Post on 10-Jan-2017
From melting steel to 3D-printing: investing
in the technology-driven German “Mittelstand”
as at 31 October 2016
GESCO – an association of industrial SMEs including market and technology leaders
Currently 17 operating subsidiaries under the roof of GESCO AG.
We think and act on a sustainable and entrepreneurial basis.
We operate in established sectors with innovative technologies.
We offer technology “made in Germany” for the world’s markets.
GESCO is comprised of flexible, operationally independent and entrepreneurially-managed entities that benefit from being part of a strong group.
GESCO AG – long-term investor and safe haven for succession solutions
We acquire and develop industrial SMEs on a long-term basis without exit intentions.
Majority acquisitions, generally 100 %.
Usually as part of a succession arrangement.
New management is offered opportunity to acquire stake of up to 20 % of the new company (“entrepreneur company”).
1. The business model
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GESCO’s portfolio strategy
Spring 2016: development of a portfolio strategy of profitable growth based on tried-and-tested GESCO business model
Criteria: long-term positive megatrends, comparable end customer markets, similar economic fluctuation and growth rates
Definition of 4 relevant end customer market segments
Grouping of existing GESCO Group companies into the new segments, new segment reporting as of Q1 2016/2017
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2. Portfolio strategy
Production process technology
Resource technology
Health and infrastructure
technology
Mobility technology
Production processtechnology
Sales*): € 76.7 mnEBIT *): € 4.5 mn
Features: Dynamically growing markets, high degree of innovation, automation, trend towards “batch size 1”
Products / services:
Robotics and automation solutions in machine and plant construction, technology-intensive manufacturing services
End customers:
Serial producers, e.g. in automotive, steel and consumer goods industries
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2. Portfolio strategy
*) unaudited pro-forma figures, financial year 2015/2016
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2. Portfolio strategy
*) unaudited pro-forma figures, financial year 2015/2016
Resourcetechnology
Sales*): € 220.2 mnEBIT *): € 18.8 mn
Features: Consolidating markets, focus on niches and customer service
Products /services:
Customised preparation of primary materials, e.g. materials supply, transport and loading technology
End customers:
Material-intensive industrial companies, globally distributed production structures, broadly diversified
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2. Portfolio strategy
*) unaudited pro-forma figures, financial year 2015/2016
Health andinfrastructure
technology
Sales*): € 112.0 mnEBIT *): € 9.5 mn
Features: Close to end consumers, not very cyclical, relatively resilient to economic fluctuation
Products / services:
Components, modules and primary products
End customers:
Providers for mass markets close to end consumers (construction, sanitary equipment, food, hygiene, medicine)
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2. Portfolio strategy
*) unaudited pro-forma figures, financial year 2015/2016
Mobility technology
Sales*): € 85.5 mnEBIT *): € 8.2 mn
Features: Cyclical automotive market, positive outlook driven by technological leaps, e.g. electromobility
Products / services:
Tools and moulds, components, parts
End customers:
Vehicle industry, e.g. car, commercial vehicle and rail
Objective of the GESCO portfolio strategy: enhance value of investment portfolio organically and through acquisitions
Respective managing directors continue to have exclusive operating responsibility for GESCO Group companies
As the majority shareholder GESCO AG has “3 levers”
1. Appointment of best possible management
2. Prioritisation of investment projects within the individual companies which promise the highest return on capital employed in the long term
3. Active consulting and support role of shareholder: Monthly discussions, regular exchange, sparring, best practice Setting focal themes on strategy days: digitalisation and Industry 4.0 Support for technical optimisation projects for profitable growth and
cost efficiency, from the beginning of a project to its implementation
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2. Portfolio strategy
Please note:
FY subsidiaries = calendar year
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3. Financial year 2015/2016
1 Jan 2015 31 Dec 2015
31 March 20161 April 2015
FY GESCO AG / GESCO Group = 1 April to 31 March
Starting position and expectations for new financial year
Forecast GDP growth: 1.7 % to 1.8 % Forecast VDMA: stagnation at best Agricultural machinery and oil industry: still no growth impetus
Industrial customers still generally showing reluctance to invest New growth stimuli still lacking in capital goods industry
of relevance to the GESCO Group Ongoing consolidation pressure in the steel industry Widespread low capacity utilisation ramps up the pressure on prices
Our measures: Short term: cost reduction, questioning investments Medium term: optimisation projects on cost and opportunities side
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3. Financial year 2016/2017
3. Financial year 2016/2017 – Q1
Q12015/2016
Q1 2016/2017 Change
Order intake € mn 146.1 122.5 -16.1%
Sales € mn 118.7 113.6 -4.3%EBITDA € mn 11.6 10.6 -9.2%EBIT € mn 6.6 5.4 -18.4%Group net incomeafter minority interest € mn 3.2 2.7 -15.4%
EPS acc. to IFRS € 0.95
31/03/2016
0.81
30/06/2016
-15.4%
Equity € mn 195.8 197.1 0.7%Equity ratio % 47.7 46.8 -Liquid funds € mn 36.6 34.6 -5.5%
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3. Financial year 2016/2017 – Q2 (operating period April to June 2016)
Start to new financial year (preliminary figures for the second quarter)
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Order intake Q2approx. € 127.8 mn
Sales Q2approx. € 115.1 mn
Q2 order intake and sales above Q1, book-to-bill > 1
─ Incoming orders─ Sales
Q1 prev. yearincl. large order
2015/2016Actual
2016/2017Budget Change
Group sales € mn 494.0 480 to 490 -2.8 % to -0.8 %
Group net incomeafter minority interests
€ mn 16.1 13.5 to 14.5 -16.1 % to -9.9 %
Earnings per share pursuant to IFRS
€ 4.85 4.06 to 4.36 -16.1 % to -9.9 %
Budget figures June 2016
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3. Financial year 2016/2017
Expectation after Q1: sales and earnings for the full yearexpected to reach lower ends of ranges at best
Proposal to Annual General Meeting on 25 August 2016: capital increase from company funds and share split
Objective: to make the share “lighter” through higher number of shares in order to enhance the share’s attractiveness for private investors and to improve liquidity
Implementation: Increase in share capital by € 1,330,000 through capital increase from
company funds Redistribution of share capital through share split 1:3 All shares are fully entitled to dividends for financial year 2016/2017
Implementation expected in Q4 2016
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4. The GESCO share
4. Share price development (in %) – 1 and 10 years
GESCO vs. Indices, 1 year GESCO vs. Indices, 10 years
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GESCO DAX SDAX
4. The GESCO share
Free float: 85.3 %
Stefan Heimöller, entrepreneur, member of supervisory board: 14.7 %
Investmentaktiengesellschaft für langfristige Investoren TGV: 13.9 %
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14.7% Stefan Heimöller
13.9%Investmentaktiengesellschaft fürlangfristige Investoren TGVapprox. 31.4% other institutionalinvestors
approx. 40% retail investors
Appendix – GESCO Group overview
Company Sales 2015€‘000
Staff as at31/12/2015
GESCO AGshareholding
AstroPlast Kunststofftechnik GmbH & Co. KG 16,262 92 80%
Paul Beier GmbH Werkzeug- und Maschinenbau & Co. KG 12,117 117 100%
C.F.K. CNC-Fertigungstechnik Kriftel GmbH 9,708 66 80%
Dömer GmbH & Co. KG Stanz- und Umformtechnologie 15,661 104 100%
Dörrenberg Edelstahl GmbH 179,243 509 90%
Frank Group 27,629 258 90%
Franz Funke Zerspanungstechnik GmbH & Co. KG 15,383 80 80%
Haseke GmbH & Co. KG 12,969 64 80%
Hubl GmbH 12,775 106 80%
Georg Kesel GmbH und Co. KG 11,239 60 90%
MAE Group 44,359 222 100%
Modell Technik Formenbau GmbH 13,961 115 100%
Protomaster GmbH 17,688 123 82.17%
Setter Group 26,984 98 100%
SVT GmbH 33,464 186 90%
VWH GmbH 11,421 109 80%
Werkzeugbau Laichingen Group 26,594 177 85%
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Founded: 1989Share capital: € 8,645,000Shares: 3,325,000 registered sharesFree float: 85.3%Stock markets: Xetra; Frankfurt (regulated market);
Berlin, Düsseldorf, Hamburg, Hanover, Munich, Stuttgart (open market)
Sec. identification number: A1K020ISIN: DE000A1K0201IPO: 24/03/1998 End of financial year: 31 MarchDesignated sponsors: equinet Bank AG
Oddo Seydler Bank AG
Appendix – Facts and figures for GESCO AG
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Appendix – Financial calender
Financial calendar
14 Nov. 2016 Q2 figures
21 - 23 Nov. 2016 German Equity Forum, Frankfurt/Main
Feb. 2017 Q3 figures
29 June 2017 Annual Accounts Press Conference / Analysts‘ Meeting
Aug. 2017 Q1 figures
31 Aug. 2017 Annual General Meeting, Wuppertal
Nov. 2017 Q2 figures
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Appendix – Investor Relations contact
Investor RelationsGESCO AG Telephone: +49 202 24820-18 Investor Relations Fax: +49 202 24820-49Oliver Vollbrecht E-mail: info@gesco.deJohannisberg 7 Internet: www.gesco.de 42103 WuppertalGermany
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