Strong start for GESCO in 2021

- Encouraging recovery in demand

- Incoming orders and sales up significantly

- EBIT margin sees substantial improvement

- Good outlook for 2021 as a whole confirmed

Wuppertal, 18 May 2021 - GESCO AG, an industrial group made up of market- and technology-leading SMEs listed in the Prime Standard, has released its quarterly statement for the first quarter of 2021, confirming the preliminary figures published as part of the virtual Accounts Press and Analysts' Conference on 27 April 2021 and the outlook for the full year already under way.

Following a challenging financial year 2020, GESCO Group's companies recorded an encouraging recovery in demand in the first quarter of 2021. The business with stainless steel products was a driving factor in this development. However, other areas also recorded business volume that was significantly higher year on year. As in previous years, project business was subdued in the reporting period and is set to slowly but continuously gather steam over the course of the year. The Production Process Technology and Resources Technology segments reported significantly better sales and earnings figures than in the same quarter of the previous year, whereas development in the Healthcare and Infrastructure Technology segment was positively stable compared to the good first quarter in 2020.

Incoming orders at GESCO Group stood at € 136.4 million in the reporting period and were therefore up by 18.8% year on year (Q1 2020 continued: € 114.8 million). Group sales also increased considerably and amounted to € 112.6 million (+10.5%). The reporting period ended with an order backlog of € 164.7 million (Q1 2020 continued: € 140.4 million).

Improved utilisation and capacity adjustments made it possible to reduce the ratio of material expenditure to total output from 61.2% to 55.3% while also lowering the personnel expenditure ratio from 27.6% to 24.4 %. Earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at € 11.4 million in total following € 6.3 million in the first quarter of 2020 (from continuing operations). On the heels of a slight decrease in depreciation and amortisation (no impairment losses were recognised in the reporting period), EBIT rose considerably in the first quarter of 2021 to stand at € 7.4 million following € 2.1 million in the same quarter of the previous year (Q1 2020 continued). As a result, the Group's EBIT margin improved significantly from 2.1% to 6.6%.

Accompanied by an improvement in the financial result and a tax rate of 36.6%, Group net income after minority interest as generated by the eleven continuing companies stood at € 4.0 million. Group net income after minority interest had stood at € 1.2 million in the same quarter in the previous year (Q1 2020 continued). Accordingly, earnings per share amounted to € 0.37 following € 0.11 for the continuing business operations and € 0.04 including the discontinued business operations in the first quarter of 2020.

On account of the slight increase in total assets (€ 400.4 million vs. € 390.8 million as at 31 December 2020), the equity ratio stood at 57.8% as at the reporting date after most recently coming in at 58.3%. As a result, the equity ratio remained sufficient and well above the minimum ratio of 40%. At € 60.9 million, liquid assets reflected a further increase in the cash position as compared to the most recent reporting date (€ 49.2 million). The solid financial parameters continue to provide a good starting position for further organic and inorganic growth.

The Production Process Technology segment benefited primarily from good business involving stainless steel technology. Incoming orders increased markedly by 58.1% to stand at € 19.3 million, with segment sales rising to € 12.4 million (+23.8%). As usual, the production of machinery, plant and equipment already under way will only start to have an impact on sales and earnings over the course of the year in this segment. Segment EBIT amounted to € 1.1 million after € -1.1 million in the same period of the previous year (Q1 2020 continued). The segment's EBIT margin stood at 8.6%.

Thanks to higher demand, especially in the tool and strip steel business, and the solid order situation for loading technology, the Resource Technology segment recorded a considerable increase in sales and a disproportionately steep rise in earnings. Sales revenues rose by 14.0% to € 67.0 million. EBIT stood at € 5.9 million after € 2.3 million in the first quarter of the previous year. The segment's EBIT margin therefore rose from 4.0% to 8.8%. The positive development was supported by all companies in the segment.

The Healthcare and Infrastructure Technology segment continued to be in stable condition in the first quarter of 2021 and demonstrated that it is largely resilient and unaffected by economic conditions in the capital goods industry. At € 42.3 million, incoming orders were up by 20.2% year on year (from continuing business operations). At € 33.3 million and € 3.4 million respectively, both segment sales and EBIT were exactly on a par with the same quarter in the previous year (from continuing business operations). The EBIT margin improved slightly from 10.0% to 10.3%.

Thanks to the successful start in the current financial year and the current overall conditions, GESCO confirms the outlook for the 2021 as a whole as already published on 27 April 2021. The Executive Board expects Group sales of between € 445 million and € 465 million and Group net income after minority interest of € 16.5 million to € 18.5 million (both target ranges in principle before M&A activities and without changes to the scope of consolidation).

In this context, Ralph Rumberg, CEO of GESCO AG, says: "It is still not possible to fully assess the impact of the coronavirus pandemic. The future developments continue to be associated with uncertainties. However, the economic recovery indicates a potential turning point from our perspective. The noticeable easing on the demand side led to catch-up effects in the reporting period. Only the months ahead will tell if these effects are going to last. We will intensively focus on our target portfolio architecture and achieve further success as part of our NEXT LEVEL strategy with the help of our excellence programmes. Doing so is the way to safeguard our company's future and remain successful in the long term with the Group."

The complete interim statement for the first quarter of 2021 is available at https://www.gesco.de/en/investor-relations/financial-reports/.

¹⁾ After minority interest. ²⁾ XETRA closing price as at the balance sheet date. ³⁾ Number as at the balance sheet date.

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, 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.

Contact
Julia Pschribülla
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Tel +49 (0) 202 24820-18
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Internet: www.gesco.de