Demag Cranes sustains its upward trend in the second quarter of financial year 2010/2011
Düsseldorf, 04. May 2011
- Group order intake up significantly – 28.8 per cent higher than previous year’s figure
- Group revenue climbs by 12.0 per cent year on year
- Group operating EBIT sees marked increase of 39.0 per cent on the prior year’s period
- Guidance figures raised for financial year 2010/2011: Group revenue of EUR 1.02 to EUR 1.05 billion anticipated
- Further statement on the announcement of a public tender offer
The Demag Cranes Group sustained its upward trend in the second quarter of financial year 2010/2011. Key financial reporting indicators improved significantly. Demag Cranes AG’s CEO, Aloysius Rauen, stresses: “Our business performance has been very positive in the first two quarters of the financial year and has encouraged us to be optimistic. We have raised our guidance figures in the current financial year for revenue accordingly.”
Group order intake boosted – 28.8 per cent higher than previous year’s figure
The Demag Cranes Group generated significantly increased order intake of EUR 277.9 million during the second quarter of financial year 2010/2011 (Q2 2009/2010: EUR 215.7 million). This represents growth of 28.8 per cent compared with the previous financial year’s quarter. Order intake in the first half of financial year 2010/2011 totalled EUR 561.9 million, equivalent to a rise of 40.4 per cent on the comparative figure for the previous financial year (H1 2009/2010: EUR 400.2 million). All segments contributed to this very positive trend. The Group order book improved compared with the previous financial year’s reporting date (31 March 2010: EUR 290.5 million) by 30.3 per cent to reach EUR 378.4 million as at 31 March 2011.
At segment level, order intake in the Industrial Cranes segment rose sharply by 39.5 per cent to EUR 131.0 million year on year. Alongside volume business with components, we also recorded strong project business during the past quarter, also enabling us to generate more orders for Process and Standard Cranes compared with the same quarter of the previous year. Order intake for the first six months of the financial year grew by 47.9 per cent to EUR 266.9 million. The Industrial Cranes segment order book stood at EUR 232.5 million at the 31 March 2011 balance sheet date (31 March 2010: EUR 173.7 million), which represents an increase of 33.8 per cent.
The Port Technology segment also reported strong growth in order intake relative both to the first quarter and the first half of financial year 2009/2010. Order intake ran to EUR 59.6 million in the reporting period, a year-on-year gain of 34.4 per cent. Compared with the first half of financial year 2009/2010, order intake surged by 64.9 per cent to EUR 123.3 million (H1 2009/2010: EUR 74.8 million). As in the preceding quarters, this positive trend reflected higher demand for Mobile Harbour Cranes and services. The Port Technology segment order book stood at EUR 79.2 million as at 31 March 2011, compared with EUR 60.5 million as at 31 March 2010.
In the Services segment, order intake rose by 12.8 per cent from EUR 77.4 million in the previous year’s quarter to EUR 87.3 million in the second quarter of financial year 2010/2011. On a six-month basis, order intake improved by 18.4 per cent from EUR 145.0 million in the previous year’s period to EUR 171.7 million in the reporting period. Higher capacity utilisation and the resulting increased utilisation of customers’ crane equipment also boosted demand for our services. The order book as at 31 March 2011 amounted to EUR 66.8 million, compared with EUR 56.3 million a year earlier.
Group revenue climbs by 12.0 per cent year on year
The Demag Cranes Group generated EUR 254.6 million in revenue in the second quarter of financial year 2010/2011, 12.0 per cent up on the previous year’s quarter (EUR 227.4 million). Revenue for the first six months, at EUR 485.8 million, was up 11.4 per cent on the comparative period of the previous financial year (H1 2009/2010: EUR 436.0 million).
In the Industrial Cranes segment, the second-quarter revenue of EUR 108.8 million was slightly up on the previous year’s quarter (Q2 2009/2010: EUR 108.2 million). On a six-month basis, at EUR 211.5 million, revenue remained slightly below the comparative figure for the previous financial year (H1 2009/2010: EUR 214.7 million). This goes back to the first quarter of financial year 2010/2011, when high-revenue Process and Standard Cranes product lines were billed, as expected, in smaller numbers than in the same period of the previous year. As Standard and Process Cranes have delivery times ranging from six to more than twelve months, they are characteristic of the late-cycle bias in this segment.
In the Port Technology segment, we generated revenue of EUR 67.9 million, a substantial 46.8 per cent increase on the previous year’s quarter (Q2 2009/2010: EUR 46.3 million). Comparing the six-month figures, revenue climbed by 43.2 per cent from EUR 84.2 million to EUR 120.5 million. Sales were driven by revenue from sales of Mobile Harbour Cranes and services.
Revenue in the Services segment at EUR 78.0 million also showed an improvement in the reporting period, a gain of 6.9 per cent on the previous financial year’s quarter (Q2 2009/2010: EUR 73.0 million). Spare parts business was once again a major contributor to this growth. Compared with the first half of financial year 2009/2010, revenue rose by 12.1 per cent, from EUR 137.1 million to EUR 153.8 million.
Group operating EBIT sees marked increase of 39.0 per cent on the prior year’s period
In the second quarter of financial year 2010/2011, the Demag Cranes Group generated operating EBIT of EUR 14.6 million. This represents a significant 39.0 per cent rise on the comparative figure a year earlier (Q2 2009/2010: EUR 10.5 million). On a six-month basis, we improved operating EBIT by 37.6 per cent from EUR 19.7 million to EUR 27.1 million.
Operating EBIT in the Industrial Cranes segment, as expected, showed a slight deterioration with a negative figure of EUR 0.2 million in the second quarter of financial year 2010/2011 compared with a positive EUR 1.0 million in the same quarter of the previous year. Comparing six-month data, operating EBIT was a negative EUR 0.7 million compared with a positive EUR 2.9 million in the previous year’s period. The decrease mainly reflected higher selling expenses in connection with the improved order situation.
Operating EBIT in the Port Technology segment improved from minus EUR 0.3 million in the first quarter of 2009/2010 to plus EUR 2.7 million in the period under review. On a six-month basis, we boosted operating EBIT from minus EUR 2.9 million in the previous year’s period to EUR 5.0 million in the first half of financial year 2010/2011. Contributing factors here mainly consisted of higher revenue, better margins and optimised capacity utilisation at our Düsseldorf-Benrath factory.
In the Services segment, operating EBIT rose year on year by 19.2 per cent due to higher revenue from EUR 12.9 million to EUR 15.4 million. Comparing figures on a six-month basis, we recorded an increase of 15.4 per cent to EUR 28.4 million (H1 2009/2010: EUR 24.6 million), enabling us to achieve an operating EBIT margin of 19.7 percent year on year.
Guidance raised for financial year 2010/2011: Group revenue of EUR 1.02 to EUR 1.05 billion anticipated
We re-evaluate our guidance figures from quarter to quarter based on the trend in our business at that time. Considering the positive economic outlook for the current and following financial years, we anticipate significant ongoing growth once again. Thanks to our excellent business performance in the past six months, we are raising our guidance figures for financial year 2010/2011 as follows: as of today, our Group revenue target for the current financial year is in the range of EUR 1.02 billion to EUR 1.05 billion (previous guidance: EUR 970 million to EUR 1.0 billion). For financial year 2010/2011, we now anticipate an operating EBIT margin ranging from 6.1 to 6.5 per cent (2009/2010: 5.8 per cent).The guidance figures for the next financial years communicated in our Annual Report remain unchanged (see page 102 et seq. of our Annual Report 2009/2010).
Further statement on the announcement of a public tender offer
As has already been communicated, Terex Industrial Holding AG, a subsidiary of Terex Corporation, Westport, Connecticut (USA), announced its intention on 2 May 2011 to submit a public tender offer of EUR 41.75 per share to the shareholders of Demag Cranes AG. On several occasions in the past year, personal contact at the highest levels between Terex and Demag Cranes has taken place. The indication of interest expressed by Terex at the time was carefully reviewed by the Management and Supervisory Boards, but was considered on the whole not in the interest of the Company and its stakeholders.
According to Terex, the company intends to publish a complete set of documentation with details of conditions and strategic indications in connection with its recently announced tender offer during the course of this month. As soon as Terex has submitted the tender offer documentation, the Management and Supervisory Boards of Demag Cranes AG will review it without prejudice and publish a reasoned opinion.
About Demag Cranes
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 2009/2010, the Group, with its 5,711 employees, generated revenue of around EUR 931.3 million. Since the end of June 2006, the Demag Cranes share (WKN: DCAG01) has been listed in the Prime Standard of the Frankfurt Stock Exchange and is traded on various indices including the MDAX®.
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Conditions for forward-looking statements
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 are 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.