Demag Cranes records strong order growth in first quarter of financial year 2010/2011
Düsseldorf, 08. February 2011
- Group order intake surges by 53.9 per cent year on year
- Group revenue up 10.8 per cent compared to the previous year’s quarter
- Group operating EBIT increases considerably by 36.0 per cent year on year
- Outlook confirmed: significant increase in revenue and earnings expected in coming financial years
Demag Cranes AG began its new financial year (2010/2011) with a marked rise in order intake. Group revenue and operating EBIT also improved as the economy picked up. Demag Cranes AG’s CEO, Aloysius Rauen, states: “Financial year 2010/2011 has started well for the Demag Cranes Group. In particular, the order situation, which has, once again, improved significantly, encourages us to be optimistic for the upcoming quarters of the financial year.”
Group order intake surges by 53.9 per cent year on year
The Demag Cranes Group generated order intake of EUR 284.0 million in the first quarter of financial year 2010/2011 (Q1 2009/2010: EUR 184.5 million), which corresponds to a marked increase of 53.9 per cent. All segments contributed to this positive development. As at 31 December 2010, the Group order book stood at EUR 366.0 million and was thus up 23.1 per cent on the previous year (EUR 297.3 million).
As a result of improvement in the overall economic situation and thus increase in demand for our products, order intake in the Industrial Cranes segment went up significantly by 57.1 per cent from EUR 86.5 million in the first quarter 2009/2010 to EUR 135.9 million in the reporting period. In addition to the demand for components, we received – compared to the previous quarter – many more orders for Process and Standard Cranes. The Industrial Cranes segment order book came to EUR 217.9 million as at 31 December 2010 (31 December 2009: EUR 182.2 million).
The number of orders was also up in the Port Technology segment in the quarter under review. Thanks to increased demand for Mobile Harbour Cranes and after-sales service, order intake saw strong first-quarter growth of 109.3 per cent, increasing to EUR 63.7 million. The Port Technology segment order book came to EUR 88.5 million as at 31 December 2010 (31 December 2009: EUR 62.0 million).
In the Services segment, order intake grew by 24.9 per cent to EUR 84.4 million. The increased use of crane systems pushed demand for our services. The order book stood at EUR 59.6 million as at 31 December 2010, compared to EUR 53.1 million in the previous year.
Group revenue grows by 10.8 per cent
Group revenue amounted to EUR 231.2 million in financial year 2010/2011 and was therefore 10.8 per cent up on the previous year’s first quarter (EUR 208.6 million). All three segments contributed to varying degrees to this positive performance.
In the Industrial Cranes segment, revenue declined by 3.5 per cent to EUR 102.7 million (Q1 2009/2010: EUR 106.5 million). This shortfall is, above all, attributable to the high-revenue Process and Standard Cranes. As expected, fewer were billed in the reported period compared to the first quarter of the previous year. Standard and Process Cranes have delivery lead-times of six to twelve months and are characteristic of the late-cycle bias in this segment.
Revenue in the Port Technology segment rose by 38.7 per cent to EUR 52.6 million (Q1 2009/2010: EUR 37.9 million), attributable to the high revenue from Mobile Harbour Cranes and service business.
Services segment revenue improved by 18.1 per cent in comparison with the same quarter of the previous year to EUR 75.8 million. All product lines contributed to this revenue growth.
Group operating EBIT increases considerably by 36.0 per cent year on year
The Demag Cranes Group generated operating EBIT of EUR 12.5 million in the first quarter of 2010/2011, a significant increase of 36.0 per cent compared to last year's figure of EUR 9.2 million. Operating EBIT was distributed among the segments as described below.
The Industrial Cranes segment reported, as expected, a slight decline in operating EBIT to minus EUR 0.5 (Q1 2009/2010: plus EUR 2.0 million). This shortfall year on year essentially relates to the higher revenue volume generated by the sale of Standard and Process Cranes and the higher figures for operating EBIT in the first quarter of financial year 2009/2010.
Operating EBIT in the Port Technology segment grew from minus EUR 2.6 million in the first quarter of 2009/2010 to EUR 2.2 million in the period under review. This rise in operating EBIT is attributable to the higher revenue generated.
Operating EBIT in the Services segment also improved from EUR 11.7 million in the first quarter of financial year 2009/2010 by 11.3 per cent to EUR 13.1 million on the basis of increased revenue.
Outlook confirmed: significant increase in revenue and earnings expected in coming financial years
The Management Board of Demag Cranes confirms the outlook communicated at the conference for the full year results for financial year 2009/2010.
In view of the positive economic outlook, we expect to regain strong rates of revenue growth in the coming years. From today’s perspective, we aim to achieve Group revenue in the range of EUR 970.0 million to EUR 1.0 billion in financial year 2010/2011. No later than financial year 2012/2013, Group revenue is expected to reattain the record level reached in financial year 2007/2008 (EUR 1,225.8 million). The new emerging-market product families are planned to deliver another sharp jump in revenue in financial year 2014/2015.
The changes in cost structure will also allow us once again to attain substantial improvements in operating EBIT. For financial year 2010/2011, we anticipate an operating EBIT margin slightly above the level attained in financial year 2009/2010 (5.8 per cent). Subject to meeting our revenue target, we expect the Group operating EBIT margin to be back above ten per cent as early as financial year 2012/2013. The operating EBIT margin is set to climb again sharply with significant planned revenue growth in financial year 2014/2015, partly because enlarging production facilities and building new ones close to our customers will mean that administrative and logistics costs will not rise as steeply as revenue.
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.