GEA Group J.P. Morgan European Capital Goods CEO Conference PENNYHILL PARK HOTEL, BAGSHOT, UK, JUNE 15TH 2017
GEA in a nutshell 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. Dairy Farming Dairy Processing Food Beverages Employees Market Cap Revenue Operating EBIT-Margin EUR 7.0 bn approx. 17,000 EUR 4.6bn (FY15) 11.7% (FY15) (May 17) (March 17) EUR 4.5bn (FY16) 10.8% (FY 16) 2 J.P. Morgan European Capital Goods CEO Conference
You are in touch with GEA every day Approximately one quarter of Dairy Farming Every fourth liter of processed milk human blood is comes from GEA and Processing Pharma handled by GEA production systems equipment Every third chicken More than one third nugget is produced of all polymer by GEA technology producer are using Food Chemical GEA Drying technology Around every third About one fourth of waste- process line for water sludge from petroleum instant coffee was Utilities and natural gas processing is installed by GEA dewatered by GEA high- Beverages performance decanters Approx. every second liter of beer is brewed Every second with the aid of systems container ship in the Marine and process solutions world sails with GEA from GEA marine equipment on board 3 J.P. Morgan European Capital Goods CEO Conference
Megatrends – understanding and taking advantage of opportunities URBANIZATION WITH GROWING GREATER FOOD SAFETY AND ENERGY SCARCITY AND MIDDLE CLASS QUALITY STRICTER ENVIRONMENTAL REGULATIONS Growing demand for processed Readiness of industry to invest Greater interest in efficient and food and medication more for greater process reliability resource-saving production processes GEA offers GEA offers GEA offers intelligent engineering processes components and process certified hygienic/aseptic processes for resource-economical technology for processed food, and components to meet the strict technologies, energy-saving ready meals, fortified lifestyle standards of the industry machines and processes, as well beverages and food, medications as heat recovery 4 J.P. Morgan European Capital Goods CEO Conference
GEA‘s business model Equipment Service • Standardized and partly customized equipment offering • Goods are generally manufactured in large quantity and through a high- volume production based on • Product, user and result- standardization and modularization oriented service offering covering whole plant life cycle Solutions • Highly customized and modularized solutions delivered in projects • The offering meets specific application or client needs 5 J.P. Morgan European Capital Goods CEO Conference
Successful strategic realignment over a period of 5 years Quo vadis, GEA? Which core In which growth Based on which Based on which businesses ? markets ? corporate structure ? initiatives ? The road ahead 2012 – 2013 2014 – 2016 2012 2013 2017 & after Fit for 2020 Completion of Target definition Strategic portfolio GEA 2020 Reorganization review Prioritization of OneGEA applications (in the Procurement & food sector) manufacturing, Control systems, Digitalization, IT architecture 6 J.P. Morgan European Capital Goods CEO Conference
ARTE framework as pillars for GEA’s strategy & value creation Target Footprint 2020 A pplications R egions T echnologies E xcellence Functional • Exploit market potential • Capture global growth • Strengthen innovation • Increase efficiency in target applications opportunities and technological in operations and leadership support functions • Align GEA-wide • Expand local presence • Foster cross-business • Reduce organizational application strategy • Coordinate regional and customer collaboration in R&D complexity approaches across approach GEA 7 J.P. Morgan European Capital Goods CEO Conference
Project “Fit for 2020”: From four stand -alone Segments to two integrated Business Areas Former organization New current organization Executive Board Executive Board BA BA Global Head- SSC FT ME RT PE Equipment Solutions Corp. quarter Center Support Support Support Support Regions Regions Regions Regions Regions / Countries • Stand-alone effective Segments driving • Bundling of Segments into two BAs own technologies and market approaches according to business model logic • Limited group perspective and role of the • “ OneGEA ” in countries as a platform for corporate center growth within regions / countries • Each Segment with individual go-to-market • Strengthening and streamlining of concepts and regional footprint global group functions • Increased efficiency and standardization in newly established Shared Service Center 8 J.P. Morgan European Capital Goods CEO Conference
Strategic projects to complete OneGEA Steering Systems Operational Excellence • • OneGEA Finance Manufacturing footprint • • Project Database Procurement Excellence • • HR software (Workday) OneEngineering • Common CRM (also enhances pipeline visibility) IT-Excellence Digitalization @ GEA • • IT Platform outsourcing (Platform as a Processes • Service) Products/services 9 J.P. Morgan European Capital Goods CEO Conference
In OneGEA, Application Centers (APCs) engineer solutions to meet specific local customer needs Customer Sales & Service Support Dairy Beverage Food Chemical Pharma Utilities Application Engineering BA Solutions BA Equipment Technologies & Components 10 J.P. Morgan European Capital Goods CEO Conference
Dairy: GEAs application overview Applications Market Milk Ice Cream Milk Fat Desserts & Cheese Dairy Milk Powders Nutritional Products Products Fermented Products Ingredients Formula Anhydrous Casein / Caseinate Infant Milk Formula Condensed Milk Dessert Ice Buttermilk Cream Cheese Buttermilk Powder Milk Fat (AMF) Powder Follow on / follow up Cream Frozen Yoghurt Dairy Spreads Concentrated Yoghurt Fresh Cheese Cheese Powder Coffee & Tea Whitener Formula Extended Ice Milk / Cream Ghee Desserts Hard Cheese Lactose Powder Fat Filled Milk Powder Growing up Milk Shelf Life (ESL) Milk MPC / MPI Powder Flavoured Milk Sherbet Sour Cream Butter Drinking Yoghurt Pasta Filata Cheese Skim Milk Powder Dietary Nutrition ( Milk Protein Concentrate / Isolate) Product Milk Mix Drinks Sorbet / Water Ice Sweet Cream Butter Rice Desserts Processed Cheese Yoghurt Powder Whole Milk Powder Clusters Whey & Milk Pasteurized / Fresh Milk Set Yoghurt Semi Hard Cheese Permeate Powder Sweetened WPC / WPI Powder Sour Cream Soft Cheese Condensed Milk ( Whey Protein Concentrate / Isolate ) Ultra Heat Sour Milk Drinks White Cheese Whey Powder Treated (UHT) Milk Whipped Cream Stirred Yoghurt 11 J.P. Morgan European Capital Goods CEO Conference
Dairy - Uses of milk powder and dairy ingredients • Infant formula • Yogurt • Drink milk • Other dairy products • Ice Cream • Chocolate • Biscuits/bakery • Sports nutrition • Therapeutic Food 12 J.P. Morgan European Capital Goods CEO Conference
GEA’s food expertise covers a wide range of applications and sub-applications Sub-APC: Coffee & Tea Frozen Food Bakery & Confectionary Oils, Starch & Ingr. APPLICATIONS Starch & Coffee Edible Starch Liquid Meats & Fruits & Ready Confectionary Other Food & Tea Oils Derivatives Ingredients Food Seafood Vegetables Meals Bakery & Snacks Applications Processed Chocolate Edible Oils Cultures Frozen Fruit Ready Meals Bread Instant Coffee Starch Sauces Pet Food Meat & Poultry Confectionary Processed Fish Frozen Prepared Sugar Baby Food Instant Tea Margarine Modified Starch Emulsifiers Dressings Cakes & Seafood Vegetables Salads Confectionary (Non-Dairy) Frozen Spreadable Starch Meat Frozen Baked Coffee Extract Fibers Mayonnaise Processed Gum Animal Feed Oils & Fats Derivatives Substitutes Goods Potatoes Dried Fruits & Flavors Tea Extract Ketchup Pastries Snack Bars Vegetables SUB Tomato Pastes Fruit Snacks & Cocoa Powder Proteins Biscuits APPLICATIONS & Purees Nuts X-in-1 Chips & Tortilla (Coffee/Tea; Raising Agents Spreads Pizza Chips Milk; Sugar) Sugars & Frozen Extruded Soups Sweeteners Desserts Snacks Pet Food Popcorn Ingredients Coffee / Tea Pretzels Whitener Large customer portfolios covering multiple applications GEA technologies used across multiple applications 13 J.P. Morgan European Capital Goods CEO Conference
The OneGEA setup for Food Applications should reflect the complexity of our customers’ business • Food industry dominated by large global producers • Leading producers covering a wide range of end- products • Application coverage across many types of raw materials and many possible processing methods Source: http://www.behindthebrands.org/ (2014) 14 J.P. Morgan European Capital Goods CEO Conference
Revenue by application 12 % 15 % Dairy Farming Dairy Processing 70 % w 20 % 15 % Food Revenue 2016: EUR 4,492 million Beverages Pharma/Chemical w 30 % 13 % Other Industries 25 % 15 J.P. Morgan European Capital Goods CEO Conference
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