- Incoming orders increased in the first half of the year,sales stable
- Two restructuring measures had a negative effect on earnings
- Sales and incoming orders at a satisfactory level in the third quarter
- Outlook for full year reduced
Wuppertal, 14 November 2014 – In the first half of financial year 2014/2015 there was a significant year-on-year increase in incoming orders, while sales increased slightly. As announced at the annual accounts press conference held in June, the restructuring of two subsidiaries had a significant negative effect on Group earnings.
In the first half of financial year 2014/2015, incoming orders increased year on year by 6.9 % to € 226.6 million (previous year’s period: € 211.9 million). Group sales increased slightly by 1.1 % to € 220.1 million (€ 217.8 million). The negative effect of the restructuring measures on earnings led to a decrease in earnings before interest, taxes, depreciation and amortisation (EBITDA) from € 23.7 million to € 20.1 million. Depreciation and amortisation rose considerably due to the significant investments made in the previous year and in the reporting period. As a result, earnings before interest and taxes (EBIT) fell more sharply than EBITDA to € 10.8 million (€ 15.3 million). Group net income after minority interest amounted to € 5.5 million (€ 8.6 million).
The half-year interim report encompasses the operating months of January to June 2014 of the Group’s subsidiaries. In the following third quarter, which accounts for the months July to September 2014 in the case of the subsidiaries, incoming orders amounted to approximately € 113 million (previous year’s period: € 113.3 million). Group sales came to approximately € 116 million (€ 119.5 million). Order backlog at the end of the third quarter stood at approximately € 191 million. That means the company’s operational business was on a satisfactory level in the third quarter.
As explained in the ad hoc statement dated 4 November 2014, the company does not currently expect to be able to compensate for the weak performance in the first half of the year in the second half of the year. The company has therefore reduced the outlook for financial year 2014/2015. The main reasons for the adjustments are the lower rate of capacity utilisation due to the economic situation, postponement of orders as well as changes in the order mix which negatively impact the margin. At subsidiary Frank Walz- und Schmiedetechnik GmbH, which produces wear parts for the agricultural market, the decrease in demand due to the Russia/Ukraine crisis is greater than assumed. In addition, the restructuring of one of the two affected companies will weigh down on Group earnings more than expected. The company has therefore reduced the outlook for Group sales to between € 455 million and € 460 million (from € 470 million). The company now expects Group net income after minority interest of € 14.5 million to € 15.0 million (previously € 17.5 million).
GESCO is currently examining two companies with a view to purchasing them. One of the companies would be a strategic addition to a subsidiary, while the other would be acquired directly by GESCO AG. The examinations or contractual negations are at an advanced stage in these cases, and a decision with regard to at least one of the two cases is therefore expected by the end of the financial year.
Complete interim report available at www.gesco.de/en/investor-relations/financial-reports/
Video commentary by the GESCO Executive Board Member Dr. Hans-Gert Mayrose available at
www.gesco.de/en/investor-relations/audio-and-video-clips/