G+D Reports Strong 2020 Despite the Pandemic

Giesecke+Devrient, like so many other companies, has faced considerable challenges over the past year. But through effective cost management and by increasing the margins in its business, it was able to boost its operating result for 2020 by 13% to €153 million on revenue of €2.3 billion, which was only slightly down (-5%) on last year. The net profit for the year was €43 million.

The company also reported incoming orders totalling €2.4 million, a 6% growth compared with 2019, which it attributed to the growing demand for its security-related products and solutions and its business portfolio being system-relevant in many areas and in strong demand worldwide. The order backlog at year end was €1.6 billion, compared with the previous year’s high level of €1.5 billion.

The company introduced a number of special measures to deal with the challenge of the pandemic as part of an overall crisis management approach, including both a focus on the health of employees and continuity in business processes. These measures proved to be very effective, it stated in the announcement of its annual results, enabling it to continue to advance key strategic initiatives in its business portfolio around security in the core areas of payment, connectivity, identities and digital infrastructures.

Investment in digital

G+D also continued its work and investment in digital currencies for central banks, thus addressing at an early stage a topic the company views as crucial to the future of payments transactions.

It noted that 80% of the world’s central banks are working on the possible introduction of a digital currency (a CBDC) and G+D is already carrying out the first pilot projects with central banks.

The development of a technical solution for the production and distribution of digital money is being undertaken by G+D advance52 in cooperation with the Currency Technology business unit.

The company stated that it continues to invest in the development of new digital business fields and the expansion of its business portfolio, acquiring stakes in 2020 in Swiss software company Netcetera via its G+D Ventures subsidiary and in the crypto-asset company Metaco. Overall, it invested €131 million, the same amount as in 2019.

Sales increase for banknotes

In term of the different business sectors, sales in Currency Technology at €1.03 billion were 8.5% lower than the previous year. The Banknote Solutions division was reported to have maintained its strong market position with increased sales, but the Currency Management Solutions division was negatively impacted by global travel restrictions, which resulted in a number of projects being postponed and fewer sales of compact money counting systems in particular, which are used in casinos and cruise ships.

The Banknote Solutions division expanded its production facilities for security features during the year, whilst Currency Management Solutions invested over €6 million in a new cash centre in India to process cash for one of its customers across multiple locations.

And with a view to sustainability, G+D is currently working with a central bank to develop a ‘green’ concept mark, which is to be presented in 2022. All steps from raw materials to energy use and production, transport and finally to recycling are covered in a holistic manner.

Cautious outlook

According to Ralf Wintergerst, Chairman of the Management Board and Group CEO of G+D, the company plans to closely match the revenue and earnings level of 2020, its solid order backlog enabling it to start the current financial year in a strong position.

The Currency Technology business sector expects moderate overall sales growth in 2021. G+D assumes that the Banknote Solutions division will almost maintain the very good sales level of 2020, whilst the Currency Management Solutions division expects a significant increase in sales.

He cautioned, however, that some uncertainty remains due to the pandemic.