According to the company, the downturn in the global economic climate reduced the propensity of its global customers to invest, with the manufacturing segments, Industrial Cranes and Port Technology being the hardest hit. As a result, Group order intake decreased by almost 36.4%.although towards the end of the year, orders for Gottwald’s mobile harbour cranes had stabilised at a low level
Thanks to a good order book from the record 2007/2008 financial year, Demag managed to cushion the drop in Group revenue, which was down 14.5% from the previous year.
Due to the low utilisation of its manufacturing facilities with their fixed running costs, Group operating EBIT was significantly lower year on year at Euro 67.6m. Through ‘a rigorous focus’ on cash and working capital Demag ‘once again’ generated a positive free cash flow and reduced net debt almost completely. “By launching countermeasures in good time, we have laid the groundwork to safeguard the economic and financial future of the Group and to increase our competitive edge,” said Aloysius Rauen, Demag Cranes’ CEO.
Following conclusion of negotiations as part of its restructuring programme, Demag Cranes has now implemented the steps required to improve efficiency in the Industrial Cranes and Services segments. In addition, the Management Board has already begun to meet its declared objective of more closely dovetailing the entire organisation, with measures such as uniting management of shared services like IT, human resources and purchasing, across the Group.
In the next step to full integration, Demag will also combine the operating units within the Group to centre its focus more strongly on customers and improved efficiency. With this step, the Management Board aims to define clear management structures and responsibilities within the organisation, which not only promote quick and target-driven decision-making within the team, but also help to make decisions clear to the Group’s employees.
Subject to the uncertainties concerning the market environment, Demag’s Management Board assumes that revenue in financial year 2009/2010 will be down on financial year 2008/2009. This is due not least to the substantially lower order book in the Industrial Cranes segment as at October 1, 2009 compared to the beginning of financial year 2008/2009, especially for Process Cranes and Standard Cranes.
In financial year 2009/2010, the Management Board again expects that the Group’s operating EBIT margin will be in the mid single-digit range. The Demag Group has a solid financial base and is already well positioned in its key markets. Thanks to Group integration and the restructuring measures it has systematically introduced, the hope now is that the Group can not only be steered through the present crisis but that it will achieve a greater competitive edge for the future.