Gea Process Engineering A/S

Management's review

Financial highlights DKK million 2023 2022 2021 2020 2019 Key figures Profit/loss Revenue 1,938 2,195 2,038 1,965 2,101 Profit/loss before financial income 197 248 373 137 102 and expenses Profit/loss of financial income and 182 162 54 16 -42 expenses Net profit/loss 321 345 328 89 21 Balance sheet Balance sheet total 2,493 2,396 2,389 2,875 2,593 Investment in property, plant, and 6 5 5 4 7 equipment Equity 969 1,020 973 1,054 964 Ratios Profit margin 10.2% 11.3% 18.3% 7.0% 4.9% Return on assets 7.9% 10.4% 15.6% 4.8% 3.9% Solvency ratio 38.9% 42.6% 40.7% 36.7% 37.2% Return on equity 32.3% 34.6% 32.4% 8.8% 2.1% As of 1 May 2023, a carve out of the Liquid acvies was performed. Comparison numbers in the financial highlights overview have not been restated. Explanaon of financial raos Profit Margin Profit before financials x 100 / Revenue Return on Assets Profit before financials x 100 / Total assets at year end Solvency Rao Equity at year end x 100 / Total assets at year end Return on Equity Net profit for the year x 100 / Average equity Development in the year The operang profit for the year is DKK 197 million compared to an operang profit of DKK 248 million in 2022. The profit margin has though decreased from 11.3% in 2022 to 10.2% in 2023 due to challenges in the execuon of some projects and lower sales acvity. Management considers the result of the year sasfactory in mes of headwinds in the macro-economic environment. During 2023 the company has successfully maintained a strong market posion. Targets and expectaons for the year ahead The expectaons for sales in 2024 are lower than 2023, considering connued headwinds in the macro-economic environment and also due to the Liquid business being carved out during 2023 into the newly established company GEA Liquid Technologies A/S. Management foresees also connued intense compeon. Special risks, operang risks, and financial risks Operang risks The company’s principal operaonal risk is related to the ability of being strongly posioned in the important markets. Furthermore, it is important for the company to be at the cung edge of the development within process engineering, including having the possibility to aract and keep employees with qualificaons and experience facilitang this objecve. Financial risks Because of the financial posion of the company and its financial resources, the company is only exposed to changes in the interest level to a limited extent. The company is, however, exposed to currency risks related to the current operaon. The company primarily covers its currency risks by forward contracts. Credit risks The credit risks of the company are primarily related to accounts receivable in the balance sheet. The company has no major risks regarding single engagements. The company’s policy when accepng credit risks means that all larger customers and partners are subject to current credit rang. Knowledge resources The ability of the company to aract and retain highly educated employees is essenal to its connuous growth, including engineers with experse in process development and automaon. To ensure connuous compeve products the company is invesng in the most modern process tools and research environments. This demands high skills, and substanal resources are thus also invested to develop the competences of the employees. Research and development The company is connuously engaged in adaptaon and improvement of its plants and processes as well as in new developments. The costs of research and development are recognized in the profit and loss statement unless development cost meets the requirements for recognion in the balance sheet. Climate and environment The company affects the environment via processing equipment and plants for industrial use delivered to customers. Thus, minimizing the environmental impact of the company is best achieved through its customers by delivering opmized soluons. The current strategy named Mission 26 has a Net Zero by 2040 commitment which of course reflects on the GEA Process Engineering A/S enty. 2040 is 10 years ahead of the target set by the European Union. Further sustainability targets include that all soluons will be offered with zero freshwater usage by 2030 and 50% of total energy demand is covered by cerfied energy management systems by 2026. Regarding the two focus areas – Sustainability and New Food - both serve to reduce impact on the climate and environment. The laer indirectly through less climate and environmental impact early in the food producon chain, e.g. at farms. However, GEA Process Engineering A/S contributes to the trend with new soluons that enables downstream processing of New Foods. On sustainability, the focus is on reducing energy and water consumpon at our customers’ producon sites. To implement the strategy the company has already increased the number of employees working on sustainability and sustainability is the innovaon area with the highest planned new investments. In addion to the above, several smaller iniaves can be menoned. These include technology developments to reduce the consumpon of compressed air which is very energy intensive to produce as well as iniaves at the Soeborg Test Centre to significantly reduce water ulizaon. High Potenal and Talent Pools and Focus on Development GEA Process Engineering A/S’ connued success is dependent on being able to retain experienced employees and managers and to recruit new, talented employees and managers to our company. Accordingly, we place importance on providing an aracve workplace with good opportunies for personal development. In 2021 we launched a global talent and high potenal development program for us to retain great talent in the organizaon and secure solid succession planning. This is done by building a pool of trained workers who are ready to fill key roles when leaders and other key employees step down. Suppliers and human rights The company has assessed that the biggest exposure regarding human rights is within the supplier area. This area is separately treated in the GEA Compliance Handbook. Local and internaonal regulaons on condions of employment, working hours and health and safety condions are observed in order to comply with the high standard stated in the internal GEA Compliance Handbook. The Compliance Handbook specifically states that discriminaon of employees by virtue of sex, sexual orientaon, origin, color of skin, or other personal features are strictly forbidden. Our purchase organizaon is responsible for vendor management and procures workshop components, third party equipment and services for customer projects and aer sales business. Workshop components are manufactured based on our drawings and specificaons in external workshops in and outside Denmark. Third party services are purchased in accordance with framework supplier agreements or on a case-by-case basis depending on the characteriscs of the supplier or product market. The purchasing staff are all well-trained in 'good purchasing pracce' and the legal aspects of purchasing. Every purchaser has taken an on-line test in an-corrupon and export control organized by GEA Group Compliance Management. The procedures on external workshop audits include evaluaon of working condions, maintenance of producon facilies, cleaning, training of workshop staff and safety measures at the workshop. This has posively contributed to no registered breaches on our internal procedures or any severe noncompliance of our suppliers in 2023. We expect to maintain our focus in this area in the future.

Description of significant activities of entity

Key acvies As in previous years, the core acvity of the company has been engineering and supply of industrial processing plants.