GESCO distinctly profitable despite recession

  • Full year guidance confirmed again after
    nine month period
  • Worst of the economic slump seems to have
    been overcome

Wuppertal, 3 February 2010 – Despite the severe recession in Germany and many export markets, GESCO Group can look back on a distinctly profitable third quarter and nine month period for the financial year 2009/2010 (1 April 2009 – 31 March 2010). Since the third quarter, business activities have been stabilising and customer enquiries have started to pick up again. This is an indication that declines have come to an end and that the worst of the economic slump has been overcome.

In the first nine months of the financial year 2009/2010, GESCO Group received consolidated incoming orders of € 169.0 million (previous year: € 305.9 million). Group sales fell by 29.5 %, from € 293.2 million to € 206.7 million. These figures already include declines in material prices of around € 25 million.

While margins in the previous year’s period benefited from extremely high capacity utilisation levels and subsequent economies of scale, key earnings figures in the reporting period consequently fell more sharply than sales revenues. Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to € 19.6 million (€ 40.3 million). Amortisation and depreciation was roughly at the same level as in the previous year. As a result, earnings before interest and taxes (EBIT) decreased further to € 11.5 million (€ 32.6 million). The financial result improved from € -2.8 million to € -2.0 million. Group net income after minority interest reached € 6.1 million (€ 18.4 million). Earnings per share totalled € 2.01 (€ 6.07) pursuant to IFRS.

The Group’s workforce dropped slightly and amounted to 1,765 employees in the reporting period (1,780). This figure includes 45 employees of Georg Kesel GmbH & Co. KG, who were not yet included in the previous year’s figures.

Dr. Hans-Gert Mayrose, member of the Executive Board, on business development: “While many German manufacturing companies, particularly in the mechanical engineering sector, are currently struggling and incurring losses, GESCO Group is distinctly profitable despite the severe recession. In the third quarter, there was a slight recovery in business activities, which is likely to have continued in the fourth quarter. This confirms our impression that the worst of the economic slump has been overcome.”

At the accounts press conference on 25 June 2009, Group sales were forecast to total between € 280 million and € 310 million, Group net income after minority interest between € 7 million and € 10.5 million, and earnings per share between € 2.31 and € 3.47. In the interim report for the first six months in November, the Group announced that Group net income after minority interest would come in at around the middle of the previously predicted range. This forecast can now be confirmed on the basis of the figures for the first nine months.