GESCO – an association of industrial SMEs with market and technology leaders
Segments tool manufacture/mechanical engineering and plastics technology
Currently 17 operating subsidiaries under the roof of GESCO AG as a holding company
We think and act in a sustainable and entrepreneurial manner
We do business in established sectors with innovative technologies
We provide technology “made in Germany” for global markets
GESCO is comprised of adaptable, independent operating units that benefit from being part of a strong group
1. Business model
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GESCO AG’s investment philosophy We acquire and develop industrial SMEs We have long-term goals and no intention to exit We take over majorities, almost always 100 % Most takeovers are part of succession planning The new managing directors invest up to 20 %
in their own companies (“entrepreneur companies”)
Our vision: “Best of both worlds” – We maintain the spirit of family businesses and enhance their strengths while compensating their weaknesses.
1. Business model
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When you buy shares in GESCO, you get 17 “Hidden Champions” from the industrial German “Mittelstand”...
Mechanical engineering /
tool manufacture segment
Plastics technology segment
1. GESCO Group
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...serving broadly diversified customer sectors.
1. GESCO Group
→
5
2%
4% 5% 5%
8%
8%
12%
13%
14%
25%
4%
Passenger and commercial vehicles
Other
Agricultural engineering
Machine and plant construction
Consumer goods Energy / supply
Iron, plate and metal processing, tool construction
Chemical / petrochemical industry
Foundries and rolling mills Electrical, medical technology, household goods
Construction, air conditioning, sanitary industry
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1. Business model – Strategic drivers for our business
Together with her, in the last 15 years
1,000,000,000 people worldwide have joined the middle class –
in other words: the class of consumers *)
*) Source: Deutsches Institut für Entwicklungspolitik, 2012
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1. Business model – Strategic drivers for our business
By the time she starts her business career in 2030, the world’s middle class will total
5,000,000,000 people *)
*) Forecast for 2030; source: Deutsches Institut für Entwicklungspolitik, 2012
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1. Business model – Strategic drivers for our business
All these people are improving their standard of living.
They spend money on food, energy and
transportation, cars and consumer goods.
The GESCO Group provides materials, machines, tools and components “made in Germany” to fulfil these needs, via direct or indirect export.
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1. Business model
And: the US is back! Shale gas is a game changer US to become a net exporter of energy Declining energy costs boost
reindustrialization
GESCO Group products are at hand
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1. Materials
Founded: 1860
Acquired: 1996
Sales 2013: € 162 m Staff: 495
Subsidiaries: Singapore, China, Taiwan, South Korea
JVs: Spain, Turkey
Leading European specialist for tool steel
Business segments:
• Tool steel (trade)
• Tool steel mould castings
• Steel works
• Precision castings
• Surface technology
Dörrenberg Edelstahl GmbH
Trigger:
In-depth expertise in metallurgy, own patents on tool steel, one-stop-shop with full range of tool steel products and services; excellent, well established customer access; strong internationalization
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1. Machines (example)
Founded: 1931
Acquired: 1997
Sales 2013: € 34 m Staff: 140
Subsidiary in China; in Jan. 2014 acquisition of US competitor Eitel Presses Inc.
MAE Maschinen- und Apparatebau Götzen GmbH
Highly innovative, first straightening machine worldwide for big parts (30,000 mm x 850 mm)
World market leader (>60%):
• Automatic straightening machines
• Wheel set presses
Trigger:
Niche markets with high entry bar-riers; far from being overengineered; e.g. the wheel set presses are absolutely competitive compared to low-tech Chinese alternatives
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1. Machines (example)
Founded: Roots go back to the 1960s
Acquired: 2002
Sales 2013: € 52 m Staff: 187
SVT GmbH
High-quality systems for loading and unloading liquids and gases
Specialty LNG: superior technology, No. 2 worldwide in terms of volume
Export ratio: 80%
Triggers:
The world‘s hunger for energy, and the growth of the industrial sector in emerging markets (biggest installed base: Formosa Plastics Group, Taiwan)
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1. Tools (example)
Founded: 1931
Acquired: 2011
Sales 2013: € 27 m Staff: 182
Factory sites in Laichingen and Leipzig
Werkzeugbau Laichingen Group
Complex and large high-performance tools for car body parts
Own presses for series start-ups and small-scale series
20% to 35% service business
Trigger:
Few toolmakers capable of meeting an increasing demand for high quality driven by technological development (lightweight construction) and increasingly diverse car designs
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1. Components (example)
Founded: 1836
Acquired: 2006
Sales 2013: € 34 m Staff: 297
Company sites in Hatzfeld/Germany, Hungary and Ukraine
Frank Walz- und Schmiedetechnik Group
Europe‘s leading forge for wearparts for the agricultural industry
Well-established brand name ORIGINAL FRANK with excellent reputation
70% of sales go to OEMs
30% go to specialized wholesale distributors and farmers
Trigger:
The world population continues to grow; in order to feed all these people, agriculture needs profes-sionalism, industrialization and reliable equipment
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1. Components (example)
Founded: 1963
Acquired: 2004
Sales 2013: € 15 m Staff: 60
in July 2014 acquisition of smaller UK competitor
Setter Group
Paper and plastic sticks for the sweets and hygienic industries
Quality and volume leader in the niche market of paper sticks
90% export ratio
Produces approx. 20 billion sticks in Germany
Another approx. 60 billion sticks are produced on Setter technology in the USA, delivering royalties to Setter Trigger:
Cotton buds and lollipops are pro-duced on high-performance machines which demand sticks with high accuracy and strictly defined qualities – there‘s no point in saving money on sticks that harm an industrial process
2. Financial year 2014/2015
Keep in mind:
GESCO AG and GESCO Group financial year = 1 April to 31 March
Subsidiaries’ financial year = calendar year
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2. Financial year 2014/2015
Starting position and expectations (as at Annual Accounts Press Conference on 26 June 2014)
Economic forecasts pointed to recovery (GDP: +1.9 %, VDMA: production + 3 %, GKV: sales +4 % to +5 %)
Ukraine/Russia crises affected Frank Walz- und Schmiedetechnik (wearparts for agricultural machines)
Positive signals at GESCO Group since the start of the year Demand from China has recovered
Stop on investments at major automotive suppliers no longer as strict
Situation at the companies particularly affected in 2013/2014 is improving
Special steel business at Dörrenberg Edelstahl GmbH at an appealing level good sign for the German capital goods industry
Sales at GESCO Group set to rise
Two issues weighing down earnings performance
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2. Financial year 2014/2015
Issue 1: Protomaster GmbH
Manufactures metal forming tools Produces body parts and assemblies for small and medium-scale
series using these tools Niche position, few comparable suppliers Dramatic rise in call-off orders for several ongoing (major) orders;
labour shortage and organisational deficits Concrete support by GESCO Group, investments in future development
Issue 2: MAE Maschinen- und Apparatebau Götzen GmbH
International market leader for automatic straightening machines and wheel presses
Growth driven strongly by innovation; sales more than doubled between 2006 and 2013; extensive construction and expansion projects with new administration and production building
Burdens on several fronts due to strong operating growth, construction activities, technical challenges, Eitel acquisition and organisational development, labour bottlenecks
Active support by GESCO AG
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2. Financial year 2014/2015
General current situation :
Geopolitical risks affect general business climate and customers’ willingness to invest
VDMA cuts outlook for production from +3 % to + 1 %
GDP outlook expected to be lowered
The Ukraine/Russia crisis, sanctions against Russia and Russian countermeasures will have impact on German industry
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2. Financial year 2014/2015 – Q1
Q1: mixed picture
Includes operating months January to March 2014 at subsidiaries
Stable business – sales slightly up
Earnings burdened by the two subsidiaries
Order intake on an encouragingly high level
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2. Financial year 2014/2015 – Q1
QI 2013/2014
QI 2014/2015
Change
Order intake € million 110.4 126.7 14.7 %
Sales € million 108.9 109.5 0.6 % EBITDA € million 11.9 11.4 -4.6 %
EBIT € million 7.9 6.9 -12.8 % Group net income after minority interest
€ million
4.5
3.7
-16.7 %
EPS acc. to IFRS € 1.35
31.03.2014
1.13
30.06.2014
-16.7 %
Equity € million 176.6 180.5 2.2 % Equity ratio % 46.5 44.9 - Liquid funds € million 38.8 48.3 24.5 %
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2. Financial year 2014/2015 – Q2
Q2: Less lively development
Includes operating months April to June 2014 at subsidiaries
Sales approx. € 110 million – on par with Q1, slightly above Q2 prev. year (€ 108.9 million)
Order intake approx. € 100 million – clearly below Q1, slightly below Q2 prev. year (€ 101.5 million)
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2. Financial year 2014/2015
Sales and incoming orders by quarter (in €'000)
─ Incoming orders ─ Sales
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20.000
40.000
60.000
80.000
100.000
120.000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2009 2010 2011 2012 2013 2014
2. Financial year 2014/2015
2013/2014 Actual figures
2014/2015e
Target June 2014
2014/2015e
Target Aug. 2014
Change
yoy
Group sales € million 453.3 470 to 480 470 +3.7 %
Group net income for the year after minority interest
€ million 18.1 17.5 to 18.5 17.5 -3.3 %
Earnings per share acc. to IFRS
€ 5.45 5.26 to 5.56 5.26 -3.3 %
Target figures
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Current M&A situation Fewer offers, probably because …many industrial companies recorded declines in
incoming orders, sales and earnings in 2013 not an ideal basis for approaching investors
…business owners wonder what to do with the money in a zero-interest environment
Increasing competition, e.g. from family offices
Nevertheless: two projects currently in due diligence A direct acquisition by GESCO AG A strategic enhancement of a subsidiary abroad
2. M&A
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3. The GESCO share
Freefloat: 86.4 %
Stefan Heimöller, entrepreneur, private investor: 13.6 %
Stefan Heimöller 13.6 %
Private investors ~ 46.4 %
Institutional investors ~ 40 %
Mr Heimöller is Supervisory Board member since July 2013
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3. Dividend
2010/2011 2005/2006 2006/2007 2007/2008
€ 2.00
€ 1.25
€ 1.50
€ 2.20 base dividend
€ 0.22 dividend bonus
€ 2.42 € 2.50
2008/2009 2009/2010
€ 1.30
2011/2012
€ 2.90
€ 2.50
2012/2013 2013/2014
€ 2.20
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3. Share price development (in %) – 1 and 5 years
GESCO vs. SDAX, 1 year GESCO vs. SDAX, 5 years
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90
100
110
120
130
GESCO
SDAX
80
100
120
140
160
180
200
220
240
GESCO
SDAX
3. Share price development (in %) – 10 years
GESCO vs. SDAX, 10 years
30
0
100
200
300
400
500
GESCO
SDAX
Founded: 1989 Share capital: € 8,645,000 Shares: 3,325,000 registered shares Free float: 86.4 % Stock markets: Xetra; Frankfurt (regulated market); Berlin, Düsseldorf, Hamburg, Hanover, Munich, Stuttgart (open market) Sec. identification number: A1K020 ISIN: DE000A1K0201 IPO: 24 March 1998 Index: SDAX End of financial year: 31 March Designated sponsors: equinet Bank AG Close Brothers Seydler Bank AG
Facts and figures on GESCO AG
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GESCO Group overview Company Sales 2013
€‘000 Staff
31/12/2013 GESCO AG
shareholding
Astroplast Kunststofftechnik GmbH & Co. KG 14,282 77 80%
Paul Beier GmbH Werkzeug- und Maschinenbau & Co. KG 8,901 114 100%
C.F.K. CNC-Fertigungstechnik Kriftel GmbH 6,740 49 80%
Dömer GmbH & Co. KG Stanz- und Umformtechnologie 13,716 102 100%
Dörrenberg Edelstahl GmbH 161,782 495 90%
Frank Group 33,547 297 100%
Franz Funke Zerspanungstechnik GmbH & Co. KG 16,130 81 80%
Haseke GmbH & Co. KG 12,359 61 80%
Hubl GmbH 10,257 106 80%
Georg Kesel GmbH und Co. KG 10,723 68 90%
MAE Maschinen- und Apparatebau Götzen GmbH 34,078 140 100%
Modell Technik GmbH & Co. Formenbau KG 13,979 106 100%
Protomaster Riedel & Co. GmbH 7,700 85 82.17%
Setter Group 14,773 60 100%
SVT GmbH 51,770 187 90%
VWH Vorrichtungs- und Werkzeugbau Herschbach GmbH 10,809 105 80%
Werkzeugbau Laichingen Group 26,573 182 85% 32
Financial calendar and investor relations contact
Financial calendar
28 August 2014 Annual General Meeting
2 September 2014 Small Cap Conference, Frankfurt/Main
14 November 2014 Q2 figures (01.04 to 30.09.2014)
25 November 2014 German Equity Forum, Frankfurt/Main
February 2015 Q3 figures (01.04 to 31.12.2014)
25 June 2015 Annual Accounts Press Conference and Analysts’ Meeting
Investor Relations
GESCO AG Phone: +49 202 24820-18 Investor Relations Fax: +49 202 24820-49 Oliver Vollbrecht E-mail: [email protected] Johannisberg 7 Internet: www.gesco.de 42103 Wuppertal
Germany
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