Earnings before interest and tax (EBIT) amounted to EUR 50.2 million in the period under review compared with EUR 13.2 million in financial year 2008/2009. The prior-year figure had been pushed down by restructuring expenditure of EUR 49.1 million recognised in the third quarter of 2008/2009.

The Management Board uses operating EBIT as a key indicator for management of the Group. Operating EBIT excludes purchase accounting depreciation and amortisation, comprising the impact on depreciation and amortisation of fair-value adjustments to assets acquired in business combinations. It also excludes any one-off effects, such as severance and restructuring expenses.

The Demag Cranes Group generated operating EBIT of EUR 54.2 million in financial year 2009/2010 (2008/2009: EUR 67.6 million).

Operating EBIT was distributed among the segments as follows:

In the Industrial Cranes segment, operating EBIT declined by 83.8 percent in financial year 2009/2010, from EUR 29.7 million to EUR 4.8 million. We achieved a key goal of our restructuring programme by lowering the break-even point to revenue of around EUR 470 million. The year-on-year decline in operating EBIT is the result of significantly lower revenue.

In the Port Technology segment, operating EBIT rose from minus EUR 14.8 million in financial year 2008/2009 to EUR 0.6 million in financial year 2009/2010. The following two factors contributed to the rise:

• Through the restructuring programme, we were able to significantly improve our cost base in the Port Technology segment and lower the break-even point to around EUR 200 million.
• We also optimised manufacturing capacity utilisation at our factory by providing contract manufacturing for third companies. This enabled us to lower the break-even point further, as a result of which it is now less than EUR 200.0 million.

In the Services segment, operating EBIT declined by a marginal 3.1 percent, from EUR 60.2 million to EUR 58.3 million. The prior-year figure was higher partly because we sold fewer high-margin spare parts in the first quarters of the financial year.

Group operating EBITDA declined by 17.0 percent in financial year 2009/2010 to EUR 74.3 million (2008/2009: EUR 89.5 million).

The following table contains an overview of the Group’s key cost items. The “Operating” column shows the function costs adjusted for the effects of operating adjustments. You will find a detailed breakdown of the operating adjustments in the reconciliation of Group EBIT to operating EBIT.

Cost of sales dropped by EUR 111.5 million in financial year 2009/2010 to EUR 686.3 million from EUR 797.8 million a year earlier. This was due primarily to lower revenue. As a proportion of revenue, cost of sales declined at an above-average rate, from 76.2 percent to 73.7 percent.

Selling expenses in financial year 2009/2010 were EUR 12.9 million below the prior-year figure at EUR 126.4 million. As a percentage of Group revenue, they were almost on a par with the previous year at 13.6 percent.

General and administrative expenses at the Demag Cranes Group fell by EUR 14.6 million in financial year 2009/2010 to EUR 59.5 million.

Expressed as a percentage of revenue, research and development expenses declined from 2.6 percent to 1.8 percent. Prior-year research and development expenses included restructuring expenses of EUR 6.9 million, mainly relating to impairment charges on capitalised development costs in the Port Technology segment. Eliminating these amounts, research and development expenses fell slightly as a percentage of revenue, from 1.9 percent to 1.8 percent. Research and development expenses relate primarily to activities in the Industrial Cranes and Port Technology segments (for further information, see the Research and Development section under Development of Non-Financial Success Factors).

Other operating income and expenses amounted to a net EUR 4.1 million in financial year 2009/2010 compared with EUR 2.5 million in the previous year. The increase was mainly the result of the reversal of provisions.

Interest and similar income/expenses, net, fell from EUR 11.1 million in the previous year to EUR 8.3 million in the period under review. The main factor here was the lower interest rates on the Company’s master loan agreement.

The Demag Cranes Group generated earnings before tax (EBT) of EUR 41.9 million in financial year 2009/2010 (2008/2009: EUR 2.1 million).

Operating net income after tax amounted to EUR 30.5 million in financial year 2009/2010 compared with EUR 42.8 million in the previous year.

The effective tax rate was 33.7 percent in financial year 2009/2010 compared with 44.1 percent in the previous year.

Operating earnings per share (operating EPS) were EUR 1.44, down from EUR 2.01 in the previous financial year.

Earnings per share (EPS) were EUR 1.31, up from EUR 0.04 in the previous year.

Dividend Proposal to the Annual General Meeting

At the Annual General Meeting on 2 March 2011, the Management and Supervisory Boards of Demag Cranes AG will propose that a dividend of EUR 0.60 per share be paid for financial year 2009/2010 after no dividend was distributed for financial year 2008/2009.

This represents a total dividend distribution of EUR 12,703,795.80. The Management and Supervisory Boards will also propose carrying forward the Company’s remaining net income of EUR 63,052,413.34 to new account (2008/2009: EUR 56,665,762.19).