• In the first quarter, stable demand, acquisition-driven growth of incoming orders and sales
• Earnings significantly down on the above-average figure of the previous year's period, as expected
• In the second quarter, decline in incoming orders and slight rise in sales
• Existing outlook for full year refined further
• Annual General Meeting on 29 August to vote on a change in GESCO AG's financial year to the calendar year
• Implementation of NEXT LEVEL strategy started

​Wuppertal, 14 August 2019 - Prime Standard-listed GESCO Group began the new financial year 2019/2020 with stable demand and an anticipated decline in earnings. As explained in the annual accounts press conference on 27 June 2019, GESCO Group was also unable to fully escape the significant deterioration in the capital goods industry.

In the first quarter, which encompasses the operating months January to March 2019, incoming orders came to EUR 156.9 million, up from EUR 150.4 million in the same quarter in the previous year's period. Sales also increased year on year, from EUR 140.8 million to EUR 147.8 million. This growth is primarily the result of the first-time inclusion of Sommer & Strassburger GmbH & Co. KG, which was acquired in August 2018. In organic terms, incoming orders and sales were both marginally up on the previous year's figures.

As announced in the annual accounts press conference, the decline in economic growth momentum had a noticeable effect on earnings in the first quarter. The year-on-year variance is all the more stark because the first quarter in the previous year reported by far the highest margins and strongest earnings thanks to strong demand and rising material prices. The decline is for the most part due to the development of the Resource Technology segment, where special economic effects with disproportionately high margins subsided and one-off expenditure on loading technology had an impact on the result. The Mobility Technology segment continued to be impacted by the challenging situation in the automotive industry, while the Production Process Technology and Healthcare and Infrastructure Technology segments recorded rising sales and earnings.

Overall, earnings before interest and taxes (EBIT) came to EUR 9.0 million, down from EUR 13.1 million in the previous year. Group net income after minority interest came to EUR 4.9 million (previous year's period: EUR 7.4 million).

Demand levelled out significantly in the subsequent second quarter, which encompasses the operating months of April to June of the subsidiaries. According to preliminary figures, incoming orders amounted to roughly EUR 130 million and were therefore down significantly on the record-breaking figure of EUR 162.6 million in the previous year. Sales stood at approximately EUR 147 million and were up 5.6 % on the previous year's figure of EUR 139.1 million.

As announced in the annual accounts press conference, the company will propose to the Annual General Meeting on 29 August 2019 a change in the financial year of GESCO AG to the calendar year in order to achieve parity between the reporting dates of GESCO AG and the subsidiaries. The German Financial Reporting Enforcement Panel (FREP) conducted a random audit of the consolidated financial statements for financial year 2017/2018 and submitted an error finding for the first time in relation to the different financial years. If the Annual General Meeting approves the change, GESCO AG will have a legal abbreviated financial year from 1 April to 31 December 2019. At the moment, the company is analysing in partnership with external accounting experts which accounting periods of the subsidiaries and of GESCO AG should be included in this abbreviated financial year and in previous periods. We will communicate the results of these considerations as soon as this question has been resolved.

In the interests of ensuring that financial years were comparable, GESCO also communicated an outlook for the full financial year 2019/2020 as part of the annual accounts press conference, in which both GESCO AG and the subsidiaries were included for the full twelve months. For this financial year, the Executive Board forecast Group sales of EUR 585 million to EUR 605 million and Group net income after minority interest of between EUR 21 million and EUR 23 million. Based on the information available at the current time, the company believes that it can achieve sales roughly in the middle of the stated range and earnings at the lower end of the range.

The NEXT LEVEL strategy unveiled at the annual accounts press conference is being implemented systematically. As part of this strategy, GESCO AG is promoting the development of group companies in collaboration with their management teams. This is taking place within the scope of excellence programmes under the banner Hidden Champions with the aim of fostering growth and boosting efficiency. GESCO companies are aiming to outperform respective market growth by 3 % and increase sales per employee by 3 % on an annual basis. Kick-off workshops and programme launches at several subsidiaries have already taken place, with further measures planned.

CEO Ralph Rumberg: "As an association of small and medium-sized enterprises, we are unable to affect fluctuations in economic development. What we can do is influence the structure of the GESCO portfolio and how our companies are positioned. We are convinced that we are on the right track with NEXT LEVEL and will make GESCO Group more resistant and more successful on a sustained basis."

The full quarterly statement is available at www.gesco.de/financial-reports.

GESCO Group key figures for the first quarter (1 April to 30 June 2019) of financial year 2019/2020 pursuant to IFRS

		1st quarter 2019/2020	1st quarter 2018/2019	Change
Incoming orders	(EUR'000)	156,935	150,413	+4.3 %
Sales	(EUR'000)	147,727	140,825	+4.9 %
EBITDA	(EUR'000)	15,723	18,720	-16.0 %
EBIT	(EUR'000)	8,965	13,089	-31.5 %
Earnings before tax (EBT)	(EUR'000)	8,268	12,470	-33.7 %
Group net income after minority interest	(EUR'000)	4,856	7,404	-34.4 %
Earnings per share pursuant to IFRS	(EUR)	0.45	0.68	-34.4 %
Employees	(No.)	2,684	2,507	+7.1 %

 

About GESCO
GESCO AG is an industrial group made up of market and technology leading companies in the capital goods industry. Its focus is on production process technology, resource technology, healthcare and infrastructure technology and mobility technology. As a stock company listed in the Prime Standard, GESCO AG offers private and institutional investors access to a portfolio of hidden champions among Germany's industrial SMEs.

Investor Relations - Oliver Vollbrecht
Tel. +49 (0) 202 24820-18 - Fax +49 (0) 202 24820-49
E-mail: info@gesco.de - Website: www.gesco.de