• Nine-month period shaped by adverse effects of coronavirus pandemic
• Economic recovery in the third quarter
• M&A activities intensified
• Full-year outlook reasserted

Wuppertal, 16 November 2020 - GESCO Group, a Prime Standard-listed company, has reasserted its outlook for financial year 2020 after the first nine months of the year. Taken in isolation, the third quarter saw significant recovery in incoming orders, sales and the margin compared to the second-quarter low, but in the reporting period as a whole these indicators all fell significantly short of the previous-year period. Strategically, GESCO has driven forward its programmes for operative, market and product excellence and launched a series of targeted projects in its implementation of NEXT LEVEL. In addition, it has adjusted its M&A activities over the past few months, recruited additional staff and intensified its operations. With increased liquidity and reduced bank liabilities, GESCO also provided itself with greater financial means for acquisitions.

Economically speaking, business was dominated by the coronavirus pandemic from March onward following a satisfactory start to the year. The second quarter in particular was shaped by significant declines in incoming orders and sales, while earnings were operationally negative and further impacted by impairment losses of € 13.5 million on companies in the Mobility Technology segment that had no effect on liquidity. Operating business recovered in the third quarter, with the EBIT margin exceeding the previous year's level. In the cumulative nine-month period, a widespread reluctance to invest among customers and coronavirus-related restrictions to sales activities caused incoming orders to fall to € 354.2 million (adjusted previous-year period: € 437.2 million). Sales dipped from € 438.6 million to € 363.0 million. The fall in capacity utilisation, general price pressure and expenditure in adjustments in line with the lower order level contributed disproportionately to the decline in earnings. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell from € 43.3 million to € 27.1 million.

The impairment losses of € 13.5 million resulted in depreciation and amortisation rising to € 32.9 million (€ 19.6 million). This considerable rise in depreciation and amortisation meant that earnings before interest and taxes (EBIT) fell more sharply than EBITDA, to € -5.8 million from € 23.6 million in the previous-year period. Group net income after minority interest stood at € -12.2 million (€ 12.5 million), which corresponds to earnings per share pursuant to IFRS of € -1.12 (€ 1.15). Cash flow from ongoing business activity developed positively once again and reached € 37.5 million (€ 21.2 million). As at the reporting date, the GESCO Group reported liquid assets of € 48.4 million and an equity ratio of 48.3 %.

Ralph Rumberg (GESCO CEO): "We have put together a varied range of measures to guide the Group safely and securely through this difficult period. It goes without saying that the coronavirus pandemic will cost us sales and earnings, and the impairment losses on Mobility Technology companies will push Group earnings into the red for the first time since financial year 2002/2003. However, GESCO Group is strong enough to absorb the effects of this challenging year. We have a very solid balance sheet and have the resources to make investments and acquisitions. With NEXT LEVEL, we are on the right track to strengthening the company over the long term and optimising the portfolio. The pandemic will be with us for some time to come and will continue to shape the social and economic framework. Achieving success in this dynamic environment requires the exact approach we have outlined with NEXT LEVEL: increasing the speed at which we adapt and, above all, pursuing consistent further development."

The full quarterly statement for the first nine months is available at /en/financial-reports.

GESCO Group key figures for the first nine months (1 January to 30 September 2020) of financial year 2020 pursuant to IFRS:

		Q1-Q3 2020	Q1-Q3 2019 adjusted	Change
Incoming orders	(€'000)	354,172	437,162	-19.0 %
Sales	(€'000)	363,044	438,553	-17.2 %
EBITDA	(€'000)	27,076	43,259	-37.4 %
EBIT	(€'000)	-5,809	23,627	---
Group net result after minority interest	(€'000)	-12,188	12,474	---
Earnings per share acc. to IFRS	(€)	-1.12	1.15	---
Employees	(No.)	2,611	2,734	-4.5 %

 

About GESCO
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.

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