Valoraciones e identidad

The deteriorating global economic conditions in the fourth quarter also aff ected the GEA Group. While third-quarter order intake in the core segments continued to be up 6.9 percent in year-on-year comparison, the fourth quarter showed a marked weakening. A few customer orders were even cancelled. Although a recessionary intake growth rate had been anticipated because large contracts totaling about EUR 340 million had been taken in from South Africa in the fourth quarter of 2007, the drop nevertheless exceeded expectations. The decline in the Group´s order intake was 13.7 percent, i.e. to EUR 1,113.3 million, compared with the average for the fi rst three quarters of 2008 (EUR 1,290.2 million).

As a consequence in the past fi scal year GEA Group’s order intake fell by 1.1 percent year- on-year (excluding the Thermal Engineering Division, which is characterized by large orders to a greater extent than other divisions). There was a decline of 8.0 percent for both the core business and the GEA Group. Acquisitions made in the 2008 fi scal year contrib- uted EUR 74 million to the order intake. Changes in currency exchange rates had a nega- tive impact on order intake, of EUR 112.9 million.

Besides the major orders already mentioned and the almost mutually compensatory eff ects of acquisitions and currency shifts, this decline of EUR 433.1 million in total is attributable to intentional project selection to achieve the margin targets. Above and beyond this, the biodiesel and bioethanol plant business practically came to a standstill in 2008. Signifi - cantly fewer projects than in 2007 were tendered in the brewery sector. Orders from the big pharmaceuticals groups also decreased distinctly due to consolidation and restructuring trends in this industry.

Management Report

Group business performance

Order intake (EUR million) 2008 2007 Change (absolute) Change (%)

Energy and Farm Technology 1,645.6 1,991.2 -345.6 -17.4

Process Technology 3,346.6 3,432.1 -85.5 -2.5

Total 4,992.2 5,423.4 -431.2 -8.0

"Other" and consolidation -8.3 -6.4 -2.0 -30.7

In terms of customer industries, the highest growth rates were registered in the areas of milk production and processing, shipbuilding, and oil and gas treatment and processing. With their components, systems and plants, the Farm Technologies, Process Engineering and Mechanical Separation divisions benefi ted particularly in the milk production and processing sector, which is experiencing strong growth, particularly in emerging econo- mies. Demand for components and equipment for new oil and gas production plants and refi neries had a positive eff ect on the order intake of the Mechanical Separation and Thermal Engineering divisions in the Middle East, Canada and the USA. With the Process Equipment Division’s plate heat exchangers and the Mechanical Separation Division’s separators, GEA Group participated in the disproportionately high growth in order vol- umes in the shipbuilding sector in the fi rst three quarters.

Within the Energy and Farm Technology Segment, the Air Treatment Division is cur- rently operating mainly in the European market, where it has benefited particularly from the cyclical strength of the construction industry in Eastern Europe. The global rise in demand for milk, as well as the 2008 acquisition of Norbco in the USA, further boosted the Farm Technologies Division’s order intake. The division won further orders for major installations in CIS states, with promising opportunities for growth in the aftermarket business. During the whole of 2008, the Thermal Engineering Division suffered from the sharp decline in the number of major orders available for tender. While the trend in the power plant sector continued almost unabated, a slowdown was observed in the industrial process cooling area, particularly towards the end of the year. This is 2007 2008 Q 1 Q 2 Q 3 Q 4 1,223.5 1,265.0 1,382.1 1,113.3 1,267.9 1,196.1 1,160.5 1,792.5

Order intake by quarter (EUR million)

Order intake Energy and Farm Technology (2008 vs. 2007)

Air Treatment Farm Technologies Thermal Engineering Emission Control

mainly attributable to uncertainty in the chemicals/petrochemicals markets. By contrast there was strong growth in the components business with smaller order volumes. The Emission Control Division deliberately withdrew from the riskier turnkey plant business, thereby significantly undershooting the previous year’s figures, while considerably improving the margin quality of its order intake.

In the Process Technology Segment, the Refrigeration Division further expanded its market position in the equipment and service businesses. Slight rates of growth were achieved in the contracting business, albeit with in part signifi cant regional diff erences. The Process Equipment Division again achieved a higher level of order intake from the marine industry in the heat exchanger area, particularly for shipbuilding in Asia. But a pronounced weakness was registered in this sector in the fourth quarter. In the area of industrial heat exchangers, good market conditions continued in the energy sector, although the marine business is stagnating. Within the Mechanical Separation Division, it was par- ticularly oil production and energy that reported very strong rates of growth. The beverage industry also signaled strong demand, such as for fruit juice, wine and beer. So the declin- ing business with biodiesel projects could be more than compensated for. By contrast, the food and soft drinks activities in the Process Engineering Division were not able to equal out declines in orders for bioethanol plants and in the brewery sector. The Pharma Systems Division operated in a diffi cult market environment since major pharmaceuticals manufac- turers introduced various cost-reduction programs in early 2008. As a result many invest- ment decisions relating to new plants in Europe and America were adjourned.

Management Report

Group business performance

Order intake Process Technology (2008 vs. 2007) Refrigeration Process Equipment Mechanical Separation Process Engineering Pharma Systems

Revenue

Group revenue for the full year rose to EUR 5,179.0 million (previous year: EUR 4,856.0 mil- lion), representing a year-on-year improvement of 6.7 percent. The growth rate contribution from the core segments amounted to 7.3 percent. Acquisitions contributed revenue of EUR 68.4 million. The eff ect from changes in forex rates amounted to minus EUR 115.0 million.

Despite the current weakening of the economy, the Group benefited from its increasingly global presence in dynamic long-term growth markets such as Eastern Europe, Asia and South America. While revenue in these markets grew 9.1 percent, contributing 32.0 per- cent to total revenue, business in Western Europe was up by only 5.9 percent (42.5 percent share of total revenue). Revenue in the USA fell 2.4 percent (14.4 percent share of total revenue). But adjusted for currency eff ects, US revenue rose by as much as 4.4 percent. Revenue (EUR million) 2008 2007 Change (absolute) Change (%)

Energy and Farm Technology 1,818.6 1,648.3 170.3 10.3

Process Technology 3,338.1 3,159.0 179.2 5.7

Total 5,156.7 4,807.2 349.5 7.3

"Other" and consolidation 22.3 48.8 -26.5 -54.3

GEA Group 5,179.0 4,856.0 323.0 6.7

2007 2008

Germany Europe Americas Asia, Oceania

179.2 1,042.7 2,149.5 682.1 Africa 1,125.5 643.4 2,017.3 1,000.7 1,068.1 126.5

In the Energy and Farm Technology Segment, the Air Treatment Division continued to benefi t through to the fourth quarter from the full order books of the construction indus- try, particularly in Eastern Europe. The Farm Technologies Division again reported a high growth rate. Its market position was further strengthened by the expansion of its sales network and extension of its product range. There is growing customer interest in high- quality milk production and processing systems, particularly in Latin America. The Ther- mal Engineering Division outstripped the previous year’s revenue thanks to a high order backlog. Major orders booked in 2007 will increasingly be realized as revenue from 2009 onwards. The decline in the Emission Control Division is exclusively due to its intentional concentration on higher-margin business.

The Process Technology Segment once again posted high growth rates, particularly in its high-margin components business. The Refrigeration Division reported growing revenue for refrigeration plants for the oil, gas, and chemicals industries. The positive trend in the marine, diesel, and oil and gas markets contributed to revenue growth in the Process Equipment Division. The Mechanical Separation Division reported increased revenue from business with complete process lines. High raw materials prices provided greater incentives for customers to process and recycle used materials with the help of highly effi cient GEA technology. The Process Engineering Division did not quite suceed in matching its previous year’s level of revenue in the course of the year. The recessionary bioethanol business had

Management Report

Group business performance

Air Treatment Farm Technologies Thermal Engineering Emission Control

Revenue Energy and Farm Technology (2008 vs. 2007)

Refrigeration Process Equipment Mechanical Separation Process Engineering Pharma Systems Revenue Process Technology (2008 vs. 2007)