Results Presentation Q3 2019
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 Q3 2019 Figures
1. Results Q3 2019 2. Financials Q3 2019 3. Outlook FY 2019 3
Executive Summary Q3 2019 FY 2019 Sales Guidance upgraded, €m Q3 19 Q3 18 ∆ EBITDA 1 and ROCE 1,2 Guidance confirmed Order Growth in both Business Areas 1,255 1,197 4.8% Intake Book-to-bill ratio of 1.02x Strong service business (growth of 8.3% YoY) Sales 1,235 1,189 3.9% Record sales volume in both business areas for a Q3 Special effects of -€3m; would be slightly above prior EBITDA 1 143.1 145.2 -1.4% years level excl. special effects Increase YoY due to lower amount of purchase price EBIT 1 93.6 92.4 1.4% allocation effects Decrease due to a YoY decline in EBIT and an increase ROCE 1,2 10.5% 14.6% -417bps in capital employed from a net working capital increase 1 Before effects from restructuring (see Annual Report, page 28 ff.); previous year: pro-forma figure incl. IFRS 16 effects; 2 Capital employed excluding goodwill from the acquisition of the former GEA AG by former Metallgesellschaft AG in 1999 (average of the last 4 quarters); previous year: pro-forma figure incl. IFRS 16 effects 4 GEA Q3 2019 Figures
Update on strategic initiatives Possible disposal of GEA Bock ➢ Start of the exit process for businesses for which GEA is not the best owner ➢ Leading supplier of open and semi-hermetic piston compressors for stationary and transport-related cooling applications ➢ Around €90m sales in FY 2018 ➢ Around 300 employees of which are two- thirds located at the company’s headquarters in Frickenhausen ➢ In total four locations ➢ Germany ➢ Czech Republic ➢ India ➢ China 5 GEA Q3 2019 Figures
Update on the new organizational structure Personnel updates New COO: Johannes Giloth Further personnel updates • Johannes Giloth to join GEA’s Executive Board C-level teams now all completed on January 20 th 2020 • CEO and CSO of Farm Technologies appointed • Responsible for Procurement, Production and New Chief Technology Officer appointed Logistics • Further strengthening the strategic focus on technology • Different management positions in the areas of • Ensuring that GEA’s portfolio matches market procurement, logistics and production, amongst trends and customer demands (e.g. plant-based others with Nokia and Siemens food products, meat and dairy substitutes) • Holding a Master of Business Administration Divisional representatives nominated and an Engineering Degree • The representatives are the backbone of the future matrix structure in the countries 6 GEA Q3 2019 Figures
1. Results Q3 2019 2. Financials Q3 2019 3. Outlook FY 2019 7
Order Intake, Sales and Book-to-Bill ➢ Sales reached a new record level for a Q3 1,400 €m ➢ Solid book-to-bill ratio of 1.02x 1,383 1,373 1,331 1,317 1,200 €m ➢ Q3 order intake was also positively impacted by 1,255 1,247 1,235 1,235 1,227 1,197 1,189 1,186 order deferrals of ~€60m 1,147 1,131 1,103 1,000 €m 1,057 1,057 1,039 YoY Development ➢ Especially small (<€1m) and large (>€15m) 800 €m orders contributed to the order growth 600 €m ➢ Accelerating sales momentum compared to the prior quarters 400 €m QoQ Development 200 €m ➢ Strong improvement in orders >€5m 0.93 0.99 1.06 1.13 1.01 0.90 1.12 0.92 1.02 ➢ Orders <€5m were trending weaker 0 €m Q3 17 Q3 18 Q3 19 ➢ Sales sequentially slightly down Order Intake Sales BtB 8 GEA Q3 2019 Figures
EBITDA 1 , EBIT 1 and ROCE 1,2 250 €m 50% Change in IFRS 16 45% accounting ➢ Accounting change IFRS 16 from Q1 2019 onwards 200 €m 40% 201 ➢ Q3 2019 EBITDA 1 down YoY due to special 35% effects of - €3m despite positive IFRS 16 impact 168 150 €m 30% 157 of €18m 143 25% 21.8% 128 126 ➢ Excluding special effects, EBITDA 1 would have 19.8% 100 €m 112 111 20% 16.8%16.0%15.3% been above prior year’s level 97 94 91 91 15% 12.3% 12.0% 83 ➢ EBIT 1 with slight improvements compared to 75 10.5%10.5% 50 €m 61 10% prior year’s Q3 due to lower PPA effects 57 5% ➢ ROCE 1,2 declined YoY also due to the phasing 27 27 0 €m 0% in of IFRS 16 assets in capital employed Q3 17 Q3 18 Q3 19 1 1 1,2 EBITDA EBIT ROCE 1 Before effects from restructuring (see Annual Report, page 28 ff.); 2 Capital employed excluding goodwill from the acquisition of the former GEA AG by former Metallgesellschaft AG in 1999 (average of the last 4 quarters) 9 GEA Q3 2019 Figures
EBITDA before restructuring YoY Development [€m] Other • - €4m legal disputes FX impacts • - €3m other • - €1m Delta D&A (total) 0 • - €4m other 17 -19 -7 12 145 143 -5 18 SG&A • - €15m Personnel expenses BA-E • - €4m other BA-E • +€2m New Machines • +€1m New Machines • - €3m Service • +€10m Service BA-S BA-S • +€10m New Machines (therein • - €3m New Machines +€1m backlog review BA -S ) • +€3m Service • +€3m Service Cons. / other 128 • +€4m other EBITDA Q3 18 Volume Margin R&D SG&A Other F/X and EBITDA Q3 19 incl . €18m delta D&A IFRS 16 effect Expenses highlighted in bold letters are special effects Total special effects in Q3 2019: - €3m 10 GEA Q3 2019 Figures
EBITDA before restructuring per Segment YoY Development [€m] RoC/GCC • - €2m personnel expenses 145 -2 4 143 -3 -2 BA-E BA-S FX impacts • +€0 Volume • BA-E - €1m • +€11m Volume 18 • - €1m Margin • +€13m Margin (therein +€1m • BA- S +€2m • - €1m R&D • RoC/GCC - €2m backlog review BA-S ) • - €4m SG&A • +€0 R&D • - €6m other (therein - €4m • - €11m SG&A • +€2m other legal disputes ) • - €2m Delta D&A • - €1m Delta D&A 128 EBITDA Q3 18 BA-E BA-S RoC/GCC F/X impacts EBITDA Q3/19 incl. €18m IFRS 16 effect Expenses highlighted in bold letters are special effects Total special effects in Q3 2019: - €3m 11 GEA Q3 2019 Figures
Service Sales 500 €m 428 415 396 394 ➢ Service sales grew by 8.3% YoY to €396m 400 €m 368 366 346 331 329 171 ➢ Record service sales volumes for both Business 171 148 153 Areas for a Q3 144 138 300 €m 117 117 123 ➢ Growth at Business Area Equipment was especially driven by service in Separation and Homogenizers 200 €m ➢ Growth at Business Area Solutions was supported by 269 263 260 255 243 241 237 an increase in service volume as well as in pricing 225 220 100 €m ➢ Growth at both Business Areas supported by better pricing and by solid underlying demand 0 €m Q3 17 Q3 18 Q3 19 BA Equipment BA Solutions Please note that the differences between the sum of the BAs and the Group are explained by consolidation/others 12 GEA Q3 2019 Figures
Net working capital to sales ratio 1,200€m 25% ➢ Net working capital stood at the end of Q3 19 at €941m or 19.2% of L4Q sales – an increase of €37m or 30bps YoY 1,000€m 18.6%19.2% 18.9% 20% 17.9% ➢ However, the momentum of the Net Working Capital 17.2% 941 904 906 16.4% 15.5% 16.0% 800€m increase is getting sequentially lower 848 833 14.6% 15% 761 747 731 ➢ Net Working Capital increased at BA Equipment by €60m 674 600€m and declined at BA Solutions by €25m 10% 400€m ➢ Inventories were almost on prior year’s level and increased YoY by just €2m 5% 200€m ➢ Net trade receivables (without POC) were down by €34m YoY while net POC receivables increased by €8m 0€m 0% Q3 17 Q3 18 Q3 19 ➢ Trade payables declined by €61m and therefore NWC as of reporting date contributed most to the increase in net working capital NWC as of reporting date as % of sales (L4Q) 13 GEA Q3 2019 Figures
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