gea%20group%20cmd%202013%20 %20presentation%20gea%20me segment%20internet tcm11 25477
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GEA Mechanical Equipment2 GEA Capital Markets Day | June 26–27, 2013
Table of content
GEA Financials – Accelerating Growth through focusing on Core
GEA Mechanical Equipment – Managing Success in Challenging Markets
GEA Mechanical Equipment Financials
GEA Mechanical Separation Sales
GEA Mechanical Separation Service
Q & A
GEA Capital Markets Day – Day 1
GEA Capital Markets Day – Day 2
Markus HüllmannPresident and CEOGEA Mechanical EquipmentJune 27, 2013
GEA Capital Markets Day 2013Managing Success in Challenging Markets
GEA Mechanical Equipment4 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment: OverviewI
FinancialsII
Market & InnovationIII
Global Production ConceptIV
Service Business: OverviewV
Table of content
Pillars of GEA ME‘s SuccessVI
GEA Mechanical Equipment5 GEA Capital Markets Day | June 26–27, 2013
Forward-looking statements are based on our current assumptions andforecasts. These statements naturally entail risks and uncertainties, whichmay cause the actual results of operations, financial position or performanceto diverge significantly from the estimates given here. Factors that could cause such a divergence include changes in the economic and businessenvironment, fluctuations in exchange rates and interest rates, launches ofcompeting products, poor acceptance of new products or services, andchanges in business strategy. We are under no obligation to update forward-looking statements.
Disclaimer
GEA Mechanical Equipment
GEA vision
GEA provides the world with innovative
solutions for smart food processing and for a
more efficient use of energy resources.
GEA is a global engineering group
recognized for its excellent technologies, its
dedication to provide best solutions to its
customers, and its management principles.
The GEA vision shows us where we want to be and is our source of inspiration
GEA Capital Markets Day | June 26–27, 20136
GEA Mechanical Equipment
GEA Group‘s segment structure
7 GEA Capital Markets Day | June 26–27, 2013
16 %of Group Sales
12 %of Group Sales
Operating EBIT FY 2012: -3.7%
Operating EBIT FY 2012: 8.0%
Operating EBIT FY 2012: 8.4%
Operating EBIT FY 2012: 9.5%
GEA Farm Technologies GEA Heat Exchangers GEA MechanicalEquipment
GEA ProcessEngineering
GEA Refrigeration TechnologiesGEA Food Solutions
6 %of Group Sales
10 %of Group Sales
27 %of Group Sales
29 %of Group Sales
~ 100 %food related
~ 100 %food related
~ 6 %food related
~ 54 %food related
~ 68 %food related
~ 61 %food related
Operating EBIT FY 2012: 20.1%
Operating EBIT FY 2012: 8.1%
Spiral Cookers
Slicers
Thermoformers
Bowl Choppers Milking & Cooling
Farm Services
Farm Equipment
Finned, Shell & Tube
Cooling Towers
Plate Heat Exchangers
HVAC Systems
Separators
Decanters
Homogenizers
Valves
Spray Drying
Aseptic Filling
Brewery & Dairy Systems
Pharma Systems
Compressors
Packages and Skids
Ice Machines
Freezers
GEA Mechanical Equipment
GEA Group‘s segment structure
8 GEA Capital Markets Day | June 26–27, 2013
16 %of Group Sales
12 %of Group Sales
Operating EBIT FY 2012: -3.7%
Operating EBIT FY 2012: 8.0%
Operating EBIT FY 2012: 8.4%
Operating EBIT FY 2012: 9.5%
GEA Farm Technologies GEA Heat Exchangers GEA MechanicalEquipment
GEA ProcessEngineering
GEA Refrigeration TechnologiesGEA Food Solutions
6 %of Group Sales
10 %of Group Sales
27 %of Group Sales
29 %of Group Sales
~ 100 %food related
~ 100 %food related
~ 6 %food related
~ 54 %food related
~ 68 %food related
~ 61 %food related
Operating EBIT FY 2012: 20.1%
Operating EBIT FY 2012: 8.1%
Spiral Cookers
Slicers
Thermoformers
Bowl Choppers Milking & Cooling
Farm Services
Farm Equipment
Finned, Shell & Tube
Cooling Towers
Plate Heat Exchangers
HVAC Systems
Separators
Decanters
Homogenizers
Valves
Spray Drying
Aseptic Filling
Brewery & Dairy Systems
Pharma Systems
Compressors
Packages and Skids
Ice Machines
Freezers
GEA Mechanical Equipment9 GEA Capital Markets Day | June 26–27, 2013
• Within the GEA Group, GEA Mechanical Equipment combines all activities related to mechanical separation, homogenization, pumps, valves and tank cleaning.
• Its process equipment/components ensure smooth production processes at optimized costs in virtually all major industries.
• GEA Mechanical Equipment offers global footprint along the value chain in manyindustries, with a particular focus on the foodindustry
GEA Mechanical Equipment: segment profile
GEA Mechanical Equipment
GEA Mechanical EquipmentMarkus Hüllmann
CEO
GEAMechanical Separation
Products• Separators• Decanters• Engineering & Process
Integration• Service
Products• Valves and Valve Manifolds• Pumps• Cleaning Equipment• In-Line Process
Connections• Service
Products• Homogenizers• High Pressure Pumps• Service
GEAFlow Components
GEAHomogenizers
GEA Mechanical Equipment: structure
10 GEA Capital Markets Day | June 26–27, 2013
Jörg TimmermannCFO
Business UnitBusiness Unit Business UnitBusiness Unit Business UnitBusiness Unit
GEA Mechanical Equipment11 GEA Capital Markets Day | June 26–27, 2013
Success factors: geared up for further growth
To Do’s from 2009 …To Do’s from 2009 … … and actions taken… and actions taken
High share of standardized busi-ness but lacking cost efficiency
Customized: focus on solutions Standardized: cost efficiency
Strong installed base – but coverage not best in class
Service resources and tools substantially improved
Efficiency – substantial improve-ment potential in our plants
Flexibility increased, leanprinciples implemented
Fragmented product portfolio in a number of areas (e.g. decanters)
Streamlined product portfolio and improved development efficiency
Centralized organization –lack of customer proximity
Improvement of localcompetencies – CoC, CoE
Service business not a separate business area
Business Area Service with sole focus on service business
GEA Mechanical Equipment
LocationsLocations
GEA Mechanical Equipment: global footprint
GEA Capital Markets Day | June 26–27, 201313
Worldwide presence to be close to our customers
ManufacturingLocal Sales / Service Teams
GEA Mechanical Equipment
Equipment
Processsolution
Market
14 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment: route to customer
GEA Mechanical EquipmentGEA Mechanical Equipment
GEA Process Engineering Process integratorGEA Process Engineering Process integrator
CustomerCustomer
Ser
vice
Ser
vice
Pro
cess
Sol
utio
n
Pro
cess
Sol
utio
n
Pro
cess
Sol
utio
n
Pro
cess
Sol
utio
n
Equ
ipm
ent
Equ
ipm
ent
Equ
ipm
ent
Equ
ipm
ent
Equ
ipm
ent
& P
roce
ssso
lutio
nE
quip
men
t &
Pro
cess
solu
tion
GEA Mechanical Equipment15 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment: route to customer
Our direct sales approach to thecustomer allowes market penetration andreach:
1. We are able to explain our application know-how in a professional way
and
2. Keep the grip onService business
GEA Mechanical Equipment
–
– –
– –
– –
GEA Mechanical Equipment: fields of application
GEA Capital Markets Day | June 26–27, 201316
Chemicals / Pharmaceuticals
Marine& Energy
Oil & Gas
EnvironmentalTechnology
Beverage& Dairy
RenewableResources
GEA Mechanical Equipment17 GEA Capital Markets Day | June 26–27, 2013
Product examples: separator, mixproof valve, homogenizer
Mixproof Valves VARIVENTSeparator with integrated direct drive
Homogenization Technology
GEA Mechanical Equipment18 GEA Capital Markets Day | June 26–27, 2013
GEA ME‘s role in our customers‘ processes
Example: Dairy process
Raw milk
Ice water
Cooler
Plat
e he
atex
chan
ger1
Plat
e he
atex
chan
ger2
Heater
Bacteria-removingseparator 1
Homogenizer
Valve
Bacteria-removingseparator 2
Skimmingseparator
Raw milktank
Pump
Standardized milk
GEA Mechanical Equipment
Raw milk
Ice water
Standardized milk
Cooler
Plat
e he
atex
chan
ger1
Plat
e he
atex
chan
ger2
Heater
Bacteria-removingseparator 1
Homogenizer
Valve
Bacteria-removingseparator 2
Skimmingseparator
Raw milktank
Pump
19 GEA Capital Markets Day | June 26–27, 2013
GEA ME‘s role in our customers‘ processes
GEA Refrigeration Technologies
GEA Farm Technologies
GEA Heat Exchangers
GEA Mechanical Equipment
GEA Process Engineering
GEA Food Solutions
HomogenizerBacteria-removing / Skimming separator Valve
Raw Milk Tank Pump Plate heat exchanger
GEA Mechanical Equipment20 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment: OverviewI
FinancialsII
Market & InnovationIII
Global Production ConceptIV
Service Business: OverviewV
Pillars of GEA ME‘s SuccessVI
GEA Mechanical Equipment
685
740
874
972
717
725
844
934
100
117
161
188
14.0%16.1%
19.1% 20.1%
,0
,200
,400
,600
,800
1,000
1,200
2009 2010 2011 2012
EURm
Order Intake Sales EBIT EBIT %
21 GEA Capital Markets Day | June 26–27, 2013
Figures GEA ME 2009 to 2012
GEA ME’s 2009 to 2012 performance – continuous growth in volume and profitability
Note: EBIT = EBIT before restructuring and ppa
GEA Mechanical Equipment22 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment: OverviewI
FinancialsII
Market & InnovationIII
Global Production ConceptIV
Service Business: OverviewV
Pillars of GEA ME‘s SuccessVI
GEA Mechanical Equipment23 GEA Capital Markets Day | June 26–27, 2013
• Growing industrial production and rising wage levels drive demands
• Consumers’ nutrition habits are changing
• Energy consumption is increasing
• Willingness to pay a good price for state-of-the-art, high quality process technology exists
• Purchase decision criteria and motivations for investment into technology as we supply it differ from presently larger mature markets in North America and Western Europe
– Needed for serving the quickly growing number of end-consumers in emerging markets
– Primarily efficiency increases and progressively more regulated production standards in Northern America and Western Europe
The increasing importance of„Emerging Markets“ for GEA
GEA Mechanical Equipment24 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment:market success examples
Nozzle separated Greek Yogurt – a strongly growing premium product market
Ballast water treatment with BallastMaster ultraV – outstanding market potential
Next generation of 24/7 PMO Valve®
Improved homogenizer for nano cellulose production
iSep – intelligent separating systems
GEA Mechanical Equipment
• Human-machine interface offers an increasing business potential
• Continuous cost-pressure and scarce qualified resources at our customers, the need for self-operating and energy-efficient production processes is growing
• Timely response to changing operating conditions are immediately addressed by automatically adjusting operating parameters
• The nature of service continues to migrate from technical service (mechanics) to supplementary services (condition, utilities and energy monitoring)
• These factors warrant substantial sales potential
25 GEA Capital Markets Day | June 26–27, 2013
Intelligent separator – market
iSep – intelligent separating systems
GEA Mechanical Equipment26 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment: OverviewI
FinancialsII
Market & InnovationIII
Global Production ConceptIV
Service Business: OverviewV
Pillars of GEA ME‘s SuccessVI
GEA Mechanical EquipmentGEA Capital Markets Day | June 26–27, 2013
GEA ME’s global production footprint
2727
Global Production Concept (GPC) – operational excellence and global market coverage
EMEAEMEA Asia / PacificAsia /
Pacific AmericasAmericas EMEAEMEA Asia / PacificAsia /
Pacific AmericasAmericas
20092009 2013 / 20142013 / 2014
FLC
HOM
MSP
GEA Mechanical Equipment28 GEA Capital Markets Day | June 26–27, 2013
GPC – global footprint
GPC – highest flexibility by shiftable capabilities and manufacturing capacities
EMEA
Asia / PacificAmericas
Sales Support
Design & DevelopmentProduction
Innovation
GEA Mechanical Equipment
The GPC is close to completion
• Capacity for large separators increases by 50% - delivery times to be reducedby at least 1/3
• First cost benefits already realized (machining centres)• Further cost and WC benefits to be realized from improved plant logistics• Local demand will be served locally (Wuqing/Benaluru):
Benefits from local sourcing Customs/tariffs benefits Infrastructure for service growth
in Asia (workshops, APLC)
29
Global Production Concept (GPC)
GEA Capital Markets Day | June 26–27, 2013
Oelde Wuqing
Bengaluru
GEA Mechanical Equipment30 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment: OverviewI
FinancialsII
Market & InnovationIII
Global Production ConceptIV
Service Business: OverviewV
Pillars of GEA ME‘s SuccessVI
GEA Mechanical Equipment31 GEA Capital Markets Day | June 26–27, 2013
Service – development service sales
233.8249.9
270.9308.4
0
50
100
150
200
250
300
350
2009 2010 2011 2012
Service Sales ME
EURm
+7%+7% +8%+8% +14%+14%
Service sales have strongly contributed to the overall growth realized since 2009
GEA Mechanical Equipment32 GEA Capital Markets Day | June 26–27, 2013
Service – service philosophy
Changing service philosophy demands advanced capabilities
Reactive Service Proactive Service
Service PhilosophyService Philosophy
Key
Suc
cess
Fac
tor
Key
Suc
cess
Fac
tor
Service personnel
Spare part availability
Process know-how
Electrical integration
24/7 support
In-time delivery
X
X
X
X
X
X
X
X
GEA Mechanical Equipment33 GEA Capital Markets Day | June 26–27, 2013
Service – GEA ME service potential
Service sales growth potential is highest beyond traditional markets
Traditional technologies
Developingtechnologies
++
++++++++
SizeSize Growth potentialGrowth potential Penetration / market coveragePenetration / market coverage
+
GEA Mechanical Equipment
YouOriginal spare parts
Field service
Repairs
Rental bowls / exchange parts
Upgrades / modernization
Service – service portfolio
34 GEA Capital Markets Day | June 26–27, 2013
Customer benefit orientated service product solutions from GEA Westfalia Separator.
Factory rebuilt machines
Condition monitoring
Service level agreements
Reliability consultant – maintenance
Customer training
serv&care – our holistic service concept
GEA Mechanical Equipment35 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment: OverviewI
FinancialsII
Market & InnovationIII
Global Production ConceptIV
Service Business: OverviewV
Table of content
Pillars of GEA ME‘s SuccessVI
GEA Mechanical Equipment36 GEA Capital Markets Day | June 26–27, 2013
GEA ME‘s pillars of success
Customer proximity
Product leadership
Operational excellence
33
55
44
22
11
Profound technological understanding of customer’s processes: Collaborating at eye level
Individual, customized machines: Highest problem solving skills allow best in class solutions
Effective and flexible service organization: Strengthen customer loyalty by lifecycle benefit
Consequently decentralized structure: Centers of excellence strengthen customer proximity
Outstanding operational excellence: processing, production, logistics, GPC
GEA Mechanical Equipment37 GEA Capital Markets Day | June 26–27, 2013
2. Individual, customized machines
Customization:• Bowl• Process
parameter
Standardization:• Drive• Hood• Frame
Outstandingcapability and USP
Efficient productionand price
competitiveness
Customer value bycustomization
Customer value bycustomization
= =
Highest problem solving skills allow best in class solutions
GEA Mechanical Equipment38 GEA Capital Markets Day | June 26–27, 2013
2. Profound technological understanding
Based on our outstanding technologicalexperience, we are a valued partner toour customers
We truly understand our customers‘ processes and supply individualizedbest in class equipment
Additionally, with our highly adaptedtechnical solutions we support ourcustomers to save energy and naturalresources
Collaborating at eye level
GEA Mechanical Equipment39 GEA Capital Markets Day | June 26–27, 2013
3. Effective and flexible service organization
Our global service network ensureshighest availability and continuousefficiency of our customers‘ equipment
Our service team significantlycontributes to enlarge new machinesbusiness
Our global service retains maximumasset value and keeps plant technologyupdated
Service itself is a major driving force forprofitable growth at GEA
Strengthen customer’s loyalty bylifecycle benefit
GEA Mechanical Equipment40 GEA Capital Markets Day | June 26–27, 2013
4. Consequently decentralized structure
Our Centers of Excellence ensure quick access to technological and processknow-how – worldwide
We are close to the different markets‘ needs and enhance customers‘ loyalty
The decentralized structure offers highlyefficient processes and short cycletimes
Centers of excellence strengthen customer proximity
GEA Mechanical Equipment41 GEA Capital Markets Day | June 26–27, 2013
5. Outstanding operational excellence
Continuous process optimization is a key driver to further enhance ourcompetitiveness
Our Global Production Concept leads toa significant decrease of process andproduction costs per unit
Local sourcing and our regional logisticshubs ensure a strong lead time reduction across the supply chain
Processing, production, logistics, GPC
GEA Mechanical Equipment42 GEA Capital Markets Day | June 26–27, 2013
Success factors: Geared up for further growth
What we benefited from …What we benefited from …
Growth of customized business– mainly food industry
Ability to explore profitable nichemarkets
Innovations – mechanical focus
Service business growth fromincrease in installed base
Sophisticated service offerings –from reactive to proactive
Efficiency – substantial productivity increases
… and opportunities to come… and opportunities to come
Future growth in standardized business – Marine, Environm.
Standardization w/o limiting customer benefit
Innovations – i-focus, hygienic/ aseptic, new applications
Increase in installed base of customized machines
Service infrastructure & new concepts – CRM, PLCs, etc.
Subtantial extension and globali-zation of production footprint
GEA Mechanical Equipment44 GEA Capital Markets Day | June 26–27, 2013
Table of content
GEA Mechanical Equipment – Managing Success in Challenging Markets
GEA Mechanical Equipment Financials
GEA Mechanical Separation Sales
GEA Mechanical Separation Service
Q & A
GEA Capital Markets Day – Day 2
GEA Financials – Accelerating Growth through focusing on Core
GEA Capital Markets Day – Day 1
GEA Mechanical Equipment
• GEA ME – a story of profitable growth
• GEA ME‘s success from a financial perspective
• Capital efficiency at GEA ME – cash generation despite Capex
• Geared up for further profitable growth – the CFO agenda
46 GEA Capital Markets Day | June 26–27, 2013
Efficiency and growth …
GEA Mechanical Equipment
685
740
874
972
717
725
844
934
100
117
161
188
14.0%16.1%
19.1% 20.1%
,0
,200
,400
,600
,800
1,000
1,200
2009 2010 2011 2012
EURm
Order Intake Sales EBIT EBIT %
47 GEA Capital Markets Day | June 26–27, 2013
Figures GEA ME 2009 to 2012
GEA ME’s 2009 to 2012 performance – continuous growth in volume and profitability
Note: EBIT = EBIT before restructuring and ppa
GEA Mechanical Equipment48 GEA Capital Markets Day | June 26–27, 2013
Figures GEA ME ytd May 2013
Start into FY 2013 shows that growth continues …
347.8 379.0
36.855.3
0
50
100
150
200
250
300
350
400
450
500
2012 2013
EURmYtd May Order Intake
Order Intake >EUR 1m/OrderOrder Intake <EUR 1m/Order
384.6
434.3
0
50
100
150
200
250
300
350
400
450
2012 2013
EURmYtd May Sales
50,3%
356.3 370.4
Notes:1) 14% adj. for FX (USD/RMB), 11% adj. for acquisitions2) 5% adj. for FX (USD/RMB, 2% adj. for acquisitions
GEA Mechanical Equipment
• GEA ME – a story of profitable growth
• GEA ME‘s success from a financial perspective
• Capital efficiency at GEA ME – cash generation despite Capex
• Geared up for further profitable growth – the CFO agenda
49 GEA Capital Markets Day | June 26–27, 2013
Efficiency and growth …
GEA Mechanical Equipment50 GEA Capital Markets Day | June 26–27, 2013
Growth by customer industry
126 156 197 235121 116
131156117
140171
19684 41
44
58
45 29
44
40
47 45
48
40
23 40
41
39
93 104
109
111
60 44
50
48
1 10
9
11
0
100
200
300
400
500
600
700
800
900
1.000
2009 2010 2011 2012
Other Industries
Climate & Environment
Marine
Chemicals
Pharma
Power
Oil & Gas
Food & Beverages - Non-Liquid
Food & Beverages - Liquid
Food & Beverages - Dairy
We have managed to balance ups and downs in different customer industries and benefited from a booming food market
non-
food
. 35
4no
n-fo
od.
354
food
365
food
365
non-
food
. 34
7no
n-fo
od.
347
food
587
food
587
EURm
,
GEA Mechanical Equipment
0
50
100
150
200
250
300
Mar
May Ju
lSe
pN
ov Jan
Mar
May Ju
lSe
pN
ov Jan
Mar
May Ju
lSe
pN
ov Jan
Mar
May Ju
lSe
pN
ov Jan
Mar
May Ju
lSe
pN
ov Jan
Mar
May
2008 2009 2010 2011 2012 2013
OI < EUR 1m OI >= EUR 1m < EUR 5m OI >= EUR 5m < EUR 15m OI >= EUR 15m
51 GEA Capital Markets Day | June 26–27, 2013
Strong development of our base level business – projects smaller than EUR 1m and Service (Rolling L3M view)
Order Intake by project size
GEA Mechanical Equipment
Development Service sales
Service sales have strongly contributed to the overall growthrealised since 2009
EURm
52 GEA Capital Markets Day | June 26–27, 2013
233.8249.9
270.9308.4
0
50
100
150
200
250
300
350
2009 2010 2011 2012
+7%+7% +8%+8% +14%+14%
GEA Mechanical Equipment53 GEA Capital Markets Day | June 26–27, 2013
Regional growth
12%
11%
16%61%
Total Sales FY 2009: EUR 717.5m
Asia Pacific w/o China
China
North America
Others
17%
11%
18%
54%
Total Sales FY 2012: EUR 933.9m
78.1 85.1
14,8
FY 2009 FY 2012
China China fx
8.6%(2.9%)8.6%
(2.9%)
114.5157.4
13.3
FY 2009 FY 2012
USA USA fx
14.2% (11.2%)14.2% (11.2%)
93.4137.3
21.0
FY 2009 FY 2012
Asia Pacific w/o China fxAsia Pacific w/o China
CAGR % 19.2%(13.7%)19.2%
(13.7%)
GEA Mechanical Equipment
100.2
187.9
30.2
31.7
25.7
0
50
100
150
200
250
EBIT pre ppa &restructuring
2009
Additional EBITfrom volume
Mix and priceeffects
Operating leverageand efficiency
EBIT pre ppa 2012
EURm
54 GEA Capital Markets Day | June 26–27, 2013
Development of EBIT – growth, leverage and mix
GEA ME strongly benefited from growth, mix, leverage andefficiency improvements
• EUR 216m sales growth@ 2009 margin (14%)
• Back to pre crisis volumeonly in 2011
• Above avg growth offood business
• Strong growth of after sales/ service
• Contribution/FTE upby 25% from 2009 to2012
• GPC effect partiallyrealised
14.0%14.0%
20.1%20.1%
+610 bp
GEA Mechanical Equipment
• GEA ME – a story of profitable growth
• GEA ME‘s success from a financial perspective
• Capital efficiency at GEA ME – cash generation despite Capex
• Geared up for further profitable growth – the CFO agenda
55 GEA Capital Markets Day | June 26–27, 2013
Efficiency and growth …
GEA Mechanical Equipment56 GEA Capital Markets Day | June 26–27, 2013
Continuous improvement of WC/sales ratio since 2009
Working capital development
Implemented improvement measures• Level of stock machines reduced• Tight debtor/creditor management• EPLC started end of 2010• Outsourcing vs Insourcing
Ongoing improvement measures• Global Production Concept• PLC‘s in Asia and the Americas• Standardization• Improved sales planning (CRM)
242.
2
218.
3
217.
5
170.
4
187.
4
184.
0
178.
6
178.
0
187.
0
197.
1
184.
7
178.
1
200.
6
206.
5
208.
4
179.
9
224.
1
23.7%
27.8% 27.5%25.6%
24.5%24.6% 24.8%22.9%
21.1%23.1%
23.5%22.8%
19.3%24.0%
0
50
100
150
200
250
300
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2009 2010 2011 2012 2013
Working Capital (EURm) NOWC/LTM-Sales in % Linear (NOWC/LTM-Sales in %)
EURm
GEA Mechanical Equipment57 GEA Capital Markets Day | June 26–27, 2013
Most significant infrastructure investments substantiallycompleted – capex will return to normal level of ~ 2.5% of sales
Capital expenditure
2.4%
1.3%1.9%
2.7%
3.2%
2.2%
6.7% 6.8%
0
10
20
30
40
50
60
70
80
FY 2009 FY 2010 FY 2011 FY 2012
EURm
Global Production Concept Other Capex Capex-% of sales excl. GPC
Capex-% of sales Normal capex requirement
GEA Mechanical Equipment58 GEA Capital Markets Day | June 26–27, 2013
GEA ME – Cash generation despite unusually high level of capex
Cash flow driver
-100
-50
0
50
100
150
200
250
Jan
Feb
Mar
Apr
May Jun
Jul
Aug
Sep
Oct
Nov
Dec Jan
Feb
Mar
Apr
May Jun
Jul
Aug
Sep
Oct
Nov
Dec Jan
Feb
Mar
2011 2012 2013
Cash Flow Driver Development - L12M
EBITDA L12M Delta WC L12M CAPEX L12M CFD-% L12M CFD Margin L12M @ 2.5% Capex
~18% of
sales
~14% of
sales
EURm
GEA Mechanical Equipment
ROCE development
59 GEA Capital Markets Day | June 26–27, 2013
368 346 328 310 301 304 308 318 329 345 373 402 430 456 465
23.8%24.5%26.5%28.7%34.5%36.8%
42.4%45.8%49.0%48.9%45.0%44.1%43.0%41.0%40.0%
0
100
200
300
400
500
600
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 May
2009 2010 2011 2012 2013
Capital Employed (average LTM) ROCE (average LTM)
EURm
*ROCE LTM = EBIT (LTM) / Capital employed excluding goodwill from the acquisition of the former GEA AG by the former Metallgesellschaft AG in 1999 (average LTM)
ROCE driven by strong EBIT development and impacted by GPC
GEA Mechanical Equipment
• GEA ME – a story of profitable growth
• GEA ME‘s success from a financial perspective
• Capital efficiency at GEA ME – cash generation despite Capex
• Geared up for further profitable growth – the CFO agenda
60 GEA Capital Markets Day | June 26–27, 2013
Efficiency and growth …
GEA Mechanical Equipment61 GEA Capital Markets Day | June 26–27, 2013
Success factors: Geared up for further growth
Success factors from CFO agenda …Success factors from CFO agenda …
Continuous improvement ofexisting production facilities
Intelligent sourcing decisions –outsourcing vs insourcing
… to be continued and further extended!… to be continued and further extended!
Lean concepts to be rolled out to further functional areas
Increasing extent of “local” sourcing
Effective control environment –avoidance of failures
Further enhance transparency – op. KPI dashboards / CRM
Efficient ERP systems environ-ment – one SAP template
Use of enhanced ERP solu-tions SAP EWM, APO, BI …
But most importantly …But most importantly …
GEA Mechanical Equipment
... our success depends on … our people!... our success depends on … our people!
62 GEA Capital Markets Day | June 26–27, 2013
Success factors: Geared up for further growth
GEA Mechanical Equipment64 GEA Capital Markets Day | June 26–27, 2013
Table of content
GEA Mechanical Equipment – Managing Success in Challenging Markets
GEA Mechanical Equipment Financials
GEA Mechanical Separation Sales
GEA Mechanical Separation Service
Q & A
GEA Capital Markets Day – Day 2
GEA Financials – Accelerating Growth through focusing on Core
GEA Capital Markets Day – Day 1
GEA Capital Markets Day 2013Sales
GEA Capital Markets Day | June 26–27, 201365
Ann CuylaertsVice President Sales InternationalGEA Mechanical SeparationJune 27, 2013
GEA Mechanical Equipment
Set up sales organization
66 GEA Capital Markets Day | June 26–27, 2013
SalesSales
SalesSales Order Processing
Order Processing
Central ProcessTechnology
Central ProcessTechnology
GEA Mechanical Equipment
Energy & Marine
Beverage & Dairy
RenewableResources
Chemicals / Pharma
Environmental Technology
North America
Set up sales organization
Asia
EasternEurope& CIS
LatinAmerica
WesternEurope
Africa
Oil & Gas
Sales
67 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment68 GEA Capital Markets Day | June 26–27, 2013
Know-how bundled centrally
Responsibility for a specific application worldwide Product & process know-how Business development Development of new applications and product
GEA Mechanical Equipment
Responsibility for a region/country for all applications Market development Local sales competence for customer intimacy Where applicable Center of Competence / Center of Excellence
Competent local sales force
LocationsLocations
ManufacturingLocal Sales / Service Teams
69 GEA Capital Markets Day | June 26–27, 2013
GEA Mechanical Equipment
Set up sales organization
70 GEA Capital Markets Day | June 26–27, 2013
SalesSales
SalesSales Order Processing
Order Processing
Central ProcessTechnology
Central ProcessTechnology
GEA Mechanical Equipment
Set up sales organization
71 GEA Capital Markets Day | June 26–27, 2013
SalesSales
SalesSales Order Processing
Order Processing
Central ProcessTechnology
Central ProcessTechnology
GEA Mechanical Equipment
Set up sales organization
72 GEA Capital Markets Day | June 26–27, 2013
Product analysis Lab spinning tests Pilot scale testing of new applications Test machines
Central Process Technology
GEA Mechanical EquipmentGEA Capital Markets Day | June 26–27, 2013
How do we differentiate?
73
Innovation, being technology leader, setting standards
Differentiation by customization
Grab opportunities by process know-how
Innovation, know-how and customization
GEA Mechanical Equipment74 GEA Capital Markets Day | June 26–27, 2013
Integrated direct drive
Gear drive
Belt drive
Innovations made by GEA are setting standards
19821958 2004 2008
Standard direct drive
GEA Mechanical Equipment
Innovations made by GEA are setting standards
75 GEA Capital Markets Day | June 26–27, 2013
Geardrive
Beltdrive
Standard directdrive
Integr. directdrive
Efficiency - - + ++ ++
Space requirement + - - ++
Max. drive power - + ++ -
Wear parts - - + + ++Reliability / availability - + + ++
Ease of maintenance - + - +
Noise emission - + + ++
Comparison of different drive concepts
GEA Mechanical EquipmentGEA Capital Markets Day | June 26–27, 2013
How do we differentiate?
76
Innovation, being technology leader, setting standards
Differentiation by customization
Grab opportunities by process know-how
Innovation, know-how and customization
GEA Mechanical Equipment77 GEA Capital Markets Day | June 26–27, 2013
Individual, customized machines
Customization:• Bowl• Process
parameter
Standardization:• Drive• Hood• Frame
Outstandingcapability and USP
Efficient productionand price
competitiveness
Customer value bycustomization
Customer value bycustomization
= =
Highest problem solving skills allow best in class solutions
GEA Mechanical EquipmentGEA Capital Markets Day | June 26–27, 2013
How do we differentiate?
78
Innovation, being technology leader, setting standards
Differentiation by customization
Grab opportunities by process know-how
Innovation, know-how and customization
GEA Mechanical Equipment79 GEA Capital Markets Day | June 26–27, 2013
Grabbing opportunities, reacting on trends
Market share increased by 31% since 2008
Sales exceeded $1.5B in 2012
Average US consumers doubled expenditures for yogurt since 2002
US consumers are willing to pay price premium for healthy yogurt
Manufacturers claim cost effectiveness and high efficiency
Greek yogurt market share of US yogurt market
2008
2012
35%
4% +31%
1.5B
US EUUS EU
Expenditure Consumption
20%50%
Nozzle separated Greek Yogurt – a strongly growing premium product market
GEA Mechanical Equipment
Production methods need to emphasize the traditional character of the product
GEA ME’s nozzle type separator KDB is a unique solution Special design Continuous operation High yield: no partial solids discharges, no losses Low idle time (CIP ≥ 16h) Low OPEX (water, electricity, ice-water, cleaning costs)
Customer intimacy: GEA supplies to key players
80 GEA Capital Markets Day | June 26–27, 2013
Grabbing opportunities, reacting on trends
Nozzle separated Greek Yogurt
GEA Mechanical EquipmentGEA Capital Markets Day | June 26–27, 2013
The challenge
81
customization, technology leadership, grabbing opportunities
Scale, volume
&
Combining customization with volume
GEA Mechanical Equipment82
The challenge
Covered by low-end competition; experience will let them enter new(our) segments
Real growth potential in the middle market segment, especially in emerging markets
GEA Westfalia Separator has a dominant position in this marketsegment
GEA Capital Markets Day | June 26–27, 2013
Leading market position challenged by dynamic market environment
GEA Mechanical EquipmentGEA Capital Markets Day | June 26–27, 2013
The solution
83
High quality standard
Highly standardized
Designed to basic needs
2nd product range: GEA Westfalia Separator easyline
GEA Mechanical EquipmentGEA Capital Markets Day | June 26–27, 2013
Innovation, next control unit generation
84
Intuitive human interface
Modular programming
Integrated Operation – IO
GEA Mechanical Equipment
Ratification of IMO guidelines forces ship owners to implement ballast water treatment systems
Market potential is high:
€ 4.4B for retrofits (~33,000 ships; aged ≤ 14 years)
€ 2.0B for new vessels (~ 1,500 vessels p.a.)
Ship owners demand cost efficiency, reliability and process safety
85 GEA Capital Markets Day | June 26–27, 2013
Innovation, ballast water treatment – the market
Ballast water treatment with BallastMaster ultraV – outstanding market potential
GEA Mechanical Equipment
BallastMaster ultraV is our next seaprotectsolutions milestone
High performance / low maintenance
Green and safe
Flexible and adaptable
86 GEA Capital Markets Day | June 26–27, 2013
Innovation, ballast water treatment
BallastMaster ultraV – conquering new markets in marine business
GEA Mechanical Equipment87 GEA Capital Markets Day | June 26–27, 2013
A strong, experienced sales team
Innovative products, setting the standards in the market
And there are more innovations to come to grow our installed base
Summary
GEA Westfalia Separator stands for:
GEA Mechanical Equipment89 GEA Capital Markets Day | June 26–27, 2013
Table of content
GEA Mechanical Equipment – Managing Success in Challenging Markets
GEA Mechanical Equipment Financials
GEA Mechanical Separation Sales
GEA Mechanical Separation Service
Q & A
GEA Capital Markets Day – Day 2
GEA Financials – Accelerating Growth through focusing on Core
GEA Capital Markets Day – Day 1
GEA Capital Markets Day 2013Service
GEA Capital Markets Day | June 26–27, 201390
Steffen BerschVice President Sales InternationalGEA Mechanical SeparationJune 27, 2013
GEA Mechanical Equipment91 GEA Capital Markets Day | June 26–27, 2013
Service sales @ GEA ME (BU MSP)CAGR (2009 – 2012): ~10%
205.5220.9
239.2
269.2
0
50
100
150
200
250
300
2009 2010 2011 2012
Ser
vice
Sal
es @
BU
MS
P
EURm
+8%+8% +8%+8% +13%+13%
• BU MSP Service stands for 80% of GEA ME segment service• BU MSP Service share in relation to new equipment sales is 30-35%• The Service product share is spare parts (70%), repairs (15%) and field service (15%)
GEA Mechanical Equipment92 GEA Capital Markets Day | June 26–27, 2013
GEA ME (BU MSP) in comparison to VDMA benchmark
Benchmark criteria VDMA avg. VDMA best BU MSP
Organization structure Profit Center Profit Center Profit Center
Reporting to CEO CEO CEO
Service share in comparison to total sales
20% 30% 30 – 35%
Growth of service business (VDMA 2005 reference)
2% 5% ~10%*
Spare Part share in comparison to total service sales
58% 90% 70%
Availability of parts (first pick) 75% 96% 80%
Delivery times for parts (Europe) 4.4 days 1.0 day 1.0 day
Delivery times for parts (Global) 8.2 days 3.0 days 3.0 days
Source: VDMA Kennzahlen (vergleichen, verstehen, verändern) – Kundendienst 2012*average growth from 2009-2012
GEA Mechanical Equipment93 GEA Capital Markets Day | June 26–27, 2013
Service product portfolio –segmentation enabled development in service business
Service Cluster 1
• Installation and commissioning• Training• Consumable parts• Spare and wear parts• Service and maintenance• Unplanned repair• Planned repair
• Installation and commissioning• Training• Consumable parts• Spare and wear parts• Service and maintenance• Unplanned repair• Planned repair
Service Cluster 2
• Improved service (e.g. retrofit, modernization)• End-of-Life Services• Reconditioning• Product monitoring• Services based on telecommunication network• Competitive product and related products/systems
• Improved service (e.g. retrofit, modernization)• End-of-Life Services• Reconditioning• Product monitoring• Services based on telecommunication network• Competitive product and related products/systems
Service Cluster 3
• Consulting services (e.g. planning, inventory management, logistics, SCM)
• Not intended in GEA ME’s service scope are:• Financing services (e.g. financing, leasing, renting,
insurance)• Operational process outsourcing (e.g. line operation,
output guarantee)• Business process outsourcing
• Consulting services (e.g. planning, inventory management, logistics, SCM)
• Not intended in GEA ME’s service scope are:• Financing services (e.g. financing, leasing, renting,
insurance)• Operational process outsourcing (e.g. line operation,
output guarantee)• Business process outsourcing
Product based service
in narrowsense
Product based service
in narrowsense
Product based service
in broadersense
Product based service
in broadersense
Not directly product related service
Not directly product related service
alre
ady
cove
red
by G
EA M
Ede
velo
ping
GEA Mechanical Equipment
GEA MSP service performance
94 GEA Capital Markets Day | June 26–27, 2013
Success factorsthat ensure furthergrowth of service
business
Success factorsthat ensure furthergrowth of service
business
More than 650 trained own service
personnel
Installed base:~ 70,000 deliveredmachines25 authorized repair workshops
repairing 1,500 machines/year
250 spare partshipments/day;
65,000 customercontacts/year
Automatic track and trace for every shipment
>100,000 activespare parts
Emergency deliverytime less than 24 hours in Europe
2 regional logisticcenters &
40 local hubs forparts
Installed base in more than 180 countries covered by over 40 own sales & service companies
GEA Mechanical Equipment95 GEA Capital Markets Day | June 26–27, 2013
The OUTLOOK – growth driver of the service business: development of the iBase
The installed base of delivered machines is growing. The growth rate of service potential is 4.5%.
Separators Decanters
Piec
es
GEA Mechanical Equipment96 GEA Capital Markets Day | June 26–27, 2013
The OUTLOOK – growth driver of the service business: utilization of service potentials
The iBase is growing continuously, the service potential is growing by 4.5% p.a..
Annual service spend is 4-7% of the replacement asset value.
The lifetime of a centrifuge is between 20 and 40 years.
Capture rate is 65% (in 2005: only 53%).
Capture rate in developed markets at 70-80%, while in emerging markets it is at 40-50%.
High capture rate in Food, Chemical/Pharmaceutical and Renewable Resources applications
GEA Mechanical Equipment98 GEA Capital Markets Day | June 26–27, 2013
The OUTLOOK – growth driver of the service business: utilization of service potentials
The service products and programs of GEA Westfalia Separator are designed to fulfill the three central tasks of maintenance.
Three central tasks of maintenanceThree central tasks of maintenance
Increase reliability
of the equipment
Increase reliability
of the equipment
Cost control
Cost control
Efficient processesEfficient
processes
Meet budget request
Meet budget request
Maximum utilization of raw product
Maximum utilization of raw product
Higher availability of the plant
Higher availability of the plant
GEA Mechanical Equipment99 GEA Capital Markets Day | June 26–27, 2013
The OUTLOOK – growth driver of the service business: utilization of service potentials
1970 – 19901950 – 1970 1990 – 2005 2005 – 2013
Strategy Breakdown Preventive PredictiveRCM*
ProactiveRCM*
Approach Fix it Scheduled Conditionmonitoring
Failure sourcedetection
Humananalogy
Heartattack By-pass Detection
via EKGMonitor cholestorol
*RCM = Reliability-Centred Maintenance
GEA Mechanical Equipment100 GEA Capital Markets Day | June 26–27, 2013
Why we want to focus even stronger on service in the future and what is on our agenda:
EBIT margin substantial above group average
Low volatility in revenue generates continuous earnings stream
Strong contribution to customer relationship
GEA Mechanical Equipment
What is on the agenda?
101 GEA Capital Markets Day | June 26–27, 2013
Increase service coverage of the installed base (International Repair Network; Marine Service Network; Logistics)
Expand the service product portfolio (more pro-active maintenance products)
Broaden geographic coverage and strengthen local capabilities (GEA ME Campus; de-central training)
Improve condition monitoring by setting up a machine operation center
Global roll-out of SAP-Service-CRM to get 360° view on customers
GEA Mechanical Equipment103 GEA Capital Markets Day | June 26–27, 2013
Table of content
GEA Mechanical Equipment – Managing Success in Challenging Markets
GEA Mechanical Equipment Financials
GEA Mechanical Equipment Sales
GEA Mechanical Equipment Service
Q & A
GEA Capital Markets Day – Day 2
GEA Financials – Accelerating Growth through focusing on Core
GEA Capital Markets Day – Day 1
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