DGAP-News Gesco AG: GESCO takes stock for financial year 2020 and publishes outlook for new financial year 2021
DGAP-News: Gesco AG / Key word(s): Annual Report
GESCO takes stock for financial year 2020 and publishes outlook for new financial year 2021
- Sales and earnings target achieved or surpassed (continuing operations)
- Overall result negative as expected following impairment
- Dividend suspended for financial year 2020
- Preliminary figures for first quarter allow positive outlook for 2021
Wuppertal, 27 April 2021 - GESCO AG, an industrial group made up of market and technology leading SMEs listed in the Prime Standard, takes stock of this past financial year 2020 and elaborates the outlook for the current financial year 2021 at its Annual Accounts Press and Analysts' Conference.
GESCO has completed its first full financial year running concurrently with the calendar year in reporting year 2020 (FY 2020). In the previous year, the change in financial year to 31 December resulted in a nine-month abbreviated financial year from 1 April to 31 December 2019 (AFY 2019), meaning that the previous year's figures are only comparable to a limited degree.
Within the scope of the NEXT LEVEL strategy, GESCO successfully sold a group of six subsidiaries and closed the Mobility Technology segment in December 2020. With the portfolio restructuring completed, the outlook for financial year 2020 for the continuing operations was adjusted to Group sales of approximately € 400 million and Group net income for the year after minority interest of around € 5 million. In February 2021, the majority shareholding in VWH GmbH was also sold as part of a management buy-out. A total of seven companies is reported as "discontinued operations" in the consolidated financial statements.
In financial year 2020, GESCO achieved the forecast sales of the continuing operations at € 397.2 million and noticeably surpassed the earnings forecast at € 5.8 million.
Affected by the developments surrounding the coronavirus pandemic, financial year 2020 also proved to be an exceptional year for the GESCO companies. After a satisfactory start to the year, subsidiary business performance was substantially disrupted by the pandemic in March 2020. The impact of these disruptions affected the companies to varying degrees. The situation became even worse for companies already suffering from the automotive industry's reluctance to invest in the previous year. Companies in all segments especially felt the impact in terms of customer demand in spring of 2020, following crisis-related plant closures. Travel restrictions for sales and service were a steady feature for the companies throughout the year. There was a broad scale decline in incoming orders, caused by the overall increase in uncertainty, leading to customers' reluctance to invest. Positive developments were noted in particular in the production of paper sticks and in stainless steel products. Significant orders were also acquired in loading technology.
All told, incoming orders in GESCO Group reached € 492.8 million in the financial year (AFY 2019: € 403.2 million). Incoming orders among continuing companies stood at € 407.1 million in the financial year, compared to € 331.9 million in abbreviated financial year 2019. Group sales for continuing operations amounted to € 397.2 million (AFY 2019: € 354.8 million). Including discontinued operations, Group sales totalled € 495.2 million (AFY 2019: € 439.6 million).
Measures have already been in place at the Group since 2019 to allow for the adjustment of capacities and costs to the lower utilisation. Despite these efforts, margins have decreased compared to the previous period. Earnings before interest, taxes, depreciation and amortisation (EBITDA) for continuing operations amounted to € 33.4 million (AFY 2019: € 37.0 million). Earnings before interest and taxes (EBIT) for continuing operations stood at € 16.7 million (AFY: € 24.4 million), representing an EBIT margin of 4.2 % (AFY 2019: 6.9 %).
The continuing operations generated a Group net income for the year after minority interest of € 5.8 million in the financial year (AFY 2019: € 14.5 million). Earnings per share from continuing operations accordingly amounted to € 0.54 (AFY 2019: € 1.34). After minority interest, Group sales including discontinued operations totalled € -16.6 million (AFY 2019: € 12.4 million). Of that amount, € 17.6 million were attributable to non-cash expenditure for impairment for discontinued operations and valuation allowances for financial assets. Earnings per share from continuing and discontinued operations amounted to € -1.53 in total (AFY 2019: € 1.14). The final figures correspond to the preliminary figures published on 26 March 2021.
The Group's net debt improved significantly from € 102.9 million to € 33.4 million, thanks in particular to the successful portfolio restructuring efforts. In addition, provisions for pension obligations and lease liabilities fell by € 15.9 million.
Given the negative result on the whole in financial year 2020, the Executive Board and Supervisory Board have decided to suspend the dividend payment as part of the existing dividend strategy. The decision also serves to maintain liquid reserves in light of the NEXT LEVEL strategy. GESCO will continue to pursue its basic dividend policy.
In the new financial year 2021, GESCO Group's development will benefit from the fact that the automotive industry in particular, as well as the capital goods industry, will have a significantly less pronounced impact on the portfolio of continuing operations compared to previous years. In addition, the Executive Board believes that the MAPEX and OPEX programmes that form part of the NEXT LEVEL strategy will continue to have an effect. The Executive Board expects a broad-based increase in sales to a range of between € 445 to € 465 million as well as an increase in Group net income after minority interest ranging from € 16.5 to € 18.5 million. As the further effects of the pandemic cannot currently be assessed with any degree of certainty, the outlook for financial year 2021 may also change at short notice.
In the first quarter of the new financial year 2021, order intake reached approximately € 136 million (continuing operations in Q1 2020: € 114.8 million) with sales of around € 113 million (Q1 2020: € 101.9 million), according to preliminary figures. The key driving factor for the positive business development in the first quarter was the business with stainless steel products. However, other areas also recorded business volume that was significantly above the previous year. EBIT reached roughly € 7.4 million with a margin of 6.6% (Q1 2020 continued: € 2.1 million with a margin of 2.1%). The Group net income for the quarter after minority interest amounts to around € 4.0 million (Q1 2020 continued: € 1.2 million). While development in the Healthcare and Infrastructure Technology segment was positively stable year on year in terms of sales and earnings, the Production Process Technology and Resources Technology segments reported significantly better sales and earnings figures than in the same quarter of the previous year. As was the case in previous years, machinery and plants in the project business often do not have an impact on revenue and earnings until later in the year.
The CANVAS business model analyses, conducted for the first time in 2019, became a firm fixture of the annual planning process for many subsidiaries over the course of financial year 2020 and serve as a common benchmark for our business activities. In addition, a large number of projects were launched and expanded in the past financial year within the scope of the NEXT LEVEL strategy thanks to the help of the Operational Excellence (OPEX) and Market and Product Excellence (MAPEX) programmes. The aim of the programmes is to provide GESCO Group with a viable position for the future and create added value at all levels by increasing efficiency and expanding business volume.
Ralph Rumberg, CEO of GESCO AG: "We look back on a challenging and exciting year 2020 with conditions that were out of the ordinary. At holding level and in the manufacturing subsidiaries, we faced considerable challenges, but our teams on location certainly rose to the challenge. We owe them a debt of gratitude! We made great progress together with our NEXT LEVEL strategy in 2020, despite the dynamic environment. We achieved a lot with the further development of our portfolio architecture and the implementation of our excellence programmes, but we are not done yet."
The complete Annual Report is available at https://www.gesco.de/en/investor-relations/financial-reports/.
The video recording of the Executive Board's presentation at the Annual Accounts Press and Analysts' Conference on 27 April 2021 will be available on the GESCO website at https://www.gesco.de/en/investor-relations/financial-reports/ on the following day.
GESCO Group key figures
|Incoming orders||€ '000||407,092||331,921||403,157|
Group net income
from continuing operations1)
|Earnings per share||€||0.54||1.34||-|
Group net income
from discontinued operations1)
|Earnings per share||€||-2.07||-0.20||-|
Group net income from
continuing and discontinued operations1)
|Earnings per share||€||-1.53||1.14||1.14|
|Total assets||€ '000||390,821||-||506,099|
|Employees (as at 31/12)||No.||1,695||1,756||2,718|
|Share price (31/12 resp. 31/03)||€||18.35||18.86||18.86|
|Dividend per share||€||0.00||0.23||0.23|
1) After minority interest.
GESCO AG is an industrial group made up of market and technology leading companies in the capital goods industry with a focus on production process technology, resource technology, as well as healthcare and infrastructure 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.
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|Phone:||+49 (0)202 248200|
|Fax:||+49 (0)202 2482049|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||1188212|
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