GESCO Presentation 22 Dec 2016

From melting steel to 3D-printing: investing

in the technology-driven German “Mittelstand”

as at 22 December 2016

1. Business Model

2. Financial Year 2016/2017

3. M&A and Recent Acquisition

4. Capital Market

Overview

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GESCO Group – an association of industrial SMEs including market and technology leaders Currently 17 operating subsidiaries under the roof of GESCO AG

We think and act on a sustainable and entrepreneurial basis

We operate in established sectors with innovative technologies

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

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

GESCO AG – long-term investor and safe haven for succession solutions We acquire and develop industrial SMEs on a long-term basis without exit intentions

Majority acquisitions, generally 100 %

Usually as part of a succession arrangement

New management is offered opportunity to acquire stake of up to 20 % of the company it runs

1. The business model

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GESCO’s new portfolio strategy: What remains, what changes? Preserving the well-proven:

Long term oriented, sustainable business model Long term investments, no exit-focus Combination of internal and external growth Entrepreneurial approach, independently managed subsidiaries Active IR, open communication with the capital market

Providing new impetus: A new portfolio strategy

4 segments higher transparency, new framework for acquisitions Systematic benchmarking Optimisation projects for individual subsidiaries

A more active role of GESCO AG in terms of consulting for its subsidiaries The holding provides stronger support for its subsidiaries A stronger focus on free cash flow (working capital, investments) A more active approach towards M&A

Our goals: Living up to historic margins and growth rates Stimulating external growth Strengthening the GESCO model for a rougher, faster changing environment

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GESCO’s portfolio strategy

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

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

Definition of 4 relevant end customer market segments

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

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Production process technology

Resource technology

Health and infrastructure

technology

Mobility technology

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Production process technology

Dynamically growing markets, high degree of innovation, automation, „batch size 1“

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

Resource technology

Consolidating markets, focus on niches and customer service Customised preparation of primary materials, e. g. materials supply, transport and loading technology

Health and infrastructure technology

Not very cyclical, relatively resilient to economic fluctuation

Components, modules and primary products for providers for mass markets close to end customers

Mobility technology

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

Tools and moulds, components, parts etc. for vehicle industry


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

Respective managing directors continue to have exclusive

operating responsibility for GESCO Group companies

As the majority shareholder GESCO AG has “3 levers”

1. Appointment of best possible management

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

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

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

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Please note:

FY subsidiaries = calendar year

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2. Financial year 2016/2017

1 January 2016 31 December 2016

31 March 2017 1 April 2016

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

The environment

Forecast GDP growth: 1.7 % to 1.8 % Forecast VDMA: stagnation at best Agricultural machinery and oil industry: still no growth impetus „Dieselgate“ burdens automotive industry‘s propensity to invest Political risks (Brexit decision, Turkey) increase uncertainty Outcome of US elections unclear

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

Our measures:

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

in the context of the new portfolio strategy

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2. Financial year 2016/2017 – 1st HY

1st HY 2015/2016

1st HY

2016/2017

Change

Order intake €m 258.1 250.3 -3.0 %

Group sales €m 237.3 228.7 -3.6 %

EBITDA €m 26.1 21.0 -19.6 % EBIT €m 16.0 10.6 -33.9 % Group net income after minority interest €m 7.9 4.8 -39.2 %

Earnings per share acc. to IFRS € 2.39 1.46 -39.2 %

Cashflow from ongoing business activities €m -3.2 13.9 -

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The first half year

Q1: rather weak initial quarter Q2: burdened, since customers postponed deliveries

of major orders to Q3 1st HY: slightly declining order intake and sales,

earnings figures clearly burdened Cash flow significantly improved

2. Financial year 2016/2017 – Segment Development 1st HY

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1st HY 2015/ 2016

1st HY 2016/ 2017

Remarks

€ m € m

Production Process Technology

Sales 32.2 30.7 production of machinery and plants in progress; significant improvement expected for 2nd HY

EBIT 1.1 0.5

Resource Technology

Sales 107.7 100.7 customers from oil and chemical industry reluctant to invest, price pressure in steel industry, postponements to Q3

EBIT 9.8 6.4

Healthcare / Infrastructure Technology

Sales 58.7 59.9 very robust, less sensitive to economic climate, profitable growth EBIT 5.1 6.2

Mobility Technology

Sales 39.0 38.8 uncertainty in end-markets, challenging tooling environment EBIT 4.4 1.5

2. Financial year 2016/2017 – Q3 (operating months July to Sept. 2016)

Preliminary figures for the third quarter

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Q3: order intake +5% yoy

─ Order intake (€‘000) ─ Sales (€‘000)

In Q3 order intake (approx. € 126 m) and sales (approx. € 128 m) on satisfactory level

Q2: order intake +14% yoy

The second half year

In Q3 quite a number of machines and plants delivered strong quarter

In Q4 declining operating business and one-off expenses

Guidance for the full FY from August 2016 was narrowed

2015/2016 Actual

2016/2017

Guidance as at Aug. 2016

2016/2017

Guidance as at Nov. 2016

Group sales € m 494.0 480 at best 480 at best

Group net income after minority interest

€ m 16.1 13.5 at best 11.5 to 12.5

Guidance

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More active approach towards M&A

Market still characterized by strong demand and a limited number of companies offered

Focus on 4 end customer segments

GESCO still generates high deal flow

GESCO has intensified its activities, aims to generate direct contact with entrepreneurs / business owners, which has already led to a number of personal meetings

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3. M&A and Capital Market

Recent acquisition: Pickhardt & Gerlach Group (PGW)

Leading supplier of refined cold rolled strip steel Products: nickel-, copper-, brass- or zinc-coated strip steel

and nickel-coated wire Customer sectores: electro-technic industry, automotive,

dekorative arcicles, sporting equipment, office supply Product examples: electronic circuit breakers,

file folders, windscreen wipers… Highly automated production systems

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3. M&A

Recent acquisition: Pickhardt & Gerlach Group (PGW)

Family business, founded 1902, taken over by Hekhorn family in 1990 GESCO acquires 100% of the shares from Hekhorn family as part of a

succession planning process Signing Dec. 2016, approval of antitrust authorities expected

in the near future Managing Director of technology will continue to work for PGW Will be integrated in the Resource Technology segment Approx. € 30 million sales, 40 employees

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3. M&A

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

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

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GESCO DAX SDAX

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4. The GESCO share – share split

Share split 1:3 was realized on 22 Dec. 2016

Implemented as a reaction upon shareholders’ requests One „old“ share was replace by 3 „new“ shares Split was preceded by capital increase through own funds

in order to reach a nominal value per share of € 1.00 and a reasonable split ratio

Volume of equity remained unchanged, no inflow of new funds Before: 3,325,000 shares After: 9,975,000 shares Market not influenced by this measure, after the split distributed on a higher

number of shares, share price reduced correspondingly Targets:

Lighten” the share“ Increase attractiveness of share,

especially for retail investors Support liquidity in the share

4. The GESCO share – shareholder structure

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Free float: 85.1%

14.9 % Stefan Heimöller (entrepreneur, member of supervisory board, private investor)

13.9 % Investmentaktiengesellschaft für langfristige Investoren TGV (institutional investor)

approx. 40.0 % other private investors

approx. 31.2 % other institutional investors

Directors‘ Dealings: In current FY purchases by members of supervisory and executive board.

Appendix – GESCO Group overview

Company Sales 2015 €‘000

Staff as at 31/12/2015

GESCO AG shareholding *)

AstroPlast Kunststofftechnik GmbH & Co. KG 16,262 92 100%

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

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

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

Dörrenberg Edelstahl GmbH 179,243 509 90%

Frank Group 27,629 258 90%

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

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

Hubl GmbH 12,775 106 80%

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

MAE Group 44,359 222 100%

Modell Technik Formenbau GmbH 13,961 115 100%

Pickhardt & Gerlach GmbH & Co. KG (Acquired in Dec. 2016) 100%

Protomaster GmbH 17,688 123 82.17%

Setter Group 26,984 98 100%

SVT GmbH 33,464 186 90%

VWH GmbH 11,421 109 80%

Werkzeugbau Laichingen Group 26,594 177 100% 20

*) as at 14 Nov. 2016

Founded: 1989 Share capital: € 9,975,000 Shares: 9,975,000 registered shares Free float: 85.1% Stock markets: Xetra; Frankfurt (regulated market); Berlin, Düsseldorf, Hamburg, Hanover, Munich, Stuttgart (open market) Sec. identification number: A1K020 ISIN: DE000A1K0201 IPO: 24/03/1998 End of financial year: 31 March Designated sponsors: equinet Bank AG Oddo Seydler Bank AG

Appendix – Facts and figures for GESCO AG

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Appendix – Financial calendar and IR contact

Financial calendar

14 Feb. 2017 Q3 figures

29 June 2017 Annual Accounts Press Conference / Analysts‘ Meeting

Aug. 2017 Q1 figures

31 Aug. 2017 Annual General Meeting, Wuppertal

Nov. 2017 Q2 figures

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

Germany