Demag Cranes reports successful financial year 2010/2011
Düsseldorf, 30. November 2011
- Guidance fully achieved for Group revenue and exceeded for operating EBIT
- Proposed dividend of EUR 0.78 per share
- Group order intake up 23.1 % on previous year
- Group revenue grows 14.1 % year on year
- Very substantial 39.7 % growth in Group operating EBIT compared with previous year
- Guidance for next financial years: further growth expected
The Demag Cranes Group brought financial year 2010/2011 to a successful close. Not least thanks to factors including the economic recovery, demand for products and services noticeably improved overall. Group order intake increased by 23.1 % compared with financial year 2009/2010 to EUR 1,121.2 million. At EUR 1,062.3 million, Group revenue was 14.1 % up on the prior-year level and slightly above the guidance of EUR 1,060 million. The Group’s operating EBIT amounted to EUR 75.7 million, up 39.7 % on the prior year. The operating EBIT margin stood at 7.1 %,exceeding the guidance of approximately 6.4 %. Demag Cranes thus substantially improved on keyperformance indicators compared with the prior year and satisfied its forecast – last updated in its third quarter – in every respect, for Group revenue and even surpassing it in terms of operating EBIT. Based on the positive performance of the business in the past financial year, the Management Board and Supervisory Board have jointly decided to propose a dividend of EUR 0.78 per share for financial year 2010/2011 at the Annual General Meeting. This represents a 30% increase on the previous year.
Aloysius Rauen, CEO of Demag Cranes AG emphasises: “We rigorously implemented our growth strategy in financial year 2010/2011 and comfortably achieved our guidance. Demag Cranes is in an excellent position as a result to attain our ambitious revenue and earnings targets in the financial years ahead.”
Group order intake up 23.1 % on previous year
The Demag Cranes Group generated order intake of EUR 1,121.2 million in financial year 2010/2011. This represents an increase of 23.1 % over financial year 2009/2010 (EUR 910.6 million). All segments contributed to the healthy trend in orders. The Group order book stood at EUR 361.7 million as at 30 September 2011, an improvement of 18.0 % from the figure on the previous year’s reporting date (EUR 306.6 million).
In the Industrial Cranes segment, order intake was up sharply by 24.9 % to EUR 514.8 million in financial year 2010/2011. The prior-year figure was EUR 412.2 million. Both crane and components business rallied strongly as a result of the general economic recovery. The Industrial Cranes segment order book came to EUR 201.5 million as at 30 September 2011, compared with EUR 180.0 million at 30 September 2010.
The Port Technology segment can also look back on very positive order development: compared with financial year 2009/2010, the value of orders received rose by 35.7 % from EUR 197.0 million to EUR 267.3 million. Mobile Harbour Cranes, which can be used for various applications, accounted for the major part of order intake, but demand for port technology services also increased sharply again in the past financial year. For the first time since the financial and economic crisis, Demag Cranes received another order for 22 Automated Guided Vehicles (AGVs) from long-standing customer Europe Container Terminals (ECT) in Rotterdam. The Port Technology segment order book came to EUR 105.6 million as at 30 September 2011 (30 September 2010: EUR 76.9 million).
Greater capacity utilisation and the associated increased use of crane systems by customers also led to an improvement in the order situation in the Services segment. Compared with financial year 2009/2010, order intake was up 12.4 % from EUR 301.5 million to EUR 339.1 million. Alongside standard services such as fault elimination, maintenance and repairs, spare parts were in greater demand than in the prior year. The Services segment order book stood at EUR 54.6 million as at 30 September 2011, compared with EUR 49.6 million at 30 September 2010.
Group revenue grows 14.1 % year on year
Group revenue was up 14.1% in the past financial year to EUR 1,062.3 million (financial year 2009/2010: EUR 931.3 million). All segments contributed to this increase, especially the Port Technology segment.
The Industrial Cranes segment generated revenue of EUR 489.8 million, 11.1 % more than in financial year 2009/2010 (EUR 440.8 million). In particular, this figure reflected the healthy intake of orders for Process Cranes and Standard Cranes in the previous quarters, which are recognised as revenue after an average production time of six to twelve months. Component sales also contributed to this positive development.
The Port Technology segment saw revenue grow by 25.8 % to EUR 239.0 million. The main revenue drivers here were Mobile Harbour Cranes and services.
In financial year 2010/2011, the Services segment generated revenue of EUR 333.5 million, an increase of 10.9% over the prior-year figure (financial year 2009/2010: EUR 300.6 million). Spare parts business and general field service were principally responsible for this revenue growth.
Very substantial 39.7 % growth in Group operating EBIT compared with previous year
The Demag Cranes Group generated operating EBIT of EUR 75.7 million in financial year 2010/2011. This represents a substantial 39.7 % increase on the previous year (EUR 54.2 million).
In the Industrial Cranes segment, Demag Cranes more than doubled operating EBIT relative to the previous year. Mainly as a result of the year-on-year increase in revenue, operating EBIT of EUR 10.8 million was generated in financial year 2010/2011, up from EUR 4.8 million in financial year 2009/2010. The product mix contributed positively to this outcome. The operating EBIT margin was 2.2 %.
In the Port Technology segment, operating EBIT increased from EUR 0.6 million in financial year 2009/2010 to EUR 9.2 million in the period under review. The main factors here were significantly higher revenue and the significantly improved cost base as a result of restructuring combined with better production capacity utilisation at the Düsseldorf-Benrath factory. The operating EBIT margin in the Port Technology segment was 3.8 %.
Operating EBIT in the Services segment increased from EUR 58.3 million in financial year 2009/2010 to EUR 66.2 million. The increase was driven by spare parts business and also strong modernisation business in the fourth quarter of the financial year, as customers tend to carry out modernisation work during works holidays in the summer months. The operating EBIT margin was 19.8 %, once again in the target margin corridor of approximately 20 % for the segment.
Workforce increasing again with growth in business
As at 30 September 2011, the Group had 6,115 employees, 404 more than on 30 September 2010. This workforce increase mirrored the strategy of expanding activities in emerging markets. In Germany, the Demag Cranes Group had a workforce of 2,820 at the reporting date (30 September 2010: 2,734).
Demag Cranes AG majority owned by the Terex Group, USA, since August 2011
On 19 May, Terex Industrial Holding AG, a subsidiary of Terex Corporation, Westport, Connecticut, USA, submitted an offer for all outstanding shares in Demag Cranes AG. After extensive concessions from Terex, including a marked increase in the offer price from EUR 41.75 to EUR 45.50 per share, far-reaching autonomy for Demag Cranes as a separate operating segment within the Terex Group, a five-year guarantee to retain the German sites and a three-year guarantee not to impose any redundancies in direct connection with the takeover, the Management Board and Supervisory Board unanimously recommended shareholders to accept the improved offer. The tender offer consequently succeeded with an acceptance rate well in excess of the minimum of 50 %. At the end of the additional acceptance period, Terex attained a shareholding of 81.83 %. Negotiations are currently underway for the signing of a domination and profit transfer agreement. Demag Cranes expects that it will be able to bring the required negotiations to an end in January 2012 and for a resolution approving the domination and profit transfer agreement to be adopted at the Annual General Meeting of Demag Cranes AG on 24 February 2012.
Guidance for next financial years: further growth expected
The Demag Cranes Group pursues a clear and successful strategy, which is geared to sustained and profitable growth. Expectations about the future course of the global economy still carry some geopolitical uncertainty. The overall economic uncertainties, notably due to the debt crisis in Europe and the US, make it increasingly difficult to give reliable long-term projections for ongoing economic trends and the associated demand for our products.
The Management Board currently anticipates on-going revenue growth for the next two financial years. There are plans to generate Group revenue of approximately EUR 1.1 billion in financial year 2011/2012. For financial year 2011/2012, the Management Board projects an operating EBIT margin of roughly 9.5 %. By financial year 2012/2013, Group revenue is anticipated to be back up to around EUR 1.3 billion, thus exceeding the level achieved in the record financial year of 2007/2008 (EUR 1,225.8 million). In financial year 2014/2015, factors notably including the new product families for emerging markets, the recovery of the port technology business – aided by the expected award of a number of pending large-scale projects for port terminals – and further growth in the services business, primarily through greater penetration of the broad installed base, are set to add further momentum to revenue. Provided that the revenue projection is attained, the Group is expected to regain a Group operating EBIT margin of over 10% by as early as financial year 2012/2013.
About Demag Crane
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 such as Demag Cranes & Components GmbH and Gottwald Port Technology GmbH, agencies and a joint venture. In financial year 2010/2011, the Group, with its 6,115 employees, generated revenue of EUR 1,062.3 million. Since August 2011, the Terex Group in the United States (www.terex.com) has held a majority share in the company.
Demag Cranes AG. We Can Handle It.