Earnings before interest and tax (EBIT) was EUR 13.2 million in the period under review compared with EUR 135.8 million in financial year 2007/2008. This clearly reflects the negative impacts of the financial and economic crisis on the earnings of the Demag Cranes Group.

Part of the decrease is due to our factories operating below capacity. In addition, EBIT is reduced by EUR 49.1 million in restructuring expenses and EUR 5.3 million in other operating adjustments. This includes EUR 3.7 million in severance expenses relating to the departure of CEO Harald J. Joos with effect from 31 March 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.

Operating EBIT came to EUR 67.6 million in the period under review, down from EUR 137.5 million in the previous year. A focus of attention in the normal course of business is on efficient utilisation of factory capacity. Faced with diminishing order intake and revenue, however, we are currently concentrating on optimising working capital and cash flow. We are therefore accepting any resultant temporary underutilisation of production capacity with negative implications for EBIT. In May, we announced a restructuring programme that targets precisely this aspect and lowers the break-even point in each segment. This is to be achieved by substantially reducing fixed and variable costs in the Industrial Cranes and Port Technology segments. The restructuring programme aims to save up to EUR 60 million with packages of measures to secure the long-term financial stability of the Group. We have also adopted the objective of more closely dovetailing the entire organisation, for example, by uniting management of shared services across the Group. This relates to services such as IT, human resources and purchasing. In this way, we are responding to the uncertain market situation and expectations that the crisis in our industry may continue for some time by adding further flexibility to our capacity.

With regard to the Port Technology segment, we concluded negotiations for a compensation agreement and redundancy scheme in connection with the restructuring process in early July.

Negotiations with employee representatives on the Works Council in the remaining parts of the Group were brought to a successful conclusion on 23 October 2009. Further information is provided in the Report on Post-Balance Sheet Date Events.

Operating EBIT was distributed among the segments as follows:

In the Industrial Cranes segment, operating EBIT decreased by EUR 18.0 million or 37.8 percent to EUR 29.7 million in financial year 2008/2009. We generated an above-average intake of orders in the previous financial year for lower-margin Process Cranes delivered to customers after an average production time of approximately twelve months, producing a further shift in the segment’s product mix. This and the underutilisation of our factories reduced the operating EBIT margin, which stood at 5.4 percent.

In the Port Technology segment, operating EBIT dropped sharply compared with financial year 2007/2008. The main causes of the EUR 36.9 million fall in earnings compared with the previous year are lower revenue and further decreases in production resulting in lower utilisation of factory capacity, both of which are consequences of the difficult business situation relating to ports.

In the Services segment, fewer spare parts were sold due to lower utilisation of customers’ cranes. As the spare parts business generates disproportionately large EBIT margins, this led to a EUR 15.2 million or 20.2 percent decrease in operating EBIT compared with the previous year. Despite the negative business environment, the operating EBIT margin for financial year 2008/2009 was within our medium-term expectations at 20.2 percent.

Group operating EBITDA fell by 44.1 percent from EUR 160.0 million in the previous year to EUR 89.5 million in financial year 2008/2009.

Cost of sales decreased by EUR 66.4 million in financial year 2008/2009 compared with the previous year. This mainly reflected the year-on-year drop in revenue. Cost of sales includes EUR 22.6 million in restructuring expenses.

Selling expenses in financial year 2008/2009 were almost on a par with the previous year, at EUR 139.3 million. As a percentage of Group revenue, however, selling expenses increased from 11.3 percent to 13.3 percent. The main factor here was the lower revenue. Contained in the selling expenses are EUR 6.6 million in restructuring expenses.

General and administrative expenses at the Demag Cranes Group were down by a slight EUR 2.0 million from EUR 76.2 million in the previous year to EUR 74.2 million in financial year 2008/2009. General and administrative expenses included restructuring expenses of EUR 12.5 million.

Expressed as a percentage of revenue, research and development expenses rose to 2.6 percent (2007/2008: 1.6 percent). Research and development expenses increased by EUR 7.8 million or 39.5 percent, from EUR 19.7 million to EUR 27.6 million. This includes EUR 6.9 million in restructuring expenses, mainly relating to impairment charges on capitalised development costs in the Port Technology segment. Eliminating these amounts, research and development expenses grew slightly as a percentage of revenue, to 1.9 percent. Research and development expenses mainly relate 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). An additional EUR 0.6 million in research and development expenses was capitalised in the Port Technology segment in financial year 2008/2009 (2007/2008: EUR 0.7 million).

Other operating income and expenses amounted to a net EUR 2.5 million in financial year 2008/2009, down from EUR 5.9 million in the previous year. The decrease was mainly a result of exchange rate effects and lower gains on asset disposals.

Interest and similar income/expenses, net, fell from EUR 12.0 million in the previous year to EUR 11.1 million in the period under review. The main factor here consisted of lower interest rates on the Company’s master loan agreement.

Despite EUR 49.1 million in restructuring expenses, the Demag Cranes Group still generated earnings before tax (EBT) of EUR 2.1 million in financial year 2008/2009 (2007/2008: EUR 123.8 million).

Operating income after tax came to EUR 42.8 million in financial year 2008/2009, compared with EUR 85.2 million in the previous year.

As the adverse effects of the economic and financial crisis and the restructuring expenses already incurred have had a heavy impact on net income after tax in financial year 2008/2009, the Management Board and the Supervisory Board have jointly decided not to propose a dividend for financial year 2008/2009 at the Annual General Meeting.

The effective tax rate stood at 44.1 percent in financial year 2008/2009 compared with 34.7 percent in the previous year. In absolute figures, this corresponds to EUR 0.9 million as against EUR 42.9 million in the previous year. The lower base represented by the net income before tax of EUR 2.1 million compared with EUR 123.8 million in the previous year means that the Group’s foreign companies and factors such as non-tax-deductible expenses account for a larger share of the total.

Operating earnings per share (EPS) consequently amount to EUR 2.01, down from EUR 4.00 in the previous financial year.