• Coronavirus pandemic exacerbates reluctance to invest in automotive sector and capital goods industry
• Incoming orders and sales decline
• Earnings significantly down on the figure of the previous year's period, as expected
• Full-year outlook confirmed

Wuppertal, 29 May 2020 - The GESCO Group, listed on the Prime Standard, has confirmed the preliminary figures published at the annual accounts press conference with its quarterly statement for the first quarter of the current financial year (1 January to 31 March 2020) and confirmed its full-year outlook. Due to the change in the financial year of GESCO AG in line with the calendar year, the previous year's figures have been adjusted to ensure that the reporting periods of GESCO AG and of the subsidiaries coincide.

The outlook in the automotive sector and capital goods industry had already waned in the final few months of the abbreviated financial year 2019, but the weak demand situation has worsened significantly over the past months in the wake of the coronavirus pandemic. Factory closures initially affected China before spreading to Europe and the US. GESCO Group's supply chains remained intact - thanks in part to a predictive procurement management system - and so no supply-related production losses were reported. No Group companies are currently subject to any government-imposed closures, with the exception of those in the US. However, factory closures did mean that customers were not able to purchase supplied parts and preliminary materials at times, and procurement and sales of capital goods were also deferred.

GESCO Group recorded lively demand in the first quarter of 2019, with incoming orders soaring to their second-highest single-quarter level in the company's history of € 156.9 million (adjusted), whereas reluctance to invest in the automotive sector and the capital goods industry and the spread of the coronavirus pandemic had a noticeable effect on the reporting period. Incoming orders came to € 137.0 million, while sales stood at € 129.5 million (previous year, adjusted: € 145.8 million).

As explained at the annual accounts press conference, earnings were disproportionately low in the first quarter. The Healthcare and Infrastructure Technology segment reported stable earnings in this period, whereas the order and earnings situation in the Mobility Technology segment deteriorated further. The latter's EBIT was negative for the first quarter and is set to remain negative over the course of the year as a whole. In Production Process Technology, as usual work has begun on the construction of machinery, plant and equipment in the first months of the year, which will only have an impact on sales and earnings later on in the year. EBIT in this segment was therefore still negative in the first quarter of the year, but will be significantly positive over the year as a whole. Margins were down in the Resource Technology segment due to the economic situation, with orders in project business only having an impact on sales and earnings later in the year. Group earnings before interest, taxes, depreciation and amortisation (EBITDA) came to € 8.4 million (€ 13.8 million), and EBIT was € 1.8 million (€ 7.8 million). There was only a minor change in the financial result and a slight rise in the tax rate, so Group net income after minority interest was € 0.4 million (€ 4.0 million).

As expected, the effects of the coronavirus crisis have intensified since the end of the reporting period on 31 March 2020. April saw customers in Europe and the US forced to close their factories, and so demand for supplied components and preliminary materials was correspondingly low. Capital goods procurement was largely suspended for the duration of the factory closures. International travel restrictions also brought a halt to service technicians' activities, leading to the postponement of acceptance procedures for completed machinery and systems. Production ramp-ups at customers raises hopes of a gradual recovery in demand, but process efficiency is still significantly down on pre-crisis levels. Based on the information available at the current time, the Executive Board confirms the outlook published at the annual accounts press conference and continues to expect full-year Group sales of between € 540 million to € 560 million and Group net income after minority interest of € 8 million to € 11 million. It should be noted that forecasts may change significantly at short notice in light of the dynamic development of the coronavirus crisis.

CEO Ralph Rumberg: "Financial year 2020 will undoubtedly pose significant challenges to the GESCO Group. That being said, these challenges appear manageable from the current standpoint. Our solid financial basis with liquid assets of approximately € 30 million and a Group equity ratio of roughly 50 % will help us in this regard. The nature of our group, which consists of small and medium-sized enterprises, and its decentralised decisions and versatile implementation is beneficial in a situation that requires particular flexibility and creativity. And, last but not least, with NEXT LEVEL we are moving in the right direction to exit this crisis in stronger and healthy shape."

Full quarterly statement at /en/financial-reports.

GESCO Group key figures for the first quarter (1 January to 31 March 2020) of financial year 2020 pursuant to IFRS:

About GESCO
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, 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
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