Presentation German Investment Seminar 2015 New York, January 12th, 2014 GEA Group Aktiengesellschaft
Disclaimer 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. Due to rounding, the sum of percentages of order intake and sales by region as well as by customer industry may vary from 100%. 2 GEA - German Investment Seminar January 2015 New York engineering for a better world
Table of Contents GEA Equity Story Pages 4 - 28 Q3 2014 Results Presentation Pages 30 - 49 Back-ups Pages 51 - 61 Historical Key Figures GEA Group & Segments Pages 62 - 67 ADR Information Page 68 3 GEA - German Investment Seminar January 2015 New York engineering for a better world
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. Sales Operating EBIT Margin Employees Market Cap EUR 4.3bn (FY13) 10.6% (FY13) >18,000 (Sep 14) >EUR 6.5bn (Sep 14) Dairy Farming Dairy Processing Food Beverages 4 GEA - German Investment Seminar January 2015 New York engineering for a better world
GEA in summary You are in touch with food processed by GEA equipment every day … Every 4 th liter Every 3 rd instant Every 3 rd chicken Every 2 nd liter of of milk you are coffee production nugget you are beer you are consuming has been line around the globe eating has been drinking has gone processed through has been built by processed by our through our GEA equipment . GEA . equipment . components . …we are all this and more every day. 5 GEA - German Investment Seminar January 2015 New York engineering for a better world
What we like about the food industry (1): Steady growth rates due to continuing urbanization Today the world ’ s Urbanization Illustrative population lives Developed economies (B) 300 KM 1.1 1.0 50% in the cities 2010 2050 necessary agricultural 50% supply area in the countryside Shanghai Emerging markets (B) 5.3 By the year 2050 the 2.6 world ’ s population will live 75% Germany in the cities 2010 2050 ~ 200 million people moving into cities p.a. consuming 25% ever more 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) 6 GEA - German Investment Seminar January 2015 New York engineering for a better world
What we like about the food industry (2): Stable consumer spending also in tough times Economically Economically good times difficult times 7 GEA - German Investment Seminar January 2015 New York engineering for a better world
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? 8 GEA - German Investment Seminar January 2015 New York engineering for a better world
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 9 GEA - German Investment Seminar January 2015 New York engineering for a better world
What we like about the food industry (5): Continuous launch of new products to stimulate demand ~ 3,500 new products entered ~ 2,000 new food products p.a. the US food market in 2012 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) 10 engineering for a better world GEA - German Investment Seminar January 2015 New York
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% Emerging Markets 30% ~32% 25% 20% 15% 10% ~12% 5% ~2% 0% Top Customer Top 10 Top 50 Top 100 Top 150 Top 200 Number of customers 11 GEA - German Investment Seminar January 2015 New York engineering for a better world
Local Emerging Markets food producers grow faster than multinationals Selection of local GEA customers in Emerging Markets Sales CAGR FY 2010-13 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 12 GEA - German Investment Seminar January 2015 New York engineering for a better world
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” 13 GEA - German Investment Seminar January 2015 New York engineering for a better world
ARTE framework as pillars for GEA ’ s strategy Target Footprint 2020 A pplications R egions T echnologies Functional E xcellence • Exploit market • Exploit market • Capture global • Strengthen • Increase efficiency potential in target potential in target growth opportunities innovation and in operations and applications applications technological support functions • Expand local leadership • Align GEA-wide • Align GEA-wide • Reduce presence • Foster cross- application strategy application strategy organizational • Coordinate regional and customer and customer business colla- complexity approaches across approach approach boration in R&D GEA 14 GEA - German Investment Seminar January 2015 New York engineering for a better world
Targeted applications for target footprint “GEA 2020” 1 5 Expand in total solutions for Grow leading position in dairy edible oils, starch & sugar 6 2 Grow leading position in liquid food Enter confectionery, biscuits & pizza 3 7 Strengthen packaging Strengthen personal care competencies 4 8 Foster processing intelligence & Expand in animal proteins automation 15 GEA - German Investment Seminar January 2015 New York engineering for a better world
Example how GEA executes its application strategy Milk intake & preparation Milk intake Milk storage Bacteria removal Standardization Pasteurization & preparation & distribution (optional) • Milking • Valves • Standardization • • Heat Sterilization • Pumps parlor separator separator exchanger • Tanks Coagulate & de-whey Press & ripe Final process Bacteria Curd Whey drainage Water cooling, Cutting Primary Pressing starter mixing production & pre-press brining, ripening & Slicing packaging • Tank • Cheese vat • Curd filler • Pressing line • Brining system • Cutter • Packer • Dosing unit • Brine treatment • Slicer 16 GEA - German Investment Seminar January 2015 New York engineering for a better world
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 17 GEA - German Investment Seminar January 2015 New York engineering for a better world
Project “Fit for 2020”: From four stand -alone Segments to two integrated Business Areas Current Organization Future Blueprint Executive Board Executive Board Equipment Solutions Global SSC Head- 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 18 engineering for a better world GEA - German Investment Seminar January 2015 New York
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