- Group Order Intake Declines by 36.4Â Percent
- Group Revenue at EURÂ 1,047.6Â Million Meets Forecast (EURÂ 1.0Â BiIlion to EURÂ 1.1Â Billion) and 14.5Â Percent Below the Previous Year
- Operating Group EBIT at EURÂ 67.6Â Million Exceeds Forecast (EURÂ 55.0Â Million to EURÂ 65.0Â Million) and Down 50.8Â Percent Year on Year
- Significant Decline in Net Income After Tax due to Restructuring Provisions: No Dividend To Be Proposed
- Net Debt Almost Fully Eliminated
- Restructuring Negotiations Concluded – Group Integration Ongoing
The 2008/2009 financial year of Demag Cranes AG (GER:D9C) was marked by adverse impacts of the economic and financial crisis. The ensuing downturn in the global economic climate reduced the propensity of our customers all over the world to invest, with our manufacturing segments, Industrial Cranes and Port Technology, being the hardest hit. As a result, Group order intake decreased by almost 36.4Â percent. Thanks to a good order book from record financial year 2007/2008, we managed to cushion the drop in Group revenue, which was down 14.5Â percent from the prior year's figure. Having achieved revenue of EURÂ 1,047.6Â million, we reached our target of EURÂ 1.0Â billion to EURÂ 1.1Â billion forecast for financial year 2008/2009 at the end of the third quarter. Due to the low utilisation of our manufacturing facilities with their fixed running costs, Group operating EBIT was significantly lower year on year at EURÂ 67.6Â million, the target range being, however, slightly exceeded (forecast at the end of third quarter: EURÂ 55.0Â million to EURÂ 65.0Â million). Through our rigorous focus on cash and working capital management, we have once again generated a positive free cash flow and reduced net debt almost completely even in the crisis financial year 2008/2009. Aloysius Rauen, Demag Cranes AG's CEO sums up: "Financial year 2008/2009 was a crisis year that had a serious impact on our business performance and workforce. By launching countermeasures in good time, we have laid the groundwork to safeguard the economic and financial future of the Group and to increase our competitive edge."
Group Order Intake Declines by 36.4Â Percent
The Demag
Cranes Group generated order intake of EURÂ 841.9Â million in financial
year 2008/2009. This was 36.4Â percent down on the previous year as a
result of the general fall in demand. The order book stood at
EURÂ 313.1Â million as at 30 September 2009, compared with
EURÂ 523.5Â million a year earlier.
Order intake in the Industrial Cranes segment sank in financial year 2008/2009 as our customers continued to show little readiness to invest, or otherwise repeatedly postponed capital spending plans. Compared to the previous year, order intake declined by 40.8Â percent to EURÂ 397.9Â million. The Industrial Cranes segment order book came to EURÂ 197.7Â million at 30 September 2009 (30 September 2008: EURÂ 350.4Â million). The sharp downturn in international cargo business also made its mark on order intake in the Port Technology segment, which sank by 52.1Â percent to EURÂ 151.8Â million compared to the prior-year period. All product lines were affected by the negative trend. Towards the end of the year, order intake for Mobile Harbour Cranes stabilised at a low level. The order book amounted to EURÂ 69.4Â million at 30 September 2009 (30 September 2008: EURÂ 121.7Â million). In financial year 2008/2009, we also suffered a fall in demand for our products and services in the Services segment. Order intake was down 12.7Â percent to EURÂ 292.1Â million, the impact on spare parts business being especially severe. The Services segment order book totalled EURÂ 46.0Â million at 30 September 2009 (30 September 2008: EURÂ 51.4Â million).
Group Revenue 14.5Â Percent Below the Previous Year
Although
revenue shrunk compared with financial year 2007/2008 as a result of the
weak order volume, the effect of the decrease was cushioned by a good
order book from record financial year 2007/2008. At Group level, revenue
fell by 14.5Â percent year on year. Looking at the regional picture, we
suffered decreases in revenue in almost all regions. However, at
9.4Â percent, the fall in revenue in emerging markets was significantly
lower than in mature markets, where we recorded a reduction of
16.9Â percent.
The segments were affected by the revenue decrease in different ways: with a 4.4 percent reduction to EUR 545.8 million, revenue fell far less in the Industrial Cranes segment than in the other two segments due to a well-filled order book. The main revenue drivers were Standard and Process Cranes. While the orders for some of these cranes were received in financial year 2007/2008, the cranes were delivered to customers and the revenue realised in financial year 2008/2009 after an average manufacturing time of six to twelve months. In the Port Technology segment, revenue fell by 37.3 percent to EUR 204.0 million. As this segment accounts for substantially more project business than the other two segments, it was hit especially hard by the financial and economic crisis. While the volume of orders stabilised at a low level towards the end of the financial year, it was not possible to make up for the severe decrease in revenue experienced in the second and third quarters. In the Services segment, revenue was down by 9.5 percent to EUR 297.7 million. Reduced crane utilisation by our customers brought a drop in demand for our high-revenue, high-margin spare parts. This trend made itself felt particularly severely in the third quarter of 2008/2009. The demand situation became steady again towards the end of the financial year.
Operating Group EBIT Down 50.8Â Percent Year on Year
Operating
EBIT came to EURÂ 67.6Â million in financial year 2008/2009, having
dropped from EURÂ 137.5Â million in the previous year.
In the Industrial Cranes segment, operating EBIT decreased by 37.8Â percent to EURÂ 29.7Â million in financial year 2008/2009. We generated an above-average intake of orders in financial year 20007/2008 for lower-margin Process Cranes delivered to customers after an average production time of approximately twelve months, producing a further shift in the segment's product mix. In addition to the underutilisation of our factories, this shift had a negative impact on the operating EBIT margin, which stood at 5.4Â percent. In the Port Technology segment, operating EBIT dropped sharply compared with financial year 2007/2008. The main causes for the EURÂ 36.9Â million fall in earnings compared with the previous year were lower revenue and further decreases in production resulting in lower utilisation of factory capacity, both of which are consequences of the difficult business situation relating to ports.
In the Services segment, fewer spare parts were sold due to lower utilisation of customers' cranes, resulting in EURÂ 15.2Â million less operating EBIT year on year. Despite the negative business environment, the operating EBIT margin for financial year 2008/2009 was within our medium-term expectations at 20.2Â percent.
Significant Decline in Net Income After Tax: No Dividend To Be
Proposed
Due to the adverse effects of the economic and
financial crisis and the EURÂ 49.1Â million restructuring expenses already
booked, net income after tax in financial year 2008/2009 dropped
significantly to EURÂ 1.2Â million (as at 30 September 2008:
EURÂ 80.8Â million. As a result, earnings per share (EPS) came to EURÂ 0.04
after the EURÂ 3.79 in financial year 2007/2008. Under these
circumstances, the Management Board and Supervisory Board have jointly
decided not to propose a dividend for financial year 2008/2009 at the
Annual General Meeting. This decision has been made taking into account
the fact that the economic environment continues to be strained and
uncertain. In principle, attractive dividends will be paid again in
future in line with the Company's operating performance.
Net Debt Almost Fully Eliminated
The balance sheet of the
Demag Cranes Group is on a firm financial footing thanks to our ongoing
systematic finance management, which is mainly the result of our
rigorous focus on cash and working capital management in recent years.
As a result, even in the crisis financial year 2008/2009, we have once
again generated a positive free cash flow and reduced net debt almost
fully to EUR 6.3 million (as at 30 September 2008: EUR 18.4 million) –
despite pay-out of dividends amounting to some EURÂ 30Â million for
financial year 2007/2008.
Restructuring Negotiations Concluded – Group Integration Ongoing
Following
conclusion of negotiations as part of the restructuring programme, Demag
Cranes has now implemented the steps required to improve efficiency in
the Industrial Cranes and Services segments. In addition, the Management
Board has already begun to meet its declared objective of more closely
dovetailing the entire organisation, with measures such as uniting
management of shared services like IT, human resources and purchasing,
across the Group. In the next step to full integration, we will now also
combine the operating units within the Group to centre our focus more
strongly on our customers and improve our efficiency. With this step,
the Management Board aims to define clear management structures and
responsibilities within the organisation, which not only promote quick
and target-driven decision-making within the team, but also help to make
decisions clear to the Group's employees.
Outlook for Financial Year 2009/2010: Single-Digit Operating EBIT
Margin and Lower Revenue Level Expected
Subject to all
uncertainties concerning the market environment, the Management Board
assumes that revenue in financial year 2009/2010 will be down on
financial year 2008/2009. This is due not least to the substantially
lower order book in the Industrial Cranes segment as at 1 October 2009
compared to the beginning of financial year 2008/2009, especially for
Process Cranes and Standard Cranes. In financial year 2009/2010, the
Management Board again expects that the Group's operating EBIT margin
will be in the mid single-digit range. Overall, the Demag Cranes Group
has a solid financial basis. We are also already well positioned in our
key markets. Thanks to the Group integration and restructuring measures
we have systematically introduced, we believe we can not only steer the
Group through the crisis, but also give it greater competitive edge in
the future.
About Demag Cranes AG
The Demag Cranes Group is one of the
world's leading suppliers of industrial cranes and crane components,
harbour cranes and terminal automation technology. Services, in
particular maintenance and refurbishment, are another key element of the
Group's business activities. The Group is divided into the business
segments Industrial Cranes, Port Technology and Services and has strong
and well-established Demag and Gottwald brands. Demag Cranes sees its
core competence in the development and construction of technically
sophisticated cranes and hoists as well as automated transport and
logistics systems in ports and terminals, the provision of services for
these products and the manufacture of high-quality components.
As a global supplier, Demag Cranes manufactures in 16 countries on five continents and operates a worldwide sales and service network that is present in over 60 countries through its subsidiaries, representative offices and a joint venture. In financial year 2008/2009, the Group, with its 5,934 employees, generated revenue of EUR 1,047.6 million. Since the end of June 2006, the Demag Cranes share (WKN: DCAG01) has been listed in the Prime Standard of the German Stock Exchange and is traded on various indices including the MDAX®.
We Can Handle It.
Conditions for Forward-Looking Predictions
This press release contains forward-looking statements relating to the business, financial performance and earnings of Demag Cranes AG and its subsidiaries and associates. Forward-looking statements are based on current plans, estimates, projections and expectations and are therefore subject to risks and uncertainties, most of which are difficult to estimate and which in general are beyond the control of Demag Cranes AG. Consequently, actual developments as well as actual earnings and performance may differ materially from those which explicitly or implicitly assumed in the forward-looking statements. Demag Cranes AG does not intend or accept any obligation to publish updates of these forward-looking statements.
Selected Financials as at the End of Financial Year 2008/2009 (as at 30 September 2009)
 |  | Financial Year 2008/2009  |  | Financial Year 2007/2008  |  | Change in % | |
Group (in EUR million) | Â | Â | Â | ||||
Order intake | 841.9 | 1,323.4 | -36.4 | ||||
Order book1 | 313.1 | 523.5 | -40.2 | ||||
Revenue | 1,047.6 | 1.225.8 | -14.5 | ||||
Operating EBIT2,3 | 67.6 | 137.5 | -50.8 | ||||
in % of revenue | 6.5 | 11.2 | -4.8 % pts | ||||
Net income after tax | 1.2 | 80.8 | -98.6 | ||||
Earnings per share (in EUR ) | 0.04 | 3.79 | -98.9 | ||||
Net debt1 | 6.3 | 18.4 | -66.0 | ||||
Equity ratio1 | 227.7 | 271.2 | -16.0 | ||||
Equity in %1 | 27.8 | 29.3 | -1.5 % pts | ||||
Gearing in %1 | 2.7 | 6.8 | -4.0 % pts | ||||
 |  |  |  | ||||
Industrial Cranes (in EUR million) | Â | Â | Â | ||||
Order intake | 397.9 | 671.9 | -40.8 | ||||
Order book1 | 197.7 | 350.4 | -43.6 | ||||
Revenue | 545.8 | 571.2 | -4.4 | ||||
Operating EBIT2,3 | 29.7 | 47.8 | -37.8 | ||||
in % of revenue | 5.4 | 8.4 | -2.9 % pts | ||||
 |  |  |  | ||||
Port Technology (in EUR million) | Â | Â | Â | ||||
Order intake | 151.8 | 316.8 | -52.1 | ||||
Order book1 | 69.4 | 121.7 | -43.0 | ||||
Revenue | 204.0 | 325.5 | -37.3 | ||||
Operating EBIT2,3 | -14.8 | 22.1 | n/a | ||||
in % of revenue | -7.3 | 6.8 | n/a | ||||
 |  |  |  | ||||
Services (in EUR million) | Â | Â | Â | ||||
Order intake | 292.1 | 334.6 | -12.7 | ||||
Order book1 | 46.0 | 51.4 | -10.4 | ||||
Revenue | 297.7 | 329.1 | -9.5 | ||||
Operating EBIT2,3 | 60.2 | 75.4 | -20.2 | ||||
in % of revenue | 20.2 | 22.9 | -2.7 % pts |
1 As at end of period.
2 Formally adjusted
EBIT.
3 Adjusted to reflect the effects of operating
adjustments.
Contacts:
Demag Cranes
Contact for media representatives:
Nikolai
Juchem
Head of Corporate Communications and Marketing
Phone:
+49 (0)211 7102-1019
E-mail: nikolai.juchem@demagcranes-ag.com
or
Contact
for investors and analysts:
Horst Thelen
Head of Investor
Relations
Phone: +49 (0)211 7102-1210
E-mail: horst.thelen@demagcranes-ag.com