MAN Group: 2007, the most successful year ever in the Group's history
Operating profit €1,730 million (up from €1,105 million) / Return on sales 11.2 percent (up from 8.5 percent)
- Order intake up 17 percent, sales up 19 percent
- Earnings per share €8.24 (up 63 percent)
- For the first time over 100,000 vehicles shipped out
- Over 1,300 new jobs created
- New truck plant inaugurated in Poland
- Greater financial flexibility after rating (A–/A3)
- 2008: a further rise in sales and operating profit budgeted
2007 was another record period in the 250-year history of the MAN Group. All the important performance indicators were significantly upgraded: oper-ating profit surged 57 percent to a new alltime high of €1,730 million (up from €1,105 million). ROS was for the first time double-digit at 11.2 percent (up from 8.5) while ROCE climbed from 28.0 to 31.9 percent. Order intake (up 17 percent) and sales (up 19 percent) likewise mounted appreciably. And, for the first time over 100,000 vehicles were shipped out within one fiscal year. This outstanding performance was driven by the strong demand for transport services and energy combined with internal measures aimed at enhancing profitability. Stockholders, too, will benefit as the Executive Board will recommend to the Supervisory Board the distribution of a good 35 percent of the EpS to be proposed to the annual general meeting.
"The MAN Group's focus on the high-growth transport, propulsion and energy sectors is paying off and the Group is perfectly poised for further expansion on an international scale," commented CEO Håkan Samuelsson on the occasion of the annual accounts presentation. "This year we are cele-brating our 250th birthday and our successful corporate history reflects not only a long tradition and high reliability but also our innate ability to absorb change and embrace opportunities. With such dynamism, MAN faces a strong future."
The prior-year high order intake of €16.6 billion was surpassed by 17 percent to reach €19.4 billion. Demand stayed very strong for large diesel engines (up 29 percent), especially for marine propulsion purposes. Commercial Vehicles reported 26 percent higher orders, with demand for trucks accelerating further in C&E Europe and Russia. Specifically for these markets MAN has since 2007 been running a new Polish truck facility as an addi-tional production plant which in double-shift operation can build up to 30,000 units annually. With its production facilities working to capacity, Turbo Machinery managed to book new orders at the 2006 level of €1.5 billion; order influx at Industrial Services shrank to €1.6 billion after this business area had been awarded a particularly high plant construction contract in 2006.
The MAN Group raised its sales by 19 percent to €15.5 billion (up from €13.0 billion). Commercial Vehicles advanced by €1.7 billion or 20 percent to €10.4 billion of which €512 million originated from the sale of leased vehicles from MAN Finance's fleet. Excluding this one-off factor sales of Commercial Vehicles rose by 14 and the MAN Group’s by 15 percent. Working to the limits of its capacities, Diesel Engines also lifted sales a double-digit 21 percent to €2.2 billion. Turbo Machinery reported sales of €1.1 billion (up 22 percent). This latter business area is currently building extra capacities in the form of a production plant in China to come on stream in the fall of 2008. The 5-percent sales growth to €1.4 billion at Industrial Services resulted from extended service business. All production plants were stretched to the limits of their capacity in 2007 which inevitably curbed further possible sales increases. As a consequence, orders on hand jumped to a new record of €14.8 billion (up from €11.3 billion).
At December 31, 2007, the MAN Group employed a workforce of 55,086 including temporary employees and thus created in 2007 altogether 1,371 new jobs; in order to flexibly respond to the sharp rise in production, the number of temporary/loaned labor was upped by 606 to 4,031 as of year-end.
The structural improvements achieved have prompted MAN to step up the profitability benchmark for all business areas and for the Group as such. For the years ahead, the ROS benchmark is now 8.5 percent (up from 6.0) for the average of an economic cycle. Within the MAN Group the bandwidth for the ROS benchmark across an economic cycle is ±2 percentage points. "We are confident that with the flexibility now in place and the profitability achieved in 2007, we can sustain this 8.5-percent average," added Håkan Samuelsson.
In strict pursuance of its strategic focus on Transport-Related Engineering MAN again undertook a number of acquisitions and divestments in the course of 2007. Industrial Services' steel business was sold to CCC Steel GmbH & Co KG, Hamburg. Following the sale, MAN holds a 33.3-percent stake in the new company. To support Commercial Vehicles' growth strategy MAN Finance International GmbH added vehicle rental to its business by acquiring an around 25-percent stake in EURO-Leasing GmbH.
Fiscal 2008 is likely to see a steady inflow of orders at the achieved high level. Sales are predicted to rise by 5+ percent, the operating profit is ex-pected to climb, too. Says Håkan Samuelsson: "We are looking to an ROS at the 2007 level and hence our anniversary year 2008 should again turn out to be a record 12 months."
During the past weeks, the MAN Group has gone through a corporate rating process: The two agencies, Standard & Poor’s and Moody’s, have rated MAN at A– and A3, respectively. These grades place MAN among the 10 top-rated DAX industrial corporations. The ratings assigned further improve the MAN Group’s access to the capital market and will add to MAN’s financial flexibility and a more diversified finance structure.
Die MAN Gruppe ist eines der führenden europäischen Industrieunternehmen im Bereich Transport-Related Engineering mit jährlich rund 15,5 Mrd € Umsatz (2007). MAN ist Anbieter von Lkw, Bussen, Dieselmotoren, Turbomaschinen sowie Industriedienstleistungen und beschäftigt weltweit rund 55 000 Mitarbeiter. Die MANUnternehmensbereiche halten führende Positionen auf ihren Märkten. Die MAN AG, München, ist Mitglied im Deutschen Aktienindex Dax der 30 führenden deutschen Aktiengesellschaften