GEA Group Aktiengesellschaft (ETR:G1A)

CMD 2021

← View all transcripts

Sep 29, 2021

Good morning to everybody. It's my pleasure to welcome all of you to our Capital Markets Day 2021 here in London. My name is Oliver Luckenbach. I'm the Head of Investor Relations of GEA, and I joined the company 18 months ago. Today, the entire management team of GEA that is present here today It's very much looking forward to meeting and interacting with you, our investors and analysts in person here in London. So thank you very much for coming here to the Landmark Hotel to be able to interact with us in person despite the ongoing pandemic. But at the same time, I know that there are many of our investors and analysts and friends of GEA visiting us from home or from the home office. And I know that many of them would be happy and would have loved to be here with us in London today as well. But I'm pretty sure that sooner or later, we will meet again on one of our next roadshows or conferences, so I'm quite positive and confident here. So what do we have prepared for you today? Let's have a look at the agenda. We will start this morning with our CEO, Stefan Klebert, talking about the turnaround story of GEA and our Mission 26. We will then get more details on all the pillars of our Mission 26. Later on, we will have 2 deep dives into the 2 largest divisions of GEA. That is our Separation and Flow Technologies business, represented by the CEO, Klaus Stoyentien and we also have Ilya Apokovic here, the CEO of our Liquid and Powder Technology business. And both businesses combined account for roundabout 60% of total gear sales and 65 percent of EBITDA. Later on, we will then have Johannes Gehlert, talking about our operational excellence program, what we have planned here for the next 5 years. And at the end of the day, we have our CFO here on stage, and he will then bring everything together to show you what we are doing here with our Mission 26. So the only thing that is between me and our Capital Markets Day, that is the disclaimer. I would like to ask you to have a look at the disclaimer. I will not read it word by word, but We'll assume that you have read it, and we will take it as read to the notes of this meeting. And with that, it's my pleasure to hand it over to our CEO, Stefan Klebert. Stefan, please Come on stage. Thank you very much, Oliver, and a very warm welcome from my side. Welcome to London. It's a pleasure for us being here after a long while of the COVID pandemic. It was not possible to travel for all of us, and it is really great to see you all in person here. And I hope that we can deliver a lot of value for you today and a lot of information, where Are we? What did we do? And what are we doing forward looking? Let me just start with the turnaround story. So when I started 2.5 years ago at GEA, there were some really positive things. The company was in stable and growing markets. The company was and is still technology leader in many segments, And we have a lot of pride engineers and good engineers. So these are the very good things of GEA. However, On the other side, at the end of 2018, the company was in a difficult situation. Like you remember, There was no P and L responsibility below the Executive Board level, and therefore, there was a huge lack of accountability. There was a financial underperformance. And all in all, we had 7 profit warnings in a row. We had a high staff Turnover managers were leaving, and that was the opportunity for me to step into this great company and to build up a new management team. And you will meet many of the new team today and can make your own opinion about the new team. As I said, we had or the company had 7 profit warnings in a row. A lot of trust was destroyed. And when I started 19th February as CEO of this company, the share price was €20.51 That was long before COVID, let's say, and not impacted by any outside influences. We also had some Analysts saying this is an uninvestable stock. We also had yesterday a dinner where some of you participated, and I hear the same things also yesterday. And this definitely changed during the last two and a half years. We are proud about that. And the team, I would say, did really a good job. So just to reflect, what have been the 5 key drivers to this contribution? What did we really changed? And what should also give you trust that GEA nowadays is a completely different company than it was at the end of 2018. 1st and utmost important, we change the organization. Changing of organizations is normally a very Challenging issue in a company, but in that case, everybody knew and feel that the organizational change called OneGEA Led to the wrong direction, and there was a great openness to change, and we worked it out without any support of consultants. So only the management team we started, we went to the mountains with at the weekend with a small management team out of 40 or 50 people and we created the first idea where do we want to go. At the end, we ended up with 5 divisions consisting out of 17 business units, all with a clear and full P and L responsibility. And we created A new management team, we brought in new people from outside industries with completely different backgrounds, and we mixed it with very experienced, long term managers from GEA. And I think all of this is a Great success factor of what you can see today. We promised at the last Capital Market Day here in London about quite exactly 2 years ago that we will improve the efficiency that we need to take out stuff. We were talking about headcount 800 program that we want to decrease the number of staff by 800, keeping the same level of turnover. And at the end, we achieved more than 1400, which really shows you also how good the efficiency potential of the company meanwhile is. And that was also possible because we had all these managers in place with a clear responsibility, with a clear accountability. And during the first management meeting, I had a very simple presentation with very few words on a chart. And if you ask our managers, They all will remember that I said a budget is a budget, and the budget remains a budget. And this is a very clear statement, and all our managers know they can do many things, but at the end, they have to deliver. And if they don't deliver, we are looking for alternatives. And that's also a kind of very clear performance culture, but we give a lot of freedom to the people. And with that, we achieved a huge efficiency. We started with a portfolio planning. We took out Companies which are not in our strategic scope. So for instance, we sold GEA BOG, a company in the refrigeration technology doing compressors for large auto buses and lorries. This is definitely not our target market. And some other smaller debt investments where we are convinced that these are not strategically important and that they will not ever meet our target margins. So by doing so, we sold 7 companies, meanwhile, €300,000,000 turnover with an average margin of 5% EBITDA. Net working capital optimization. You also remember, There are a lot of you covering gears since many years. That was always an issue, especially also in the years 'fifteen to 'eighteen. Networking capital went up, and there were always promises to decrease it, but it was not done. I think we did as a company a great job here. Markus personally had every week a cash is king call, And we really put a lot of actions into place to decrease the net working capital. And meanwhile, we are very, very stable here on a level of about 8%. And our new colleague, Johannes, you didn't meet him at the last Capital Market Day because he was not yet there. He joined us, 1.5 year ago, and he's really an expert in operations. He managed, professional purchasing organizations before at Nokia, for instance, and also production. And he made a big difference in how to bring efficiency into our operations, and he will also tell you more about that later. And there is a small number, But an important number we also decreased during the last two and a half years, the number of reduction factories from 62 down to 50. These are the numbers. On the left side, you see the continuous declining margin. The blue bar shows a difference between IFRS 16, which was not in place to that time, so just to We make it comparable. But you can see that we are having an impressive turnaround. For this year, we expect a margin of 12.4% to 13%. And next year, this is our midterm guidance, 12.5% to 13.5%. So we are fully on track. We are really delivering or even over achieving what we promised to you at the Capital Market Day 2019. You can see here our numbers. And of course, in 2019 at the Capital Market Day, nobody knew about COVID and what it means. And despite COVID, Despite this pandemic, we could deliver our promises, and we could perform and increase our margins. Let me now talk a little bit about our end markets because I think this is a very fantastic thing. I also, like you know, Worked for different companies before in the machine building sector, but GEA is very well positioned in very attractive markets. So more than 80% is about food, beverage, pharmaceuticals. And we have a lot of mega trends, who are really helping us to see a bright future. So there is a growing world population. There is a demand for new food. There is a demand for food safety, for sustainable solutions. And there is a growing middle class and all these factors will create very stable, steady growing markets for us. I always like to say as long as there are human beings on that wonderful planet who need to eat and drink something, we are in safe harbor. Some numbers about the markets. You can also see that production growth in our main market is quite good compared to other industries, And the industry volatility is very low, and that also shows you the attractiveness of the market in which we are in. This is one of my favorite charts because this is a fantastic Picture to see how independent GEA is from a single customer. And that gives us also a lot of negotiation power. I mean, you might also know that a lot of other companies think about sub suppliers in the automotive industry. Sometimes they cannot afford to walk away from a single offer. If they don't get it, they simply need to close the ANA complete factory. So we have a very bright very huge number of customers in many different segments, and that makes us a very stable company. So far so good. So this is what we did during the last two and a half years and which hopefully also created Trust again that you can nowadays say, this is a management team, this is a company I can trust. And now we are looking forward. Mission 26 is our strategy program for the next 5 years, and this is our main topic for today. And I'm going to explain you what is Mission 26 about. A bottle of nutritious formula, A refreshing glass of low sugar orange juice, a precious vaccine. Gaia Technologies are Working behind the scenes to improve quality of life and enable smarter, greener production processes. Mission 26 is about accelerating profitable growth. So the Create program, which we did in the last two and a half years, was to stabilize the company, to bring the company back in good shape and to set up a kind of organization which is ready for growth. And this is where we are now, and Mission 26 will tell you how are we going to accelerate profitable growth in the next 5 years. The most important numbers, we believe and are committed and convinced that we can create organic sales CAGR between 4% 6% during the next years. We are also committed and convinced that we will achieve at the year 'twenty six latest Our EBITDA margin above 15% and the ROCE beyond 30%. How are we going to do that? Let's first talk about our purpose. Engineering for a better world, this is Nothing new, this is what you know, but we also discussed that intensively. And at the end, we said, this makes even more sense than all the years before because sustainability is an important issue, and we will talk about that also later on. And engineering for a better world is an extremely good purpose. We will have the buy in from our employees, and this really makes a difference and is a great purpose for our company. And we broke it down into a new vision, which is we safeguard future generations by providing sustainable solutions for the nutrition and pharmaceutical industries. This is what we stand for. And this is a fantastic market. And as I said, this is also good to see how our people are committed to do good things, how they like The slogan also and the purpose, Engineering for a better world. Mission 26 consists out of 7 levers, and we will go through all these levers during the day to explain you in detail how will we arrive at 15% EBITDA margin and this growth 4% to 6% until the year 'twenty six. Though sustainability is where everything starts, we have developed a comprehensive ESG strategy, And we are committed to do our job to decrease the greenhouse gas emission in this world. So we are already from 2021, from this year on, we are already nowadays CO2 neutral because we are compensating our CO2 emission by gold standard certificates and this is also what only a few companies Neutrality to 2,040, and Nadine will tell you more about that later on. And our targets are validated by the Science Based Target Initiative. So they are also proven and checked from an external agency. Innovation and digitalization is the 2nd lever. We developed a clear innovation strategy. We have we plan a significant increase in R and D spend, And we bundled all the digital initiatives under the responsibility of a new Chief Digital Officer, who joined us beginning of August, and we will also tell you more about that later. A very fantastic additional lever for the future is new food. This is something which is very specific for GEA. You might hear a lot of innovation and digitization activities in many other industry segments. But you will nothing hear about new food because this is really something which is very special and only companies like GEA can contribute here. And this is an additional new growth market and we will also give you a lot of insights later on about this new market and why are we very well positioned here. Then we are running different excellence programs, for instance, sales excellence. We will fully leverage the potential of our region country organization, and we will also manage performance more precisely, more effectively, and that also will help us to grow. Service excellence is also a very clear target and one of the levers. We have a fantastic installed base and we have also differences in the quality of what we what kind of Usage we take out of this installed base depending on the business units, and we have developed very clear plans what we can do here. And of course, it's also about increasing our revenue stream, which was recurring business. So Software as a Service plays a role here and also Service Contracts. Operational Excellence, Johannes will Tell you more about that later on. It's about further optimization of the production footprint, but it's also and of course, Optimization of the procurement organization, and Johannes will show you a lot of very interesting examples what we already did and how Big the potentials here in GEA are. And last but not least, we would be also ready for acquisitions. So whenever a right acquisition comes across, we would be ready to take it. And we can, of course, afford also significant acquisitions. It's very clear that we will not do any stupid things. We will also Not risk our investment grade. It's also very important and very clear. And the good thing is that we do not need to do acquisitions if there are not the right targets around. That's important to know because We have so many good ideas how to improve this company further and how to create more value in the future. This is Mission 26 And Mission 26 is a pure organic growth program. And if we have the opportunity to do acquisitions, we are prepared. We have a great balance sheet. That's also the reason why we started now with a share buyback program to be ready, but it's not a must. To sum it up, we have these 7 levers: sustainability, innovation, digitalization, new food, 3 excellence programs: Sales, Service and Operations and Acquisitions, which comes on top if we find the right targets. So far, so good to turnaround story in Mission 26. And now I have the pleasure to introduce you to my first team member, Nadine. Nadine Stirlay is, I would say, representing the next generation in GEA, and, I'm very proud to have her in my team. She started law and made a PhD in law, has more than 10 years working experience and is now really taking the job and the role as our Chief Sustainability Officer, and I'm very happy and very proud that she is in the team. Nadine, let's welcome Nadine on stage. Thank you. Yes. Thank you very much, Stefan, and also warm welcome from my end. As Stefan just said, GEA's purpose is and stays engineering for better world. That is we future we safeguard future generations by providing sustainable solutions for the Nutrition and Pharmaceutical Industries. What does that mean? In early April, we the Executive Board established the new Sustainability Department, which for the first time, clustered all relevant activities, which have been performed before by different departments. And by doing so, we professionally handle coming increasingly the increasingly upcoming regulations. However, on top of that, We established also the new sustainability approach, which is the following. We engineer. We engineer sustainable solutions. We do that responsibly. And we do that with great people. For a better world, we engineer sustainable solutions responsibly with great people for a better world. What does that mean? Well, we as a company, we take our global responsibility very seriously, and we truly believe that we can make the difference. In other words, we actively support the friends. In other words, we actively support the United Nation Sustainable Development Goals and by contributing to a better world. So this is a bold statement, isn't it? But what for what does this bold statement stands for? Let me explain in detail. Coming to our sustainable solution, which is our product portfolio. We enable our customers with our solutions to drive climate change mitigation. And we generate positive impact in environmental and social and society with our solutions like new food and food safety. In terms of our global operations, we comply with stricter environmental and social regulations. We face growing waste problems, and we care for water scarcity and pollution. And In terms of our supply chain, we drive transparency and traceability. We do have a great workforce. However, by fostering diversity and inclusion, We are better able to innovate. We attract more top talents, and we are more likely to outperform. And by enabling our workforce in terms of lifelong learning and in terms of long term career development, We improved the company performance. We enhanced human capital and employee satisfaction. And all three pillars create a society value as we reduce food and water scarcity And we improve the health and nutrition industries. And by actively contributing our knowledge, our know how, We strengthen the local communities we are operating in. What does that mean in detail? How do we measure that? Coming to our sustainable solutions. Here, you see 4 KPIs, 4 targets, which are covering the 3 most important on topics such as greenhouse gas emissions, water and our contribution to a circular economy. I do have two examples to explain what I mean. The first example is our 0 Freshwater solution. Imagine you want to step out of your business of being an investor or analyst, and you start to produce milk powder. Milk powder is a quite interesting investment because milk powder is an essential ingredient for the food industry. And while you are becoming an expert, you learn that 15, 15 percent of milk is further being processed. The rest, namely the 85% is water. And in the past, it just has been displaced, just thrown away. While someone else in the world, for example, Australia is facing a water problem. With our membrane filtration technology, you can capture the water. You can clean it, And you can reuse it. And if you do it intensively, you can even drink it. This is what our Indian customer is doing. By doing so, he's capturing the water, He's cleaning it, and he reuses it. And this means that he's independently working and does not need to a fresh water connection. And by doing so, he saves 2,100,000 liter of water per day of operations. To put that into perspective, this is 1 Olympic swimming pool per day. The other example I have is our food tray. This time, you do not invest in milk powder, but you Come the CEO of a company, packaging food, fresh food, fresh food like meat, fish, pasta or cheese. And due to the fact that your company is located in Europe, you are obliged to reduce plastic waste. With our sustainable packaging machine, you can use cardboards. And cardboards are made of natural raw materials or at least 100% recycled by natural raw materials. But the legislation on the waste plastic The plastic waste is not the only one you need to consider. You also need to take care of due to the fact that you are dealing with fresh food, to safety hygiene. So and you need to acknowledge that plastic It's the only the one and only material to properly wrap the food. Our film is super thin and is reduced to the absolute minimum of quantity to maintain the necessary level of food safety and hygiene. With that, you save up to 80% of plastic. Coming to our global operations. Also here, we have set a number of targets, which are listed here. These targets also addressing our corporate responsibility towards the local communities we are operating in. In the interest of time, I just pick one example. It's about our suppliers. By 2026, We want to have all preferred suppliers to fulfill our sustainability criteria. What does that mean? I'd also have two examples. The first one, the first criteria is about greenhouse gas emissions. If we want to bring down our greenhouse gas emissions, we need to know how much emissions are coming out of our supply chain, such as purchased goods, such as logistics or distribution. The next example on the criteria is about our responsibility on human rights in the supply chain. Finally, and coming to and the focus on our employees. By 2026, We want to become the employer of choice in our industry. Also here, we have set a number of targets, which shall measure our progress. And as said before, by fostering diversity, As of now, we want to have every 3rd position, which is a new hire or a replacement filled by a woman. In absolute terms, that is a 21% female representation in our top management. Well, this seems to be rather low, this figure, but let me put that into perspective. We are an engineering company, And we are active in an industry driven by men. So for us, this is a very ambitious target. However, our most ambitious target for us to drive is our net zero goal by 2,040. This is the overarching goal, and this is for us, that means this is leading by example. Let me explain that in more detail. By 2,040, we want to be net 0. This is a long way. So in terms of interim targets, by 2,030, We want to be down in our greenhouse gas emissions in our own operations by 60%. In technical terms, our own operations is so called is the so called scope 1 and scope 2. In terms of our product portfolio, we want to be decrease our greenhouse gas emission footprint by 18%. This is the so called scope 3. And to cross that bridge in achieving our targets, Protection projects. And this secures that we are in our own operations are carbon neutral as of now. Our ambition, being net 0 in 2,040, brings our goal 5 is bringing forward our goal 5 years earlier than the government of Germany and even 10 years in terms of the commitment of the European Union. But we don't only aim for being net 0 by ourselves. We are also we also enable our customers of driving their decarbonization. Let me show you what I mean. The Earth's climate system is under pressure, threatened by the increased greenhouse effect. Now more than ever, it is time for us to be clever about energy. GEA recognizes the need to act now. We design sustainable and integrated process solutions by offering a unique holistic approach based on our in house knowledge in process and utilities that minimize your operational costs, reducing your energy consumption and carbon footprint. By utilizing waste heat from the refrigeration plant And reusing it in the production process, we can reduce your energy usage and operational costs by more than 30%. Actually, More than 90% of the factory seat demand can be supplied from upgraded waste heat. Furthermore, by Trying green energy to the optimized production process, CO2 emissions can be reduced to 0. We Now let's take a look from where we are coming and where do we want to be in 2026. Our journey started in March 2020, when the so called DAX 50 ESG has been established. Since then, GEA is listed in the top 50 hit list of companies with special focus on environmental, social and responsibility. This is followed by our excellent A list score for our management in water and our A- award in terms of climate. And both are part of the CDP Sustainability Ranking. Since then, a lot happened, what you can see here. Let me highlight 2 milestones. The first one in April this year and to encourage our company's management to have a tangible sense of responsibility of sustainability, Our supervisory board agreed to anchor sustainability into the targets of the viable compensation of our executive board. The second milestone just a few days ago, last week, is the validation of the science based target in terms of our decarbonization roadmap. And it's the approval that our targets and our plans are science based and in line with the overall goal of limiting the global warming to 1.5 degrees Celsius. Sorry. So we have done a lot in the last couple of months to drive sustainability in our company. The sustainability strategy in terms of Mission 26 Constitutes now the framework to gather pace in the future. What is new now is that We start to systematically and extensively communicate our road map, our actions and our targets in our sustainable report, which is on an annual basis. And by doing that, we actively support the United Nations Sustainability sustainable development goals. And by doing so, we foster engineering for a better world. And by having said this, I hand back to Stephan. Thank you very much. Thank you very much, Nadine. So I hope you could see that we are really taking this issue serious, and that is a real commitment for us and that we are really want to be at the forefront of sustainability. And Nadine did a great job since she took over the role as Chief Sustainability Officer because there's a lot of work behind and many, many things we have to roll out into the company and more to come. And I hope that this is something which also you appreciate. Let's now talk about the next topic, Innovation and Digitalization. Already last year, we defined a clear innovation in R and D. First of all, it's about environmental sustainability. And this is, of course, also in line with our Sustainability targets, we want to develop new machines, new equipments, which are much more sustainable than the former generations because we believe and we think that this is, first of all, our Commitment which we need to fulfill our sustainability targets, but it's also for us a growth opportunity because More and more we see customers asking us not only about price and quality of products, they are also asking about energy consumption, water consumption and especially larger corporations will do so more and more in the future. So therefore, we need to develop and we want to focus on sustainable environmentally friendly products and solutions. And second is new food. We will also talk about that later on, but this is a completely new market. The time is right. We can also develop a lot of applications here, and we are doing so already. But this is a focus in our innovation strategy. Digital Solutions, of course, this is something where we see a lot of opportunities. Also for recurring revenue, we stopped selling software. We sell software only as a service in the future, which gives us a lot of opportunities. You are very familiar, I think, with these things. And last but not least, it's modularization and configuration. This is something which helps us to drive efficiency, to reduce complexity, which helps us to create faster delivery times and which also helps our customers to make their choice easier. By 'twenty six, our clear plan and intention is to increase the number of products sold, which are not older than 5 years from 10% to 30%. So in 'twenty six, if you look at the total turnover in 'twenty six, We want to have 30% of this turnover coming out of products and solutions, which are not older than 5 years. And if you look at the distribution of these four pillars for this Additional on new turnover, we expect that the majority is coming from environmental sustainability, new food, modularization and also from Digital Solutions because this is, of course, the smallest bucket because it is also from the value, The smallest thing and then we also have about 10% others, which are contributing here. What It's also important to know we defined very clear targets for each business unit for all four buckets. And you can understand that there are business units who can significantly contribute to innovation in new food, but Maybe not so much in sustainability and that there are other business units where it is vice versa. To give you an example, if you are talking about Milking robots in farm technology, that has nothing to do with new food. But of course, we can come up with more sustainable solutions. If we are talking about another business unit, Refrigeration Technology, a cooling compressor has nothing to do with new food, But it can be more sustainable as well. Or if we are talking about liquid and powder business units, We can innovate in new food or separation, for instance. So that's the reason why it is different, but we broke it down and each business unit has a clear target and is clearly committed to innovation of these 4 buckets. The intention is to increase R and D spendings from today 2.6% to 3%. And what is probably even more important, All this increase will go into the projects in the R and D project. So we are not Talking about increasing invest in R and D centers or test centers also on, it will be really project oriented. And therefore, we will really definitely increase significantly our R and D spend here. Yes. And our innovation strategy is already bearing fruit. It's not that we are saying this is what we intend to do in the future. We already started. And we will also give you some insights and some deep dives to give you a better understanding what we are doing here in Innovations. And I would like to welcome another team member on stage. It's Fredericke. Fredericke is also another representative of the new generation, let's say, that she's working in my CEO office, studied mechanical engineering. You know, it's hard to find women studied mechanical engineering or engineering at all at the RWTH Aachen, which is a very famous university for technique in Germany, probably the most famous one, and she graduated there. 7 years of work experience, and she will give you now some deep dives and some information in detail. Thank you, Stefan. One project which we have achieved in the area of environmental sustainability is our biosolids granulator for wastewater treatment plants. I would like to give you a deep dive into the technology by showing you a short video first. Waste water treatment plants usually produce a large amount of sludge. Sludge contains a lot of water. This comes with high transportation costs and energy intense disposal. Therefore, you see this causes CO2 to ammunitions. With our Century Fuchs based decanter, you can see we are very efficiently dewatering the sludge And then putting it into a drying chamber to dry it even further. So we have improved the process here significantly. What you see here now is the sludge Going into our decanter, you see how it's separated from the water and then pulled further into the drying chamber. The result from this Process is basically a very fine powder, which is then further processed, which you see here. Very late innovation just introduced. Exactly. So here on the left side, you see how the powder looks like from the conventional processes. On the right side, you see how it looks with our processing techniques. With this technology, if we calculate it for a country like Germany, we can achieve a CO2 savings of up to 21,000 tons of CO2 per year, which is quite significant. Another project that I'd like to introduce is the high performance slicer, which we have developed this year as well. If you cut the, cooked ham or sausage, usually, you need to shock freeze it Before in order to slice it to prevent it from deforming. We have or our engineers have actually developed This new special sawtooth edge, which you see on the picture up there as well, which can cut the meat without the need to shock freeze at first. Therefore, this process step can be avoided, and we can save quite a lot in amount of energy. If you calculate it for a slicer, it's around 32 megawatts per hour per year, which would equal the amount of energy that around 7.5 households are using. In a short video now, I'd show you like to show you how this looks like. So there you can see that it's a very high technology process and that the meat is cut very straight. Thank you. Back to you, Stephane. Good. So that was an insight in already existing innovations, which we just recently released an environmental sustainability. New food is something Ilja will tell you more about later on. And now let's go to Digital Solutions. We created this year with our new Chief Digital Officer, a new virtual unit called GEA Digital. And this is, I would say, a very interesting organization because it's virtual organization people continue to work in the individual business units or divisions for their individual digital applications, but at the same time, we put our corporate organization on top or together. And so that we can ensure that Everything which is energetic will be done only once and everything is which is individual will be done in the business unit or in the division. And we have already today about 150 employees working on digital solutions only, And they are also very proud to become a member of GEA Digital and be a part of this journey. Now I would like to introduce Dairy Net to you, Which is a software that we have developed recently. It has been co developed together with our customers in order to bring them real value and give them a transparency about their farm and their cows. It's accessible from almost everywhere. So let me now show you first how this looks like. This is the dashboard. This is a real time monitor of the data. This is from a small from a farm based in the rural areas of Germany. It has around 170 cows. Now imagine, you would be a farmer with a farm of that size. What would be the most important parameters for you to look out for? It would probably be the milk yield, which you see on the right side compared to the previous month and then on a daily basis. The other important parameter for you should be the milk quality. This is what you see here on the right side, and this is highly depending on the health of your cows. If we then scroll a little bit further down, we see that this farm has actually 3 milking robots Installed, those are our automated milking systems. And then also important for you as a farmer now is Where do you need to act? What do I need to do? Is there anything important? And this is what you see on the right, where you do see There are 6 cows which might need your attention, so you can click on it. Let's now select the cow Louise. And here you see all the data about Ruiz. You see the red triangles, and here you can get some further information. And this one shows The inflammation values very early on, and therefore, we can inform the farmer that he needs to check it. Thereby, he can prevent the milk and therefore sorry, thereby, he can act directly in order to prevent further milk losses. So it's quite important for him. One further feature which I'd like to show you, As you probably know to quite a lot of graphics and curves, let me show you the lactation curves. So here you see when the cow has cut, that it increases quite steadily, decrease Increases quite steadily and then over the time, it decreases. We have noticed that our farmers really like to look at those curves, and they like to look how the individual cows are So let me show you one as well. 48, here, we've actually selected a high performer. So this cow, You might want to consider for your further breeding. And thereby, we do help our farmers in order to get more sustainable to Had to grow their farm sustainable in a good way. Isn't that impressive? Absolutely. Great. I think it's a good very good example what you can do with digitization and how advanced GEA already is here. And even if we are talking a lot about new food today, this is an existing stable market and we also expect a continuous growth in this existing dairy market because simply of the growth of the world population. Yes, DariNet, It's, by the way, software as a service. We don't sell that. It's software as a service. Every farmer has a so this is an identical release, And this is also a good example for a continuous growing revenue flow. Modernization and configuration is the 4th pillar, and we also have a deep dive here. Fredericke? Exactly. So we would like to introduce to you the configurator that we are using in our business unit, They have already 100% modularized portfolio, so their machine is 100% configurable with the configurator that I'll show you in a second. We do already have today around 118 orders per month going in through the system. So it's quite good news. In former times, one of the biggest issues was that our sales guys went out, So the machine and then the back office and the engineers had a lot of questions. So the orders took quite long and there was a ping pong of questions going back and forward. This we could tackle now all in our system because it's a guiding guided selling solution, and we could improve our selling by 50%. So the amount of time is where we will spend now. Let me now show you how the system is looking like. It's a SAP based solution, which I show you in a demo here. There it is. So our sales people take this tool to our customers and then configurator something with them. So let me now buy configurator for the harmonizer here. I go in the system. I select the harmonizer. I can look in for further information on this one. And then let's select dairy. What do you like? Coffee creamer. And then you see the parameters are preselected based on the selection that I've done, and I can still customize it. But let me now confirm those. I continue, then I need to add the parameters from my production line, The flow rate and the pressure, let's use 300 here. And here you see then The system directly calculates what kind of machine fits best to my parameters. So here is a recommendation based on my selection, Which I can then directly pick. What we have seen that the customers likes to have a little bit of choices, so we do give them 2 options. First option, most important, What happens if the customer wants to upscale its production soon? So the next, bigger machine, let me see, It's then here, so the big next upgrade. And then the other question that the customer usually has is, Well, what's the machine that's a little bit smaller than this one and what's the price for it? And that we see here then. In the We can then actually select the choice, adjust the parameters as well. And then you can book Further options and modules on top of the machine selected. It's similar to a car configurator basically, We can have a basic motor or you have an upgrade of the motor, and this is, of course, based on your production needs. And then in the end, you can upload your terms and conditions into the system, and you get a direct quote, which you can print even at the customer side, and then hopefully, this is signed soon. So the hit rate also of this is at the moment at around 47%, which is Thank you very much, Fredericke. I hope that also gave you some insight that during the last two and a half years, we did not do only restructuring and Optimization of basics. We already started to lay the ground for further growth, and I think these are good examples and which also gives you trust that there is more to come. We are now having a coffee break. Yes, let's Meet again at quarter to 'twelve. Thank you. Yes. I hope all of you enjoyed the coffee break, and we will now continue with our pillars. And it's my pleasure to welcome Ilya on stage, studied Chemical Engineering and holds an MBA, more than 30 years of work experience, more than 20 years with Ger, not only the CEO of Liquid and Powder Technologies, but he will also tell you about our fantastic New Foods story. Elia? Thanks, Oliver, and Welcome all. And I'm very pleased to be able to give you a brief presentation on our topic of new food. And you'll see from my brief resume here, I'm one of the old school that Stefan has brought up from the old Geiger Organization to support this development, nevertheless. So I'm here to talk to you today briefly about new food. First of all, I want to talk about what is new food. We've heard The phrase very often, but really what does it mean? And then why new food? Why is it important for our Community and Sustainability. And then finally, why Gaia is really positioned well to support this industry, but also why this industry is there also to work with GEA to develop it further. So first of all, what is new food? Let's define what we're talking about here. So for us, new food New Food are products which are produced by using proteins or other ingredients like essential fatty acids, which are sourced from nontraditional sources, okay? And these food products I then produced and manufactured to either substitute a traditional food source or at some point even completely replace that traditional food source. And here, we'll show some examples. And we've got 3 categories of New Foods. 1st of all, in the plant based category, this will be familiar to All of you most likely. You'll all recognize the dairy alternative beverages that we see in the to those beverages made from oats, almonds, soy, etcetera. And we'll also see in our supermarkets The growth of the number of, let's say, plant based foods, solid foods, which we're seeing on our market shelves. You've all got bars in front of you, chocolate bars, which haven't got any dairy in it whatsoever. And then finally, a move into plant based ingredients. So these are intermediates, which are used as building blocks to produce plant based foods. So these are quite common at the moment. Then we move into the cell based protein category. And here we have an example, cell based applications, cultured meat. We've heard about growing laboratory meat, meat products without harming a living animal. And then precision fermentation. This is a really exciting area that we're looking at right now. What is this? This is about mass production of cells, specific cells through fermentation and then isolation of very specific unique proteins, which have the functionality, which can then be added to food products to give you texture, taste functionality, similar to products which we're already used to. And then probably, let's say, the least palatable of those alternative proteins, insect proteins. And what we've also seen, proteins from crustaceans. So there's a whole raft of different categories in this marketplace that we are now looking at to focus on. Why do we need new food? What's the point? Well, here are really to 2 charts. Firstly, the growth of the population of the world. We expect from 2018 to 2013 over 10% increase in the global population. But what's also key here is the growth of the middle classes in the global population because it's the middle classes that are demanding these high quality proteins. And put simply, if this continues in this way, which we know it will, We will not be able to provide enough proteins, acids and foods to feed this growing population going forward. This is a longer term view, but it is happening. But the here and now is driven by you and me. We're living in a period where we, the consumer, have never had so much influence and power on how we can affect big industry, how we can make them change what they do by our preferences. And what this chart shows us is, right now, these are the 4 main reasons why consumers are moving towards a flexitarian diet. This is not about vegetarianism. It's not about veganism, It's about flexitarianism. And these are the top reasons. First of all, because we want to be healthier. We want to feel healthy. We want to look after our bodies. Secondly, environmental concerns. And finally, growing awareness of animal welfare. So this is what's happening now. And what's big industry doing? I'll just pause for a moment while you digest some of these statements, which we've collected. And just to point out, each of these customers here Our actually customers current customers of Gaia. And what this shows us is these big food producers are really taking this seriously, but they're taking it the seriousness the here and now. Look at Nestle. They're focusing on Oceanic Sustainability. Danone. Danone are calling it a food revolution driven by consumers. And both Unilever and Impossible Foods are focusing on the environmental impact of traditional food manufacturing and the sustainability of new food. So this is what's happening. It's really current. Now why is this such an exciting opportunity for GEA? And why is GEA such an exciting opportunity for this industry? So what I show you here, These are, let's say, the process steps required in the production of an advanced protein, an animal based protein or a plant based protein. There are many, many process steps, but these are the key ones from mixing, from sterilization, fermentation, Separation, drying, milling, you name it, these technologies, each one of them already exist in GEA's technology portfolio. We already have this in house, which is used for one application or another. It sits within one division or another. And when we compare to other competitors that we've We've seen moving into this space. We see we have a unique position in terms of the technologies that we own in house. We don't know of any other competitor at the moment in this space that has a portfolio covering the whole process requirements. But it's not just about having the unit technologies for this process. This is a very, very simplified process flow diagram of a typical plant based or cell based process line. In reality, it's hugely complex. Each process step has multiple sub steps in preparation, in heat treatment, in pH adjustment, in homogenization, etcetera, etcetera. And somebody needs to put this together for our customers. We also think there's a lot of start ups moving into this business as well. They don't have the experience or the knowledge of how to build these types of plant. GEA does. GEA has this core competence in its toolbox through its Liquid and Powder Technologies division. We are capable of integrating all our own unique technologies into end to end industrial scale processing solutions, and we can do it globally. So therefore, We are uniquely positioned to support this industry, but this industry Needs a supplier like Gaia to move it forward. Now it's not just I or we that believe this. The industry has already recognized it. As Stefan said, this is not what are we going to do, this is what are we currently doing. And I'm really pleased to announce that Novozymes, Novozymes is a world leader in biotechnology and biochemistry, Has recently partnered with GEA to build their first advanced proteins plant in North America based on plant sources, which will produce advanced proteins as an ingredient to meatless burgers. So we secured this contract from Novozymes, and the reason they selected GEA were for exactly those reasons that I described in the previous two slides. This plant is currently under design. Construction will start next year. It will come online in 2023. And it's not the only thing we're doing. I'll talk a little bit more later on in another presentation that I'll give you about what we are doing here. And this just describes in a little bit more detail exactly what it is we're doing from Novozymes. So we're harvesting cells from fermenters. We're collecting cells, and then we're preparing those cells in order to break them down and release proteins. And the breakdown is done through homogenization, Gaia homogenizers. And that's the cells are then released and then we separate into the various different protein fractions. We then isolate The specific protein that we need for the final product, and then we take it through a clarification phase, sterilization, before finally filling it into bulk containers for dispatch to end use. This is what we are doing for Novozymes. These are examples of Gaia Technologies, which will form part of this process line. So finally, what does that mean for us? Well, the consumption of new food will grow threefold between now and 2,030. And for us, for GEA, we see that by 2026, We will achieve an order intake in this application of in excess of €400,000,000 on an annual basis. Today, we're at 120,000,000. So that concludes this brief presentation. I hope that's given you a little insight into where we're going in this application. And with that, I'd like to invite my colleague, Azam Owaisie, to join me on stage here for the next presentation. As is the newest member of our leadership team, having joined GEA in April 2021 as our regional CEO for North America. And Az brings with him a wealth of experience that he's gained from various leadership positions that he's held in Fortune 500 listed stock companies in the U. S. And we're very, very pleased to have him on board. Az? Thank you, Ilya. Good morning. I'm extremely excited to talk about the sales excellence program that we have at Gaia as part of the Mission 26. As you know, new machine growth is a critical target for the Gaia global sales organization, both from a regional and country level to the BU level. And primarily because the more new machines we sell, it's a larger installed base, which gives us opportunities for recurring revenue and also the service side of the business. So recently, we went to a regional organization. And what that does is it really allows Gaia to leverage our best practices in the region and really optimize our routes to market. Traditionally, when strategic plans are done, they're done from the top down. What we do now is we're actually doing it from the region and country in conjunction with the BU level, developing it from the bottom up. So what this allows us to do is we develop these strategic plans. We have specific initiatives in those strategic plans tied to really detailed action plans with owners, timeframes and then the resulting financial commitments. Those then are all aggregated up as part of our overall budget. What this really allows the region to do, now it gives local control, ownership and accountability down to the local salesperson and the sales manager. So there's a lot more daily interaction. We can I'll talk a little bit later about some of the KPIs we're using, But really allows for a closer monitoring of our process. In addition, as we're developing our plans, We're actually developing not just goals, but stretch goals. So really looking at obviously we want to take market share, but what other actions can we do to maybe even double, triple what we want to go towards. So that's part of the original action. As we started developing the process, it's been in development for a while, But there are certain areas that we really saw as opportunities for to get better. And number 1 was really there was a significant untapped potential worldwide. Now GEA, we are the market leader in several regions or one of the top providers in those regions. However, there are some areas which we call white spots that present some opportunities for us to really make investments, make sure that we're positioned properly for growth. The second thing is, we did realize that in some areas, we have some under utilization of our sales force. So the goal is really how do we provide the tools to really utilize our sales force effectively and get the biggest return on investment from our sales personnel. The next thing is really our channel, Understanding our route to market and obviously by region and by business, it's really going to vary what kind of channel. So obviously, we've got a direct sales channel. We go to channel through independent reps, through distribution, through systems integrators, but really depending on the market and where our position is and really the opportunity, we need to understand and make sure we streamline that process. And I'll be giving examples of several of these just a little bit later on. Also, our incentivization systems for our salespeople, do they tie to the goals of the business? As we've brought on companies in the past, When we were part of 1 when there was the 1 GEA initiative, when we had some acquisitions, we'd bring those companies on, but we didn't do a really good job of integrating the sales organization into the GEA system and is now part of Create going on for 18 months now, we've got a process where we're formally integrating those businesses and utilizing standard processes across those businesses. So there's 2 key levers really for driving sales excellence. The number one is really route to market optimization, and I'll talk about this in just a second, but it's really identifying where do we need to play, where are the big opportunities. Once we do that, then the second one is really the sales excellence enablers. This really focuses on process improvement. What can we do to get better processes in the system, standard processes and at the end of the day, make our sales team more efficient. So this is an example I'll give you of one of our business units within GEA. And as you can see, we've got some pretty good market share in several regions. However, as we did a deep dive on this particular business unit, we realized that we had some white spots here as you can see in Greater China, NCE And in North America. And we consider white spots really less than 10% market share. So we really saw this as a great opportunity. The nice thing is, is we have the products for the markets. It's just we haven't been gone to the market effectively. So what we've done is actually said, okay, here's the areas that we really need to focus on, not ignoring anything else, but these are the areas that are really going to drive some growth. And we know that there's some local potential there. The total available market is large for us. So this is the opportunity. Being responsible for North America, I'll use a personal example, what we're doing in the United States. So with that same business unit, When we acquired that business unit, we had one sales representative in North America, and that person was actually based on the East Coast, where our headquarters are. And that person was handling all customer interaction from his location. Obviously, there was support from overseas, But the customer base was spread out throughout the United States. We did have some reps that were supporting us. But typically with reps, they do a good job where maybe customers are a little bit more sparse. But as you know, reps have several product lines that they're representing. So there's always a mind share play we have with our reps as well. So what we actually did is we did a heat map analysis to understand where are the opportunities and where are the big cluster of companies. So as we did this analysis, we realized that there were 3 So as we did this analysis, we realized that there were 3 main areas of the United States where there are big clusters of customers. And this was obviously on the East Coast, the South and then also on in the Far West. And so what we've decided to do Is really invest in sales personnel, direct sales personnel in these locations. What this allows them to do is really develop that customer intimacy. So now they are developing relationships at all levels of the value chain. So not just from the engineering to the procurement side, but also to the leadership of each of these businesses as well. And also as most of you know, the United States is a very as well. And also, as most of you know, the United States is a very large country. In our old structure, if you're going to visit a customer, that's a flight, Maybe one customer visit and then you're flying back. It's not very efficient. Your time and territory management isn't really there. This really allows our sales people to focus in that cluster of customers and now they can make multiple customer visits a day. But what's also critical is now they're on top of projects. Ilya talked about our there are Novozymes facility that's being done in the United States. You. Being upfront on many of these types of projects really allows us to be on the front end versus coming in afterwards and then trying to bid against and at that point sometimes it becomes a price war. We can actually start selling value upfront. We still have reps in the area and those are in areas where maybe the customers are a little bit more sparse And we don't need to spend as much time there. So that's where we'll actually focus our reps. So this kind of exercise is being done and has been done throughout the globe in various regions where we've identified many of these white spots. So now that we've we know what areas to go into, the second piece is really focusing on what kind of sales excellence enablers can we add. And this is really all about how do we make our sales people's job easier, right? I mean, our sales people, they're out in front of the customer. We want them having as much face time as possible. We don't need them worrying about all this paperwork in the back end. If we can automate things for them, which we've done, It makes their life a lot easier. So giving them tools, we've developed a sales playbook. I'll get into that in just a second. And what we want to do is standardize this across the globe. Obviously, the way we sell is going to be a little bit different, but the metrics and the processes across the globe are going to be the same. What's nice is it really allows for very good information exchange globally. So as part of the toolbox, there's really 4 main levers that we're focusing on. And that's Salesforce efficiency, effectiveness, growth, and at the end of the day, customer satisfaction, because if we don't have our If our customers aren't satisfied, we're not going to be repeat customers. So in that, I'm going to do a dive on 3 of these initiatives. 1 is our development of our KPIs, Our further development of our CRM system and then how are we optimizing our incentive plans to focus on the goals of the organization. So the first thing I'd like to talk to are our dashboards. This is critical. And I know many of you have probably seen, well, there's a lot of dashboards that are developed now. But the goal here of these dashboards is really to provide and I'll use an operations term, daily management. Typically, when we have this kind of data, we'll get a month end report and many companies get this month end report and then they do analysis of, okay, why did we miss, why are we good, etcetera. These are real time data that on a daily standpoint, a sales manager can work with their salesperson and look and see There are specific metrics that could be tied to their order intake, could be tied to order conversion, the number of quotes out, Close gross margin, etcetera, whatever that is. This can be looked at on a daily basis. And every day, there can be a conversation and a person can see, hey, am I winning or losing for that day? What's nice about this is this really allows somebody to proactively make changes throughout the month. So versus waiting after the fact now before they can actually develop action plans and countermeasures to get back on track. This is actually done by division, But we can actually drill down to region and country and down to the individual salesperson. What's also nice is because this is a big database, areas where we're over driving. We can actually utilize these best practices and help some regions or individuals that are maybe struggling and maybe utilize those Best practice is to get them back on track. The second thing is the CRM and digitalization. So we established this actually back in 2017, but really with the advent of the Create system and when Stephan came on board, we've really put this into high gear. And now we have one central customer experience for sales, marketing and customer service. And now we actually Follow worldwide the same process across all those disciplines. What this is doing is it's really allowing for efficient collaboration across internal businesses and then also externally to our customer. So what the CRM database does is it really gives us visibility to our global installed base. So now anybody sitting in North America can look at one of our customers and say, hey, we've also got installed base and they've got locations in other areas of the globe. How are we supporting them? What have we done service wise? And how can we transfer that communication back to the customer locally? So at the end of the day, the result is we're it's a faster communication and problem solving on the customer side. And at the end of the day, it's an overall better customer I talked earlier about some of the metrics and how we're developing plans. So this is an example of what we're doing based on the 4 pillars I talked about, the efficiency, effectiveness, growth and customer satisfaction. So by business unit, each of the regions and the territories in the regions are developing strategic plans tied to those. And so we've got this for every business unit. And then what we do is we roll that up and these clusters or region are actually rolled up to the business unit. And you can see here in one of our BUs, we're actually going growing at a 4.2 CAGR based on the plans developed internally And the last item I want to talk about is really on the incentive. How do we incentivize our salespeople? As I mentioned earlier, When we had different sales organizations and it was a little disjointed, some of the KPIs and their incentives Really didn't tie in directly to the GAIA goals. And at the end of the day, we want to make sure that we incentivize our salespeople And those goals that they have are tied directly to the end effect of what we're doing in terms of growth at GEA. So this is obviously sales, order intake, gross margin, EBITDA, stuff like that. So we didn't have prior to 2020, we didn't have a uniform program. We launched this in 2020. As I mentioned, it's focused on annual financial KPIs. But in addition to those KPIs, There may be some individual business KPIs. So for example, Ilya talked about new food. Salespeople may have a new food target, new product, A lot of new products we're excited about. They might have a new product target. Any of the processes that we've installed in our playbook, those are all tied. And what's nice is the variable component, It's very attractive. So we're really incentivizing our people to sell more and focus on the key goals and growth. Obviously, some of the critical metrics that we're measuring, growth is key, so order intake, but not just growth, but profitable growth. And that's where we get into gross margin. And then also there's cash and experience and this is where we're also looking at payment terms because obviously The higher margin, the better we get paid, it gives us more money to invest into additional people, additional development, etcetera. So what does this mean? So overall, if you look at our history, and obviously this has a little bit of effect for COVID, But 2018 to 2021, our new machine CAGR was actually slightly decreasing. It wasn't a big growth opportunity for us. Our service is really carrying us. Now with some of the processes we've implemented moving forward, we're projecting our CAGR over the next 5 years to be 4% to 5% versus the market CAGR that Stephane mentioned earlier about 3.6%. So definitely this is a market share gameplay. But it's not just about driving market share, we talked about efficiencies. And so one thing we're also measuring is our selling expense as a percentage of total sales. Traditionally, we've been hovering around 11.5% to 12.5% of selling expense as a percent of total sales. With our efficiencies, we're projecting to be somewhere between 9% to 11% corridor, which is very efficient So in conclusion, our new machine business, we're going to strongly accelerate that growth by number 1, improving our route to market, Talked about those white spaces really driving those, developing these sales optimization and tools in the organization. And then also setting the right incentives for our people to make them excited to sell. So that at the end of the day results in an optimized sales force and really a reduced cost to serve the market and hopefully continued growth in the market. And with that, I'd like to turn it over to Doctor. Armen Tien, who's been at GEA since 2007. And Armen has had several senior leadership to positions within GEA. Thank you, Dear ladies and gentlemen, a warm welcome also from my side. Allow me a short introduction into my current position because it shows what we have done with our turnaround story. I'm the Chief Service Officer for the division, Separation and Flow Technologies. With this, I have the profit and loss responsibility for 3 business units, separators, homogenizers and valves and pumps. This means managing together with several teams the whole value chain chain for service. Today, I'm standing here as the leader of the work stream service excellence, one of the work streams in the Mission 26. And with this, we are covering all GEA businesses, and we will talk about service in all 17 business units. Mission 26 for Service has two lines of attack. The first line of attack is really growing the Service business. The second line of attack is to transform as much business as possible for service from a transactional character to a recurring character. This means tying the customers closer up and working in customers with real partnerships. In the next 20 minutes, I will show you how these two lines of attack who will make the difference and how we can grow the business in the next 5 years. But let me first show you what our performance in service has been till this year. So we are around a €1,600,000,000 business in service. The growth of service is moderate with 2.3%. Our service share with 36 percent already in 2020 is good and is in an industry benchmark quite good for a machining and engineering company. Now we are targeting 5% to 6% CAGR on Service Business till 'twenty 6. You might ask how to do this? How can we go down this road? Well, the first thing is in the last months, we really like also Asim said this, We really analyzed our organization and we found a lot of different opportunities, small ones, the typical low hanging fruits, which were implemented already now. Examples, here for example is cross selling opportunities, not really done in many of our business units when a customer call for spare parts to offering other services so that we can offer him a better solution. 2nd part, for example, is to have spare parts kits available for things, very simple things, no rocket science, but really making already today the difference. But the key foundation for our service growth is the installed base. Installed base means all the machines, the equipment, the plants that are in operation and that are that we have installed in the last years. And we really look clearly on this. How does this installed base now develop in the coming years? Well, looking at in for service because we will have a growing installed base, which will help us to grow our business even stronger. But what we also identified is, if we are honest and we will talk in a moment about this, that we are not already at the edge serving our customers today. In parallel, we have also checked how much recurring character has our business. And we learned that there is much more opportunity in and we will now look at this and convert as much business in the coming years to a recurring character. But let me make one comment to it. It means also transform existing business from a transactional character to its It's not all, only growth. Now if we look at this, it's about installed base. And this means for us, we have 2 growth dimensions. And yes, you can see here on this. The first growth dimension is service coverage. Service coverage is about How many of the installed base is served by us today? And you can see this in this line here in the X coordinate. If you look at the Y coordinate, it's the share of wallet. This means how much revenue we already generate with customers today compared to the potential we have with this customer. This you can see here. Now if you look at the green dots, These are our existing performance we have in these both growth dimensions today. A green dot up in the right corner there Means we really do an excellent job and we have a strong service business because we have a high coverage. So we serve a lot of our customers And with each customer, we get the maximum out of the relationship. And if you now look here on this slide, you see the blue dots The commitments of our 17 business units for 'twenty six, how to improve the business exactly on well defined measures. If you look at this slide, you might say, it's a little bit complex. But I decided to really show this because this shows you what potential we have in service today. Let me go through the slide. The first thing what we can see is our service sales share. So it's a service sales in relation to the total sales we And you can see we have quite a broad range from 20% up to over 60% in our business units. By the way, this is also where our ranking of top and low performers is based on. The second one is service coverage. So it's about how much of our Ibase do we already today serve well. This is from 21% to 85%, Quite a widespread in our different business units. But what all business units have, they have real good touch points with the customers Because even engineering solutions have a lot of OEM products where the customer comes back to us to ask for customized molds, Wants to have special spare parts or where we have protected designs for. So this is a really huge opportunity for us in that way. The third one we can see is how many service FTEs we have for total FTEs. You might first say, What does this mean? But well, it is not really scientific that you can see by the ranking. The better you perform, the more service people you have, which means Also, you have a higher service coverage and so capacity in service is one of the most important points. Even if we talk Today about digitalization, we need local service people to make the difference. And with this, I come to another criteria that we have set up. It's a global presence. This means for the individual business units to see how do they do their service today. It's a little bit what Halk Essen said. What is our route to market? We have some, mostly the low performers who do with the central approach. So this means from the headquarters, they go out and serve all types of customers in that way. And we have the well performing ones, which have local service people at their place where they really can get an interaction and have a high service coverage there. The last Point here is about our Ibase. As you said, it is our foundation or even backbone for this. What we can see here is that we have only 3 business units, which by heart know where their machines are and know where they are in operation. And we have many of the business units where we can really improve our data, our knowledge about our customers and improve with this our coverage and our share of wallet with these customers. So in summary, we have very strong business units, which already are top performers. You find them here on this rights and site. And we have a lot of business units with improvements. Already this best practice sharing, With using the same infrastructure, with having same tools in place and even some in some places sharing service Capacities, we can really improve it and make a difference in that way. And how will we do this? How will we do that? We have put 3 lines of action together to make this happen. The first one is a very thing. It's for the foundation. It's about base service. It's to set the ground for a real proper normal service, a normal service that you would expect when you go to your car dealer, which means you have competent sales service people in place that really can repair the machine, maintain the machine and do the difference. We have here 7 action fields defined that we work on. Then operational service excellence. These are 5 activity fields where you can constantly improve the service activity and I will talk about this in a minute and it will help us to manage our growth and transform our business without adding a lot people. Last but not least, you need special activities to Increase the recurring service character of our business. And that's where we have also put a lot of measures together that the different business units select to really develop their business with the customer. But before selecting measures, we did a self assessment, a maturity self assessment along these three pillars or the What is it now, 12, 16 different action fields. And you can see it here. It's like a heat map. And it's maybe a little bit overwhelming. You see here the different areas of action and here the self assessment of the 17 business units. Again, on the right hand side, you see quite strong ones where you can say very well matured businesses already established. But still also for these, you can see when we look at recurring Services, we have a lot of room of improvement here. And when we look, we have some which even have white spots in the base service. So very easy to fix because we have the knowledge already in house to do it. And this is what has happened in the last months and how we have now put together action plans for each individual business unit to make it happen. Here we go a little bit deeper into the base service action line. If you look here, we have 7 different ones and let me pick for the sake of time only one, which is place. Place means this is our route to market. How have we set up our service business locally? And we already identified that we can't be present on our own in every market because the installed base might not be the right. But if we Ask somebody to do it for us, we need to certify it. So we have certification programs for us in place for service technicians. We improved this in that way. We have set up in certain markets combined service teams or we're talking about so called first responder teams, More generalist who takes care of the machine and the specialist, for example, from this remote service, connected to this guy and advise him how to help to keep the machine in operation and do the right maintenance. If you go to the next level, my really favorite is operational service excellent. Every day, we can improve our service business along 5 different areas. And because it's so famous today to talk about it, I think we let's talk about e commerce. E commerce is a buzzword, I know. But for me and for us, e commerce means that in our internal organization and our customers Have an easy access to order field service and spare parts by us with the right systems. It makes life much easier for us and you just heard it. Everyone is used to it as a consumer because of car industry is mainly where we compare ourselves to, But we are a machine building company working in niche markets with highly customized solutions. So for us, it's always important If we do e commerce, that we have the right setup. And the foundation was just set by Fredericke, for example, with having a real solid sales configurator, Which helps us really to offer also the right service later on. And I will use the sales contributor also in the next example that will come up for the recurring character. For the recurring business, we have detected 4 areas where we really want to focus on. The logical simple one everyone knows are service level agreements. Simple ones where you have a contract with the customer for spare parts and field service around maintenance. The second one is really that we already take care of the performance of the machine and really inform the customer if it goes out of balance and if we can if we should interact. The 3rd level we do, we even we manage the machine, which we call then Performance Plus Systems that we put in place. This is all done under the service level agreements. The important point is now, which often we have detected is A challenge for us, the handover from new sales to service. This is why for the sales configurator, we in Two business units have now worked on that we have also a kind of service level agreement configurator available. So we have modularized all our service level agreements so that we can have customized solutions, but the customized solution is easily selected by the salesperson already online. And this will boost our recurring character. So these are all the types of measures and we have built a kind we call it cookbook of because it's about execution. And to get real commitment, each business unit puts together a kind of roadmap for the next 5 years having a clear plan when to do what. And depending on the maturity level, Each of this business unit has its own path to go. Some really focus on base service, others Are already very advanced and for them the clear goal is to have more recurring service in the next 5 years available. So if we summarize this all together, it becomes a real big package. All our actions we have done will result in an organic growth of 5% to 6%. We have several measures, as we said, to improve our service coverage. We have a clear commitment from each business unit that it will grow to 64% within the next 5 years because they have clear plans how to do it. Other measures will be around share of wallet. How can we gain more business with our customers from today till 26. We want to go here to 62% in that way. Now you might ask, You missed your 3rd dimension. What's about recurring service? Our ambition for 'twenty six on recurring services that 20% of the service revenues In 'twenty six, we'll be based on recurring business models. So there we have a clear thing, 20%. And on top, 50% of the new equipment sales in 'twenty six will be linked already with a service level agreement. So a real strong development to maintain our growth and at the end, increase our service share to 36% in 2026. The organizational changes, The improved financial transparency and the clear profit and loss responsibility in service, Which all were introduced with the turnaround measures end of 'twenty nine are our foundation that we can do the growth. This is important for us that we have an organization set up that can focus fully on the service activities and is measured on their own KPIs around this. With this, we will further contribute as a predictable and profitable revenue stream to the success of GEA and together with our colleagues in new machines and service, to grow our business in the next 5 years. With this, I think we are at the end of our second session, And we invite you now for lunch, and we'll come back in 45 minutes for the second part or for I hope you all took the opportunity to get something to EAT. It's good to see you back here in the room and for sure also you at home who were able to take the opportunity to get something to eat. It's now my pleasure to announce Claus Stuyentien, the CEO of our Separation and Flow Technologies division. As you can see, Claus Studied Energy and Supply Engineering has more than 30 years of experience in various senior manager positions and for almost 2 years, the CEO of Separation and Flow Technologies. Claus, Please come on stage. Thank you, Oliver. So it's my pleasure right after the lunch now to present my division, that is Separation and Flow Technologies. And I would like to start with our position for GEA or even to say the value of separation and flow technologies for GEA. So we account for 48% of the EBITDA share of GEA and onefour of the top line revenue. And we are currently performing at the ROCE of 23%. Our ambition is it to grow by a sales CAGR of 4% to 5% till 2026 at an improved EBITDA margin of 24% to 26%. By saying that, I would like to present 4, I would say top priorities for our division to develop our mission to achieve our results. 1st of all, participating on the growth story of New Food. Secondly, is maintaining our position as technology leader, and I will show you later today some nice examples mainly in the regions North America, Latin America and APAC and finally, taking care of our operational, I would say, excellence and efficiency. Starting with our markets, you have heard a lot about New Food today. And new food, it's not by coincidence, is why one of our growth territories for separation and flow technologies. So we assume a strong growth not only of the industry, even our share in growing with the market trends and beyond. And in addition, we have a significant footprint in pharma applications. They are worth for 15% of our revenue, and we are able to outperform the market growth of 5%, even to gain market share in significant numbers, and I will show later why we are doing so. In combination with some upcoming trends, like plastic alternatives, so industrial applications and a solid backbone in our traditional applications like dairy and beverage. We I would say the market trend is a friend of us in separation and Flow Technologies in the next upcoming years. What is of utmost important that is really maintaining our position as technology leader, and we not only claiming it for us, you can And I would like to give you 2 examples how we are doing it. First of all, it's about test capacity. So we have made significant investments in our test capacities, test centers in all our locations, being able to offer our, I would say, customers of any size, from the start up to the big corporates, ideal test possibilities, opportunities for their new products and new processes. This brings us in a leading position whenever we talk about the next over the next order. And we will continue to do so. And you cannot imagine how big the market trend is with us in testing new products as Ilya have presented in new food applications. The other part I would like to mention is about the innovation as such. We are aiming for a share of radical or breakthrough innovations of minimum 30%. You saw the nice presentation of the configurator of the homogenizer equipment. In homogenizing, we are aiming for a share of nearly 60% of radical innovations. This is Very much important, very much of importance for us because this maintains our technology leadership. The last column is about market coverage. This is something we have the largest sales force amongst all divisions within Separation and Flow Technologies, but there are, of course, some white spots in Service and Sales. And you have heard something of our efforts, what has presented to, I would say, become better. So In a nutshell, we think we are well positioned. The markets are with us. Technology leadership is our aim, and we have some growth opportunities in the markets. Markets, it's the buzzword, new food. You have heard a lot of it. And new food, only to give you a flavor How important it is for my division, we are growing by 30% this year in New Food, and we are aiming for sales CAGR of 15%. So we would like to clearly outperform our competition, and we are perfectly prepared by offering the complete portfolio, what our clients requiring and by having launched new, I would say, advanced product series perfectly fitting to these kind of applications in separation and in homogenizing. So we are in the leading market position, and we are able to maintain it in the course of the next years. The story about pharma application is a little bit different. The market growth is nearly 5%. You have seen it in the presentation of Stefan? But we are daring to say we will grow by 10%, and we have shown the growth in the course of the last years. Why that? We put a lot of efforts in new in development of new perfectly fitting equipment for liquid biopharma applications. And now we are in the process to harvest all the investments in the course of the last 2 years. Even this year, we are growing much faster than the market trends. And this is of you. Utmost importance for our bottom line because it's a highly profitable business, and we have launched in all 3 BUs new specific pharma product lines. And especially for the small batch productions, we have launched a laboratory homogenizer, and it you. Sounds like a nitty gritty thing, but it's the entrance card to go for larger scale production for pharma applications. And today, I would like to present something later today called Kaiteiro that is a similar story. So we would like to offer the perfect product for the small batches for the test batches of the big pharma companies. Last but not least, when we talk about our markets, dairy is always worthwhile to mention. It's our backbone, our you, solid traditional business as well as beverages. And this is not volatile. This is bringing, I would say, the base load for our production for our business as such. We are going to launch 8 new products next year, and we are talking here rather about incremental developments, some smart things. But this is a traditional market, and we don't see really breakthrough innovations here. But why is it so important? And why is it so important that we in GEA are keeping 2 parts of the business. So first of all, the business, the solutions part, so being the turnkey solutions provider for our clients, but is hosted by the colleagues from Liquid and Powder Technologies and the components part for us. We are selling 25% of our components through our colleagues from the solutions part. So in the eyes of the clients, There is no difference. There is only GEA as the partner for the dairy business, so we will keep our position. If you look to the growth rates, there is a flip side of the story. And if I'm talking about the flip side, it's about oil and gas business, marine business, but it's declining. So this is a little bit limiting our growth scenario, And therefore, we are talking about 4% to 5% in the course of the next years. The I would say the good part of the story is We're exchanging, I would say, business from red oceans, so quite competitive business in especially Marine through highly profitable business of farmer and new food applications. So this is also triggering better bottom line results. Talking about innovations, and this is the key message for my division. I will give you two examples here. First of all, we talk a lot about sustainability And what does it mean now? If our clients require really breakthrough sustainable products, We have to do something differently. Incrementally, you can save energy of 5% to 10% by improving motors and so forth. But to doing something really different, you have to think differently. So we are in the process to develop a full fledged portfolio offering sustainable separators. And by saying that, we will save up to 45% of the energy consumption. Why is it so important? If the decision criteria will change in the eyes of our clients and the demands, we will be prepared. We are the front runners to offer sustainable solutions for customer needs. And on the left side of the chart, you see you can see a future trend, what could be the next megatrend. We're talking about plastic alternatives made out of biopolymers. Again, we are you in this cell based fermentation process business, and we are well prepared because we, as GEA, we have a footprint in And if we are talking about plastic alternatives, it is not comparable with food or dairy applications. It's an industrial application. We run through different test cycles with main clients, and it has been proven that our equipment is a perfect fit to the requirements of our clients. And the 1st large scale production site in Japan will be built in the next year, and the order will be placed this year, and it will come to us. And why makes it me so excited. It's a large scale production or even a midsized production, and there is equipment in worthwhile of €10,000,000 to €20,000,000 of GEA's equipment. If you think about the breakthrough innovation, what turns into a large scale production, It could be a huge wave in growth for GEA in the near future and definitely in the far future. Talking about innovation, I will give you another example. I was talking about our ability to outperform the market growth in pharma. This is a small device called Kaiteiro, that is a Greek name for cell. And why is it so important? Since 10 years, we have got requirements from the big corporate pharma companies in the U. S. To replace with big filter banks that size by for a specific process, for a specific small batch process. So you think about a fermentation process where the broth is coming out of the fermenter and going over a large filter bank. And then you can see it flowing through the filter. And for the pharma corporates, it's there's no alternative to it today, And it's not really, I would say, a charming process. You have to you will lose a lot of valuable product in the filter stripes, And it's somehow difficult to get this certification for each project. It's time consuming. It's costly. So they were approaching us. So if you are talking about harvesting cells, that is a separation process. Why not offering a disposal you, separator for exactly these applications. And today, I can tell you, we have We've tested a machine for 2 years. We are going to launch it this month. It's a disposal separator made out of plastic. It's a friction free bearing. That means it's running friction free. It's flying The separators or that is the from the, I would say, German engineer perspective, the biggest argument in the eyes of our clients, you. It's batch ready in 10 minutes. Before it took the clients up to weeks to prepare such a process, You will get the maximum harvest out of it. And finally, there is no sterilization and no cleaning process in place anymore. So from the customer perspective, it's of highest value. If we are talking about pricing power through innovation, That is a very good example. Nobody else can offer it. It creates massive value for our clients, gives us power to price it at the customer's value and its recurring business. With each batch, You will dispose the separator, the sealed bags, the plastic stuff. And if you question now the sustainability side of it, In the eyes of our clients, it's a major step because beforehand they have used these big filter bands, so much more material and much more waste. It's a small device. It's triggering market share gain, and It's improving our bottom line. It's a breakthrough innovation. Digitalization, That's a buzzword, and probably you have find all the 5 headlines here somewhere else. What is in for separation and flow technology. What is the main driver for us? It's speed. Digitalization has to do with speed. So we have equipped all our components with a connectivity gateway, all sensors. So it's easy for our clients to decide Whether they would like to get remote access to any equipment, it's easy and transparent to use apps on your smartphone to run and supervise your operation mode. And finally, you can offer remote services by predictive maintenance and so forth. Sales tools, e commerce, you have heard about it. You have seen the example from Horogenizing from my division. We are aiming for integrating all our components to an extent of 90%, 95% into such a system. This will bring enormous efficiency gains for us in Separation and Flow Technologies, and this is one of the main driver, again, keeping our bottom line stable or even improving it. And finally, to mention intelligent equipment That has to do with big data, with software applications. We are using or we are cooperating with universities, with startups to be fast because speed is a differentiator from the competition. And we are just running tests, runs here in London with Stains Water to optimize to Cantas, for instance, and there's much more to say. So the message here is speed, power to do things, not only to talk about it, as a differentiator. Talking about margin again, because quite often I have been asked so that is a high margin level even in comparison with our competitors, how to maintain it. You have heard about innovation. I would like to touch the service point again. Armin presented the service share within GEA, it's 33%. We are talking about separation and flow technologies. We are well beyond 40% in our service share. That is one of our profit momentum, I have to say. We are quite advanced in doing our service, on organizing our service activities, but there's always some room for improvement. So there are 3 levers. 1st of all, growth in new machine business, of course the second one, capture rate and the third one It's about service level agreements, and this is again a big lever for our division because we are in the process to accelerate these activities, and it's even welcome by our clients, but you can only successfully offer it by digitalize your own your complete value chain, and we are in a good shape to do that. And the second one worthwhile to mention is about operational excellence. In a fully digitalized production site and a lot of automatization will create bottom line effects in a positive way. And together with the colleagues from my CEO, Johannes Gillot, we are in the process to optimize our factories further. And one, I would say, beneficial point is, again, the standardization and the modularization efforts we are undertaking. This is the foundation to fully automize production. Last but not least, I would like to mention our production footprint. We are in the process to move our production of pumps from Germany, to Poland. This is again a profit contributor for our bottom line. And we are constantly localizing products, especially for Wipes and Pumps, in the different areas of the world. In a nutshell, we are in a good shape, and we dare to be confident that we can even become better. So sales CAGR of 4% to 5% It's our ambition at an improved EBITDA level of 24% to 26%. Finally, summing up our main fields of improvement or focus fields, it's capturing growth, it's launching new innovations, It's Service Business and finally taking care of our costs and our efficiency. Thank you very much. I would like to hand over to my colleague, Ilya, again, presenting now the division, Liquid and Powder Technologies. Thank you, Klaus. Just to remind everybody, my name is Ilya Aprakovich. I have since 20 20 being the Head of our Liquid and Powder Technologies division. We are the solution provider, the end to end process solution provider for Gaia. And I'd like to take you through my journey over the last few years. Before I take you on that journey, I just want to position LPT within Gaia for you. So we account for around 36% of sales share in Gaia. So we are the largest division by volume, and we contribute 23% to EBIT to Adar share. We have a ROCE currently, we have a ROCE of in excess of 170%, This demonstrates our capital efficiency here in the division and also shows our contribution to GEA's cash generation but also shows our contribution to GEOR's ROCE targets set for 2026. In terms of market position, we choose to work in markets where we are either the first, second or third in the markets that we want to operate in. Examples here are dairy powders and infant formula, we are number 1 market leader. In brewing for beer, we are number 1 market leader. In fermented products, yogurts, desserts, We're number 1 market leader. And then it's our other industries, fruit juices, nonalcoholic beverages, certain chemical applications, We play as number 2 or number 3 player. This is where we intend to play. This is by choice. And certainly based upon feedback we've had from various customer surveys, I think we can call ourselves technology leaders in the market What do we want to achieve by 2026? Well, we can believe We truly believe with the strategies and initiatives we put in place, we can achieve a sales CAGR Growth of between 4% 5% up to 2026 and an EBITDA margin of between 10% 12% by 2026 coming from our forecast position this year of 9.2%. And how we will achieve that are through our strategic focus on growth Profitability, growth through development of new applications, through innovation in sustainability and profitability through focus on our operational excellence and driving service as a major profit lever in our organization. So just a little bit more history. Stefan took over The position of CEO of GEA in early 2019, at that time, he asked me to take care of what was then our application center in dairy from the old BA solutions in the Woundayo structure with a clear objective to stabilize that operation and deliver our promises for 2019. Here, you can see On the right hand part of this slide, the financial performance of this division from 2017 down to 2019 and then what's happened in 2022. This is the inflection point. This is when Stefan took over. This is when I came into the picture. So clearly, looking at this development, There was clearly a problem with this division. And in order to turn it around, we need to understand what caused this issue. And so we embarked on real root cause analysis to understand what the issues were, and then we came up with plans to resolve and rectify those issues. And this is what we did in this 2 year period. First of all, we rightsized the division through our Headcount 800 program. We had a portfolio of poor performing projects. We cleaned them up. Now we have a very healthy, clean project portfolio. We focused heavily on improvements in our project management processes and in fact end to end processes in the delivery of our projects. And we improved through the new create structure the engineering efficiency of the organization. And also, through this create structure, naturally, we devolved EBITDA accountability and responsibility to the local operating unit managers. These steps resulted in this turnaround of the business. So here we are now at the end of 2021. And I think we have created a really solid and sound platform for LPT now to stop focusing internally on resolving what was going on, to now look externally and focus on profitable growth. That's what we intend to do and we have been doing now throughout this year, which will also position us to adapt and flex to our changing customer demands, customer needs, application changes. So how are we going to do this? So we've developed a strategy which is now in place, which is firmly embedded in GEA's Mission 2026 strategy. We will look for growth through development of new applications and here, specifically establishing a new food core competence within LPT and within GEA. We will drive innovation in sustainable solutions in order to support our customers achieving their targets, and we will enhance our digital offering to provide more services to our existing customer base and our new customer base while capturing them for plant lifecycle time. Profitability will come from continued focus on our process excellence through the sales process, through execution, through site installation, coupled with work that we do with our COO office in procurement excellence and production excellence. And we will grow our service portfolio and our service share. Claus mentioned that SFT, they have a service share of over 40%. LPT is in the range of 20%. So we have a significant opportunity here to grow a highly profitable business. So let's look at those growth levers first of all. New Food, we've talked a lot about it, so I won't go into too much detail. But what will we do? As I said, we will establish a biotech center of competence by pooling the relevant knowledge and resources within Gaia into a central core competence so we can support this business. We will invest in a new R and D and Science Center where our customers can come and develop products with us, We can demonstrate our ability to scale up their operations. Incidentally, we are building mobile pilot facilities also. These will be containerized units, which we can send to our customers so they can run tests themselves. And if anybody is interested, we will be exhibiting one of these at the Enugu Food Fair next year in Germany. And if anybody would like to come, we'd Very much like to see you there. You saw from the new food presentation, the players in this space our existing customers. So we'll leverage those relationships in order to develop this business for us, but we'll also partner with the huge number of start ups. We'll be selective, but we'll partner with those start ups to enable them to develop their products, which we can then industrialize, to take to market. Sustainability. So we will drive Innovation in our technologies in order to meet not just our own bold sustainability targets, but also to support our customers to meet their sustainability targets. All of our customers, and you can read it, they're all setting their own Sustainability targets, reduction of greenhouse gas emissions, etcetera, etcetera. They simply cannot do this without a partner like GEA, who is driving sustainability into their technologies. So we will be focusing on providing solutions with reduced water consumption, reduced carbon footprint. We'll be focusing on sustainable food products and applications And recycling reuse wherever possible. And finally, digitalization. So we'll grow our digital offering, which will be complementary to our equipment, providing customers with additional insight into their plant operation and allowing us to provide them additional services, which we haven't been able to do until today. But these are not just words. Let me give you some examples of what we've actually already achieved. So in new food, we talked at the bottom example here is the Novozymes example. This I talked about a little bit earlier. Look at the other 2 here. At the top, alternative proteins, we're building the world's first pilot installation for harvesting of krill proteins. Now we talked about a pilot installation, this is a double digit million project. It's not a small project. The customer is Aker BioMarine. So we will develop this technology with them, which will then be rolled out on industrial scale. The second example here is a plant based beverage project, which we've currently executed. We were contracted by one of France's leading dairy companies to build them a process line, an end to end solution for production of a dairy alternative beverage based upon oats, rice and soya. And then of course, finally, there's a jewel in our crown of today, which is the Novozymes example we talked about earlier. If you look at sustainability, these are real examples of what we've already achieved today. The top example, which we're really proud of. We partnered with our company with our client Innocent Juices. You may know Innocent. They're one of the world's leaders in production of smoothies and fruit juices. They wanted to produce smoothies in the world's 1st carbon neutral juice factory. They didn't know how to do it. They approached us. We put we used our expertise in processing solutions and how do we make these juices together with our colleagues in Refrigeration Technologies And the expertise in heat manipulation from refrigeration and heat pumps, you saw earlier in the day Nadine presented the SENSE initiative. This is a living example of SENSE. This is where we take waste heat from the refrigeration process, we compress it, We make usable heat. We feed it into the juice production process for sterilization, etcetera, and for CIP. So it's a completely closed cycle. And together with the customer who are powering this plant with wind energy, this is the first carbon neutral fruit juice factory in the world. And then developing new technologies. We're developing a Carbon dioxide abatement system for use in heavy industry such as glassmaking and metalmaking. We already have a product line in exhaust gas treatment here. This would then be complementary to that as an add on to remove carbon dioxide from exhaust gases, thus reducing our greenhouse gas footprint and that of our customers. But not only here, we're also looking at recovery of carbon dioxide from brewing plants all from soft drinks plants as well and reusing. So these are real examples of what we're doing. And then looking at the digital space, These products are available. So the first product, GEA Insight Partner, and we use the word partner, something Armin mentioned earlier, we want to partner with our company through our digital offerings rather than just supplying them. These are subscription based products, which are already available in the marketplace. Insight partner designed specifically for the brewing industry using GEA knowledge and core competence Provides our customers with detailed insights into how each brew in their daily, weekly, monthly production plan Is operating, allows them to compare 1 brew against another, gives them insight and allowing them to make informed decisions on how to optimize the operation of their plant. GEA OptiPartner. This has been designed using GEA expertise and knowledge in the dairy industry to optimize production in dairy powder plants. This is an autopilot. What this does is, this monitors constantly the operation of a dairy powder plant. And depending on the KPIs that the customer wants to optimize, could be energy, could be throughput, Could be moisture content in the powder, this software automatically adjusts in real time the operating parameters of that dryer to optimize those KPIs. And we've actually seen customers that have installed this improvements in productivity of between 5% and 7% to nameplate capacity. So these are already in the marketplace. They're subscription based. They're recurring revenues for LPT, And we are now rolling this out fully into the marketplace. And then finally, through Connected Services, through our standard Automation platform, we can provide our customers with automation services, maintenance services from wherever we are by connecting into their plants. All this is available. And then when we look at improving profitability, we, as a contracting entity, Our success is based upon our ability to deliver our projects to our customers on time, on specification, on budget. And as long as we do that, then we will be profitable. So we will focus continue to focus on the end to end process of everything we do, starting in sales, through project management, through engineering, working together with our COO organization. And then finally, in service, Using all the pillars that have been described by Armin earlier on today, we will look to grow our service share. We will increase our digital offering. We'll extend our service products, and we will develop local service maturity. So what have we done? What have we already achieved? Well, first of all, We have focused over the last 2 years on really professionalizing project management and project engineering in LPT. So we have developed state of the art project management techniques, models, policies, procedures that have been rolled out to all our engineering units globally. And what does that mean? That means that all our engineering units operate in the same way. We understand. We can interrogate projects. We can we have early warnings after what's going on. We can see what's happening in all our projects. We've developed A very strong governance model, all the way through strict adherence to our project management principles, but also through risk management. All our key large projects go through a risk management process, including the executive board, who interrogate those projects so we understand what it is that we are getting involved in, and we do not take any unmitigated risks. And we'll focus particularly on those rather difficult areas in project management and project execution, which is what happens when you get to site where you have scope creep and all types of eventualities. And we also want to make project management a career choice in Gaia. We want to make it an attractive career choice to our employees. And we have developed a very clear project management career path and training development program for our engineers. And also, we've been working on rolling out standard project management tools so we can maintain that consistency. At the end of the day, our mission here is to be the implementation partner of choice for our customers. Once they trust us, which I'm happy to say we've gained that back, they will continue to work with us. And then service. Our vision in service is to be able to support our customers and their projects to improve performance of their plants wherever they are, whenever, globally. That's it in a nutshell. That's what we want to do. And the pillars of our strategy to achieve that is very much as defined by Armin in the Mission 2026 service work stream. So we will grow our market coverage through our Ibase. That's our installed base. I think I don't recall arming the installed base coverage we have at the moment. But in LPT, it's around about 40%. So we still have a huge installed base we haven't even touched. But then it's not just about the installed base, it's about the share of wallet. And we know even now the installed base we touch, we haven't maximized what we can get out of that. We'll grow our digital service offerings, some of them I've shown you already, and we'll increase our operational excellence through logistics, supply chain, pricing excellence, etcetera, and we will grow our organizational maturity. As Armin said, service is local. We have to ensure we have the right competencies and the right number of resources where our customers need them. So in a nutshell, that's the journey we've been on in LPT. This is the journey we're going on from now. So we feel very confident that we can achieve, using our strategic approach, to sales CAGR growth of 4% to 5% and achieving these EBITDA targets of between 10% 12% by 2026. That brings me to the end of this short presentation. And now I'd like to invite our Chief Operating Officer, Johannes Gillot, to the stage. Johannes joined us in January 2020 as a member of our executive board, And he's brought an awful lot of innovative ideas, insights and new ways of thinking into our organization. Johannes? Thank you, Helia. Welcome, everybody, to the part of operational excellence. And I'd like to start with explaining what the operational function is all about. As you have learned, we are organized in a matrix since 2 years. The new organization of GEA took place 2 years ago. And with that, we were introducing an organization which is built on Accountability in the regions, in the divisions, in the business units, had with a strong layer of operational excellence, operational functions comprising procurement, production, supply chain and executional excellence. We're talking about 6,300 people working in all kinds of businesses in the different areas, in the different factories in the Supply Chain Production Procurement across the divisions and across the regions. Steered by a small global team, but organized in a matrix. The idea is to establish a resilient operative model, sustainable operations and to strive for best in industry expertise in those functional areas because we believe that the accountability in the divisions in the regions must be paired with an expertise on those areas of operational excellence. Why we are doing this? Because and you see that here in the middle part of the slide, we are addressing with those people, with those 6,000 300 people in the factories, in the procurement, a cost block of more than €3,200,000,000 broken down into €2,800,000,000 in spend, €2,000,000,000 in direct €800,000,000 indirect spend, our procured COGS and a €400,000,000 cost block in our factories. That's the value add we are creating in the factories. And to optimize this cost block to really kind of make this as a design factor for the company, we formed the operations as We have it now. Looking back to the Capital Market Day to 2019, there were A lot of things we need to start working on. And I can proudly say that in the last 18 months, we have developed a lot of progress in many, many areas. Just to point out a few. We have established a 1 global procurement organization, not fixed line, but in the metrics as a procurement community around strong categories, around strong performance management, and we have elevated that procurement function from many, many different separated We used a lot of time into creating a spend, cube spend analytics, where we have now visibility on our supplier base, on our spend, on our actual 2 point €3,000,000,000 €2,800,000,000 visibility. In the production areas, we started a Productivity initiatives now comprising of more than 400 different initiatives based on Lean, 6 Sigma, continuous improvement in order to get the productivity of each factory up, paired with a manufacturing footprint strategy where we have already consolidated many factories, and we have started, as it has been mentioned already a couple of times, our new factory in Poland. Everything is based on a very strong performance management. The idea and operational excellence is to establish a performance culture, a delivery culture and product focused culture. And we are pairing that with a strong monitoring with clear KPIs, with clear target setting and also expanding the target setting through the functions that have a cross functional approach to it. Last but not least, I'd like to mention that throughout the post throughout the COVID crisis, we have maneuvered our Company very well through that crisis. We didn't have major outtakes. We have been really successfully managing this crisis. In a nutshell or in numbers and just refer to the numbers what we have given you in 2019, We are meeting. We will be meeting our procurement saving targets. Remember, it was €34,000,000 where we said there's a net net saving to the EBITDA of the company. We will be slightly overachieving it this year, but it needs to be understood, we had a headwind of more than €28,000,000 we were able to compensate in addition. So with that unforeseen headwind, we would have achieved by far a better result. But even with that headwind, we were consuming or we were digesting that into our savings. The production hours we were moving, we said we will Tackle 500,000 of production hours until 2023 to consolidate, to move and optimize. We will be much faster on that. Our plan until 2023 will be to touch more than 1,000,000 of production hours. 50% is Best cost country move and 50% is consolidation within the existing factories, for example, in China, for example, in Italy. Our best cost country percentage, we had a target of 33% that will be met. The production Productivity, though, was even we have the plan to significantly overachieve that. And in addition, we have been able also through our portfolio optimization to reduce our production sites from 62 to 50. So what's next? Operational excellence, I was introducing the €3,200,000,000 cost block. It's not only about cost cutting. It's not only about Cost optimization, it's both. We need to reduce our cost base. We need to optimize our cost position on the one side In order to increase our chances, in order to enable ourselves to further growth, How do you want to do this? And that is exactly what the Mission 26 plan is about. What we have started, We have created in the last couple of months a comprehensive program for each and every function, for each and every factory to work on a comprehensive implementation plan around efficient operations, around countering the price erosion and cost increases, We also will be seeing next year to come around our product cost optimization. It's not only about procurement savings, it's about really taking cost of the products out. And that will help us in order to contribute to the EBITDA. On the other side, we have also Paired those targets with even conflicting targets like inventory management and customer excellence, like Lead time reduction like customer centricity, that is helping us to address new markets and to be more competitive in the marketplace. We need to invest in the resilience and flexibility of the supply chain because that is in that new normal world, A very important topic, how can we flexible result react on the market changes, and with that gaining also market share through our cost competitiveness. As I stated already, so we put everything into a major program called Mission 26, And we are trying to satisfy 5 major dimensions with that because it's not a uni Lateral dimension that we can focus on. It's about value delivery through TCO, total cost of ownership. Definitely, yes. That's the core of everything. It won't go without digitalization and its technology in all our supporting processes towards customers, but also within the factories. It's around people. It's around organizational excellence. It's around rendering the teams behind and elevating our people in the different functions. So a lot of work goes into enabling our people to address the new challenges. It's about customer centricity when I talk about lead times, when I talk about on time delivery, Flexibility, agility, responsiveness. And last but definitely not least is about sustainability because The operations piece, whether it's in the factories or whether it's in the supplier base, will contribute big time to the targets what Nadine has pointed out earlier. So let me just introduce that program to you function by function, starting with the procurement. On the left side, you see the major areas, the major core programs We have started with clear program plans, but also with clear deliverables. It's around supplier management and sustainability. It starts with that. We need to manage our supplier base better. It started with a visibility. Now we are going into claims management, into contract management, into long tail management, but also in management of the sustainability of our customers with very clear selection processes going forward. We will invest big time in digitalization of the procurement processes, source to pay optimization, Catalog business, e auctioning, all that will enable us to be faster, more transparent and more effective in that what we call procurement. The other part of it is the organizational effectiveness is around clear accountabilities, clear roles and Optimization of the processes. There's a lot of churn in our processes still what we need to address. And there are 2 major other programs, the Design to Value and the Project Excellence, which are It can be summarized in a word, early involvement. Designed to value early involvement means that the procurement people need to be early involved in the design of our products in order to be able to choose or help the engineers to choose the right suppliers, in order to take out cost on the left side of the chart, basically in an early phase already optimized on the cost and on our deliveries. In the project excellence, like Ilya has mentioned, we need to be early involved. It needs to be a combined team of engineers, service people, but also procurement people to optimize the project excellence because a lot of project overruns are actually root cause in an early phase of the program. And if you take all those kind of 4 areas together, we are committed to deliver a €90,000,000 EBITDA effect until 2026 to the company's bottom line. Plus, we will work on the payment days. That's the cash dimension of it, meaning that we are contributing with our increase of the payment days to the net working capital of the company. Just to give you an understanding a little bit about what supplier management in reality means and just to give you a successful example. Everybody knows that this year, the logistics cost went up big time. When I compare the logistics cost of GEA, this year, as a percentage of sales compared to the logistics cost that company spent in 2019, We were able to reduce our logistics cost by 15%. How can that be? It's very easy. We Analyzed our logistics cost. We implemented processes. We have implemented policies. We have negotiated tenders. We have professionalized the way we are doing our tenders and our choosing. We are not going to spot prices any longer, And we have been able to move a lot of our airfreight, for example, to sea freight by better planning. It's just a basic Good idea how the involvement of procurement of the awareness of the cost can help even in a time when the costs are increasing to optimize the cost situation. At the end of the day, it's about reducing the cost block, not necessarily just to renegotiate a better price. And it's a very important question. You can apply this example to many, many other examples in many other categories too. Another area is about the design to value, as I stated already, and here a good example in our automatic milking systems through the early involvement and through the collaboration with our engineering people, we are able to take 15% of the costs out in our automatic milking system. We were not able to negotiate those prices down, but we are now using less material. We are optimizing. It's a design to cost measure, And that helped us to take 15% out. We will also professionalize that and expand that over the rest of the company and really tackle it with a clear focus on total cost of ownership, with a clear design for sustainability because that is one thing we need to start early to. We need to work with our teams and basically I'm also heading the Global Engineering Excellence meanwhile. So we need to look on the modernization of our portfolio in order to take the cost out. It's about supplier management. It's about, again, digitalization. A lot of work to do, but we see good progress already. It's now to scale this to the entire company. Next function is the production function. Also here, we define 3 major programs, one about production network optimization. It's about The production network, how many sites will we have, where do we produce, what do we produce where and what does that cost us. The second part is on the GEA production system and the productivity initiatives combined with that. We are striving and we have made good progress already to define in system which is applicable to all factories, respectively of the archetypes there and we have 3 different archetypes and we have a production system, which is helping us to put everything on the same base. It's about lean, it's about 6 Sigma, it's about the classic Kaizen mechanisms, But that is helping us also professionalize our factory footprint. And that is paired with a productivity tool and productivity initiative, which is, as I said, it already comprising already 400 measures from small measures to big measures, but this is that is bring also the management the Performance Management culture into the company. It's about cost awareness. Do not be satisfied. You should not be satisfied with what you have achieved. It's just the starting point for the next, the classical continuous improvement process. And then as a separate topic, it's the factory of the future, that's more the step up approach into digitalization, into automation, into sustainability. Also for that, I have prepared 2 deep dives, not too deep, but at least to get you an understanding what we're doing. On the factory footprint, it's not about best cost country movement. It's one element out of 6. You see it here. It's about how can we use our manufacturing footprint to help the company to grow. Cost competitiveness is absolutely important, but that's not the one and the only topic. It's about core competencies. How can we Really kind of focus on that what we can do best and nobody else can do. It's about resilience. We saw that in the COVID. We see it right now with the energy crisis in China. It's about local for local. It's around sustainability. And those design principles we call them We'll define the manufacturing footprint of the future, and we need to apply that differently to the different regions, obviously. In Americas, We are looking for best cost country hub. We are looking for local growth also in the eyes of the to sustainability. In APAC, we are expanding our footprint in India. We are stabilizing our footprint in China and looking for other alternatives outside of China to create local for local contribution. In Western Europe, we are focusing on clear productivity, on clear centers of competencies, While in Eastern Europe, we are expanding our best cost country footprint and focusing also here on our factory of the future. And here, I'd like to give you one Short example for our new factory, which is at the moment being built in Kozhagl in Poland. The 3rd program was on the Factory of the Future. And I said already, the Factory of the Future It's a program, which is consisting of 3 different subprograms, 1 on digitalization, 1 on automation and one on sustainability. Here on the chart, you see our different archetypes of production, engineered to order, configured to order on projects because we have 3 different ways how we produce things. What we will do now, we will apply the different use cases to the different factories. And for each of the factories, we will have a digitalization road map, an automation road map and the sustainability roadmap being built up, paying in into those targets what we have outlined before. We are not starting from scratch. We are doing a lot already. A lot of proof of concepts, a lot of projects have been executed in last 18 months. I just want to give you one example out of Bushen, our valves and pump, our valves factory, where through an automatic on automated loaded system with a collaborative robot, we were able to increase our productivity by 35%. We were also enabling our factory to have a 30% more output, which is important not to invest in new capacities necessarily, but at the same time reducing our throughput time by 85%. So that gives you a good understanding what automation can bring us, but it needs to be tailored to each and every factory, and that is something what we are now developing with that one program. Last major topic is supply chain. I was focusing in the last couple of years very much on procurement and production, but the supply chain in the classical sense is a feel also GEA needs to step up and will be stepping up. We are working on a comprehensive supply chain operating model, which is bringing also the planning, the sales and operations planning closer to our execution. We will be focusing on an improved supply chain distribution network, warehousing, logistics, transportation. We will create a lot of measures around our performance in on time delivery, in throughput, in lead times, And we will need to digitalize our supply chain. Track and trace, one very important topic. And with that, we are having a target, and we are pretty Confident to achieve that to reduce our customer lead time by 30%. That's the customer centricity element I was referring to earlier, and we will also take out inventories from the supply chain and we'll improve our inventory rotation days by 10. Putting everything together, that is our commitment from operational excellence. And Just remember, the operational excellence is only 10% of global team, 5%. The majority of the people are in the divisions, in the regions, and collaboratively, We are striving for those targets with shared targets, €150,000,000, €60,000,000 coming from the production, €90,000,000 from the procurement, 15 days in payment, 10 inventory days, customer delivery lead times, on time delivery and Our sustainability targets to reduce 60% of our Scope 1 and 2 emissions by 2,030. With that, I would like to conclude my presentation and enjoy your coffee break. I hope you enjoyed what you have heard and seen today so far. Nevertheless, before and I can imagine at the same time that nevertheless, you might have to the other question. But before we come to your question, there's one very important topic left, and that is our Financial Ambition 2026. And who Would be better qualified to do this than our CFO, Marcus Ketter. So and I don't I have to really introduce to you because I think, first of all, your CV is self explaining and They know you already anyway. Markus? Oliver, thank you for the introduction. Glad to be back. It's 2 years since the last Global Markets Day. I've since then actually only been in December in 2019 here in London. So it's good to be back here. Good to see you. And it's the last presentation. It's a promise. Before Q and A then comes and you can ask your question. I'm, so to speak, the cliffhanger here, so I'm going to show you how the financials all tie together now from here on. But before I do this, I actually everyone, we have this here and also for the outside audience, this bar here, it's plant based protein. So I really want to emphasize this. The company is going to new frontiers. You need to see there's plant based, There's cell based proteins and there are insect based proteins. And why is that so important? I emphasize this because I got the question during lunchtime and also at dinner, Isn't this just a CapEx substitution? And it's a good question. However, it's not because it's very simple. When you look at the world, and we heard Cheve and myself actually heard an ambassador speaking from the U. S. Who actually had this agenda, feeding the world. And her point was there is enough food in the world, but not enough protein in the world. So with animal based proteins, We will not be able to feed the world. So it's not a substitution, actually, when you see the whole demand for food, quite the opposite. It will be needed to Feed the World, and it's starting right now, actually. It's still very expensive. It's still lifestyle. And how do you like it, actually? So so? Always good. It's good. Thumb is up. Okay, very good, very good. And it's really a question of feeding the world. And now it's lifestyle. Now it's in the industrial countries. It's in the in the main capital of emerging countries, where people can afford this, but it will come from lifestyle into feeding the world. And GEA It's really, as we emphasized earlier here, is really the enabler for the new food industry. And I think I really want to bring this point over. I think it's very important to understand with that, actually, we are going to new franches. Will it be €400,000,000? Probably it will be more in the year 'twenty six, but right now, we are starting with that. And that's why we said it's at least €400,000,000 in order intake in the year 'twenty six. But think of it, how to feed the world and the new food industry, our customers, will do that. And they will do this on a cost basis, Which will be also then available for people in countries who are not that wealthy. So with that, actually, I'm going to start the Financial Ambition 26, as I said, the cliffhanger here, but it's not going to be a too long presentation here. Let's start with the first slide. So you can see here, we said turnaround accomplished, and I think we can really, really say that. We the EBITDA actually, we showed numbers before 2018 here, and it We all went downhill to the year 2019. In 2019, we had the lowest EBITDA margin of 9.8%. And then from there on, actually, we quickly were able to increase it again, 11.5%. And now this year, it's 12.4% to 13% guidance. And of course, we have the year 'twenty two where it's even going to be higher. How did this happen? Well, we increased financial transparency. We reduced the headcount. We had better project execution, especially as Ilya pointed out. So it's very important that LPT is back on track here, back in good margin. And also procurement savings, as Johannes put out, very important for us. They were this is also a new area for us going into procurement, getting savings, getting a new procurement organization. So that all worked out so far very well and there's more ahead as he showed. We had also elevated capital efficiency. You see the ROCE. We were barely making our weighted average cost of capital with 10.6% here. And then the year 2020 went up to 2017%. And now this year, we're going to be between 23% 26% because we were able to reduce the net working capital considerably, and we are now flatlining at around 8% net working capital over sales. So that, of course, was a boost for our return on capital employed. As you can see, as just mentioned here, net working capital, but it's the target range now We had in 2019, which was 12% to 14%, and the target range then actually was level down to 8% to 10% here, and we think also going forward that, that is really doable. Coming to the next slide, we made promises in the Capital Markets Day 2019. You can see this year, our programs. It's operating efficiency increase that was the Headcount 100 program where we said we're going to cut 800 FTE positions in the company. That's executed. We have now, as Stephan said, around 1400 plus people less in the company. Some positions will be replaced. Well, in all bigger companies, that's always coming and going. So right now, we are saving basically 1400 employee FTEs here. Footprint optimization, we said in 2019, that's going to be a long term. We started already with that, but that's why you only see €10,000,000 here because it's going to the year 'twenty two. So €5,000,000 achieved, €5,000,000 to go. Sales efficiency program, we said it's €40,000,000 We achieved already €50,000,000 here. And as asked pointed out, we are well on track with our sales efficiency program. But of course, it's something which is more backlog because we needed to make a lot of changes there. I'm coming now on purpose. Last one, procurement consolidation. We achieved €35,000,000 there, €50,000,000 to go. Quite openly, we will not achieve that. As everyone knows, Prices, material prices, shortages, which also drive prices, will not achieve that. We are working hard, Johannes, with the organization is working diligently on this, but we are able to somehow mitigate that. But next year, there will be a net increase on our material expenses. We will mitigate it on the procurement side. And whatever cannot be mitigated, we will pass on price increases to our customers. And luckily, we are in you, positioned due to technology and due to the way the market is, that we will be able to pass this on. But the price increases are really hitting us as everyone else in the industry. Now this made us possible to achieve and even overachieve the EBITDA margins already in this year. I think that's very important to understand. We're already achieving our margins or overachieving it here in 3 divisions already in this year. And this chart here, you can see, is really the original chart from the Capital Markets presentation here in London from September 2019. It's a copy paste. So really to say, what did we promise, what did we achieve? And the 3 divisions Who are already overachieving the promised margin at that time is Liquid and Power Technologies. It's Food, Healthcare and Separation and Flow Technology. You can see at Farm and Refrigeration Technologies, we are at the upper end, close to the upper end of the range we said at that time. So we are well on our way also for next year. With that, I'm coming to the next level. So what's the next level? Stephan showed it, so I'll make it short. It's accelerating growth, 4% to 6% per annum till the year 'twenty 6. It's reaching new margin levels of greater than 15%. And thirdly, it is also a capital efficiency reaching an ROCE of beyond 30% there. How do we want to do this? And now I put in a bridge, all the presentations you heard, it's going to tie it up in these two bridges now here. So first, we start with 'twenty one estimate, and you can see here a €5,600,000,000 in revenue. That's a little bit lower than everyone is expecting. There's And there's a reason for it why we put it in this bridge here because this is the revenue going concern. So we eliminated The revenue of the companies we already sold, which were there still in partly in 2021 and then also a company which will be selling Beginning of next year, there will be the closing as it looks right now. So we eliminated all the companies who are not going concern. So that's why we are starting here with 4.6 €5,000,000,000 You have seen the presentation sales excellence of us here. New Food Innovations, also very important. This will drive the new machine business, and we see CAGR there of 4% to 5%. Service Business, as Armin, very extrovert, actually did the presentation. I hope actually that everyone really saw the potential here, which Anne was bringing over. We see that the growth can be even higher, 5% to 6 present here. It's increasing share of wallet. It's increasing penetration of the installed base. And of course, it's launching new services as we have seen in his presentation. So new machine, 4 to 5, a little bit slower, service a little bit faster growth is possible, and we reached then around €6,000,000,000 in the year 'twenty six. Now tying it up for the EBITDA margin. This year, 12.4% to 13% EBITDA With sales excellence, 1.5%, and it's volume and it's margin driven there. Service excellence, we even see a better potential. It's more margin actually. So the more actually revenue we have there, The more it adds actually to our EBITDA margin, so we see 2.0 percentage points as possible going there. Now we split up operational excellence, as Johannes showed us. 1 is the production savings, €60,000,000 that's straightforward. You have seen the factory of the future. We already are down from 60 factories to 50 factories with all the changes his team is doing. So I think that's pretty straightforward. What I need to explain here a bit is probably the procurement saving and sales price increases €90,000,000 When we looked at our cost base before the price increases on the material side started, we said €90,000,000 savings just There are some of the price increases when you say take a look product and volume in 'twenty one, product and volume in 'twenty six. Do we are really going to be €90,000,000 lower in material Fences answer to that is no, even though with everything we are doing, because the price increases will overshoot. However, we say we still can get €90,000,000 out of it because we are getting some savings. And as I said early on, the rest will be passed on via sales price increases. So in total, It ends up to €90,000,000 there, even though it's not everything on the procurement side, but it adds up with the price increases due to the fact that we have material price increases there. So €90,000,000 there. And then, of course, We have additional expenses. So we put in a 2.0 percent OpEx inflation, so everything below the gross profit. We said it's going to get more costly, obviously. Is it going to be 2% or it's going to be high inflation environment? We don't know. We assumption is 2 But if it's a high inflation environment, once again, we say that we can then actually, because it's an inflationary environment, Increase our sales prices then more to counter effect any OpEx inflation which goes beyond 2.0%. We, of course, have shared the programs Digitalization Innovation. Nadim presented sustainability here. That is all, of course, also a cost, but it's also supporting. So what we said, we're going to single it out As Expense, we're not going to allocate it here to the Excellence Program. We could have done that. But quite frankly, how to allocate this? We are saying we need to do this. We need to do sustainability, innovation, digitalization and investment in ERP, but we single it out as cost because it's all supporting All the 3 levers here we see in the excellence programs there. So that's why we have it here as a cost, and we say it's going to be around 1.5 percentage points as a deduction to it. So that's how we're going to come up with 15% greater than 15% EBITDA margin in the year 2026. That's a question we are always getting, of course, because of our KPIs, EBITDA before restructuring. And let's take a look. Also, what did we promise? We promised a range here of €210,000,000 to €250,000,000 on the Capital Markets Day in 2019 there. We said at that time that excludes any write offs we have due to our portfolio pruning and related restructuring expenses. So just the programs we are doing. We are right on track actually. We didn't do more. It's and then it's plus 60 €1,000,000 of portfolio pruning. That's mainly noncash there. So that's going to end this program in the year next year, and we are finished with that program. Now you can see this here. We have another restructuring, but it's mainly manufacturing footprint related. So we're going to footprint related. So we're going to in the next years, we're going to restructure the manufacturing footprint to be more competitive, to be more customer centric in the supply chain there. But what is the promise here from the executive board? Restructuring ends in 'twenty six. So to make it quite clear, there will not be another 3rd program Restructuring. That will end. So these two programs and we have the company completely restructured. I think that's important to understand. Now let's take a look at the next level EBITDA margin targets. You have seen here once again the Copy paste template we had from our Capital Markets Day in 2019. We have put in the sales CAGR, you've seen that for the group and the EBITDA margin also. This year is the split up for the divisions. And let me give you a little bit of a flavor here why we think that is doable. Farm Technology, 5.5%, 6.5% to the growth rate. The farming business is getting more and more automated. There are more and more bigger farms out there. And with bigger farms, they have more automation. We have the automated milking robot, which is a great success. And just give you a glimpse, we haven't announced that yet, But we're going to also do something else automated for the farms, which we think will be a great product there. So we think with that, we can outperform the growth rate of the other divisions with 5.5%, 6.5%. And also, we are very well on track to reach higher margin levels there with an EBITDA margin goal now in the year 'twenty six for 14% to 16%. Refrigeration technology also had growth rate. Why is that? It's environmental, it's sustainability, it's heat pumps. We are providing it to RT Heat Pumps. And we think especially with that business, we are able to grow the company or the group here, 5.5% to 6.5%. And we also see a good potential to reach 12% to 14% EBITDA margin. Liquid and Powder Technology. So with earlier, we said you need to have at least 10%, and earlier committed here, it's going to be at least 10%, Body sees potential going up to 12%. That's great. Growth will mainly come out of the new food business. Of course, we do not want to lose any market share in the let's call it the classic process technology business there. But the growth should really come from new food in LPT, We think 4% to 5%. And with an upside for new food, as I said, let's see how it's developed in the coming years. If it moves faster from a lifestyle product into feeding the world product, then there could be great potential in addition to what we are showing here. 10% to 12%, I think it's a very good EBITDA margin considering that LPT has since 2 years now, one and a half years since we really and earlier really this team revamped it, has a negative net working capital constantly. And in most quarters, actually, we are doing business with a negative capital employed there. So It's a great business. It's a great lever for the whole group to drive our capital efficiency and drive ROCE there. Food Healthcare Technologies is a classic machinery equipment business. It's right now getting better. It's performing. But as you can see, I mean, it's obvious, it's not anywhere else where a customer their competitors are with their machinery equipment because it's really food and health care. So we are still in the process of performance managing it. It has become much better, But still there's way to go. So when you look here at the goal of 13% to 15%, we have to say it's getting there And it's really doable when you look at the industry, which EBITDA margin you have there. That's a real doable goal, and we need to get there, and the business is good for that. Growth rate, 4% to 5% because it's small, the regular growth of a food and beverage Business and Healthcare there. Separation Flow Technology is probably here with Klaus and his team, the market leader when it comes to margin. There, I mean, everyone say we have a gear margin. And when you look at SFT, well, we're above 20 already there. And he has done a great job so far this year. He has further improved margins, and that's fantastic. And he says we're going to see further potential by simply growing volume and getting the OpEx leverage here down to EBITDA. So 24% to 26% with a growing business as FFT is doable. At the 4% to 5%, He's saying he definitely can do this, and let's see if it's going to be more. But we stick here with the 4% to 5% and with 24% to 26% in the year of 'twenty six, all achievable. So with that, I'm going to come to the questions. Is the company generating with all these programs free cash flow? And the answer you can see here is We expect to generate €2,000,000,000 in the years 'twenty 23 to 'twenty 6. And what is the assumption here? It's a stable net working capital ratio of our sales of 8% to 10%. And I have to say, we try to have it at 8% so far. As I said, it's flatlining. But let's see, there will be, of course, fluctuations between the quarters there. So that's the range. And I think with that range, It's absolutely doable to reach that goal. It's a disciplined capital expenditure, but you have seen the programs. We are investing in our company. So it's around €200,000,000,000 in CapEx we put in the model here per year. And with that, it brings us to around €2,000,000,000 with the strong operational performance I showed you before. And you can see here free cash flow was huge in 'twenty, but that was, of course, due to the fact that we were able to reduce net working capital by way over €300,000,000 last year. The strong free cash flow generation also allows for attractive shareholder returns. So we started already, as you know, a share buyback program with treasury shares. This year, we expect to have €130,000,000 in spend. For that. We already have €40,000,000 spent in treasury shares now. And therefore, next year, it's going to be €100 €70,000,000 I think it's very supportive for the stock. Also, we can tell you and promise you attractive dividend payouts. Shareholders will benefit from sustainable profit increases due to dividend increases, quite frankly. And still, we're going to have a net an increasing net cash position till the year 'twenty six. The free cash flow also allows for external growth. We are, and to say this upfront, in no hurry to do this. And we think that the GEA story also works without M and A. But still, we are saying If there's an interesting company, if there's an opportunity, we would be willing to look at it. And if It would work out also to acquire it. Perhaps to give you also some more flavor here, we did a really Systematic search of the regions. We looked at the value chains of the divisions, put in our products, Put in competitor products and said, where are we strong? Where are we not strong? And this is the way actually we did the M and A department, did the whole research. We had very interesting companies in our space. Unfortunately, they were all not for sale. It's usually family business who say, no, it's going very well. Why should I sell? We are making enough money. So usually, they don't sell. So from this systematic approach, We are still following up networking. And if someone wants to sell, they're certainly going to give us a call. But now we are actually moving now to A bit more opportunistic approach in the sense we did our systematic homework. And the opportunistic approach is we are now getting calls, as you know, also from colleagues in your banks, and say, are you interested in this or that company? And we are taking a look at that. But as I said, we are in no hurry to do this, And we have very strong strategic M and A guardrails and financial imperatives defined to really, if we do a transaction, that this transaction We'll all create value to the company. You can see this here on the left side. It's especially about filling white spots technology wise, product wise, region wise. And of course, and Nadine really emphasized it, sustainable business model must be enabled with whatever we are buying in addition. Financial imperatives, I think, are straightforward. It's we need to be the best owner or the best operator of the asset. It's about leveraging synergies, and it's about value accretion at least after a certain period of time, like 12 to 18 months, where we have actually gained traction on the synergies there. The question always is, at least I get this and I got this also in the last Capital Markets Day, is a question, so what is your leverage actually? And let me first start with the statement we have a very strong commitment to our investment grade rating. Secondly, there are 2 ways to look at our leverage. 1 is the rating agency leverage. We have an example here of Moody's, who's taking, of course, on our financial debt plus the lease payment obligations we have plus the pensions who is not deducting any cash. So looking at that, we are now down this year to like 2.7. There's a bit below what we need to have or what the maximum is for our investment grade rating. So from that perspective, when the rating agencies look at us, we are leveraged. When you look at it from a financial net leverage, so just say what is the financial debt, you exclude pension and you exclude lease Liabilities and you then deduct cash. Yes, we look negative. So it depends on which view one has take. But of course, the rating view is very important because, as I said, it's a strong commitment to investment grade. Nevertheless, there is room for further growth of the company you How did we do this? And I tell you one success factor was really to make it operational for the whole group, for everyone in the company. So we used a KPI, which is simple, everyone could relate to. It's networking capital over sales. And this is actually what we worked with in the last 2 years. However, now it's time to do the next step and also say for capital markets for investors, what's the cash conversion? So how much cash actually do you get out of your EBITDA? And therefore, we are now introducing also cash conversion ratio. We define it as free cash flow because we are using EBITDA As a KPI for our profitability, we say it's free cash flow over EBITDA. So this is Going to be forward going also reporting KPI for us, and we'll show actually how we are able to convert EBITDA into cash. And you can see here the very high cash conversion ratio, especially last year. It peaked at 127, but the reason is down here. You can see this here. We start with a net working capital over sales ratio of 15.5%, and it went down to 8%. So the cash conversion ratio when you Put free cash flow in relation to EBITDA obviously was not only operationally coming from the business, but also due to the fact that we were able reduce net working capital so considerably. However, going forward and assuming a stable net working capital of a sales ratio of 8% to 10% there. We say that our cash conversion ratio is going to be between 55% 65% of EBITDA to convert it into a free cash flow. Going away for one slide, going away from financials, I had a very extensive Presentation 2 years ago on ERP, Global SAP. We cut it short this time. Just wanted to say the message, we are on track. We also did here what we promised. We started with a new team. We started with a new approach, and we're going to have the first template implemented now beginning of November. And therefore therefore, we're going to roll it out further. It will still take 5 years because we have 67 ERP systems. And if you do the math, it's 5 years. It's 60 months. So we have to implement 1.1 ERP systems per month. So this actually puts a little bit in perspective why it takes 5 years to really come up with 1 gear global SAP here. But as I said, we are on track. This is a glimpse or 30 feet 30,000 feet view of the time plan we are having. With that, I'm coming to my last slide. And I want to show you here, we Created already significant shareholder value since we were here in London. In September 26, 2019, The share price was at 25.89. Since then, we have total shareholder return, including paying off dividends of 62%, and we created €2,500,000,000 in shareholder value. Since then, We outperformed DUCs 50. We outperformed the MDUCS. We outperformed the TMI Engineering stocks. We paid constantly dividend. And I have to admit, even though for the last 4 years, it stayed Flat at €0.85 what we paid every year dividend. And you can see here, there's not 1 year actually where we decreased the dividend, even though, as you know, In some years, the company was going through rougher times. But as I said, the promise stands. Shareholders will benefit from sustainable dividend increases in the future from here on. To support this share price development and creating shareholder value, We have now twice implemented a share buyback program. 1 was in 'seventeen, 'eighteen, and the other one is now in 'twenty one and 'twenty two. As I said, this year, dollars 130,000,000 next year, dollars 170,000,000 in share buybacks. And with that and all the measures, We are really geared towards creating more shareholder value also till 'twenty six. With that, I finish my presentation. Thanks for listening. Presentation time is over, and now it's Q and A and last remarks from Stephan afterwards. Thank you very much. To mention your name and company. And then I would say, let's go to the Q and A. And maybe you can limit it to 2 questions at a time. I saw here the first nice gentlemen. So Rebecca, if you would be so nice to give the microphone to Klas. Klas Hedziti, the nice gentlemen. Thank you for that, Oliver. So first question is on the targets looking at the margin in ROCE. So with the growth and the savings you have outlined, I can get to a well, higher margin is obviously And I can get to a well, higher margin is obviously subjective because you say about 15%. But when I look at ROCE, If I keep the net working capital turns as per your guidance, 8% to 10%, and I allow for your CapEx guidance, If I increase the margin like you suggest and take into account the sales growth, I can see much higher ROE than 30%. I can see 40% ROE. So the first Question, Markus. That's obviously best in class in capital goods, and you can get there without much prepayment. So Looks pretty conservative. It seems like you're keeping the powder dry. So if I start there, why not 40, why 30 on the ROCE? We thought that greater 30% is a really good go there. And if everything Goes right. You might be right. But hey, we all know life. We never know if everything goes right till 'twenty six. But If we see that everything goes right till 'twenty six, we are happy actually to upgrade that number. Okay, sounds good. My second one is on the moving parts in the bridge. And I understand that roughly onethree of the growth, speaking to Oliver in the morning, is price and mix. And better net pricing, accelerated service growth should contribute to that. But within That OpEx inflation, where I think wages sit, have you assumed that we will see spillover effects from bottlenecks in supply Require to hire more service technicians probably as you grow the service wallet. So what kind of wages sit in the bridge there. Thank you. Yes. You're right. That could very well be the case that we're going to see higher wage inflation. However, we did just an assumption of to present. And as I said in the presentation, we are aware of that. That might be not enough if we go into a high inflation environment. But then at the same time, we would be increasing sales prices there. And we have not put this into account either. So both is missing basically, a higher inflation on the material and wage front and also higher sales prices, which go beyond the regular price increases. But that would be a pass through. As I said, luckily, we are in a position actually in our industry to do pass through cost increases to the sales process. Okay. Does that answer your question? 2 seconds. 2 seconds. 2 seconds. It's question 2.1. So it's close to 2.1. And the reason I come back because GEA in the past wasn't successful in passing on the wage increases. You were good with raw materials, but wages typically was a bit of a challenge. Now we have the digital initiative. We have new food. Obviously, cash flow leads profit, and you see net working capital collection is improving a lot. So I guess You're more confident as well in net pricing, right, Stefan, right? And Markus, I'm looking at you, Markus, but yes. Yes, definitely. I mean, that's also many things Like you're mentioning us to do something with being consequent and with managing also sales organization and also As presented, that we already started with a different incentive scheme and that our sales guys or the Vast majority of the sales guys already is incentivized by margins also, and therefore, we can much better steer it than in the past. Okay. So our next question is Camille Frome. Can you just quickly introduce yourself? So Not everybody is already aware. Thank you, Rebecca. This is Lucy Carlier from Morgan Stanley. So two questions. I'll try to limit myself to that. The first one is you developed quite a lot on separation flow and also liquid and power technology. But when we look at the kind of the breakdown of the targets, they are quite ambitious target around farm technology And also Refrigeration, which you haven't touched upon so much today. So can you maybe help us understand why you see these businesses Actually growing more than the rest of Gaia. And we've seen already in the form quite a lot of margin expansion. How do you manage to expand above kind of this level already? Yes. So first of all, I mean, the reason why we have Only LPT and SFT here is simply because of the fact that we didn't want to overload. I mean, it was already a lot of Stuff I think today what we presented and SFD and LPT are our largest divisions and that is that was the reason why we thought we just This Capital Market Day with SFT and LPT. Next time, we will also come with our colleagues from RT, FHT and Feet. And to be more specific on the growth, I mean, if you look at our growth we achieved during the last 2 years in Farm Technology, you can see that this is also fantastic growth already now. Automatic milking is A really very clear trend. So there are very important trends in the farming industry. First of all, there is a consolidation of farms going on. That means that farms are getting larger and larger. That is a driver to automatic milking. And then all the farmers have the same problem. They have difficulties in finding labor, enough labor. So They also all try to automate, and that will really drive the growth, and the automatic milking We'll grow faster than the market, the dairy market. That's the reason for that. And on top what Markus mentioned, we will also Start quite soon with a completely new system for automatic feeding, which is also a sustainable product because today, Normally, the farmer is driving around the farm with the old tractor, yes, pulling out a lot of diesel, gasoline to the air. And we have, developed a completely sustainable battery driven automatic feeding system. And there are many, many ideas We have and this will accelerate the growth in farm technology. For RT, it's mainly based on the heat pumps. So RT is, of course, a product or a division, which needs a lot of electric power, to drive the compressions. And the heat pumps are very energy efficient systems, and we expect that There will be a lot of changes going on in the refrigeration industry that Companies are investing in that area to really also become more sustainable. And this is the underlying reason for the growth in these two divisions. Just maybe for the margin expansion in those, is that really Yes, the operating leverage from that additional growth or the other drivers? Yes, absolutely. And I mean also In Farm Technology, the management introduced already a lot of good actions to optimize the cost And it's also, of course, about growth because when we grow, then we have over absorption of the cost structure, and that all kicks in. Fair enough. Thank you. My second question was around the software. It was not something that you had discussed much in the past. You. You spoke about your proprietary software, software as a service. So just kind of to clarify maybe your exposure, how much of your revenues today are derived from software and how much already SaaS? So that would be my first question. And when you think about Expanding this business, how much of the R and D increased budget that you are planning is effectively going into that field? And how do you target, I would say, the go to market for your software offering? Because just out of curiosity, whether this is similar than your regular go to market for the equipment and service. I mean, the Dairy Net, which Frederic presented to you is a very new system. We used to have another one. But the Dairy Net is a really fantastic system, which is really a comprehensive software to our system for the farmer. And we just started. This is the first really very strong and clear example of software as a service. There will this will not be sold. There will be only one release. Every customers get upgraded at the same time. We are Selling it at the moment for quite low price because we want to cover the market. So it's at the moment here, not such a significant revenue, but we have to win this market. We have to be present because there are also smaller software about being present in that market, yes. That is to this topic. And the second question was about How much do we spend in R and D, Umino? Yes. I was just wondering in the 45% increase in R and D spend you're planning, How much of that is targeted to increase the software portfolio or perhaps also kind of improving the go to market For your software. Yes. I mean, it is the vast majority of that Investo Project will not go into software. It's simply because of the broad range we have. But as I also mentioned and showed, we have already 150 people working full time in R and D of Digital Solutions. And this is something we will increase definitely, But the big majority of the R and D investments will go into our traditional products. Okay. So next question, who is first? Okay. So Arsalan, can you quickly introduce yourself? Arsalan Obaidula, Deutsche Bank. First question is on the 2022 guidance. And just looking at where the margin where there's some of the key divisions, if you look at, I guess, The majority, if you look at LPT and SFT, they're significantly above for 2022 in terms of expectation of margin. I'm just wondering the reason for not looking at the group level for sort of increasing your margin corridor if there's Sort of other potential headwinds that factor into that? Or is that something that potentially in the next quarter or 2, that's something to be considered? Well, there is, of course, some headwinds we are seeing right now due to material price increases and to due to shortages in the supply chain. But we already did an increase for next year, right, from 11.5% to basically 12%, 12.5%, 13.5%. So It's still going to be a big step for us. I mean, it's easier to increase the EBITDA margin when it was lower, and now it's getting a little bit tougher, of course, there. And still, We are saying this year, it's 12.4% to 13%. So I guess when we have a range for next year, It's not it cannot be below 13.5%, right, there. So but we leave the margin in there. But with that, for if we come out in 2021, as we just said. So it's going to be at the upper end, at least, there for next year. Brilliant. And then the next question is more broadly whether, I guess, if you're seeing sort of trends, especially more you could say in the sort of developed world towards more actually in terms of dietary patterns, you've obviously talked about new food, but actually maybe towards localization and less sort of packaged or processed foods. Is that A significant trend you think you're seeing evidence of that as almost a countertrend and an opportunity to maybe see some compression in some of your markets. Was that not significant? Yes. I mean, first of all, the vast majority of our business is in processing of food and not in packaging. And, but I also would not be afraid of the packaging business because it has to do something with the sustainability of the product. So it's simply not possible to produce to deliver it or keep it stable for some days or weeks if you don't Use the right packaging material. That's also the reason why we will also see in the medium and long term plastic packaging in the in the food industry because this keeps the food safe and fresh. So our next question comes from Sebastian. Can you also quickly introduce yourself? Yes. Sebastian Kuehne from RBC. So I have questions on the new food business. So it was a good presentation, but when I do the calculation, you. You made €120,000,000 orders this year or that's your plan, of which, I don't know, €70,000,000 to €90,000,000 is the Novozymes order. And that leaves maybe €30,000,000 for other new food orders. It still seems a bit unbalanced. And I was wondering, given that you're so confident on the growth. What do you see in the pipeline? Is it the big food manufacturers? Is it Danone, Nestle that want to Invest Big or is it small startups that come at a large number and order €20,000,000 worth of projects. So would like to understand a bit more what you see in the market. And then secondly, on pricing, again, for the new food equipment. Do you price these new you, very fancy equipment units, at a level where you can achieve your margin targets? Or do you price it in a way that try to get into this market in the 1st place and be the dominant player there. If I could answer the question on the pipeline. Currently, first of all, it's very dynamic at the moment in the new food space. We are seeing A huge number of new projects on a monthly basis entering our pipeline, but the value of those projects, I think as you've alluded to, actually vary greatly. We have projects which are of No single digit million projects into the mid to high double digit millions. The customer landscape is just as varied. We have, of course, some of the customers that The clients that you saw in the presentation are already in discussions in that space, but we see many, let's say, smaller start up type businesses that are looking at developing their Technologies which are in that smaller scale. The Novozymes project, I wouldn't say is unique, But I don't but the pipeline isn't full of that size of project. It's a lot more midsize types of projects in there. In the range, I would say the bulk in the range of €15,000,000 to €30,000,000 perhaps up to €50,000,000 Yes. Then second question on the how do you price it? Do you price higher because it's a very dynamic market? Or do you price to get into this market and be the biggest player there? Right. Well, first of all, our pricing is in this new market is based upon the value that the customer gets out of us. And I hope I was able to demonstrate to you through the presentation the value that we can deliver through the technologies which belong in our group plus our ability to deliver. What I can say is that the projects that we are currently executing are being executed at, let's say, higher than average margins that we see in our some of our traditional businesses. So it's certainly not a market that we're buying into. Okay. Next question comes from Max. Also, Max, can you please introduce yourself? It's Max Yates from Credit Suisse. Could I just ask about the phasing of the cost savings over the period. Do you expect these to be so when we look at the procurement and the factory efficiencies, do you expect these to be fairly linear? Or is there any kind of back end loading to these? Johannes? Well, in the factory, we started a year ago already and with creating the factory. So they will kick in, in 2022 and 2023 already. So it's a kind of a linear, not a back end loaded situation there because we have many, many also small projects now kicking in. It's not the one big Seeing what we are doing. On the procurement, we also have tried to somewhat balance that. There are some elements which require more time like design to cost activities. We're really looking into changing The gear and taking out engineering or with engineering support, taking out the cost, that takes a little longer. And that is basically compensated with still to be done negotiation topics. So the negotiation part, we started early when I started, and that will continue also in 2022 and slowly being replaced by those longer term measures. And as a net net effect, it's a kind of a balance. Okay. And just the follow-up was on heat pumps. So you talked about a lot for Refrigeration. Can you just this is Heat pumps in buildings or this is heat pumps for sort of commercial customers? Yes. So we are the heat pumps are for industrial purposes, but we also delivered heat pumps, for instance, in Malmo, where we are helping the community to use our heat pumps for the heating of the buildings, yes. And how big is this of your business right now? That's a small part, a small part of what we are doing. Okay. If I could just ask one very final quick follow-up. Just on the temporary cost savings. So You had sort of in COVID less travel and reduction of cost. Are we now at kind of more normal cost levels? Or do you think you. When you look into sort of 2022, it's probably for Markus, how you think about the travel cost budget and kind of what kind of headwind that might So to speak, Hedman, there will be some more costs associated with that. But I can tell you that we said that we're going to cut The travel budget to 70% of pre pandemic budget actual level. So that is actually 70%, 7 0 percent of the expenses we had in the year 2019, and 30% is supposed to be savings. We are well on track this year, but of course, next year counts because probably everywhere travel will increase again. But So we have to see that we're going to keep the budget. Once again, we expect to see a 30% savings still also next year in comparison to pre pandemic actual costs. All right. Are there any other Lars, 2.2 and then Sebastian, 2.2. All right. Thank you. Yes, I have 2 follow ups. First on current trading, We talked about this during the dinner yesterday. This is more an open forum. You said, Marcus, that you feel very confident on price cost. The freight costs have come down, etcetera. How this is a broader thing in industrious at the moment, logistics costs are going through the roof. Could you first comment on that? And then Also in terms of the development of large orders, the pipeline is good. Underlying was very good in the Q2. Are we seeing large orders in the 3rd? Maybe I'll take that. I mean, Johannes had some good insights in the logistic costs. I think the team around Johannes Optimized many, many things. And despite the prices are picking up in Logistics, we and GEA could be We're able to decrease our costs, yes. So that's a good thing of all the inefficiencies we still found and find in GEA that we can work on that. And concerning the pipeline, we are very optimistic also So in line what we promised you in the last analyst call. So there is nothing which worries us that this Good stuff. That's good. My second one is on just a general reflection on FHT and the margin. And So when you go through each division compared to what I assumed, FHT's margin ambition to me looks quite punchy considering we have a lot of old M and A in there, Cost structure, you have the old food solutions business that was struggling in the past. So, Stefan, can you comment on, Yes. How can we improve the margin here? And yes, is this how conservative or bullish are you there? I mean, it's right. FHT is a kind of conglomerate, yes. And of course, we also see a necessity and also opportunity to increase margin significantly here. It's When you look at the different business units, we have some fantastic business units with very good profitability, and we have some others who need to improve, but this is what we are working on. And there is also a clear focus from the Executive Board on that division, and we will walk our way. Okay. So Sebastian, your turn. Yes, a question on China. Now with China and Australia, conflict boiling up a little bit. Do you see an incremental drive of China that they try to So basically to become more independent of New Zealand and Australia. Is that the trend that you've seen in the past? And is that intensifying? The other question would be on M and A. Do you think the meat market is still interesting? Or do you think there's a kind of a terminally declining industry in future. And then maybe in new plastics, you mentioned it briefly in the presentation, But that would be more like, so bioplastic would go into chemical industry. It's not really food related, but this is an interesting area for M and A. So the first question concerning the independency of China. Yes, There is a clear trend. I mean, shortly before COVID arrived, I visited the first Chinese customer are producing insulin. In the past or still today, China is importing the vast majority of the insulin from Western countries, but this is also what they started to do by themselves. We see a similar trend also with the milk powder after the scandals we had in China. Now a Certain trust is obviously coming back that the Chinese can prove that by themselves. So yes, I think this also will drive additional business. And M and A, I mean, M and A is a very complex topic we discussed already. I mean, it is it will be driven by opportunities. It is not So easy that we say exactly in that area, in that segment, we want to buy something and then we have a choice out of 5 or 10 companies we can buy. So it is it will be driven by opportunities. And of course, we will focus on companies with a good growth and which will fit into our value chains that we can also ideally expand our value chains. And this is what we are looking for, yes. Okay. Any questions left from the other? Lucy? Okay. I would suggest that we take the first questions then also from the web. All right. Thank you. Lucie again from Morgan Stanley. The first one, I wanted to connect a little bit more the sustainability aspect with the financials. I think we saw from the operation that there is some saving links to the sustainability objective that you have. But I was wondering, if we look at the bridge that you've presented. Where do we kind of find the link with sustainability? So Is it some of it investments on the R and D? Where do we find that in terms of sales? Because I appreciate the savings for a lot of your customer and the benefit for the planet, but where does that also benefit you guys? Marcos? It's Well, so Dave, this microphone doesn't work out. This one works here. It does. Good. And so it's a supportive function throughout our excellence programs there. We cannot allocate, say, okay, there's a 0.1 percentage here and 0.1 percentage there or even more in ServiceNow and Sales. So that's why I said we singled it out here and said it's part of the 1.5 Percentage points in cost, but it's a supportive function through all of our initiatives there, the other 6 levers. So that's the cost. And what about the benefits? The benefits are included in sales, service and operational excellence there. As I said, we were not able to allocate the cost, and it's needed actually to bring these kind of profit margins then going forward because customers really are asking for that. Sustainability is, I'd say, a key issue for our customers. Thank you. And just a quick question on sustainability. Are you able to give us an idea of how much you think your revenue will and be eligible for EU taxonomy at this stage. At this stage, Quite frankly, we are still working on that like everyone else. We're in contact with other companies. Everyone sees this as a challenge to really go through the classifications of the EU taxonomy and see which equipment are we selling, which equipment is mentioned in the EU taxonomy. So unfortunately, as of today, I cannot give you a number, but we are diligently working actually to get the number together to report for this year. Okay. And I had a question on the service side. Just maybe very practically, when you want to increase your share of wallet or you. Have a subscription contract or recurring contract. How do you go to an individual customer that has used the gear machine for Years years and maybe calls you from time to time just for a couple of spare parts. How do you convince that person that they actually need to Sign up a long term service with, let's say, an annual kind of payment for the company. What's practically the process? There are 2 very practical ones I can say today. First is that we offer certain digital solutions that you will get only also on existing equipment If you then with us have a contract, so this means you can have an online monitoring on your existing equipment, but only if you then, let us make a service contract. The second point is always, yes, it's about spare parts. That's the worst case, when we have only a spare parts relationship with the customer. But even if something goes wrong, it's always an opportunity with an existing customer to offer him that we can say, look, if you would have made with us a maintenance contract in that way, these things would have not happened and we could Handle it better than you can handle it on your own. So you always come in that direction. And what we have launched also in certain business units is then to help the customer that he can make a TCO comparison between if he does it on his own and if he would do it with us. So he can calculate what are the benefits for him doing it If he does it, for example, with his own facility management. So these are the typical things how you can get introduced in that one. The other one, what we do very clear is, At the moment, in certain areas, we have this already available that we really target certain customers with the installed base for repair and upgrades. So this is a point where we are strong. We did not talk about this today, but repairs is really extending the lifetime of the product. And this is where you can have a new relationship with a customer when you get in and say, hey, we can help you that you can extend the lifetime of the machine. It's sustainable And it's for you a cost advantage. I would like to take the first to question from the web. It's actually coming from one of our analysts, Sven Weier from UBS. I will read the question and then what so question by question and then would ask the team to answer. So the first question is, In your food business, which end markets are likely to grow above the 4% to 6% range and which ones below? Where does dairy fit in there, given that dairy processing sales still are still well below peak? Yes, I can take that. If I take LPT and the LPT business, if I eliminate New Food from the portfolio, we see an overall growth potential of 2.3% to 3.1 percent. Dairy, I think, as Claus Mentioned earlier is fairly robust, and we see growth rates in the region of 2%, 2.5% per annum in that industry. So the major growth area we see will come from new food, That's what will give us the overall CAGR in LPT of 4% to 5%. Then growth opportunities outside of the non food business. For us, in the last 12 months, we've seen a significant growth in the lithium processing sector, and particularly in China. It's been over 100% growth last year over previous years. We don't expect that level of growth to continue, but we do still expect growth rates above batteries. So that's from an LPT perspective. Claus? In regards to the non food business, I made you aware of these plastic alternatives, and there are other technologies in the field of so called industrial applications, where we have a strong footprint in, only to give you a flavor about our homogenizing business. Industrial Applications are good for 30% of the homogenizing business. So there are more growth opportunities, and we are not really sad about the trend, I would say, in Marine. So the decline exchanging the decline in Marine by quite profitable industrial applications. So we do see a gross CAGR of 4% to 6%, even if some of the industrial applications like marine We'll go down. Okay. Maybe I can take the next one. I mean, we didn't give a guidance For Q3, we said it might it will be also in a similar range like to Q2. It might come up to this direction. And then yes, it would be and it will be including Novozymes. Markus, are you taking the last one here? Yes. I'll take the 4 here. And then we come back Oliver, you come back to number 2, I think. The working capital target here, yes, that will be very helpful to keep us at the lower end of the range, 8% to 10%. And if we don't have any fluctuations, it will give us some upside actually or some downside in that case for our range, but we actually want to keep that at around 8%, and that is, here, to your honesty, very much supporting that with the payment days plus 15 inventory days minus 10. And number 2, Oliver? Yes. Actually, there was a second question on what growth opportunities do you see outside your non food business, I. E, the other 20% of sales, e. G, you just had an announcement on your role in New Marine Foods. But I think, Ilya, you also Mentioned that during your first answer. Yes. Okay. Then I would like to take another question maybe here from the room, if there is any in the meantime. If not, yes, then last one's again and then also we have Then one from the Met again and then Max, it's you. Thank you, Klas at Citi. So 1st on the service opportunity in liquid and powder. Obviously, you have a much lower share, 20% compared to 40% in separation of flow. But isn't the business structurally different in that you have in separation of flow, you have much more components rotating parts. So structurally, you will always have a higher service business than in a project business. I'm just trying to understand what the True upside potential is for LPT Alstorte. Yes, you are correct. Structurally, it is a different business model, and I don't ever Expect that we will achieve the service share levels that we see in SFT. But as I mentioned in my presentation, We currently have an installed base coverage of approximately 40%. And I also think on Armin's charts, we're probably one of the divisions that has some kind of estimation on what our I base coverage is. But nevertheless, we do know that there is a significant installed base out there that we haven't yet touched. And we also feel that we don't have the we haven't maximized our from the Ibase that we do service. So I think it's a mindset change in LPT. I mean, normally, This division is a project in business seeking those nice, meaty projects. What we've recognized, Service contributes significantly to our profitability, and that's why we see it as a real positive lever. What you might see with the service share moving forward, you won't see a huge change in the service share because what we see with our New equipment growth will come from new applications and particularly new food. And typically, with our projects, service activities will kick in sometime after new equipment is designed. For example, with the latest projects in advanced proteins, they won't come on stream until end of 2022 into 2023. So then we'll start to see 1 or 2 years after that more growth. But if we eliminate That part from the portfolio, we expect 2% to 3% growth in service share over the period. That's great. Okay. My second and final one is on Connected Fleet. And you're very helpful in talking through the wallet opportunity in service. But not sure if I saw like how number how much of the fleet is today in terms of a commercial contract and how that has changed over the last 5 years. That would be very interesting. I mean, a general answer would be, it really depends on the business units. We have business units where we are much, much, much further advanced, Farm Technology, for instance, also in the SFT business, but we also have other business unit where it is not used at all. So It's a mix. There is no one single number. Okay. Max, before I get back to you, I will take one question from the web, and then I will be back to you immediately. So there's another question from one of our analysts, it's Akash Gupta from JPMorgan. And First question is regarding the phasing of our organic growth and margin. Clearly, 2022 We'll see a good growth from recent order momentum, but post 2022, shall we expect slow progress as you first invest in the business before potential recap in benefits in 'twenty five to 'twenty six Or do you expect a steady progress towards targets 2026? Maybe I'll take that. I mean, predictions are Always difficult, especially if it is about the future, and nobody knows what will happen 'twenty five or 'twenty four. So therefore, we guided CAGR, and we are very That we can achieve this CAGR. I mean, look, at the moment, I would say the bottleneck is rather supply chain. And in China, the world is meanwhile talking about a lack of electric power supply. In U. K, there is missing fuel. So I would say, if maybe late and chips are missing, and so if hopefully in 1 year or so, all these Issues are solved again, then this might also cause additional, boom or acceleration of the growth. And therefore, I mean, we see no specific differences here, and we are very optimistic that we can achieve this KKR until 'twenty six. Then the second one is actually, can you talk about risk of cannibalization from New Food Growth as it could reduce demand for machines used in conventional food. I think as we also said or explained, there is very limited risk that this will be a cannibalization because It's about feeding the world. It's, up to now a very, very small proportion of food which is produced worldwide. And therefore, for the next 5 to 10 years, we don't expect any significant cannibalization by New Food. It will be our on top opportunity for us to grow. And the third question, I think we already answered was on price increases included in our organic sales Rosh Tagrid, I think that was your question, Klas, when we said, okay, we'll be round about onethree, 1% to 2% out of the 4% to 6% will be coming from price and mix. And with that, Max, back to you. Here we go. Thank you. Just my question was going back to the sales presentation where you showed how you looked at the sort of white spots and the gaps. So I mean, you mentioned sort of Asia and U. S. In that specific example. But when you go into, say, a market like Asia, Who do you typically come up against when you're trying to take share when you add another salesperson? Is it sort of local smaller competitors? Or are you coming up against TETRA Laval, SPX, Alpha Laval, who do you normally find there? And kind of how easy is it to take share against them? Maybe because the question is more focused on Asia, I'll take it. I mean, it always as I said, GEA is a very complex organization with a lot of different businesses. And in each of our 17 business units, we have a completely different set of competitors. And that also varies sometimes from region to region. But of course, the big ones are those we met very often, and we also the names you mentioned We are also the ones we meet in Asia and in North America, but it's always a different mix, let's say, depending also on the business unit we are talking about. And is it so when you put a new salesperson there, I mean, is it as simple as Kind of you go in, you think your product is more efficient. I mean, if I take, say, your biggest division, What do you really go into a customer and say, right, we've got a salesperson now here? Is it the efficiency of the product? Is it the service? What do you really compete on when you're coming up against them in these areas. I mean, at the end, you are always successful in sales if everything fits, if you have the right product, which If you understand the customer needs, if you offer a competitive price and if you have a salesperson who can really connect with the customer, it's always A mix of that. I mean, obviously and definitely, we have the right products. We are competitive. Otherwise, We would not show this order intake or this growth we see right now. And just finally, just a very quick clarification. So, Markus, you talked about when you went through the targets that you have for 2022 as in each of the cost savings buckets. Did you say that $15,000,000 that was still to come from procurement, you probably wouldn't get it because of cost inflation, but you would If cost inflation was high, you would offset it with price. I just wanted to clarify it. So overall, that kind of net impact could be broadly neutral next Yes. That's exactly what we are doing right now. We are increasing prices to compensate for the material price increases. So overall, sort of net neutral. So overall, yes, there are, of course, in other areas, and Johannes can take that, Some cost savings, but overall, we expect to see net cost savings next year. But Johannes, do you want to perhaps? Well, obviously, our pipeline is full of ideas also for next year, and we have a lot of topics, but we can Take down the prices and optimize the cost, but we will see, like we experienced this year, €29,000,000 28,000,000 as Net effect negative savings, we also will experience that next year, mainly driven by the allocation situation we are supposed to. And but net net, it will be basically not diluting our margin. Okay. Let's go back to the web. Once more, we have a question or two questions actually from Will Macaulay from Morgan Stanley. First question is, in terms of the lifetime cost of a product, What would be the rough split between the new equipment and the service? How does your market share split between the two areas. Yes. It's again practically impossible to say for GEA as a group because of the a variety of our businesses. I mean, I give you 2 extreme examples. For instance, if you are talking about a separator, the service costs during the lifetime are much higher than the New investment, if we are talking about a spray dryer, for instance, the new investment or a yogurt liner, so the new investment is much higher than the service over the lifetime, and therefore, it's difficult to say. Yes. And the second one is actually what are the implications for BU if they do not meet a set of targets. Then they win a meeting with me. Okay. I just see there was a third one coming up, if I see this right. What is your content or market share difference between traditional dairy and new alternate milk, milks such as almond or soya. Okay. So here, we need to differentiate in dairy between liquid and powder. And then, of course, we need to differentiate between drinking liquid and fermented or Yogurt type products. But broadly speaking, in dairy, I would suggest our Market share in this space is somewhere in the range of 15% to 20%, whereas in the alternative space. It's probably a little lower, around about 10% to 15%. Okay. So coming back to the audience here, are there any more questions? If not, then let's go back to the web. And there's a follow-up one from Akash Gupta from JPMorgan. It's actually on the service business, service presentation today, so it's excellent. So If you are not servicing your installed base, then who is doing that? Customers themselves or competitors? Can you also talk about service opportunities for non gear installed base? Yes. 1st of all, as you know, our products are often in niche markets and very customized to the needs of our customers. So what we see that most of the machines Normally, the service is organized then by the customer themselves, either they do it themselves, they have people, they do it or they will ask local people like local electricians or mechanics to take care of these machines if we don't do it. In certain markets and for certain products, For sure, you find also service organizations to do that. But often, this is also why customers ask us if we can qualify and certify their people to do the job for them on their machines. So this is where we have an opportunity to get in because it's not competition who's taking over our business in that way, but it's often the customer themselves. The second part It's about this. Yes, for sure, there is a lot of installed base out there. And I think that's the second step of growth when we have our own house in order also to look how we can utilize our competence we have for servicing certain technologies also to expand it to a broader installed base. But we decided clearly to have an organic growth for our own products first and to really have this in place and protect our customer base before going out. By the way, we do this already in certain things. We have already independent private label activities where we target with our companies, the installed base of competitors. But this is only in special areas, and we are now seeing how we can further accelerate this. Okay. Just to remind everyone, we have 10 minutes left in our Q and A session. Lucy. So coming back to the audience here in London. One second. Thank you. Claus was discussing earlier the connected installed base, but you presented earlier your Quotation system or kind of it seemed a little bit like almost an e platform or e commerce platform. I was just kind of wondering how are you rolling this out to the 1,000 and 1,000 and 1,000 customer that you have globally, and we know you have very fragmented customer base. So how do you roll that out? And then secondly, how do you think about the change of business model of digitalization? Because we hear from a lot of industrial companies which are active in service that actually what they're trying to do now is almost to reduce the labor force and Optimize the productivity of the labor force using more digital innovation. You want to increase a lot more your service exposure because maybe you So from a slightly lower level than others. So how do we think about increasing the service, but obviously still using this digital tool? So Or the change in business model versus the man in the van going around and fixing machines? Well, when you look at this, I think, for sure, digital tools are enablers, but we have and we are selling mechanical machines in many cases. So you need hands to make it happen. A digital tool can't do it. A digital tool is always then good when you talk about automation or if you talk even about optimization when you do it on data, so data patterns, algorithms. But for the local work and what we have seen is that we can really Also do the first thing, which is the base service. This means really touching the machine, exchanging spare parts and repairing this thing. So this is why We see this as a first step. The point what I see there is not that digital solutions replace the mechanical thing, what I think is Certain companies do and we also check on this is to certify third parties to be your service technician in the field and do that because that makes sometimes the life for us in that way easier and especially when we are in remote areas. So we are also on this path to do that. We have certification programs for service technicians established. At the moment, it's mainly used by our own customers who want to certify their facility management. Okay. Then We have here one question on the web from our Italian based analysts. So hello, Gianmarca, Buonacina from Equita. So the question is, good morning. In the past, you showed around about €40,000,000 SG and A headwinds per year, While from the EBITDA bridge, 21,000,000 to 26,000,000, it seems lower, 2% headwind or €100,000,000 in 5 years or €20,000,000 per year. Why? Thank you. Going forward, we're going to run a tighter control on the SG and A expenses, quite frankly, and that's the reason. So that's going to be the budget for everyone, and they need to keep it. Otherwise, as Stephan said, BU going to get a meeting with him. Thank you. So just thinking about the portfolio. So let's say that you would, at some point, push ahead with a little bit bigger portfolio change, maybe one of the divisions Struggling to meet these ambitious targets and so forth without mentioning who I think could be the one. You all look extremely sort of confident here, which is great. What are the synergies, I. E, when we have this hybrid structure on the cost side, Would it is it still difficult to cut one off basically? That sounds brutal, but just trying to understand in terms of how interlinked All the divisions are within each other. Okay. I mean, let's start with the 2 representatives who are here, LPD and SFD, and I think you also I heard a lot of good examples. This is really an interlinked business and maybe this is at the core, core of our business because The components and the project business goes along with each other and its fruitful combination, and there is also a lot of synergies. FHT is a business which is exactly at the same markets. So we see a lot of similar or equal customers. And this is also where synergies are coming from. And at the end, it's also machine building where we need the same components. When Johannes is purchasing, you always have to remember, out of the €5,000,000,000 turnover we generate, we spent about €3,000,000,000 to suppliers. So this is really and as bigger the volume is, as more effective and efficient we can source normally. And RT is also present with similar customers, but it is a bit more independent, let's say. But it's an interesting business and the same is valid for Epti. It's also a bit more independent. It's a different route to market. But at the end, Everything has to do with food and beverages and also cooling technology also with Can optimize in each of these 5 divisions. So selling a complete division is not an issue for us at all at the moment. We are taking one more question from the web and then the last question from the audience, if there's any. And then I would give it back to Stefan for the closing remarks. So the last question we take from the is from well, Macaulay again, Morgan Stanley. What kind of cost savings can you, more sustainable systems, generate for a customer versus acquisition cost. Can your competitors offer these systems? What are the main drivers for customers to go to these systems? So if I understand it right, it's a question I don't understand why the acquisition costs, what does it has to do with the Okay, okay, okay. Yes, okay. It's a very it's again, it's very difficult to answer this question for the whole portfolio we have. But for instance, if we if you now think about the decanter, the sludge which Fredericke presented. This is a fantastic device. And I mean, the savings will be The payback will be very quick after probably 2 or 3 years because the investment It's really helping to save a lot of energy, but it depends on the application, depends on the product. So there is no general rule, let's say. And can your competitors offer these systems? This is exactly our Innovation power, our innovation know how. There might be, of course, also systems where we compete with others. But if you take this example again from the sludge Dick Ender, this is something we recently launched 2 months ago, And this is a new application, and this is what GEA can offer and to our knowledge, nobody else. So who wants to ask the final question for our 2021 Capital Markets Day? Is there any? I think no questions left if I look into the faces here. Okay, then very good. Yes, thanks for the Q and A. And then I hand it over, Stefan, to you for the Yes. You may then also ask to put the big screen back on the small screens. So you are almost ready. You survived. And I hope it was a very interesting day for you. And I hope that you can digest all the information we gave you. Let me try to sum it up. I mean, we are about to shift from our self help story to a profitable growth story to accelerating the profitable And we gave you a bit more insight what we did since the last Capital Market Day, which was 2 years ago and where the share price was €25 at the time. And we presented to you our Mission 26. This will lead us to 4% to 6% growth, organic growth a year. We expect EBITDA margin beyond 15% and the ROCE margin beyond 30%. And this is a bunch of ideas, Not only ideas of concrete measures and activity we are going to set up to achieve that. And innovation plays an important role, New food, sustainability, all the things we spoke about today, and I hope that we could give you enough insight that you see that there is a lot of detailed planning already behind. So at the end, I mean, I hope we could convince you that we have leading positions in attractive and growing markets and our markets are really fantastic food, beverage, pharmaceuticals. And as I said, as long as there are human beings on the earth who need to eat or drink something. We are really in safe harbor and gear as needed. And we're also very well positioned in this Very interesting upcoming market new food. Ilya presented you a lot of insights into this fantastic new growth opportunities. From the bottom of my heart, and I hope that you also could feel that. And Nadine also asked me when she took over This position is that, hey, Stefan, how serious do you take that in a scale from 0 to 10? And I said 11. And this is exactly what we are doing. And if you also compare our targets with other companies, you can see that we are really at the forefront because we believe it's a commitment from a company and we also believe that this makes a difference in the medium to long term because Our customers sooner or later will go to companies who are putting a strong focus on sustainability. Yes. With that, we have a clear plan to grow. And as Markus presented, we also are reliable dividend payer, And we also have the intention to increase the dividend. And last but not least, I think we are a good team meanwhile. 2 years ago, the show was run mainly by Markus and myself. Today, we could present you already Some members of our great teams, we have some more of these great people, but I'm also very proud about the team who did a very good job here. Thank you very much. And I hope this all increases your trust and your commitment to our fantastic company, GEA. So thank you very much for coming to London to participate in our Capital Market Days. Stay healthy, stay safe, and have a safe trip home. Thank you very much.

• Slides