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MAN raises profitability targets appreciably

(PresseBox) (München, ) Retargeted for 2010: ROS 8.5 percent (until now 6 percent), ROCE 22 percent (up from 18 percent) Structural improvements planned to save €250 million Order intake January through April up 21 percent to €6.4 billion Four-month sales 2007 up 11 percent to €4.3 billion Prospects for 2007: 10 percent sales hike and accelerated earnings improvement

The MAN Group is appreciably raising its targeted returns with a new ROS set at 8.5 percent (until now 6.0 percent) as average within one business cycle to be achieved by 2010. For economically buoyant times, the figure is double digit. “In order to attain this new benchmark, we will have to implement structural improvements of €250 million over the coming years,” announced Håkan Samuelsson, MAN AG’s CEO, at today’s annual general meeting in Munich.
In future, the ROCE target will be at least 22 percent (until now 18 percent). Among the items on the AGM agenda is the election of the stockholder representatives on MAN AG’s Supervisory Board.

Order intake and sales booming
The surge in order intake by the MAN Group’s manufacturing areas continued through April 2007 with double-digit growth rates in a number of instances. For the first four months, aggregate order intake rose 21 percent to €6.4 billion and sales by 11 percent to €4.3 billion. Especially Commercial Vehicles (up 32 per-cent) and Diesel Engines (up 17 percent) reported vigorous growth. Orders awarded to Turbo Machinery substantially remained at the year-earlier level. Due to several megacontracts booked in Q1/2006, four-month order inflow in 2007 at Industrial Services was as yet down by 29 percent but major project contracts are expected in the course of 2007. As of the end of April, the MAN Group’s order backlog scaled to a new all-time high of €13 billion (up 15 percent).

In his address, Håkan Samuelsson cited among the success factors accounting for the solid business performance, MAN’s focus on the growth markets of trans-port, propulsion, and energy. The related moves included the sale of MAN Roland Druckmaschinen and MAN TAKRAF as well as the planned disposal of In-dustrial Services’ steel-trading business. In all and together with the divestments in 2005, MAN has thus shed noncore business with a sales volume of €3.6 billion and bolstered its profitability. Today, MAN’s business centers on commercial vehicles, diesel engines, and turbo machinery as well as industrial services. “We have created a capable, sustainable and manageable structure and we have set up a solid base for further bankable growth,” emphasized the CEO. The growth has also had an impact on jobs and today’s MAN Group presently has a world-wide workforce of 50,928 (up from 50,290 at year-end 2006).

Steps for further improving profitability The new ROS target applies to all four business areas and must be achieved on average by 2010, the ROCE benchmark of 22 percent being the minimum. To upgrade profitability the Executive Board has defined a number of essential
measures: Commercial Vehicles will further strengthen its operations in such growth markets as C&E Europe and expand its sales and service networks. Diesel Engines and Turbo Machinery will rigorously broaden worldwide their profitable service business. At Industrial Services low-margin activities will be improved. “We have set ourselves ambitious targets for both the Group and the individual business areas; in view of what we have so far achieved, these targets are realistic,” added Samuelsson. Parallel to these profitability targets it is also planned to push ahead with the expansion of all business areas; for the period up to 2010, this represents an annual growth of 10 percent.

Eco-friendly hybrid bus successfully launched MAN took the opportunity of the stockholders’ meeting to unveil publicly a newly developed city bus with hybrid drive. In the course of lengthy trial operations in Nuremberg, previous-generation vehicles of this prototype have achieved fuel savings of between 20 and 25 percent, compared with the best diesel engine drive. Particularly in stop-and-go city traffic, vehicles propelled by MAN’s hybrid system throttle appreciably their fuel consumption.
The broad use of hybrid propulsion systems under such conditions would be an important contribution toward lowering CO2 emissions in city traffic.

In terms of environmental protection CEO Samuelsson announced major engineering efforts on the part of all the business areas. “A large share of our expen-ditures is directed at engineering our products for improved fuel efficiency, economy and environmental compatibility. In fact, the climate issue is also a source of vast opportunities for the MAN Group. With its turbo machines and chemical reactors, MAN builds the key components for producing synthetic diesel from, e.g., natural gas or biomass (GTL or BTL). BTL (biomass to liquid) is seen as a significant approach for producing from renewable sources a fuel that is CO2 neutral. Almost all kinds of biomass may be used and per cultivation hectare, such biomass is far more productive than today’s biofuels.

The first BTL reactors have been delivered to Choren Industries where they constitute the core components of the world’s first industrial-scale BTL complex which Choren is presently constructing in Freiberg, Saxony. The world’s biggest GTL complex is currently under construction in Qatar; the turbo machines and reactors are being supplied by MAN.

Prospects for 2007
For all of 2007, MAN expects order intake to remain stable at a high level; a sales growth of 10 percent is targeted. As to operating profit, this is again predicted to outpace sales which would mean an ROS at the level of the first quarter (9.6 percent). In this its pre-jubilee year, MAN is therefore heading for a new record. Next year, 2008, the MAN Group will be celebrating its 250th anniversary.

The speech given by Håkan Samuelsson at the annual general meeting will be available at If required the press release may be sent by e-mail
(Phone: +49. 89. 36098-111).


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