Gea Group Ag Ord

Thank you very much and good afternoon, ladies and gentlemen, and thank you all for joining us today for our first quarter 2026 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 the first quarter, and Alexander will then cover the business and financial review before Stefan takes over again for the Outlook 2026. Afterwards, we will open the call up 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 very much, Oliver, and a good afternoon, everybody. It's my pleasure to welcome you again to our conference call today. Please keep in mind that we operate under our new organizational structure from 1st of January 26th and hence will report our first quarter 26 results in our new divisional setup. Pure flow processing, nutrition plant engineering, pharma and food applications and farm technologies. The new organization reduces complexity and reduces costs. We have already seen first benefits. from it in the first quarter and for the entire year 26 weeks back savings of 10 to 15 million euros. Another 10 million euro is coming on top on 27. We had a strong start in 26. Our key performance indicators improved significantly once again. As indicated with our fourth quarter release, the 1.8 billion euro order intake, which we booked in the fourth quarter of 2025, was extraordinarily strong and shouldn't be considered as a new normal. We benefited from nine large orders, which of course cannot be repeated every single quarter. The first quarter of 26 reflects now a more normalized level of large orders and is with an order intake volume of 1.5 billion and an organic year-over-year increase of 6.4%, a very good start to the year. This performance is surely significantly better than the industry average. Orders below €5 million in size were the driver of this performance in terms of large orders, so orders above €15 million We booked three with a total value of 73 million versus three large orders amounting to 83 million euro in the prior year quarter. Thus, the increase in order intake is coming from a broad base. Sales rose by 1.2% to 1.3 billion euro. Organic sales growth amounted to 5.3%, which is already within the guidance range of 5 to 7 percent for the full year 26. EBDA before restructuring expenses increased by 3.9 percent year over year to 206 million euro. The corresponding EBDA margin improved to 16.2 percent and marked a new first quarter record. Return on capital employed continued to rise at a high level further to 35.7 percent in the quarter. which is well within the full year guidance range of 34 to 38%. Net liquidity decreased by 24 million Euro year over year to 162 million Euro due to a higher network and capital outflow in the quarter. Let me briefly introduce to you our new offer that we have recently launched for our customers. GEA Security Partner. Over the past years, we have gained substantial information security expertise by implementing a holistic security approach throughout our own company. This includes hands-on experiences in securing complex global production environments, connected products, IT and OT landscapes and regulated operations. Since our customers are dealing with increasingly connected production environments and are facing new regulations such as the EU NIS2 Directive and EU Cyber Resilience Act, they need to strengthen the security of their IT and operational technology environment. New obligations are coming up such as stronger security governance and mandatory incident reporting. And this is exactly where our GEA security partner comes in. We have deep knowledge of our systems installed at the sites of our customers and therefore can leverage our in-house security expertise to the benefit of our customers. ER Security Partner is a modular portfolio of complementary industrial security offerings which strengthen the security of their operational technology environment and helps them to establish the processes and structures needed to operate securely and meet regulatory requirements. The new offering enables us to turn our security expertise into a sustainable competitive advantage strengthening customer relationships and differentiating GIA in the market. Let me now say a few words on how the situation in the Middle East affects GIA, given that the conflict has unfortunately not yet been resolved and continues to have far-reaching implications for the global economy. There are two dimensions that need to be considered, direct implications and indirect effects such as rising oil prices. Starting with the direct implications as already mentioned with the publication of the full year results, our direct exposure to Middle East is low. We have neither production sites nor important suppliers in the region and we continue to negotiate projects with customers from the region. Therefore, we do not see any material direct impact on our business. Turning to indirect effects through capacity constraints and cost inflation. We also do not see any material impact here. There are a couple of things to keep in mind. First, we are not an energy intensive company. Last year, our energy bill amounted to less than 30 million euro, and most of our energy consumption is already secured under fixed price agreements until the end of 26. Second, as just mentioned, we have no major suppliers in the region. In addition, more than 80% of our procurement is sourced locally, which limits our dependency on global supply chains and, in particular, to sea freight. Logistics are mostly arranged and paid for by GEA, but charged to the customer. Of course, we are not completely immune to price inflation resulting from capacity constraints and higher energy costs due to the conflict in the Middle East. We expect price increases, especially in energy-intensive raw materials such as steel, In response, we are engaging in an active dialogue with our suppliers to negotiate against price increase requests and are counteracting these effects with targeted measures, also with price increases whenever necessary. From today's point of view, the indirect implications remain manageable. Nevertheless, we continue to monitor the situation closely. With that, I would like to talk not only about the negative aspects and risk, but also about the opportunities arising from these volatile times for GEA. Due to the increasing scarcity of energy resources and the associated rise in energy costs, energy efficiency is an even more important topic than ever. Now more than ever. Majority of our customers are very energy intensive. The current situation creates an even stronger incentive to modernize their asset base and processes. At GEA, we are very well positioned to benefit from it due to our add better products and sustainable solutions portfolio. We have already launched our environmental label, Add Better, in summer 2023. And this label marks GIA products and solutions that are significantly more resource efficient than their predecessors. Solutions range from different applications, such as our Add Cool, that reduces energy consumption for spray drying by up to 49%, our tablet press NextGen 45 that reduces energy consumption by 27%, or our electrical oven GIA eBake G2 that saves up to 32% energy consumption, just to mention a few of them. At the end of 25, we had already 50 at better label products, and the portfolio is growing further. This nicely reflects our strategy, which we follow for some years now. To innovate more energy-efficient solutions. It proves to be the right strategy more than ever before. I now hand over to Alexander, who gives you more insights into our performance of the first quarter.

Thank you very much, Stefan, and also a very warm welcome from my side, ladies and gentlemen. I will now walk you through our business and financial performance in the first quarter, reflecting our new divisional setup. Let's have a closer look at the group performance first. As Stefan has already highlighted, we had a strong start to 2026, also in terms of order intake. All divisions contributed to this positive development, except for nutrition plant engineering, which faced a small decline. From a customer industry perspective, dairy processing and dairy farming continue to be strong. In addition, pharma and other industries like distribution and storage, as well as marine, were showing good demand. This underscores the broad-based strength of our order intake development. When looking at the order intake performance on a reported basis, an adverse FX translation effect of 49 million euro, or minus 3.4%, needs to be considered. Sales grew organically by 5.3%, driven by both new machine and service sales. Organic growth in the new machine business reached 5.8%, supported by a strong performance of pure flow processing, pharma and food applications, and in particular of farm technologies. The service business reported a healthy organic growth rate of 4.6% once again, continuing its growth trajectory for the last 22 quarters. On the back of the slightly stronger growth in the new machine business, the service sales share declined by 0.5 percentage points to 41.2%. EBITDA before restructuring expenses rose by 8 million euro to 206 million euro, resulting in a corresponding year-over-year margin expansion of 0.4 percentage points to 16.2%. Higher volume, better gross margin, and stable operating costs were the drivers of the profitability increase. Let's have a closer look at the performance of the divisions. I will start with pure flow processing, which is the former separation and flow technologies division, plus the compressor business unit from the former heating and refrigeration technologies division. This division reported strong numbers across all key performance indicators. significant order intake growth, solid sales, as well as a further EBITDA margin expansion. Order intake rose organically by 13% year-over-year, driven by all order size brackets below €15 million. Demand was strongest in dairy processing, beverage, food, and marine. Thus, order intake strength was broad-based across both order sizes and customer industries. Organic sales grew by 6.3% year over year, driven by strong growth rates in new machine and service business. As both businesses grew roughly at the same rate, the service sales share remained almost stable at 47.5%. Higher sales volume combined with the better margin quality in the new machine business resulted in an improvement in gross profit. operating costs rose slightly. As a result, EBITDA before restructuring expenses increased by €4 million to €126 million. The corresponding margin expanded at a high level further by 0.2 percentage points to 26.5% in the quarter. Let's move on to nutrition plant engineering, which is the former liquid and powder technologies division, plus the solutions business unit from the former heating and refrigeration technologies division. The division had a slower start to the year after a record fourth quarter. As Stefan said earlier, the super strong volume of large orders we saw in the fourth quarter 2025 should not be considered as a new quarterly run rate. Large orders tend to be lumpy, which drives higher quarterly volatility. While Nutrition Plant Engineering had seven large orders with a total volume of €346 million in the fourth quarter of last financial year, we booked three large orders totaling €73 million in the first quarter of this financial year. All of them were in dairy processing. Thus, the strength in this customer industry continued. On the back of the very strong performance in the fourth quarter, order intake declined year over year by 2.1% organically in the first quarter. Growth in customer industries, pharma, dairy processing and distribution storage was not enough to offset the declines we saw in beverage and chemical. Sales declined organically by 4.8% year over year. Service sales continued its growth trajectory, increasing organically by 5.2% year over year. At the same time, organic new machine sales declined by 9.3%, reflecting the late booking of orders in 2025. While order intake declined in the first nine months of 2025, it accelerated significantly in the fourth quarter. However, these late booked orders in the fourth quarter could not yet be converted into sales. This is still to come and will lead to an improvement in new machine sales during the course of 2026, already beginning in the second quarter. As a result of the stronger service sales growth, the service sales share increased by 3.2 percentage points year over year to 34.4% in the first quarter. The lower sales volume and the corresponding inferior cost absorption led to a reduction in EBITDA before restructuring expenses from 40 million in the prior year quarter to 32 million euro in the first quarter of 2026. The corresponding EBITDA margin fell by 1.3 percentage points to 8%. We expect a strong profitability acceleration in the coming quarters and therefore feel very comfortable with our divisional guidance of 11% to 13% EBITDA margin for the full year. Moving on to pharma and food applications, which is the former Food and Healthcare Technologies Division. Nothing has changed here except for the name. Pharma and food applications reported a strong set of numbers again. This is the fifth quarter in a row with improvements in all major KPIs. Solid organic top line growth coupled with continuous margin improvement. Organic order intake increased by 5.9% year over year, mainly driven by orders between 1 and 5 million euros in size. In terms of customer industries, pharma and food processing and packaging business positively contributed to this growth. Sales grew by 3.9% year-over-year in organic terms, driven by strong new machine sales. While the new machine business delivered an organic growth rate of 5.8%, the service business grew only slightly at 0.4%. As a result of the stronger performance in the new machine business, the service sales share decreased from 36.1% in the prior year quarter to 34.6% in this year, the first quarter of 2026. Despite the slightly lower reported sales volume and the lower service sales share, gross profit remains stable because of the better gross margin. Due to the low operating costs, EBITDA before restructuring expenses rose by 6.4% to 33 million, leading to an EBITDA margin of 13.4%. This is an all-time high for first quarter, a strong start to the year. Continuing with farm technologies, this division remained unchanged, neither changes to the portfolio nor to the name. Farm Technologies reported an outstanding quarter with double-digit growth rates in order intake and sales and a significant improvement in profitability. Let me give you some more details here. The favorable market environment for dairy farmers continued. After an already significant organic order intake growth of 26% in the fiscal year 2025, the first quarter of 26 reported another strong growth rate of 13.7% year-over-year. This increase was mainly driven by the strong demand for automated milking systems in the new machine business. In terms of order sizes, base orders showed a particularly strong performance. Sales generation continued to accelerate in the quarter, following a positive organic growth momentum in the second half of 2025, organic sales growth accelerated to 26% year-over-year in the first quarter. New machine sales experienced a substantial organic increase of 57.4%, which needs to be seen in the context of a weak new machine business in the first quarter of 2025. Service sales grew organically at 3.9%. As a result of the significant outperformance of the new machine business, the service sales share declined from an extraordinarily high level of 58.7% in the first quarter of 2025 to 47.8% in the first quarter of 2026. EBITDA before restructuring expenses rose considerably by 57.8% year-over-year to €34 million. Main reason for this extremely positive development is the significantly higher sales volume with the corresponding fixed cost absorption. The corresponding EBITDA margin increased by 3.9 percentage points to 16.7%, the strongest first quarter on record. Let me close the divisional chapter with an overview of the EBITDA growth contribution in the first quarter of 2026. All divisions, except for nutrition plant engineering, contributed to the increase in EBITDA before restructuring expenses by improving their gross profit and, in most cases, lower operating costs. Farm Technologies was the largest EBITDA growth contributor in the first quarter on the back of significantly higher sales volume and the resulting capacity utilization. Let me now turn to another important topic, networking capital. As in prior years, the first quarter shows the typical seasonal uptick in networking capital versus year-end. This quarter-on-quarter increase was mainly driven by a reduction in trade payables. In addition, inventories and contract assets increased due to the higher order backlog. Year-over-year, networking capital remained almost stable at 383 million euros. The high volume of the large orders over the last four quarters led to higher advance payments, which are reflected in an increase in contract liabilities. This results in a net working capital to sales ratio of 7%, placing us at the bottom of the guided corridor of 7% to 9%. On a rolling last four quarters basis, which smooth seasonality, the ratio has been stable over the last two quarters. As expected, Free cash flow was negative in the first quarter of the year. Let's have a look at the main drivers. Operating cash flow was a negative 125 million, mainly driven by two factors. First, the network and capital outflow from the quarter-on-quarter build-up. And second, the 90 million euro outflow in others. This position includes the outflow of bonus payments for fiscal year 2025, which, as you know, was again a very successful year. The CAPEX-related cash outflow of 33 million was rather low compared with our full year 2026 guidance of around 240 million euro. This slower start is a pattern we have seen over the last two years, so we expect CAPEX to ramp up in the coming quarters. As a result, free cash flow stands at minus 190 million euro, leading to a net cash flow of minus 240 million euro after deducting lease payments and interest paid. Quarter on quarter, this reflects the typical seasonal cash outflow in the first quarter, which reduces the net cash position to 162 million. Like in previous years, the first quarter had the slow start in terms of cash generation, which will accelerate during the course of the year. We do expect roughly the same level of free cash flow for the full year as in 2025. With that, I hand back to Stefan for the outlook.