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Demag Cranes' Business Continues to Recover in the Third Quarter of Financial Year 2009/2010 – Order Situation Improves Significantly

Group Order Intake Upward Trend Unbroken

Group Revenue to Recover Notably in the Coming Quarter due to Group's Late-cycle
Business Bias

Lower Cost Base Increases Group Operating EBIT Significantly

Financial Year-end Outlook: Order Intake Considered a Positive Indicator for a Good Fourth Quarter

Düsseldorf, Germany, 10 August 2010. The third quarter of financial year 2009/2010 saw Demag Cranes AG’s business continue to recover, its order situation reflecting the ongoing upward trend. Compared with both the preceding quarter (Q2 2009/2010) and the comparative quarter of the previous year (Q3 2008/2009), the Group received a substantially higher number of orders. The figures for Group revenue, due to the Group’s late-cycle business bias, were, as expected, lower than those for the preceding quarter (Q2 2009/2010) or the same quarter a year earlier (Q3 2008/2009). Thanks to the improved cost base resulting from our restructuring programme, Group operating EBIT showed a significant year-on-year increase in the third quarter. Demag Cranes AG’s CEO, Aloysius Rauen, emphasises: “In the third quarter of the financial year, we were able to profit from the global upswing and received substantially more orders. In addition, we are now benefiting from the results of the cost-cutting measures resulting from our successfully implemented restructuring programme. We have laid the foundations for the continuing upturn in our business.”

Group Order Intake Upward Trend Unbroken

In the third quarter of financial year 2009/2010, the order situation showed a strong recovery. Order intake rose in value to EUR 242.9 million, up 39.6 percent on the comparative quarter of the previous year (Q3 2008/2009). Compared with the preceding quarter (Q2 2009/2010), order intake increased by 12.6 percent. All segments contributed to this growth. In the first nine months of financial year 2009/2010, the Demag Cranes Group generated order intake to the value of EUR 643.1 million (Q1 to Q3 2008/2009: EUR 655.6 million). As a result of the strong order trend in the second and third quarter, the shortfall on the first nine months of the previous year was negligible.

Industrial Cranes segment achieved strong third-quarter growth in order intake. At EUR 113.3 million, it increased by 49.5 percent over the same quarter a year earlier (Q3 2008/2009: EUR 75.8 million). This also marked further improvement on the EUR 93.9 million recorded in the preceding quarter. On a cumulative basis, the EUR 293.8 million order intake for the first nine months of the current financial year was 8.5 percent down on the comparative figure for the previous year. The order book in the Industrial Cranes segment came to EUR 195.5 million at 30 June 2010 (30 June 2009: EUR 247.5 million). Compared with 31 March 2010, the order book grew by 12.5 percent.

The third quarter of 2009/2010 also brought a continuation of the positive trend in customer orders in the
Port Technology segment. At EUR 51.6 million, order intake was above both the same quarter a year earlier (EUR 33.3 million) and the preceding quarter (EUR 44.3 million). The demand for Mobile Harbour Cranes continued to increase. Some port operators are already seeing a return to growth in container handling and ports are also operating at increasingly higher capacity. Nonetheless, existing handling capacity is being taken back into service first before any investment is made in expansion. Because of this, the Port Technology segment did not sell any automated products during the period under review. Order intake for the first nine months amounted to EUR 126.4 million, 17.1 percent above the comparative figure for the previous year. The order book ran to EUR 82.8 million at 30 June 2010 (30 June 2009: EUR 83.9 million). Compared with 31 March 2010, the order book grew by 36.9 percent.

Order intake in the Services segment at EUR 78.0 million for the third quarter of 2009/2010 surpassed the figure for the same quarter of the previous year (EUR 64.9 million) by 20.3 percent. The order situation also improved relative to the preceding quarter (EUR 77.4 million). Increasing crane utilisation by customers further boosted spare parts business in the period under review. The nine-month cumulative figure for order intake came to EUR 223.0 million (Q1 to Q3 2008/2009: EUR 226.8 million). The Services segment order book amounted to EUR 62.5 million at 30 June 2010 (30 June 2009: EUR 53.0 million).

Group Revenue to Recover Notably in the Coming Quarter due to Group's Late-cycle
Business Bias

Group revenue fell in the third quarter of 2009/2010 compared with the same quarter a year earlier by 7.0 percent to EUR 205.1 million. Due to the late-cycle bias of our business, we generally benefit from any upswing with a lag of six to twelve months. The 9.8 percent lower revenue relative to the preceding quarter can be attributed to this fact. Taking into account delivery times and billing terms, the positive trend in order intake consequently was, expectedly, not able to show through in revenue for the quarter under review. As a result, Group revenue was also down on a nine-month basis, at EUR 641.1 million, compared with the same period of the previous year (Q1 to Q3 2008/2009: EUR 791.8 million).

In the Industrial Cranes segment, third-quarter revenue fell by 15.2 percent compared with the same quarter a year earlier and 6.4 percent relative to the preceding quarter to EUR 101.3 million. This reflects, in particular, weak order intake in the high-revenue Process and Standard Cranes business in the first and second quarters of 2009/2010. Plant engineering business in particular is subject to fluctuations due to various factors. In the nine-month period, the Industrial Cranes segment generated revenue of EUR 316.0 million (Q1 to Q3 2008/2009: EUR 420.5 million).

Revenue in the Port Technology segment totalled EUR 29.6 million in the third quarter of 2009/2010, 16.0 percent down on the comparative quarter of the previous year. Compared with the preceding quarter, revenue fell by 36.0 percent. Most of the revenue generated came from sales of our Mobile Harbour Cranes. The drop in revenue relative to both the same quarter a year earlier and the immediately preceding quarter is attributable to revenue being postponed to the fourth quarter of 2009/2010. Under our contracts with some customers, products are not billed until customer acceptance. As has already been mentioned with reference to the order situation, we transacted virtually no business with our automated products in the period under review. In the nine-month period, revenue in the Port Technology segment came to EUR 113.8 million, a decrease of 22.1 percent on the comparative figure for the previous year (Q1 to Q3 2008/2009: EUR 146.1 million).

In the Services segment, revenue in the reporting period rose by 12.7 percent to EUR 74.2 million compared with the comparative quarter a year earlier. Encouragingly, demand for high-revenue, high-margin spare parts has begun growing again. The revenue increase compared with the preceding quarter was 1.7 percent. Due to the weaker trend in the first quarter of 2009/2010, revenue for the first nine months, at EUR 211.3 million, remained 6.1 percent down on the comparative period of the previous year (Q1 to Q3 2008/2009: EUR 225.2 million).

Lower Cost Base Increases Group Operating EBIT Significantly

In the third quarter of 2009/2010, the Demag Cranes Group generated operating EBIT of EUR 10.0 million (Q3 2008/2009: EUR 5.3 million). The 87.4 percent increase is largely accounted for by the improved cost base as a result of our restructuring programme. Compared with the preceding quarter (EUR 10.5 million), operating EBIT has remained near-constant. Relative to the first nine months of 2008/2009, Group operating EBIT decreased from EUR 55.2 million to EUR 29.7 million.

In the Industrial Cranes segment, operating EBIT decreased from EUR 3.0 million in the comparative quarter of the previous year to minus EUR 1.6 million in the third quarter of 2009/2010. This was also down on the preceding quarter (EUR 1.0 million). The decrease reflected the lower revenue. Operating EBIT in the first nine months of 2009/2010 was EUR 1.3 million, compared with EUR 25.6 million in the same period of the previous year.

In the Port Technology segment, operating EBIT improved to minus EUR 0.8 million in the third quarter of 2009/2010 (Q3 2008/2009: minus EUR 7.5 million). Despite significantly lower revenue, operating EBIT remained on a par with the preceding quarter. In comparison with the previous year, operating EBIT reflects the positive effects of our restructuring programme. In the first nine months, operating EBIT improved to minus EUR 3.8 million (Q1 to Q3 2008/2009: minus EUR 10.3 million).

Operating EBIT in the Services segment increased in the period under review by 35.8 percent to EUR 15.3 million (Q3 2008/2009: EUR 11.3 million). Spare parts business showed particularly strong growth in the third quarter. As a result, the operating EBIT margin showed a further substantial rise compared with the preceding quarter, increasing to 20.6 percent. Operating EBIT in the first nine months of financial year 2009/2010 came to EUR 39.9 million (Q1 to Q3 2008/2009: EUR 44.5 million). The shortfall year on year relates to the weaker trend in the first two quarters of financial year 2009/2010.

Financial Year-end Outlook: Order Intake Considered a Positive Indicator for a Good Fourth Quarter

The recovery in order intake is considered a positive indicator for a good fourth quarter of 2009/2010. For the full year 2009/2010, the Management Board anticipates Group revenue of approximately EUR 900 million and operating EBIT of EUR 45 to 50 million. Capital expenditure should slightly exceed the previous year’s level. This corresponds to our previous announcements concerning the outlook for financial year 2009/2010.
We aim in general to continue rigorously aligning our Group to growth and greater efficiency. The focus of growth is on foreign markets.

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®.

Demag Cranes AG. We Can Handle It.

Contact person for media representatives:
Nikolai Juchem
Senior Vice President Corporate Communication and Marketing
Phone: +49 (0)211 7102-1019
E-Mail:

Contact person for investors and analysts:
Horst Thelen
Senior Vice President Investor Relations
Phone: +49 (0) 211 7102-1210
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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 the Third Quarter of 2009/2010 (30 June 2010)

In EUR million	Q3 2009/2010	Q3 2008/2009	Δ	Q1-Q3 2009/2010	Q1-Q3 2008/2009	Δ

Group
Order intake	242.9	174.0	39.6 %	643.1	655.6	-1.9 %
Order book¹	340.9	384.4	-11.3 %	---	---	---
Revenue	205.1	220.6	-7.0 %	641.1	791.8	-19.0 %
Operating EBIT²	10.0	5.3	87.4 %	29.7	55.2	-46.1 %
in % of revenue	4.9 %	2.4 %	2.5 % pts	4.6 %	7.0 %	-2.3 % pts
Net income after tax	4.1	-31.3	n/a	13.0	-5.0	n/a
Earnings per share (in EUR)	0.19	-1.48	n/a	0.62	-0.25	n/a
Net debt¹	8.8	5.9	47.7 %	---	---	---
Equity¹	259.3	235.8	10.0 %	---	---	---
Equity ratio in %¹	31.8 %	27.6 %	4.2 % pts	---	---	---
Gearing in %¹	3.4	2.5 %	0.9 % pts	---	---	---

Industrial Cranes
Order intake	113.3	75.8	49.5 %	293.8	320.9	-8.5 %
Order book¹	195.5	247.5	-21.0 %	---	---	---
Revenue	101.3	119.5	-15.2 %	316.0	420.5	-24.9 %
Operating EBIT²	-1.6	3.0	n/a	1.3	25.6	-94.8 %
in % of revenue	-1.6 %	2.5 %	-4.0 % pts	0.4 %	6.1 %	-5.7 % pts

Port Technology
Order intake	51.6	33.3	55.0 %	126.4	107.9	17.1 %
Order book¹	82.8	83.9	-1.2 %	---	---	---
Revenue	29.6	35.2	-16.0 %	113.8	146.1	-22.1 %
Operating EBIT²	-0.8	-7.5	88.8 %	-3.8	-10.3	63.6 %
in % of revenue	-2.8 %	-21.3 %	18.4 % pts	-3.3 %	-7.1 %	3.8 % pts

Services
Order intake	78.0	64.9	20.3 %	223.0	226.8	-1.7 %
Order book¹	62.5	53.0	18.1 %	---	---	---
Revenue	74.2	65.8	12.7 %	211.3	225.2	-6.1 %
Operating EBIT²	15.3	11.3	35.8 %	39.9	44.5	-10.3 %
in % of revenue	20.6 %	17.1 %	3.5 % pts	18.9 %	19.8 %	-0.9 %-Pkte

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

Additional Table: Comparison of the Q3 2009/20010 with the Q2 2009/2010

In EUR million	Q3 2009/2010	Q2 2009/2010	Change in %

Group
Order intake	242.9	215.7	12.6 %
Revenue	205.1	227.4	-9.8 %
Operating EBIT¹	10.0	10.5	-4.6 %

Industrial Cranes
Order intake	113.3	93.9	20.6%
Revenue	101.3	108.2	-6.4 %
Operating EBIT¹	-1.6	1.0	n/a

Port Technology
Order intake	51.6	44.3	16.4 %
Revenue	29.6	46.3	-36.0 %
Operating EBIT¹	-0.8	-0.3	n/a

Services
Order intake	78.0	77.4	0.8 %
Revenue	74.2	73.0	1.7 %
Operating EBIT¹	15.3	12.9	18.4 %

¹The adjustments reflect the effects of operating adjustments.