Georg Fischer (GF) Investor Update summary

Strategic transformation and portfolio focus

• Accelerated strategic direction to focus on water and flow solutions, leveraging recent acquisitions and divestments, including the integration of Uponor and expansion in piping markets.

• Signed agreement to divest the Machining Solutions business to United Grinding Group for CHF 630–650 million, with closing expected in Q1/Q2 2025, subject to regulatory approvals.

• Ongoing review of strategic options for the Casting Solutions division, with a preferred divestment to a strategic buyer and a project team in place.

• Portfolio transformation aims to capitalize on growth in water and flow solutions, targeting leadership in sustainable water management and industrial flow processes.

• The divestment will result in a consolidated gain at the net income level and create a leader in ultra-precision machining.

Financial implications and guidance

• Divestment of Machining Solutions valued at CHF 630–650 million, including a CHF 20 million earnout linked to EBITDA by end of 2025.

• Proceeds will be used to partially repay Uponor transaction financing, reducing net debt and interest expenses by CHF 20–25 million annually.

• Corporate bonds will be issued to further refinance debt, with leverage expected to decrease to 2.5–2.7x net debt/EBITDA post-transaction.

• 2024 guidance anticipates flat organic sales and a comparable EBIT margin around 9%, reflecting headwinds in European automotive and construction markets.

• One-off costs from the divestment are minimal, mainly related to IT and HR system separation.

Market positioning and growth outlook

• With the integration of Uponor, pro forma piping sales reach €4.3 billion, positioning the company as a top player in the sector.

• Sustainable solutions address key trends such as climate change, urbanization, and energy efficiency, targeting industrial and infrastructure markets.

• Both Piping Systems and Building Flow Solutions have demonstrated strong sales growth and EBITDA margins above 15% over recent years.

• Targeting CHF 5 billion in annual sales by 2030 as the number one water and flow solutions market leader.

• Plans to intensify bolt-on acquisitions in the fragmented water solutions market, focusing on regional and technology coverage.