Q2 2020 Results Stefan Klebert, CEO Marcus A. Ketter, CFO DÜSSELDORF, AUGUST 12, 2020
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 Q2 2020 Figures
Highlights Q2 2020 Stefan Klebert, CEO 3 GEA Q2 2020 Figures
GEA with significant earnings growth in Q2 20 despite COVID-19 related decrease of order intake and sales €m ∆ Q2 20 Q2 19 COVID-19 impacting order intake Order Intake 1,034 1,147 -9.8% Book-to-bill of 0.89x vs. 0.92x in Q2 19 Also sales is impacted by COVID-19 whereas service sales Sales 1,165 1,247 -6.6% developed more robust than new machines Better gross profit, cost cutting and some windfall profits EBITDA 1 140.4 111.2 26.2% Net relief from special items YoY of €12m EBITDA Margin 1 12.1% 8.9% 314bp Stronger improvement compared to EBITDA 1 as D&A declined EBIT 1 93.4 57.5 62.5% slightly YoY Substantial increase based on significant improvement of ROCE 1,2 14.8% 10.5% 428bp both, EBIT 1 and Capital Employed - 421 €m Net debt of €330m turned into net cash position of €92m Net debt -92 330 1 before restructuring; 2 L4Q 4 GEA Q2 2020 Figures
GEA with professional crisis management during COVID-19 • Crisis Management Team and Taskforce installed at an early stage • Early measures taken for workplace safety, e.g. hygiene standards, canteen closures • Dashboard implemented with all relevant KPIs • Remote Service Tool launched • Supply chain issues managed smoothly • Liquidity initiative launched with focus on accounts receivable, expense management and reduction of NWC • Proactive savings measures implemented • Numerous local donation initiatives supported Solid development in H1 despite challenging environment 5 GEA Q2 2020 Figures
Production almost 100% 90% unaffected 80% by COVID-19 70% (total uptime 60% production sites) 50% 40% 30% 20% 10% 0% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Uptime is defined as % of total available factory working hours (already deducted by holidays, sick leave, etc.) GEA Q2 2020 Figures 6
COVID-19: GEA is well prepared in case of a second wave • Safety of employees: Pandemic emergency plans, tools to work remotely and protection equipment are in place • Supply chain: Tool allowing visibility on major suppliers material and distribution situation • Production: Clear safety procedures and processes to keep production sites operating • Service: Remote access support tool • Finance: Liquidity Office established, ready to continue cost cutting measures Measures in place to secure business continuity 7 GEA Q2 2020 Figures
Business & Financial Review Q2 2020 Marcus A. Ketter, CFO 8 GEA Q2 2020 Figures
GEA Group: Strong Order Intake Order intake declined by 9.8% YoY EBITDA 1 growth (adj. -8.0%) 1,377 1,343 1,500 €m 1,255 1,147 1,034 • Order intake was mostly impacted by declining 1,000 €m medium sized orders (>€5m, <€15m) and despite COVID-19 500 €m orders below €1m 0 €m related top-line • Book-to-bill ratio almost stable (0.89x vs 0.92x Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 in Q2 19) decline Sales Sales fell by 6.6% YoY (adj. -5.2%) • Global travel restrictions due to COVID-19 1,340 1,500 €m 1,247 1,235 1,165 1,094 impacted order execution 1,000 €m • Service sales only down by 3.3% and share 500 €m of total sales increased to 32.7% (vs. 31.6% 0 €m in Q2 19) Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 EBITDA 1 margin increased to 12.1% from 8.9% EBITDA 1 • Improvement of gross profit 200 €m 150 143 140 111 • Lower overhead costs from cost savings 105 100 €m initiatives and windfall profits from COVID-19 Q2 19 EBITDA 1 included a burden of special 0 €m • Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 items of €21m; Q2 20 included a burden of €9m 1 before restructuring measures GEA Q2 2020 Figures 9
Very solid EBITDA 1 development in Q2 20 despite negative top-line impact from COVID-19 €m ∑ ∆ +€24m ∆ +€29m ∆ - €5m 4 -7 140 7 4 Special items: -12 FX: Q2 20: - €9m 7 - €3m Translational Special items: Q2 19: - € 14m - €5m Transactional Q2 20: - Q2 19: +€9m Special items: Q2 20: - €9m 32 111 Q2 19: - €21m -11 - €9m New +€34m New Machines Machines - €2m Service - €1m Service Special items: Q2 20: - Q2 19: - €16m EBITDA 1 Volume Margin R&D SG&A Other FX EBITDA 1 Special Items FX Q2 19 Q2 20 10 GEA Q2 2020 Figures
Separation & Flow Order Intake Order intake down by 11.1% YoY (adj. -9.8%) • Decline mostly driven by the customer Technologies: 400 €m 332 323 325 310 288 industries Oil & Gas and Marine and less 200 €m pronounced by Dairy Processing and Food Sales and EBITDA • Pharma and Chemical with higher order 0 €m increase despite intake Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 COVID-19 impact Sales Sales growth of 4.0% YoY (adj. 5.4%) • Sales increase was driven by a strong 340 400 €m 324 313 301 278 development in the customer industry Food 200 €m • Service sales grew by 1.5% which resulted in a sales share of 40.3% vs. 41.3% in Q2 19 0 €m Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 EBITDA 1 margin rose to 20.4% from 15.3% EBITDA 1 • The improvement was predominantly driven 100 €m 74 69 64 by a strong growth of gross profit 60 46 Q2 19 EBITDA 1 was burdened by €9m 50 €m • special items, Q2 20 burdened by only €1m 0 €m Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 1 before restructuring measures GEA Q2 2020 Figures 11
Liquid & Powder Order Intake Order intake declined by 8.4% YoY (adj. -6.6%) • Decline mostly driven by BUs Beverage & Filling, 566 549 Technologies: 600 €m 505 Powder and Liquid, BU Chemical was up 365 335 400 €m • Impact from travel restrictions and order Substantial EBITDA 200 €m postponements 0 €m increase despite Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 COVID-19 taking a Sales fell by 5.1% YoY (adj. -4.3%) Sales toll only on order • Execution was impacted by travel 600 €m 484 445 438 423 restrictions related to COVID-19 385 intake and sales 400 €m • Service sales declined by 6.7% and account 200 €m now for 22.0% of sales (vs. 22.4% in Q2 19) 0 €m Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 EBITDA 1 margin rose to 8.9% from 5.6% EBITDA 1 • Improvement driven by better gross profit 60 €m 40 and lower overhead costs 37 40 €m 30 25 Q2 19 EBITDA 1 was burdened by €10m • 20 €m 8 special items, Q2 20 burdened by only €2m 0 €m Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 1 before restructuring measures GEA Q2 2020 Figures 12
Food & Healthcare Order Intake Order intake down by 13.5% YoY (adj. -13.4%) • Weaker orders in the BUs Bakery and Food Technologies: 300 €m 244 222 222 210 192 Solutions as well as Slicing & Packaging 200 €m • Good growth in Pharma & Healthcare Strong EBITDA 100 €m 0 €m growth despite Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Italian legal entities Sales Sales declined by 5.8% YoY (adj. -5.6%) being particularly • Especially those BUs with a high exposure to 256 300 €m 252 232 237 213 Northern Italy (Pasta and Bakery) were affected by COVID- 200 €m impacted by travel restrictions 100 €m 19 • Service sales declined less by only 3.9% and 0 €m account now for 24.2% of sales (vs. 23.7% in Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q2 19) EBITDA 1 margin rose to 9.1% from 4.8% EBITDA 1 • Improvement resulted from better gross profit 30 €m 22 19 and lower overhead costs 16 16 20 €m 12 Q2 19 EBITDA 1 was burdened by €8m special • 10 €m items, Q2 20 burdened by only €2m 0 €m Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 1 before restructuring measures GEA Q2 2020 Figures 13
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