DGAP-News: Gesco AG
/ Key word(s): Half Year Results/Half Year Results
31.08.2020 / 07:15
The issuer is solely responsible for the content of this announcement.
Wuppertal, 31 August 2020 - GESCO Group, a Prime Standard-listed company, reports on its performance over the first six months of financial year 2020 and adjusts its outlook for the year as a whole. The figures for the first half of the year and the outlook for the full year correspond to the preliminary figures published on 3 August 2020.
Business development was already affected by the coronavirus pandemic in the first quarter, and it continued to deteriorate significantly in the second quarter. The state-imposed lockdowns in public life and the closure of industrial companies, particularly in the core European markets of France, Italy and Spain, had a massive impact on economic life. Supply relationships were interrupted, and customers were reluctant to place orders in response to the increased uncertainty and to protect their liquidity.
In the cumulative first half of the year, incoming orders reached € 239.7 million following € 287.3 million in the same period of the previous year. Following the change of the financial year to the calendar year, the previous year's figures have been adjusted in order to present comparable period figures. At around 38 % each, the declines were particularly pronounced in the Mobility Technology and Production Process Technology segments, which have a high proportion of customers in the automotive sector. Resource Technology recorded a decline of around 15 %, while incoming orders in Healthcare and Infrastructure Technology were only slightly below the previous year's figure.
Sales were down in total from € 295.1 million to € 237.6 million. In this respect, Mobility Technology and Production Process Technology were also particularly hard hit, with declines of around 30 %. Revenue in Resource Technology also fell by approximately 24 %, while revenue in Healthcare and Infrastructure Technology reached the previous year's level.
The sharp drop in sales led to a disproportionately steep decline in earnings. With the cost-of-materials ratio hardly changing, the personnel expenditure ratio increased due to lower capacity utilisation. Earnings before interest, taxes, depreciation and amortisation (EBITDA) therefore decreased more sharply than sales and came to € 12.9 million (previous year's period: € 28.8 million).
In view of the massive economic impact of the coronavirus pandemic, GESCO AG has carried out impairment tests for all subsidiaries. As a result, companies in the Mobility Technology segment recorded non-cash goodwill amortisation and depreciation of property, plant and equipment totalling € 13.5 million. In conjunction with regular depreciation and amortisation of € 13.3 million, total depreciation and amortisation amounted to € 26.8 million (€ 12.9 million), which resulted in a disproportionately steep decline in EBIT to € -13.9 million (€ 15.9 million). In total, the Group loss after minority interest amounted to € -17.4 million (€ 8.6 million) in the first six months of the year.
Despite extremely limited visibility, GESCO AG published an outlook at the annual accounts press conference on 28 April 2020. At the Annual General Meeting on 18 June 2020, it substantiated its outlook and forecasted Group sales of around € 540 million and Group net income after minority interest of around € 8 million. Since then, the operational outlook for the second half of the year has become clearer, the reluctance to invest in the automotive and capital goods industries is proving to be persistent and the recovery expected in the Production Process Technology and Mobility Technology segments in the second half of the year is no longer realistic from today's perspective. In addition, a large number of coronavirus-related restrictions mean that the recovery of business activity in other divisions is also slower and less efficient. All in all, the company now expects Group sales for 2020 as a whole to exceed € 450 million and Group net income after minority interest before impairment losses to at least break even. Taking into account the non-cash impairment losses mentioned above, the Group net result after minority interest will be at or above
€ -13.5 million.
Regardless of the current economic situation, GESCO Group is hard at work on the further implementation of the NEXT LEVEL strategy. As part of the Group's excellence programmes, the company initially suspended all workshops in the spring, but has resumed them in recent weeks while maintaining coronavirus-compliant conditions. As far as the concept of the strategy is concerned, the pandemic has shown GESCO that it is definitely on the right track with NEXT LEVEL.
Kerstin Müller-Kirchhofs (CFO): "In times of utmost uncertainty, we see it as our duty to provide the capital market with the best possible orientation based on what we know at the present time. In contrast to many other issuers, and despite extremely limited visibility, we published an outlook at the annual accounts press conference. We made it clear from the outset that this outlook may change in the short term in view of the dynamic development of the coronavirus pandemic and its effects on the economy and society."
Müller-Kirchhofs on the AGM: "We held the Annual General Meeting on the scheduled date of 18 June in the form of a virtual annual general meeting. We have therefore ensured that all resolutions were passed promptly and that the dividend of € 0.23 per share announced on 30 March 2020 was subsequently paid. We view this as sending a signal of reliability to our shareholders. During the Annual General Meeting we provided detailed answers to all questions received. We welcome the fact that, in this unprecedented situation, legislators have offered issuers a way to conduct annual general meetings in a legally secure manner, but at the same time we hope that it will be possible to meet shareholders, shareholder representatives and guests in person again next year."
The full half-year interim report is available under www.gesco.de/en/financial-reports.
GESCO Group key figures for the first half (1 January to 30 June 2020) of financial year 2020 pursuant to IFRS:
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
Phone: +49 202 24820-18 - Fax: +49 202 24820-49
E-mail: firstname.lastname@example.org - Website: www.gesco.de
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