GEA Group AG

Earnings Release • Feb 23, 2004

News Details

Ad-hoc | 23 February 2004 22:00

Further steps towards re-alignment and preliminary financial figures for 2003

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Frankfurt/Main, February 23, 2004. The Executive Board of mg technologies ag (mg) resolved today on further steps towards its strategic realignment. In order to simplify the group structures, with economic effect from January 1, 2005 GEA AG (GEA) is to be incorporated into mg. In preparation for this measure, mg today asked the Executive Board of GEA to initiate proceedings for the squeeze- out of free-float GEA shareholders in accordance with Section 327a of the German Stock Corporation Act. At present, mg holds more than 98 percent of the GEA capital stock in ordinary and preferred shares. As such it is entitled to demand that the GEA General Meeting resolve to transfer the shares of the remaining shareholders (the minority shareholders) to mg against an appropriate cash settlement. In conjunction with these measures, the merger of holding staff functions of mg and GEA is being prepared. An alternative location is Bochum. The consistent efforts to give a leaner look to Lurgi and Lurgi Lentjes, which belong to mg’s industrial plant engineering business, are being continued. What is decisive here is the focus on profitable, low-risk in-house technologies. Low yield areas are to be spun off. The reduction of around 500 jobs in industrial plant engineering will proceed on schedule thru 2006. This will result in a considerably lower break-even point. According to preliminary figures for business 2003, the mg Group posted sales of Euro 8.2 billion*. The increased burden on profits placed by industrial plant engineering resulted in a pre-tax loss of Euro 241 million*, as opposed to the expected loss of around Euro 170 million* announced last October. The preliminary Group EBT was influenced by one-time factors and extraordinary charges totaling Euro 437 million*, for the most part from industrial plant engineering. These include value impairments to reflect contract risks and the ending of long-term legal disputes as well as portfolio adjustments with the spin-off of loss-making business activities. In addition high costs were incurred in re-aligning mg and giving it a considerably leaner group organization. Thanks to their sound business performance GEA and Dynamit Nobel – after adjusting for extraordinary items – generated an current profit of more than Euro 200 million, each judging by the preliminary figures. The spin-off of the Chemicals business with Dynamit Nobel and solvadis is progressing according to plan and will become effective in financial year 2004. * In the annual accounts activities to be disposed will be shown seperately (discontinued operations). end of ad-hoc-announcement (c)DGAP 23.02.2004 ——————————————————————————– WKN: 660200; ISIN: DE0006602006; Index: MDAX Listed: Amtlicher Markt in Berlin-Bremen, Düsseldorf, Frankfurt (Prime Standard), Hamburg und München; Freiverkehr in Hannover und Stuttgart 232200 Feb 04