gesco ag company presentation october 31st 2016

From melting steel to 3D-printing: investing

in the technology-driven German “Mittelstand”

as at 31 October 2016

GESCO – an association of industrial SMEs including market and technology leaders

Currently 17 operating subsidiaries under the roof of GESCO AG.

We think and act on a sustainable and entrepreneurial basis.

We operate in established sectors with innovative technologies.

We offer technology “made in Germany” for the world’s markets.

GESCO is comprised of flexible, operationally independent and entrepreneurially-managed entities that benefit from being part of a strong group.

GESCO AG – long-term investor and safe haven for succession solutions

We acquire and develop industrial SMEs on a long-term basis without exit intentions.

Majority acquisitions, generally 100 %.

Usually as part of a succession arrangement.

New management is offered opportunity to acquire stake of up to 20 % of the new company (“entrepreneur company”).

1. The business model

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GESCO’s portfolio strategy

Spring 2016: development of a portfolio strategy of profitable growth based on tried-and-tested GESCO business model

Criteria: long-term positive megatrends, comparable end customer markets, similar economic fluctuation and growth rates

Definition of 4 relevant end customer market segments

Grouping of existing GESCO Group companies into the new segments, new segment reporting as of Q1 2016/2017

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2. Portfolio strategy

Production process technology

Resource technology

Health and infrastructure

technology

Mobility technology

Production processtechnology

Sales*): € 76.7 mnEBIT *): € 4.5 mn

Features: Dynamically growing markets, high degree of innovation, automation, trend towards “batch size 1”

Products / services:

Robotics and automation solutions in machine and plant construction, technology-intensive manufacturing services

End customers:

Serial producers, e.g. in automotive, steel and consumer goods industries

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*) unaudited pro-forma figures, financial year 2015/2016

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Resourcetechnology

Sales*): € 220.2 mnEBIT *): € 18.8 mn

Features: Consolidating markets, focus on niches and customer service

Products /services:

Customised preparation of primary materials, e.g. materials supply, transport and loading technology

End customers:

Material-intensive industrial companies, globally distributed production structures, broadly diversified

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Health andinfrastructure

technology

Sales*): € 112.0 mnEBIT *): € 9.5 mn

Features: Close to end consumers, not very cyclical, relatively resilient to economic fluctuation


Components, modules and primary products

End customers:

Providers for mass markets close to end consumers (construction, sanitary equipment, food, hygiene, medicine)

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Mobility technology

Sales*): € 85.5 mnEBIT *): € 8.2 mn

Features: Cyclical automotive market, positive outlook driven by technological leaps, e.g. electromobility


Tools and moulds, components, parts

End customers:

Vehicle industry, e.g. car, commercial vehicle and rail

Objective of the GESCO portfolio strategy: enhance value of investment portfolio organically and through acquisitions

Respective managing directors continue to have exclusive operating responsibility for GESCO Group companies

As the majority shareholder GESCO AG has “3 levers”

1. Appointment of best possible management

2. Prioritisation of investment projects within the individual companies which promise the highest return on capital employed in the long term

3. Active consulting and support role of shareholder: Monthly discussions, regular exchange, sparring, best practice Setting focal themes on strategy days: digitalisation and Industry 4.0 Support for technical optimisation projects for profitable growth and

cost efficiency, from the beginning of a project to its implementation

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Please note:

FY subsidiaries = calendar year

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3. Financial year 2015/2016

1 Jan 2015 31 Dec 2015

31 March 20161 April 2015

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

Starting position and expectations for new financial year

Forecast GDP growth: 1.7 % to 1.8 % Forecast VDMA: stagnation at best Agricultural machinery and oil industry: still no growth impetus

Industrial customers still generally showing reluctance to invest New growth stimuli still lacking in capital goods industry

of relevance to the GESCO Group Ongoing consolidation pressure in the steel industry Widespread low capacity utilisation ramps up the pressure on prices

Our measures: Short term: cost reduction, questioning investments Medium term: optimisation projects on cost and opportunities side

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3. Financial year 2016/2017 – Q1

Q12015/2016

Q1 2016/2017 Change

Order intake € mn 146.1 122.5 -16.1%

Sales € mn 118.7 113.6 -4.3%EBITDA € mn 11.6 10.6 -9.2%EBIT € mn 6.6 5.4 -18.4%Group net incomeafter minority interest € mn 3.2 2.7 -15.4%

EPS acc. to IFRS € 0.95

31/03/2016

0.81

30/06/2016

-15.4%

Equity € mn 195.8 197.1 0.7%Equity ratio % 47.7 46.8 -Liquid funds € mn 36.6 34.6 -5.5%

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3. Financial year 2016/2017 – Q2 (operating period April to June 2016)

Start to new financial year (preliminary figures for the second quarter)

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Order intake Q2approx. € 127.8 mn

Sales Q2approx. € 115.1 mn

Q2 order intake and sales above Q1, book-to-bill > 1

─ Incoming orders─ Sales

Q1 prev. yearincl. large order

2015/2016Actual

2016/2017Budget Change

Group sales € mn 494.0 480 to 490 -2.8 % to -0.8 %

Group net incomeafter minority interests

€ mn 16.1 13.5 to 14.5 -16.1 % to -9.9 %

Earnings per share pursuant to IFRS

€ 4.85 4.06 to 4.36 -16.1 % to -9.9 %

Budget figures June 2016

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Expectation after Q1: sales and earnings for the full yearexpected to reach lower ends of ranges at best

Proposal to Annual General Meeting on 25 August 2016: capital increase from company funds and share split

Objective: to make the share “lighter” through higher number of shares in order to enhance the share’s attractiveness for private investors and to improve liquidity

Implementation: Increase in share capital by € 1,330,000 through capital increase from

company funds Redistribution of share capital through share split 1:3 All shares are fully entitled to dividends for financial year 2016/2017

Implementation expected in Q4 2016

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4. The GESCO share

4. Share price development (in %) – 1 and 10 years

GESCO vs. Indices, 1 year GESCO vs. Indices, 10 years

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GESCO DAX SDAX

4. The GESCO share

Free float: 85.3 %

Stefan Heimöller, entrepreneur, member of supervisory board: 14.7 %

Investmentaktiengesellschaft für langfristige Investoren TGV: 13.9 %

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14.7% Stefan Heimöller

13.9%Investmentaktiengesellschaft fürlangfristige Investoren TGVapprox. 31.4% other institutionalinvestors

approx. 40% retail investors

Appendix – GESCO Group overview

Company Sales 2015€‘000

Staff as at31/12/2015

GESCO AGshareholding

AstroPlast Kunststofftechnik GmbH & Co. KG 16,262 92 80%

Paul Beier GmbH Werkzeug- und Maschinenbau & Co. KG 12,117 117 100%

C.F.K. CNC-Fertigungstechnik Kriftel GmbH 9,708 66 80%

Dömer GmbH & Co. KG Stanz- und Umformtechnologie 15,661 104 100%

Dörrenberg Edelstahl GmbH 179,243 509 90%

Frank Group 27,629 258 90%

Franz Funke Zerspanungstechnik GmbH & Co. KG 15,383 80 80%

Haseke GmbH & Co. KG 12,969 64 80%

Hubl GmbH 12,775 106 80%

Georg Kesel GmbH und Co. KG 11,239 60 90%

MAE Group 44,359 222 100%

Modell Technik Formenbau GmbH 13,961 115 100%

Protomaster GmbH 17,688 123 82.17%

Setter Group 26,984 98 100%

SVT GmbH 33,464 186 90%

VWH GmbH 11,421 109 80%

Werkzeugbau Laichingen Group 26,594 177 85%

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Founded: 1989Share capital: € 8,645,000Shares: 3,325,000 registered sharesFree float: 85.3%Stock markets: Xetra; Frankfurt (regulated market);

Berlin, Düsseldorf, Hamburg, Hanover, Munich, Stuttgart (open market)

Sec. identification number: A1K020ISIN: DE000A1K0201IPO: 24/03/1998 End of financial year: 31 MarchDesignated sponsors: equinet Bank AG

Oddo Seydler Bank AG

Appendix – Facts and figures for GESCO AG

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Appendix – Financial calender

Financial calendar

14 Nov. 2016 Q2 figures

21 - 23 Nov. 2016 German Equity Forum, Frankfurt/Main

Feb. 2017 Q3 figures

29 June 2017 Annual Accounts Press Conference / Analysts‘ Meeting

Aug. 2017 Q1 figures

31 Aug. 2017 Annual General Meeting, Wuppertal

Nov. 2017 Q2 figures

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Appendix – Investor Relations contact

Investor RelationsGESCO AG Telephone: +49 202 24820-18 Investor Relations Fax: +49 202 24820-49Oliver Vollbrecht E-mail: [email protected] 7 Internet: www.gesco.de 42103 WuppertalGermany

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gesco ag company presentation october 31st 2016

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