Gea%20cmd%20 %20ceo%20presentation%20for%20handouts%20per%2020141013 tcm30 19142
Gea%20cmd%20 %20ceo%20presentation%20for%20handouts%20per%2020141013 tcm30 19142
description
Transcript of Gea%20cmd%20 %20ceo%20presentation%20for%20handouts%20per%2020141013 tcm30 19142
GEA Group Aktiengesellschaft
London, October 13, 2014
GEA’s strategic transformation to “OneGEA” Jürg Oleas, CEO GEA Group
engineering for a better world
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%.
Disclaimer
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 2
engineering for a better world
• Strategic Roadmap “GEA 2020”
• ARTE framework as pillars for GEA’s strategy
• Future organizational set-up “Fit for 2020”
Agenda
1
3
2
3 GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA”
engineering for a better world
The steps of GEA’s strategic transformation
“Fit for 2020”
reorganization
With which
core businesses?
Where are
we driving
GEA?
2012
GEA
long-term
strategic
direction
GEA
strategic
portfolio review
“GEA 2020”
target footprint
2013
With focus on which
growth areas?
In which efficient
organizational setup?
Divestment of HX Segment
2014: Concept
2015: Implementation 2012 – 2013
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 4
engineering for a better world
2003 – 2008 2009 – 2014
• Divestiture of
Chemicals & Plant
Engineering, Closure
of Zinc Smelter
• Reorganization into 5 distinct segments
and 31 business units
• Elimination of overlaps
1 mg acquired GEA in 1999; 2 mg and GEA merged in 2005 for legal and tax reasons; 3 the portfolio of GEA Group 2009 was similar to pre 1999 GEA “old”
GEA has focused its portfolio and organization in steps
GEA Group3
FS
-Segm
ent
FT
-Se
gm
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t
HX
-Se
gm
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PE
-Se
gm
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ME
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GEA Group2 mg
technologies1
Sp
ecia
lty M
ech
.
En
gin
ee
rin
g
Pla
nt
Eng.
Chem
icals
Oth
er
firm
s
Focus on specialty
mechanical engineering
Portfolio analysis
and HX divestiture
• Focusing on food and
beverages as prime
customer industries
Carving out HX from among 5 divisions,
consolidating HX factory landscape
GEA Group
A-D
ivis
ion
R-D
ivis
ion
C-D
ivis
ion
M-D
ivis
ion
D-D
ivis
ion
E-D
ivis
ion
H-D
ivis
ion
P-D
ivis
ion
B-D
ivis
ion
FT
-Se
gm
en
t
HX
-Se
gm
en
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PE
-Se
gm
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ME
-Se
gm
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t
RT
-Se
gm
en
t
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 5
engineering for a better world
GEA’s long-term strategic direction
Agenda
Pursue clear technology and market
leadership
Further develop food processing focus
and solutions for demanding
production processes
Become global by getting closer
to our customers
Use of portfolio management as tool
to leverage strengths and allocate
resources
Build an organization and capabilities
to support strategic vision
Drive sustainable value creation
Guardrails for
the overall GEA
strategy
Guardrails for the
overall GEA
strategy defined
by GEA Executive
Board in a first step
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 6
engineering for a better world
GEA’s long-term strategic direction
• Foster cash generation mindset
across GEA Group
• Grow the GEA business
organically at target level above
GDP growth
• Maintain GEA Group ROCE within
a corridor of 20-25% throughout
the cycle
• Perform prudent cash and risk
management ensuring sufficient
liquidity headroom, healthy capital
structure and robustness against
risk scenarios
• Sustain investment grade and
keep dividend payout ratio at a
level of industry benchmarks
• Intensify role of the GEA
Group corporate center to
ensure all businesses work
towards GEA Group strategic
direction (strategy process)
• Leverage cooperation
potential across businesses
(synergies)
• Strengthen value-add of
corporate center (e.g.,
standardized processes,
bundling of knowhow, shared
services)
• Develop HR strategy and
capabilities to support growth
and leadership
• Seek balanced portfolio
(cash generation, industry
and geographic
diversification, and risks)
• Divest business for which
GEA is not best owner or
which cannot contribute to
strategic vision
• Develop global presence
and grow especially in
emerging markets with long-
term potential
• Defend market position in
developed markets
• Continue expanding service
business in order to ensure
sustainable profitability and
customer satisfaction
• Intensify customer focus
through leveraging local
sales network and key
account management for
major customers
• Expand presence in
attractive niche markets
within food processing
• Opportunistically serve other
innovation-driven
industries that leverage our
technologies and business
models
• Avoid markets not
supported by long-term
global trends, markets with
high cyclicality or
commoditized markets
• Sustain technology and
innovation leadership as
key USP in each market
• Avoid markets where GEA
has significant technologic
disadvantage or where GEA
is disadvantaged in terms of
relative market share
Agenda
Pursue clear technology and market
leadership
Further develop food processing focus
and solutions for demanding
production processes
Become global by getting closer
to our customers
Use of portfolio management as tool
to leverage strengths and allocate
resources
Build an organization and capabilities
to support strategic vision
Drive sustainable value creation
Guardrails for the
overall GEA
strategy defined
by GEA Executive
Board in a first step
§1
Pursue clear
technology
and market
leadership
§2
Further develop food
processing focus
and solutions for
demanding
production
processes
§3
Become global
by getting
closer to our
customers
§4
Use of portfolio
management as
tool to leverage
strengths and
allocate resources
§5
Build an
organization
and capabilities
to support
strategic vision
§6
Drive
sustainable
value creation
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 7
engineering for a better world
GEA wants to serve markets with these criteria
Customer industry willing to
pay a premium for process
quality and reliability
Limited project risk profile,
maximum project duration
1-2 years
Scope of supply limited
to elements directly
controllable by us
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 8
engineering for a better world
Urbanization
Shanghai
necessary agricultural supply area
Illustrative
What we like about the food industry (1): Steady growth rates due to continuing urbanization
2.6
5.3
2010 2050
Emerging markets (B)
1.0 1.1
2010 2050
Developed economies (B)
~ 200 million people moving into cities p.a. consuming
ever more processed and convenience food
Source: United Nations; Euromonitor; The Guardian; Oxford Economics; Documentation “Wie wird die Stadt satt” (ARD 24.09.2014)
By the year 2050 the
world’s population will live
50% in the cities
50% in the countryside
300 KM
Germany
Today the world’s
population lives
75% in the cities
25% in the countryside
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 9
engineering for a better world
What we like about the food industry (2): Stable consumer spending also in tough times
Economically
good times
Economically
difficult times
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 10
engineering for a better world
Food brands thrive on long-term product consistency in taste, texture and appearance. Precise process technology warrants that.
What we like about the food industry (3): Branded food producers prefer precision equipment
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 11
engineering for a better world
What we like about the food industry (4): Zero failure tolerance a significant entry barrier
If equipment fails e.g. in the marine
industry, the industrial customer suffers
some efficiency loss
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 12
If equipment fails in the food industry,
the end customer’s health could be at
risk
engineering for a better world
„Avatar” meat (…)
contaminated by a
phosphorescent bacteria”
(China) Source: Telegraph, 27.04.2011
„Horse meat scandal
in Europe” Source: NY Dailynews, 08.02.2013
Periodic food scandals have sensitized customers for food safety concerns
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 13
engineering for a better world
…
…
…
…
Quality of After-Sales Service 23%
Price 30%
Machine Quality and Performance 71%
…
…
Ranking of key buying criterion according to GEA customer satisfaction survey,
September 20141
For GEA’s cutomers, machine quality and performance is by far #1 buying criterion
What we like about the food industry (5): Price apparently not the most decisive purchase criterion
1 Stratified sample size n=3274, external poll
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 14
engineering for a better world
Our vision “GEA 2020”: To be the first choice of our customers
Our ARTE framework defines our strategy how to reach
the target footprint “GEA 2020”
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 15
In particular we always want to be the first choice
of our customers in the relevant food industry.
the globally leading engineering group to provide smart
solutions to sophisticated process industries.
GEA to become
engineering for a better world
• Strategic Roadmap “GEA 2020”
• ARTE framework as pillars for GEA’s strategy
• Future organizational set-up “Fit for 2020”
Agenda
1
3
2
16 GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA”
engineering for a better world
ARTE framework as pillars for GEA’s strategy
Applications Regions Technologies Functional Excellence
• Exploit market
potential in target
applications
• Align GEA-wide
application strategy
and customer
approach
• Capture global
growth opportunities
• Expand local
presence
• Coordinate regional
approaches across
GEA
• Strengthen
innovation and
technological
leadership
• Foster cross-
business colla-
boration in R&D
• Increase efficiency
in operations and
support functions
• Reduce
organizational
complexity
Target Footprint 2020
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 17
engineering for a better world
Application strategy to maximally support customers in solving their process challenges
Customers
…are looking for a
solutions partner with end-
to-end know-how, who
knows the whole
production process for their
application
Application
know-how
Unique selling proposition
Application strategy
• Expand GEA’s process
competencies into new
applications
• Identify attractive “white
spots” along process chains
and fill gaps by acquisitions
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 18
A R T E
engineering for a better world
1
4
2
3
5
8
6
Targeted applications for target footprint “GEA 2020”
Grow leading position in dairy
Grow leading position in liquid food
Strengthen personal care
Expand in animal proteins
Expand in total solutions for
edible oils, starch & sugar
Enter confectionery, biscuits & pizza
Strengthen packaging
competencies
Foster processing intelligence &
automation
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 19
7
A R T E
engineering for a better world
In cheese making technology, GEA had a gap…
Milk intake
& preparation
Milk storage
& distribution Standardization
Bacteria removal
(optional) Pasteurization
Milk intake & preparation
• Milking
parlor
• Standardization
separator
• Sterilization
separator
• Heat
exchanger
• Valves
• Pumps
• Tanks
Whey drainage
& pre-press Pressing
Water cooling,
brining, ripening
Cutting
& Slicing
Primary
packaging
Curd
production
Final process Press & ripe Coagulate & de-whey
• Tank
• Dosing unit • Cheese vat • Pressing line • Brining system
• Brine treatment
• Cutter
• Slicer
• Packer • Curd filler
Bacteria
starter mixing
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 20
A R T E
engineering for a better world
…which GEA filled by taking over de KLOKSLAG
Milk intake
& preparation
Milk storage
& distribution Standardization
Bacteria removal
(optional) Pasteurization
Whey drainage
& pre-press Pressing
Water cooling,
brining, ripening
Cutting
& Slicing
Primary
packaging
Curd
production
Final process Press & ripe Coagulate & de-whey
Bacteria
starter mixing
• Milking
parlor
• Standardization
separator
• Sterilization
separator
• Heat
exchanger
• Valves
• Pumps
• Tanks
• Tank
• Dosing unit • Cheese vat • Pressing line • Brining system
• Brine treatment
• Cutter
• Slicer
• Packer • Curd filler
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 21
A R T E
Milk intake & preparation
engineering for a better world
Attractive market
Leading market position
Significant upsides
• Rising consumption of milk and cheese products is driving the demand for production capacities
• Market for cheese production machines grows steadily
• Extension of GEA’s product portfolio towards full solutions provider for semi-hard cheeses
• Leading supplier for semi-hard cheese manufacturing equipment in Western Europe
• Innovative group with strong established R&D
• De Klokslag’s current growth is restricted by regional range; larger volume possible through integration
into GEA network; in particular in Emerging Markets such as Latin America
• Ability for GEA to act as full solutions provider → a key selling point in non-EU markets
• Mutual advantages through integration of R&D resources and bundling of manufacturing
de KLOKSLAG is an ideal complement
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 22
A R T E
engineering for a better world
GEA’s food exposure to grow to 75% - 80%
Food
Non-
Food
Sales exposure 2020:
75% - 80% food No 100% food exposure due to multi-purpose
functionality of our products:
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 23
A R T E
engineering for a better world
ARTE framework as pillars for GEA’s strategy
Applications Regions Technologies Functional Excellence
• Exploit market
potential in target
applications
• Align GEA-wide
application strategy
and customer
approach
• Capture global
growth opportunities
• Expand local
presence
• Coordinate regional
approaches across
GEA
• Strengthen
innovation and
technological
leadership
• Foster cross-
business colla-
boration in R&D
• Increase efficiency
in operations and
support functions
• Reduce
organizational
complexity
Target Footprint 2020
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 24
engineering for a better world
Local Emerging Markets food producers grow faster than multinationals
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
Sales CAGR FY 2010-13
Local EM
food producers1
32%
68%
1/3 of local players are
not yet GEA customers1
GEA
customers
Selection of local GEA customers in Emerging Markets
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 25
11%
A R T E
engineering for a better world
China 53
GEA has still room for improvement in Emerging Markets
1Value for Germany = Index 100; Source: IMF GEA 3rd party sales in EUR million and GDP USD billion
Germany
= Index 100
Countries where GEA‘s sales coverage as a % of GDP is higher than in Germany
Countries where GEA‘s sales coverage as a % of GDP is lower than in Germany
Brazil 54
Argentina 82 Chile 66
Mexico 34
Colombia 23
Peru 41
Russia 79
Turkey 67
Vietnam 260
Thailand 141
Indonesia 38
South Africa 198
India 38
Germany 100
Indexation average GEA Sales/GDP per country 2011 - 20131
USA 40
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 26
A R T E
engineering for a better world
ARTE framework as pillars for GEA’s strategy
Applications Regions Technologies
• Capture global
growth opportunities
• Expand local
presence
• Coordinate regional
approaches across
GEA
• Increase efficiency
in operations and
support functions
• Reduce
organizational
complexity
Target Footprint 2020
• Strengthen
innovation and
technological
leadership
• Foster cross-
business colla-
boration in R&D
• Exploit market
potential in target
applications
• Align GEA-wide
application strategy
and customer
approach
Functional Excellence
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 27
engineering for a better world
Source: Frankfurter Allgemeine Zeitung (26.06.2014)
~ 3,500 new products entered
the US food market in 2012
~ 2,000 new food products p.a.
in German supermarkets alone
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 28
The continual market launch of new food products creates markets for innovative food processing equipment
Additionally, higher resource efficiency (e.g. power, water usage) is a major competitive
advantage for an equipment supplier
A R T E
engineering for a better world
Innovations made by GEA help industrial clients to launch new innovative products
• Continuous process to withdraw water by freezing
instead of evaporation
GEA Juice Freeze
Concentration
Innovation
Impact on product quality
• Natural flavor can be preserved in the concentrate
(e.g. juices, coffee, milk)
• Better taste and aroma of end product justifying higher price
• Higher overall equipment efficiency due to less demanding
cleaning in place (CIP)
Benefit for industrial customers
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 29
A R T E
engineering for a better world
Innovations made by GEA help industrial clients to reduce total cost of ownership
GEA Niro MSD™ Spray Dryer Size 4000:
Up to 700 tonnes milk powder per day
GEA Capital Markets Day 2014 - GEA’s strategic transformation to “OneGEA” 30
Equivalent of ~300 truckloads
of raw milk per day1
• Use scale-up algorithm based on computational
fluid dynamics (CFD) modelling and deep
process know-how to design the world’s largest
milk powder plant
Innovation
• Approximately 10% lower total cost of
ownership (TCO)
Benefit for industrial customer
Impact on costs
• Compact spray dryer chamber
• Simpler operation
• Lower energy cost
1 based on assumption of 15,000 litres raw milk per truckload (4.4m litres of raw milk shall be processed to 700t milk powder)
A R T E
engineering for a better world
ARTE framework as pillars for GEA’s strategy
Applications Regions Technologies Functional Excellence
• Capture global
growth opportunities
• Expand local
presence
• Coordinate regional
approaches across
GEA
Target Footprint 2020
• Exploit market
potential in target
applications
• Align GEA-wide
application strategy
and customer
approach
• Strengthen
innovation and
technological
leadership
• Foster cross-
business colla-
boration in R&D
• Increase efficiency
in operations and
support functions
• Reduce
organizational
complexity
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 31
engineering for a better world
Current segments with diverse organizational set-up
Farm Technologies Refrigeration Technologies Process Engineering Mechanical Equipment
BU Farm
Equipment
BU Milking & Cooling
BU Farm
Services
TC Engin.
Solutions
TC Comp.
TC Freezing
BU MSP
BU FS
BU HOM
'Matrix' between
Products and Sales
'Matrix' between
TCs and Sales
Matrix between
TCs and Sales
(SBUs for steering)
Stand-alone BUs with
matrix organization
= Stand-alone businesses
PD/PM
= Operations (Purchasing, Production & Procurement) = Sales only = Product Development/ Product Management
PD/PM PD/PM PD/PM PD/PM PD/PM PD/PM PD/PM PD/PM
BU FLC
PD/PM
Sales Sales Sales Sales Sales
Operations Ops Ops Ops Ops Ops Ops Ops
TC TC TC … … …
SBU
SBU
PD/PM PD/PM PD/PM
Sales (MCs)
Note: TC = Technology Center; MC = Market Company PE; PD = Product Development; PM = Product Management
Current structures display high complexity from a customer’s as well as from an administrative point of view
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 32
A R T E
engineering for a better world
• GEA a partner
for its customers
due to application
know-how
• Exploit market potential
in target applications
• Align GEA-wide
application strategy
and customer approach
Applications Regions Technologies
• Untapped potential
mainly in Emerging
Markets
• Capture global growth
opportunities
• Expand local presence
• Coordinate regional
approaches across GEA
Target Footprint 2020
• GEA perceived as
technology leader
• Further strengthen
innovation and
technological leadership
• Foster cross-business
collaboration in R&D
• High complexity in
organization and no
standardization of
processes
• Increase efficiency in
operations and support
functions
• Reduce organizational
complexity
Functional Excellence
“OneGEA”: Closer operational and organizational integration of key dimensions to maximize value-add to customer
GEA will improve particularly with regard to regional coverage and functional excellence
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 33
engineering for a better world
• Strategic Roadmap “GEA 2020”
• ARTE framework as pillars for GEA’s strategy
• Future organizational set-up “Fit for 2020”
Agenda
1
3
2
34 GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA”
engineering for a better world
Project “Fit for 2020”: From four stand-alone Segments to two integrated Business Areas
Current Organization Future Blueprint
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 35
Executive Board
• 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
• “One GEA” 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
Equipment BA
Solutions BA
Global Corp.
Center
SSC RT FT ME PE Head-
quarter
Regions Regions Regions Regions
Support Support Support Support
Regions / Countries
Executive Board
engineering for a better world
Applications Regions Technologies Functional Excellence
Future organizational set-up (“Fit for 2020”) reflects all elements of ARTE strategy
Executive Board
Shared Services Center (SCC)
Global Corporate Center (GCC)
North
America
Latin
America
Western E.
& MEA
Nordics, UK/IE,
& BeNeLux Asia-Pacific
DACH &
Eastern E.
36 GEA Capital Markets Day 2014 - GEA’s strategic transformation to “OneGEA”
Product Engineering & Development (PED)
Product Management & Sales (PMS)
Supply Chain & Production (SCP)
Equipment Service (SER)
Global Corporate Center (GCC)
Technology Centers (TEC)
Application Centers (APC)
Solutions Service (SER)
Equipment Business Area Solutions Business Area
engineering for a better world
Future setup will significantly strengthen our core cash flow generation ability
Streamlined Capex
Working Capital Discipline
Stronger Top-line Growth
Quantum
leap on GEA
Cash Flow
Drivers
Cost Savings €
€
€
€
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 37
engineering for a better world
Sales
&
Service
Operations
&
Engineering
General
&
Administration
“Fit for 2020” Savings: Design Teams with top-down savings mandates
• Functional bundling in countries
• Delayering / Increased span of control
• Shared Service Center
• Optimized production network
• Leverage outsourcing
• Increase span of control
• Delayering / Increased span of control
• Sales effectiveness & sales support synergies
• Bundling of after sales
Main Levers Savings Target
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 38
Cost
Savings
at least
EUR
100m
p.a.
Personnel
approx.
1000 FTE
engineering for a better world 39 GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA”
“Fit for 2020” Commitment: Savings come fully on top of regular budget
Ongoing business
Growth
Flat
Moderate
Decline
Increase
Slight
increase
Keep
New GEA
Volume growth
Operational leverage
Efficiency increase
Operational measures
Top-line
Scenarios
Severe
Downturn
Strict Budget tracking
Operating
EBITDA-Margin Drivers
Efficiency increase
Cost cutting initiatives
“Fit for 2020”
+ EUR 100m |-1000 FTE
Savings by 2017
+ EUR 100m |-1000 FTE
+ EUR 100m |-1000 FTE
Severe macroeconomic downturns need to be handled separately
Strict Savings tracking
+
+
+
=
=
=
Operating
EBITDA-Margin
engineering for a better world
“Fit for 2020” savings
target substantiated
with detailed measures
Anticipation of imple-
mentation progress and
cost budget overruns
Realization of savings
and overall budget
Measure
implementation
Cost budget
compliance
Project Tracking
• Clear responsibilities
• Detailed milestone
plan
• Detailed savings plan
(incl. timing, FTE, cost
type)
• Steering and
monitoring of cost
drivers (e.g. FTE)
• Easy to monitor
• Early indicators
Cost driver
development
• Monthly review
• Cost and FTE budgets
• No tolerance
of deviation
• Strict escalation
process
Actual
Delta
Target
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 40
“Fit for 2020” Tracking: Project progress and savings closely monitored from three angles
engineering for a better world
Design Team has been carefully screened - incentives tied to delivering on savings and operational targets
Regions and countries
R-LAM R-NCE R-WE&MEA R-APC R-DACH&EE R-NAM
GCC SSC
G-FIN G-HR G-TAX G-IR G-CD G-CMB G-IT G-SIM G-LC SSC
Equipment BA
E-CFO E-PED E-PMS E-SER E-SCP
Solutions BA
S-CFO S-TEC S-APC S-SER
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 41
engineering for a better world
Major organizational design rules to warrant a leaner and better organization
Physical design of the future organization
• Span of control of new organizational units: Increase by 2
• Number of layers of the new organization: Reduction of 2 complete management levels
A
Saving targets – top-down guidelines for target sizing of new organization
• At least EUR 100m savings allocated to different business functions
B
ARTE guardrails – adherence with the ARTE framework
• Coordinated regional approaches across GEA with one country “Head of GEA” with own P&L
C
Flexibility & Simplicity & Scalability rule
• Reduced complexity, scalable and acquisitions easy to integrate, flexibility in downturn; “must-have” vs. “nice to have”
D
“Customer First” – each organizational decision is for customers benefit
• Implement-ability, increased customer reach & proximity
E
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 42
engineering for a better world
Board: 4-7 layers apart
from customers
Executive Board
4-7 layers
Customer
Board: 3-5 layers apart
from customers
3-5 layers
GEA taking out two complete
management layers:
• Segment Management
• Business Unit
Management
Cutting management layers is an important design deliverable for the new organization
Future set-up Situation today
Executive Board
Customer
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 43
Executing “Fit for 2020”
engineering for a better world
Capital Markets
Day 2014
Implementation to begin in Q2 2015 after a diligent charting process
Milestone: Detailed plan for
new organizational structure
GEA Capital Markets Day - GEA’s strategic transformation to “OneGEA” 44
Preparation for
execution of new
structure (e.g. systems
adaption)
Sizing of functions
Detailed organizational
design/blueprint
(new org charts,
processes, governance)
Implementation and
external reporting from
Q2 2015 onwards
2015 2014
Strict ongoing saving
tracking
Preparation for implementation
”saving tracking tool”