GEA on Roadshows and Conferences Preliminary Results Q4 2015 - PowerPoint PPT Presentation

GEA on Roadshows and Conferences Preliminary Results Q4 2015 DÜSSELDORF, FEBRUARY 4TH, 2016

Disclaimer This presentation contains forward-looking statements. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. Statements with respect to the future are characterized by the use of words such as "expect", "intend", "plan", "anticipate", "believe", "estimate" and similar terms. 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 materially from the estimates given here. Factors that could cause such a divergence include, inter alia, 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. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. We undertake no obligation to update or revise any forward-looking statements. Due to rounding, the sum of percentages of order intake and sales by region as well as by customer industry may vary from 100%. GEA on Roadshows and Conferences - prelim. Q4 2015 2

Table of Contents GEA Equity Story Pages 4 - 27 Q4 2015 Preliminary Results Presentation Pages 29 - 55 Back-ups Pages 57 - 66 Historical Key Figures GEA Group & BAs Pages 67 - 77 ADR Information Page 78 GEA on Roadshows and Conferences - prelim. Q4 2015 3

GEA in summary 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 Sales Employees Market Cap Operating EBIT Margin EUR 4.6bn (FY15) 11.7% (FY15) ~17,500 (Dec 15) EUR 7.2bn (Dec 15) GEA on Roadshows and Conferences - prelim. Q4 2015 4

GEA in summary You are in touch with food processed by GEA equipment every day … Every 4 th liter Every 3 rd chicken Every 2 nd liter of Every 3 rd instant of milk processed is nugget is processed beer is brewed using coffee line has been handled by GEA with GEA GEA equipment built by GEA . equipment. equipment. and solutions. … we are all this and more every day. GEA on Roadshows and Conferences - prelim. Q4 2015 5

GEA’s food exposure 75% - 80% Sales exposure 2020: No 100% food exposure due to multi-purpose 75% - 80% food functionality of our products: Non- Food Food GEA on Roadshows and Conferences - prelim. Q4 2015 6

What we like about the food industry (1): Steady growth rates due to continuing urbanization Today the world ’ s Urbanization population lives Illustrative Developed economies (B) 300 KM 1.0 1.1 50% in the cities necessary agricultural 2010 2050 supply area 50% Emerging markets Shanghai in the countryside 5.3 (B) By the year 2050 the 2.6 world ’ s population will live 75% 2010 2050 Germany in the cities ~ 200 million people moving into cities p.a. consuming ever more 25% processed and convenience food in the countryside Source: United Nations; Euromonitor; The Guardian; Oxford Economics; Documentation “Wie wird die Stadt satt” (ARD 24.09.2014) GEA on Roadshows and Conferences - prelim. Q4 2015 7

What we like about the food industry (2): Stable consumer spending also in tough times Economically good times Economically difficult times GEA on Roadshows and Conferences - prelim. Q4 2015 8

What we like about the food industry (3): Zero failure tolerance a significant entry barrier If equipment fails in the food industry, the end- consumer’s health could be at risk Would you as a food producer save money on a machine risking a food scandal if the machine is not working properly? GEA on Roadshows and Conferences - prelim. Q4 2015 9

What we like about the food industry (4): Price apparently not the most decisive purchase criterion Ranking of key buying criterion according to GEA customer satisfaction survey, September 2014 1 Machine Quality and Performance 71% Price 30% Quality of After-Sales Service 23% … … … … … … For GEA ’ s customers, machine quality and performance is by far #1 buying criterion 1 Stratified sample size n=3274, external poll GEA on Roadshows and Conferences - prelim. Q4 2015 10

What we like about the food industry (5): Continuous launch of new products to stimulate demand ~ 3,500 new products p.a. entering ~ 2,000 new food products p.a. the US food market in German supermarkets alone Additionally, higher resource efficiency (e.g. power, water usage) is a major competitive advantage for an equipment supplier Source: Frankfurter Allgemeine Zeitung (26.06.2014) GEA on Roadshows and Conferences - prelim. Q4 2015 11

What we like about the food industry (6): GEA’s client base is highly fragmented Cumulative Revenue Share 45% ~ 30% of the Top 50 customers 40% are already coming from 35% ~32% Emerging Markets 30% 25% 20% ~12% 15% 10% ~2% 5% 0% Top Customer Top 10 Top 50 Top 100 Top 150 Top 200 Number of customers GEA on Roadshows and Conferences - prelim. Q4 2015 12

Local Emerging Markets food producers grow faster than multinationals Sales CAGR FY 2010-13 Selection of local GEA customers in Emerging Markets 11% Local EM food producers 1 1/3 of local players are not yet GEA customers 1 32% GEA customers 68% 1 65 listed local food players in EM with sales > EUR 1bn, in total sales of EUR 210bn in FY 2013 ; 11% CAGR based on FY 2010 – FY 2013 sales in EUR Source: Thomson Reuters GEA on Roadshows and Conferences - prelim. Q4 2015 13

Our vision “GEA 2020” : To be the first choice of our customers GEA to become 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 on Roadshows and Conferences - prelim. Q4 2015 14

ARTE framework as pillars for GEA ’ s strategy 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 application strategy • Foster cross-business • Reduce organizational • Coordinate regional and customer colla-boration in R&D complexity approaches across approach GEA GEA on Roadshows and Conferences - prelim. Q4 2015 15

Project “Fit for 2020”: From four stand-alone Segments to two integrated Business Areas Former organization New current organization Executive Board Executive Board Equipment Solutions Head- Global SSC FT ME RT PE BA BA 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 • “One GEA” 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 GEA on Roadshows and Conferences - prelim. Q4 2015 16

New current organizational set- up (“Fit for 2020”) reflects all elements of ARTE strategy Executive Board A pplications R egions T echnologies Functional E xcellence Equipment Business Area Solutions Business Area Product Engineering & Development T Technology Centers T Product Management & Sales Application Centers A Supply Chain & Production Equipment Service Solutions Service North Latin Western E. DACH & Nordics, UK/IE, Asia-Pacific R America America & MEA Eastern E. & BeNeLux T E Global Corporate Center (GCC) E Shared Services Center (SCC) GEA on Roadshows and Conferences - prelim. Q4 2015 17

Financial Targets for FY 2017 - FY 2020: Operating EBIT Margin: 13% to 16% GEA has gradually managed up Operating EBIT Margin to > 11% Max. 16% Operating EBIT-Margin (LTM) Upside:  Service  Op. leverage * 10.5% 10.3% 10.6% 11.4% 11.7%  Underperforming unit Min. 13% 8.8% 8.4% 6.8% 2008 2009 2010 2011 2012 2013 2014 2015 2 1 2017 12 13 2020 * In FY 2015 € 23m out of the guided € 125m cost savings until 2017 were already achieved GEA on Roadshows and Conferences - prelim. Q4 2015 18

Financial Targets FY 2014 - 2020 CAGR Organic Sales Growth FY 2014 - FY 2020: 4% to 6% FY 2017 - 2020 Service to Sales Ratio: ~30% Operating EBIT Margin: 13% to 16% Working Capital to Sales Ratio: 10% to 12% Capex to Sales Ratio: 1.5% to 2.0% Cash Flow Driver Margin: 12% to 15% ROCE: 20% to 25% Net Effective Tax Rate: 24% GEA on Roadshows and Conferences - prelim. Q4 2015 19