Conference Call Results Q2 2017 DÜSSELDORF, 26 JULY 2017
Disclaimer This presentation contains forward-looking statements. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. Statements with respect to the future are characterized by the use of words such as "expect", "intend", "plan", "anticipate", "believe", "estimate" and similar terms. Forward-looking statements are based on our current assumptions and forecasts. These statements naturally entail risks and uncertainties, which may cause the actual results of operations, financial position or performance to diverge materially from the estimates given here. Factors that could cause such a divergence include, inter alia, changes in the economic and business environment, fluctuations in exchange rates and interest rates, launches of competing products, poor acceptance of new products or services, and changes in business strategy. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. We undertake no obligation to update or revise any forward-looking statements. Due to rounding, the sum of percentages of order intake and sales by region as well as by customer industry may vary from 100%. 2 GEA Conference Call Presentation Q2 2017
1. Results Q2 2017 2. Financials Q2 2017 3. Outlook FY 2017 3
Executive Summary Key figures Q2 2017 Order Intake Sales Op. EBITDA Operating Op. ROCE 1 Op. CFD Margin (EURm) (EURm) (EURm) EBIT (EURm) 1,241 1,138 122 102 19.4% 7.0% Δ +1.6% YoY Δ -1.6% YoY Δ -15.7% YoY Δ -18.6% YoY Δ -528 bps YoY Δ -416 bps YoY 1 Operating ROCE L4Q = operating EBIT (L4Q) / Capital employed excluding EUR ~800m goodwill from the acquisition of the former GEA AG by the former Metallgesellschaft AG in 1999 (average L12M) 4 GEA Conference Call Presentation Q2 2017
Share buyback program GEA on February 6 th , 2017 announced: • Share buyback of up to EUR 450m • To be executed within a year starting in March 2017 • Repurchased shares to be cancelled • Current # of shares outstanding 192.5m Status as per Friday, July 21 st : • Total shares bought back since March 8th: 8,448,235 • Average purchasing price: EUR 37.97 • ~70% of EUR 450m have been spent so far Link to the interim reporting of the share buy back program: http://www.gea.com/de/investoren/share-information/aktienruckkauf/index.jsp 5 GEA Conference Call Presentation Q2 2017
Strategic projects to complete OneGEA Steering Systems Operational Excellence • OneGEA Finance • Manufacturing footprint • Project Database • Procurement Excellence • HR software (Workday) • OneEngineering • Common CRM (also enhances pipeline visibility) IT-Excellence Digitalization @ GEA • IT Platform outsourcing (Platform as a • Processes Service) • Products/services 6 GEA Conference Call Presentation Q2 2017
Current Strategic Projects (“below the line”) Cash Expenditures (P&L and CapEx) 2017 1) 2018 1) Total in €m P&L 2) P&L 2) P&L 2) CapEx CapEx CapEx Steering Systems ~ 20 ~ 25 ~ 10 ~ 15 ~ 30 ~ 40 Operational Excellence ~ 20 ~ 20 ~ 25 ~ 30 ~ 45 ~ 50 IT Excellence ~ 15 ~ 10 ~ 5 ~ 20 ~ 10 Digitalization ~ 2 ~ 3 ~ 5 Total ~ 57 ~ 55 ~ 43 ~ 45 ~ 100 ~ 100 1) spending could partially be delayed into the subsequent year 2) "below the line", i.e. adjusted for in operating EBITDA 7 GEA Conference Call Presentation Q2 2017
OneGEA manages businesses across legal entities OneGEA Finance reports data accordingly GEA until 2015 One GEA Various product groups / applications Example: „How Sales in various countries much money Regions / Countries do we make in company XYZ Managers of Regions or located in country Countries Across products and applications ? ABC?“ Across countries Products, Applications, Services Example: „How Managers of much money • Central view on KPIs of do we make with individual legal entities Products (BA-E), or dairy separators without granularity in the US?“ • No view across legal entities Applications (BA-S), or by application, product or service category Service categories 8 GEA Conference Call Presentation Q2 2017
OneGEA Finance enables all GEA managers to more effectively steer in the OneGEA Organization 2018/2019 Target State Starting situation 2016/2017 17Q2 Legal entity • • Migration to OneGEA Financial steering dimensions review organization, involving aligned with organizational ( e.g. systems) >200 legal entities structure Global • • Harmonized structures & Heterogeneous cost center reporting across legal entities reporting dimensions structure and processes • Central transparency on across legal entities Sales & Gross Margin Sales and Gross Margin by Product Groups / • for Products / Applications / Limited central Applications / Services accessibility of Services across countries (Cost of Sales Method) financial details • Central transparency on on legal entity level Primary Costs Total Costs in each by Organizational Units • High complexity due OneGEA Org. Unit (Total Cost Method) to variety of local • Increased granularity Finance systems Overhead Costs of Overhead Costs by Organizational Units • Overall low level of by OneGEA Org. Unit (Cost of Sales Method) reporting automation • Higher efficiency and Continuous improvements automation in reporting (e.g. process automation, cost data granularity and drill-down processes functionality, harmonization of accounting and master data, etc.) 9 GEA Conference Call Presentation Q2 2017
Timeline for the OneGEA ERP Project Action until End of 2018 Targeted status 2020 Targeted status 2023 OneGEA ERP Performance Performance Performance One high performance uniform platform Weakest platforms ‘One for all’ Interim solution Existing well performing platforms Scalability Scalability Scalability Step 3: Step 1: Step 2: • Eventually, consolidation into • Migration of the weakest • Consolidating the number of only one common high platforms has already started platforms onto the best existing performance platform ones • Platforms to be migrated into • OneGEA ERP (SAP, Cloud existing better solutions which • 80% of GEA is aimed to run on solutions) to be fully can be further migrated in the SAP platforms by the end of operational from 2023 second step with much less 2020 onwards effort 10 GEA Conference Call Presentation Q2 2017
1. Results Q2 2017 2. Financials Q2 2017 3. Outlook FY 2017 11
Key figures and change YoY Q2 2017 Order Intake 1 Sales 1 1,500 € m 1,600 € m Δ Δ +1.6% 1,241 -1.6% 1,222 1,157 1,138 adjusted 2 : +0.6% 1,200 € m adjusted 2 : -2.5% 1,000 € m 672 659 634 602 800 € m +2.0% -5.0% 500 € m 400 € m 622 617 586 +0.8% 571 +2.6% 0 € m 0 € m Q2 16 Q2 17 Q2 16 Q2 17 BA Equipment BA Solutions BA Equipment BA Solutions Operating EBITDA 1 Operating EBITDA Margin 200 € m Δ -15.7% Δ YoY Q2 16 Q2 17 145 150 € m adjusted 2 : -15.7% 122 62 35 BA Equipment 15.1% 16.5% 148 bps -43.1% 100 € m +12.6% BA Solutions 9.7% 5.8% -391 bps 50 € m 97 86 0 € m GEA Group 12.6% 10.8% -180 bps Q2 16 Q2 17 BA Equipment BA Solutions 1 Please note that the difference between the sum of the BAs and the Group is explained by consolidation/others; 2 Adjusted = before currency translation and structural effects 12 GEA Conference Call Presentation Q2 2017
Order Intake, Sales, Operating Margins 5,500 € m 16% 13.7% 13.4% 14% 5,000 € m 12.6% 12.0% 12.0% 11.9% 11.9% 11.6% 12% 10.9% 10.2% 10.3% 10.3% 4,500 € m 10% 4,000 € m 8% 6% 3,500 € m 4% 3,000 € m 2% 2,500 € m 0% Q2 12 Q2 13 Q2 14 Q2 15 Q2 16 Q2 17 Order Intake L4Q Sales L4Q Operating EBITDA Margin L4Q Operating EBIT Margin L4Q 13 GEA Conference Call Presentation Q2 2017
Order intake development by size 1,400 € m 1,246 1,241 1,222 1,223 1,170 1,168 1,158 1,200 € m 1,149 1,144 1,136 46 1,127 118 136 111 1,084 54 1,068 55 123 50 160 83 179 136 79 128 36 87 89 112 116 97 1,000 € m 103 91 137 68 96 48 182 221 228 201 193 190 163 211 170 174 158 156 800 € m 194 600 € m 835 400 € m 812 799 805 791 791 788 773 765 765 758 754 718 200 € m 0 € m Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 < € 1m >= € 1m < € 5m >= € 5m < € 15m >= € 15m 14 GEA Conference Call Presentation Q2 2017
Order intake split as of Q2 2017 L4Q: Top 20 countries account for 74% of GEA‘s order intake More than 5% Country Share of total order intake Growth y/y BtB Betw een 1% and 5% USA 16% 1.01 Betw een -1% and 1% Germany 9% 1.08 Betw een -5% and -1% China 7% 0.89 Less than -5% France 4% 0.95 Canada 4% 1.99 Netherlands 3% 0.85 32% of order intake Great Britain 3% 0.97 Russia 3% 1.15 31% of order intake India 3% 1.15 0% of order intake New Zealand 3% 1.75 Spain 3% 0.90 6% of order intake Italy 2% 1.33 Mexico 2% 1.23 31% of order intake Poland 2% 0.81 Australia 2% 1.00 Brazil 2% 1.09 Japan 2% 1.04 Indonesia 2% 1.38 Belgium 2% 0.79 South Africa 2% 1.25 Emerging Markets 37% 1.03 GEA 100% 1.03 15 GEA Conference Call Presentation Q2 2017
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