Gesco Brussels March 2015 EN

Dr. Kalliwoda Capital Markets Conference

Brussels, 18th March 2015

From melting steel to 3D-printing: investing in the

technology-driven German “Mittelstand”

GESCO Group – an association of industrial SMEs

with market and technology leaders

Segments tool manufacture / mechanical engineering

and plastics technology

Currently 17 operating subsidiaries under the roof

of GESCO AG as a holding company

We think and act in a sustainable and entrepreneurial manner

We do business in established sectors with innovative technologies

We provide technology “made in Germany” for global markets

GESCO is comprised of adaptable, independent operating units

that benefit from being part of a strong group

GESCO AG – a long term investor

and a safe haven for succession issues

We acquire and develop industrial SMEs an a long-term basis –

exit is not part of the business model

We take over majorities, almost always 100 %

Most takeovers are part of succession planning

The new managing directors invest up to 20 %

in the company they run (“entrepreneur companies”)

1. Business model

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The GESCO share offers a focussed portfolio of 17 “Hidden

Champions” serving broadly diversified customer sectors

1. GESCO Group

→

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2%

4%

5%

5%

8%

8%

12%

13%

14%

25%

4%

Passenger and commercial vehicles

Other

Agricultural engineering

Machine and plant construction

Consumer goods Energy / supply

Iron, plate and metal processing,

tool construction

Chemical / petrochemical industry

Foundries and rolling mills

Electrical, medical technology, household goods

Construction, air conditioning, sanitary industry

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1. The 4 biggest companies (sales and staff: FY 2013)

Dörrenberg Edelstahl GmbH

• Leading European

specialist for tool steel

• Steel mill, trading,

mould castings and

surface technology

• Strong internationalization

• Sales € 162 m, staff 495

SVT GmbH

• Systems for (un)loading

liquids and gases

• Specialty LNG:

No. 2 worldwide

• Export ratio: 80 %


MAE Maschinen- und

Apparatebau Götzen GmbH

• World market leader for

straightening machines

and wheel set presses

• Highly innovative

• Acquired US competitor

in Jan. 2014


Frank Walz- und

Schmiedetechnik Group

• Europe‘s leading forge

for wearparts for the

agricultural industry

• 70 % of sales to OEMs,

30 % to wholesale and

farmers


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1. Two very special companies (sales and staff: FY 2013)

Setter Group

• Paper and plastic sticks

for the sweets and hygienic

industries, world market

leader for paper sticks

• 90 % export ratio

• 20 bn sticks produced in

Germany each year

• 60 bn sticks produced

in US on Setter technology


C.F.K. CNC-Fertigungs-

technik Kriftel GmbH

• Leading centre in high-

precision wire erosion

and die sinking

• Cutting-edge production

line, 40 machines

• Advanced laser melting

systems (3D printing) for

functional prototypes,

medical implants etc.


2. Financial year 2014/2015 (1 Apr. 2014 – 31 March 2015)

General situation:

Good start into the new FY with positive signals from various regions and

customers, VDMA was optimistic and German GDP was supposed to grow

But the difficult situation at two subsidiaries turned out to burden earnings

significantly:

Protomaster GmbH, produces car body parts and assemblies for small

and medium-scale series on self-produced tools

MAE Maschinen- und Apparatebau Götzen GmbH, international market leader for

automatic straightening machines and wheel set presses

Both companies faced a dramatic increase in customer demand and

requirements, making reorganisations and investments necessary

Since summer 2014 more subdued economic environment, the

Russia/Ukraine crisis and other geopolitical risks affect general business

climate and customers’ willingness to invest

VDMA cut outlook for production growth in 2014 from 3 % to 1 %

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2. Financial year 2014/2015 – Q1 to Q3

The first nine months

Comprises operating business Jan. to Sept. 2014 of subsidiaries

Order intake increasing, sales flat

The two restructuring cases weigh on group earnings

First half year rather weak, significant margin improvement in Q3

Guidance for full FY is confirmed

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2. Financial year 2014/2015 – Q1 to Q3 (subsidiaries‘ operating months Jan. to Sept. 2014)

Q1 – Q3

2013/2014

Q1 – Q3

2014/2015

Change

Order intake € m 325.2 340.0 4.6 %

Sales € m 337.2 337.9 0.2 %

EBITDA € m 36.9 34.4 -6.8 %

EBIT € m 24.3 20.4 -15.8 %

Group net

income after

minority interest

€ m

13.6

10.5

-22.9 %

EPS acc. to IFRS € 4.08

31/03/2014

3.14

31/12/2014

-22.9 %

Equity € m 176.6 181.0 2.5 %

Equity ratio % 46.5 45.0 -

Liquid funds € m 38.8 35.0 -9.8 %

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burdened by the two

restructuring cases

satisfactory customer

demand

high investments in

prev. and current FY

weigh on EBIT

always in

our focus: a strong

balance sheet

€ 7.3 m dividend

payed out

20.000

40.000

60.000

80.000

100.000

120.000

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

2009 2010 2011 2012 2013 2014

Based on the information currently available,

guidance for the full FY is confirmed

2. Financial year 2014/2015 – Q4 (subsidiaries‘ operating months Oct. to Dec.) and Outlook

Q4: operating business on a satisfactory level

Order intake approx. € 108 million (prev. year’s period: € 110.4 million)

Sales approx. € 116 million (prev. year’s period: € 116.1 million)

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─ Order intake

─ Sales

2. Financial year 2014/2015 – Outlook

2013/2014

Actual

2014/2015e

Outlook

Group sales € m 453.3 455 to 460

Group net income after minority interest

€ m 18.1 14.5 to 15,0

Earnings per share acc to IFRS

€ 5.45 4.36 to 4.51

Target figures

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Current situation with respect to M&A

Currently more offers Increasing competition, e. g. from Family Offices

At present some projects under examination

2. M&A

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January 2015: Setter Group acquires Setterstix Corp. / USA

GESCO subsidiary Setter is market leader for paper sticks for the hygiene industry

Recently acquired Setterstix Corp. is the leading US producer of paper sticks for the confectionary industry with approx. € 10 m sales and 40 employees

acquisition rounds off Setter‘s position in the US market perfectly

Production location in the US helps Setter to expand its business in Central and South America

The comapnies have common origins, but have been separate companies for decades

2. M&A

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Free float: 86.4 %

Stefan Heimöller, entrepreneur, member of supervisory board: 13.6 %

Investmentaktiengesellschaft für langfristige Investoren TGV

(voting rights announcement from 29 Dec. 2014): 5.4 %

Dividend policy: payout ratio approx. 40 % of

Group net income after minority interest

3. The GESCO share

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13.6% Stefan Heimöller

5.4%Investmentaktiengesellschaftfür langfristige Investoren TGV

35% other institutional investors

46% retail investors

3. Share price development (in %)

GESCO vs. SDAX, 1 year

GESCO vs. SDAX, 5 years

14 GESCO vs. SDAX, 10 years

80

85

90

95

100

105

110

115

120

80

100

120

140

160

180

200

220

240

0

100

200

300

400

Founded: 1989

Share capital: € 8,645,000

Shares: 3,325,000 registered shares

Free float: 86.4 %

Stock markets: Xetra; Frankfurt (regulated market); Berlin, Düsseldorf, Hamburg, Hanover, Munich, Stuttgart (open market)

Sec. identification number: A1K020

ISIN: DE000A1K0201

IPO: 24 March 1998

Index: SDAX

End of financial year: 31 March

Designated sponsors: equinet Bank AG Oddo Seydler Bank AG

Facts and figures on GESCO AG

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GESCO Group overview

Company Sales 2013

€‘000

Staff

31/12/2013

GESCO AG

shareholding

Astroplast Kunststofftechnik GmbH & Co. KG 14,282 77 80%

Paul Beier GmbH Werkzeug- und Maschinenbau & Co. KG 8,901 114 100%

C.F.K. CNC-Fertigungstechnik Kriftel GmbH 6,740 49 80%

Dömer GmbH & Co. KG Stanz- und Umformtechnologie 13,716 102 100%

Dörrenberg Edelstahl GmbH 161,782 495 90%

Frank Group 33,547 297 100%

Franz Funke Zerspanungstechnik GmbH & Co. KG 16,130 81 80%

Haseke GmbH & Co. KG 12,359 61 80%

Hubl GmbH 10,257 106 80%

Georg Kesel GmbH und Co. KG 10,723 68 90%

MAE Maschinen- und Apparatebau Götzen GmbH 34,078 140 100%

Modell Technik GmbH & Co. Formenbau KG 13,979 106 100%

Protomaster Riedel & Co. GmbH 7,700 85 82.17%

Setter Group 14,773 60 100%

SVT GmbH 51,770 187 90%

VWH Vorrichtungs- und Werkzeugbau Herschbach GmbH 10,809 105 80%

Werkzeugbau Laichingen Group 26,573 182 85%

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Financial calendar

Financial calendar

25 June 2015 Annual Accounts Press Conference and Analysts’ Meeting

14 August 2015 Q1 figures (01.04. to 30.06.2015)

18 August 2015 Annual General Meeting

31 Aug. / 1 Sept. 2015 Small Cap Conference, Frankfurt/Main

13 November 2015 Q2 figures (01.04. to 30.09.2015)

24 / 25 November 2015 German Equity Forum, Frankfurt/Main

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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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GESCO AG Johannisberg 7 42103 Wuppertal

Germany

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Gesco Brussels March 2015 EN

Presentations & Public Speaking

Transcript of Gesco Brussels March 2015 EN