Donat von Muller - Head of IR Helmut Schmale - CFO Jurg Oleas - CEO

Klas Bergelind - Citibank Felicitas Bismarck - Deutsche Bank Andre Finke - HSBC Sebastian Kuenne - Berenberg Peter Reilly - Jefferies Ben Maslen - Morgan Stanley Sven Weier - UBS Peter Rothenaicher - Baader Bank

Yes good afternoon. Welcome to our conference.

Let’s start with some key messages for the quarter. The main theme of this quarter is that the order intake is coming along nicely despite only few large orders as we shall see later with orders continuing to surge ahead of the sales development currently.

P&L wise we saw gradual improvement in top as well as bottom line. Not yet enough to offset the shortfall in quarter one but certainly enough to give us confidence in our guidance for the full year, especially in respect of the book-to-bill and comfortable order backlog situation currently.

The operating and return on capital employed even though adversely affected by the first consolidation of the Imaforni acquisition in quarter two is in the upper range of the guidance corridor. The last 12 months cash flow driver margin even slightly above the guidance corridor.

The figures 2016 continued, the order intake grew by over 7% before accounting and structural impact which gives us comfort with our moderate sales growth guidance for the year for the full year 2016. Inspite of the fact that in the first half year sales after lagging behind year-on-year due to the shortfall in quarter one.

Business equipment that has to cope with high single digit decline in our dairy farming business in times of still depressed dairy prices did a very nice job in over compensating this headwind by generating auto growth in other product areas. Not really visible on this slide but traceable for you on pages 26 and 27 in the appendix is the fact the overall organic growth of over 7% was composed of double-digit growth in the business area equipment and modelled at single-digit growth in the business area solutions.

The mix is yet another example of the resilience resulting from all our diversified industry exposure. Our group has the potential to overcome and over compensate temporarily weaknesses in certain sectors by buoyant demands in others.

The organically flat sales development represents a huge improvement over the weak sales conversion in quarter one which as we explained at the time had a couple of technical reasons that were rather temporary in nature. Admittedly we had to not yet compensate in the revenue shortfall in quarter one and still left behind by our half year closing but we are moving in the right direction and as I said before we forgot to auto momentum and backlog we see ourselves on track in delivering on our guidance of moderate sales growth for the entire year 2016.

Against organically flat sales, EBITDA grew 4% making 44 basis points increase in consolidated group EBITDA margin. This slide reports on GEA’s margin progression gradually overtime, and as you will see that development continues and we see ourselves well on track to deliver at least 13% operating EBITDA margin by year 2017 which is what we promise in our midterm guidance from the October 2014 [ph].

The good news from this slide, the organic increase by over 7% in orders came even on the back of a small reduction of large orders, larger than €15 million, so this was not an all the lucky results of large order lumpiness. Small orders which had suffered in quarter one among other things from the decline in dairy farming orders grew back to old levels, thanks to increasing demand in various components and despite the continuing weakness in dairy farming while medium sized orders from €5 million to €50 million even jumped to a historic high.

All together this was the second highest quarterly order intake ever only some 2% below the all time record of the quarter 2014 and 2015. But please note this was achieved with substantially less large orders than in quarter four 2015.

The regional sales development also past four quarters is marked by the comparative weak sales number of quarter three 2015 and quarter one 2016. In an LTM comparison of this period, the Dutch and Eastern European region fared best which defies conventional that as it contains the Russian Federation as the CIS [ph] states.

Order intake in this region went up during the first half year as it did for Russia in particular. More significant products, regions for regions declining this period were dairy farming and cooling solutions raised by customers in this year.

The pie chart on the left hand side of the chart delivers some break down of the LTM sales volume by industry. Overall the sales volume is flat, however what stands out is that food beverages and pharma and even more chemical sales are able to balance for the reduction of sales in the dairy related businesses.

Clearly the dairy processing business continues to stand out but unexpectedly dairy farming business got softer whereas lately food and pharma chemical applications tend to gain in volume. But you will see more details of the recent changes on the following page that describes order intake trend.

Almost three quarters of our exposure are up quarter on quarter and around 40% year-on-year which outweighs the industries being down. But [ph] in longer term trend by looking at volume for quarter averages, dairy farming oil gas and marine not surprisingly are more strongly down, together they account for only one sixth of our exposure, though which is small enough to be overcompensated by other industries.

A little down our beverages and pharma together almost one fifth of our exposure somewhat up our dairy processing and other industries together about one third of our exposure and more strongly up our food applications and chemicals together almost one third of our triple exposure. This slide from another angle again underlines two fundamental aspects that have held true for a long time.

Our exposure is by its overall clear focus on food and beverage application is still reasonably enough diversified to offset temporary weakness in one sectors by the others. On balance, our exposure is lowering even though the composition may change overtime.

The increasing order backlog is not only reflective of the Imaforni acquisition which was closed at the beginning of quarter two but also the natural consequence of order intake surging ahead of sales in the first half of the year. It visualises once more why we are not too concerned about our revenues still trailing prior year by the midpoint of this year.

The situation from count perspective look fundamentally different from last years, when order slowed and sales growth consequentially too. This year when orders have surged ahead of sales the situation simply is that what is sitting in the backlog already will be converted to revenue eventually.

These are fundamentally more positive circumstances than last year at this point in time in this year. Return on capital employed, acquisitions cost adjusted ratio dropped slightly in the recent past.

This dilutive effect is driven by accounting mechanics and is transitory in nature. The orange curve is the last 12 months and adjusted return on capital employed.

The fact that most charges for strategic projects were incurred already in 2015 means that 2016 we will see much less of an impact. As evidenced here by this steep rebound of the orange curve which will only continue upwards as the 2015 charges disappear from the LTM perspective.

Working capital is still at a level slightly over 13% or upper boundary guided for the full year. I said last quarter there is room for improvement.

Working capital, of course [Indiscernible] with order backlog and with sales which is why the book-to-bill ratio larger than one makes it harder to bring the working capital percentage down at the moment. Cash flow driver margin.

As with return on capital employed the orange line depicts the unadjusted cash flow driver margin which was impacted by various charges around fit for 2020 particularly in 2015, it is now rebounding. The adjusted or operating SEC margin in the last 12 months average which is the metric we are guiding for keeps peeping up and we seem to be in a comfortable position to deliver on our guidance range for this metric for the year as a whole.

Before discontinued operations and uses of funds such and dividend and acquisition the net positioning improved by some €145 year-on-year. Adjusting this variant through one-off charges, this corresponds to a cash generation of slightly over €300 million the past four quarters.

Lets turn then to the service business. The service volume again organically outgrew our OEM sales, making for sales service of minimal 30% of group revenue.

Service in the BA solutions which has been -- it’s actually a lower share of revenue has been growing more dynamically. The service share of each segment is displayed at the bottom of the bars contrasting 2016 with prior year.

That brings me, then, to my last slide of the presentation, which is the guidance for the full year 2016. And here I can confirm without reservations or qualifications or previously given guidance for the year 2016.

The most important element in there are the expectation of moderate revenue growth and operating EBITDA between €645 million and €750 million and operating cash flow driver margin between 10% and 11%. This forecast includes any realized savings from our group restructuring.

Thanks for listening.

So this concludes the call. We will now accept your questions.

Yes, good afternoon gentlemen. It’s Klas from Citi.

I’ve got three questions please. Firstly, on slide six I can see that adjusted EBITDA is flattish year-over-year, i.e., ex-currency and the impact from M&A.

If I look the sales is flat, and you say that savings are on track. But then EBITDA shouldn't be flat year-on-year unless price mix has weakened and you are no longer presenting an EBIT bridge.

It becomes difficult for us to understand what's going on here. If you can help us to understand how savings and price mix moved in the quarter?

Sorry, Klas; are you first continuing with your question, or shall we answer?

No, no no Jurg answer them one by one. Sorry for that.

Okay, so lets then start with that question regarding from the point of margin development, yes in the quarter, as such again the margin benefitted on the one hand from the fit for 2020 program, which is as I said fully on track to date to reach the guided level of €80 million for the year. On the other hand we had a couple of operational headwinds adversely affecting margins.

The business area equipment had to cope with the fact that farm tech sales are down year-on-year by high single digit percentage and also farm tech services sales group [ph] is free from bugs [ph] the market environment completely. So that will certainly have adverse impact on the development and the profitability of that business area.

And the business area solution again that face some gross margin pressure from industry mix impacts as well as a slightly lower margin in the backlog at the beginning of the year 2016 as a consequence also slack in the margin quarter three last year.

Okay, that's very clear. So you feel that you are confident that obviously with the €80 million that is targeted fit for 2020 for this year, that when you go through the second half that those price mix headwinds are going to abate for you to improve the operational gearing in the second half.

Is that correct?

We assume as we said that we will deliver in line with our guidance that assumes that the €80 million savings for the year will be fully harvested and that we see some marginal recovery in the second part of the year as well operationally.

Okay, very good. My second question is, coming back a little bit to base orders obviously we had weak base orders in the first quarter and now we're coming back strongly.

My question is really, is this just a catch up effect from last quarter, or are these market share gains in the new structure that you have in the business, is this sustainable? I mean, one question that we got from investors this morning is whether this is just catch up.

So I just want to understand the sustainability.

Yes I think it’s healthy [ph] mix. I mean it always will vary from quarter to quarter the composition between large order and base orders that what is important and whether you look at Q2 isolated or if you look at it together with Q1 it’s a good development, solid development despite and that you always have to consider when you compare with previous year that almost all the order intake was sales of the so-called MFD product group which is milking dairy farming is co called base orders because they are below 1 million at least 90% of them and there we just had to take a couple of fits in the past quarters, even so in Q2 that this product group developed quite nicely, thanks to Eastern Europe mainly Russia where we got some good orders to compensate for the lack of orders than the rest of the world.

So we are very happy with the development of base orders and it’s not jut one off as I see it, it’s a solid development of them.

Very good. Thank you.

My...

that you have seen certainly also that serves business was good this quarter and that of course is in all likelihood also let of was below €1 million.

And just a quick follow-up on that on service in farm tech, is this coming back now? Was this just a one quarter phenomenon?

It’s a fact that as the business in the farm tech was doing a bit well this quarter two compared to the quarter one 2016 was based on the fact that we got larger order in Russia in this quarter which contributed to that volume development I wouldn’t call the crisis in the farm tech business behind ourselves yet.

Okay, very good. Just on that seasonality though, because when I look back and look at old farm tech, I can see that you're always up second quarter versus first quarter.

So I'm trying to understand how much was underlying improvement versus you saying that you are up second quarter versus first?

Sorry, could you repeat, what was your assumption?

So seasonality wise you are always up second quarter versus first quarter in farm tech when volumes are more stable. And I just want to gauge how much was underlying improvement versus just seasonality.

Well its difficult to answer, I mean the fact is due to the lack of volume in many parts of the world because of the milk price our sales force around the world, they have focussed on the few opportunities they are still there and I believe they have gained some market share also and we were very happy to see that in Eastern Europe as Helmut just pointed out they were able to get some good orders in order to compensate not completely but to a large extent. Now whether that would say like that also is difficult to say, the seasonality is always there, it has to do with the construction site on the farms at least in the Northern Hemisphere.

The farmers, they usually they don’t construct the foundations for rotaries, for robotic equipment, etcetera in the winter time. So they make sure that those are all finished in autumn that where the high season for ordering usually Q1 and Q2 and not so much Q1, Q2, Q3 and also much Q4 because then they have winter time.

So since it’s an influence of several things that we are motivating our sales people to compensate for the lacking areas due to the milk price crisis and obviously they were quite successful in Q2.

Thank you so much.

Yes, thank you very much. I have a follow-up question to my former colleague.

Is your -- on your like-for-like development on the operation EBITDA it seems that your acquisitions are very profitable and have pushed up like the EBITDA quite a bit. Do you see any reason why this should change going through the year?

How long are we profiting from this please? And the second question I had would be, your order intake in the equipment division was very, very strong.

It seems like there was some larger or I mean, medium-sized orders in here. Are these the orders you are discussing about Eastern Europe, or is there something else?

And could you give us some detail just which industry is that and how sustainable you think that is? And last question would be: how do you see the pricing or the product mix right now in your order book compared to where we were in the beginning of the year?

Thanks.

Yes, your question about the margin of the M&A. Yes, we did some accretive acquisitions, we as we always promise that if we do acquisitions one not the only one but once judging criteria is that it should be accretive, some of them are not able to be accretive from the first day but obviously here we have some quite good acquisition in the last couple of months.

Bear in mind when you look at your overall margin also that when you look at slide six that the business area equipment shrinked for the time being that’s not an area of concern, it is just a matter of getting the sales realized and as you can see on the lower part of that slide the business equipment has much higher margins and solutions, so if equipment is shrinking and solutions is growing then you have the certain dilution of the overall EBITDA margin which is not a pricing headwind, it’s just a headwind of the different gross rates of the two business areas with different margin profiles. Could you repeat your second question please?

Yes, just as a follow up....

Yes the order intake in equipment, well talking about industries Helmut showed in the slide how the industries in general develop. And what I can say and we should be extremely proud about our people in that business area they were able to grow the product area separation by almost a record number in at least in time with GEA then they grew also homogenization.

And they grew also organically for component quite the high with extremely high gross rate, they also grew what we in all times called for the food solutions above 10% growth. They were able to have a very strong growth in the compressors with the exception of making [Indiscernible] for all the other product segments of that equipment in the order intake had some of them a high and single digit and most of them a double digit growth in the order intake.

That leads me then to the second question, the pricing pressure. I think our equipment people if there would be too much pricing pressure they would not be able to grow in these areas and this is across different industries.

I think we are always closer to already some OneGEA effect, where our sales forces around the world are working now more and more aligned. We have the product managers and the application manager’s in order to offer the customers the best solutions and the best product.

So I’m personally very happy to see that the equipment people could grow that high, interest of high percentage and of course we will that in about four to six months and also in sales.

Okay, but the last question was more generally how do you see the product mix or the pricing within your order book? Not necessarily dependent on equipment, but for the Group as a whole?

For the Group as a whole, we see that up, against what we had at the beginning of the year, that is the case of our solutions and with the mix which here for ourselves explaining in the BA equipment, also there this is the case.

Okay.

Yes the pricing pressure dates an area and I do not want to talk about competitive but you could just read about it a week ago somebody complaining there. That is an area which -- that I think is homemade by those people, that pricing pressure.

And we abstain from this. I think, when I think about our group is that we have huge areas of activities, so if we feel that in one area two competitors are killing themselves than we let them kill themselves then we get our orders from other areas, but we are not so much affected by that.

But it is true that in some areas there is pricing pressure, but from here there is room enough with our product and industries to be more active in other areas.

Great. Thank you.

Yes, good afternoon thanks for taking my questions. And the first one relates to your large order pipeline, maybe you could comment about the current shape of that pipeline?

And the same for M&A is there anything which we should expect for the second half in terms of transactions to be concluded? And lastly, a question similar to one of the questions already asked, I think you mentioned in previous conference calls that your sales force -- or that the somewhat modest order intake trends were also affected by the sales force having to cope with the fit for 2020 and the whole reorganization.

Is this impact now this negative impact now fully behind? And had that a role also with regard to this strong improvement in order intake momentum in the second quarter?

Yes, I would like to start with the last of your three questions. The fit for 2020 impact, what we have to be aware is that in Q2 organically we are delivering these results with more than 1000 less on board which is a fantastic achievement of our people because we have to keep in mind if you do any kind of ratio order intake by employee or sales by employee or profit by employee or order intake by sales people there has been a tremendous improvement in efficiency.

So keep in mind that we are delivering these results and these volumes with more than 1000 people less on board. When it comes to the large order, -- sorry just to finalize that the third question of you, there is still of course alignment undergoing etcetera but I think more and more the smoke is disappearing and the OneGEA starting to work at the sales front.

It will take a bit more time until everything is aligned on the sales side. But a order intake as we can see is obviously working already well.

Also on the service side, we have also open positions in those areas which we are going to fill soon but this is fully in target with Fit for 2020. When it comes to your first question about large order pipeline for the remaining part of the year, orders about EUR20 million or EUR30 million, we do see a healthy pipeline even so we didn't book one of the real big ones in Q2.

I think the larger orders was close to EUR30 million in Q2, but what I like when I discuss this with our regional heads just recently, that we have from all kind of industrials large orders in the pipeline -- be it chemical/pharma, infant formula, also dairy, also beverage breweries, also coffee crystallization et cetera. So there enough for GEA to pick and I'm fully confident that our sales people will do the right choices and pick the right order.

We are getting again in a position that we have to pick orders. We are not taking just any orders.

We are carefully analyzing for which ones is it worth to offer when it comes to the large orders, because to offer large order is quite an effort and its enough orders in the pipeline so that we can analyze which are the ones which are most interesting, most promising for GEA. When it comes to M&A pipeline there we have to decline one or two opportunities because when we're go in to the detailed due diligence and we find any kind of things which doesn't match to GEA acquisitions criteria’s then we abstain from this, but we are currently in decisions and in due diligence process.

We have some midsized targets or I'm confident that we will see further acquisitions in the second part of the year.

Perfect, many thanks.

Hi, gentlemen. It's Sebastian Kuenne here.

I have three main questions. One relates to the food processing business, where I was wondering what the progress is in terms of profitability.

I think the latest we heard was slightly above breakeven, but maybe you can give some more light on that. Then on the Fit 2020, it's been asked before, but I would like to dig a bit deeper there on the cost savings that you want to achieve, the EUR80 million for this year.

I think you said, you saved EUR16 million in Q1. And if I now ride that forward, then let's assume you made EUR20 million in Q2, which gives you a EUR36 million savings.

Yet when I checked the EBIT before restructuring, there's no improvement. So it gives me actually a 130 basis point decline in the adjusted margin.

Does it mean that the orders you took last year were much worse in terms of quality, and that this is now improving? So that would be the second question.

And lastly, beverage -- in the beverage area, we hear the read-across from Krones, for example, that talk much about very intense price pressure also coming from China, with Chinese players entering the European market and South America and Africa. Is there any more price pressure, for example, in beverage than in other areas?

Or would you say that you are walking away from those contracts? Thank you.

Yes. Coming back to your last question the pricing pressure, we don't see that this comes from China.

So it is themselves, they're doing it. So, I mean, they have to look into the mirror and then they find the one who is making the price pressure.

Coming to the food processing part, the margin is developing, its not just a breakeven, the operational margin or gain margin is now in the upper or in between 5% and 10%, I would not like to disclose more on that, so its in a very good track of recoveries and we did this major turnaround of that acquisition. However, I always have to emphasis that it's more and more difficult to make a comparable because into the OneGEA, when we went into OneGEA, the old segment, food processing and packaging was of course allocated into the different functional part just to OneGEA.

We are still tracking, but we do see that the order intake as I just mentioned couple of minutes ago is developing nicely. And of course that also has an impact on margins and we've all the adjustments we did.

The managers did there in the past and we are starting to harvest now finally. So it's still slightly below the overall GEA margin, but it will come up and I think it will be soon closer to overall GEA margin.

Yes. And this regard to your second question, I've answered that already from one of questions I got previously.

I mean, we had headwinds definitely in the business equipments around the situation in the dairy farming business there which has a reduction in volume or double-digit reduction in volume which we needed to swallow that we were forced to swallow. And in the Business Areas solution I've made the point that we had somewhat less margins at the opening backlog in the year 2016 compared to prior year based on the thing that we had a selected demand in the quarter free of last year.

And then we got some orders in that which had a slightly lower margin compared to what we usually have.

And that would mean that you fully make up for this in the second half of the year? I mean, it's a very, let's say, second half year heavy earnings that you achieve about [Indiscernible] but that would be more in 2016 than in 2015, if I follow my calculations here.

So it's even more back-end heavy?

This is unfortunately every year the case for the company. I would love to change it, but unfortunately the mechanics are as they are.

Yes, you're right and we wouldn't repeat our guidance if we wouldn't think that we could make up for that in the second part of the year.

Understood. Thank you very much.

Thank you.

Good afternoon. In previous calls you talked about the negative impact on investments because of the sanctions against Russia causing some countries in Western Europe to slow down or reverse investment.

And now you're having some good order intake in Russia or Eastern Europe. Was this just a one-off, or are you seeing a sustained trend with investment taking place inside Russia because of the sanctions and the changing trade relationship?

And then secondly, you may not want to answer this, but is dairy farming -- could it still be down again next year? Or do you end up getting to the stage where it's difficult to see much of a further decline?

And then, lastly, you're running out of time to spend the surplus capital from the heat exchanger divestment. Maybe it's too early, but can you give us an update on what your thinking is?

And will you be addressing that issue in the forthcoming capital markets day in October?

Yes. Thank you very much for your questions.

The negative impact on Russia, it is true that it has blocked a lot of projects which we had in the pipeline. However, in different areas as I mentioned already a minute ago, our sales effort, our regional team and our country team is doing an excellent job in trying to find all kind of business opportunity for GEA, obviously they were quite successful and not only in milk, dairy and farming, in a wide broader area.

So currently Russia, we wouldn't see it any more as a concern here in the Executive Board, because we happy to see that our people is addressing it effectively and selling the full potential which GEA has to offer regardless of the sanctions, of course, we are always following the rule. But Russia is trying to become a sales health case, so they're trying to produce their own milk.

They're trying to produce their own cheese. They're trying to produce their all kind of other products and obviously country sales people is able to commit our customers in Russia that GEA is the right partner to fill those gaps.

When it comes to dairy farming, the future of dairy farming, it's difficult to see. But I think our dairy farming people they have adjusted themselves also size-wise besides Fit for 2020.

They have used all the flexible time possibilities in order to cope with the situation whether it will go away the milk price. I don't believe so, at least not in this year.

It's almost impossible to predict anything for next year, but I think GEA has adjusted itself and is starting to learn to live with this level. Hence, I also can say that we haven't seen any further margin deterioration when we compared Q2 and that product will compared to Q2 in the previous times.

And the last point which you had was the surplus in capital and what we are doing in that regard. I mean, we are constantly having that our radar screen and we are preparing here an educated case on how we handle at year end.

As we promised we will come back to this topic in due time, but its all – so roughly to underline again what you've just said the other minute that we still have a decent pipeline of potential acquisitions which we are looking into. But we stick to what we said.

We are having this on the radar.

Thank you.

Good afternoon. Thank you.

Three questions, please. Firstly, you mentioned in your narrative how the new structure was helping you win new orders, win new business, maybe take some market share.

Can you give a kind of few examples as to how that is helping and whether you've had all the benefit from that? That's the first question.

Secondly, just on M&A, I noticed that it adds almost 4% to revenues and just over 2% to orders. Why is that a mismatch?

Is that just seasonality, or is there a weaker book-to-bill in the income M&A and then can you give us some expectation for net liquidity at the end of this year where you expect come out relative to the EUR982 you did last year given that you obviously spend some money on M&A and you have the outflows on Fit for 2020? Thank you.

Yes. When it comes to your first question, some examples of our sales force is starting to be successful in this new setup is first of all, there were carried out many workshops between the product managers and the application managers together with the regional or the country managers in order to train them on the whole product portfolio which GEA has to offer.

Then many of them had also intensive workshops to focus on the so called cross-selling, cross-selling means if the customer has for example, a brewery project, that the country managers explains to the customer that we are also doing this refrigeration and keeping the beer cold in the cellars et cetera that we have compressor technology et cetera which was not done in that magnitude in the past. This so called cross-selling which is a key initiative of this one GEA starting to work obviously and I think its also a matter that during this one GEA we did not only change organization but also our roundabout 43 country manager has been – has gone under a very thorough assessment in order to really pick the best and the right people and I think we have now excellent people at forefront representing the GEA portfolio and introducing the applications and the product into the customer.

Well, if I then take the two other additional questions with regard M&A. Yes, your observation is right.

Revenues are stronger up in order intake from acquisitions that has simply to with our latest acquisition, where the sales volume was in a very high level in this quarter where order intake was somewhat less, but this is simply and I repeat simply a timing issue that the general business environment in the bakery industry is rated from our end and that's being very convenient. And then, with regard to net liquidity, that's a little bit of a crystal ball, I outlined in my net liquidity reconciliation in that net cash position [Indiscernible] that we are doing on a early basis on EUR300 million of operational cash flow, and that certainly will be also the case for this year.

And then it depends very much on how we are going to spend for future acquisition. So assume that maybe in the second part of a year as it's normally – it's little stronger than the first part in operational cash flow somewhat between EUR150 to EUR200 million will fall into place and then again said we would have further acquisitions.

How much that would be. I cannot tell you now.

Got it. Thank you.

Thanks very much.

Yes. Thanks for taking my questions, I've got three.

The first one is actually more on the strategic outlook. Obviously we've seen one of your bigger clients, Danone, making a big acquisition with WhiteWave.

And I was just curious, given all the noise we have on lactose-free, on soy, and all of these kind of new trends here, and we are also still familiar with the boost you got from Greek yogurt. So do you see kind of a new investment wave coming here that could also help you accelerating your organic growth in the coming quarters?

Because I'm sure they not only do M&A, but they're probably also going to invest into those trends quite heavily. And how you are positioned regarding your products and the manufacturing of that?

And the second question is probably indirectly related to that, also kind of a sneak preview question for your capital markets day. Obviously, you have the 4% to 6% organic growth target, and now on the order intake you made it above 7% for the first time in a while.

And I think if you keep your orders stable here, it will be also similar for Q3. So should we assume that, you know, you definitely stand behind the 4% to 6%, and that the cost saving measures that you will announce then, that they should be seen on top of your existing margin range?

And then the last question I had was also on dairy more. I was just wondering what the kind of traditional cooperative is in terms of the CapEx.

Have you seen -- I mean, they've been cutting earlier than dairy farming. So should we assume that this has already reached the bottom?

Thank you.

Yes. Your first question about this lactose and all kind of other trends like gluten, et cetera, or soy milk in general is only one answer to that question that's always good for GEA, because we have all this technologies and we are developing these things together with the customers.

So if the customers want to change his portfolio from cow milk to products produced with soy milk or whatever else, GEA always has something to offer technology wise. Also when there is trends like in Mexico and in some parts of the U.S.

about sugar-free et cetera then its good for GEA because those things is demanding technology and we believe have excellent engineers to develop those changes together with the customers. What dimension it will take.

I cannot say this. It's difficult to say.

But any type of movement there, of course is business for GEA because this is demanding technologies less competition around when you talk about lactose-free and this complex processes in the food industry to extract certain components or introduce certain other components in the food processing line. So, I'm quite optimistic but I can honestly not tell you how much that is going to contribute in addition to GEA.

Then when it comes to the gross targets and the capital market and to cost savings we would not like to disclose now things which we are planning to disclose at the market capital day. We are of course happy with the order intake growth we see so far though we see as on track.

We have no reasons to change for the time being our guidance and about future cost savings from procurement and global manufacturing footprint let's wait and see what we're going to present at a capital market day. I would not like to speculate today about this year.

As on cooperatives and how they position themselves in the marketplace.

Yes. I believe that you're right that the cooperative they have reach the bottom of their let's say cutting down CapEx et cetera and you just said it at the beginning we are trying to find alternatives, some of them going into other liquid and some of them are going into more complex sophisticated products in order to process their milk and use their milk just in order to not be exposed to the pure, simple milk powder production, et cetera.

So, I believe that the cooperatives will continue to invest now and that we have seen the bottom there in their CapEx constrains.

Thank you.

Hi. Thank you.

Just a few from me left, I guess. On orders, could you give us some commentary on what's going on by region, just to give us an understanding of where you're seeing the growth from and perhaps where it's still lagging and where there's room for things to still pick up?

And then on revenue recognition, are you able to quantify how much you'll be able to catch up in Q2, and whether there's more of a catch-up to come in Q3 as well?

Hi. Regional wise what I can say in Q2, but also what we see in the near future.

If we go through the regions we see North America with organic in the order intake. We see north and central Europe with more of stagnation, because they are quite heavily impacted by the milk and diary farming and they have some huge orders in last year.

So the comparison to last year makes it for them difficult to grow. The DACH/Eastern Europe region which mainly dominated by Germany, by Russia and also Switzerland and some other Eastern European countries we see it's very positive.

They have been developing positive, I just mentioned a couple of examples from Russia. So that organically is growing.

Latin America is our biggest surprise, organically they're currently growing at a double-digit number when it comes to order intake and I have no reason to believe that this will continue for the rest of the years. Western Europe, Eastern Africa has also been growing mainly driven less by Africa, but more by Middle East and Spain, Spain has developed quite nicely in the order intake organically and will continue.

We see good prospective in Middle East. And then also Asia Pacific we will come back to a solid growth, so we believe that by the end of the year we will see also a good organic growth in the order intake.

With regard to the volume development, I personally foresee that you will see the catch up to start in the quarter three already as we have high backlog, book-to-bill ratios and hence we must assume that now the catch-up will kick in starting from the quarter three onwards and this also pre-condition that finally we'll make yearly guidance on [Indiscernible].

Thank you. And sorry, just a follow-up.

From your comments it wasn't clear whether Asia-Pacific is already growing or whether you expect it to start growing later in the year?

No. It is growing.

Q2 was organic growth.

Right. Okay.

Thank you.

Yes. Hello, gentlemen.

With regard to the cost for the implementation of Fit for 2020, what do you think is expected to come in the remainder of 2016? How far are you in terms of the payout for the provisions you have taken for this?

And another question regarding the financial results, has this performed better in the second quarter with this minus EUR6.5 million? Do you think this is a quarterly run rate forward now?

Regarding Fit for 2020 as Helmut said, we are on track. The payout of course they have all done.

You can see from our net liquidity bridge which Helmut showed where we did say by the end of Q2 also the impact for Fit for 2020, but certainly the biggest amount of it has been paid out in the different areas of the restructuring program. And I can also say as we stand here, I think it was statistics of last week we have only about slightly over 100 positions to be reduced from this over 1500 positions or 2000 gross positions and vast majority of this measure still open is coming from the shared service area which is also planned it like that because as you may remember, the shared service is done country by country or clusters of countries.

And we had also in the original plans that some countries are only being done by the end of the year, so we can very soon say that reduction and the measures of Fit for 2020 they have been all implemented. Could you repeat your or with regard to the quarterly run rate for the financial result, I mean still have about EUR140 million of debt in the balance sheet, which we can only pay down by the year 2017 and hence I assume that the run rate for the financial result will remain about the same unless we need to really pay negative interest rate which I don't foresee by now.

And specifically with the restructuring charges you expect to come, will it be a low double-digit billion [ph], or do you don't you expect here further things, further major things to come, as you have already provisions?

We once gave the guidance that we set ourselves an upper limit of EUR250 million for the one-off. And that is something where we believe we will stay a little bit below maybe, let's see, but we will not exceed that, fore sure.

Okay. Thank you.

Yes. Thank you very much for guiding the conference.

Thank you very much for all the listeners for attending and asking the questions which I hope that we were able to answer to you full satisfaction. And as I usually say, there is still a big race to go for GEA for a second half, but we are quite excited to see that GEA is able to pick the orders as they have proved in Q2 and that of course is the best foundation to close what we need close for the remaining part of the year.

Thank you very much.