Demag Cranes Reports Record Profit for Financial Year 2005/2006

• All financial targets achieved
• Significant improvement of profitability
• Dynamic growth in all segments
• Notable reduction of net financial debt
• Dividend proposal: EUR 1.00 per share
• Outlook 2006/2007: Group sales increase of 7 to 10 percent,
adjusted EBITDA 20 to 25 percent higher, adjusted EBIT up 24 to 29 percent

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Düsseldorf (euro adhoc) - In financial year 2005/2006, Demag Cranes
AG delivered sustained, profitable growth, thus fully meeting the
targets set by the Management Board. The positive results are mainly
attributable to the Group’s consistent focus on meeting the demands
of markets for new products, process optimisation and cost reduction
measures in addition to the favourable global economic developments.
CEO Harald J. Joos summarises the past year as follows: "The year
2006 was a milestone for the Demag Cranes Group. With extraordinarily
satisfactory business results, a rocketing start on the stock market
and the successful launch of new products, we have gained a further
edge on the competition and are ideally equipped for the future."

Order Intake and Sales Showing Dynamic Growth At EUR 1,054.0 million,
order intake of the Group was up by 14.4 percent over the prior year.
The order book as at 30 September 2006 amounted to EUR 305.6 million,
having grown 22.4 percent in the period under report. Thanks to
continuing keen demand for products and services, Group sales at EUR
986.9 million were 11.9 percent higher, thus strengthening the market
position of the Demag Cranes Group even further. As a result of
successful positioning in emerging markets and intensive
concentration on mature markets, the Group achieved sales growth in
all relevant sectors. The sales share in emerging markets remained
unchanged at 28 percent in financial year 2005/2006; the BRIC
countries (Brazil, Russia, India and China) included in this figure
recorded a sales increase of 22 percent.

Significant Improvement in Earnings Figures and Profitability The
Group achieved earnings before interest, taxes as well as
depreciation and amortisation (EBITDA) of EUR 105.6 million, which
corresponds to outstanding year-on-year growth of 24.4 percent. The
EBITDA margin was up by 1.1 percentage points to 10.7 percent. The
very positive results are mainly attributable to the Group's focus
on, for example, process optimisation, product standardisation,
component modularisation and optimisation measures in purchasing and
production. Adjusted EBIT rose by 32.0 percent to EUR 84.5 million.
The EBITDA margin improved as a result by 1.3 percentage points to
8.6 percent.

Earnings before taxes increased considerably to 32.5 million (prior
year: EUR 2.5 million), which, however, were still impacted by
one-off effects such as those relating to the Initial Public Offering
(IPO) and stock exchange listing. Correspondingly, net income after
tax was notably higher at EUR 22.1 million (prior year: EUR 0.5
million). The resulting earnings per share amount to EUR 1.04.

Industrial Cranes Segment: Significant Improvement in Profitability
The Industrial Cranes segment benefited, as expected, from a
generally favourable economic environment and was able to expand its
strong market position even further. At EUR 478.2 million, order
intake of the Group was up by 8.8 percent over the prior year. The
order book increased by 15.3 percent to EUR 164.0 million as compared
to 30 September 2005. This positive development was driven by
increased demand for standard cranes, process cranes, KBK crane
construction kits and drives. Price stabilisation further supported
sales, with the United States of America, Italy, Brazil and South
Africa showing particularly strong growth. Adjusted EBIT in the
Industrial Cranes segment totalled EUR 10.8 million, having developed
at an exceptional rate of 730.8 percent. The EBIT margin grew
eight-fold to 2.4 percent over the 0.3 percent of the prior year.
This reflects the success of the restructuring programme and various
optimisation and cost reduction measures.

Port Technology Segment: Record Sales and Strong Increase in Earnings
Throughout the financial year, the order situation in the Port
Technology segment continued to be extremely positive. Order intake
was up by 23.7 percent at EUR 300.5 million in the year under report.
The order book totalled EUR 104.0 million, being 37.6 percent higher
compared to the prior year’s figures. The fact that sales grew by
13.7 percent to a record level of EUR 269.6 million confirmed the
success of the Group's market and product strategies. Sales were also
pushed by a growing volume of global cargo handling. As a
consequence, especially the Group's activities in Spain, the
Netherlands as well as North and South America benefited in the
period under report. Adjusted EBIT jumped 20.1 percent to EUR 24.5
million. This represents an over-proportional sales growth rate that
led to an EBIT margin increase of 0.5 percentage points to 9.1
percent.

Services Segment: Further Growth through Outsourcing The Services
segment was favourably influenced by the expansion of its worldwide
network as well as a positive economic climate. Consequently, order
intake at EUR 275.3 million was 15.2 percent over the figure of
financial year 2005/2006. Order book reached EUR 37.5 million, having
grown by 17.6 percent as compared to 30 September 2005. Sales were up
by 14.4 percent to EUR 268.3 million. One of the main growth drivers
was the ongoing trend among customers to outsource their maintenance
and modernisation operations. This led to the acquisition of
additional maintenance contracts in the period under report. On a
regional basis, sales went up in particular in the United States of
America and in Germany. Adjusted EBIT improved year-on-year by 16.5
percent to EUR 49.3 million. Profitability was also boosted in this
segment. At 18.4 percent, the EBIT margin was 0.4% higher over the
same period in the prior year.

Notable Reduction in Net Financial Debt Due to the positive cash flow
before financing, net financial debt was reduced by 25.2 percent to
EUR 133.3 million. Due to the simultaneous increase in shareholders’
equity by 17.6 percent to EUR 188.9 million, the gearing (net
financial debt to total equity) improved by 40.4 percentage points to
70.6 percent

Dividend Payment of EUR 1.00 Planned The Management Board of Demag
Cranes AG would like shareholders to participate in the success of
the Company to reflect performance. Already in the context of the
IPO, it was announced that between 50 and 60 percent of the adjusted
annual net income for financial year 2005/2006 would be distributed
in the form of dividends. Staying true to its promise, the Management
and Supervisory Boards will propose to the General Shareholders’
Meeting a dividend to the amount of EUR 1.00, which corresponds to a
dividend yield of 4.5 percent of the offer price at the time of the
IPO. For the coming years, we pursue a dividend policy with a pay-out
ratio of 35 to 45 percent of the adjusted annual net income.

Slight Increase in the Number of Employees As at 30 September 2006,
the Group had a total of 5,680 permanent employees (excluding
temporary employees, apprentices and trainees). Compared to the prior
year, this represents an increase of 2.9 percent. The number of
employees in the Port Technology segment increased notably. Faced
with the sharp increase in production volume, we have mainly focussed
on the recruitment of specialists for our production, inventory
management, and customer services.

Outlook: Further Increases in Sales and Earnings Expected For the
course of financial year 2006/2007, the Management Board anticipates
a stable economic environment with strong growth trends in some
markets. From today’s point of view, it can be assumed that demand
for the products and services in the three segments, Industrial
Cranes, Port Technology and Services, will continue to increase,
particularly due to the impact of the market and product initiatives
that have been launched. Particular confidence is gained from the
positive order intake for new products in the Industrial Cranes and
Port Technology segments, including order intake for fully automated
applications. For the Services segment, the Management Board of Demag
Cranes AG anticipates a continuing trend among customers towards
outsourcing, which is expected to result in increased coverage of the
Company’s own installed base with maintenance and modernisation
contracts. With more than 650,000 "Demag" electric cranes and hoists
in operation, Demag Cranes has the largest installed base worldwide.
The medium-term goal is to increase service coverage from
approximately 40 percent this financial year to 50 percent.

In view of this growth, the Management Board of Demag Cranes AG
expects sales to increase in a range from 7.0 to 10.0 percent in
financial year 2006/2007 compared to the prior year. Demag Cranes
expects the operating result to continue to improve significantly as
a result of its strategy of sustained profitable growth. At the Group
level, adjusted EBITDA is expected to grow from 20 to 25 percent and
adjusted EBIT between 24 and 29 percent. A considerable improvement
in profitability is particularly expected in the Industrial Cranes
segment. CEO Joos emphasises, "After successfully refocusing the
Group on sustained profitable growth, we are ideally placed to expand
our leading market positions even further and to create added value
for our shareholders, customers and employees."

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 core element of its business activities. The
Group is divided up into the three segments: Industrial Cranes, Port
Technology and Services. It 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.

Cautionary note regarding forward-looking statements

This press release contains forward-looking statements on Demag
Cranes AG, its subsidiaries and associates, and on the economic and
political conditions that may influence the business performance of
Demag Cranes AG. All these statements are based on assumptions made
by the Management Board using information available to at the time.
Should these assumptions prove to be wholly or partly incorrect, or
should further risks arise, actual business performance may differ
from that expected. The Management Board therefore cannot assume any
liability for the statements made.

end of announcement euro adhoc 25.01.2007 07:30:00
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ots Originaltext: Demag Cranes AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Nikolai Juchem
Head of Corporate Communications and Marketing
Telefon: +49(0211) 7102 1019
Email: nikolai.juchem@demagcranes-ag.com

Branche: Machine Manufacturing
ISIN: DE000DCAG010
WKN: DCAG01
Index: CDAX, SDAX, Prime All Share, Classic All Share
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