GEA Group Aktiengesellschaft (G1A) Earnings Call Transcript & Summary

Ladies and gentlemen, as Chairman of the Supervisory Board, I hereby open this year's Annual General Meeting of GEA Group Aktiengesellschaft. And in accordance with the company's articles of association, I will take over as Chairman. On behalf of the Supervisory Board and the Executive Board, I would like to extend a very warm welcome to you, dear shareholders and proxies. This year's meeting will be held as a virtual Annual General Meeting without the physical presence of shareholders or their proxies with the exception of the company-appointed proxies in accordance with the German COVID-19 Mitigation Act. The Executive Board and the Supervisory Board have decided to do so in order to provide adequate protection for you and all participants on stage and behind the scenes. On the other hand, you, ladies and gentlemen, should of course be given the opportunity to exercise your rights as far as possible. Dear non-German-speaking shareholders, the entire Annual General Meeting will be simultaneously translated into English. I would like to welcome the notary Professor Jorg Timmermann, who will certify the resolutions of this Annual General Meeting as required by the German Stock Corporation Act. I would also like to welcome the members of the Executive Board. For health protection purposes, the other members of the Supervisory Board, with the exception of Professor Kohler, will not attend today's meeting in person. However, as Chairman of the Supervisory Board and Chairman of the meeting, I have the opportunity to contact them at any time. Professor Kohler, as a court-appointed member, will personally introduce herself later on prior to her election. Fiscal year 2019 and this year have seen major changes at the Executive Board level. Mrs. Snels as well as Dr. Schmale and Mr. Bersch retired from the Board. We already bid farewell to Dr. Schmale at our last AGM. Today, I would like to take the opportunity to thank Mrs. Snels and Mr. Bersch. Both of them have made a major contribution to the success of the company in a challenging market environment. Mr. Ketter and Mr. Giloth joined the Executive Board as new members. I'm very pleased that we have the 2 gentlemen on board. They will now briefly introduce themselves to you. Mr. Ketter, may I ask you to begin?

Yes, of course. My name is Marcus Ketter. I was born in Essen. I studied in Munich, macroeconomics. Went back to Essen, worked for 4 years in Essen at STEAG, worked as Controller. Went to the United States, I obtained an MBA in New York at the Columbia Business School; moved to Silicon Valley where I worked 3.5 years in different functions for NASDAQ listed companies. Then I went back to Germany, had different functions at thyssenkrupp AG and became CFO at Schuler AG Industrial Group. And before I joined GEA, I was CFO of Klockner & Co in Duisburg. I'm very pleased that I've now become the CFO with GEA.

Well, thank you very much, Mr. Ketter. Mr. Giloth, would you please introduce yourself?

Yes. Good morning. My name is Johannes Giloth. I am an economic (sic) engineer. Studied at Kaiserslautern University and at the University of Greenwich in London. Worked with Gemini Consulting in management consulting. Worked at Metro AG. Joined the Siemens company via the Siemens Management Consulting then worked in communication of Siemens AG. And as a result of the merger with Nokia, I worked with Nokia Siemens Network. With Nokia Siemens Network, I had several functions in the areas of strategy and procurement as well as production and became the supply -- the Chief Supply Chain Officer, and the last position I held was COO. I have been with GEA since the 20th of January 2020 as COO. And I'm in charge of production, procurement and supply chain.

Well, thank you very much indeed, Mr. Giloth. Ladies and gentlemen, there was also a change on the Supervisory Board. Mr. Eberlein resigned his mandate as a member of the Supervisory Board with effect from September 30, 2020, for personal reasons. On behalf of the Supervisory Board, I would like to thank Mr. Eberlein for his many years of fruitful cooperation and wish him all the best. Mr. Eberlein is well recognized for his high level of expertise in all tech and financial matters, which has always contributed to the benefit of our company. Mr. Eberlein was a much respected discussion partner for us and especially for me on the Supervisory Board. Thanks to his profound knowledge of GEA Group's business areas, combined with his professional experience, his advice was always much sought after and always helpful. As successor to Mr. Eberlein, Prof. Dr. Annette Kohler was appointed a member of the Supervisory Board as of October 1, 2020, by order of the Dusseldorf local court on August 20, 2020, at the request of the Executive Board which in turn was based on a proposal by the Supervisory Board. The Supervisory Board elected Prof. Dr. Kohler as Chairwoman of the Audit Committee shortly thereafter. As you can see from the agenda, Professor Kohler is to be elected to the Supervisory Board as a shareholder representative. I would now like to give the floor to Professor Kohler, who will briefly introduce herself to you.

Ladies and gentlemen, I'm particularly pleased to be able to introduce myself to you and to talk to you. First of all, I would like to thank you for having been given the opportunity during the last few weeks as a member of the Supervisory Board and in the Audit Committee to have been able to work for GEA. I'm 53 years old. I come from Sigmaringen. I'm married and I live in Dusseldorf. After studying economics in Germany and the United States and different stations in science and practice, I have now since 2005 been at the University of Duisburg-Essen as Chair of Accounting, Auditing and Controlling. My focus is at national and international accounting as well as national and international corporate governance. As a result of having been able to work with GEA Group and since I have been appointed to the Supervisory Board in October, I am -- have become familiar with the topics and tasks that both the Supervisory Board and the Executive Board will be dealing with. And I'm convinced that, by way of active and constructive commitment, I will be able to contribute to the future success of GEA Group. And that's why I would be very pleased if you put your trust in me and elected me to the Supervisory Board of GEA Group. Thank you very much.

Well, thank you very much, dear Professor Kohler, for the short introduction. With Professor Kohler, we have been able to welcome an outstanding financial expert into our midst. She's predestined to create a fresh momentum, and I am convinced that due to many years of practical experience on various supervisory boards, she will contribute to the successful implementation of our corporate strategy. Ladies and gentlemen, 2019 was an extremely important and highly successful fiscal year for GEA. For this reason, I would like to once again thank the entire Executive Board, the employee representative bodies and in particular all employees of GEA Group. Their high level of personal commitment and their willingness to support the necessary changes were remarkable. Before we address the items on our agenda, I would first like to explain the rules that apply to today's Annual General Meeting. The entire meeting will be broadcast live for shareholders and the public on the company's website. Via the Investor Portal, shareholders who have registered in good time as well as their proxies have the opportunity to cast their votes by postal vote, grant power of proxy, issue instructions to the proxies and lodge objections to resolutions for the record. You can address -- access the Investor Portal using the data sent to you with your confirmation of registration. Professor Timmermann has satisfied himself in advance of the meeting that the technical equipment is in proper working order. Should problems nevertheless arise during our transmission, they will of course be immediately resolved. If necessary, please check whether your Internet connection is stable and make sure that your Internet browser is up to date. If you have any questions about using the Investor Portal, please contact our service provider, Computershare. The contact details can be found on the Start page of the portal under the menu item Contact. The other members of the Supervisory Board have refrained from participating in view of the current spread of the infection. They are also following the meeting on their screens. All members of the Executive Board are present. Notice of this Annual General Meeting, including the complete agenda and the management's proposed resolutions of the announced agenda items, was given by the Executive Board in due form and time in the Federal Gazette on October 19, 2020. The notice of the meeting was also disseminated throughout Europe. In addition to the announcement in the Federal Gazette, the notice of the Annual General Meeting was communicated to the group of persons named therein in due form and time in accordance with section 125 of the German Stock Corporation Act. The notice of the Annual General Meeting, the annual financial statements of GEA Group Aktiengesellschaft for fiscal year 2019 and all other obligatory documents relating to this AGM have been available on the company's website since notice of the Annual General Meeting was given. Within the statutory period, the company did not receive any motions to supplement the agenda, and no countermotions to the agenda items or proposals for the election of members of the supervisory or auditors that required publication. Ladies and gentlemen, we are once again keeping an electronic attendance register for today's Annual General Meeting. It is currently being compiled and will be made available to you on the Investor Portal in the Menu section under List of Participants before voting begins. The list of participants at today's virtual Annual General Meeting only includes those shareholders who are represented by the proxies of the company. In contrast, shareholders who cast their vote by mail are not included in the attendance list. Please note that only the directory visible on the Investor Portal is valid. Information provided to you on other websites or by any other means other than this portal will not be taken into account. Any kind of photographing or other duplication of the list of participants as well as the abuse of the data contained therein is prohibited. Pursuant to section 19, subsection 2, sentence 2 of our articles of association, I determined the type and form of voting as follows. This year, voting during the Annual General Meeting will takes place exclusively via the Investor Portal, you will have access to this portal with the data sent to you. There, you can cast your vote via electronic absentee ballot, grant powers of proxy and issue instructions to the proxies or lodge objections to resolutions for the record. Authorization and instructions of the proxies and postal votes can be issued, revoked or changed via the Investor Portal until voting begins. Please follow the corresponding instructions on the Investor Portal. The proxies appointed by the company are Dr. Ralph Pennekamp and Mr. Bastian Laue. They will exercise the voting right on your behalf exclusively on the basis of the instructions you have given. Both gentlemen are present here today. Please note that authorizing company-appointed proxies and casting postal votes on the published resolution proposals will only be possible until voting begins. I will inform you again in good time. We will vote on all agenda items in a single ballot. We will use the accumulation method for voting, which I will explain to you before the respective votes. Ladies and gentlemen, contrary to what is practiced during an in-person meeting, we will not hold a general debate this year. The shareholders had the opportunity to address questions to the company via the Investor Portal until November 23, 24 hours. Until this time, there was also the opportunity to submit written comments or send video messages via the company's website. We published the written comments and the video messages on the company's website in accordance with the requirements set out in the notice of the meeting. The video messages will be played after the explanation of the agenda. Thus, together with the subsequent answer to the questions that have been submitted, they will replace our usual general debate. During today's meeting, neither requests to speak nor procedural motions and motions of order will be possible via the Investor Portal. Ladies and gentlemen, I will now call agenda items 1 to 11. With the exception of agenda item 1 on which no resolution will be adopted, the remaining agenda items will be called for a joint resolution later on. Let me now turn to agenda item 1, presentation of the adopted annual financial statements of GEA Group Aktiengesellschaft and the approved consolidated financial statements as of December 31, 2019. The group management report, combined with the management report of GEA Group Aktiengesellschaft for fiscal year 2019, including the report of the Supervisory Board for fiscal year 2019. Ladies and gentlemen, the aforementioned documents contain the explanatory report of the Executive Board on the disclosures pursuant to sections 289 a(1) and 350 a(1) of the German Commercial Code as well as the Corporate Governance Report including the Corporate Governance Statement and the Remuneration Report. The annual financial statements and consolidated financial statements as of December 31, 2019, and the group management report combined with the management report of GEA Group Aktiengesellschaft, has been audited by KPMG Wirtschaftsprufungsgesellschaft Berlin in its capacity as auditor appointed at the last Annual General Meeting. The Supervisory Board examined in detail the annual financial statements, the consolidated financial statements, the combined management report for the company and the group, and the proposal for the appropriation of net earnings. Together with the auditor, the audit report was discussed in detail at the preparatory meetings of the Audit Committee on March 5 and 12, 2020, and at the Supervisory Board meeting on March 12, 2020, at which the financial statements were adopted. Neither the audit performed by the auditor nor the audit performed by the Audit Committee or the Supervisory Board gave rise to any objections. The auditor issued the required audit certificates pursuant to section 322 of the German Commercial Code without qualification. At its meeting on March 12, 2020, the Supervisory Board approved the annual financial statements and consolidated financial statement presented by the Management Board. The annual financial statements are thus adopted in accordance with section 172 of the German Stock Corporation Act. The written report of the Supervisory Board on its activities in the past year 2019 can be found in the annual report starting on Page 27. I hope that you will understand that I will not repeat all these statements orally. Instead, I will only outline the focal points of the Supervisory Board's activities in the past year. Among other things, the focus was on the aforementioned changes at the Executive Board level. In addition, one focus was placed on obtaining advice on relevant acquisition-related matters. The Supervisory Board set up a dedicated committee for the purpose of being able to address and take an in-depth look at these topics. In addition, the Supervisory Board dealt with the new organizational structure and the transformation program CREATE. Another key issue we addressed in fiscal year 2019 and this year was succession planning for the shareholder representatives on the Supervisory Board. We are confident that we will be able to propose highly competent individuals for election at next year's Annual General Meeting. You've just met one of them, Professor Kohler. Her election by today's Annual General Meeting will be for Mr. Eberlein's remaining term of office that will expire at the 2021 Annual General Meeting. Within the framework of succession planning and taking into account our target profile for the Supervisory Board, we continue to strive for at least 2/3 of the shareholder representatives being considered independent. Far-reaching changes are necessary to meet these requirements. For example, I myself will not be available for another term of office. However, I would like to point out that some shareholders with a larger share of voting rights wish to be represented on the Supervisory Board. Against this backdrop, I assume that representatives of 2 anchor shareholders will continue to sit on the Supervisory Board in the future. But we're not only concerned with retaining our independence. At the same time, the proposals for elections submitted today and at the next Annual General Meeting are and will be based on our ambition to ensure a diverse composition of the Supervisory Board. Ladies and gentlemen, at this juncture, I would now like to give the floor to the Executive Board for its comments on the 2019 annual financial statements as well as the company's business development. Mr. Klebert will explain the key figures for fiscal year 2019 and subsequently provide an outlook for the future. Mr. Klebert, the floor is yours.

And thank you, Dr. Perlet. Dear shareholders, good morning from Dusseldorf. And welcome to this premiere, the first ever purely virtual Annual General Meeting of GEA Group AG. But this is already the new norm, you might say and thus quite rightly so. After all, this year nearly all listed companies have presented their annual financial statements for 2019 digitally due to the COVID-19 pandemic. And for most of us, virtual conferencing has already become part and parcel of our daily lives over the past few months. However, let me be very clear about this. We at GEA have not taken this decision, to accept this new normal, lightly. As you may know, we had initially postponed our Annual General Meeting scheduled for April to a to-be-determined date at the end of the year. At that time, we had every hope and intention to offer our Annual General Meeting as an in-person shareholder meeting. Why was this so important to us? We were absolutely determined to give you, dear shareholders, the opportunity to make full use of your rights especially this year, a year fraught with many question marks and uncertainties. It seemed like the right thing to do to not prematurely dismiss the option of engaging with you in our traditional format. Ladies and gentlemen, alas the pandemic continues to dictate how we can operate safely. Therefore, we finally have to take the decision to forego your physical presence today. This safeguards your health and protects all those involved in the Annual General Meeting. The dynamics of the infection in recent weeks have shown that this was definitely the right decision. In the end, the tighter rules and regulations that have been reimposed over the last few weeks would have simply made having a physical meeting today impossible. However, let me assure you that we have spared no effort in arranging this virtual Annual General Meeting in such a way that your right as shareholders are safeguarded to every extent possible. At this point, let us begin by taking a brief glance at the year 2019, which of course ended some time ago. Regardless of the company's performance and key financials, it represented an important and truly defining year for GEA because it was the year in which we charted the group's future course. Following this, I will elaborate on the measures put in place, measures which have already turned out be instrumental in helping us emerge relatively unscathed to date from the challenging year 2020. Relying on this foundation, we have even been able to turn this crisis into an opportunity by accelerating digitalization and strengthening our focus on sustainability topics. Finally, I will conclude by outlining our priorities and targets for the current fiscal year. So let us virtually connect today and jointly take a look at fiscal year 2019, a world still unaffected by the coronavirus and a year that would eventually turn out to be a year of new beginnings and where GEA made major progress. Our achievements are impressive and speak for themselves. Our strategy has been effective, and we delivered on our promises. In 2019, we outlined a new organizational and management structure for the group. We have been successfully working in this setup since early 2020. We initiated and have consistently implemented various projects aimed at enhancing our profitability. Moreover, we have defined and communicated new medium-term targets. But at the same time, we have also succeeded in enhancing our key financial figures. Within a period of 12 months, we have improved many things. The optimization of our net working capital and cash flow and, very importantly, our positive liquidity clearly speak for themselves. They plainly show that the measures we have initiated have proven effective. We set quite ambitious targets for ourselves in 2019 and met all of them and even exceeded some of them. This excellent performance, in connection with our strong free cash flow position, was the reason why we decided to once again propose an unchanged dividend of EUR 0.85 per share. We already disbursed the legally permitted maximum partial amount of EUR 0.42 on the originally planned dividend payout date in spring 2019. Despite the challenges posed by the outbreak of the COVID-19 pandemic in early 2020, we remain unwavering in our belief that GEA's future growth opportunities will be realized. Our sound business model goes hand in hand with a strong footprint in several attractive and structurally growing sectors, including food, beverage and pharma. I would like to take this opportunity to extend my thanks to all our employees. They are the ones who have allowed GEA to make this turnaround and to get back on track through their dedication and commitment paired with a healthy dose of discipline. Thank you very much for this. In 2019, we slightly exceeded our sales and ROCE targets. Sales rose by 1.1% to EUR 4.9 billion. Originally, we had forecast a moderate decline. ROCE was at 10.6% and thus slightly higher than the projected 8.5 to 10.5 percentage range. Totaling EUR 479 million, our operating result, EBITDA before restructuring measures, was at the upper end of the projected range of EUR 450 million to EUR 490 million. Please bear in mind that this figure already includes the adverse impact of nonrecurring expenses in the amount of approximately EUR 40 million absorbed by our company. Well, let me give you a few key performance indicators. As anticipated, EBITDA was -- let me give you a more detailed account of a few key performance indicators. At 4.93 million (sic) [ 4.93 billion ], the group's full year order intake in 2019 was slightly higher than the prior year, marking another all-time high for GEA since the divestment of the GEA Heat Exchangers. GEA's sales also reached another record high. Like order intake, sales slightly increased by 1.1% to a total at EUR 4.88 billion. At the same time, our important service business experienced disproportionate growth. Year-on-year, the share of sales attributable to service climbed from 30.9% to currently 32.2% (sic) [ 32.3% ]. Today, compared with the -- yes and as anticipated, EBITDA before restructuring measures was approximately 11% down on the previous year, amounting to EUR 479 million in the 2019 fiscal year. It should be noted that compared with the previous year, the 2019 year under review witnessed the first-time application of the IFRS 16 leases accounting standard. For the purpose of ensuring comparability between the 2 fiscal years, the IFRS 16 effect of the year under review was factored into the 2018 EBITDA before restructuring measures. This resulted in a roughly EUR 67 million increase in the respective pro forma figure for the 2018 fiscal year. Moreover, during the year under review, the company absorbed special effects to the tune of around EUR 41 million, while fiscal 2018 had included a nonrecurring profit contribution in the amount of approximately EUR 23 million. At 9.8%, the corresponding margin was well over 130 basis points below the prior year level. Totaling 10.6%, our ROCE was even slightly ahead of expectation. In the year under review, the key financial was adversely impacted by a decline in EBIT before restructuring measures as well as the higher level of capital employed. The improvements made in the current fiscal year go to show the potential we have already unlocked on the basis of the measures we put in place. Our net working capital to -- our -- was improved by EUR 65 million as of balance sheet date. As a result, the new net working capital to sales ratio was down to just 14%. This means that at the end of the year 2019, we were already very successful in optimizing our net working capital. However, this does not imply that we have fully accomplished our envisaged enhancement of net working capital. Absolutely not. Its further reduction is one of our top priorities. Over the current fiscal year, we have already shown that there is still some potential. The reduced level of net working capital has also helped us to significantly increase our free cash flow from EUR 120 million (sic) [ EUR 122 million ] in the previous year to a level of EUR 342 million. This success was instrumental in allowing us to reduce our net debt to 0 at the end of the year. This allowed us to achieve net liquidity in the amount of EUR 28 million. Ladies and gentlemen, even though we were forced to postpone our Annual General Meeting until autumn on account of the pandemic, we placed our trust in GEA's strength and stuck to both our dividend proposal and the original dividend payout date. In early May, we already disbursed half of the proposed dividend of EUR 0.85 for the full fiscal year. In doing so, we took full advantage of the possibilities. And today, you take a resolution on the remaining amount of EUR 0.43. So we took full advantage of the legal possibilities for your benefit. GEA has proved to be an operationally sound and valuable company even now during the crisis. Today, you hold a reliable dividend-paying stock that gained more than 30% in the year under review. Over the course of the year, we were able to fully make up for the negative response of the capital market to yet another profit warning issued in early February 2019. Following several years of bad news for you, our shareholders, we managed to stand our ground and prove ourselves by taking consistent action and the right initiatives out there in the capital market. Just like the respective indices, GEA's share price performance in the current fiscal year 2020 has been marked by a pandemic-driven steep fall in March and then an equally sharp bounce back in the months thereafter. And this development is a clear vote of confidence on the part of the capital market. And at the same time, it encourages us to continue the path we have embarked upon. Well, what does -- did this path look like? Which strides have we made in 2019 and 2020? When I was addressing you for the very first time at last year's Annual General Meeting in April 2019, I was already able to outline and explain the core issues at hand. In September 2019, we -- at the Capital Markets Day, we delivered a detailed presentation outlining the individual projects and measures. Our most important lever, in 2019, we set the organization on a completely new footing. During the summer, we began devising new structures. Starting as early as October, the group's restructuring was gradually taking shape. And since the beginning of this year, we have fully switched to the new structure. What exactly have we done? We have decentralized entrepreneurial responsibility, handing it back to where it actually belongs: in the hands of the individual divisions, business units, subsidiaries and countries. Today, our managers are once again directly responsible for sales as well as profit and loss. They are acting as entrepreneurs within our group. This ultimate decision-making authority, which nonetheless also implies that they're held accountable for their decisions, ensures greater transparency and better comparability. In turn, this reinforces and strengthens the entrepreneurial spirit across GEA as a whole. By the way, this is not only reflected in the positive figures we have already seen throughout the current fiscal year. Our new organizational structure has also proved to be a model for success in the current coronavirus crisis. More on that later. But first of all, let us get back to the year under review. Concurrently with the group's transformation, we reshuffled the Executive Board and our leadership team in the course of the year 2019. Following the changes at the Executive Board level already explained by Dr. Perlet, we are now a team of 3 Executive Board members. This means that we have streamlined the Executive Board, reducing it from 5 to 3 members. By instituting the global Executive Committee, we have more closely involved our key operations managers in running the company, which ensures a much faster implementation of all essential decisions. The committee is comprised of the Executive Board, the division CEOs, regional CEOs as well as our Head of Human Resources. With senior -- 13 senior managers from 8 different nations, we are once again sending a strong signal in terms of diversity. In 2019, we not only made good progress in revamping our internal structures, but also did our homework in terms of restructuring, and faster than expected. For instance, we were able to accelerate the recognition of expenses in the amount of almost EUR 50 million, which were originally planned for the current year 2020, in fiscal year 2019. Given the extraordinary expenses and adverse impact caused by the pandemic in the current fiscal year, this disciplined approach will pay off even more. A major improvement was the effort to make our procurement organization more effective. For this purpose, we combined and pooled the resources of previously autonomous areas. Today, procurement, production and logistics are subsumed under a new Executive Board portfolio headed by Johannes Giloth. In the current fiscal year, we have already witnessed distinct progress where procurement is concerned. In 2020, we will save than EUR 25 million by professionalizing and standardizing our procurement processes. The same applies to production. This is another area where we triggered changes while laying the foundation for our future production footprint back in 2019. Amongst other things, we will relocate capacities within Europe. We have pool production operations in the Asia Pacific region and built up so-called centers of competence around the world. On the one hand, this will help us lower our expenses and level of complexity. On the other hand, we will simultaneously increase capacity utilization of our production sites. And likewise, we will be able to respond more flexibly to respective levels of demand. In the current year, we have already made major strides in optimizing our production. Another element of our corporate realignment includes a review of our portfolio and the divestment of selected operations as previously announced. In particular, this applies to low-margin and low-synergy activities. We initiated corresponding divestments back in 2019, with some of them already completed. For instance, the sale of compressor manufacturer GEA Bock in the refrigeration sector, which is expected to be completed early next year. Moreover, we recently divested 2 entities in the Farm Technologies division, selling our barn and milk cooling businesses. This strategic portfolio adjustment will allow us to further focus on our core markets in the food, beverage and pharmaceutical sectors. In addition, this will also increase our earnings margin in the long run. Then -- but last but not least, operational excellence includes a modern and competitive IT infrastructure. Here, we have some catching up to do, but this is another issue we resolutely addressed back in 2019. We worked out and adopted a corresponding road map, and we began the continual enhancement and harmonization of our infrastructure. At the same time, we have been professionalizing the backbone of our business planning system starting last year, and that is our ERP systems. ERP stands for enterprise resource planning, and that is the central software system of a company. The latter comprises the planning, management and control of corporate and operational processes within the group. Historically, our group had roughly 100 different systems of this kind. Currently, there are still more than 60 running, the coordination and analysis of which requires unnecessary resources and hampers transparency. Thus, the harmonization and reduction of this number to a single, uniform, group-wide system represents a milestone that will facilitate the management of GEA. But there's more to the story. We are simultaneously investing in GEA's overall digital transformation. Harmonizing our data and resource management tools represents a Herculean task that will keep us busy until 2025. But these efforts are going to pay off. ERP consolidation will help us streamline and make our processes more efficient while increasing transparency and our ability to steer operations. In the meantime, we have entered into a strategic partnership with SAP to implement our global ERP system. Ladies and gentlemen, particularly in times like these, when the world is grappling with a historic pandemic, we must not lose sight of one thing: our efforts to tackle a climate change and promote sustainability. At GEA, these tasks are part of our DNA. With our solutions, we have always helped to meet global challenges like population growth, global food supply and the conservation of resources. As a technology leader, we are living up to our global responsibility. We equip refrigeration plants and units with climate-friendly technologies. We build carbon-neutral beverage production lines for our customers. We have developed a heat pump system that extracts exhaust air from the London underground network using the waste heat to provide heat and warm water to many households and schools in a central London neighborhood, a truly low-carbon and sustainable solution. And at the same time, we are permanently optimizing our own environmental key performance indicators. For instance, by lowering our water consumption by 4.2% and reducing our waste by 7% compared to the previous year. Our efforts to make our own production even more sustainable is not just lip service. We have achieved tangible and measurable results. Last year, for instance, we again improved our EcoVadis supplier ranking. We have achieved one of the top ratings within the framework of the demanding climate action scores under the Carbon Disclosure Project, CDP. And 2019 was the first year we made a commitment to becoming a partner of the renowned World Economic Forum. We are committed to engineering for a better world. Due to our exemplary commitment to the environment, social affairs and corporate governance, we were named from its inception to the new DAX 50 ESG Index. This goes to show that at GEA, social responsibility and value creation go together. They are mutually intertwined. A healthy environment requires the strength of economically sound companies that drive sustainable innovation. On the other hand, industries will only survive in the long run if they reduce their ecological footprint and do their part to make a viable contribution to conserving our natural resources. GEA takes this mission very seriously, and we intend to make our engagement even more transparent. In the years ahead, we will therefore further extend -- expand our sustainability report and publish it as a stand-alone document. Of course, in 2020, the central topic for all of us has revolved around the impact of the COVID-19 pandemic. GEA responded early to the crisis. In January when the virus was beginning to spread in China, we set up a global task force. Ever since, the latter has been continually monitoring and analyzing developments. When necessary, we consult quickly and align our actions with the crisis management teams at all sites and in an uncomplicated manner. It goes without saying that this, first and foremost, serves the purpose of protecting the health of our own workforce. Based on our experience in Asia, we quickly learned our lessons and took respective precautions at all GEA production site worldwide early in the year. We closed canteens, tightened our hygiene rules and set up a global coronavirus headline -- hotline for our employees. Shifts are kept separate from each other. This way, we can minimize the risk of having to shut down an entire factory in the event of an infection. And as seen with many other companies, we have gained extensive experience in allowing our people to work remotely from home. Our crisis management is well developed and has proven effective. A dedicated reporting tool provides a daily overview of the number of infections, staffing levels and project progress at all corporate sites. Needless to say, we are also committed to supporting customers during these exceptional circumstances. For instance, the increased use of augmented and virtual reality technologies has allowed us to, by and large, continue planning the construction of entire factories and the installation of larger plants, delivering training courses for engineers and apprentices or further streamlining our production processes. Because we, as a technology partner, devote our full attention to ensuring that the multitude of essential products manufactured by our customers, food, beverages, hygiene products and vaccines, continue to be available to customers. As part of our crisis management, we have continuously and systematically analyzed the lessons learned this past spring. Based on this information, we have set clear priorities aimed at making GEA even more resilient. We wanted to be prepared for various scenarios, one of which included a second wave of the pandemic, which has now sadly materialized. Given our intense preparations, we are confident that we will once again cope well and manage this trying situation. Ladies and gentlemen, we managed to close the 2019 fiscal year unscathed by this pandemic. As for the current fiscal year, for which many companies have failed to give any guidance whatsoever, we anticipated a slight decline in sales as early as March, given developments that were foreseeable at this point in time. Moreover, in our outlook for 2020, we also reduced our earnings and ROCE expectations accordingly. So far, sales have fared in line with our expectations. However, as far as EBITDA before restructuring measures and ROCE are concerned, we have shown a much better performance. Our successful handling of the COVID-19 pandemic was greatly facilitated by our early and consistent crisis management. Likewise, our efficiency improvement measures put in place last year are having an increasingly positive impact on our financial performance, cash flows as well as our financial position. The notable increase in our net liquidity at the end of the third quarter despite the ongoing crisis is testament to the quality of our financial management. Given these measures, we have strengthened GEA as a whole and can continue to build on a healthy and viable group. Even if the pandemic continues to cast a shadow over our short-term prospects, our medium- and long-term targets remain unchanged. The same holds true for our targeted dividend payout ratio. Despite the current situation, we have every reason to be optimistic about the future. Today, your GEA is a vital, energetic company, full of life, and an excellent sustainable investment. Our business model has turned out to be robust and viable, especially in turbulent times like these, because we generate the lion's share of our sales in the food and/or beverage industry as well as the pharmaceutical sector. In other words, in key sectors that remain stable even in the midst of a pandemic and which are frankly even growing in demand. This is where global megatrends play into our business models. For example, as more people live longer, there's greater need for medicines and medical care. Cities and megacities continue to grow in number and size. A globally expanding middle class have more expendable income and driving greater demand for processed food as well as functional foods. And of course, there's rising demand for meat and protein alternatives. In a nutshell: Our markets keep growing. Our aim is to remain one of the leading contenders in these arenas, taking an even more prominent position going forward as a technology and quality leader and as a strong world-renowned brand that stands for resource-saving solutions. So ladies and gentlemen, for this reason, we will keep our eye on the ball and resolutely pursue our strategic and sustainability goals. In the current and coming fiscal year, we will focus all our energy on boosting order sales -- order intake, sales and profitability, continuing to systematically implement the measures put in place while coping with the impact of the COVID-19 pandemic. Our aim is to create value for all of GEA's stakeholders. In this context, we, the Executive Board and the Supervisory Board, are asking you to give your approval to the domination and profit and loss transfer agreement concluded between GEA Group Aktiengesellschaft and GEA Internal Services GmbH that will be put to the vote under agenda item 7 today. Amongst other things, the agreement dated March 2 of this year will not take effect until it has been approved by the AGM participants. Taking into account the legal requirements, I would like to outline the basic principles of the agreement as well as the reasons why it was concluded in the first place. The full text of the agreement is included in the notice of Annual General Meeting and is also available on GEA's website under the AGM 2020 section, together with the joint report by the 2 contracting parties as well as additional documents. GEA Internal Services GmbH is a wholly owned subsidiary of GEA Group Aktiengesellschaft. The objective of the company is to render centralized services for affiliated companies particularly in the areas of information technology, HR support, procurement, billing, finance and accounting, reporting, controlling, contact management as well as other administrative and management services. It would act as an internal service provider for the purpose of pooling the above services previously provided by GEA Group AG for the benefit of the group companies. The domination and profit and loss transfer agreement serves to form a fiscal unity between the 2 companies for both corporate and trade tax purposes, which results in the joint taxation. This would make it possible to immediately offset potential losses incurred by GEA Internal Services GmbH against profits generated by GEA Group AG and vice versa. Thus, positive and negative results may be offset against each other for tax purposes on a group level. Depending on the taxable earnings of the companies involved, this may lower the tax burden. Subject to the approval of the agreement in the current 2020 fiscal year, GEA Internal Services GmbH may already be incorporated into the consolidated tax group of GEA Group AG with effect from this year. The key obligations of the contracting parties are as follows: GEA Internal Services GmbH subjects the management of its company to GEA Group AG. GEA Group AG is entitled to give instructions to the company's Board of Directors. Moreover, GEA Internal Services GmbH is obliged to transfer its entire profit to GEA Group AG. Barring other retained earnings which are set aside or reversed, this amount comprises the net income for the year prior to the profit transfer reduced by a financial loss carried forward from the previous year and an amount that is excluded from distribution as the case may be. With the consent of GEA Group AG, GEA Internal Services GmbH retains the right to transfer amounts from the net income for the year to other retained earnings in accordance with section 272, paragraph 3 of the German Commercial Code, provided that this is permissible under commercial law and economically justified in terms of reasonable commercial considerations. As a consequence, the profit to be transferred to GEA Group AG will be reduced to this extent. At the request of GEA Group AG, such retained earnings set aside during the term of the agreement must be reversed and used for offsetting a net loss for the year or to be transferred as a profit. In turn, GEA Group AG is obliged to offset any loss incurred by GEA Internal Services GmbH. An exception only exists insofar as such offsetting is not possible by making withdrawals from other retained earnings set aside during the term of the agreement. In all other respects, the agreement contains the customary provisions governing a domination and profit and loss transfer agreement that is entered into for the purpose of establishing a fiscal unity. As mentioned before, GEA Internal Services GmbH is a wholly owned subsidiary of GEA Group AG. For this reason, neither a review of the domination and profit transfer agreement by expert auditors nor the submission of an audit report was required. Following the approval of the Annual General Meeting and entry into the commercial register, the domination and profit and loss transfer agreement, except for the right to issue instructions, will take retroactive effect for the period commencing January 1, 2020. Giving one month's notice, the agreement may be contractually determined -- terminated for the first time as of midnight on December 31, 2024. This ensures compliance with the minimum period required to establish a fiscal unit. Unless the agreement is terminated, it will renew for another year, respectively, subject to the same notice period. Apart from that, termination for cause without notice is always possible. There was no alternative other than the conclusion of the presented domination and profit and loss transfer agreement to achieve the objectives outlined above. The conclusion of another type of intercompany agreement, like an operating management agreement, would not have provided the possibility of securing the envisaged tax benefits. Ladies and gentlemen, this brings me to the end of my presentation today. It goes without saying that we will -- that we have striven to keep you posted on GEA's progress. And we'll continue to do so even if the virus upends one or more of our planned events in upcoming fiscal calendar. We sadly had to cancel this year's Capital Markets Day and hope that you will understand. Again, the inability to engage in a personal exchange with the capital market played a decisive role in the decision to cancel this event. If at all possible, we will hold the next Annual General Meeting as an in-person event once more. However, that depends on how the pandemic evolves in the course of the coming months. Dear shareholders, ladies and gentlemen, in spring 2019 I spoke the following words when addressing you as GEA's newly appointed CEO. "GEA cannot, and will not, continue like this." Taking stock, I may proudly say today: We have kept this promise by resolutely and dauntlessly changing course, by putting in place a new culture of entrepreneurship, and by relying on a highly motivated top-notch team. As you can see, in many ways GEA is undergoing a transformation, an organizational, technological and cultural transformation, which began already in 2019. And our new approach is bearing fruit. We've already accomplished a great deal of what we originally set out today. We are right on track. And yet, we will not become complacent. We are not going to just sit back and wait, especially when faced with a historical crisis in the form of a pandemic, which the world has been grappling with for almost a year and likely will have to continue to do so. As I said back then, I'm fully convinced of GEA's potential for the future. This still holds true today, now more than ever. And I do not just say so as CEO of GEA Group AG, but also as a shareholder with 100,000 shares. Engineering for a better world. Thank you very much for your attention.

Thank you very much for your deliberations, Mr. Klebert. I would like to point out that the text version of the speech has been available on the company's website since November 20. Ladies and gentlemen, before we move on to the other items on the agenda, I would first like to announce the attendance. Out of the total of capital EUR 520,370,765.57 (sic) subdivided into 180,492,172 no-par-value shares of the company, are currently represented at the company the following: nine million one hundred eight twenty eight thousand two hundred four hundred and forty two (sic) shares, And all these votes are also represented in the AGM. This amounts to 55.78% of the registered share capital being represented. 15,183,660 postal votes were received. The attendance regarding (sic) [ including ] the postal votes amounts to 116,011,902 no-par-value shares. This corresponds to 64.28% of the registered share capital. Ladies and gentlemen, before we play the video messages and answer the questions you submitted, I would like to briefly explain the items on the agenda. This will make it easier for you to understand the video messages as well as the questions asked. Mr. Klebert has already given you a detailed account of the annual financial statements and the business performance. No resolution will be passed. Agenda item 2 concerns the appropriation of net earnings. We proposed a dividend of EUR 0.43 per profit-participating no-par-value share. In May of this year, an interim payment of EUR 0.42 per profit-participating share was already paid out to you. Thus, the dividend for the 2019 fiscal year amounts to a total of EUR 0.85 per profit-participating no-par-value share. Agenda items 3 and 4 relate to the ratification of the acts of the members of the Executive Board and the Supervisory Board for fiscal year 2019. Agenda item 5 concerns the appointment of the auditor. Based on the recommendation of the Audit Committee, the Supervisory Board proposes that KPMG AG Wirtschaftsprufungsgesellschaft Berlin be reappointed as auditor of the company and the group for the 2020 fiscal year. Under agenda item 6, the Supervisory Board proposes to the Annual General Meeting to elect Prof. Dr. Annette Kohler as a member of Supervisory Board. In the event of her election by the Annual General Meeting, she has already declared her acceptance of the mandate so that her term of office is -- that her term of office as a court-appointed member of the Supervisory Board will expire upon election by the AGM. In accordance with section 10, paragraph 6 of the articles of association, the appointment will take effect from the end of this Annual General Meeting until the end of the Annual General Meeting resolving on the discharge for fiscal year 2020. This corresponds to the regular expiry of Mr. Eberlein's term of office. Under agenda item 7, the Executive Board and the Supervisory Board propose that the conclusion of the domination and profit and transfer agreement between GEA Group Aktiengesellschaft and its wholly owned subsidiary, GEA Internal Services GmbH, be approved. Mr. Klebert has already reported to you on this. Item 8 concerns a few amendments to the articles of association. They include the alignment of the proof of shareholder status with current law, the nonphysical participation of shareholders in an Annual General Meeting by means of electronic communication as well as voting by postal vote, the convening of and resolutions during Supervisory Board meetings, and the authorization of the Executive Board with the consent of the Supervisory Board to make partial distributions of the company's net earnings. Agenda items 9 and 10 embrace resolutions aimed at creating authorized capital, in each case with the authorization to exclude subscription rights for no more than 10% of the nominal capital that exists at the time the resolution is adopted by the Annual General Meeting. The creation of Authorized Capital II and III essentially corresponds to the previous authorizations, which have expired in the meantime. In each case, the new term ends on November 25, 2025. Under the proposed Authorized Capital II, the Executive Board is to be authorized to increase the company's nominated capital by up to approximately 25% of the currently existing nominal capital, by issuing new no-par-value shares against cash and/or noncash contributions. Authorized Capital III can, unlike Authorized Capital II, only be used against cash contributions and provides for the possibility of the so-called simplified exclusion of subscription rights in accordance with section 186, paragraph 3, sentence 4 of the German Stock Corporation Act. Please refer to the detailed information on the requirements, in particular the -- with regard to the exclusion of subscription rights and the respective report of the Executive Board, which is included in the notice of the meeting. And then finally under agenda item 11, a resolution is to be passed on the authorization to issue bonds with conversion or option rights and/or obligations and to create conditional capital to service these bonds. In total, the proposed authorization to exclude subscription rights relates to a pro rata amount of 10% of the nominal capital. Once again, this is due to the expiry of the previous authorization. In this respect, please allow me to one more time refer to the report of the Executive Board for details. In view of current events, please allow me to provide some further explanations with regard to the proposed resolutions just presented under agenda items 9 to 11. ISS, Institutional Shareholder Services, published a negative voting recommendation on these agenda items 2 weeks ago. They were not in line with its guidelines, which only permitted share issues with subscription rights totaling no more than 50% of the nominal capital. Major institutional investors based their voting behavior on this recommendation. If the aim of obtaining the necessary majority of 3/4 of the nominal capital represented at the time of the vote and the resolutions is not achieved, only the authorization to increase the nominal capital by up to EUR 77 million will exist until April 2022. However, the Executive Board and the Supervisory Board are very keen to obtain the necessary financial flexibility of making use of the authorizations for corporate action that are to be adopted today. In this respect, I refer to the corresponding report of the Executive Board on these agenda items, which you will find both in the notice of the Annual General Meeting and on the home page. On Wednesday last week, the Executive Board therefore felt compelled to issue a declaration committing itself to refrain from using the existing authorized capital in the amount of EUR 77 million. This way, the threshold required by the ISS is not [ breached. ] This commitment is limited in time until next year's Annual General Meeting reduces this authorization to EUR 25 million. It is subject to the condition that today's resolutions on agenda items 9 to 11 receive the necessary majority. The declaration of the Executive Board is published on the home page below the documents on agenda item 11. As a result, ISS withdrew its negative voting recommendation last week. It now recommends that investors vote in favor of the proposed resolutions. Following the vote, I will announce the voting results for all agenda items. Ladies and gentlemen, as already announced, it will not be possible to hold a general debate at the virtual general meeting this year. However, we have given you, dear shareholders and proxies, the opportunity to submit written comments or video messages via the company's website up to 2 days before the Annual General Meeting. During the same period, you also had the opportunity to address questions to the company via the Investor Portal. No written comments were received in the run-up to the meeting. We posted a video message on the company's website, which is still accessible there. Before answering your questions at this Annual General Meeting, we would like to show the video message that was submitted. It was sent by the German association for the protection of securities holdings. The speaker is Mr. Tungler, the Senior Managing Director of the association. I would now like to ask our technicians to show the video message.

Ladies and gentlemen, dear shareholders, my name is Marc Tungler. I am the Senior Managing Director of the German association for the protection of investors. We are represented as every year at GEA's AGM. And with our questions, GEA has changed a lot very positively. We had many concerns in recent years, but the management managed to make a turnaround. Margins are considerably increasing. Cash flow developed very positively. And we get the impression that the new Executive Board is tackling the changes, and these changes are worthwhile making. We wish the GEA Executive Board, the employees all the best health and that they further continue to drive GEA forward. We would like to organically and inorganically grow. And once we do this and when we have the margins also, the shareholders will benefit because hopefully the dividend will also increase. We would like to thank GEA for trying have this in-person meeting. But GEA paid this interim payment, we respond very positively to that. Please also consider the shareholders and be friend with them for today. I would like to wish all of you all the best. Stay safe and healthy. And regarding GEA and its employees, well, my wishes also go out to them. And I hope that next year, we meet again at an in-person Annual General Meeting. Thank you.

I would like to express my sincere thanks for the transmission of the video message and the interest in our company expressed therein. We now proceed with answering the questions you have submitted in the run-up to the Annual General Meeting.

First of all, I would like to emphasize that it is important to us to answer your questions regardless of the privilege granted by the COVID-19 mitigation act. We would like to answer the questions in the same quality as we have always done in other years in the context of an in-person meeting. As the Chairman of the Supervisory Board, I will first answer the questions to relating to the Supervisory Board. The Executive Board will then answer the questions addressed to it in detail. And so I would like to start with the question addressed to the, well, Supervisory Board regarding Pavan and goodwill. Mr. [ Buchele ], he asked a question of, "Who from the former Executive Board is responsible for the acquisition of the Pavan Group? And that has an impact on the Executive Board remuneration and severance payment. After the division of responsibilities on the Board, Steffen Bersch and Dr. Helmut Schmale should have been responsible too." Well, for the Executive Board of Aktiengesellschaft there's overall responsibility. And so the whole -- the entire Executive Board decided on the acquisition of the Pavan Group at an Executive Board meeting back in 2017. Information on the composition on the severance payments, of the remuneration and the severance payment, is in the annual report and also on the website of GEA. In the 2019 annual report starting on Page 102, you find detailed information on the agreements made with former Executive Board members who left the company. Then Mr. [ Buchele ] well also asked another question. "So why did the, well, economic situations of the Pavan Group not form one of the focal points of the work of the Supervisory Board? When I read the Supervisory Board report, I cannot see that the full impairment of goodwill was an important topic for the Supervisory Board, even though this impairment implies that the target was missed big time, because last year there was obviously no need to have this impairment." Well, the Supervisory Board has regularly dealt with the acquisition of the Pavan Group and its performance. During the years 2018 and '19 during the meetings of the Supervisory Board and during the, well, meetings of the presiding committee of the Supervisory Board, we had this as a standard point that was reported on. And of course, we also discussed the impairment or the goodwill of the Pavan Group. This was also a major point discussed in the Audit Committee and also by the full Supervisory Board during their meetings. So those were the questions addressed to the Supervisory Board. Now I would like to ask Mr. Klebert to ask the questions addressed to him.

Dr. Perlet, I start with question number one. It comes from DSW, German society for the protection of security holdings. "Well, the topic of sustainability is driving investors and impact business models. How do you see sustainability with regard to your products and the overall group? Do -- are you responding? Are you proactive or reactive in this particular area?" Since 2018, we have got a statement of sustainable value creation at GEA, which was adopted. And there, the Executive Board formulated our targets in terms of sustainability. This is a strategic guideline, which applies across the group. The document is published on the gea.com website. And what has particularly importance is our products and solutions engineering for a better world. This is our central value proposition to our customers, investors and our staff. Apart from the responsible design of our own value processes, GEA makes contributions for its customers by providing efficient product and process solution, enables sustainable management and the protection of natural resources. The sustainability topics from a customer point of view have got an impact on the total cost of ownership. Regarding the plants and equipment used during useful life, reduction of water and energy consumption and reduction in greenhouse gas emissions, we have for example a district heating project in the center of London with our heat pumps. I mentioned it before. We have got waste heat. And with the help of our technologies, 1,350 private households, a school and 2 leisure centers receive warm water. In our heating, we use 100-kilowatt ammonium heat pump. And it is important milestones in the efforts of the London Islington quarter to reduce carbon emissions and become carbon-neutral by 2030. Then we've got another partner, innocent, an important customer from the beverage industry there. We put into practice, well, state-of-the-art CO2-neutral juice production plant in the Netherlands. And it will be opened in 2021 and produce 400 million bottles of chilled juice for the European market, which accounts for about 60% of the annual production of the company. With regard to [ filled ] juices, the approach is based on a sustainable process and environmentally-friendly technologies produced by GEA. We focus on maximizing the efficiency of energy and resources and the reduction of waste. In a sense, estimates say that this climate-neutral plant will enable the company to reduce its overall CO2 footprint by about 10% in total. Then the next question comes from SdK. "To what extent based on the reorganization have things changed in terms of communications within GEA?" Prior to the new organization, we as a new Executive Board placed particular attention on improving our communication to become more transparent and more reliable in the future when it comes to our relevant interest groups and the way we communicate. In this context, we as Executive Board members were much more active and more available than this was the case prior to 2019. For instance, the Executive Board participated in many conferences and investor calls and did a lot more public relations work in various media. And this has already resulted in one thing: the trust in the company has been reinforced. Based on our new organizational structure where instead of 2 segments, we report now KPIs for 5 divisions. We've got various projects and new tools. This enables us to communicate in more detail and better and faster to inform you about your company. As to the implementation of communication, we can say that both with regard to investor relations and communications, marketing and brandings, we in the meantime have new and highly experienced senior managers, well, both from a [ DAX ] -- from [ DAX ] companies. And the next questions come from DSW. "When you look at order intake, you can see that due to corona, there's one or the other skid marks, so to speak. How do you value the -- how do you assess the, well, order situation when the orders coming from your customers? Will there be catch-up effects as soon as the corona situation eases?" Well, just like GEA, many of our customers have put a strong focus on liquidity. And this is why they were reticent with regard to ordering new machinery and plants and particular with the LPT division. Partly, field services also affected because there were restrictions or maybe also access restrictions to the plants. Since the demand for GEA equipment, well, in particular in the food sector, will not change in the long run. This is what we think. And we think that order behavior after COVID will get back to normal. And we think this is possible. And then the reduction for GEA was not as strong as in other sectors, so that the catch-up effects should be limited. Next question, SdK. They said, "Well, that GEA doesn't have a customer problem but a margin problem. Did we have a margin problem in some regions or some products? What were the reasons?" Well, GEA indeed doesn't have a customer problem. The growth we achieved last year and the satisfaction of our customer base underlines that GEA has worked and achieved a good, well, brand position. GEA has got a diversified customer base and is operating globally. Dependence on individual customers' markets and the impact on the margin tends to be low. Price pressure regarding the various products varies depending on the complexity of the solutions and competition in the technologies in the market. Due to the new projects structure, responsibility for P&L was reinforced and with a higher focus on margins. In addition, we took measures to increase efficiency in production to accomplish savings in procurement, optimize production footprint, review our portfolio and, if necessary, divest low-margin business. Next question from SdK. "Market leadership in first or second place usually doesn't result in margin problems. Why with GEA?" Well, GEA has got a market-leading position in many markets, a strong brand and innovative technologies. And in GEA, we have got 2 business areas as well then in the past, and there was a clear lack of P&L responsibility which decreased the margin. With the new or CREATE organization, we had 6 principles we addressed this matter with then: The 5 divisions, number one. Second, P&L responsibility was handed to the operational managers, and this way, we reinforced entrepreneurial actions. Then strong country organizations with the divisions. Then leveraging synergies in procurement and production. Then fifth, reinforcing the service business. And number six, increasing transparency by having 5 divisions with the limited business units. And then another question by SdK, "What are the measures to get back to old -- well, to former results?" This is a question that was asked and answered before, so that I can simply repeat. One important factor for strength in GEA is the new organizational structure, and well in parallel, clear P&L responsibility for the managers. And at the same time, we've got the 5 divisions. The Capital Markets Day last year, we presented a package of measures telling you how we want to achieve our, well, results. It's the headcount 800 program, which we have successfully implemented, our portfolio adjustment and then the optimization of procurement. Another question by SdK. "Which are the main KPIs for the operational 5 divisions and the divisions, the regions?" The main KPIs are sales, EBITDA before restructuring, and ROCE. And in addition to that, GEA also comprised various other KPIs to get a meaningful overall picture. And this includes order intake of course, net working capital and cash flow. Then next question by SdK. "Where do we find profit and loss responsibility?" P&L responsibility is with the individual management of the companies along the organizational structures. Aggregated responsibility is with the heads of the business units respectively, and then with the divisions and regions. Then another question by SdK. "GEA offers the shareholders a payout of EUR 0.85 in the third year with a negative -- a loss of EUR 171 million for the group. Is this an expression of confidence?" The answer is that in the previous fiscal year 2019, many things were put to the test and scrutinized. The Executive Board and the Supervisory Board agree, still agree that dividend policy is to remain unaffected by this. The annual loss of EUR 171 million is mainly due to the noncash impairment of Pavan. Without taking consideration the Pavan effect, GEA in operational terms would have posted a profit. GEA is an operationally sound and healthy companies and is in many sales market in a leadership position with its core technologies. And this is an expression reflected in the level of the dividend payout. And so we kept it in line with the previous years for 2019 too. Next question by SdK. "What about medium-term margin objectives?" As then published at the Capital Markets Day 2019, we would like to have an EBITDA margin before restructuring in 2020 to between 11.5% to 13.5%. And this is an objective we stick to and maintain. Then next question by SdK. "In the previous years, GEA also encountered technical problems with filling lines. And have you resolved this for good?" Well, as to the aseptic filling plants and lines, the technical issues and snags have been resolved. I think this is what the question refers to. This was with regard to the ABF 1.0 filling line. Out of the 5 original projects, 2 have, well, finalized. One matter was clarified. And for two, we set aside provisions, which cover the expected cost to complete. Then another question by SdK. "Which dairy business will remain after the divestment of the barn and milk cooling business? What will remain with GEA?" After the divestment of the barn and cooling, business, farm technology will focus on its core business, automatic milking in particular. And this way, we will continue to provide lines, equip plants for milk production. Also, our dairy business and the LPT division is completely unaffected by this. Then a further question by SdK. "GEA went through a year of transformational change after plenty of negative news before. How did the employees take this change?" We are observing the mood in the company and the satisfaction of our staff, in particular by looking at the voluntary turnover rate. That is voluntary resignations compared to the overall number of staff. Then we have got a staff survey, which is ongoing. As to the voluntary turnover rate in 2018 and '19, when we compare the 2, we have got a significant decline from 5.9% to 4.9% worldwide and 2.8% to 2.1% in Germany. So this gives rise to a positive attitude we assume with regard to our companies. And it underlines that our employees have seen this change in a positive way. And at the same time, GEA in the, well, environment of the COVID-19 environment, has been stable and sound employer. The employee survey for 2020 is underway, so that in early next year we will have an up-to-date and very detailed reflection of the satisfaction level of our employees. Another question by SdK, and well, this is what I already read out to you. Okay, a similar question, "How was the reorganization taken by the employees?" The CREATE project gives us the reorganization of the group as of 1st of January, subdivided into 5 divisions. This organizational change was welcomed by a majority of the staff, and they also desired that. When we compare the turnover rate of staff, I mentioned it before, we can see that it, well, showed a marked decline. Then another question by SdK is, "Well, what about the perception of capital markets players is?" Well, this is satisfactory to GEA the way GEA is seen. We talk to many investors, and they think that our path embarked upon is good and positive. But there are also some investors who, due to the negative ad hoc disclosures in 2018 and before, still remain very reticent. We would like to regain their trust as GEA investors. And we are well on track there because as a new top management, we have always delivered on our promises. Then a question by DSW. "Dear Mr. Klebert, Mr. Ketter, ever since you've taken the helm at GEA, you have implemented substantial changes and reorganized the group. Well, what is the added value for this in the new organization? And how far does this reflect on us as shareholders?" Within the framework of the reorganization, GEA gave P&L responsibility to its executives. The organizational setup with 5 divisions and the respective technologies, dedicated units and locally driven sales activities allow GEA to engage in a focused and efficient customer proximity. The results are reflected in higher order intake with simultaneous efficiency increase when you look at the financial performance, cash flow and financial position of the company. The goal is to further reinforce the group because only a sound and healthy group is able to grow and create the corresponding added value for the benefit of the shareholders. Next question by DSW. "Do you see or do you expect a consolidation phase in the business areas we are active in, something that will give us new opportunities in the future?" Both, well, the food sector, well, and the pharma and the chemical sectors are marked by a multitude of different suppliers, machinery and equipment, which, well, they are active globally and also regionally. And there are consolidation of suppliers in the market, and GEA has made a contribution to that in the past. And in the future, we also intend to make our contribution by being more active and wanting to be more active in the M&A area. Another question by DSW. "Well, the shareholders positively responded that you will start to take -- well, the [ salt line ]. Well, what attributes would have -- would such a target have to be?" Well, it will -- as a target, a potential target would have to match the business model of GEA. So it should be somewhere in the food, pharma, process technology, chemical, well, activity areas. And then the KPIs, the financials of acquisition targets should be within the ranges envisaged by GEA or will be able to be developed into this direction. Another question by DSW regarding divestments. "You have delivered, and you have sold some of your companies this year. What further changes can we expect? Well, doesn't corona show particularly weak areas, warts and all?" The measures for efficiency increase initiated in 2019 also include a strategic portfolio adjustment, yes. At the end of 2019, GEA announced that we wanted to divest the Bock Group, and this will materialize in 2020 as planned. Then in 2020, GEA divested 2 other companies that used to belong to the farm technology division. Then well, further measures for portfolio adjustments are continuously reviewed by us and scrutinized. Because a long-term portfolio management is part and parcel of our long-term strategy, even without the coronavirus crisis. And in some areas, it may also be the case that we divest in individual, well, businesses when GEA is not the best owner. As to the coronavirus pandemic, GEA doesn't only benefit from the crisis management activated early. No, in addition to that, we've got the efficiency increase measures we initiated last year, which can clearly be reflected in the financial performance, cash flow and positional -- financial position. SdK, another question. "GEA went through a year of change. Before, there were plenty of negative news. We heard what has changed. What is GEA doing differently today?" And here, the negative reports in 2018 came as a consequence of a lack of P&L responsibility within the group. And against this backdrop, GEA in 2019 announced a new organizational structure and adopted it. And since January 2020, we have been living in this setup. And this new organizational structure is based on the following fundamental principles. Number one, GEA, well, based on the technology fields are subdivided into the so-called divisions. Number two, GEA gives clear P&L responsibility to its senior managers and wants clear, central entrepreneurial decisions and, well, thinking. And number three, GEA connects the established sales organization under the former OneGEA structure with the division, which means the sales activities in the individual countries are pooled for all divisions and locally and centrally. And fourth, by optimizing procurement and purchasing and by means of a clearly defined production concept, we leverage synergies. Number five, the GEA service business is to be reinforced by P&L responsibility for the, well, service business. Well, you know that per division, we've got one CSO, one Chief Service Officer. And number six, the management -- the running of the group is transparent -- based on transparent reporting of the 5 divisions. And based on these 5 divisions and the individual measures, we have got a positive effect. And we can also see first successes reflected in our KPIs. When we look at the financial performance, cash flow and financial position, a clear improvement of net liquidity, despite the coronavirus pandemic, shows how good the financial management is set up within the framework of the new organization. Let's continue with the question by the SdK. "The Handelsblatt newspaper has called the new divisional structure as a backwards road. Has this movement away from the 2 business areas towards 5 divisions been completed?" The new organizational structure links the advantages of the former divisional structures and the former OneGEA organization. So the positive things of those structures have been united with a clear focus on the reintroduction of the profit and loss responsibility. Although the allocation of disciplinary responsibility for the staff has been terminated, and the reporting of the KPI already happens in the new structure, the complete reorganization of the entire group will require some time. This does not only but also go for the optimization of procurement and our production concept. Both measures have a medium- to long-term focus. Another question by SdK. "What about the growth strategy of GEA, internal growth and external growth?" GEA presently is focusing on a return to its old strength. The reorganization of the strength will contribute to that and will make that possible. Long-term growth requires a strong and healthy group. Our top focus therefore will be that the measures initiated in 2019 are continued in the long run. We are continuously observing the market environment and are looking at and trying to pursue attractive acquisition possibilities. Now a question by Mr. [ Udo Ruta ]. "The annual report says that in the framework of focusing on farm technology and that GEA wants to divest farm technology and other areas. Have there already been conversations in this respect in the course of the 2020 year?" Well, I have to correct that. We have not announced to divest these entire areas. The 2019 annual report referred to the announcement of the Capital Market Day 2019, namely that selected areas of farm technologies and refrigeration technologies might be divested, but not the entire division. In this connection, in 2020 the signature of corresponding agreements for selling compressor business, that is GEA Bock. And barn technology with farm technology Royal De Boer, milk tanks GEA Japy, so both from farm technologies have been announced. For all the 3 companies, the signing has taken place. The conclusion of the transactions are expected for the end of 2020 and the beginning of 2021 at the latest. Now I will pass the floor to my colleague and CFO, Marcus Ketter, to answer the remaining questions.

Well, thank you very much indeed. First question comes from Mr. [ Buchele ]. "Well, for the cash-generating unit, Pavan, the discounting rate was 0.9%, 7.7%, and the growth discount was reduced to 1%. Previous year, it had been 1.5%. How high would the goodwill amortization have been if the previous year's parameters had been used for the calculation?" Well, the previous year's parameters relates to the group of cash-generating units in the equipment business area, and therefore cannot be applied to the Pavan validation object. But if we fictitiously included the 7.7% and a growth rate of 1.5% for the valuation test of Pavan, this would lead to an impairment need of EUR 209.9 billion. Next question also was asked by Mr. [ Martin Buchele ]. It's a longer question. "What about the composition of the cost of capital? What about the composition? Give us the following amounts that did affect the country risk premium, the cost of equity, the basic interest rate, market risk premium, beta factor plus country risk, equity ratio, share of equity cost in WAAC (sic), the tax rate, the share of borrowing cost." From the share of equity capital cost and the share of debt capital cost, the total cost rate of 9% and [ 7.27% ] respectively should result. The total cost of capital rate used for discounting in 2019 is based on risk-free interest rates. Pavan basic 0.9%. Country risk premium, 0.7%. Beta factor unlevered, 0.93. And risk premium, 8.9%. Credit spread, 2.9%. Tax rate, 26.7%. External debt rate growth rate, 1.0%. Equity cost rate 10.21%. Composition cost of capital BAE in 2018, base interest rate 1.0%. Country risk premium, [ nought point ten -- three percent ]. Beta factor unlevered 0.93. Risk premium -- credit -- tax rate, 27.85%. External debt rate growth rate, 1.7%. Cost of capital, [ 1.9%. ] Next question also asked by Mr. [ Buchele ]. "From which comparable companies or peer groups were the above beta factors derived? Which criteria were decisive for the selection of the peer group for each peer group's stated beta factor of the indebted company? And the beta factor of the company without debt, beta unlevered; which method was used to calculate the beta factor unlevered?" For example, the Hamada formula, the beta factors are composed as follows. Peer group Pavan 2019 unlevered beta: John Bean Technologies Corporation, 1.08; Marel, 0.93; Middleby, 1.09; I.M.A. Industria Macchine S.p.A., 0.79, Krones, 0.86. Peer group BAE 2018 unlevered beta: John Bean Technologies Corporation, 1.04; Marel, 1.86; Middleby Corporation, 1.86; SPX, 1.03, Alfa Laval AB, 0.93; Dalian Refrigeration Company, 0.80; [ Nestle ], 0.78. Based on the levered beta factor, the unlevered beta factors are assumed under the debt beta and tax shield so-called Harris and Pringle formula. The used peer companies with regard to the qualitative and quantitative characteristics are in harmony with the measured object. The business model is used. And the value chain, the geographical markets, the life cycle of the company, the cash-generating units will be taken into account of. Relevant quantitative characteristics are sales, profit margin, market capitalization or market structure. Next question also asked by Mr. [ Martin Buchele ]. "What about the determination of the country risk premium?" For example, default spread according to Damodaran [ with month ] indication state the premium rates of the 3 most important countries, probably including China, and their weighting. The calculation of the country risk premium is based on the Damodaran data. It is ultimately approximated by the credit spread. We have the 3 most important countries: China, 0.5%, weighting 60.5%; Italy, 2.10, weighting 35.40%; U.S.A., 0.0, weighting 3.29%. Next question from the DSW. "With the working capital, you have more than done your homework. Pleasing results. What would you consider a normal level with working capital? Can you engage in further optimization?" We are very satisfied with the development of the net working capital, we are at the lower end of the target we formulated. And now the issue is to secure this level and further reduce it. We see further potential to do that in all the relevant areas: advance payments, liabilities and so on and so forth. Next question also from the DSW. "We see the increase in the margin despite declining sales. Please illustrate this effect. How will margin further develop?" Effect on margin of declining sales in the first 3 quarters of 2020, the declining sales in the first 3 quarters 2020 were mainly in the new machines business. The service business in the first 3 quarters of 2020 was robust. The higher service share had an advantageous effect on the margin. Moreover, the margin have improved as a result of project development. The efficiency measures bear fruit, and the new structure is proving its effect. Next question also from the DSW. "In the present fiscal year, we will have increased restructuring expenses. Do you also see that for the next few years? And when will that surpass the normal ones?" This year, we expect a level below the prior year. On the Capital Market Day 2019, for 2019 to '22 we have total value of 250 million that we mentioned, and we stick to that. In the next few years, we expect a further reduction of restructuring expenses. These figures do not include potential impairments that might result from further divestment activities. Next question from the SdK, German association for the protection of capital investors. "In 2019, you talked about a dip in sales, which has not confirmed but with a positive effect." The stable order intake and positive developments in the first 3 quarters led to a situation where GEA slightly revised its forecast to the level of the prior year. An important driver for this positive development was the service business, which had record results for both divisions, equipment and solutions. Next question was asked by Mr. [ Michael Rudof ]. "Is it correct that the after-tax result, the profit of 284.5 million at GEA Group AG was only achieved because hidden reserves were created by intragroup sales of companies? Income from profit and loss transfer agreements was increased by 331 million by increasing written-off values resulting from the intragroup company transactions described in point 17 of the notes of the financial statements, by 331 million by means of a fair value measurement. How much profit effective cash flow was generated by this? None? Wasn't such behavior previously called window dressing? Today, this is called creative accounting. A heartfelt thank you to our CFO for making it possible to pay a dividend." Well, it's correct that due to an intragroup contribution, the investment income of GEA Group AG has increased accordingly. The contribution was made at fair value, thereby uncovering hidden reserves. This measure served to strengthen the equity structure of GEA Group AG and to ensure a stable dividend policy in the long term. Next question from SdK. "Since when has KPMG been the auditor of the company?" The auditor of the annual financial statement and of the consolidated financial statement first happened in the 2018 business year -- 2011 business year. Next question, SdK. "What about the 10-year relationship with KPMG, does that create a problem?" The tender process, which we initiated in 2020 and that will start in 2021, has happened according to the rules and regulations. So there is no conflict with the present EU rules and regulations. Possible changes with regard to change of the rotation of the auditors in accordance with the Financial Market Integrity Act will be taken account of and evaluated. Next question also comes from the SdK. "Forecast GEA also had 300 million to 350 million corporate results. Which steps do you consider to be realistic?" On the Capital Market Day 2019, we gave a bandwidth for the EBITDA before restructuring of 11.5 to 13.5% for 2022, and we stick to this statement. Based on this target, in the medium term we see corporate results of more than EUR 300 million to be achievable. Next question by Mr. [ Udo Ruta ]. "The balance sheet, when you look at that at first sight with an equity ratio of about 36%, seems to be well equipped. The second view shows considerable uncertainties, because equity to the tune of EUR 2.1 billion mainly consists of goodwill 1.5 billion and 0.4 million intangible assets. During the last impairment test, has the corona pandemic been taken account of? Will that lead to corrections during the 2019 impairment tests? Were there any discussions on that with the auditors and possibly diverging opinions on the valuation?" In the framework of the impairment test on the 31st of December 2019, COVID-19 was not taken account of, because the institute of German auditors considered that to be an event having an effect on the value. And therefore we only took account of the effect after the 31st of December. We simulated potential risks, but this did not lead to any need for value adjustments. Next question, also from [ Udo Ruta ]. "What about the balance goodwill? How is that allotted to the different divisions?" Goodwill is allotted to equipment and solutions business areas. BA Equipment, eight hundred and eighty one million eight hundred and twenty seven; BA Solutions, six hundred and thirty million three hundred and fifty four million (sic). Next question also by [ Udo Ruta ]. "According to the HGB, there was a value adjustment on receivables with affiliated companies to the tune of EUR 67 million. Which companies did that affect? And what was the subject of this demand?" This mainly falls on the receivables from cash pooling, mainly foreign subsidiaries which did not have sufficient liquidity. Next question by Mr. [ Udo Ruta ]. "When you look at the entire receivables, 3.6 million (sic), it is striking that the equity is surpassed by 70%. Do you think that this reduction is meaningful in the long run? Which possibilities are taken account of in order to improve that ratio?" To ensure financial stability, GEA has the target to always have a balanced ratio of equity and outside capital. The present equity rate of 36.6% is within an adequate and ordinary range. Next question also from [ Udo Ruta ]." What about the composition of liabilities, 3.6 million (sic)? What are they composed of?" Well, the 3.6 billion are composed of long-term liabilities, 1.9 billion; short-term or noncurrent ones, 2.1 billion. Basically, the liabilities are from trade receivables, contractual ones, 1.4 billion; short-term and long-term ones towards employees to the tune of 1.1 billion; short and long-term financial liabilities to the tune of EUR 0.5 million. Next question from DSW. "You originally announced dividend is something that you stuck to, which we like and interpret as a sign of optimism. We wanted to underline that you paid an advanced payment to the dividend as made possible by the COVID Act. But what about the dividend in the next few years? Which parameters and/or KPIs will be relevant for you for determining the dividend?" Our general dividend policy stipulates that 40% to 50% of our annual profit will be distributed. Simultaneously, it's important for us to pay a stable dividend to our shareholders. That is EUR 0.85 per share. In the future, restructuring expenses for GEA will decline so that we will end up in the dividend corridor of 40% to 50%. On the other hand, I'm convinced that in the future, we will also be able to talk about rising dividends. Next question from the SdK. "What about the investors of Albert Frere from Belgium and Elliott and Singer? Are they still on board of the AG?" According to the voting rights that we know of, which are also published on our website, Oliver Capital has about 15.4 million shares, that is 8.51%. And for E Singer, 250,000 shares, that is 0.14% of voting rights to the -- And voting rights through instruments to the tune of 4.81%. That is a total of 4.95% in total. Next question also from the SdK. "What is the forecast that you gave to analysts?" In particular, given the good development of GEA during the first 9 months of the 2020 business year, we decided to render our forecasts more precise. Sales, slight decline compared to the '19 business year. EBITDA before restructuring expenses, we assume more than EUR 500 million will materialize. ROCE between 15.0% and 17.0%. Next question from the SdK. "Is GEA Group in total at the SAP level? You're talking about harmonization of ERP systems. When will things happen, and how?" GEA presently has 67 ERP systems for historic reasons on different platforms. Many of the larger production sites already use SAP technology. In addition, GEA also relies on SAP technology in other areas. The consolidation, the endeavored consolidation of the ERP and SAP landscape has started during the last few months. We have made enormous progress. We set up in new central areas, business process management. The harmonization of processes for the entire organization is in full swing. This is supported by more than 150 staff in the operational units. They are part and parcel of a newly set up BPM community. Simultaneously, in December 2019, we started a big tender in order to find a suitable implementation partner for the global SAP program. A large international IT company has received the award. Since then, we have been working together with our staff on setting up the templates and on preparing the worldwide introduction of the S/4HANA technology. The next big milestone will be the next rollout in June 2021. The entire change to -- in S/4HANA is envisaged for 2025. Next question comes from the SdK. "What about the planning status quo for switching SAP S3 to HANA S/4? And how will that happen? How will SAP be rolled out?" On the Capital Market Day on the 26th of September 2019 in London, we communicated plans for consolidating the international SAP landscape. We announced that, we announced this endeavor, and we have been working on that since then. This is strengthened by a strategic partnership with SAP, which we mutually reinforced in May. With the programs, we embarked on a new path. In the next few months, we will concentrate on harmonizing processes. Thanks to cooperation with SAP and our implementation partners, we now have the possibility to define the necessary templates. By the end of this year, this work will be finished for all the processes for sales and service. In the first quarter of next year, we will then start the rollout which will be finished end of next year. That's the next big milestone for us. After that, there will be first implementation with holding companies and small regional companies because financial processes are less complex than production or warehousing. Next question by [ Michael Rudof ]. "Item 10 of the agenda states the Board of Management is authorized, with the consent of the Supervisory Board, to exclude the subscription rights of shareholders if the issue price of the new shares is not significantly lower than the stock market price for shares of the company, with the same terms at the time the issue price is determined. What does the Board of Management mean by not material? The Board of management would grant the new investor the shares, at a discount of the stock market price of no more than what percentage?" The provision that you have referred to concerning the issue of new shares at an issue price not significantly lower than the stock market price is the so-called simplified exclusion of subscription rights pursuant to article 186, paragraph 3, sentence 4 of the German Stock Corporation Act. In connection with this provision, which is in any case only permissible in the context of a cash capital increase and is limited to 10% of the share capital, I would like to refer you first to the report of the Board of Management on agenda item 10, which is included in the invitation to today's Annual General Meeting. Among other things, it is stated that the authorization for simplified exclusion of subscription rights is intended to enable the management to take advantage of favorable stock market situations at short notice. The authorization deliberately does not provide for rigid limit for a permissible maximum percentage deviation from the stock market price. In this respect, it is intended to provide scope or the possibility to take account of the market situation prevailing at the time of issuing the new shares. Accordingly, in connection with the introduction of the simplified exclusion of subscription rights, the legislature had clarified that in the case of authorized capital, the resolution of the Annual General Meeting only had to stipulate that the issue of new shares was to be carried out in close relation to the stock market price, whereas the concrete determination of the issue price was to be made later by the Executive Board on the basis of the then current stock market price. As explained in the report of the Executive Board on agenda item 10, the Executive Board will, however, keep any discount on the stock market price as low as possible in accordance with the market conditions prevailing at the time of placement. The next question comes from Mr. [ Martin Buchele ]. The goodwill of the Pavan Group, which was not acquired until 2017, was fully amortized in the amount of two hundred forty seven thousand five hundred eighty nine thousand euros (sic). In the previous year, goodwill was increased by eight thousand five hundred and ninety nine euros, thousand euros (sic). The balance sheet terms -- in balance sheet terms, the acquisition therefore represents a complete [ misinvestment ]. What were the sales revenues?" The revenues were between 150 million and 200 million. Excluding goodwill amortization, restructuring effects, Pavan was profitable in 2019. "I assume" -- well, the next question also comes from [ Martin Buchele ]. "I assume that when it comes to the acquisition of the Pavan Group, a due diligence took place. Which companies were entrusted with that? Legal, financial, what about the consultation fees? Did you continue working with these?" Well, we had the usual market due diligence. DLA Piper and KPMG were entrusted with that. The total costs were less than EUR 500,000. KPMG is still the auditor of GEA Group, and DLA continues to work as a legal adviser for GEA. Next question also from [ Martin Buchele ]. "According to Mr. Klebert, CEO Klebert, activities with low margins and small synergy will be divested. See annual report Page 26. What does that mean for the Pavan Group?" We can conclude that the synergies expected from the acquisition do not exist. Pavan was a good opportunity for GEA to enter into the pasta, snack and milling technology, a product area where before the acquisition, GEA had not been represented. Pavan, however, in the first business year 2018 developed below the expected business case. And in addition, it was clearly below the budget in 2019. As a result of these negative developments, the Executive Board of GEA Group decided to focus its attention on Pavan in the framework of its controlling and monitoring function. And therefore as a result, the goodwill of Pavan had to be reallocated. The new goodwill generating cash -- because of -- because the budget was not met, was not in a position to meet the expectations. Pavan does not have activities with lower margins, but the expected -- figures expected in the business case could not be reached. And this is the end of my questions, which I wanted to answer.

Thank you very much, Mr. Klebert, Mr. Ketter. Ladies and gentlemen, all the questions that have been handed in have been fully answered. At the same time, this concludes item 1 on the agenda with a statement that the general meeting has taken note of the adopted annual financial statements, the approved consolidated financial statements as of December 31, 2019, and the consolidated management report combined with the management report of GEA Group Aktiengesellschaft. And ladies and gentlemen, this brings us to the vote on the proposed resolutions outlined in our agenda. As already explained, no resolution will be passed on agenda item 1. Resolutions on agenda items 2 to 6 and 8 will be passed by a simple majority of the votes cast. Resolutions on agenda items 7 and 9 to 11 require a majority of at least 3/4 of the share capital represented at the meeting. Votes will be cast on the Investor Portal via instructions to the company appointed proxies or by postal vote. You may access the portal by using the credentials, the data you provided on your registration confirmation. Voting takes place according to the aforementioned accumulation method. That is, only the Yes votes and No votes will be counted. Shareholders and proxies who wish to vote in favor of a proposed resolution, that is with a Yes vote, must click on Yes next to the relevant agenda items. Shareholders and proxies who wish to vote against a proposed resolution, that is to vote No, must click on No. Shareholders who wish to abstain from voting do not need to do anything. We will now proceed to the vote on agenda items 2 to 11. The text of the proposed resolutions was published in the Federal Gazette on the 19th of October 2020. I will therefore confine myself to summarizing the individual points relating to the agenda items 2 to 11. The proposed resolutions will be put to the vote in exactly the same version as the one published in the Federal Gazette. We'll start with item 2 on the agenda, appropriation of net earnings in accordance with article 2, section 1, paragraph 4, COVID-19 Mitigation Act. The Executive Board of GEA Group Aktiengesellschaft with the consent of the Supervisory Board decided back in April 2020 to make an interim payment towards the company's net earnings in the total amount of EUR 154,233,021.92 generated by GEA Group Aktiengesellschaft in the fiscal year 2019, by paying out EUR 0.42 per profit-participating no-par-value share to the shareholders. This interim payment was disbursed on the 2nd of May 2020 where the interim payment towards net earnings paid out for the 180,492,170 (sic) [ 180,492,172 ] profit-participating no-par-value shares that existed at that particular point in time amounted to EUR 75,806,712.04 (sic) [ EUR 75,806,712.24 ]. Against this backdrop, the Executive Board and the Supervisory Board proposed that the remainder of the total net earnings of GEA Group Aktiengesellschaft for the fiscal year 2019 in the amount of EUR 104,230,021.92 (sic) [ EUR 154,233,021.92 ] be appropriated as follows: EUR 77,611,633.96 are to be used to pay an additional dividend of EUR 0.43 per profit-participating no-par-value share, with EUR 814,675.72 being carried forward. We now come to agenda item 3, the ratification of the actions of the members of the Executive Board for fiscal year 2019. The Executive Board and the Supervisory Board propose that [ this charge ] be granted to the members of the Executive Board that were in office in the 2019 fiscal year for this period. Then we come to point 4 on the agenda, ratification of the actions of the members of the Supervisory Board for the 2019 fiscal year. The Executive Board and the Supervisory Board propose that the actions of the members of the Supervisory Board in office in fiscal year 2019 be ratified for this period. With regard to agenda items 3 and 4, I would like to draw your attention to the exclusion of voting rights pursuant to section 136 of the German Stock Corporation Act. The members of the Executive Board and the Supervisory Board may not exercise voting rights attached to their own shares or third-party shares with respect to resolutions on their discharge. Nor can third parties exercise voting rights attached to shares that belong to members of the Executive Board or the Supervisory Board. The members of the Executive Board and the Supervisory Board have been made aware of this exclusion of voting rights and have been asked to take precautions in this particular respect. Then let's proceed to item 5 on the agenda, appointment of the auditor for the 2020 fiscal year. Under this agenda item and based on the recommendation of the Audit Committee, the Supervisory Board proposes that KPMG AG Wirtschaftsprfungsgesellschaft Berlin be appointed auditor of the company and the group for the 2020 fiscal year. I will continue with agenda item 6, election of a member of the Supervisory Board. Based on the recommendation of the Nomination Committee, the Supervisory Board proposes that Prof. Dr. Annette Kohler be elected as a member of the Supervisory Board. Item 7 on the agenda, approval of the conclusion of a domination and profit and loss transfer agreement between GEA Group Aktiengesellschaft and GEA Internal Services GmbH. The Executive Board and the Supervisory Board propose that the Annual General Meeting approve the conclusion of the domination and profit and loss transfer agreement between GEA Group Aktiengesellschaft and GEA Internal Services GMBH dated the 2nd of March 2020. As regards the following agenda items 8 to 11, please refer to the published notice of meeting for the exact wording of the resolutions proposed by the management. Agenda item 6 (sic) [ 8 ] embraces 4 proposals for amendment to the articles of association: amendment to section 17 of the articles of association in accordance with ARUG II; amendment of section 17 of the articles of association to permit participation in the Annual General Meeting by means of electronic communication as well as postal voting; amendment to the articles of association with regard to calling Supervisory Board meetings and passing resolutions at these meetings; and then the addition to section 24 of the articles of association, authorizing the Executive Board to make interim payments towards net earnings. Let's turn to agenda item 9, creation of a new Authorized Capital II and authorization to exclude shareholders' subscription rights and the corresponding amendment to section 4, paragraph 4 of articles of association. Agenda item 10 embraces a resolution on the creation of a new Authorized Capital III and authorization to exclude shareholders' subscription rights, and the corresponding amendment to section 4, paragraph 5 of the articles of association. And the last item on the agenda refers to the authorization to issue convertible warrant bonds, profit participation rights or income bonds with the authorization to exclude subscription rights, creation of contingent capital while simultaneously canceling the existing contingent capital and corresponding amendment to section 4, paragraph 6 of the articles of association. Ladies and gentlemen, if you have not already cast your votes, I now ask you to do so in relation to agenda items 2 to 11. Voting is performed in line with the already mentioned accumulation method. This is only the Yes votes and the No vote will be counted. If you want to vote Yes or No for one of the agenda items 2 to 11, please click on the Yes or No box next to the respective item on the Investor Portal. If you want to abstain in relation to individual items on the agenda, you do not need to do anything. Please issue your instructions to the proxies or cast your postal votes starting now. You will have 5 minutes to do so. That is until 12:18. [Presentation]

Ladies and gentlemen, it is 12:18. Your time for casting postal votes and issuing instructions to the proxies is up. I note that all shareholders had the opportunity to exercise their voting rights. I hereby end the opportunity to vote on agenda items 2 to 11. Voting on agenda items 2 to 11 has ended. And I request that the Investor Portal be closed for voting, and that the notary makes a corresponding record of this fact. Until the result of the vote is available, I will interrupt the general meeting for between 15 to 20 minutes. [Presentation]

Ladies and gentlemen, I have the attendance rate and the results on the vote for agenda items 2 to 11. I continue the Annual General Meeting, announce the attendance, and give you the results of the vote for agenda items 2 to 11 as follows. In addition, you can read the individual details on the results of the votes on the agenda items on the presentation. We show -- we will also give you the information on our website. Attendance first. From the registered share capital of the company in the amount of EUR 520,375,765.57 subdivided into 180,492,172 no-par-value shares, a total of 100,834,750 no-par-value shares are represented at the virtual AGM with the same amount of votes via proxy and instructions. This amounts to an attendance rate of 55.87% of the registered share capital. In addition, we received postal ballots for 15,196,063 no-par-value shares. Thus, the attendance in addition to the postal ballots, we have 160,030,830 (sic) [ 116,030,813 ] no-par-value shares. This corresponds to 64.29% of the registered share capital. I now proceed to the result of the vote on agenda item 2, appropriation of net earnings. I note that for 140,453,859 (sic) [ 114,453,859 ] no-par-value shares, we have got valid votes that were cast. This amounts to 63.41% of the registered nominal capital. Yes votes, 130,747,498 (sic) [ 113,747,498 ] votes, that amounts to 99.38%. No votes, 706,361 votes, equivalent to 0.62%. I note and announce that the AGM has adopted the motion for resolution proposed by the Executive Board and the Supervisory Board with the necessary majority. Now let's turn to the result on agenda item 3, the ratification of the acts of the members of the Executive Board for fiscal year 2019. Well, for 115,691,850 no-par-value shares, valid votes were cast. This is equivalent to 64.10% of the registered share capital. Yes votes, 140,783,038 (sic) [ 114,783,038 ] votes equivalent to 99.21%. No votes, 908,812 votes equivalent to 0.79%. I note and announce that the AGM has adopted the motion for resolution proposed by the Executive Board and the Supervisory Board, as announced in the Federal Gazette on the 19th of October 2020, with the necessary majority. I would like to take this opportunity and thank the Executive Board for the work they did in the previous fiscal year. Now I turn to agenda item 4 and the result of the vote. That is the ratification of the acts of the members of the Supervisory Board for fiscal year 2019. For 115,591,524 no-par-value shares, valid votes were cast, and this corresponds to 64.04% of the registered share capital. Yes votes, 140,214,277 (sic) [ 114,214,277 ] votes, 98.81%. No votes, 1,377,247 votes equivalent to 1.19%. I note and announce that the AGM has adopted the motion for resolution proposed by the Executive Board and the Supervisory Board with the necessary majority. Now I turn to the result of the vote on agenda item 5, appointment of the auditor for fiscal year 2020. I note that during the vote, we had 115,975,207 no-par-value shares represented with valid votes. This corresponds to 64.25% of the registered share capital. Yes votes, 150,736,450 (sic) [ 115,736.450 ] votes equivalent to 99.79%. No votes, 238,757 votes equivalent to 0.21%. I note and announce that the AGM has adopted the resolution proposed by the Supervisory Board with the necessary majority. Let me turn to the result of the vote on agenda item 6, election of a Supervisory Board member, Prof. Dr. Annette Kohler. I note that 160,023,820 (sic) [ 116,023,812 ] no-par-value shares were represented with valid votes. This is equivalent to 64.28% of registered share capital. Yes votes, 113,401,133 votes equivalent to 97.74%. No votes, 2,622,679 votes equivalent to 2.26%. I note and announce that the Annual General Meeting has adopted the resolution proposed by the Supervisory Board with the necessary majority. I turn to the result of the vote on agenda item #7, approval of conclusion of a domination and profit and loss transfer agreement between GEA Group Aktiengesellschaft and GEA Internal Services GmbH. I note that 116,009,459 no-par-value shares were represented with valid votes. This corresponds to 64.27% of the registered nominal capital. Yes votes, 115,386,102 votes equivalent to 99.46%. No votes, 623,357 votes equivalent to 0.54%. I note and announce that the Annual General Meeting has adopted a resolution proposed by the Executive Board and the Supervisory Board on agenda item 7 with the necessary majority of votes and the capital. Let me turn to the result of the vote on agenda item 8a, amendment to section 17 of the articles of association in accordance with ARUG II. I note that 116,024,210 no-par-value shares were represented with valid votes. This is equivalent to 64.28% of the registered share capital. Yes votes, 115,995,842 votes equivalent to 99.98%. No votes, 28,368 votes equivalent to 0.02%. I note and announce that the Annual General Meeting has adopted the proposal for resolution submitted by the Supervisory Board and Executive Board with the necessary majority. Now let me turn to the results of the vote on agenda item 8b, amendment on section 17 of the articles of association to permit participation in the Annual General Meeting by means of electronic communication as well as postal voting. I note that 114,450,917 no-par-value shares with valid votes were cast. This corresponds to 63.41% of the registered share capital. The Yes votes of 113,707,798 votes equivalent to 99.3% (sic) [ 99.35% ] of the capital. The No votes, 743,119 votes equivalent to 0.65%. I state and announce that the Annual General Meeting has adopted the resolution proposed on agenda item 8b with the necessary majority, in line with the announcement in the Federal Gazette on the 19th of October 2020. Let me turn to the result on the vote of agenda item 8c, amendment to the articles of association with regard to the calling of Supervisory Board meetings and passing resolutions at these meetings. I state that 116,022,018 no-par-value shares were represented with valid votes. This corresponds to 64.28% of registered share capital. Yes votes, 116,006,789 votes equivalent to 99.99%. No votes, 15,229 votes equivalent to 0.01%. I state and announce that the Annual General Meeting has adopted the resolution, for the proposal for resolution submitted by the Executive Board and the Supervisory Board with the necessary majority. Now let's turn to the result of the vote on agenda item 8d, addition to section 24 of the articles of association authorizing the Executive Board to make interim payments towards net earnings. I state that 114,451,678 no-par-value shares were represented by valid votes. This corresponds to 63.41% of the registered share capital. Yes votes, 113,719,505 votes equivalent to 99.36%. No votes, 732,173 votes equivalent to 0.64%. I state and announce that the Annual General Meeting has adopted the proposed resolutions submitted by the Executive Board and the Supervisory Board on agenda item 8d with the necessary majority. Now let's turn to the results on the vote on agenda item 9, creation of a new Authorized Capital II and authorization to exclude shareholder subscription rights and the corresponding amendment to section 4, paragraph 4, articles of association. I note that 116,023,751 no-par-value shares were represented with valid votes. This is equivalent to 64.28% of registered share capital. Yes votes, 77,188,221 votes equivalent to 66.53%. No votes, 38,835,530 votes equivalent to 33.47%. I note and announce that the motion for resolution on agenda item 9, creation of a new Authorized Capital II and the authorization to exclude shareholders' subscription rights and the corresponding amendment to section 4, paragraph 4 of the articles of association, was not adopted by the necessary majority and was thus rejected by the Annual General Meeting. Now let me turn to the results on the vote on agenda item 10, creation of a new Authorized Capital III and authorization to exclude shareholders' subscription rights and the corresponding amendment of section 4, paragraph 5 of the articles of association. I note that 116,022,751 no-par-value shares were represented by valid votes. This corresponds to 64.28% of the registered share capital. Yes votes, 76,441,200 votes equivalent to 65.88%. No votes, 39,581,551 votes equivalent to 34.12%. I note and announce that the motion for resolution proposed on item 10, creation of the new Authorized Capital III and authorization to exclude shareholders' subscription rights and the corresponding amendment to section 4, paragraph 5 of the articles of association did not meet with the necessary majority and was thus declined by the Annual General Meeting. Now let's turn to the results of the vote on agenda item 11, authorization to issue convertible or warrant bonds, profit participation rights or income bonds with the authorization to exclude subscription rights, creation of contingent capital while simultaneously -- and corresponding amendments, section 4, paragraph 6 of the articles of association. I note that 116,023,036 no-par-value shares were represented with valid votes. This corresponds to 64.28% of registered share capital. Yes votes, 76,303,265 votes equivalent to 65% -- 65.77%. No votes, 39,719,771 votes equivalent to 34.23%. I find and announce that the motion for resolution on agenda item 11, authorization to issue convertible bonds with profit participation rights or income bonds with the authorization to exclude subscription rights, creation of contingent capital and corresponding amendment to section 4, paragraph 6 of the articles of association did not meet with the required majority and was thus rejected by the Annual General Meeting. Ladies and gentlemen, as I announced at the very beginning, the shareholders who cast their votes have got the possibility of lodging an objection. They have got 3 minutes time for doing that until 12:58. They may do so electronically via the Investor Portal. [Presentation]

Ladies and gentlemen, objections regarding the agenda items were not lodged. We have dealt with and come to the end of today's agenda and Annual General Meeting. Before I close this Annual General Meeting, I would like to thank all those involved on stage and behind the scenes for their support in holding this Annual General Meeting. Ladies and gentlemen, I would like to conclude this year's Annual General Meeting of GEA Group Aktiengesellschaft. Under these extraordinary circumstances, I wish you and your family a merry Christmas and a happy new year. I very much hope that we will be able to welcome you at our next Annual General Meeting in whatever form it may take place. And well, the most important thing: stay safe and healthy. [Statements in English on this transcript were spoken by an interpreter present on the live call.]