2016 Capital Markets Day - GEA engineering for a better world 1330... · Agenda GEA Capital Markets...

GEA

LONDON, 5TH OF OCTOBER 2016

2016 Capital Markets Day

Disclaimer

2GEA Capital Markets Day - October 2016

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%.

Agenda


2 OneGEA country sales organization – Oliver Cescotti

3 OneGEA application focus in solutions engineering – Niels Erik Olsen

1 ARTE framework as pillars for GEA’s strategy – Jürg Oleas

4 Service in OneGEA – Dirk Hämling

5 Production & Procurement – Steffen Bersch

6 One Engineering – Kristina Böe

7 Shared Service Center – Stefan Heimann

8 Financials – Dr. Helmut Schmale

p. 21

p. 31

p. 4

p. 43

p. 54

p. 75

p. 84

p. 97

What we have presented to you at our last CMD:ARTE framework as pillars for GEA’s strategy


Target Footprint 2020

Regions

• Capture global growth

opportunities

• Expand local presence

• Coordinate regional

approaches across

GEA

Technologies

• Strengthen innovation

and technological

leadership

• Foster cross-business

collaboration in R&D

FunctionalExcellence

• Increase efficiency

in operations and

support functions

• Reduce organizational

complexity

Applications

• Exploit market potential

in target applications

• Align GEA-wide

application strategy

and customer

approach

Applications are deep-seated within our new organizational structure


Application Centers

Business Area Equipment Business Area Solutions

Executive Board

Technology Centers

Solutions Service

APC Beverage APC Chemical APC Dairy APC Food APC Pharma APC Utilities

Ad interim

What we have presented you at our last CMD:ARTE framework as pillars for GEA’s strategy



Regions


opportunities



approaches across

GEA

Technologies


and technological

leadership





in operations and

support functions


complexity

Applications



• Align GEA-wide


and customer

approach

Strong local region/country organization…


DACH &

Eastern EuropeNorthern/Central

Europe

Latin America

Western Europe,

M. East/Africa

Asia-Pacific

North America

…already bearing fruits


Vietnam

Colombia

India

Peru

Mexico

Kenya

In these countries the order intake roughly doubled YTD August

Pakistan

Morocco




Regions


opportunities



approaches across

GEA

Technologies


and technological

leadership





in operations and

support functions


complexity

Applications



• Align GEA-wide


and customer

approach

GEA is already performing well in terms of innovation: From batch processing to continuous processing


ConsiGma™ continuous tableting line

The platforms take up 70% less space than batch

plants can be built more quickly and with much

lower capital expenditure

Units can be designed, deployed and approved for

commercial manufacture within a year, compared

with 2–3 years for traditional plants

Faster, more consistent and reliable tablet

production with reduced use of resources

The award winning technology is already in use in

portable mini factories for on-demand drug

production

FDA approval for a therapeutic that was both

developed and commercially manufactured using

GEA’s ConsiGma™ technology

GEA is already performing well in terms of innovation: Innovation progress in automated milking


2009: MIone 2016: Monobox2014: DairyProQ

GEA‘s milking robot orders not affected by falling milk prices

44.5

37.9

49.1

43.8

29.4

23.4

2011 2012 2013 2014 2015 2016 e

Order intake milking robots

IFCN world milk price indicatorin USD / 100 kg ECM

Source: IFCN for world milk price indicator: www.ifcndairy.org Note: Numbers refer to the average IFCN world milk price indicator in the respective year / in the first half of 2016

• Multi Box robot using one robot arm for

multiple boxes

• World wide first system to use 3D

technology for attachment

• Unique teat rinsing system inside the teat

cup to clean teats before milking

• Utilization of the modular platform as centre

part within the Monobox, GEA’s next robot

generation for smaller family farms

• Next generation of 3D camera

• New robot wash concept to minimize water

and electricity consumption

• First robot parlor which enables larger

farms to milk up to 400 cows/h

• Milking technology fully integrated into a

modular platform.

• Teat rinsing AND teat disinfection after

milking integrated in the teat cup

http://www.ifcndairy.org/

With OneGEA we can do even better!


Currently, more than 600 engineers are

driving innovation across products and

technologies under one central

management.

OneGEA is the right platform for

achieving even more!


Sales

2016 2017 2018 2019 2020 2021

Sales decrease of current

product portfolio without

innovation

Maintaining competitive

position of current product

portfolio through

incremental innovation

Main driver for additional

sales: breakthrough

innovation

Why do we innovate?

Both, incremental and breakthrough innovation

need a balanced focus to support organic growth

The innovation dashboard enables the effectivesteering of GEA‘s innovation portfolio


Ideas/projects per innovation phase

R&D spending

Time to market

FTE in R&D

2 3

4 5 6

1 Sales new products[EURm and % of total sales]

[#][years]

Payback of R&D spending

[FTE and % of total #employees] [EURm and % of sales] [years]

FY 2015 Q2 2016 LTM Q2 2015 YTD Q2 2016 YTD

X% X%

X% X%

EUR XmEUR Xm

EUR Xm EUR Xm

Front End Foundation Development Go-to-market

12/2015

06/20162014 2015 Q2 2016

Front End + Foundation

Development + Go-to-market

12/2014 12/2015 06/2016

X% X% X%

FY 2015 Q2 2016 LTM Q2 2015 YTD Q2 2016 YTD

Capex Opex

77

1.7%

42

2.0%41

1.9%

77

1.7%

2014 2015 Q2 2016




Regions


opportunities



approaches across

GEA

Technologies


and technological

leadership





in operations and

support functions


complexity

Applications



• Align GEA-wide


and customer

approach

Project “Fit for 2020”: From four stand-alone Segments to two integrated Business Areas


Former organization New current organization

• 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

• “OneGEA” 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

Executive Board

RTFT ME PE Head-

quarter

RegionsRegions Regions Regions

Support Support Support Support

BA Equipment

BA Solutions

Global Corp.

Center

SSC

Regions / Countries

Executive Board

23

80

125

2015 2016 2017

“Fit for 2020”: Savings & one-off charges


Build-up of minimum cumulative savings

• GEA ahead of savings guidance for FY 2015 (EUR 23m vs. EUR 10-20m guidance)

• 2016: Biggest leap in savings; at least break-even with charges

[EURm]

One-off charges (Σ 2015/16):

∑ 2015 - 2016

• Severance packages

• Training / relocation

• SSC build-up

• Office consolidation

• IT system changes

• External project support

• Other implementation cost

~ 1.5 – 2.0x long term annual savings

Fit for 2020: Smooth and cost-conscious process- Key success factors


Stringent planning and tracking of execution

Clear responsibilities & managers’ commitment to saving targets

Close cooperation with work council on socially acceptable solutions

Use of natural fluctuation and internal job market to avoid forced redundancies

Attractive voluntary leave & early retirement programs

2%4%

3%

6% 6%

9%

0%

2%

4%

6%

8%

10%

Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

LTM Operating EBITDA per FTE

Key Performance Indicators per FTE (LTM; base year Q4 2014)


2%1%

-1%

2%4%

7%

-2%

0%

2%

4%

6%

8%

Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

LTM Order Intake per FTE

1%2%

1%

2%2%

4%

0%

1%

2%

3%

4%

Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

LTM Sales per FTE

2%4%

3%

6% 6%

8%

0%

2%

4%

6%

8%

10%

Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

LTM Operating EBIT per FTE

Agenda










With GEA since: 2006

Current position: Country Manager of the Russian Federation Country Cluster

Prior responsibilities:

• 2006 – 2016: Managing Director of GEA Refrigeration Russia

Education: Political Science at the FU Berlin and the LMU Munich, Germany

Oliver Cescotti (53)


GEA’s footprint in Russia at a glance


Headquarter

Workshop

Workshop

• Headquartered in Moscow

• 2 main workshops in the

Moscow region

• More than 350 employees of

which:

99% are Russian native

speakers

Over 110 are after-sales

service employees

More than 200 are

engineers (mostly in

Service and BA Solutions)

0

20

40

60

80

100

120

140

160

2014 2015 2016 e

GEA Russia achieved strong EUR-denominated growth despite a strongly depreciating Ruble


Order Intake development in Russia in EURm

+7% y/y

+9% y/y

* Compared to the annual average of 2014

1 EUR = 51 RUB

annual average

1 EUR = 75 RUB

average L12M per 30 Sep 2016

Depreciation by 47%*

1 EUR = 68 RUB

annual average

Depreciation by 33%*

The Russian market offers for GEA further growth potential


After restricting imports of food, pharma and other products Russia now

strives to become self-sufficient; the government provides financing support to

local producers

Strategy of self-

sufficiency

This policy stimulates demand for equipment and engineering solutions

meeting western standards and efficiency levels

Demand for

quality equipment

& solutions

Engineered solutions comprising western equipment need to comply with

local technical standards and provide documentation in local language

Local technical

standards

1. By combining forces, GEA has now the critical mass to offer one-stop

shopping for complex solutions while reducing the paperwork and

negotiation efforts for the customer

2. Significant potential for additional business for operations which were not

represented in the way they should be

3. Since the launch of OneGEA, GEA Russia already secured projects for

the APCs Dairy, Beverage, Chemical and Utilities

The OneGEA

opportunity

“When in Rome, do as the Romans do”


Separate sales people

Offers not in customer’s local language

Offers not reflecting local technical standards

Very little internal coordination, sometimes even

resulting in internal competition

Integrated approach

Product 2Product 1 Product 3

OneGEA offers process solutions integrating all

necessary components

All efforts and documentation aligned by the

local organization in the local language

GEA recognized as a local company due to local

assembly workshops and local engineering

Product 2Product 1 Product 3

Before OneGEA: Under OneGEA:

One face to the customer providing one solution in

one contract with one competitive quotation

The customer does not want to deal with various

suppliers for one project

GEA was able to participate again in the bidding process for a key project


• Separate sales efforts of 3 GEA

companies

• No added value for the client by

considering 3 contracts

GEA was out of the

bidding process for a

starch factory in

2013/14…

• One face to the customer

• Optimal alignment of internal

competencies to make the most

competitive quotation to the customer

… now, GEA is back in

the process!

1. Local customizing of standard components from GEA

core factories is now possible

2. Providing the technical documentation in local

language to obtain approval from local governmental

authorities for entire process lines integrating standard

western components

3. Customers appreciate the transparency: customers can

now much easier track the progress of their order and

inspect on site

4. Currency: providing part of the value chain in local

currency makes for a natural hedge and reduces the

currency exposure of the order, costs and custom duties

(from a local perspective)

Competitive advantage: multi-functional local assembly workshop (1/2)


5. A local workshop gives the customer more comfort about

service backup and adds to GEA’s reputation of reliability

and visibility in the market

6. 99% of local staff are Russian native speakers with over

200 engineers reflecting GEA’s commitment to fostering

local presence on long-term basis

7. Locally engineered solutions with access to and support

of the global engineering organization focused on

innovation and sustainability makes GEA to one of

the most attractive partners today in Russia

Competitive advantage: multi-functional local assembly workshop (2/2)


Core component

from GEA factory

e.g. Berlin, Germany

Solutions

Engineering

made in Russia

Further products can be sourced locally in future Example: components for a wellhead depletion gas booster station


Main

components

Gas circuit

Lubrication

system

Cooling system

Automation

control

• Screw compressor

• Electric motor

• Oil separator

• Valves

• Oil pump

• Filters

• Oil cooler

• Dry Cooler

• Glycol pump

• Valves

• Field measuring devices

• Programmable logical controller

• Control panels

Auxiliary systems

• Ventilation & heating

• Gas analyzer

• Fire extinguishing system

Assembly

Current

• Engineering & documentation

• Assembly

Russian Imported Future

• Valves

• Inlet filter – separator

• Gas filter

• Gas cooler

Agenda












Current position: Member of the Executive Board responsible for the Business Area Solutions


• 2015: Head of Application Center, Business Area Solutions

• 2010 – 2014: Member of the Management Board of the former GEA Process Engineering Segment

• 2004 – 2009: Executive Vice President and Vice President of GEA Process Engineering responsible for the

Chemical Division, Test & Development and Automation

• 2003: Division Manager GEA Filtration Europe (Niro)

• 1993 – 2002: Various management positions within GEA, inter alia in Singapore, China, the USA and Denmark

• 1991 – 1992: Project Engineer at Niro A/S

Education: MSc in Mechanical Engineering from Technical University of Denmark

Niels Erik Olsen (50)

The OneGEA setup for Food Applications should reflect the complexity of our customers’ business


Source: http://www.behindthebrands.org/ (2014)

• 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

http://www.behindthebrands.org/

APC Food Promise to Customer


A Good Night’s Sleep

Our solutions’ reliability is rooted in our process and application

expertise, which drives us to proactively assist in optimizing our

customers’ business. At APC Food we share a powerful sense of

responsibility to help our customers thrive and grow through a

lasting business relationship.

Frozen Food

GEA’s food expertise covers a wide range of applications and sub-applications


SUB

APPLICATIONS

Coffee

& Tea

Edible

Oils

Starch &

Starch

Derivatives Ingredients

Liquid

Food

Meats &

Seafood

Fruits &

Vegetables

Ready

Meals Bakery

Confectionary

& Snacks

Edible Oils

Margarine

Spreadable

Oils & Fats

Sauces

Dressings

Processed

Meat & Poultry

Processed Fish

& Seafood

Instant Coffee

Instant Tea

Coffee Extract

Tea Extract

Cocoa Powder

X-in-1

(Coffee/Tea;

Milk; Sugar)

Starch

Modified Starch

Cultures

Emulsifiers

Flavors

Frozen Fruit

Frozen

Processed

Potatoes

Meat

Substitutes

Pizza

Ready Meals

Prepared

Salads

Bread

Cakes

Biscuits

Pastries

Frozen Baked

Goods

Frozen

Desserts

Chocolate

Confectionary

Sugar

Confectionary

Fruit Snacks &

Nuts

Snack Bars

Gum

Chips & Tortilla

Chips

Extruded

Snacks

Popcorn

Pretzels

Frozen

Vegetables

Mayonnaise

Ketchup

Tomato Pastes

& Purees

Spreads

Soups

Dried Fruits &

Vegetables

Coffee / Tea

Whitener

Proteins

Raising Agents

Sugars &

Sweeteners

Fibers

Pet Food

Ingredients

Coffee & Tea

Oils, Starch & Ingr. Bakery & Confectionary

Sub-APC:

Starch

Derivatives

Other Food

Applications

Animal Feed

Pet Food

Baby Food

(Non-Dairy)

APPLICATIONS

Large customer portfolios covering multiple applications

GEA technologies used across multiple applications

Chemical

In OneGEA, Application Centers (APCs) engineer solutions to meet specific local customer needs


Technologies &

Components

Application

Engineering

Sales & Service

Support

BA Solutions

Beverage FoodDairy Pharma Utilities

BA Equipment

Customer

OneGEA Push and Pull dynamics make for a muchmore focused offering for diverse market demands


Technology Centers

INTERNAL SUPPLIER

Application Centers

APPLICATION SOLUTION OWNER

Country Organization

SALES & SERVICE

Pull

Pull

Pull Push

Push

Push

Application engineers

requesting development of

particular tech features

Salesforce asking for

particular solutions to match

customer applications

Customer enquiries

generating innovation ideas for

specific applications

Salesforce systematically

working to expand customer

base and geographical

footprint

APC encouraging countries

to sell particular solutions for

specific applications

Technology Centers

conduct R&D to improve

equipment

Customer

Much has been accomplished within the Application Center Food since Go Live in June 2015


Before OneGEA go-live: Status per October 2016: Long-term Ambition:

• Fragmented food setup with

few or no dedicated resources

• Food organization starting to

build to support growing

business volume

• Strong Food organization

across all areas of GEA

Food

Organization

• Food business driven by ad-

hoc reactive approach

• Segmentation model in place

to drive communication and

proactive approach

• GEA present in all major

food categories

Application

Segmentation

• Limited or no line approach • Push of new (full) line

solutions to the market

• Full line solution offering in

all key food applications

Solution

Focus

• GEA not present in Bakery,

weak presence in other

applications

• GEA now among key players

within the bakery industry

• GEA main player in several

key applications

Industry

Presence

Close cooperation across GEA Business Areas (BA) to offer solution supply in key Food Applications


Oil

Extraction

(Soy)

Cleaning,

grinding

maturation

Process

Steps

Heat

exchanger

Solvent

Extraction

Centrifuge Reaction

tank

Dosing

Tank

Dosing

system

PH adjust

Spray

dryers

Powder

handling

Powder

packing

Separation

Fiber /

Protein

Fiber wash,

&

Separation

Hydrolysis

Acid or

Enzyme

Concen-

tration

Neutralize

adjustmentDrying

HighLowLow

Washing

Dewater

Decanter

Dryer (Ring)

Centrifuge

Washing

tank

Decanter

Dewater

Centrifuge

Decanter

Hydro-

cyclone

Vacuum

filter

Dryer

Medium

Technology

GEA

Presence

Fiber

Drying

Wash

Clean

Dry

Huller

Breaker/

Grinder

Flaker

Starch

Handling

(Pea)

Packing

Filling

Powder

Handling

Big Bag

Containers

MediumHighHighHigh

Thermal

evaporation

Membrane

filtration

Low MediumHigh

Overall process design, integration and execution by APC Food to match customer’s application

GEA components supplied by either BA Equipment, BA Solutions or 3rd party

EXAMPLE: Ingredients (Veg. Protein; Hydrolysed) – Process Steps, GEA Presence:

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj-n6ekn8DLAhXjQZoKHewxCLcQjRwIBw&url=http://www.wztaikang.com/en/productshow.asp?id%3D288&bvm=bv.116636494,d.bGs&psig=AFQjCNGbnK3aDhKkz1Z4iSuwQNYuwCmz0A&ust=1458046989506779

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj-n6ekn8DLAhXjQZoKHewxCLcQjRwIBw&url=http://www.wztaikang.com/en/productshow.asp?id%3D288&bvm=bv.116636494,d.bGs&psig=AFQjCNGbnK3aDhKkz1Z4iSuwQNYuwCmz0A&ust=1458046989506779

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiG__PNn8DLAhVDCZoKHZ8yDLgQjRwIBw&url=http://www.gea.com/global/en/productgroups/milking-systems/cooling-tanks/index.jsp?m%3D938&bvm=bv.116636494,d.bGs&psig=AFQjCNEX3lSsg18YhdXgXT_vrQ-w7Q26cQ&ust=1458047299241922

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiG__PNn8DLAhVDCZoKHZ8yDLgQjRwIBw&url=http://www.gea.com/global/en/productgroups/milking-systems/cooling-tanks/index.jsp?m%3D938&bvm=bv.116636494,d.bGs&psig=AFQjCNEX3lSsg18YhdXgXT_vrQ-w7Q26cQ&ust=1458047299241922

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj1tOzY8b3LAhVGGZoKHSqLDe0QjRwIBQ&url=http://www.gea.com/global/en/binaries/GEA Drying and Particle Formation Technologies for the CHEMICAL industry_tcm11-24003.pdf&bvm=bv.116636494,d.bGs&psig=AFQjCNH_x9V0ZXySfG-ZS6aS92oxNKD0jg&ust=1457966219999844

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj1tOzY8b3LAhVGGZoKHSqLDe0QjRwIBQ&url=http://www.gea.com/global/en/binaries/GEA Drying and Particle Formation Technologies for the CHEMICAL industry_tcm11-24003.pdf&bvm=bv.116636494,d.bGs&psig=AFQjCNH_x9V0ZXySfG-ZS6aS92oxNKD0jg&ust=1457966219999844

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiO_q-y4b3LAhUCGZoKHXryDsgQjRwIBw&url=http://www.gea.com/global/en/productgroups/filling_packaging-systems/bag_sack-powder-fillers/index.jsp?s%3D22473&bvm=bv.116636494,d.bGs&psig=AFQjCNHkygs_TrV7QDEoyJEwS-kYb7LYWQ&ust=1457961823431250

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiO_q-y4b3LAhUCGZoKHXryDsgQjRwIBw&url=http://www.gea.com/global/en/productgroups/filling_packaging-systems/bag_sack-powder-fillers/index.jsp?s%3D22473&bvm=bv.116636494,d.bGs&psig=AFQjCNHkygs_TrV7QDEoyJEwS-kYb7LYWQ&ust=1457961823431250

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjw6NeVpsDLAhXKJJoKHa_OCb0QjRwIBw&url=http://www.gea.com/global/en/products/plate-evaporator.jsp&psig=AFQjCNHPGTRCOd83VvKCXhkY_RT9FLEIeg&ust=1458049039547034

http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjw6NeVpsDLAhXKJJoKHa_OCb0QjRwIBw&url=http://www.gea.com/global/en/products/plate-evaporator.jsp&psig=AFQjCNHPGTRCOd83VvKCXhkY_RT9FLEIeg&ust=1458049039547034

GEA focus on offering solutions is well in line with our customers’ demand for full line solution supply


2%2%

4%4%4%

5%5%

6%6%

7%7%7%7%

9%10%

19%32%

0% 5% 10% 15% 20% 25% 30% 35%

InjectingTray sealing

TumblingMixing

Bowl CuttingCoating

FryingGrindingFormingChilling

CookingHorizontal Packaging

Component bundleVertical Packaging

SlicingFreezing

Full line solution

Type of equipment for investmentn=81

Source: GEA Customer Survey conducted by Lindberg International (June 2016)

Q: In what kind of equipment are you planning to invest?

EXAMPLE: Survey conducted among GEA customers

in the meat processing industry

GEA Customer Rationale for full line solutions supply:

Minimize risk of

product

contamination

Process

optimization

Enhance end-

product quality

Energy

efficiency

Sub-

ApplicationGrowth potentials

M&A

opportunities

Coffee & Tea Add process steps from grinding to extraction

Roll-out recent innovations: SHYE to strengthen position in coffee extraction

Oils, Starch &

Ingredients

Increase market share in liquid food (e.g. soups and dressings)

Act as line integrators in fragmented supplies for starch & starch derivatives and

proteins

Acquire technologies in Edible Oils to enhance process line solution

competencies

Frozen Food

Push sales of freezers outside US

Tap into large market potential in ready meals

Expand line supply in potato and vegetable processing

Bakery

Establish local presence in Asia Pacific and North America,

Further expand business in Middle East, Africa

Exploit synergies with other GEA technologies (i.e. ingredients handling,

mixing, freezers etc.)

New Applications Potential to expand into pet food and non dairy baby food to be further

investigated

APC Food overall: Ambition statement Rationales and objectives


Focus on leveraging existing food capabilities in GEA to grow APC Food


Applications Regions Technologies Functional Excellence

AS

-IS

• Strong competencies in core

food applications

• Food organization being build

up

• Positive food drivers / mega

trends

• Global GEA footprint

• Need for dedicated food sales

resources

• Technology white spots in core

applications

• Industry consolidation through

M&A

• Strong GEA project mgt. and

execution capabilities

• Need for execution platform in

Food

• Need for scalability of

organization outside of APC

Food

ST

RA

TE

GIC

FO

CU

S • Core applications

• New applications

• Customer centricity driven by

application and full line focus

• Regional application

development

• Potential in less-developed

markets

• Food capabilities in Region &

Countries and APC Food (incl.

Application training for Regions

& Countries)

• M&A to close strategic

technology white spots

• Technology synergies across

APC Food and GEA

• Project execution organization

in APC Food

• Project excellence toolbox,

practices, financials

• Manufacturing platforms (via

Global Ops.)

• Strategic Account Management

Agenda











Current position: Head of GEA’s Global Service Operations (Business Area Equipment & Business Area Solutions)


• 2015 – 2016: Head of Service Business Area Solutions

• 2006 – 2015: Managing Director of GEA Brewery Systems and responsible for the Eastern European business

(2013-2015) and for the Africa business (2010-2013) in the former GEA Process Engineering Segment

• 2004 – 2005: CFO of GEA Diessel

• 2002 – 2003: CFO of GEA Process Engineering China

• 2000 – 2001: CFO of Tuchenhagen Brewery Systems

• 1995 – 2000: Controller at GEA Tuchenhagen

Education: MBA from University of Applied Science in Kiel, Germany

Dirk Hämling (43)


GEA Service organization: Yesterday versus today

44

Former organization New current organization

• Stand-alone acting service org. units within

segments

• Each segment with different service

offerings, go-to-market concepts &

regional footprint

• No alignment of service operations &

strategies

• Limited benchmarking & best practices

• Global Service strategy & product development

defined in the business areas

• One local GEA organization per country as a

platform for service sales & execution

• Alignment & strengthening of service scope,

offerings, go-to-market concepts & strategies

• Driving service excellence by internal

benchmarking & best practice approaches

Executive Board

RTME PE Head-

quarter

BA Equipment

BA Solutions

Global Corp.

Center

SSC

R/C service org. units

Executive Board

Service Service

FT

Service

Service

Service

ServiceService

Service

Service

Service

ServiceService

Service

Service

Service

ServiceService

Service

Service

Service

ServiceService

GEA Capital Markets Day - October 2016

Service Yesterday Service Today/Tomorrow

OneGEA = One face to the customer

45

BU

Flow

Components

BU

EvaporationBU

Separation

BU Drying

Plant Manager Plant Manager

GEA Service

Manager

BU Liquid


Service prior to OneGEA Future business model

GEA Service: Future business model

46

Reactive spare parts business …

• > 70% spare parts sales

• Primarily reactive service sales & focus on new

project business, rather than service

• No standardized business approach

… proactive solutions business

• Solution-oriented customer service (ARTE)

• Pro-active global service sales strategy (ARTE)

• Focus on customer plant life cycle & total cost of

ownership (ARTE)

• Efficiencies through use of standardized products

& processes (ARTE)


http://portals-eur.bcg.com/sites/my_visual_services/my_pl/Lizenzbilder/Miscellaneous/Fotolia_34180146_S.jpg

http://portals-eur.bcg.com/sites/my_visual_services/my_pl/Lizenzbilder/Miscellaneous/Fotolia_34180146_S.jpg

http://portals-eur.bcg.com/sites/my_visual_services/my_pl/Lizenzbilder/Miscellaneous/Fotolia_11756189_XL.jpg

http://portals-eur.bcg.com/sites/my_visual_services/my_pl/Lizenzbilder/Miscellaneous/Fotolia_11756189_XL.jpg

How does GEA Service meet customer demands?

47

Relationship basedTransaction based

Result

oriented

service

offer

Product

oriented

service

offer

User

oriented

service

offer

Cu

sto

me

r C

en

tric

ity:

Cu

sto

me

r va

lue

Competence development

Plants

Lines

Units

Components

Breakdown

driven

Spare parts

Self driven

Partnership

driven

Breakdown &

preventive

maintenance

Mechanical

based

predictive

maintenance

Performance

driven

Process

based

predictive

maintenance

Overall

equipment

effectiveness

consulting

Performance

management

Customer segmentation


GEA Service portfolio structure at a glance

Beginning of life services

Training

Installation

Commissioning

Spare parts

Corrective maintenance

Farm Services

Preventive maintenance

Second-hand equipment

Up-grades

Modernization

Optimization

Predictive maintenance

Performance contracts

Service software products

On-site project support

Consulting services & operations

Life-time services Extended-life services

Plant

Life Cycle


GEA’s key growth levers in service (1/2)

49

• No overall & comprehensive service

offerings for newly sold projects 1Automatically generated &

customized service offerings for

complete process lines

Historic hurdles & weak points

• No comprehensive transparency

about existing installed base

• No systematic service follow-up2

• Selective white spots in regional

coverage

• Need for service knowledge build-

up in regions & countries

3

Key growth levers Our ambition

OPOSO

One project one service order

Increase existing

installed base coverage

“Service is Local”

Leverage regional capabilities

Monitor and internally

benchmark coverage across

businesses and regions to

increase capture rates

• Expand service footprint

worldwide

• Leverage local service

competences & best practise

sharing


GEA’s key growth levers in service (2/2)

50

• More reactive breakdown services

with high focus on spares4Develop service concepts with

high focus on life cycle

equipment efficiency

Historic hurdles & weak points

• Multiple stock locations &

duplication of parts

• Decentralized & limited stock

planning with multiple ERP systems

5

Key growth levers

Advanced service

portfolio development

(e.g. digital services)

Drive service excellenceEfficient service logistics in

speed &

quality worldwide

Our ambition


Today’s spare part logistics Future spare part logistics

Deep-dive: Drive service excellence

51

Customers

• Mutliple stock locations & duplication of parts

• Decentralized & limited stock planning

• High working capital & obsolescence

• Multiple ERP systems with limited integration

Decentral customer service

Regional

hubs

Regions/

Countries

Customers

GEA workshops

& ext. suppliers

• Consolidation of stock locations to central hubs

• Centralized planning of stocks

• Potential spare part manufacturing close to central hubs

• Implementation of modern technologies & methods*

Efficient service in speed & quality worldwide

* E.g. 3D printing, virtual stock, advanced forecasting, etc.


Our service ambition: > 30% of sales

Development of service business:

27% 27% 27%

29%30%

FY 2012 FY 2013 FY 2014 FY 2015 Q2 2016 LTM FY 2020

Service sales as a % of group sales

GEA‘s service business to reach more than 30% by 2020

> 30%

GEA Capital Markets Day - October 2016 52

Agenda











Current position: Member of the Executive Board responsible for Business Area Equipment


• 2014 – 2015: Executive Vice President Business Unit Mechanical Separation (Business Area Equipment)

• 2010 – 2014: Vice President Service International GEA Westfalia Separator Group GmbH

• 2007 – 2010: Managing Director GEA Middle East, Dubai/UAE

• 2005 – 2007: President Business Unit Service GEA Westfalia Separator Food Tec GmbH

Education: Graduated food technologist with a focus on biotechnology from University of Applied Science Lippe in

Lemgo, Germany

Steffen Bersch (47)


GEA overview on Production and Supply Chain


Production Supply Chain & Procurement

2.5bnEUR

~ 26,000GEA

Production sites Headcount (FTE)’s Spend volume Number of suppliers

65 ~ 4,550

Increasing economic & political uncertainties forcing companies to increase flexibility


Economic & political uncertainties increasing … … forcing enterprises to adapt

Business models need to be adapted

and global flexibility increased to

balance out these risks

Particularly asset- and capex-

intensive functions like

manufacturing need to get

optimized to act flexible

Therefore the right global

configuration of manufacturing plants

is fundamental to preserve global

competitiveness

Our Operations Strategy 2020 based on ARTE



Technological

leadership in core

activities

Production close to

GEA’s customers

Excellent and lean

production

pplicationsA echnologiesTegionsR FunctionalxcellenceE

Balanced regional

supplier landscape

Focus on core

manufacturing

activities

Reduced total

system costs in

supply chain

Challenges addressed by our Operations Strategy


Regional balancing of production footprint

Consolidation of production into multi-purpose sites

Make or Buy review (products/process steps)

Shifting sourcing volumes to best-cost countries

Bundling of sourcing volumes to preferred suppliers

1

2

3

4

5






3

4

5

Consolidation of production into multi-purpose sites 2

Regional balancing of production footprint 1



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100

%

Share

of

pro

duction h

ours

Share of salesNeed to rebalance production and

sales footprint

GEA’s production is currently

concentrated in a few regions

Many country sales

organizations import from few

production countries

30% of sales not locally

produced

*Production hours = hours of attendance in the production areas

Current regional distribution of sales and production

chart for illustrational purposes only; based on 2015 data

Without local

production

ca. 30%

1 2 3 4 5



Regionalization of production

wherever volume justifies

Raise share of value added to

above 50% wherever we choose to

produce

Compensate real wage

increases in high labor cost

countries by productivity

increases of at least 5% p.a.

Establish a truly global and

flexible production network

1 2 3 4 5

For example in Germany, real wage growth over the period 2012 to 2015 was 6.2%


100.0%

102.9%

105.9%

109.1%

100.0%

101.4%

103.4%

106.2%

94%

96%

98%

100%

102%

104%

106%

108%

110%

2012 2013 2014 2015

Nominal pay increase Inflation adjusted pay increase

Collectively agreed wage raises metal industry (“tarifliche Lohnerhoehungen Metallindustrie”)



Regional balancing of production footprint 1




3

4

5




Production sites of GEA ranked by headcount GEA’s manufacturing footprint

consists of 65 production sites

with an average of 78 FTEs / site

6 multi-purpose sites are already

located in China, India, US and

Germany

Sites

He

ad

co

un

t

0

100

200

300

400

500

600

Average 78 FTEs

1 2 3 4 5

Fragmentation of production

landscape calls for consolidationSites in Emerging Markets



2015 GEA

Benefit from scaling effects and

flexibility of work force utilization

Increase utilization of the sites

and enhance flex capacity

Setup will require major capex

investments

Benefit from multi-purpose

campus sitesAverage # of

employees / site78

Specialized sites Multi-Purpose sites

Product lines

Manufacturing site

Production sites 65

1 2 3 4 5

2020






2

4

5


Make or Buy review (products/process steps) 3


Focus own manufacturing on GEA’s core technologies

Share of core

production~80%

2015

Focus in-house production

capacities on CORE technologies

and processes

Semi-core will support flexibility

through capacity outsourcing

Manufacturing outsourcing and

supplier integration for non-core

activities

Focus capex on CORE to

strengthen technology leadership

1 2 3 4 5

2020






2

3

5


Shifting sourcing volumes to best-cost countries 4



Best cost sourcing

(for Europe)

Shift sourcing volumes to best-

cost-countries (Eastern Europe

and APAC)

Increase regional sourcing for

existing best-cost production sites

Further develop sourcing structure

in line with progress in

manufacturing footprint

Shift sourcing volumes to leverage

low cost benefitsRegional sourcing

(outside WE)

~13%

~35%

2015 2020

>30%

>70%

2015 Share of Sourcing Volumes per Region

BA-E

BA-S

1 2 3 4

18%13%

Americas

5

69% 63%

Western Europe

5% 7%

Eastern Europe

8%18%

Asia Pacific






2

3

4


Bundling of sourcing volumes to preferred suppliers 5



Cumulated Spend Volume

Highly fragmented supplier base

GEA spend volume in 2015 of

2.5bn EUR for direct and indirect

materials

In total ~26,000 suppliers are

used across both Business Areas

More than 22,000 suppliers have

spend volume of <100k EUR

Limited number of suppliers

shared across the organization

Number of suppliers

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

80% Spend

2,600 Suppliers

1 2 3 4 5



Structuring of global spend into

common spend categories

Nomination of centrally acting

Category Managers and Lead

Buyers to foster cross-functional

cost reduction

Development of cost design and

cost engineering capabilities

within Supply Chain

Significantly increase share of

centrally managed spend

2015 2020

Share of centrally

managed spend12% >40%

GEA Spend 2015 ~ 2.5bn EUR

# Suppliers -50%

1 2 3 4 5

% Preferred

suppliers

~26,000

25% >65%

EUR 60 – 80m gross savings to build up until 2019







Anticipated gross savings

from optimization in

production & supply

chain until 2019

Net savings effect not

predictable from current

perspective

GEA might tactically

choose to stimulate

growth in certain regions

through more competitive

pricing

1

2

3

4

5

Agenda











Current position: Head of Cross-Application Execution (Business Area Solutions)


• 2005 – 2015: Technical Director at GEA Brewery Systems GmbH

• 2003 – 2005: Head of Engineering with power of procuration

• 2000 – 2003: Head of Engineering International

• 1998 – 1999: Project Manager at Tuchenhagen Brewery Systems GmbH, Germany

• 1995 – 1998: Project Engineer and Product Manager Units at Tuchenhagen GmbH, Germany

Education: B.Sc. degree in Process Engineering and Diplom-Ingenieur from the Technical University Hamburg-Harburg,

Germany

Kristina Böe (46)


Before OneGEA we had to deal with the followingchallenges:


Site C

IT System C

Site D

IT System D

Site A

IT System A

Site B

IT System B

X

X

XX

1) Many different sites with incompatible IT platforms 2) Different sites follow different demand cycles

Year 1 Year 2

Pharma

(site B)

Coffee

(site A)C

apacity

needed

Capacity

needed

Year 1

Site BSite AC

apacity

needed

Capacity

needed

Year 2

Site BSite A

3) Causing under- or / overcapacity locallyExchange of

resources impossible

because of site

distance/system

heterogeneity

Sub-optimal

utilisation of capacities

overall

X

Capacity available

Year 3

One Engineering vision: Flexible global sharing ofresources on one common platform


• „Follow the sun“ collaborative engineering

• Global transparency of sub-supplier tasks

• Global flexibility in capacity management

One

Engineering

system

One

Engineering

system

One

Engineering

system

OneGEA created common engineering pools allowingto share resources


Yesterday: Before 2014 Today

Application 1 Application 2

Engineering pool

Application 1 Application 2

No exchange of capacities Sharing of capacities

Requ

est fo

rp

roje

ctsu

pp

ort

X

Vision: One common engineering system will makethe engineering pools even more efficient


Site C

One System

Site D

One System

Site A

One System

Site B

One System

One Engineering

Plant design Component design

Common product data management

All sites using one common engineering system State-of-the-art engineering platform comprising

all engineering facets

Common engineering pools ensure optimal utilisationof engineers


Cap

acity

ne

ed

ed

Year 1

Site B (Pharma)Site A (Coffee)

Cap

acity

ne

ed

ed

Year 2

Site B (Pharma)Site A (Coffee)C

ap

acity

ne

ede

d

Cap

acity

ne

ede

d

Engineering pool Engineering pool

Engineering pools balance fluctuations in demand

Application dedicated engineers always fully utilised

Application dedicated capacity

Capacity flexibly contributed

A collaboration success story


Charles from US

Alex from Canada

Engineering project

Charles and Alex at the client‘s site

• GEA engineers Alex and Charles are both

part of the North American engineering pool

• Alex, responsible project engineer, was

unavailable for a specific weekend

• Charles filled in for him, went to the

customer’s site and continued working where

Alex had left off

Engineering pool enables flexibility

and shifting of capacities

The customer was satisfied that GEA made

this commitment to have an engineer on site

One Engineering – Business Benefits


Lower procurement cost

Common component database facilitates usage of standard components from preferred vendors

Flexibility of resources fosters full utilization independent of cycles

Sharing a state-of-the-art platform by all engineering disciplines

Increase efficiency

“One common language” eliminates double work

Cutting lead time and production cost

One Engineering data management tool enables speedy and unambiguous exchange of technical

information, minimizing rework of engineering data by having a centralized database

Agenda











Current position: Head of Shared Service Center


• Since Sept 2014: CIO GEA Group AG and Managing Director of GEA IT Services GmbH

• 2010 – 2015: CIO GEA Mechanical Equipment

• 2008 – 2009: Deputy CIO GEA – Division Mechanical Separation

• 2007 – 2009: Head of IT Projects at GEA Westfalia Separator

• 2002 – 2007: IT consultant at GEA Westfalia Separator

Education: Apprenticeship as Software Developer at GEA Westfalia Separator in Germany

Stefan Heimann (37)


Why GEA outsourced repetitive transactional procedures to 3rd party shared service centers

85

OneGEA

Executive Board

BA

Equipment

BA

Solutions

Regions / CountriesRegions / Countries

Regions / Countries

Global

Corporate

Center

Shared

Service

Center

• Economies of scale in

transactional services

justifies centralized

pooling

• Process

standardization easier

to achieve under

central control

• Supporting growth

(also post-merger

integration) by

providing scalable

processes

• Relieve operations

from administrative

burdens


Transition in all countries now in stable mode, further process optimization ahead

86

2015

H2

Transition of

local back office

functions to 3rd

party SSC

(”lift and shift“)

Transformation

of processes

• Finance/

Accounting

• HR

• Drive

digitalization by

standardizing

processes

• Extend scope

of services

beyond

2016 2017


GEA’s ambitious SSC implementation scenario with rapid ‘lift and shift’ approach pays off

87

• Full transparency and control over historically grown, inefficient

processes

• Harmonization can now be decided and implemented centrally by

one strong SSC organization

• Process design decided centrally by SSC

Control &

Transparency

• Ambitious transition time schedule limits period of uncertainty

• Short transition period reduces the risk of losing specialist

knowledge

• Transition in one go instead of keeping the organization busy

over several years

• Quick realization of savings

Essence of Speed

• Business Process Outsourcing drives reduction of complexitySimplification


Current scope of GEA’s Shared Service Center

88

GEA SSC

Finance/

Accounting

Human

ResourcesIT

Accounts payable

Accounts receivable

Asset schedule

Travel expenses

Standard reporting

IT Delivery &

Enterprise

Management

IT Security & Data

protection

ERP Process

Customizing

IT Operations

Employee Lifecycle

Management

Recruiting

administration

Training administration

HR first-level support

Payroll

HR reporting

Travel & Fleet

management


Transition Implementation - Wave ScheduleTransition activities closed by the end of 2016


Knowledge transferService

Rehearsal TestStabilization

Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul.

2015 2016

Jul. Aug.

IT

Aug.

Wave 1

Wave 2b (HR)

Wave 3

Wave 6

Wave 11

Wave 2a (F&A)

Wave 10

Sept.

Wave 9

Wave 5

Wave 7

Wave 8

Wave 4

HR

F&A

Remaining entities / processes

HR

F&A

HR

F&A

Oct. Nov. Dec.

Go Live EventCMD

2016

SSC serving all GEA countries from two hubs –Overview


GEA countries with all SSC

services (F&A + HR + IT)85%

6%GEA countries with IT service

and local outsourcing of SSC

F&A / HR services

2%GEA countries with IT, SSC HR

and partial SSC F&A services

3% GEA countries with only SSC

IT services

Bucharest

Manila

GEA SSC Location

4% GEA countries covered /

supported from other countries

% denote aggregate share of sales

Full SSC coverage achieved in countries accounting for 85% of group sales

SSC business volume indicatorsIntroducing process performance measurement


Quick wins and benefits from SSCGEA benefits from SSC already now

92

Already implemented measures:

Uniform workplace conditions (same workflow tools, central helpdesk, shared guidelines)

KPI based performance control of transactional processing

Higher transparency of process, application and system landscape

Higher visibility of process shortfalls and infrastructure issues, so mitigations can

be implemented faster

Efficiency increase – SSC savings already contribute to GEA‘s improved margin

Improved process monitoring by dividing up functions and better process

transparency

Benefits


Transformation of services within the current scope has started

93

GEA SSC

Finance/

Accounting

Human

ResourcesIT

Local ERP

replacements

Standardization invoice

processing

Travel expense

standardization

Credit control concept

to further improve cash

collections

IT Landscape optimization, elimination of local platforms

Service improvement Platform outsourcing

evaluation (IaaS* / PaaS**)

ERP platform outsourcing & cloud transformation

Office365 Microsoft Cloud

Global HR process

design

HR Core Cloud

Payroll standardization:

GER consolidation and

outsourcing decisions

by country

* Infrastructure as a service; ** Platform as a service


SSC: Next steps within existing scopeStandardization as key enabler for digitalization


Process and system standardization

• Consolidation of ERP & application landscape into one global ERP system

• Implement robotic process automation (RPA)

Transfer ever more process steps towards SSC

• Setup / extend multilingual vendor helpdesk

• Broaden scope of reporting factory

Define and implement universal policies and guidelines

Fully standardized IT services

Future SSC opportunities for GEAEvolve to Global Business Services


Procure to Pay (PTP) process:

Procurement / indirect spend incl. catalogue management, global sourcing support

Order to Cash (OTC) process:

Order handling for high-volume standard orders

Service order handling and scheduling of service technicians

Customer helpdesk (24/7; multi-lingual)

Financial Closing (month end)

HR Services:

Administration of performance appraisals

Extend employee and manager self-services (e.g. changes of personal data)

IT Services:

Further platform outsourcing (IaaS / PaaS)

Offshore centers of competence once single ERP kicks off (e.g. process customizing)

Facility Management Services:

Fleet management, repairs / maintenance, real estate / rental, office inventories

Agenda










Agenda


2

1

Capital allocation

Financial targets until 2020

Target values until 2020

CAGR Organic Sales Growth CAGR (2016 – 2020) 4% to 6%

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: 22%

Updated Financial Mid-term Targets


*normalized capex; ratio may temporarily exceeded because of various growth initiatives

GEA sees its mid-term organic sales growth potential in the range from 4% to 6% (CAGR 2016-20)


All customer industries are assumed to contribute positively to organic growth

Top 3 growth contributors:

Dairy Processing1

Food2

Pharma/Chemical3

Financial Targets for FY 2017 - FY 2020:Operating EBIT Margin: 13% to 16%


* Already include first cost savings from “Fit for 2020”

GEA has gradually managed up Operating EBIT Margin to > 11%

8.8%

6.8%

8.4%

10.5% 10.3% 10.6%11.4% 11.7% 11.9%

2008 2009 2010 2011 2012 2013 2014 2015 2016 Q2LTM

1 2017 12 13 2020

Operating EBIT-Margin (LTM)

Min. 13%

Max. 16%

Upside:

Service

Op. leverage

Underperforming unit

Improved production & procurement

* *

Agenda


2

1

Capital allocation

Financial targets until 2020

Acquired annual sales volume

M&A status-quo: What has been acquired since the disposal of Heat Exchangers


40

50

35

85

221

SumImaforniHilgeCMT

11

ComasScan Vibro /

De Klokslag

GEA managed to identify, approach and acquire a portfolio of margin accretive

companies with a high strategic fit

[EURm]

We have discontinued several deals for the followingreasons


GEA could have spend more than EUR 1bn during the last three years by taking

significant risks and paying prices far in excess of GEA’s stock valuation

Complexity (e.g. smaller deals with significant relocation and reorganisation requirements)

Compliance (e.g. legal and tax compliance, IP infringements)

Restructuring cases (e.g. companies entailing significant operational restructuring efforts)

Strategic fit (e.g. market positioning does not add value to GEA)

Valuation (e.g. price expectations exposing GEA to a significant impairment risks)

Acquisition criteria focus on strategy and value creation


ARTE fitA

Strategic fitB

Value

creation

C

Market

attractiveness

Target

attractiveness

Earnings

per share

Total share-

holder return

DCF >

Price

CFD >

hurdle rate

ROCE >

hurdle rate

Functional ExcellenceRegionsApplications Technologies

Capital allocation:Determining the amount of residual cash


We will have a detailed look at:

Which sources of funds are available?

For which purpose in the near/medium term should we retain which amounts of funds?

How much, if any, residual cash would be left over?

1

2

3

Strategic reserveMax. amount of

cash available

per end 2017

Allowed potential

debt increase to

keep Baa2

Expected cash

generation 2017

Estimated

cash position

per end 2016

M&A Investments in

organic growth

Residual cash

Note: For illustrative purposes only

This bridge does not consider the option of (partially) funding the pension deficit

Timeline capital allocation decisions


CMD 2014:

Capital allocation

priorities

CMD 2016:

Presentation of

timeline

Cash check

Q3 2014 Q4 2014 - now October 2016 Jan/Feb 2017March/April

2017

Decision on use of

residual cash

Acquisition of

Scan Vibro, De

Klokslag, CMT,

Comas, Hilge and

Imaforni

Summary

Jürg Oleas

107

Summary of the key messages


OneGEA enables:

Application focus: Market share gains in neglected customer industries (e.g. food)

Regions: Market share gains in many countries due to systematic approach, critical size, cross-selling

Production & Procurement: EUR 60 - 80m of gross savings until 2019

One Engineering: Increased efficiency, lower lead time & production cost, higher flexibility of resources

Service: Further growth opportunities (e.g. OPOSO)

Shared Service Center: Potential of transfer of further activities


GEA‘s journey hasn‘t ended yet, it only just started

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2016 Capital Markets Day - GEA engineering for a better world 1330... · Agenda GEA Capital Markets...

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