GEA Group Aktiengesellschaft: GEA Group AG has recognized non-cash impairments in the fourth quarter of 2019 and accelerates the recognition of restructuring expenses - Group forecast unchanged
January 27, 2020 at 09:40 am EST
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DGAP-Ad-hoc: GEA Group Aktiengesellschaft / Key word(s): Miscellaneous/Preliminary Results
GEA Group Aktiengesellschaft: GEA Group AG has recognized non-cash impairments in the fourth quarter of 2019 and accelerates the recognition of restructuring expenses - Group forecast unchanged
27-Jan-2020 / 15:33 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
Ad hoc disclosure in accordance with MAR, Article 17
GEA Group AG has recognized non-cash impairments in the fourth quarter of 2019 and accelerates the recognition of restructuring expenses - Group forecast unchanged
Within the framework of its annual planning process, GEA Group Aktiengesellschaft has recognized a non-cash impairment in the amount of approximately EUR 248 million in the fourth quarter of 2019. This impairment has solely resulted from the impairment test of the goodwill of GEA's Italian subsidiary Pavan S.p.A. acquired in November 2017. In fiscal years 2018 and 2019, the economic performance of the Pavan Group was well below expectations. It was therefore decided by GEA to separately monitor the company's goodwill and business progress as well as to take restructuring measures with effect from October 2019. The current business plan for the Pavan Group anticipates a business development that will continue to be significantly below the business plan assumed at the time of the acquisition. This has led to the complete impairment of the goodwill of the Pavan Group.
Furthermore, overall, GEA is making rapid progress with its restructuring programs and has therefore accelerated the recognition of restructuring expenses. In comparison to the previously expected amount of up to EUR 55 million, this amount now totals approximately EUR 105 million on an EBITDA level in fiscal year 2019. The difference mainly results from accelerated restructuring expenses in the amount of approximately EUR 47 million that have already been accrued for the planned reduction of a total number of 800 full-time employees by the end of 2020.
The impairments and restructuring expenses will have no earnings effect on the key financials underlying GEA's guidance for 2019. These figures include primarily sales revenue, EBITDA* as well as ROCE*, each adjusted for restructuring expenses.
Nonetheless, there will be an impact on specific key financial indicators like reported EBITDA and ROCE, net income, earnings per share, as well as the company's equity and leverage ratios. In turn, this will result in a negative reported EBIT as well as a negative net income for fiscal year 2019. However, GEA does not anticipate any effect on the dividend proposal for fiscal year 2019.
Furthermore, preliminary key financials indicate that the results for the 2019 fiscal year are in line with GEA's guidance. Both order intake at an estimated EUR 4.93 billion and consolidated revenues, which are expected to total EUR 4.88 billion, are slightly higher than the previous year. As to EBITDA before restructuring, GEA is expected to achieve a level that ranges between EUR 470 million and EUR 480 million. ROCE before restructuring is expected to amount to approximately 10 percent.
The final figures and the Annual Report for fiscal year 2019 will be released on March 17, 2020.
* EBITDA and ROCE, each before restructuring, as defined in the 2018 Annual Report for fiscal year 2019, p. 28 f, forecast p. 127
Contact:
GEA Group Aktiengesellschaft
Fabian Kirchmann
Head of IR
Phone +49 (0)211 9136 1080
Fax +49 (0)211 9136 31087
fabian.kirchmann@gea.com
27-Jan-2020 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de
Language:
English
Company:
GEA Group Aktiengesellschaft
Peter-Müller-Straße 12
40468 Düsseldorf
Germany
Phone:
+49 (0)211 9136-0
Fax:
+49 (0)211 9136-31087
E-mail:
ir@gea.com
Internet:
www.gea.com
ISIN:
DE0006602006
WKN:
660200
Indices:
MDAX
Listed:
Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Munich; Regulated Unofficial Market in Hanover, Stuttgart, Tradegate Exchange
GEA Group AG is a German-based holding company of the GEA Group which operates as a supplier of system and components to the food, beverage and pharmaceutical industries worldwide. The activity of the Company is divided into five operating segment: Separation & Flow, Liquid & Powder, Food & Healthcare, Farm Technologies and Refrigeration Systems. Separation & Flow encompasses GEAâs process engineering components and machines including separators, decanters, homogenizers, valves and pumps. Liquid & Powder provides process solutions for the dairy, beverage, food, chemical and other industries. Moreover, Food & Healthcare offers solutions for food processing, covering the preparation, marinating and further processing. Farm Technologies offers, amongst others, automatic milking and feeding systems in addition to conventional milking solutions and digital herd management tools. Lastly, Refrigeration Technologies offers industrial refrigeration, heating and sustainable energy solutions.
GEA Group Aktiengesellschaft: GEA Group AG has recognized non-cash impairments in the fourth quarter of 2019 and accelerates the recognition of restructuring expenses - Group forecast unchanged