- Business activities remain at high level in fourth quarter- GESCO subsidiary MAE acquires US market leader Eitel Presses- Cautiously optimistic outlook for the new financial year
Wuppertal, 13 February 2014 – GESCO Group’s economic performance in the first nine months (1 April to 31 December 2013) of financial year 2013/2014 was initially shaped by a subdued economic climate, which put pressure on margins.
The first nine months of the financial year at GESCO Group encompass the months April to December for GESCO AG and January to September for its subsidiaries. A relatively weak first half of the year for GESCO Group was followed by an upturn in business activity in the third quarter of financial year 2013/2014 with growth in both incoming orders and sales.
The figures for the nine-month period are still hampered by the weak first half of the year. Incoming orders fell from € 337.1 million to € 325.2 million. Sales rose slightly year on year to € 337.2 million (previous year’s period: € 335.0 million). EBIT stood at € 24.3 million (€ 30.1 million). Group net income after minority interest amounted to € 13.6 million (€ 17.0 million), equating to earnings per share pursuant to IFRS of € 4.08 (€ 5.12).
Looking at the third quarter on its own, incoming orders rose by 1.2 % to € 113.3 million and sales were up by 4.5 % to € 119.5 million. Business activities also remained at a high level in the fourth quarter, which includes the months October to December for the subsidiaries: Incoming orders rose by 7.5 % year on year to approximately € 110 million, while sales climbed by 9 % to around € 115 million. Order backlog came to approximately € 180 million at the end of the fourth quarter.
Thanks to the slightly better-than-expected sales figures in the fourth quarter, the company has adjusted its planned Group sales from roughly € 435 million to around € 450 million. The margin will be impacted in the fourth quarter by, among other things, one-off effects, which were announced and explained in the half-year interim report and will be slightly higher than expected. In particular, these include increased due diligence expenses as well as unexpected technical problems in two complex projects. In terms of Group net income for the year after minority interest, the company previously anticipated an amount at € 18 million or slightly lower; from the current perspective, earnings are likely to come in at slightly lower than € 18 million.
The GESCO portfolio was expanded at the turn of 2014. Effective as of 1 January 2014, MAE Maschinen- und Apparatebau Götzen GmbH acquired Eitel Presses Inc., the market leader in the US levelling machine industry. Eitel generates annual sales of approximately € 10 million. MAE itself is the global market leader in automatic levelling machines as well as wheel presses; its global market share in both products groups is in excess of 60 %. The acquisition of the US market leader constitutes a crucial step for MAE to significantly strengthen its presence on the US market.
GESCO Executive Board member Dr. Hans-Gert Mayrose on the quarterly figures: “It is currently difficult to say whether or not the positive development of business activities in the third and fourth quarters will trigger a sustained turnaround. Overall, however, we have the impression that the reluctance to invest on the part of customers – at times a massive reluctance – has eased somewhat, especially when it comes to capital goods. Positive signals have also been emanating from the Chinese market since the end of 2013; this market had been very difficult in 2013. From today’s perspective, we are therefore cautiously optimistic for the new financial year 2014/2015. The strategic investments we make over the course of the financial year should generate growth – and earnings should benefit, as a number of negative effects will cease in the new financial year.”
Complete interim report available at www.gesco.de/en/investor-relations/financial-reports/
Video commentary by Dr. Hans-Gert Mayrose, member of the Executive Board, available at www.gesco.de/en/investor-relations/audio-and-video-clips/