Gea Group Ag Ord

Good day and thank you for standing by. Welcome to the GEO Group AG Full Year 2025 Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1, 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1, 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Oliver Leckenbach, Head of Investor Relations. Please go ahead.

Thank you very much, Heidi, and good afternoon, ladies and gentlemen, and thank you for joining us today. for our fourth quarter and full year 2025 earnings conference call. With me on the call are Stefan Klebert, our CEO, and Alexander Kocherscheidt, our CFO. Stefan will begin today's call with the highlights of our successful financial year 2025 And Alexander will then cover the business and financial review of the fourth quarter before Stefan takes over again for the outlook 2026. Afterwards, we open up the call for the Q&A session. Please be aware of the cautionary language that is included in our safe harbor statement as in the material that we have distributed today. And with that, I hand over to Stefan.

Thank you, Oliver, and a good afternoon, everybody. It's my pleasure to welcome you again to our conference call today for our 25 years final numbers. 2025 was a big year for GEA. It was a year full of successes. We were able to raise our outlook for fiscal year 25 already in summer after strong development in the first six months. and we achieved all our raised targets. In some cases, we even exceeded them. In July, we signed one of the largest single orders to date. Together with Balatna, we will build the world's largest integrated dairy farm and milk powder facility in Algeria. This project will strengthen the food security of an entire region in the long term and contribute to its economic development. The biggest highlight of the year was clearly the DAX entry on the 22nd of September via the demanding fast entry procedure. Since September, we are officially belonging to the 40 largest and most valuable stock listed companies in Germany. This marks a significant milestone in our company's historic spanning nearly 145 years. We have also achieved great results when it comes to sustainability. Our direct emissions, scope 1 and 2, got further reduced during the year, leading to a reduction of 62% from our emissions in 2019. This is ahead of our short-term target of a 60% reduction in 26. We hit the target a year earlier than planned. That's a fantastic achievement for all the teams around the world working on the decarbonization of our own operations. Also, with regard to the reduction of our Scope 3 emissions, we have made further progress. We reported a 38% reduction, which proves that we are very well on track to reach or even outperform our midterm target set for 2030. Independent assessments also confirm that we are leading the way in sustainability. In times ranking of the world's most sustainable companies, we moved up from 33 in 24 to 12th place in 25 and to second place in Germany. This shows that a company can not only improve financials, we can also improve at the same time our efforts for sustainability. Let me give you some background information on our strong financial performance in 25. The overall order environment for GEA has been very dynamic in the second half of the year, like expected, so that we achieved an organic order intake growth rate of 9.1% for the full year, after 4.2% in the first half year. All divisions contributed to this strong performance. Sales rose by 1.4% to 5.5 billion euro. Organic sales growth amounted to 3.7% at the upper end of the guidance to 2.4%. The profitable service business continued its dynamic development leading to a service sales share of 40% up from 38.9% in 24. EBDA before restructuring expenses increased by 8.4% year over year to 907 million euros. This reflects the higher cross-profit and is based on the further expansion of the service business as well as higher profitability in the new machine business. The corresponding EBDA margin improved from 15.4% in 2024 to 16.5% in 2025, exceeding the guidance range of 16.2% to 16.4%, which was raised in July. We are at the highest profitability level ever. Return on capital employed rose on a high level further to 36.2%, well in the guided range of 34 to 38%. In short, we delivered again in all aspects. Our shareholders should not only benefit from our good share price performance, they would also like to share our success with them through a higher dividend. We propose an increase of 15 cent to 1 euro and 30 cents. 2025 was the first year of our mission 30 after we achieved our mission 26 target two years earlier. I would like to use the next few minutes to give you a brief update on our gross drivers. As a reminder, we target an organic sales CAGR of more than 5% until 2030, which is based on six drivers. First, sustainable solution sales with a target sales share of more than 60% by 2030. After 31.6% in 2024, the ratio expanded further to 45.7% in 2025. Thereof, and I think that is a really impressive number and worth to highlight it, 42.3% is EU taxonomy-aligned sales. Our Add Better products are also part of our sustainable solutions. We were able to increase the share of the Add Better sales to more than 9%, which is remarkable considering that we have this eco-label in place for only two and a half years now. Second, service sales is expected to increase to 2.9 billion sales in 2030. In 2025, this number stood already at 2.2 billion euros as service remained on its growth trajectory with a year-over-year organic sales growth of 6.8%. Our development in the service business is a real success story. We have raised the service share from 32% in 2019 to 40% in 2025 with an average organic growth rate of 8%. And we expect the service business to continue with a strong growth rate until 2030. We aim for an order intake of more than 400 million euro in new food in 2030. The development in this business is lower than what we had expected, but we still think that this will become a relevant market in the future. If we want to feed the growing world population, we need alternative proteins. After a weak performance in 2024, the order intake almost doubled to roughly 70 million euro in 2025. As we highlighted during 25, we see first improvement in this customer industry and discussions with customers are picking up again. We are optimistic that this development continues and that we can make further progress in 26. To shed a bit more light into recent developments in new food sector, let me share some insights into one of our customers, Solar Foods. At our Capital Markets Day in October 24, we presented to you the pilot plant, which was equipped with our processing equipment to produce proteins out of CO2. This plant started operations in 24 and produces 160 tons of Zolein annually, which is then used in protein drinks, shakes, and snacks. Due to its success, the customer is currently designing his first real industrial scale production facility, which will increase the annual production capacity to 6,400 tons. We have entered into an exclusive agreement with them to negotiate the supply, design, construction and delivery of the process equipment for this factory. Fourth, Our above average growing verticals. In our capital markets day in October 24, we presented to you a list of verticals which we expected to grow much faster than the overall 5%. 2025 clearly demonstrated this outperformance. While the overall order intake at GR grew close to 7%, the gross verticals reported an outstanding growth rate of more than 30%. our automated milking systems, as well as our engineering solutions to decarbonize the food and beverage industries. We are the main growth contributors. Fifth, we expect digital sales to grow to more than 200 million by 2030. In 2025, the sales volume stood at roughly 80 million euros, up from more than 70 million in 2024. We also made further progress in connecting our machines. In the meantime, 11,000 machines are connected to the GEA cloud. By 2030, 80% of the machines installed at customer size and suitable for digital applications will be connected. This would correspond to more than 35,000 gear machines. And finally, our target for the vitality index. The share of sales from products that are less than five years old is to increase to 30% by 2030. We started with 10% in 2021, improved it to 16.4% in 2024, and raised it to further 19.2% in 2025. Thus, we almost doubled the sales share within four years. This nicely demonstrates our innovation strength and the push for new products. Our commitment to this KPI is also reflected in the long-term incentive scheme of the Executive Board. To sum it up, we have made good progress in each of the six levers by improving the corresponding KPIs. That shows you that we are well on track towards our mission 30 growth targets. But 2025 wasn't the only successful year for GEA. Over the past years, we have consistently delivered on average annual organic growth in order intake and sales. across all time periods, despite a very challenging external environment marked by COVID, the war in the Ukraine, supply chain disruptions, and further geopolitical tensions. When you put this into context of the development in the broader mechanical engineering sector, the performance is even more impressive. According to the German Engineering Federation, orders in the German mechanical and plant engineering sector have fallen by 6% on average per year during the last four years, while we have grown our order intake on average by 5.5% per year organically or 3.3% per year in reported terms in the same period. This outperformance clearly underlines the resilience of our business mode and the competitiveness and strength of our organization. Since 1st of January 26, we are live with our new organizational structure and the new executive board. The 14-member global executive committee has been dissolved and replaced by a new seven-member executive board. The regional matrix organization has been eliminated. The COO organization will be dissolved within the first half of 26. Therefore, we are in the progress to integrate the functions into other areas of responsibility. Johannes will remain on board if necessary until summer to ensure a smooth transition. After that, we will be six people in the executive board. The strategically important countries China and India report now directly to me. This new setup means faster decision-making, being closer to the customers in markets, decreasing costs, and finally enabling us to achieve our mission targets even better. I am very much looking forward to working with my new executive team. We have known and worked with each other for many years now, and everyone has made a significant contribution to the success of the past years. And now I hand over to Alexander, who will give you more insights into the fourth quarter.