DGAP-News: Gesco AG / Key word(s): Quarterly / Interim Statement/Quarterly / Interim Statement2016-08-15 / 07:30
The issuer is solely responsible for the content of this announcement.
- Sales and earnings short of previous year's figures, as expected
- Second-quarter incoming orders and sales slightly up on the first quarter
- Sales and earnings for the full financial year expected at lower end of target ranges at best
Wuppertal, 15 August 2016 - As expected, GESCO Group recorded a subdued start to financial year 2016/2017 (1 April 2016 to 31 March 2017). The capital goods industry, in which the majority of the Group subsidiaries operate, experienced sluggish development in the first quarter, which comprises the operating months January to March 2016 at the subsidiaries. Ongoing issues in the eurozone, persistently low oil prices and general political uncertainty continued to dampen investment propensity. Many companies in the industry recorded low capacity utilisation, which ramped up the pressure on prices. Against this backdrop, sales and earnings fell short of the previous year's figures, as expected.
At EUR 122.5 million, incoming orders in the first quarter may not have matched the unusually high figure reported in the first quarter of the previous year (EUR 146.1 million), but they were up on the last quarter of the previous year (EUR 105.1 million). Group sales amounted to EUR 113.6 million (previous year's period: EUR 118.7 million) in the first quarter.
The partial fall in capacity utilisation and general price pressure had an impact on earnings figures. Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 10.6 million, down from EUR 11.6 million in the same period last year. The slight increase in depreciation and amortisation meant that earnings before interest and taxes (EBIT) fell more sharply than EBITDA to EUR 5.4 million (EUR 6.6 million). Group net income after minority interest closed the period at EUR 2.7 million (EUR 3.2 million).
In the second quarter, which accounts for the operating months April to June 2016 in the case of the subsidiaries, incoming orders amounted to approximately EUR 127.8 million (previous year's period: EUR 112.0 million). Sales came to approximately EUR 115.1 million (EUR 118.6 million). This means that both incoming orders and sales increased slightly quarter on quarter; the book-to-bill ratio was also over 1 in the second quarter.
At the annual accounts press conference on 30 June 2016, the Executive Board forecast Group sales for financial year 2016/2017 of between EUR 480 million and EUR 490 million and Group net income after minority interest of between EUR 13.5 million and EUR 14.5 million. According to the information available at the current time, the Group expects sales and earnings to come in at the lower end of these ranges.
In the statement for the first quarter, segment reporting is based for the first time on the new portfolio strategy, which was presented at the annual accounts press conference. The strategy defines strategically attractive segments experiencing positive megatrends in which GESCO AG would like to target acquisitions. In additiont, the reclassification of the segments offers greater transparency to the capital market. The reclassification of the operating segments is geared towards the respective customer markets and encompasses the Production Process Technology, Resource Technology, Healthcare and Infrastructure Technology as well as Mobility Technology segments. One common element of all these segments is that they pursue B2B business models with a focus on the capital goods industry.
Dr Eric Bernhard, Chairman of the Executive Board: "A view to the conditions offers little cause for optimism at the present time. The capital markets have reacted neither to Brexit nor the political events in Turkey with major price losses in recent weeks. However, both issues increase general uncertainty for the real economy, which is unfavourable for the propensity to invest - and therefore also for the capital goods sector, in which the focus of our activities lies. We are implementing cost-cutting measures and scrutinising investments that may not be immediately necessary. In addition, we have kicked off a number of optimisation projects at individual Group subsidiaries which are geared towards leveraging both costs and opportunities and improving margins over the medium term."
The full quarterly statement is available at www.gesco.de.
GESCO Group key figures for the first quarter (1 April to 30 June 2016)
of financial year 2016/2017 pursuant to IFRS:
GESCO AG is an industrial group with market and technology leaders in the investment goods industry focusing on production process technology, resource technology, health and infrastructure technology and mobility technology. As a stock listed company on the Prime Standard, GESCO AG offers private and institutional investors access to a portfolio of leading small and medium-sized industrial German companies, so-called hidden champions of Germany's Mittelstand.
Investor Relations, Oliver Vollbrecht
Tel. +49 202 24820-18, Fax +49 202 24820-49
E-mail: email@example.com, Internet: www.gesco.de
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