From melting steel to 3D-printing: investing in the technology-driven German Mittelstand. as at 22 March 2017

Transcription

1 From melting steel to 3D-printing: investing in the technology-driven German Mittelstand as at 22 March 2017

2 1. Business model highlights 1 holding company 28 years of experience 4 divisions ~500 m sales 2,500 staff 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 Long-term investments Succession issues 100% takeovers New management acquires 10% to 20% ~100,000 German SMEs face succession in the years ahead 2

3 1. Business model GESCO a Group in acceleration Active portfolio management: one loss-maker to be sold, one Hidden Champion acquired Divestment: restructuring case Protomaster put for sale Acquisition: Pickhardt & Gerlach joins GESCO Group Portfolio becomes stronger and more robust Active ownership: new impetus for profitable growth A new portfolio strategy 4 segments higher transparency, new framework for acquisitions Systematic benchmarking Optimisation projects for individual subsidiaries A more active role of GESCO AG in terms of consulting and support for its companies A stronger focus on free cash flow (working capital, investments) Active M&A approach: access to entrepreneurs Continuously attractive deal flow via M&A network New portfolio strategy widens horizon for attractive targets In addition: proactive direct contact with business owners 3

4 1. Business model GESCO current situation and outlook From an operating point of view, 2016/2017 turns out to be better than expected in Nov Exit of loss-maker burdens 2016/2017 accounts, but reduces future risks Newly aquired PGW will provide external growth All in all, our portfolio has been strengthened New financial year 2017/2018 should generate growth in sales and earnings on an organic basis Optimisation projects have been identified in FY 2016/2017, will be implemented in FY 2017/2018 and generate impact in FY 2018/2019 We expect to start into the new FY with a strengthened, more robust portfolio and good perspectives for profitable organic as well as external growth 4

5 1. Business model Our industry 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. Our divisions Representing strategically attractive end customer markets: Production process technology Resource technology Health and infrastructure technology Mobility technology 5

6 1. Business model: our divisions Features: Dynamically growing markets, high degree of innovation, automation, trend towards batch size 1 Production process technology (Share of Group sales approx. 15 %) Products / services: End customers: Robotics and automation solutions in machine and plant construction, technology-intensive manufacturing services Serial producers, e.g. in automotive, steel and consumer goods industries Products/services (examples): (semi)automatic assembly lines 3D printing straightening machines 6

7 1. Business model: our divisions Features: Consolidating markets, focus on niches and customer service Resource Technology (Share of Group sales approx. 45 %) Products / services: End customers: Customised preparation of primary materials, e.g. materials supply, transport and loading technology Material-intensive industrial companies, globally distributed production structures, broadly diversified Products/services (examples): high-alloyed tool steel coating and hardening loading arms for gases and liquids 7

8 1. Business model: our divisions Features: Close to end consumers, not very cyclical, relatively resilient to economic fluctuation Health and infrastructure technology (Share of Group sales approx. 25 %) Products / services: End customers: Components, modules and primary products Providers for mass markets close to end consumers (construction, sanitary equipment, food, hygiene, medicine) Products/services (examples): arms for medtech paper sticks for hygiene and sweets industry spareparts for agricultural technology 8

9 1. Business model: our divisions Features: Cyclical automotive market, positive outlook driven by technological leaps, e.g. electromobility Mobility technology Products / services: End customers: Tools and moulds, components, parts Vehicle industry, e.g. car, commercial vehicle and rail (Share of Group sales approx. 15 %) Products/services (examples): vibration damper tools for car body parts moulds for aluminium die cast 9

10 2. Financial year 2016/2017 Please note: FY subsidiaries = calendar year 1 January 31 December 1 April 31 March FY GESCO AG / GESCO Group = 1 April to 31 March 10

11 2. Financial year 2016/2017 Q1 to Q3 (Jan. to Sept at subsidiaries) Q1-Q3 2015/2016 Q1-Q3 2016/2017 Change Order intake m % Group sales m % EBITDA m % EBIT m % Group net income after minority interest m % Earnings per share acc. to IFRS 1) % Cashflow from operating activities m % 1) Based on new no. of shares after share split 1:3 on The first nine months: General environment for capital goods still dampened Q1/Q2: comparatively weak, additionally burdened because customers postponed deliveries of major orders to H2 Q3: significantly better, large orders delivered, improvement in sales and margins Q1 to Q3: order intake stable, sales and earnings below prev. year s figures Cash flow significantly improved 11

12 2. Financial year 2016/2017 Division development Q1-Q3 m Q1-Q3 2015/ 2016 Q1-Q3 2016/ 2017 Remarks Production Process Technology Sales EBIT Numerous machines will be delivered in Q4. Full FY expectation: sales slightly under, earnings clearly above previous FY. Resource Technology Sales EBIT Oil and chemical industry still reluctant to invest. Margin improvement in Q4. Full FY expectation: sales and earnings slightly above previous FY. Healthcare / Infrastructure Technology Sales EBIT Very robust; profitable growth. Full FY expectation: sales slightly, earnings clearly above previous FY. Mobility Technology 1) Sales EBIT Parts for series production and large tools develop lively, other sections suffer from car manufacturers reluctance to invest. Full FY expectation: sales and earnings clearly under previous FY. 1) Division includes restructuring case Protomaster GmbH, which is put for sale. 12

13 2. Financial year 2016/2017 Q4 (Oct. to Dec at subsidiaries) Preliminary figures for the fourth quarter Q4 order intake ~ 122 m: +16 % yoy Q4 sales ~ 125 m: stable yoy Order intake ( 000) Sales ( 000) Numerous machines delivered, margins better than expected In full FY book-to-bill > 1, order backlog 188 m (+10%) 13

14 2. Financial year 2016/2017 outlook and first view on 2017/2018 Target figures for Group sales Target figures for Group net income after minority interest 480 m at best 480 m Q4 better than expected, operating outlook raised 11.5 m to 12.5 m 12.5 m to 13.5 m...but decision to sell Protomaster will burden earnings For new FY growth in sales expected 6.5 m negative one-off 6 m effect to } 7 m For new FY growth in earnings expected 2016/2017 Guidance Nov /2017 Guidance Feb /2018 First indication 2016/2017 Guidance Nov /2017 Operating guidance Feb /2017 Guidance Feb /2018 First indication 14

15 3. M&A and Portfolio Development More active approach towards M&A Market still characterized by strong demand and a limited number of companies offered Focus on 4 end customer segments GESCO continuously generates high deal flow GESCO has intensified its activities, aims to generate direct contact with entrepreneurs / business owners, which has already led to a number of personal meetings 15

16 3. M&A and Portfolio Development Recent acquisition: Pickhardt & Gerlach Group (PGW) Leading supplier of refined cold rolled strip steel Products: nickel-, copper-, brass- or zinc-coated strip steel Customer sectors: electro-technic industry, automotive, decorative articles, sporting equipment, office supply Product examples: electronic circuit breakers, file folders, windscreen wipers Highly automated production systems 16

17 3. M&A and Portfolio Development Recent acquisition: Pickhardt & Gerlach Group (PGW) Family business, founded 1902, taken over by Hekhorn family in 1990 GESCO acquired 100% of the shares from Hekhorn family as part of a succession planning process Signing Dec. 2016, approval of antitrust authorities in Jan Managing Director of technology will continue to work for PGW Will be integrated in the Resource Technology division Approx. 30 million sales, 40 employees 17

18 3. M&A and Portfolio Development Decision to sell Protomaster GmbH Communicated as a restructuring case since FY 2014/2015 Generated operating losses in FYs 2014, 2015 and 2016 GESCO supported Protomaster strongly over the last years On 2 Feb decision to put Protomaster for sale Sales process started immediately Exit decision expected to burden Group net income after minority interest in FY 2016/2017 with a one-off effect of ~ 6.5 m Risks from that investment will be taken into account as far as recognisable GESCO overall strategy unchanged: exit is and will continue to be last resort and certainly an exception 18

19 4. GESCO share GESCO strengthens equity for further growth "Small" capital increase placed on 21 March 2017 Maximum volume of 864,499 shares issued Oversubscribed several times Placement price Placed in the Accelerated Bookbuilding process to institutional investors in Germany and abroad with the exclusion of subscription rights New share capital 10,839,499, divided into the same number of registered shares Highly effective, cost-efficient process Inflow of funds approx. 20 million Placed against the background of the acquisition of the Pickhardt & Gerlach Group, finalized in January 2017 A broadened equity base will continue to ensure full ability to act in terms of acquisitions as well as investments in the existing Group 19

20 4. GESCO share vs. SDAX and DAX 1 Year in % (total shareholder return) Pleas note: Share split 1:3 was implemented on 22 Dec

21 4. GESCO share vs. SDAX and DAX 10 Years in % (total shareholder return) Pleas note: Share split 1:3 was implemented on 22 Dec

22 4. The GESCO share shareholder structure 13.7 % Stefan Heimöller (entrepreneur, member of supervisory board, private investor) 12.8 % Investmentaktiengesellschaft für langfristige Investoren TGV (institutional investor) approx % other private investors approx % other institutional investors Free float: 86.3% Directors Dealings: In current FY purchases by members of supervisory and executive board. 22

23 Appendix GESCO management Executive Board Dr Eric Bernhard * 1972 Board member since Jan. 2016, CEO since July Portfolio strategy. Strategic and operational development of subsidiaries. Investor Relations. Many years of management experience in consulting and various industries. Robert Spartmann * 1960 Board member since Financials, legal, HR, M&A, advising holdings. Tax advisor and auditor. Many years of experience in SME sector. From 1995 to 2000 external advisor for GESCO Group. 23

24 Appendix GESCO management Supervisory Board Klaus Möllerfriedrich Chairman * 1947 Co-founder of GESCO. Board member since Tax advisor, auditor, consultant. Stefan Heimöller Deputy Chairman * 1963 Board member since Business owner / entrepreneur. Dr Nanna Rapp * 1969 Board member since MD of E.ON Inhouse Consulting GmbH. 24

25 Appendix GESCO Group overview Company Sales Staff as at 31/12/2015 GESCO AG shareholding AstroPlast Kunststofftechnik GmbH & Co. KG 16, % Paul Beier GmbH Werkzeug- und Maschinenbau & Co. KG 12, % C.F.K. CNC-Fertigungstechnik Kriftel GmbH 9, % Dömer GmbH & Co. KG Stanz- und Umformtechnologie 15, % Dörrenberg Edelstahl GmbH 179, % Frank Group 27, % Franz Funke Zerspanungstechnik GmbH & Co. KG 15, % Haseke GmbH & Co. KG 12, % Hubl GmbH 12, % Georg Kesel GmbH und Co. KG 11, % MAE Group 44, % Modell Technik Formenbau GmbH 13, % Pickhardt & Gerlach GmbH & Co. KG (Acquired in Dec. 2016) approx. 30,000 approx % Protomaster GmbH 17, % Setter Group 26, % SVT GmbH 33, % VWH GmbH 11, % Werkzeugbau Laichingen Group 26, % 25

26 Appendix Facts and figures for GESCO AG Founded: 1989 Share capital: 10,839,499 Shares: 10,839,499 registered shares Free float: 85.1% 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: Designated sponsors: 31 March equinet Bank AG Oddo Seydler Bank AG 26

27 Appendix Financial calendar Financial calendar 29 June 2017 Annual Accounts Press Conference / Analysts Meeting Aug Q1 figures 31 Aug Annual General Meeting, Wuppertal Nov Q2 figures 27

28 Appendix Investor relations contact Anything else you d like to know? Contact: Oliver Vollbrecht, Head of IR Phone: vollbrecht@gesco.de Investor Relations GESCO AG Phone: Investor Relations Fax: Oliver Vollbrecht info@gesco.de Johannisberg 7 Internet: Wuppertal Germany 28