Press release

Demag Cranes Reports Improved Order Intake in the Second Quarter of Financial Year 2009/2010

Group Key Figures Up Compared to the First Quarter of Financial Year 2009/2010

Group Integration Activities: New Management Structure Implemented

Outlook for Financial Year 2009/2010 Unchanged

Düsseldorf, 5 May 2010. In the second quarter of its 2009/2010 financial year, Demag Cranes AG saw its business development continue to stabilise. Notably, the order situation showed an improvement over the preceding quarter (Q1 2009/2010). Compared to the first quarter of the current financial year 2009/2010, the Group took in some 17 percent more orders, reflecting the upturn in the industry environment. Group revenue and Group operating EBIT were also up on the preceding quarter but, as expected, down on the comparative figures for the previous year, which were bolstered by the strong order book from record financial year 2007/2008. Demag Cranes AG’s CEO, Aloysius Rauen, underscores: “We saw the recovery of the industry environment and the stabilisation of our business continue in the second quarter. This has reconfirmed our confidence for the financial year overall. It is too early, however, to give a general all-clear signal considering the current developments on the financial markets.”

Group Order Intake Improves

Demag Cranes Group order intake for the second quarter of financial year 2009/2010 came to EUR 215.7 million. This represents an increase of 7.7 percent compared to the previous year. Order intake was also up on the preceding quarter, with an increase of 16.9 percent. This shows that the trend remains positive and the order situation is continuing to stabilise. The Demag Cranes Group generated order intake of EUR 400.2 million in the first half of financial year 2009/2010 (H1 2008/2009: EUR 481.7 million). The EUR 81.5 million decrease on the previous year’s period is mainly explained by the strong order intake in the first quarter of 2008/2009, when the full impact of the financial and economic crisis was yet to be reflected in the financial figures. The Group order book stood at EUR 290.5 million as at 31 March 2010 and was down, as expected, year on year (31 March 2009: EUR 430.3 million).

Order intake in the Industrial Cranes segment came to EUR 93.9 million in the second quarter of 2009/2010. This is on a par with the second quarter of 2008/2009, but shows a healthy increase on the EUR 86.5 million recorded in the first quarter of 2009/2010. On a cumulative basis, order intake for the first half of 2009/2010 totalled EUR 180.4 million, a reduction of 26.4 percent on the comparative figure for the previous year. Due to the late-cycle bias of the industrial crane business, the financial and economic crisis had not yet made itself felt in the first quarter of the previous year, allowing a very high order intake to be generated in that period. In contrast, customer reticence with regard to capital expenditure decisions was still noticeable in the period under review. The Industrial Cranes segment order book stood at EUR 173.7 million at 31 March 2010 (31 March 2009: EUR 291.1 million).

The second quarter of 2009/2010 brought first signs of stabilisation in contract awards in the Port Technology segment. Order intake, at EUR 44.3 million, was above both the figure for the second quarter of the previous year (EUR 34.1 million) and that for the first quarter of 2009/2010 (EUR 30.4 million). Although demand for Mobile Harbour Cranes, in particular, picked up in the period under review, we still deem the entire market to be volatile. Some terminal operators consider that cargo volumes have reached the end of their decline and that it is bottoming out. It remains to be seen how enduring the upward trend will prove to be. For now, with terminals currently still underutilised, idle handling capacity will be brought back into operation before there is any investment spending on expansion. The first-half order intake of EUR 74.8 million was on approximately the same level as in the previous year (EUR 74.6 million). The order book was worth EUR 60.5 million at 31 March 2010 (31 March 2009: EUR 86.1 million).

At EUR 77.4 million, order intake in the Services segment also exceeded the comparative figure for the previous year, with an increase of 8.3 percent. Orders also improved compared with the first quarter. Overall, the Services segment saw a continuation of the encouraging stabilising trend in orders, although once again it remains to be seen whether this trend will hold. On a cumulative basis, orders were generated to the value of EUR 145.0 million (H1 2008/2009: EUR 161.9 million). The Services segment order book amounted to EUR 56.3 million at 31 March 2010 (31 March 2009: EUR 53.1 million).

Group Revenue Shows Increase on the Preceding Quarter

Group revenue decreased compared with the second quarter of the previous year by 15.2 percent to EUR 227.4 million in the second quarter of 2009/2010. Compared with the preceding quarter, however, Demag Cranes Group revenue increased by 9.0 percent. On a cumulative basis, Group revenue for the first half of financial year 2009/2010 came to EUR 436.0 million, down 23.7 percent on the comparative figure for the previous year. This was due to the substantially weaker first quarter in 2009/2010, when the drop in revenue compared with the preceding quarter of the previous year stood at 31.2 percent. The year-on-year decrease was much smaller in the second quarter.

In the Industrial Cranes segment, revenue in the second quarter of 2009/2010 decreased by 26.6 percent year on year to EUR 108.2 million. Weak order intake in preceding quarters was once again reflected relatively strongly in the revenue trend. Revenue nonetheless showed a slight 1.6 percent increase on the preceding quarter. In the first half of 2009/2010, the Industrial Cranes segment generated revenue of EUR 214.7 million, down 28.7 percent on the comparative period of the previous year.

The Port Technology segment took in revenue of EUR 46.3 million in the second quarter of 2009/2010, on a par with the same quarter of the previous year. Compared with the first quarter of 2009/2010, revenue rose by 22.0 percent. Most of the revenue was generated from sales of our Mobile Harbour Cranes. Segment revenue for the first half of 2009/2010 amounted to EUR 84.2 million, a decrease of 24.0 percent from the first half of 2008/2009 (EUR 110.8 million). The discrepancy compared with the previous year’s period was accounted for by lower revenue in the first quarter of 2009/2010.

Revenue in the Services segment dipped slightly by 1.5 percent to EUR 73.0 million compared with the same period of the previous year. Demand for high-revenue, high-margin spare parts was still restrained as customers continued to operate below capacity, resulting in correspondingly low crane utilisation. Compared with the preceding quarter, however, revenue gained by 13.7 percent. Nonetheless, as a result of the weaker trend in the first quarter of 2009/2010, the half-year revenue figure of EUR 137.1 million was 13.9 percent down on the comparable figure for the previous year (H1 2008/2009: EUR 159.3 million).

Group Operating EBIT: Stabilisation Continues

Group operating EBIT came to EUR 10.5 million in the second quarter of 2009/2010, down from EUR 19.4 million in the same period of the previous year, but improving by 14.1 percent compared with the preceding quarter. On a cumulative basis, Group operating EBIT fell from EUR 49.8 million in the first half of 2008/2009 to EUR 19.7 million in the current 2009/2010 financial year.

Operating EBIT in the Industrial Cranes segment fell in the second quarter of 2009/2010 compared with the previous year’s quarter by EUR 8.5 million to EUR 1.0 million. The deterioration in operating EBIT reflects lower revenue and an unfavourably biased product mix. Operating EBIT showed a further slight decrease below the figure for the first quarter of 2009/2010 (EUR 2.0 million). Operating EBIT for the first half of the financial year was a low EUR 2.9 million, compared with EUR 22.7 million in the comparative period of the previous year.

In the Port Technology segment, operating EBIT improved from a EUR 4.4 million loss in the second quarter of 2008/2009 to a EUR 0.3 million loss in the second quarter of 2009/2010. Compared with the first quarter of 2009/2010, operating EBIT in the period under review showed an improvement of EUR 2.2 million. This reflected ongoing positive effects from the restructuring programme. On a cumulative basis, operating EBIT in the Port Technology segment amounted to a loss of EUR 2.9 million, at exactly the same level as in the same period of the previous year.

Operating EBIT in the Services segment decreased by EUR 2.0 million from EUR 14.9 million in the previous year’s comparative period to EUR 12.9 million in the period under review. In the second quarter of 2009/2010, the situation in the spare parts business also continued to be challenging due to the reduced utilisation of customers’ cranes compared with the same period of the previous year. Although the Services segment operating EBIT margin for the second quarter of 2009/2010, at 17.7 percent, was down on the figure for the first quarter of 2009/2010 (18.3 percent), operating EBIT increased in absolute figures compared with the preceding quarter by EUR 1.2 million. Operating EBIT for the first half of financial year 2009/2010 amounted to EUR 24.6 million (H1 2008/2009: EUR 33.3 million).

Group Integration Activities: New Management Structure Implemented

We have completed yet another important step towards Group integration by creating clear management structures and responsibilities within our organisation. In this context, we have filled all of the management positions in our Executive Committee. The Executive Committee as a management body consists of the members of the Management Board and six senior management members who are responsible at operating level for Research & Development, Design & Engineering, Production, Product and Contract Management, Services, Sales and Human Resources worldwide. Since 1 May 2010, the new function-orientated management structure beneath the Executive Committee has now come into effect as planned. This unites us as a single, coherent Group in terms of responsibilities and streamlines coordination and workflows in the process.

Financial Year 2009/2010: Outlook Remains Unchanged

Reliable predictions remain as difficult in the current environment as they were before, as many economic and financial institutes confirm. The Management Board consequently reaffirms its outlook as communicated when the results for financial year 2008/2009 were presented. The Board expects revenue in financial year 2009/2010 to be down on financial year 2008/2009 and that Group operating EBIT margin in financial year 2009/2010 will once again be in the mid singledigit range.

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 services, 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®.

Demag Cranes. We Can Handle It.

Contact for media representatives:
Nikolai Juchem
Head of Corporate Communications and Marketing
Phone: +49 (0) 211 7102-1019
E-Mail:

Contact for investors and analysts:
Horst Thelen
Head of Investor Relations
Phone: +49 (0) 211 7102-1210
E-Mail:

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 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.

Selected Financials as at the End of the Second Quarter of Financial Year 2009/2010 (31 March 2010)

	Q2 2009/2010	Q2 2008/2009	Δ	Q1-Q2 2009/2010	Q1-Q2 2008/2009	Δ

Group (in EUR million)
Order intake	215.7	200.4	7.7 %	400.2	481.7	-16.9 %
Order book¹	290.5	430.3	-32.5 %	---	---	---
Revenue	227.4	268.2	-15.2 %	436.0	571.2	-23.7 %
Operating EBIT²	10.5	19.4	-45.7 %	19.7	49.8	-60.4 %
in % of revenue	4.6 %	7.2 %	-2.6 % pts	4.5 %	8.7 %	-4.2 % pts
Net income after tax	4.6	8.1	-43.3 %	9.0	26.2	-65.8 %
Earnings per share (in EUR)	0.22	0.38	-42.6 %	0.43	1.23	-65.4 %
Net debt¹	6.0	30.5	-80.5 %	---	---	---
Equity¹	244.5	265.4	-7.9 %	---	---	---
Equity in %¹	31.2 %	30.3 %	0.9 % pts	---	---	---
Gearing in %¹	2.4 %	11.5 %	-9.1 % pts	---	---	---
Industrial Cranes (in EUR million)
Order intake	93.9	94.7	-0.8 %	180.4	245.1	-26.4 %
Order book¹	173.7	291.1	-40.3 %	---	---	---
Revenue	108.2	147.5	-26.6 %	214.7	301.0	-28.7 %
Operating EBIT²	1.0	9.4	-89.9 %	2.9	22.7	-87.1 %
in % of revenue	0.9 %	6.4 %	-5.4 % pts	1.4 %	7.5 %	-6.2 % pts

Port Technology (in EUR million)
Order intake	44.3	34.1	29.8 %	74.8	74.6	-0.2 %
Order book¹	60.5	86.1	-29.7 %	---	---	---
Revenue	46.3	46.6	-0.7 %	84.2	110.8	-24.0 %
Operating EBIT²	-0.3	-4.4	92.2 %	-2.9	-2.9	-2.6 %
in % of revenue	-0.7 %	-9.5 %	8.8 % pts	-3.5 %	-2.6 %	-0.9 % pts

Services (in EUR million)
Order intake	77.4	71.5	8.3 %	145.0	161.9	-10.5 %
Order book¹	56.3	53.1	6.0 %	---	---	---
Revenue	73.0	74.1	-1.5 %	137.1	159.3	-13.9 %
Operating EBIT²	12.9	14.9	-13.3 %	24.6	33.3	-26.0 %
in % of revenue	17.7 %	20.1 %	-2.4 % pts	18.0 %	20.9 %	-2.9 % pts

¹As at end of period.
² The adjustments reflect the effects of operating adjustments.

Additional Table: Comparison of the 2009/2010 Second Quarter to the 2009/2010 First Quarter

	Q2 2009/2010	Q1 2009/2010	Change in %

Group (in EUR million)
Order intake	215.7	184.5	16.9 %
Revenue	227.4	208.6	9.0 %
Operating EBIT¹	10.5	9.2	14.1 %

Industrial Cranes (in EUR million)
Order intake	93.9	86.5	8.6 %
Revenue	108.2	106.5	1.6 %
Operating EBIT¹	1.0	2.0	-51.3 %

Port Technology (in EUR million)
Order intake	44.3	30.4	45.7 %
Revenue	46.3	37.9	22.0 %
Operating EBIT¹	-0.3	-2.6	86.6 %

Services (in EUR million)
Order intake	77.4	67.5	14.6 %
Revenue	73.0	64.2	13.7 %
Operating EBIT¹	12.9	11.7	9.9 %

¹The adjustments reflect the effects of operating adjustments.