GESCO: 2016/2017 impacted by non-recurring effect, significant growth expected for 2017/2018


DGAP-News: Gesco AG / Key word(s): Final Results/Final Results

29.06.2017 / 07:30
The issuer is solely responsible for the content of this announcement.

·       2016/2017 sales and earnings figures in line with the
amounts previously published on a preliminary basis

·       Portfolio Strategy 2022 is being implemented
·       Significant growth expected in financial year 2017/2018
·       Supervisory Board is to be expanded
Wuppertal/Finnentrop, 29 June 2017 - GESCO Group, an association of small and medium-sized industrial companies, is reporting on an eventful financial year 2016/2017 (1 April 2016 to 31 March 2017) at its annual accounts press conference today, and forecasts significant growth for financial year 2017/2018. Crucial strategic steps were taken within the scope of the Portfolio Strategy 2022, which was approved in early 2016, for a return to profitable growth for the GESCO Group. The portfolio was rounded out by the Pickhardt & Gerlach Group, a leading processor of strip steel, which was acquired at the start of 2017. The stake in Protomaster GmbH, which had negatively impacted Group net income in previous years, was put up for sale in February 2017. The company performed a 1:3 share split in December 2016 and raised equity of some EUR 20 million through a capital increase in February 2017.  
In operating terms, the GESCO Group reported stable development in financial year 2016/2017, an increase in incoming orders, a slight decline in sales and a significant decline in earnings marked by a negative non-recurring effect. The final figures correspond to the preliminary sales and Group's net profit after minority interest figures announced on 24 May 2017. Incoming orders rose by 3.2 % to EUR 498.7 million in the reporting period, compared to EUR 483.2 million in the previous year. Group sales totalled EUR 482.5 million (previous year: EUR 494.0 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 49.7 million (EUR 53.3 million). Earnings before interest and taxes (EBIT) were significantly impacted by the non-recurring effect of EUR 6.6 million in impairment losses associated with the planned sale of Protomaster GmbH, falling from EUR 31.5 million to EUR 22.1 million. Group net income after minority interest totalled EUR 7.9 million (EUR 16.1 million). Cash flow from ongoing business activity improved significantly, rising by 55.5 %, from EUR 27.0 million to EUR 41.9 million.
In line with GESCO's long-time dividend policy of distributing roughly 40 % of Group net income after minority interest, the Executive Board and Supervisory Board will propose to the Annual General Meeting on 31 August 2017 a dividend of EUR 0.35 per share (previous year: EUR 0.67 per share, adjusted in line with the increased number of shares following the 1:3 share split in December 2016).
The Executive Board expects to see increasing customer demand from the capital goods industry as well as initial operational results generated by the further implementation of the Portfolio Strategy 2022. The portfolio changes made in recent months have also made a contribution to ensuring positive development. In view of this, the Executive Board forecasts sales and earnings growth based on data currently available. Group sales are expected to increase to around EUR 510 million to EUR 530 million, corresponding to growth of between 5.7 % and 9.8 %. Group net income after minority interest will more than double the current figure and stand at between EUR 17 million and EUR 18 million.
The first quarter of financial year 2017/2018, which encompasses the operating months January to March 2017, supports this positive assessment: at approximately EUR 148 million, incoming orders were up 21 % on the previous year's figures, while sales rose 17 % to approximately EUR 133 million. The order backlog grew by 16 %, to EUR 209 million.  
A proposal will be put to the Annual General Meeting on 31 August 2017 to expand the Supervisory Board from three to four members, utilising the flexibility in the number of Supervisory Board members provided by the 2016 amendment to the German Stock Corporation Act (AktG). Expanding the number of Supervisory Board members will enable the company to cover new areas of competence on the Supervisory Board. It will also ensure that the Supervisory Board maintains a quorum when a member of the Supervisory Board is unable to participate in the passing of a resolution. Mr. Jens Große-Allermann will be nominated for election. He is member of the Executive Board of Investmentaktiengesellschaft für langfristige Investoren TGV, GESCO's largest shareholder who currently holds approximately 14.4 % of the share capital.
GESCO Chairman of the Executive Board, Dr Eric Bernhard regarding financial year 2016/2017: "The past financial year marked a relaunch with the clear goal to enable GESCO after several years of declining dynamics to grow profitably again on a sustainable basis - organically as well as by again more frequent acquisitions. With the Portfolio Strategy 2022, we put essential measures in motion. On the one hand our companies defined and implemented optimization projects. On the other hand we streamlined our portfolio and strengthened it by an acquisition, made it more robust and reduced risks." 
Dr Bernhard adds: "The further consequent implementation of the Portfolio Strategy 2022 in combination with a more lively business activity gives us reason for an optimistic view on the new financial year. We will not just past the negative non-recurring effect from the portfolio-optimization; we will also generate both internal and external profitable growth."
The full annual report is available at
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 as well as 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
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29.06.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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