gesco oddo frankfurt

Investing in the technology-driven German „Mittelstand“

From melting steel... ...to 3D printing

Oddo Small and Midcap Event Frankfurt/Main 17 Feb. 2016

Long-term investments

1 holding

company

1. Business model highlights

2

~500 €m sales

2,550 staff

27 years of

experience

17 direct

subsidiaries

Technology made in Germany for the world markets

(direct or indirect export)

Always in search of new

“hidden champions”

M&A is an ongoing process

Succession issues

100% takeovers

New management acquires

10% to 20%

~100,000 German SMEs face succession in the years ahead

1. Business model

Materials

Machines

Tools

Components

Our world: B-to-B and investment goods. From melting steel to 3D printing.

Our mission: Being successful by supporting our customers’ success

with products and services made in Germany.

Services

3

25% Passenger and

commercial vehicles

1. Business model

4

15% Iron, plate and

metal processing, tool construction

15% Machine and

plant construction

Our customer sectors: widely spread.

12% Other

5% Chemical and petrochemical

industry

6% Energy

6% Agricultural technology

5% Electrical, medical

technology, household goods

3% Construction,

air conditioning, sanitary industry

4% Consumer goods

industry

4% Foundries and

roller mills

1. Business model – Materials (sales and staff FY 2014)

5

Providing high-alloyed tool steel Europe’s leading

centre for

special steels

Distributing around the world

for decades. Own subsidiaries in Asia.

~ 3,000 customers from the investment

goods industry (machines, tools, etc.)

One of the first apps in the industry.

However: personal contact

is king.

Extensive expertise

from in-house steel foundry, casting,

coating & hardening

€ 172 m sales 500 staff

1. Business model – Machines and systems (sales and staff FY 2014)

6

Makes things run smoothly Worldwide: 85% export ratio.

Loading arms

for gases and liquids

Specialty

LNG

Provides accuracy and safety

Straightening machines

and wheel set presses

World market leader

in both divisions



1. Business model – Tools (sales and staff FY 2014)

7

Supports accurate production

Large, complex tools

for car body parts

Large in-house presses;

strong service business


Moulds for

aluminium die-casting

Supports lightweight construction


In-house foundry

with three die-casting presses

1. Business model – Components (sales and staff FY 2014)

8

Reliable parts for farmers

Europe’s leading forge for

agricultural wear parts

Founded in 1836

well-established brand


Supports stable production processes


Paper and

plastic sticks

Sweets and hygienic industries

90% export ratio

1. Business model – Services (sales and staff FY 2014)

9

Provides precision and creativity

High-precison

wire erosion and

die sinking

Successful

3D printing business unit

€ 8.3 m sales 57 staff

Increases the lifetime of means of production Coating &

hardening division

Provides different technologies

plus in-depth expertise

Subsidiaries’ FY = calendar year

Please keep in mind:

10

2. Financial year 2015/2016

Jan. Dec.

March April

GESCO AG / GESCO Group FY = 1 April to 31 March

How did we start? Initial situation and expectations for 2015/2016 (as at annual accounts press conference on 25 June 2015)

+ Positive forecasts:

GDP +2.1% VDMA +2% GKV +2.6%


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- Low oil price oil industry

reluctant to invest

- Agricultural technology still weak

- Some tool

manufacturers in the Group expect weaker business (cyclical effects)

- Two restructuring

cases still negatively

affecting margins

+ Business at a

satisfactory level, e.g. at

Dörrenberg, Haseke, Setter

• sales should grow organically

• plus inorganic growth (Setterstix)

• but margins continue to be too low

+ Setterstix

(acq. Jan. 2015) provides external

growth

Where are we now? Situation after first nine months

Pretty lively

customer demand

2. Financial year 2015/2016 – Q1 to Q3

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Earnings grow even stronger,

especially due to:

Growing order intake

and sales

operating improvements;

better than expected e.g.

CFK WBL Group

Setter Group

restructuring activities at 2 subsidiaries

(MAE and Protomaster) proceeding

2. Financial year 2015/2016 – Q1 to Q3 (Jan. to Sept. 2015 at subsidiaries)

Q1 to Q3 2014/2015

Q1 to Q3 2015/2016

Change

Order intake € m 340.0 378.1 11.2%

Sales € m 337.9 369.2 9.3% EBITDA € m 34.4 40.5 17.6% EBIT € m 20.4 25.3 23.7% Group net income after minority interest

€ m

10.5

12.9

24.1%

EPS acc. to IFRS € 3.14

31/03/2015

3.90

31/12/2015

24.1%

Equity € m 182.8 190.6 4.3% Equity ratio % 45.3 44.1 - Liquid funds € m 35.3 37.9 7.5%

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Organic: +6.5%

Organic: +8.5%

Solid balance sheet,

room for growth

€ 5.8 m dividend

paid out in Q2

Pretty lively

business

Operating improvements,

restructuring activities

proceeding

2. Financial year 2015/2016 – Q4 (Oct. to Dec. 2015 at subsidiaries)

How are we proceeding? As expected, customer demand slightly calmed down in Q4. (preliminary figures)

14

Q4 2015/2016

-4.4%

€ 108.8 m ∼ € 104 m

Q4 2014/2015

Order intake Sales

Q4 2015/2016

+5.8%

€ 113.4 m ∼ € 120 m

Q4 2014/2015

Where do we go from here? General current situation: a mixed picture.

Already in July,

VDMA cut outlook from +2%

to zero growth


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Declining demand from

China due to decreasing

growth

Oil and chemical industry still

hesitant to invest

Resummee as at half year (Nov. 2015)

• No indication of a significant, widespread decline in demand

• But no notable growth impetus either

Within GESCO Group

Many profit warnings on the

stock market

2. Financial year 2015/2016 – Outlook

Target figures for Group sales.

16

2014/2015 Actual

2015/2016 Guidance June 2015

€ 451 m

€ 490 m to

€ 480 m

2015/2016 Guidance Feb. 2016

∼ € 490 m +8.5% yoy

2. Financial year 2015/2016 – Outlook

Target figures for Group net income after minority interest.

17

2014/2015 Actual

2015/2016 Guidance June 2015

€ 12.4 m

€ 14.0 m to

€ 12.5 m

2015/2016 Guidance Feb. 2016

+29.5% yoy ∼ € 16 m

3. Share price development (in %) – 1 and 5 years

GESCO vs. SDAX, 1 year GESCO vs. SDAX, 5 years

18

─ GESCO ─ SDAX

85

90

95

100

105

110

115

120

70

80

90

100

110

120

130

140

150

160

170

180

Free float: 85.5%

Stefan Heimöller, entrepreneur, member of supervisory board: 14.5 %

Investmentaktiengesellschaft für langfristige Investoren TGV: 11.9 %

Dividend policy: payout ratio approx. 40 % of Group net income after minority interest

Appendix – Shareholder structure and dividend policy

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Founded: 1989 Share capital: € 8,645,000 Shares: 3,325,000 registered shares Free float: 85.5% Stock markets: Xetra; Frankfurt (regulated market); Berlin, Düsseldorf, Hamburg, Hanover, Munich, Stuttgart (open market) Sec. identification number: A1K020 ISIN: DE000A1K0201 IPO: 24/03/1998 End of financial year: 31 March Designated sponsors: equinet Bank AG Oddo Seydler Bank AG

Appendix – Facts and figures for GESCO AG

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Appendix – GESCO Group overview

Company Sales 2014 €‘000

Staff 31/12/2014

GESCO AG shareholding

Astroplast Kunststofftechnik GmbH & Co. KG 16,646 92 80%

Paul Beier GmbH Werkzeug- und Maschinenbau & Co. KG 9,492 108 100%

C.F.K. CNC-Fertigungstechnik Kriftel GmbH 8,330 57 80%

Dömer GmbH & Co. KG Stanz- und Umformtechnologie 14,719 102 100%

Dörrenberg Edelstahl GmbH 171,683 501 90%

Frank Group 28,225 274 90%

Franz Funke Zerspanungstechnik GmbH & Co. KG 16,861 81 80%

Haseke GmbH & Co. KG 12,742 63 80%

Hubl GmbH 10,806 101 80%

Georg Kesel GmbH und Co. KG 12,454 69 90%

MAE Maschinen- und Apparatebau Götzen GmbH 24,768 160 100%

Modell Technik Formenbau GmbH 13,948 115 100%

Protomaster GmbH 8,630 110 82.17%

Setter Group 14,567 59 100%

SVT GmbH 44,104 182 90%

VWH Vorrichtungs- und Werkzeugbau Herschbach GmbH 11,151 109 80%

Werkzeugbau Laichingen Group 25,196 178 85% 21

Appendix – GESCO management

Executive Board

22

Dr-Ing Hans-Gert Mayrose * 1958. Joined GESCO in 2000, board member since 2002. M&A, IR, advising holdings. Many years of management experience in the domestic and international capital goods business.

Robert Spartmann * 1960. Board member since 2001. Financials, legal, HR, advising hol-dings. Tax advisor and auditor. Many years of experience in SME sector. From 1995 to 2000 external advisor for GESCO Group.

Dr Eric Bernhard * 1972. Board member since Jan. 2016. Stra-tegic and operating development of subsi-diaries. Many years of management experi-ence in consulting and various industries.

Appendix – GESCO management

Supervisory Board

23

Klaus Möllerfriedrich Chairman

* 1947 Co-founder of GESCO.

Board member since 1989. Tax advisor, auditor,

consultant.

Stefan Heimöller Deputy Chairman

* 1963 Board member since 2013.

Business owner / entrepreneur.

Dr Nanna Rapp * 1969

Board member since 2015. MD of E.ON Inhouse

Consulting GmbH.

Appendix – Financial calendar

Financial calendar

15 February 2016 Q3 figures (01/04 to 31/12/2015)

17 February 2016 ODDO Small & Mid Cap Event, Frankfurt/Main

30 June 2016 Annual Accounts Press Conference and Analysts’ Meeting

15 August 2016 Q1 figures (01/04 to 30/06/2016)

25 August 2016 Annual General Meeting

15 November 2016 Q2 figures (01/04 to 30/09/2016)

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Appendix – Investor relations contact

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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Anything else you’d like to know?

Contact Oliver Vollbrecht, Head of IR Phone: +49 202 2482018

Email: [email protected]

gesco oddo frankfurt

Engineering