GEA Group AG

Earnings Release • Nov 21, 2001

News Details

Corporate | 21 November 2001 11:59

mg technologies AG english

mg Group Increases Earnings Despite Economic Trend Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– mg Group Increases Earnings Despite Economic Trend Positive development throughout Group / Lurgi makes it into the profit zone / Significant increase in orders / Focus on growing markets Despite the economic setback, the mg Group has achieved the seventh in-crease in earnings in succession in the fiscal year ended September 30, 2001. According to preliminary figures, the mg Group upped its pretax earnings by more than 5 percent to approximately EUR 294.4 million (1999/2000: EUR 278.8 million). “In light of the significant slowdown of the economy, the renewed improvement in earnings is a sign of the fundamental strength of the Group. Our strategic focus on attractive technology markets in the areas of engineer-ing and chemicals has proven successful,” said mg’s CEO Dr. Kajo Neukirchen. Dynamit Nobel and GEA are as strong as ever. Above all the companies active in industrial plant engineering made a decisive step forward and improved their earnings situation significantly. Lurgi did particularly well and after the high loss in prior year is now back in the black. Despite disinvestments, the sales of the mg Group were slightly higher than in the previous year at EUR 8.818 billion (1999/2000: EUR 8.797 billion). In line with its consistent portfolio management strategy, in 2000/2001 mg separated from companies that no longer belong to its core business. This included Lurgi Metallurgie and parts of the steel construction and boiler systems activities. Dynamit Nobel separated from the majority of the traditional explosives busi- ness and the high voltage insulators, adhesives, and electroplating units. At the same time, the Group strengthened its position in the promising life sci- ences market with the acquisition of the French active ingredients specialist Sylachim. The number of employees dropped from 38,408 to 35,298 persons (including trainees). The decline is partly a result of the disinvestments. After making adjustments for these changes, the mg Group had about 1,830 fewer employees than a year earlier at balance sheet date; the downsizing was accom-plished in a socially compatible manner. Significant improvement for mg engineering Due to the positive development in industrial plant engineering in particular, mg engineering was able to improve significantly overall. On the whole (not consolidated), earnings were boosted from EUR 67.4 million to approximately EUR 161.2 million. Sales were up from EUR 3.985 billion to EUR 4.167 billion. Incoming orders for the entire division rose more than 16 percent to EUR 4.291 billion. With earnings at EUR 166.5 million, GEA nearly achieved the record level of the prior year (1999/2000: EUR 174.4 million). Sales amounted to EUR 2.886 billion (1999/2000: EUR 2.653 billion), and incoming orders reached EUR 2.981 billion (1999/2000: EUR 2.640 billion). As a market and technology leader, GEA developed better on average than the markets in which it is active. In its first year following the restructuring, Lurgi managed to reach the profit zone. After a prior-year loss of EUR 65.4 million, the plant construction com- pany achieved earnings totaling EUR 6 million in the reporting period. The realignment of its portfolio on future-proof technologies and the concentration on the oil, gas, chemicals, and life sciences markets thus proved successful. Sales rose to EUR 499 million (1999/2000: EUR 468 million). Incoming orders in- creased by 87 percent to EUR 730 million (1999/2000: EUR 391 million). At Lurgi Lentjes, too, the development was favorable despite the noticeable weakness of the environmental technology markets. Although sales dropped to EUR 516 million (1999/2000: EUR 635 million) and incoming orders dropped to EUR 355 million (1999/2000: EUR 444 million), the prior-year loss of EUR 56.6 million was reduced by more than two thirds to EUR 18.5 million. Zimmer remained in the profit zone. With earnings of EUR 7.2 million (1999/2000: EUR 15 million), the plant engineering company specializing in fi-bers and polymers managed to exceeded its projected earnings in an excep-tionally difficult market environment. Sales rose to EUR 266 million (1999/2000: EUR 229 million). Due to the expansion of its leading technology position, Zimmer succeeded despite the weak markets in increasing its incoming orders to EUR 225 million (1999/2000: EUR 214 million). mg chemical group going strong In fiscal 2000/2001, the mg chemical group presented itself in strong condition. On the whole (not consolidated) it achieved favorable earnings at approximately EUR 301.1 million. The prior-year value of approximately EUR 359.5 million was significantly affected by the sale of the remaining stake in MG plc. At EUR 4.044 billion, sales of the mg chemical group were lower than in the previous year (1999/2000: EUR 4.215 billion). The reasons were the disinvestments and a low market price level in certain areas of chemicals distribution. Dynamit Nobel continued the successful development of the past few years. At EUR 271.8 million (1999/2000: EUR 242 million), it achieved the highest earn-ings in company history. Through the acquisition of the French active ingredi-ent producer Sylachim, the rapidly growing segment of customer syntheses for the pharmaceuticals industry was strengthened. Sales fell slightly to EUR 2.639 billion due to disinvestments (1999/2000: EUR 2.681 billion). The business of solvadis, which is active in the field of chemicals distribution, also developed satisfactorily. At EUR 29.3 million, however, pretax earnings cannot be compared with the prior-year result of EUR 117.5 million. The prior year was significantly affected by the special effect from the sale of the remaining stake in MG plc. Sales were down to EUR 1.406 billion, primarily as a result of a lower market price level for natural products (1999/2000: EUR 1.533 billion). Focus on growing markets continues mg’s consistent concentration on promising growth markets, combined with its consistent portfolio management and an ongoing financial fitness program, was successfully continued. This applies in particular to the focus on the persistently dynamic markets of the life sciences industries. Sales generated with the life science business rose from 30 percent to 33 percent. On the whole, at least 80 percent of the sales of the mg Group is thus positioned in the attractive markets of life sciences, specialty chemicals, and environmental technology. Rising uncertainty of the economy In the current fiscal year, it cannot be ruled out that the economy will decline as far as a recession. Through the strategic focus on growth markets in the areas of engineering and chemicals, the strong market and technology posi-tions, and our ongoing financial fitness program, which was already intro-duced Group- wide at the beginning of fiscal 2000/2001, the mg Group believes it is well prepared for an even tougher economic environment. In consideration of the substantial uncertainty of the economy, however, earnings projections would be premature at this point in time. end of message, (c)DGAP 21.11.2001