DGAP-News: Gesco AG / Key word(s): 9-month figures/9-month figures GESCO takes stock after the first nine months and provides a positive outlook for new financial year 14.02.2017 / 07:27 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- - Incoming orders stable, sales and earnings down on the previous year - Operating performance better than expected in fourth quarter - Changes to portfolio: one acquisition completed, one sale planned - Full-year operating outlook raised, but impacted by one-off effects from the sale decision - Positive outlook for the new financial year 2017/2018 Wuppertal, 14 February 2017 - Business performance at the GESCO Group in the first nine months (1 April to 31 December 2016) of the current financial year 2016/2017 was characterised by a relatively weak first half of the year impacted by customer order deferrals and a livelier third quarter, in which sales rose and margins improved considerably compared to previous quarters. The subsequent fourth quarter was just as dynamic with better-than-expected operating development. The first nine months of the financial year at the GESCO Group encompass the months April to December 2016 for GESCO AG and January to September 2016 for its subsidiaries. With EUR 376.4 million, incoming orders were stable during this period and were roughly on par with the previous year's figure of EUR 378.1 million. Sales amounted to EUR 357.5 million (previous year's period: EUR 369.2 million). Against the backdrop of the relatively stable material expenditure ratio and the increased personnel expenditure ratio, EBITDA came to EUR 35.7 million (EUR 40.5 million). EBIT stood at EUR 19.9 million (EUR 25.3 million) after the slight increase in depreciation and amortisation. There was little change to the financial result, whereas the tax rate increased by a small margin. In total, Group net income after minority interest stood at EUR 9.7 million (EUR 13.0 million). Cash flow from operating activities developed extremely positively, almost doubling from EUR 16.6 million to EUR 30.7 million. At the same time, liabilities to financial institutions were reduced by EUR 7.3 million to EUR 109.9 million. In the following fourth quarter, which encompasses the operating months October to December 2016 in the case of the subsidiaries, incoming orders saw a robust increase of more than 16 %, reaching approximately EUR 122 million (EUR 105.1 million). Group sales stood at approximately EUR 125 million and on a par with the previous year (EUR 124.8 million). This resulted in incoming orders exceeding sales over the year as a whole, which is a positive sign for future development. Order backlog rose over the course of the year by just under 10 % from EUR 171.7 million to approximately EUR 188 million. With regard to Group sales, the Company confirms the forecast from November 2016 for the full financial year 2016/2017 of approximately EUR 480 million. In November 2016, the Company forecast Group net income after minority interest of EUR 11.5 million to EUR 12.5 million. Since operating business performed better than expected in the fourth quarter, the Company now believes that from an operating point of view Group net income after minority interest will come in at between EUR 12.5 million and EUR 13.5 million. However, the decision made after the end of the reporting period to sell off the majority shareholding in Protomaster GmbH (communicated in an ad hoc notification on 2 February 2017) will have a negative impact on the outlook. Earnings are expected to face a negative one-off effect of approximately EUR 6.5 million. This results in a new outlook for Group net income after minority interest of between EUR 6.0 million and EUR 7.0 million for financial year 2016/2017. The majority of the negative effects from the planned sale have no impact on liquidity. The decision to sell off Protomaster is offset by an addition to the portfolio, which will lay the foundations for external growth in the new financial year: In December 2016 GESCO AG acquired the Pickhardt & Gerlach Group (PGW) in Finnentrop, a leading strip steel processor with sales of roughly EUR 30 million, as part of its succession planning process. The approval of the purchase necessary under antitrust law was granted in January 2017. Against the backdrop of this acquisition, GESCO AG is considering the option of utilising the authorised capital granted by the 2016 Annual General Meeting either in full or in part to further strengthen the equity base. GESCO Chairman of the Executive Board, Dr Eric Bernhard: "The decision to sell off Protomaster will impact earnings in the current financial year, but will also lower risks of future development to a major extent. This decision does not affect our strategy to invest in and develop companies over the long term. All in all, the changes strengthen our portfolio and make it more robust. In financial year 2017/2018, which begins on 1 April, we also expect to generate organic sales and earnings growth. We will therefore enter the new financial year with a reduced risk portfolio, a positive outlook in terms of operating business and external growth." The full quarterly statement is available at www.gesco.de/reports. 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 and 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: [email protected], Internet: www.gesco.de --------------------------------------------------------------------------- 14.02.2017 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.de --------------------------------------------------------------------------- Language: English Company: Gesco AG Johannisberg 7 42103 Wuppertal Germany Phone: +49 (0)202 248200 Fax: +49 (0)202 2482049 E-mail: [email protected] 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 --------------------------------------------------------------------------- 544195 14.02.2017