GESCO: 2013/2014 solid performance, sales up in 2014/2015, profit remains hampered by one-off effects

Gesco AG  / Key word(s): Final Results/Forecast

26.06.2014 07:34

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Wuppertal, 26 June 2014 ‒ GESCO Group, an association of industrial SMEs in
the fields of tool manufacturing/mechanical engineering and plastics
technology, announces at today's annual press conference its solid
performance during financial year 2013/2014 (1 April 2013 to 31 March
2014). The company forecasts sales growth in financial year 2014/2015 but
expects earnings to remain curbed by one-off effects.

The financial year of GESCO AG and GESCO Group runs from 1 April to 31
March of the following year, while the financial years of the subsidiaries
coincide with the calendar year. Therefore financial year 2013/2014
encompasses the operating business of calendar year 2013, which was shaped
by subdued economic development and a lack of growth momentum. All in all,
GESCO Group succeeded in maintaining a relatively solid position in this
market environment: Business at the larger companies as well as the
majority of the smaller subsidiaries mostly either declined slightly or
remained at a stable level. Several smaller companies were hit hard by
problems in specific countries or by a downturn in industrial sectors,
which in turn impacted Group earnings.

The decline in incoming orders on an organic basis was largely offset as a
result of companies acquired in the previous year being consolidated for a
full year for the first time. Incoming orders stood at EUR 435.6 million,
just slightly lower than in the previous year (EUR 439.4 million). Sales
increased by 2.9 % to EUR 453.3 million (previous year: EUR 440.4 million)
due to the full-year consolidation of the new companies. Material prices
were less volatile and the ratio of material expenditure decreased. In
contrast, the ratio of personnel expenditure increased. With a view to
maintaining a competitive position in the long term, there were no
significant job cuts even at those companies that had been particularly
affected by falling demand in 2013. Earnings before interest, taxes,
depreciation and amortisation (EBITDA) fell to EUR 48.7 million (EUR 51.8
million). Depreciation and amortisation rose at a significantly faster rate
than sales, totalling EUR 16.7 million (EUR 14.4 million) due to the
considerable investments made in the reporting year and in previous years.
Consequentially, earnings before interest and taxes (EBIT) fell more
sharply than EBITDA in percentage terms to EUR 32.0 million (EUR 37.3
million). Group net income after minority interest stood at EUR 18.1
million (EUR 20.9 million). Earnings per share amounted to EUR 5.45 (EUR

These figures slightly exceeded GESCO Group's most recent targets in
February 2014. In keeping with the established dividend policy, which calls
for the distribution of roughly 40 % of Group net income after minority
interest, the Executive Board and the Supervisory Board will propose a
dividend of EUR 2.20 per share to the Annual General Meeting on 28 August
2014. A dividend of EUR 2.50 per share was paid out in the previous year.

The company anticipates that the economic climate will on the whole improve
in financial year 2014/2015 (1 April 2014 to 31 March 2015) and expects
sales to increase to between EUR 470 million and EUR 480 million, although
earnings are not expected to grow at the same pace. This is due to the
situation at two subsidiaries, which are currently facing considerable
challenges and having to make structural changes on account of the strong
growth that they are experiencing. Overall, the company predicts Group net
income after minority interest of between EUR 17.5 million and EUR 18.5
million for financial year 2014/2015.

Looking at the first quarter of financial year 2014/2015, which includes
the months January to March 2014 for the subsidiaries, incoming orders in
GESCO Group increased significantly from EUR 110.4 million to around EUR
126 million. At roughly EUR 109 million, sales remained more or less on par
year on year (EUR 108.9 million). At the end of the first quarter, order
backlog amounted to approximately EUR 205 million.

The full report is available at  

A video webcast on financial year 2013/2014 and the outlook by GESCO
Executive Board member Dr. Hans-Gert Mayrose can be viewed at

The annual accounts press conference/analysts' meeting on 26 June 2014 will
be broadcast live as an audio webcast on the internet from 10.30 am and
will be available at for a period of twelve months (in German

Investor Relations   *   Oliver Vollbrecht 
Phone +49 (0)202 24820-18   *   Fax: +49 (0)202 24820-49 
E-mail: info@gesco   *   Web: 

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Language:     English
Company:      Gesco AG
              Johannisberg 7
              42103 Wuppertal
Phone:        +49 (0)202 248200
Fax:          +49 (0)202 2482049
ISIN:         DE000A1K0201
WKN:          A1K020  
Indices:      SDAX
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart
End of Announcement                             DGAP News-Service