RELAUNCH Presentation November 2017 as at 14 Nov. 2017
1989 Founding LONG TERM Investor 4 GROUP SEGMENTS GESCO PROFILE 17 PORTFOLIO COMPANIES 01 IN BRIEF ~ 500 million GROUP SALES 100% TAKEOVER UP TO 3 Acquisitions per year Market leaders & established players PORTFOLIO HIDDEN CHAMPIONS Future oriented end markets based on MEGA TRENDS INDUSTRIAL Group German MITTELSTAND ~ 2,500 EMPLOYEES WORLDWIDE 36 SITES WORLDWIDE 2
01 SEGMENTS IN BRIEF Production process technology Dynamically growing markets, high degree of innovation, automation, batch size 1 Robotics and automation solutions in machine and plant construction, technologyintense manufacturing services Resource technology Consolidating markets, focus on niches and customer service Customised preparation of primary materials, e. g. materials supply, transport and loading technology Health and infrastructure technology Not very cyclical, relatively resilient to economic fluctuation Components, modules and primary products for providers for mass markets close to end customers Mobility technology Cyclical automotive market, positive outlook driven by technological leaps, e. g. electromobility Tools and moulds, components, parts etc. for vehicle industry 3
PORTFOLIO STRATEGY 2022 01 PORTFOLIO STRATEGY 2022 Starting point Long standing successful business model had been losing momentum since 2012/2013. Action In 2016/2017 we set a lot of actions in motion in order to lead GESCO back to the path of profitable growth. PORTFOLIO STRATEGY 2022 RELAUNCH 4
01 ANALYSE SITUATION Are our existing business model and our role as shareholders still suitable to achieve our goals? PORTFOLIO STRATEGY 2022 Phase of analysis terminated 02 ANALYSE MEGA TRENDS Which markets are attractive for us? 03 STRUCTURING OF SEGMENTS Which competences are the basis on which we shape our future? 01 PORTFOLIO STRATEGY 2022 04 BENCHMARK FOR EACH COMPANY How do we secure leading positions and margines? DECISION Q1/2016 the business model had to be further developed in order to realize improvement potential GESCO had to take a more active part in its shareholder role DECISION Q1/2016 growth markets related to mega trends focus put on 4 end customer market segments DECISION Q2/2016 GESCO competences identified Portfolio reshaped into 4 Group segments basis for focussed growth strategy foresees up to 3 acquisitions per year DECISION Q3/2016 Competitive benchmarking realised for each company optimisation potential identified support needs substantiated resulting gaps quantified 5
05 MANAGEMENT LEVER How do we best fulfil our duties as a shareholder? PORTFOLIO STRATEGY 2022 Optimizations started 06 GROWTH LEVER Which mix of measures helps us to get better? 07 MANAGEMENT METHOD How can the holding generate added value while maintaining high degrees of liberty? 01 PORTFOLIO STRATEGY 2022 08 VALUES & CULTURE DEVELOPED How can we preserve values and at the same time develop a strong culture of performance and results? DECISION Q4/2016 robust organization: placement of managing directors & key positions prioritization on investments for growth & competitiveness consultative support to the portfolio companies DECISION 03 04/2016 concrete actions developed and anchored in planning focus on revenue growth and competitiveness Increase cash flow through new focus on working capital DECISION 03 04/2016 annual strategy meetings used as kick off for strategic planning ambitious 3 year targets agreed with the Managing Directors consulting by portfolio managers in financial and technical topics & projects DECISION 03 04/2016 cultural change has been initiated operational degrees of freedom have been retained stronger focus on obligation and achievement have been put in place 6
A REFINING ACQUISITION FIELD OF BUSINESS processing of strip steel with brass, copper, nickel & zinc SIGNING: DEC. 2016 CLOSING: JAN. 2017 ACQUISITION 2016/2017 Profile Pickhardt & Gerlach Group HIDDEN CHAMPION Leading supplier in Europe USPs: QUALITY LEADER & DEDICATED CUSTOMER SERVICE CUSTOMER SECTORS electronics, home accessories, interior fittings, packaging, office supply, household appliances, handicraft & DIY, furniture accessories, sporting goods, automotive ~ 30 m SALES 41 STAFF 01 M&A SPECIALTY high degree of automation, production technology and site state of the art 7
FINANCIAL YEAR 2017/2018 H1 Dynamic start into the new financial year 02 H1 Business activity in capital goods industry has picked up significantly PORTFOLIO STRATEGY 2022 in progress, optimisation projects begin to show results Portfolio strengthened by acquisition of Pickhardt & Gerlach Group (PGW), included in P+L for the first time in current financial year Incoming orders and sales increased significantly, earnings more than doubled Also in Q3 incoming orders and sales on a high level H1 earnings benefit from better capacity utilisation and a favourable order mix in connection with dynamic market development disproportionately high earnings increase EBIT margin imroved from 4.6 % to 7.7 % Outlook for full financial year narrowed New guidance: sales and earnings expected to come in at upper end of outlookranges 8
FINANCIAL FIGURES IN DETAIL 02 H1 H1 2016/2017 H1 2017/2018 Change Remark Incoming orders m 250.3 276.3 +10.4 % organic: +2.8 % Sales m 228.7 264.7 +15.7 % organic: +8.2 % EBITDA m 21.0 32.6 +54.9 % EBIT m 10.6 20.4 +92.1 % Earnings before tax m 9.2 19.1 +108.6 % Group net income after minority interest m 4.8 10.6 +118.1 % Earnings per share pursuant to IFRS 0.49 0.97 +98.0 % Weighted average number of shares No. 9,974,793 10,838,956 +8.7 % Employees No. 2,528 2,572 +1.6 % Disproportional growth due to better capacity utilisation and favourable order mix Disproportional growth due to higher no. of shares Increase due to capital increase from March 2017 PGW s staff included for the first time (41 employees) 9
SEGMENT DEVEL0PMENT 02 H1 Segment m H1 H1 2016/2017 2017/2018 PRODUCTION PROCESS RESOURCE HEALTH & INFRASTRUCTURE MOBILITY Incoming orders 34.7 38.3 lively customer demand; companies started production of Sales 30.7 30.5 plants and machines which will contribute to sales and EBIT 0.5 earnings mainly in H1 0.1 Incoming orders 114.3 138.7 Extraordinarily strong H1 with especially favourable Sales 100.7 137.7 environment, PGW included for the first time EBIT 6.4 19.8 Incoming orders 59.1 63.6 Lively customer demand; all companies could increase Sales 59.9 63.6 order intake EBIT 6.2 6.5 Incoming orders 42.2 35.7 Good demand for parts for serial production, large tools Sales 38.8 33.1 business declining; negative one off effects; segment EBIT 1.5 development falls short of expectations 0.6 10
160000 140000 120000 100000 2017/2018 Q3 (operating business July to Sept. 2017) 128 115 126 129 INCOMING ORDERS Q3: +4% YOY SALES Q3: +7% YOY 128 131 138 131 02 Q3 133 80000 60000 40000 20000 0 AE U O S Q1 Q2 Q3 Q4 Q1 Q2 Q3 AE U O S AE U 2016 2017 Preliminary figures for Q3: Business activity still on a high level ORDER BACKLOG END of Q3: approx. 200 m / +5 % yoy O= Order intake (left) million S = Sales (right) million 11
OUTLOOK 2017/2018 Expectations for full financial year 03 OUTLOOK ENVIRONMENT IMPROVED GESCO GROUP 2016/2017 Actual 2017/2018 Outlook June 2017 1) 2017/2018 Outlook Nov. 2017 2) Change yoy FORECAST German GDP 2017 +1,4% to +1,8% VDMA Production forecast +3% after years of stagnation Group sales m 482.5 Group net income after minority interest m 7.9 Earnings per share acc. to IFRS 2) 0.79 510 to 530 17 to 18 1.57 to 1.66 approx. 530 approx. 18 approx. 1.66 Sales and earnings now expected at upper end of ranges: sales approx. 530 m, earnings approx. 18 m 1) as at annual accounts press conference on 29 June 2017 2) as at financial report H1 from 14 Nov. 2017 3) no. of shares increased due to capital increase from March 2017 approx. +10 % approx. +128 % approx. +110 % 12
OUTLOOK Expected Segment Development for full FY 03 OUTLOOK PRODUCTION PROCESS RESOURCE HEALTH & INFRASTRUCTURE MOBILITY Sales EBIT Sales EBIT Sales EBIT Sales EBIT segment benefits from trend to automation, sales and earnings expected above prev. year s figures profitable organic growth plus strong external growth due to addition of Pickhardt & Gerlach Group; very strong H1, normalisation on a high level expected for H2; sales and earnings expected clearly above prev. year stable development, sales increasing, earningsstable orslightlyrising despite one off burdens in invidivual companies for growth and optimisation projects sales below prev. year; earnings expected to come in at or slightly below prev. year s figures 13
GOALS PORTFOLIO STRATEGY 2022 05 03 Portfolio PORTFOLIO STRATEGY 2022 Strategy2022 GESCO PORTFOLIO leading GESCO back to the path of profitable growth by consistently implementing measures in order to reach the ambitious goals agreed with the managing directors INTERNAL GROWTH 8% GESCO GROUP sustainably reaching the targeted EBIT margin by 2022 GESCO ACQUISITIONS acquiring up to 3 Hidden Champions per year with intensified M&A activities EXTERNAL GROWTH (corresponds to a margin of roughly 4% of Group net income after minority interest) 14
SHARE PRICE DEVELOPMENT 04 THE SHARE GESCO Share (incl. div.) vs. SDAX and DAX (%) as at 13 Nov. 2017 5years SDAX +133.1% DAX +82.4% GESCO +51.4% 1 year SDAX +28.7% GESCO +27.3% DAX +22.3% 260 240 220 200 180 160 140 120 100 80 60 140 130 120 110 100 90 GESCO SDAX DAX 15
SHAREHOLDER STRUCTURE 04 THE SHARE 13.7 % STEFAN HEIMÖLLER (entrepreneur, supervisory board member, private investor) ~35.9 %* other private investors 86.3% FREEFLOAT ACC. TO DEFINITION OF DEUTSCHE BÖRSE 14.4 % INVESTMENTAKTIENGESELLSCHAFT FÜR LANGFRISTIGE INVESTOREN TGV (institutional investor) ~36.0 %* other institutional investors * estimate 16
APPENDIX Significant GESCO Group companies Segment PRODUCTION PROCESS RESOURCE HEALTH & INFRASTRUCTURE MOBILITY Company/Group Sales 2016 000 Staff 31.12.2016 Share GESCO AG C.F.K. 8,586 66 80% Georg Kesel Group 10,784 58 90% MAE Group 42,886 222 100% VWH 12,330 112 80% Dörrenberg Group 181,108 523 90% Pickhardt & Gerlach Group 29,500 41 100% SVT 41,035 184 90% AstroPlast 12,993 85 100% Frank Group 29,993 285 90% Franz Funke 16,705 82 80% Haseke 13,760 69 80% Hubl 13,583 111 80% Setter Group 26,805 100 100% Paul Beier 10,469 113 100% Dömer 15,229 100 100% Modell Technik 11,399 115 100% Werkzeugbau Laichingen Group 23,448 172 100% Protomaster 13,908 121 82.17% 17
APPENDIX Please note: different financial year Financial year OPERATING COMPANIES 1 st Jan 2017 31 st Dec 2017 Financial year GESCO AG/GESCO GROUP 1 st Apr 2017 31 st Mar 2018 18
APPENDIX GESCO Facts and Figures FACTS AND FIGURES FOR GESCO AG Founded: 1989 Share capital: 10,839,499 Shares: 10,839,499 registered shares Stock markets: Xetra; Frankfurt (regulated market); Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart (open market) Sec. Identification Number: A1K020 ISIN: DE000A1K0201 IPO: 24 March 1998 End of financial year: 31 March Designated Sponsors: equinet Bank AG Oddo Seydler Bank AG FINANCIAL CALENDER 27 29 November 2017 German Equity Forum, Frankfurt/Main 13 December 2017 Munich Capital Market Conference, Munich 11 12 January 2018 Oddo BHF Forum, Lyon, France 14 February 2018 Q3 figures (01.04. 31.12.2017) 28 June 2018 Annual Accounts Press Conference / Analysts Meeting 14 August 2018 Q1 figures (01.04. 30.06.2018) 30 August 2018 Annual General Meeting, Wuppertal 14 November 2018 Q2 figures (01.04. 30.09.2018) INVESTOR RELATIONS GESCO AG Phone: +49 202 24820 18 Investor Relations Fax: +49 202 24820 49 Oliver Vollbrecht Email: info@gesco.de Johannisberg 7 Web: www.gesco.de 42103 Wuppertal Germany 19