Demag Cranes plans an IPO before the end of first-half 2006

Düsseldorf,   16. May 2006

  • Listing on the sub-segment of the official market with additional post-admission obligations (Prime Standard) on the Frankfurt Stock Exchange targeted
  • Strong growth opportunities in Port Technology and additional potential for expansion in Services
  • Strong 1H-2006 performance emphasizes the profitable growth trend
  • Listing on the sub-segment of the official market with additional post-admission obligations (Prime Standard) on the Frankfurt Stock Exchange targeted
  • Strong growth opportunities in Port Technology and additional potential for expansion in Services
  • Strong 1H-2006 performance emphasizes the profitable growth trend
    • Sales grew by approximately 19 percent compared to the first half of fiscal year 2004/2005
    • Adjusted EBIT up by approximately 64 percent compared to the first half of fiscal year 2004/2005

Demag Cranes AG, one of the world’s leading providers of industrial cranes and port technology, is planning an IPO before the end of the first-half of 2006 depending on capital market trends. The Company is striving for a listing on the Prime Standard of the Frankfurt Stock Exchange. There are no plans for a capital increase. The Company will release further details regarding the IPO at a later date.

Harald J. Joos, CEO of Demag Cranes AG, welcomes the decision to seek a stock market listing: “Demag Cranes offers outstanding technologies and is one of the global market leaders. We focus on profitable growth, primarily in the Port Technology and Services segments as well as in industrial growth markets, and are as such best prepared for the planned IPO.“

Demag Cranes provides industrial cranes and crane components under the ”Demag” brand and harbor cranes and port automation technology under the ”Gottwald” brand. The Services segment, which concentrates on the maintenance and refurbishment of cranes, completes the Company’s portfolio. Demag Cranes is one of the market leaders in all three segments. The Group has production facilities in 16 countries globally and a sales and service network that is present in more than 60 countries.

Demag Cranes is well-positioned to benefit from strong growth in global container transport, the trend towards the expansion of port infrastructure, and the increasing demand in industrial growth markets. Given the large number of Demag and Gottwald cranes already installed, Demag Cranes has an excellent platform to further expand its high-margin Services business.

Demag Cranes AG is the management holding company that heads the Industrial Cranes, Port Technology and Services segments. The historical roots of Demag Cranes date back to 1819. Demag Holding S.à r.l., Luxembourg, in which private equity investment funds advised by Kohlberg Kravis Roberts & Co. LP (KKR) have an indirect 81 percent stake, acquired the Demag Cranes AG business operations together with other businesses from Siemens in 2002.

 Dynamic earnings underscore profitable growth trend

Demag Cranes has improved its competitive edge and earnings potential in recent years. The focus was on product innovations, expanding its global business (particularly in China) and measures to increase efficiency.
In fiscal year 2004/2005 (year ended September 30, 2005)* Demag Cranes’ sales and earnings grew significantly. The Group, with its 5,520 employees (as of September 30, 2005) recorded total sales of
€ 881.6 million (Prior year: € 810.1 million) and Adjusted EBIT of € 64.0 million (prior year: € 34.1 million).

First six months: Noticeable sales growth in profitable growth segments

The favorable trend persisted in the first six months of the current fiscal year. Ongoing organic growth led to sales growing by slightly less than 19 percent compared to the first half of fiscal year 2004/2005 to reach € 465.2 million. All three segments achieved double-digit growth in sales: Port Technology saw sales increase around 31 percent, Services increased by around 16 percent and Industrial Cranes sales grew by around 15 percent. Adjusted EBIT increased more than sales, by around 64 percent to € 30.9 million. The Adjusted EBIT margin increased significantly in the first six month of the current fiscal year, rising by 1.8 percentage points to 6.6 percent. This result reflects the expansion in high-margin businesses and the consistent application of measures to enhance earnings power.

In preparing for the scheduled IPO, the Demag Cranes AG Group intends to relocate its head office from Wetter (Ruhr) to Dusseldorf.

About Demag Cranes AG

The Demag Cranes Group is one of the world’s leading providers of industrial cranes and crane components, harbor cranes and port automation technology. Services, in particular maintenance and refurbishment services, are another core element of its business activities. The Group, which is divided into the Industrial Cranes, Port Technology and Services segments, has strong brands (“Demag” and “Gottwald”). Demag Cranes believes that it is a global market leader by virtue of its innovation and technology leadership, its excellent product and service quality and its close and long-term customer relationships. 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 fiscal year 2004/2005, the Group reported total sales of € 881.6 million and an Adjusted EBIT of
€ 64.0 million.*

Selected Financials (Combined Financial Statements, € in millions)*

  2005 2004 Δ in %
Combined Financial Statements
Group      
Sales € 881.6 m € 810.1 m 8.8

Adjusted EBITDA*

€ 84.9 m € 55.9 m 51.9
Adjusted EBIT* € 64.0 m € 34.1 m 87.7
 

Industrial Cranes

     
Sales € 409.9 m € 393.6 m 4.1

Adjusted EBIT*

€ 1.3 m € -15.9 m -
 

Port Technology

     
Sales € 237.1 m € 194.9 m 21.7
Adjusted EBIT* € 20.4 m € 15.5 m 31.6
 
Services      
Sales € 234.6 m € 221.6 m 5.9

Adjusted EBIT*

€ 42.3 m € 34.4 m 23.0
 

Selected Financials (as of Sept. 30)

Combined Financial Statements
  H1 2006 H1 2005 Δ in %
Group      
Sales € 465.2 m € 392.1 m 18.6
Adjusted EBITDA* € 40.8 m € 28.9 m 41.2
Adjusted EBIT* € 30.9 m € 18.8 m 64.4
 

 

* All financial figures have been derived from the Combined Financial Statements of DCC HoldCo 3 (drei) GmbH and Gottwald HoldCo 3 (drei) GmbH (“Demag Cranes’ Combined Financial Statements”), prepared in accordance with International Financial Reporting Standards (IFRS). On the group level, “Adjusted EBIT” and “Adjusted EBITDA” are presented to eliminate the effects of the application of purchase accounting, restructuring and consulting expenses primarily relating to restructuring measures, severance and redundancy expenses, profits (losses) from divestments and certain other expenses and income which management believes are not normally recurring or not in the normal course of business, even though some items have resulted in expenses or income in more than one period. As presented in Demag Cranes’ Combined Financial Statements, the EBIT of each segment (Industrial Cranes, Port Technology and Services) excludes the effects of these items and segment EBIT is therefore referred to in this press release as “Adjusted EBIT”. Adjusted EBIT and Adjusted EBITDA are not measures as defined under IFRS or United States Generally Accepted Accounting Principles (‘‘U.S. GAAP’’). The definitions of Adjusted EBIT and Adjusted EBITDA used by Demag Cranes may differ from similar definitions used by other companies and thus may not be fully comparable to similarly titled measures of other companies.

 


 

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