GCC Kepler Cheuvreux Conference on Roadshow and Conferences Q3 2015 GCC Frankfurt...~ 2,000 new food products p.a. in German supermarkets alone What we like about the food industry

Frankfurt, January 19th, 2016

GCC Kepler Cheuvreux Conference

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

2 GCC Kepler Cheuvreux Conference, January 19th, 2016


GEA is a global leader in equipment and process technology providing innovative solutions

for smart food processing and for a more efficient use of energy resources.

GEA in summary

Sales

EUR 4.5bn (FY14)

Operating EBIT Margin

11.4% (FY14)

Employees

~18,000 (Sep 15)

Market Cap

>EUR 6bn (Sep 15)

Dairy Farming Dairy Processing Beverages Food



You are in touch with food processed by GEA equipment every day…

GEA in summary

…we are all this and more every day.

Every 4th liter

of milk processed is

handled by GEA

equipment.

Every 3rd instant

coffee line has been

built by GEA.

Every 3rd chicken

nugget is processed

with GEA

equipment.

Every 2nd liter of

beer is brewed using

GEA equipment

and solutions.



GEA’s food exposure 75% - 80%

Food

Non-

Food

Sales exposure 2020:

75% - 80% food No 100% food exposure due to multi-purpose

functionality of our products:



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



What we like about the food industry (2): Stable consumer spending also in tough times

Economically

good times

Economically

difficult times



What we like about the food industry (3): Zero failure tolerance a significant entry barrier

If equipment fails in the food industry, the end-consumer’s health could be at risk

Would you as a food producer save money on a machine risking a food scandal

if the machine is not working properly?



…

…

…

…

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 customers, machine quality and performance is by far #1 buying criterion

What we like about the food industry (4): Price apparently not the most decisive purchase criterion

1 Stratified sample size n=3274, external poll



Source: Frankfurter Allgemeine Zeitung (26.06.2014)

~ 3,500 new products p.a. entering

the US food market

~ 2,000 new food products p.a.

in German supermarkets alone

What we like about the food industry (5): Continuous launch of new products to stimulate demand

Additionally, higher resource efficiency (e.g. power, water usage) is a major competitive

advantage for an equipment supplier

GCC Kepler Cheuvreux Conference, January 19th, 2016 10


~2%

~12%

~32%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Top Customer Top 10 Top 50 Top 100 Top 150 Top 200

What we like about the food industry (6): GEA’s client base is highly fragmented

Cumulative Revenue Share

Number of customers

~ 30% of the Top 50 customers

are already coming from

Emerging Markets



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

11%



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”

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



ARTE framework as pillars for GEA’s strategy

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

Applications

• Exploit market

potential in target

applications

• Align GEA-wide

application strategy

and customer

approach



Project “Fit for 2020”: From four stand-alone Segments to two integrated Business Areas

Former organization New current organization

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



A pplications R egions T echnologies Functional E xcellence

New current 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.

Product Engineering & Development

Product Management & Sales

Supply Chain & Production

Equipment Service

Global Corporate Center (GCC)

Technology Centers

Application Centers

Solutions Service

Equipment Business Area Solutions Business Area

A

R

T

T E

E

T



> 50% of the targeted FTE reductions implemented in 2015


“Fit for 2020” continues to proceed on track

496 339

830

FTE as of

31.12.2014

17,570

FTE additions

due to M&A &

consolidation

(prelim.)

FTE as of

31.12.2015

(prelim.)

Operating

FTE

reduction

(prelim.)

18,243

Structural

"F2020" FTE

reduction

(prelim.)

Agreements secured with >400

FTEs to leave the company in the

coming months

Transfer of transactional functions

to shared service center locations in

Eastern Europe and East Asia has

begun

Agreements have meanwhile been

reached with the works councils in

almost all countries including

Germany, France and Italy


8.8%

6.8%

8.4%

10.5% 10.3% 10.6% 11.4% 11.6%

2008 2009 2010 2011 2012 2013 2014 Q3 15LTM

2 1 2017 12 13 2020

Operating EBIT-Margin (LTM)

GEA has gradually managed up Operating EBIT Margin to > 11%

Financial Targets for FY 2017 - FY 2020: Operating EBIT Margin: 13% to 16%


Upside:

• Service

• Op. leverage

• Underperforming unit Min. 13%

Max. 16%


Financial Targets

FY 2014 - 2020

CAGR Organic Sales Growth FY 2014 - FY 2020: 4% to 6%

FY 2017 - 2020

Service to Sales Ratio: ~30%

Operating EBIT Margin: 13% to 16%

Working Capital to Sales Ratio: 10% to 12%

Capex to Sales Ratio: 1.5% to 2.0%

Cash Flow Driver Margin: 12% to 15%

ROCE: 20% to 25%

Net Effective Tax Rate: 24%



Strong focus on ROCE and cash generation

18.6%

16.7%

18.8% 19.3% 19.6%

22.1%

24.7% 25.0% 25.6% 26.4% 26.6% 26.7%

25.7%

4.6% 5.0%

7.4% 8.3% 9.0% 9.6% 9.7% 9.3% 9.3%

10.1% 10.2% 10.5% 10.7%

Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

ROCE (average LTM) Cash Flow Driver Margin (LTM)

1 when “Fit for 2020” started and in accordance with our guidance on operating EBITDA; Until Q1 2014 using reported EBITDA/EBIT: ROCE LTM = reported EBIT (LTM) / Capital employed excluding goodwill

from the acquisition of the former GEA AG by the former Metallgesellschaft AG in 1999 (average LTM) and CFD LTM = (reported EBITDA (LTM) – Capex (LTM) -/+ Change Working Capital (LTM)) / Sales (LTM)

ROCE and Cash Flow Driver Margin: since Q1 2014 using operating EBITDA/EBIT1



Sources of funds:

Significant cash flow 2015 - 2017

Stronger cash generation going forward leading to higher dividend payout ratio

2. Strengthen GEA’s application know-how by

doing (bolt-on) acquisitions over a couple of

years

3. Repayment of financial debt

4. Invest in organic business development

(Service, R&D, regional presence)

5. Distribution of residual cash to shareholders

Capital allocation priorities

2017 Proceeds GEA HX Cash flow before

M&A and dividends

~1

~2

~1

Key objectives

• Maintain financial flexibility

• Maintain investment grade credit rating

• Rating relevant gross debt: 2.0-2.5x EBITDA

• Average net financial debt: 0.5-1.0x EBITDA

[EURbn] 1. Dividend payments: Change of payout ratio

from 1/3 to 40-50% of net income



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

7



Example how GEA executes its application strategy

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

Milk intake & preparation


De Klokslag CMT for smaller lines


Acquisition criteria focus on strategy and value creation

ARTE fit A

Regions Technologies Applications Functional Excellence

Strategic fit B

Value creation C

Market

attractiveness

Target

attractiveness

Earnings

per share

Total share-

holder return

DCF >

Price

CFD >

hurdle rate

ROCE >

hurdle rate



Steady growth rates

(catch-up in Emerging Markets)

Superior margin levels

(high technological requirements; high barriers to entry)

Food safety concerns

Innovation for resource efficiency

(power, water, etc.)

Product Innovation

(continuous launch of new products to stimulate demand)

Summary: What we like about the food industry

1l 10l



Preliminary FY15 order intake

1,024 1,127

1,170 1,149

1,168 1,068

1,157 ≥ 1,240

2014 2015

Order Intake

≥ 4,585 4,520

Q1

Q2

Q3

Q4

D ≥ +1%

D -9%

D -2%

D +10%

D ≥ +7%

[EURm]


engineering for a better world gea.com

Documents

GCC Kepler Cheuvreux Conference on Roadshow and Conferences Q3 2015 GCC Frankfurt...~ 2,000 new food products p.a. in German supermarkets alone What we like about the food industry