DGAP-News: Gesco AG / Key word(s): Forecast/Forecast
Wuppertal/Erkrath, 28 June 2018 - The GESCO Group, an association of industrial SMEs, is reporting a successful operating result for financial year 2017/2018 (1 April 2017 to 31 March 2018) at its annual accounts press conference today and is forecasting significant earnings growth for financial year 2018/2019.
Given the general dynamic economic development and the significant pick-up in business activities in the capital goods industry, the GESCO Group was able to generate brisk demand with rising sales and disproportionately strong operating profit growth in financial year 2017/2018. Moreover, it implemented the optimisation projects defined in the Portfolio Strategy 2022. The pleasing operating development was overshadowed by antitrust proceedings launched against Dörrenberg Edelstahl GmbH, a 90% subsidiary of GESCO AG. Provision was made in the consolidated financial statements for 2017/2018 for a financial penalty of EUR 8.5 million to settle antitrust proceedings.
Overall, incoming orders increased by 10.8% to EUR 552.4 million (previous year: EUR 498.7 million) in a mix of internal and external growth. Group sales came to EUR 547.2 million, up from EUR 482.5 million the previous year, which equates to growth of 13.4%. At 52.6%, earnings before interest and taxes (EBIT) increased at a significantly above-average rate, climbing to EUR 33.8 million (EUR 22.1 million). Group net income after minority interest increased to EUR 16.1 million, more than double the previous year's figure of EUR 7.9 million.
The Production Process Technology segment expanded its sales slightly in the face of a marginal decrease in earnings, while the largest segment, Resource Technology, was able to translate economic tailwind into operating success, making the greatest contribution to the increase in earnings in a combination of internal and external growth. The second-largest segment, Health and Infrastructure Technology, benefited from positive developments in consumer markets, continuing its profitable growth trajectory. By contrast, the Mobility Technology segment recorded a decline. There was a significant negative impact on earnings when a subsidiary shut down a business division.
In light of the vigorous increase in profits, the Executive Board and Supervisory Board will propose significantly increasing the dividend by EUR 0.35 to EUR 0.60 per share at the Annual General Meeting on 30 August 2018. In taking this step, the company is following its long-standing dividend policy of distributing around 40% of Group net income after minority interest.
The signals for continued positive economic development currently outweigh the grave political uncertainties. From today's perspective, no relevant non-recurring or one-off effects are foreseeable in the new financial year. As a result, performance should largely be shaped by organic business development. Specifically, the Executive Board is expecting Group sales of between EUR 550 million and EUR 560 million in the new financial year 2018/2019 and Group net income after minority interest of between EUR 26 million and EUR 27 million.
The rather dynamic development of the previous year continued at the start of the new financial year 2018/2019. At around EUR 150 million, incoming orders in the first quarter, which encompassed the months January to March 2018, were slightly above the previous year's exceptionally high figure of EUR 148.7 million. Sales increased by 5.5% to approx. EUR 140 million (EUR 133.4 million).
Robert Spartmann, member of GESCO AG's Excecutive Board, says: "In 2017/2018, the upturn also had an impact on the capital goods industry. Our company was able to benefit from this to varying degrees and, overall, the Group experienced pleasing growth. We successfully integrated Pickhardt & Gerlach and strengthened the Group with a series of optimisation projects. In the new financial year, we expect to record moderate sales growth and a continued increase in earnings in all segments. The high levels of the first quarter have strengthened our optimism."
The complete Annual Report is available at www.gesco.de/en.
Investor Relations - Oliver Vollbrecht
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