MAN Ferrostaal with record result

04.04.2008 -

In 2007, with earnings before interest and taxes (EBIT) of 179 million Euro (previous year: 119 million Euro), MAN Ferrostaal registered the best result in the company's history. There was a moderate rise in sales, to Euro 1.445 million (previous year: 1.378 million Euro), while the return on sales climbed significantly to 12.4% (up from 8.6% the previous year). As anticipated, the 1.556 million Euro worth of incoming orders remained below the extraordinarily high figure for the previous year (1.982 million Euro). Still, once again it exceeded the current sales figure. The orders in hand thus rose 3% over the previous year and are currently valued at more than 2.415 million Euro (previous year: 2.342 million Euro ).

"This high result is essentially the result of three sources," according to Michael Beck, CFO at MAN Ferrostaal, at a press conference on April 4: "We succeeded in improving our operational business in both lines – plant construction and services. Our investments in the methanol and ammonia plants we built in the Caribbean and the Middle East are making steady contributions to profits. And thirdly, the business realignment measures taken in recent years have made our company fit. Thanks to these measures, we have rid ourselves of businesses with weak or negative contributions to results."

With the improved result, the company's return figures have improved as well. As a result, the return on sales (ROS) rose 44%, even after the ROS had nearly doubled in the previous year. The return on capital employed (ROCE) rose from 31.2% in 2006 to 36.9%. The positive trend is also reflected in the cash flow: free cash flow rose significantly to 257 million Euro .

Incoming orders for the MAN Ferrostaal Group totalled 1.556 million Euro in 2007, 21.5% below the previous year's very high level (1.982 million Euro). The previous year's figure was marked by the second largest order in the history of the company to date, a petrochemical complex in Trinidad. The greater part of the orders for 2007 stems from the Projects line, where orders amounted to 849 million Euro (previous year's figure: 1.362 million Euro). Incoming orders in the Services line amounted to 707 million Euro, for an increase of 14% over the figure for 2006 (620 million Euro). Once again, the largest share of orders received came from abroad (76%). The most important regions proved to be Latin America with 39%, the MENA region with 15%, and the EU (excluding Germany), with 9%. 24% of incoming orders were received from within Germany. The orders on hand increased by 3% to 2.415 million Euro (previous year: 2.342 million Euro), 1.443 million Euro of this in the Projects business line, and 972 Euro in the Services line.

Sales for the MAN Ferrostaal Group, totalling 1.445 billion Euro, exceeded the previous year's level by 5% (1.379 billion Euro). This positive trend received a particular boost from the Services line. The net sales achieved here amounted to Euro 751 million, a figure 21% above the previous year's value (Euro 619 million). The trend in the Projects business line, on the other hand, ran in the opposite direction. Sales here amounted to 694 million Euro (previous year: 760 million Euro). For the most part, sales in 2007 were realized abroad (81%). The most important regions in this case were Latin America with 38%, the MENA region with 14% and the EU (excluding Germany), with 8%. 19% of sales came from Germany.

A dominant factor for the business of MAN Ferrostaal is the construction of large-scale industrial plants. The company recently completed construction of a methanol plant in Oman, with an order volume of USD 500 million, and is currently working on one of the largest orders in the company's history: the construction of a petrochemical complex in Trinidad. To date, the company has already constructed four methanol plants for the local company, Methanol Holdings Trinidad Ltd. When completed, the plant complex currently under construction will produce ammonia, urea-ammonium nitrate and melamine. The complex consists of seven individual plants and represents an investment volume of more than USD 1.3 billion. The share of this project for which MAN Ferrostaal is directly responsible is valued at around USD 1.1 billion. Another ongoing large-scale project is the construction of an ammonia plant in Venezuela, an order valued at nearly USD 500 million. The company's oil and gas projects currently under way total nearly 600 million Euro.

"For 2010, we have our sights set on a sales volume of 2 billion Euro," stated Dr. Matthias Mitscherlich, Chairman of the Executive Board of MAN Ferrostaal and Member of the Executive Board of the MAN Group. "We expect that a considerable portion of this will continue to come from the plant construction area, where our efforts are concentrated on energy, fuels, and petrochemicals. We are currently bringing our efforts in line with renewable energies, particularly solar power plants and biofuels."

About MAN Ferrostaal AG:

MAN Ferrostaal is a worldwide supplier of industrial services for the construction of large-scale industrial plants and machine supply. As a general contractor for plant construction, the company offers project development, project management and financing solutions for turnkey plants in the areas of solar thermal power plants as well as biofuels, petrochemical and industrial plants. In ccoperation with manufacturers of machines and production lines, MAN Ferrostaal offers sales and services in the areas of automotive industries, print and packaging, piping, ships and transport solutions. With 4,200 employees MAN Ferrostaal is represented in more than 60 countries. The company achieved a turnover of EUR 1.4 billion in 2007.

MAN Ferrostaal is a subsidiary of MAN Aktiengesellschaft, Munich. The MAN Group is one of Europe’s leading manufacturers of engineering equipment and vehicles, generating annual sales of around EUR 16 billion. MAN supplies products, systems and services to the capital goods industry and employs approx. 55,000 people worldwide. The core areas operated by the MAN Group, Commercial Vehicles, Industrial Services, Diesel Engines and Turbomachines, all hold leading positions in their markets. MAN is a member of the DAX German Share Index, Germany’s top 30 public limited companies.