Gea Group Aktiengesellschaft · XETR:G1A
Gea Group Aktiengesellschaft — GEA Group — Non-Deal Roadshow (November 2024)
45 slides from Gea Group Aktiengesellschaft's roadshow presentation, November 2024
Slide 1: GEA Group AG Roadshow presentation November 2024
GEA Group AG Roadshow presentation November 2024
Slide 2: Disclaimer
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 wit
Slide 3: GEA Group at a glance
GEA Group at a glance Employees Revenue EBITDA EBITDA Order intake before restructuring before restructuring expenses expenses FY 2023 18,773 5,373 774 14.4 5,469 full-time equivalents EUR million EUR million percentage of EUR million revenue 3
Slide 4: GEA Group – a compelling investment
GEA Group – a compelling investment 1 Leading positions in attractive and resilient markets 2 Sustainability pioneer Mission 30: Ambitious plan for growing and highly 3 profitable business 4 Strong Free Cash Flow generation potential 5 Attractive shareholder return Roadshow Presentation 4
Slide 5: GEA Group – what we do
GEA Group – what we do 1 Leading positions in attractive and resilient markets Food Beverage Pharma Every 4th package of Every 2nd liter of beer Every 4th liter of human blood spaghetti is processed with is brewed with the aid for making plasma-derived GEA technology of systems and process products
Slide 6: GEA Group – leading market positions across all divisions
GEA Group – leading market positions across all divisions 1 Leading positions in attractive and resilient markets #1-21 #1-31 #2-41 #1-21 #2-31 Separation & Flow Liquid & Powder Food & Healthcare Farm Technologies Heating & Refrigeration Technologies Technologies Technologies Technologies Sales (in
Slide 7: GEA Group – diversification as key to success
GEA Group – diversification as key to success 1 Leading positions in attractive and resilient markets GEA’s key customer industries are very stable, reliable and growing Balanced regional profile Production growth1 Industry volatility1 (CAGR 2003-2023 in %) (Standard Deviation 2003-2023 in %) Food &
Slide 8: GEA Group – a compelling investment
GEA Group – a compelling investment 1 Leading positions in attractive and resilient markets 2 Sustainability pioneer Mission 30: Ambitious plan for growing and highly 3 profitable business 4 Strong Free Cash Flow generation potential 5 Attractive shareholder return Roadshow Presentation 8
Slide 9: GEA – Pioneer in Sustainability
GEA – Pioneer in Sustainability Comprehensive ESG strategy with a clear pathway to Net Zero by 2040 Net Zero target by 2040 validated by SBTi First company in the DAX index family with Say on Climate vote 98.4% shareholder approval for our Climate Transition Plan 2040 at the AGM in 2024 External rec
Slide 10: Transformation of GEA's product portfolio
Processes of our customers Transformation of GEA’s product portfolio are highly energy consuming Develop more resource-efficient solutions With our R&D Launch resource-efficient products Energy efficiency through digital solutions Heat & energy recovery solutions activities we aim Phase out fossil f
Slide 11: Low-carbon heat network for HEINEKEN brewery
Low-carbon heat network for HEINEKEN brewery 2 Sustainability pioneer Impact per year1 GEA supplies In 2030, we expect for HEINEKEN Manchester the decarbonization site with heat pump solution and supports of the process industry an order intake of 5,432 t CO2e its net zero ambition more than €300m.
Slide 12: Our commitment to increase the share of sustainable solutions
Our commitment at GEA is to increase the share of sustainable solutions Share of sustainable solutions sales1 2023: 41.5% Share of sustainable solutions sales1 2030E with above-average profitability: >60% 1 The basis for calculating the share of sustainable solutions sales is the aggregation of sale
Slide 13: GEA Group – a compelling investment
GEA Group – a compelling investment 1 Leading positions in attractive and resilient markets 2 Sustainability pioneer Mission 30: Ambitious plan for growing and highly 3 profitable business 4 Strong Free Cash Flow generation potential 5 Attractive shareholder return Roadshow Presentation 16
Slide 14: Mission 30: Our plan for enduring success
Mission 30: Our plan for enduring success 3 Mission 30: Ambitious plan for growing and highly profitable business Impact. Resilient communities Thriving employees Responsible innovation >5% 17-19% >45% Organic sales EBITDA margin ROCE CAGR Growth. Value. Future-ready portfolio Optimized cost structu
Slide 15: Concrete initiatives to drive GROWTH
Concrete initiatives to drive GROWTH. … 3 Mission 30: Ambitious plan for growing and highly profitable business Organic sales CAGR1 Share of sustainable Service sales to solutions sales2 to grow increase from ~€2.0bn in >5% from 41.5% in 2023 to >60% 2024E to ~€2.9bn in 2030E >€7bn Order Intake from
Slide 16: … and VALUE.
… and VALUE. 3 Mission 30: Ambitious plan for growing and highly profitable business GROWTH. EBITDA margin increase of Growing Service business (CAGR >6%) will ~3pp contribute to further volume & margin expansion ~1.5% ~3.5% Increase of digital solutions & launch of ~1.5% 17-19% new products as well
Slide 17: COGS Program to deliver substantial impact
COGS Program to deliver substantial impact 3 Mission 30: Ambitious plan for growing and highly profitable business Functional areas Core Programs Production Production Optimization ~€120m NextGen Production Workforce Productivity Engineering & Direct Procurement Excellence Procurement Value Engineer
Slide 18: G&A improvements will significantly contribute to profitability
G&A improvements will significantly contribute to profitability 3 Mission 30: Ambitious plan for growing and highly profitable business ~1.5pp 11.4% Mission 30: < 10.0% G&A improvement potential: ~€100m G&A ratio 2023 Transform360 Simplification Growth leverage Regulatory & strategic items G&A ratio
Slide 19: GEA Group – a compelling investment
GEA Group – a compelling investment 1 Leading positions in attractive and resilient markets 2 Sustainability pioneer Mission 30: Ambitious plan for growing and highly 3 profitable business 4 Strong Free Cash Flow generation potential 5 Attractive shareholder return Roadshow Presentation 22
Slide 20: Efficient and value-generating capex investment
Efficient and value-generating capex investment 4 Strong Free Cash Flow generation potential Capex/Sales ratio (%) Target range for 2030E 6% Continuous reduction ~4.5% from 2025 onwards 5% 4.2% 3.9% 4% 3% 2.8% 2.8% 2.5 – 3.0% 2.1% 2% 1% 2019 2020 2021 2022 2023 2024E 2030E Capex 137 98 130 204 228 ~
Slide 21: NWC will continue to improve
NWC will continue to improve and contribute to … 4 Strong Free Cash Flow generation potential NWC/Sales ratio (%) Active Net Working Capital management 17.2 18 ▪ Significant improvement of all 16 Net Working Capital elements since 2019 14.0 14 ▪ Since the end of 2021, ongoing management of headwinds
Slide 22: … a significant impact on Free Cash Flow
… a significant impact on Free Cash Flow 4 Strong Free Cash Flow generation potential Free Cash Flow (2019-2023): Free Cash Flow (2024E-2030E): €2.2bn >€4bn €342m €337m Higher Free Cash Flow due to higher EBITDA, lower CAPEX Target Cash and NWC Conversion Rate2 in 2030E >60% Cash Conversion Rate in
Slide 23: Disciplined capital allocation supporting GROWTH. and VALUE.
Disciplined capital allocation supporting GROWTH. and VALUE. 4 Strong Free Cash Flow generation potential ▪ Efficient and value-generating capital expenditure CAPEX ▪ Support GROWTH. ▪ Attractive dividend payouts Dividends ▪ VALUE. for shareholders: will benefit from rising earnings Commitment to in
Slide 24: GEA Group – a compelling investment
GEA Group – a compelling investment 1 Leading positions in attractive and resilient markets 2 Sustainability pioneer Mission 30: Ambitious plan for growing and highly 3 profitable business 4 Strong Free Cash Flow generation potential 5 Attractive shareholder return Roadshow Presentation 27
Slide 25: Our shareholders participate in our success
Our shareholders participate in our success 5 Attractive shareholder return Dividend per share (€)1 Updated dividend policy 1.00 0.95 0.90 ▪ Distribute approx. 50% of net profit 0.85 0.85 0.85 (as reported) ▪ Dividend expected to increase YoY 2019 2020 2021 2022 2023 2024 2025E 2026E 2030E to reflec
Slide 26: Total shareholder return since 2019
Total shareholder return since 2019 5 Attractive shareholder return 200% 150% GEA +140.2% 100% DAX 50 ESG +74.3% STOXX TMI +74.3% 50% MDAX +22.4% 0% -50% Dez 18 Jun 19 Dez 19 Jun 20 Dez 20 Jun 21 Dez 21 Jun 22 Dez 22 Jun 23 Dez 23 Jun 24 GEA‘s share price performance is calculated on a total return
Slide 27: Q3 2024 Results
Q3 2024 Results
Slide 28: EBITDA margin improved once again significantly
EBITDA1 margin improved once again significantly Q3 2024 Q3 2023 ∆ YoY Order Intake €1,301m €1,247m +4.3% +6.6% organic Sales €1,350m €1,351m -0.1% +1.4% organic EBITDA1 €217m +4.9% EBITDA1 margin 16.1% +0.8%p ROCE1,2 32.3% -1.6%p 1 Before restructuring expenses I 2 Average of L4Q Roadshow Presentat
Slide 29: Executive Summary Q3 2024
Executive Summary Q3 2024 Pick-up in order intake & significant margin improvement Δ Δ €m Q3 24 Q3 23 reported organic One large order (>€15m) totaling €59m vs. three large orders in Order intake 1,301 1,247 4.3% 6.6% Q3 23 of €138m; strong development in orders <€1m Strong growth in organic service
Slide 30: Strong EBITDA performance in 9M and Q3 2024
Strong EBITDA1 performance in 9M and Q3 2024 Solid divisional gross profit development 9M 24 EBITDA1 growth contribution by divisions in €m Q3 24 EBITDA1 growth contribution by divisions in €m 7 598 -1 2 14 1 -11 9 -12 217 570 15 2 207 4 8 Sales ● Sales Sales Sales Sales Sales Sales Sale
Slide 31: NWC/Sales ratio stable within the guided corridor
NWC/Sales ratio stable within the guided corridor ▪ Strong reduction in inventories YoY ▪ Lower contract assets partially compensates decline in contract 800 €m 20% liabilities (advance payments) ▪ Reduction in trade payables on the back of lower inventories YoY 700 €m 15% ▪ NWC ratio at 9.3% contin
Slide 32: Good cash generation in Q3 2024
Good cash generation in Q3 2024 FCF Free Cash Flow Q3 24, €m ▪ NWC -€15m: outflow driven by -15 -35 lower contract liabilities -6 19 -53 ▪ Others €19m: mainly related to -1 -16 provisions for bonuses because 217 180 -3 of higher profitability 126 107 ▪ Good FCF of €126m EBITDA Delta NWC Taxes Cash-o
Slide 33: Order intake is picking up
Order intake is picking up Order 6,500 intake rolling L4Q in €m 6,000 6,500 5,679 5,716 5,694 5,593 5,615 5,570 5,484 5,469 5,500 5,254 5,215 6,000 5,162 5,000 5,500 4,500 4,000 5,000 3,500 4,500 3,000 2,500 4,000 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Roadshow Presentatio
Slide 34: Raised profitability guidance for FY 2024
Raised profitability guidance for FY 2024 Organic sales growth EBITDA margin ROCE (currency and portfolio adjusted) (Before restructuring expenses) (Before restructuring expenses) % YoY % % 2.0-4.0 15.4-15.6 32.0-35.0 (unchanged) (prior 14.9-15.2) (unchanged) (FY 2023: 8.4%) (FY 2023: 14.4%) (FY 202
Slide 35: Updated divisional guidance FY 2024
Updated divisional guidance FY 2024 Revenue development (organic1) Forecast for 2024 2023 EBITDA margin before restructuring Forecast for 2024 2023 Separation & Flow Technologies +5.0% to +8.0% €1,511m Separation & Flow Technologies 25.5% to 27.5% 26.2% Liquid & Powder Technologies -2.0% to +2.0% €1
Slide 36: Additional financial information for FY 2024
Additional financial information for FY 2024 Depreciation & Financial result Tax rate Capex Amortization (incl. PPA, IFRS 16)1 around around around around €200m -€25m 23%2 €240m thereof impact from PPA around €12m 1 Before restructuring expenses I 2 Estimation does not include a potential additional
Slide 37: GEA.com Engineering for a better world
| Engineering for a better world. GEA.com
Slide 38: We aim to grow much faster than 5% for specific verticals (1/2)
We aim to grow much faster than 5% for specific verticals (1/2) Division Technology Vertical Focus Regions GEA CAGR GEA Sales in Europe NAM APAC LAM (%)1;2 2030E (€m)2 LPT, SFT, Various New Food 30% <50 50-150 >150 FHT Food & Beverage HRT, LPT Heat Pumps (NEXUS) 15-20% <50 50-150 >150 Separators, V&
Slide 39: We aim to grow much faster than 5% for specific verticals (2/2)
We aim to grow much faster than 5% for specific verticals (2/2) Division Technology Vertical Focus Regions GEA CAGR GEA Sales in Europe NAM APAC LAM (%)1;2 2030E (€m)2 HRT Heat Pumps District Heating 40-45% <50 50-150 >150 SFT Decanters Environmental 5-10% <50 50-150 >150 2 FT Software Dairy Farming
Slide 40: GROWTH. VALUE. on divisional level
GROWTH. VALUE. on divisional level Organic sales CAGR Organic sales CAGR EBITDA1 margin target EBITDA margin target 2022-2026E 2025-2030E 2026E 2030E GEA Group 4.0% - 6.0% >5.0% >15.0% 17.0%-19.0% Separation & Flow Technologies 4.0% - 5.0% 4.0% - 5.0% 24.0% - 26.0% 26.0%-29.0% Liquid & Powder Techno
Slide 41: Restructuring is coming to an end
Restructuring is coming to an end PROFITABILITY ADJUSTMENTS BASED ON WITHOUT RESTRUCTURING RESTRUCTURING MEASURES 2026 ADJUSTMENTS 2030 New Food Service Sustainability Excellence Accelerating Innovation & Growth & Acquisitions New organization Digitalization Profitability From 2027 onwards Operation
Slide 42: Strong contribution for VALUE. investment opportunities
Strong contribution for VALUE. investment opportunities Improved financial profile recognized by rating agencies – significant firepower for M&A Rating Leverage (x EBITDA) Fitch BBB(-) BBB 3.6 Moody’s Baa2 Baa1 2.9 Outlook 2.2 Fitch negative stable positive 1.5 1.4 Moody’s negative stable positive s
Slide 43: GEA – development since new management took over
GEA – development since new management took over Sales (€m) EBITDA2 margin % Organic sales growth1 >5% CAGR1 >7,000 5,373 ~5,400 17-19% 5,165 4,880 4,635 4,703 14.4% 15.4-15.6% 13.8% 13.3% 8.9% 8.4% 2-4% 11.5% 9.8% CMD-21 target of CMD-21 target of 4-6% organic >15% margin sales CAGR exceeded with 6
Slide 44: GEA – development since new management took over
GEA – development since new management took over Net working capital (€m) Capex (€m) Net working capital/sales ratio (%) Capex/sales ratio (%) 1,200 14.0% 350 15% 4.5% 5% 1,100 Guided corridor 4.2% 1,000 7%-9% 3.9% 2.5-3.0% 900 ~240 4% 9.3% 250 228 800 682 10% 204 700 7.9% 2.8% 2.8% 3% 600 6.1% 6.4%
Slide 45: GEA – a compelling investment: Net Zero
GEA – a compelling investment Sustainability as an integral part of our strategy and business models Engineering for a better world. NET ZERO by 2040 Sustainable Solutions Responsible Operations Employer of Choice ▪ Reduce greenhouse gas emissions scope 3 ▪ Reduce greenhouse gas emissions scope 1 &