Demag Cranes Off to a Successful Start in Financial Year 2006/2007
Düsseldorf, 27. February 2007
- Group sales in 1st Quarter up by 10.9 percent compared to previous year's quarter
- Group EBIT margin improved by 3.5 percentage points to 8.6 percent
- Significant EBIT margin increase in the Industrial Cranes segment to 4.5 percent - annual target of 5 percent almost achieved
- 2006/2007 outlook confirmed: Group sales increase of 7 to 10 percent, adjusted EBITDA 20 to 25 percent higher, adjusted EBIT up 24 to 29 percent
The Demag Cranes Group has had a successful start to the new 2006/2007 financial year and is continuing to grow profitably in the good economic and industrial climate. At EUR 274.4 million, order intake of the Group was just 2.5 percent below the previous year's figure. However, this was due to a major project at record level in the Port Technology segment. The order book as at the end of the first quarter of 2006/2007 amounted to EUR 337.6 million, being up 7.3 percent in the period under report. Thanks to continuing sound demand for products and services, Group sales were 10.9 percent higher at EUR 242.5 million. The Port Technology and Services segments particularly contributed to this growth. Harald J. Joos, Chief Executive Officer of Demag Cranes AG, emphasises: "Our strategy of sustained profitable growth is having the desired effect. In view of the successful product launches and the favourable economic climate, I am convinced that we will achieve our ambitious goals."
Significant Improvement in Earnings and Profitability
In the first quarter of 2006/2007, the Group achieved earnings before interest, taxes as well as depreciation and amortisation (EBITDA) of EUR 26.5 million, which corresponds to outstanding year-on-year increase of 65.6 percent. The EBITDA margin was up by 3.6 percentage points to 10.9 percent. The very positive results are mainly attributable to the Group's focus on, for example, process optimisation, product standardisation, more efficient production and more effective administration processes. Adjusted EBIT grew by 88.3 percent to EUR 20.9 million. The EBIT margin improved as a result by 3.5 percentage points to 8.6 percent. In the period under review, earnings after taxes were considerably higher at EUR 9.4 million compared to EUR 1.3 million in the previous year. The resulting earnings per share amount to EUR 0.44.
Industrial Cranes Segment: EBIT Margin Target for FY 2006/2007 Almost Achieved
At EUR 130.6 million, order intake of the Industrial Cranes segment was up by 8.0 percent over the previous year. This favourable development is mainly due to double-digit growth rates in almost all business areas of the segment. Regional improvements in order intake were above all recorded in Brazil, India and Germany. Sales grew by 0.7 percent compared to the same period in the previous year, totalling 111.5 million Euros for the period ending on 31 December 2006. In the seasonally weaker first quarter, this slight increase was driven by sales growth in handling technology and drives as well as standard cranes. Adjusted EBIT improved from minus EUR 0.5 million in the first quarter of the previous year to plus EUR 5.0 million. The EBIT margin grew significantly by 4.9 percentage points to 4.5 percent. These results confirm a sustained turnaround in earnings. In addition, the target of 5 percent for the entire 2006/2007 financial year was almost achieved in the first quarter.
Port Technology Segment: Dynamic Increase in Sales and Earnings
The order intake of the Port Technology segment amounted to EUR 68.8 million and was therefore well below the record level of EUR 97.8 for the first quarter of the previous financial year. However, the previous year's figure had been the result of the largest single order for fully automatic guided vehicles (AGVs). Sales grew significantly by 27.9 percent to EUR 61.0 million. In the period under review, there was particularly high demand for Generation 5 floating cranes as well as Generation 5 mobile harbour cranes as many ports are faced with cargo handling bottlenecks. In strongly expanding ports and terminals in the Middle East, the project situation has been particularly promising. Adjusted EBIT was 64.7 percent higher at EUR 2.8 million. The EBIT margin grew by 1.0 percentage point to 4.6 percent. Due to seasonal factors, sales in the first quarter were lower than in the other quarters, which results in a lower EBIT margin in relation to relatively constant costs. This development has also been observed in the past and, as expected, will balance out in the course of the financial year.
Services Segment: Strong Demand for Reburbishments and Spare Parts
The positive trend of previous periods continued in the Services segment with significant growth in order intake and sales. Order intake increased by 19.1 percent to EUR 74.9 million. Sales improved by 16.3 percent to EUR 70.1 million. This positive development is also based on an increasing demand for refurbishments. In this respect, this segment benefits from the long service life of Demag Cranes products and from the world's largest installed base of electric cranes and hoists. In the period under review, demand for spare and wear parts was particularly high. Adjusted EBIT was 32.3 percent higher at EUR 13.1 million. The EBIT margin went up by 2.3 percentage points to 18.7 percent.
Outlook Confirmed: Further Improvement in Sales and Earnings Expected
The Management Board of Demag Cranes AG confirmed the outlook for financial year 2006/2007 submitted for the 2005/2006 Annual Report, according to which Group sales are expected to increase in a range of 7.0 to 10.0 percent compared with the previous year. At the Group level, adjusted EBITDA is expected to grow from 20.0 to 25.0 percent and adjusted EBIT between 24.0 and 29.0 percent.
About Demag Cranes:
Demag Cranes AG is one of the world's leading providers of industrial cranes, crane components, harbour cranes and port automation technology. Services, in particular maintenance and refurbishment services, are another key element of the Group's business activities. The Group is divided up into the three segments Industrial Cranes, Port Technology and Services and has the strong and established "Demag" and "Gottwald" brands. Demag Cranes sees its core expertise in the development and design of technologically advanced cranes and hoists as well as automated transport and logistic systems in ports, 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 joint ventures. In financial year 2005/2006, 5,680 employees generated sales of some EUR 987 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 included in the SDAX share index.
Demag Cranes. We Can Handle It.