GESCO: Strong first half of 2017/2018 financial year, sales and earnings at the upper end of the forecast range expected
Wuppertal, 14 November 2017 - Prime Standard-listed GESCO Group experienced a very successful first half (1 April to 30 September 2017) of financial year 2017/2018. The capital goods industry picked up significantly, and the optimisation projects launched as part of Portfolio Strategy 2022 have started to show signs of initial success. In addition, Pickhardt & Gerlach Group, which was acquired at the turn of the year, contributed external growth. Against this backdrop, the Group generated double-digit incoming orders and sales growth and saw earnings more than double.
In the first half of the financial year, incoming orders increased by 10.4 % compared to the previous year, from EUR 250.3 million to EUR 276.3 million. Sales climbed from EUR 228.7 million to EUR 264.7 million, which represents growth of 15.7 %. The improved capacity utilisation and a favourable order mix in certain areas led to a disproportionately steep rise in earnings figures. At EUR 20.4 million, EBIT gained 92.1 % (previous year's period: EUR 10.6 million), and Group net income after minority interest more than doubled to EUR 10.6 million (EUR 4.8 million).
In view of the increased result and higher depreciation and amortisation, cash flow for the period rose sharply from EUR 15.8 million to EUR 24.4 million. Cash flow from ongoing business activities also increased, reaching EUR 19.3 million (EUR 13.9 million).
The substantial rise in the Group's earnings was driven primarily by the largest segment, Resource Technology, in which Pickhardt & Gerlach Group was included for the first time. This segment also registered a strong increase in incoming orders and sales. The second-largest segment, Healthcare and Infrastructure Technology, also saw an improvement in incoming orders, sales and earnings. The figures in the Production Process Technology segment reflected the nature of the project business: in the first half of the year, the Group began producing machinery and plants that will largely be delivered in the second half of the year, when these activities have an impact on sales and earnings. The Mobility Technology segment ultimately came in below the initial expectations and registered declining business development. Business remained satisfactory in the third quarter, which encompasses the operating months July to September 2017 of the subsidiaries. Incoming orders stood at around EUR 131 million (EUR 126.1 million), and sales amounted to EUR 138 million (EUR 128.8 million).
At the annual accounts press conference on 29 June 2017, the company forecast Group sales of between EUR 510 million and EUR 530 million and Group net income after minority interest of between EUR 17 million and EUR 18 million for financial year 2017/2018. From an operating perspective, it is entirely possible that the Group could exceed these ranges based on the latest information, but the second half of the year could see opposing special and one-off effects which are not precisely quantifiable at present. After weighing up the currently identifiable opportunities and risks, the Executive Board forecasts sales and earnings at the upper end of the respective range, which corresponds to Group sales of some EUR 530 million and Group net income after minority interest of some EUR 18 million.
Dr Eric Bernhard, Chairman of the Executive Board: "GESCO Group posted remarkably successful development in the first half of 2017/2018 when compared with the same period of the previous year. Through a combination of internal and external growth, we achieved solid increases and considerably lifted the EBIT margin from 4.6 % to 7.7 % year on year. We have also initiated numerous optimisation projects as part of Portfolio Strategy 2022. Some of them are aimed at the cost side to improve efficiency through the automation of production, for example, while others are geared towards business expansion. The measures have been defined and are currently being implemented over a period of three years: 2017, 2018 and 2019. The impact on earnings as a full-year effect will naturally occur with a delay. We are therefore also optimistic for GESCO Group's medium and long term development."
The complete half-year interim report is available at www.gesco.de/reports. GESCO Group key figures for the first half (1 April to 30 September 2017) of financial year 2017/2018 pursuant to IFRS:
1st half 2017/2018 1st half 2016/2017 Change Incoming orders (EUR'000) 276,294 250,291 10.4% Sales (EUR'000) 264,736 228,744 15.7% EBITDA (EUR'000) 32,560 21,019 54.9% EBIT (EUR'000) 20,371 10,605 92.1% Earnings before tax (EUR'000) 19,138 9,173 108.6% Group net income after minority interest (EUR'000) 10,558 4,841 118.1% Earnings per share pursuant to IFRS 1) (EUR) 0.97 0.49 98.0% Employees (No.) 2,572 2,528 1.6%
1) Previous year's figure adjusted to share split 1:3 from Dec. 2016
About GESCO 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 E-mail: firstname.lastname@example.org, Internet: www.gesco.de
14.11.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.deLanguage: English Company: Gesco AG Johannisberg 7 42103 Wuppertal
Germany Phone: +49 (0)202 248200 Fax: +49 (0)202 2482049 E-mail: email@example.com Internet: www.gesco.de ISIN: DE000A1K0201 WKN: A1K020 Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service