Capital Markets Day GEA Food Solutions. Dirk Hejnal, CEO Stuttgart / Frickenhausen, June 28-29, GEA Food Solutions

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1 Capital Markets Day 2012 Dirk Hejnal, CEO Stuttgart / Frickenhausen, June 28-29, 2012

2 Disclaimer Forward-looking statements are based on our current assumptions and forecasts. These statements naturally entail risks and uncertainties, which may cause the actual results of operations, financial position or performance to diverge significantly from the estimates given here. Factors that could cause such a divergence include changes in the economic and business environment, fluctuations in exchange rates and interest rates, launches of competing products, poor acceptance of new products or services, and changes in business strategy. We are under no obligation to update forward-looking statements. Due to rounding, the sum of percentages of order intake and sales by region as well as by customer industry may vary from 100%. Since Q1 2012, the segment, GEA Convenience-Food Technologies (GEA CT), is renamed as (GEA FS). 2 GEA CMD Presentation

3 Secondary food processing and packaging machinery Machines for the preparation, marination, processing, slicing and packaging of food 2011 Revenue* EUR 417 million Employees * Excluding Packaging Material (divested) Meat Meat / Poultry Seafood Sausage / Ham Seafood Sausage / Ham Preparation, Marination and Processing Slicing and Packaging Ready Meals Poultry Vegetables Ready Meals Cheese Salad / Vegetables 3 GEA CMD Presentation

4 in the food chain Preparation Marination Processing Slicing Packaging Sugar Based Crushers Cutters Desinewers Emulsifiers Grinders Loader Meat Analyzing Systems Mixer Grinders Mixers Pumps Silo Batching Brineplants Cooling heating units Cooling units Injectors Line Components Marination Lines Massagers SuperChill Tenderizers Tumblers Batters & Breaders Conveyors Formers Freezers/Coolers Fryers & Oil treatment Grilling In Line Cookers Predusters Spiral Cookers Tempura OptiScan Loaders Peelers Slicers Thermoformers Traysealers Vertical Flowpackers Labelling/Printing Lollipop formers Lollipop coolers Lollipop wrappers Sugar cube formers Sugar cube dryers Sugar cube packers Vertical form fill seal 4 GEA CMD Presentation

5 Extended Board Segment President VP HR/Legal COO CFO Dirk Hejnal Michael Kämpfert Dr. Marco Gandini Dr. Hans-Jörg Harth Product Management Services Sales Technologies Factories Lasse Hansen Paul Conover Ted Hegeman Harrie Neijnens Marco Silz Dirk Hejnal (46), 25 years GEA, formerly CEO GEA FT Michael Kämpfert (46), 16 years GEA, formerly GEA Holding Head of HR Marco Gandini (45), 18 years GEA, formerly GEA ME, MD GEA Niro Soavi Hans-Jörg Harth (41), 9 years GEA, formerly GEA Holding Head of Group Accounting Lasse Hansen (49), 1 year GEA, formerly MD Xerox Scandinavia Paul Conover (50), 12 years CFS, Services USA, China, Thailand, Sales Americas Ted Hegeman (55), 25 years CFS, Sales Europe, Services Europe, Key Accounts Harrie Neijnens (57), 33 years CFS, Engineering, BU Sugar & VFP Marco Silz (48), 14 years GEA, formerly GEA HX Head of Quality Management 5 GEA CMD Presentation

6 Prior to the acquisition several strategic initiatives had been started Introducing lean manufacturing: Intensified outsourcing Assembly/Manufacturing facility in China Plant closure (Slagelse, Denmark) Global Procurement benefiting from GEA agreements Streamlining organizational structure of Business Units Shared Services Center Market approach: focus on integrated solutions, rather than just component sales 6 GEA CMD Presentation

7 After taking charge in Feb 2012, new management found urgent improvement potentials Improvement potentials within Execution of restructuring Management of supply-chain R&D Integration with GEA Group Operational consequences Quality issues with premature deliveries and bottlenecks with spare part supplies getting customers disgruntled Margin deterioration due to cost overruns Lack of cutting edge product innovations 7 GEA CMD Presentation

8 The shortfall in profitability had been compensated by POC accounting in FY 2011 Sales EBIT bef. PPA Reported Key Figures Q EUR 53m EUR -45m Thereof non-recurring items Q EUR -42m EUR -36m thereof POC-adjustments: EUR -42m EUR -21m thereof other risk provisions: EUR -14m Operating EBIT before PPA Q EUR -9m 8 GEA CMD Presentation

9 Top-down approach to charting new course Vision Values Customer Satisfaction & Quality Mission Critical Goals Strategy Action Plans 9

10 Critical Short Term Goal (Priority 1) Reduction of Organizational Complexity New leaner organizational structure Effective August 2012 Foundation of all other actions Reduction of temporary labour (50 manufacturing, 30 admin) 10 GEA CMD Presentation

11 Critical Goal (Priority 2) Significant Operations Isssues Cost overruns/quality of order precalculations Review of Bill of Materials and parent cost calculations on two sample product lines Installation & Commissioning Review of specifications / configurations and order verifications Purchasing & supplier development Increase quality of supplies Reduce lead times 11 GEA CMD Presentation

12 Margin Improvement Potentials (Mid-Term) Synergies with sister segments CIP (GEA ME, GEA PE, GEA FT) Chemicals (GEA FT) Refrigeration (GEA RT) Focus on profitable service business and enhance value preposition to our customers More focus on tier 1 & tier 2 customers who are in need of process solutions Focus on new markets (Asia, Latin America, Eastern Europe) Bring product innovations to market (currently over 20 initiatives under development) 12 GEA CMD Presentation

13 Throughout your product and process Lifecycle we add value by optimizing your operational Performance 13 GEA CMD Presentation

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