring items
(EUR million) (% of Revenue)
3 4 4 4
6,000
5,000
4,000
3,000
2,000
1,000
engineering for a better world
Cash Flow Driver Development*
13 Annual General Meeting Fiscal Year 2014
(EUR million)
* only continued operations
GEA has a strong focus on liquidity generation
Cash Flow Driver to revenue: 9.0% - before non-recurring items 10.1%
540
405
-94
-41
Cash Flow
Driver
Δ average
Working Capital
Capex EBITDA
engineering for a better world 14 Annual General Meeting Fiscal Year 2014
Net Liquidity Reconciliation
1 Net after payment of transaction costs; 2 Including fixed deposits with a remaining period ≤ 1 year (EUR 200 million)
Net Cash 12/31/2014 2
Proceeds from Proceeds from HX-Sale 1
Dividend (Div)
Delta Working Capital
EBITDA
Net Debt 31.12.2013 w/o HX
Elimination Net Cash Position HX
Net Debt 12/31/2013 incl. HX
Net Cash bef. DOP, M&A and Dividend
Discontinued Operations (DOP)
Capex
Effects from Acquisitions (M&A)
Taxes / Interests / Others
D +324
Cash generation LTM: EUR ~324m (EUR million)
903.7
1,030.1
-115.5
-13.1
35.9
-58.9
-93.8
-109.3
-287.8
-63.4
-33.7
539.9
-178.6
engineering for a better world 15 Annual General Meeting Fiscal Year 2014
Comparison of net assets (2014 vs. 2013)*
* Amounts adjusted due to first time classification of a business area as discontinued operation and due to change in accounting policy for employee benefits
1,606
6
3,887 3,117
2,578 2,715
01.01.2013 01.01.2014
Non-current assets
Current assets
Of which assets
held for sale
6,465 5,832
Equity
Current liabilities
Of which debts held for
sale
6,465 5,832
Non-current
liabilities
(EUR million) (EUR million)
620 0
2,293 1,746
1,856 1,558
2,316 2,527
01.01.2013 01.01.2014 12/31/2013 12/31/2013 12/31/2014 12/31/2014
Assets Equity and liabilites
engineering for a better world
Development Equity and Goodwill ratio
16 Annual General Meeting Fiscal Year 2014
(in %)
1,868 2,164 2,167 2,316 2,527
36,3% 34.8% 33.7% 35.8% 43.3%
74.7% 69.1% 66.5%
98.1% 99.5% 100.0%
0%
20%
40%
60%
80%
100%
0
1.000
2.000
3.000
2010 2011 2012 2013 2014
Equity Equity ratio
Goodwill +/- deferred taxes to equity (HX in DOP) Goodwill +/- deferred taxes to equity (incl. HX)
3,000
2,000
1,000
(EUR million) Heat Exchangers reported
under discontinued operations
engineering for a better world
Employees1 by regions
17 Annual General Meeting Fiscal Year 2014
62% 18%
11% 4% 2%
2%
0%
Western Europe
Asia/Pacific
North America
Eastern Europe
Latin America
Middle East
Africa
Employees
2014
18,243
+3%
Top-3-Countries
USA
1,569
China
1,552
Germany
5,868
* Full-time equivalents (only consolidated entities and continued operations) as of reporting date, excluding vocational trainees and inactive employment contracts
engineering for a better world 18 Annual General Meeting Fiscal Year 2014
GEA Share 2014 appreciably better than benchmark
Dez. Jan. Feb. Mrz. Apr. Mai. Jun. Jul. Aug. Sep. Okt. Nov. Dez. Jan. Feb. Mrz.
80%
90%
100%
110%
120%
130%
140%
GEA Group MDAX STOXX Europe TMI Industrial Engineering
2014 2015
Total Shareholder Return (TSR) 2014 at +8%
Feb Jan Mar Apr May Jun Jul Aug Sep Oct Nov Dec Feb Jan Mar Dec
engineering for a better world 19 Annual General Meeting Fiscal Year 2014
GEA* vs. STOXX® Europe TMI Industrial Engineering
* Balance sheet date (12/31/2014)
Market capitalization Market capitalization incl. dividends
Last 3 months percentage points +6 +6
Last 6 months percentage points +8 +8
Last 12 months percentage points +7 +9
Last 24 months percentage points +39 +45
Last 36 months percentage points +40 +52
engineering for a better world 20 Annual General Meeting Fiscal Year 2014
Dividend payments1 and proposal
36.8
73.5 55.4
73.7
101.1 105.9 115.5
134.7
0.20
0.40
0.30
0.40
0.55 0.55 0.60
0.70
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0
20
40
60
80
100
120
140
160
2008 2009 2010 2011 2012 2013 2014 2015
#REF! #REF!
2
1 Dividend payments respectively for the preceding fiscal year; 2 On basis of dividend proposal
(EUR million) (in EUR)
0.7
0.6
0.5
0.4
0.3
0.2
0.1
engineering for a better world
Agenda
21 Annual General Meeting Fiscal Year 2014
1 Highlights FY 2014
2 Financial Year 2014
3 Agenda
5 Outlook FY 2015
4 GEA 2020
engineering for a better world
Annual General Meeting: Agenda (1/2)
22 Annual General Meeting Fiscal Year 2014
1. Annual Financial Statements, Management Report & Report of the Supervisory Board
2. Appropriation of Net Earnings
3. Ratification of the Acts of the Executive Board in the 2013 Fiscal Year
4. Ratification of the Acts of the Supervisory Board in the 2013 Fiscal Year
5. Election of the Auditor for the 2014 Fiscal Year
engineering for a better world
9. Authorization to acquire and use treasury stock as well as exclusion of the right to tender and of the subscription right
7. Creation of a new Authorized Capital III granting authorization to exclude shareholders‘ subscription rights and corresponding amendment to the Articles of Association
8. Resolution on the authorization to issue convertible or warrant bonds, profit participation rights or income bonds, the creation of contingent capital as well as the respective amendment to the Articles of Association while simultaneously cancelling the respective authorization given in 2010 and the contingent capital in accordance with s. 4 para. 5 of the Articles of Association
Annual General Meeting: Agenda (2/2)
Annual General Meeting Fiscal Year 2014 23
6. Cancellation of Authorized Capital II in accordance with s. 4 para. 4 of the Articles of Association, creation of a new Authorized Capital II and authorization to decide on the exclusion of shareholders‘ subscription rights, and the corresponding amendment to s. 4 para. 4 of the Articles of Association
engineering for a better world
Agenda
24 Annual General Meeting Fiscal Year 2014
1 Highlights FY 2014
2 Financial Year 2014
3 Agenda
5 Outlook FY 2015
4 GEA 2020
engineering for a better world
GEA is a global leader in equipment and process technology providing innovative solutions
for smart food processing and for a more efficient use of energy resources.
GEA in summary (1/2)
25 Annual General Meeting Fiscal Year 2014
Dairy Farming Dairy Processing Beverages Food
Revenue
EUR 4.5bn (FY14)
SALES
Operating EBIT Margin
11.4% (FY14)
Employees
>18,000 (Dec14)
Market Cap
>EUR 9.0bn (Apr15)
engineering for a better world
You are in touch with food processed by GEA equipment every day…
GEA in summary (2/2)
26 Annual General Meeting Fiscal Year 2014
…we are all this and more every day!
Every 4th liter
of milk you are
consuming has been
processed through
GEA equipment.
Every 3rd instant
coffee production
line around the globe
has been built by
GEA.
Every 3rd chicken
nugget you are
eating has been
processed by our
equipment.
engineering for a better world
GEA successfully accomplished former reorganizations
27 Annual General Meeting Fiscal Year 2014
1 mg acquired GEA in 1999; 2 mg and GEA merged in 2005 for legal and tax reasons; 3 the portfolio of GEA Group 2009 was similar to pre 1999 GEA “old”
2003 – 2004 Focus on engineering
2006 – 2008 Focus on specialty
mechanical engineering
2009 – 2010 Bundling Business in
Segments by Technology
GEA Group3
FS
-Segm
ent
FT
-Se
gm
en
t
HX
-Se
gm
en
t
PE
-Se
gm
en
t
ME
-Se
gm
en
t
RT
-Se
gm
en
t
mg technologies1
mg
en
gin
ee
rin
g
mg c
hem
ical
gro
up
GEA Group2
A-D
ivis
ion
R-D
ivis
ion
C-D
ivis
ion
M-D
ivis
ion
D-D
ivis
ion
E-D
ivis
ion
H-D
ivis
ion
P-D
ivis
ion
B-D
ivis
ion
Pla
nt
Eng.
Oth
er
firm
s
• Divestiture of
mg chemical group
• Dynamit Nobel
• solvadis
• Reorganization into 5 distinct
segments and 31 business units
• Elimination of overlaps
• Divestiture of Plant Engineering
and Closure of Zinc Smelter
• Lurgi
• Lurgi Lentjes
• Zimmer
• RuhrZink
engineering for a better world
Where are we
driving GEA?
The steps of GEA’s strategic transformation
Divestment of HX Segment
Annual General Meeting Fiscal Year 2014 28
With which core
businesses?
With focus on
which growth
areas?
In which efficient
organizational
setup?
2012
GEA long-term
strategic
direction
2012 -2013
GEA strategic
portfolio review
2013
“GEA 2020”
target footprint
2014: Concept
2015: Implementation
“Fit for 2020”
reorganization
engineering for a better world
GEA’s long-term strategic direction
29 Annual General Meeting Fiscal Year 2014
Pursue clear technology and market leadership
Further develop food processing focus and solutions for demanding
production processes
Become global by getting closer to our customers
Use of portfolio management as tool to leverage strengths and allocate resources
Build an organization and capabilities to support strategic vision
Drive sustainable value creation
engineering for a better world
GEA wants to serve markets with these criteria
30 Annual General Meeting Fiscal Year 2014
Customer industry willing to
pay a premium for process
quality and reliability
Limited project risk profile,
maximum project duration
up to 2 years
Scope of supply limited
to elements directly
controllable by us
engineering for a better world
Source: Frankfurter Allgemeine Zeitung (06/26/2014)
~ 3,500 new products p.a. entering
the US food market
~ 2,000 new food products p.a.
in German supermarkets alone
Continuous launch of new products to stimulate demand
31 Annual General Meeting Fiscal Year 2014
Additionally, higher resource efficiency (e.g. power, water usage) is a major
competitive advantage for an equipment supplier
engineering for a better world
Our vision “GEA 2020”: Be the first choice of customers
32 Annual General Meeting Fiscal Year 2014
the globally leading engineering group to provide smart
solutions to sophisticated process industries.
In particular we always want to be the first choice
of our customers in the relevant food industry.
Our ARTE framework defines our strategy how to reach
the target footprint “GEA 2020”
GEA to become
engineering for a better world
ARTE framework as pillars for GEA’s strategy
Regions Technologies Functional Excellence
• Exploit market
potential in target
applications
• Align GEA-wide
application strategy
and customer
approach
• Capture global
growth opportunities
• Expand local
presence
• Coordinate regional
approaches across
GEA
• Strengthen
innovation and
technological
leadership
• Foster cross-
business colla-
boration in R&D
• Increase efficiency
in operations and
support functions
• Reduce
organizational
complexity
Target Footprint 2020
Applications
• Exploit market
potential in target
applications
• Align GEA-wide
application strategy
and customer
approach
Annual General Meeting Fiscal Year 2014 33
engineering for a better world
Applications in line with customer industries
34 Annual General Meeting Fiscal Year 2014
A R T E
Other Industries Pharma Chemical
Beverages Dairy Processing Dairy Farming Food
engineering for a better world
Regions & Countries: Global coverage ensured
35 Annual General Meeting Fiscal Year 2014
R-APAC
R-NAM
R-DACH&EE
R-NCE
R-LAM
R-WE&MEA
Cluster Clustered
White spot
R T E A
engineering for a better world
Technologies and Innovations
36 Annual General Meeting Fiscal Year 2014
A R T E
engineering for a better world
From Segments to two integrated Business Areas
37 Annual General Meeting Fiscal Year 2014
Current Organization Future Blueprint
Executive Board Executive Board
Head-
quarter FT
Regions
Support
ME
Regions
Support
RT
Regions
Support
PE
Regions
Support
Global Corp.
Center
SSC Equipment BA
Solutions BA
Regions / Countries
• Stand-alone effective Segments driving own
technologies and market approaches
• Limited group perspective and role of the
corporate center
• Each Segment with individual go-to-market
concepts and regional footprint
• Bundling of Segments into two BAs
according to business model logic
• “One GEA” in countries as a platform for
growth within regions / countries
• Strengthening and streamlining of
global group functions
• Increased efficiency and standardization in
newly established Shared Service Center
A R T E
engineering for a better world
Agenda
39 Annual General Meeting Fiscal Year 2014
1 Highlights FY 2014
2 Financial Year 2014
3 Agenda
5 Outlook FY 2015
4 GEA 2020
engineering for a better world 40 Annual General Meeting Fiscal Year 2014
Anuga FoodTec 2015
• Two Dairy Technology Awards
GEAs ecoforce decanter family
GEA Provident Flow Analysis
• Gold medal International Foodtec
GEA MultiDrum
engineering for a better world 41 Annual General Meeting Fiscal Year 2014
GEA and SAP collaborate in Industry 4.0 project
• Condition monitoring of machines
• Predictive maintenance, to better plan timing of service
• Introduced on CeBIT 2015
Customer
engineering for a better world 42 Annual General Meeting Fiscal Year 2014
Fully automatic milking stall module
• Milking stall module – all components integrated in module located beside every cow
• Particularly user friendly service module
• Optimization of milk transport
• Dipping function for best hygiene
engineering for a better world
Provided that there is no decline in global economic growth and a constant currency
basis compared to FY 2014, and without taking into account the impact of acquisitions
and one-off effects, we are aiming in FY 2015 for:
Guidance FY 2015
Annual General Meeting Fiscal Year 2014 43
Sales
moderate organic
growth
Operating EBITDA
(EURm)
580 - 620
Cash Flow Driver Margin
9.0% - 9.5%
This forecast does not yet take into account first savings generated in connection with the
reorganization of the Group. Against this backdrop, GEA will submit a more detailed outlook on the
Company’s business progress together with the first quarter report on May 11, 2015.
engineering for a better world
Sales
&
Service
Operations
&
Engineering
General
&
Administration
“Fit for 2020” Saving Targets updated
• Functional bundling in countries
• Delayering/Increased span of control
• Shared Service Center
• Optimized production network
• Leverage outsourcing
• Increase span of control
• Delayering/Increased span of control
• Sales effectiveness & synergies
• Bundling of after sales
Main Levers Saving Target
Annual General Meeting Fiscal Year 2014 44
Cost
Savings
at least
EUR
100m p.a.
Personnel
approx.
1,000 FTE
Updated
Saving Target
Cost
Savings
at least
EUR
125m p.a.
Personnel
approx.
1,450 FTE
engineering for a better world
951 999
Q1 2014 Q1 2015
Preliminary Order Intake* and Revenue* Q1 2015
45 Annual General Meeting Fiscal Year 2014
1,024 1,113
Q1 2014 Q1 2015
Book-to-bill ratio 1.1
Order Intake Revenue
BA E BA E BA E BA E
BA S BA S BA S BA S
* only continued operations
(EUR million)
D +8.7%
Organic:
D 2.7 %
D +5.1%
Organic:
D -1,6 %
engineering for a better world
Financial Calendar
46 Annual General Meeting Fiscal Year 2014
2 0 1 5 May 11, 2015 Interim Report Q1 2015 Düsseldorf
Jul 29, 2015 Interim Report Q2 2015 Düsseldorf
Oct 27, 2015 Interim Report Q3 2015 Düsseldorf
engineering for a better world 47 Annual General Meeting Fiscal Year 2014
Forward-looking statements are based on our current assumptions and forecasts. These
statements naturally entail risks and uncertainties, which may cause the actual results of
operations, financial position or performance to diverge significantly from the estimates
given here. Factors that could cause such a divergence include changes in the economic
and business environment, fluctuations in exchange rates and interest rates, launches of
competing products, poor acceptance of new products or services, and changes in
business strategy. We are under no obligation to update forward-looking statements.
Disclaimer
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