Market outlook
Forecasting the demand has become more challenging due to the macroeconomic uncertainties caused by the budget deficits and the level of public debt in Europe and the US. Despite the aforesaid, the demand for maintenance services is expected to be above last year’s level due to the higher capacity utilisation within customer industries. Also, the demand for new equipment is expected to grow compared to last year. However, due to the timing of large port crane projects, the quarterly Equipment order intake may fluctuate significantly.
Financial guidance
We forecast year 2011 sales and operating profit to be higher than in 2010. The increased technology and IT development will add approximately EUR 20 million to their cost base from 2011, while the benefits will follow from 2012 onwards.
President and CEO Pekka Lundmark said; “We can be satisfied with our top line growth and, in particular, with the fact that our order book is now 43.2 percent stronger than a year ago. A tight pricing environment and the cost inflation in combination with our own decisions to increase technology and IT development spending to ensure our competitiveness in the long run is, unfortunately, slowing down the bottom line growth. Increasing prices wherever possible and a tight cost control are clear priorities for us right now”.
“The ongoing consolidation of our industry took a significant step forward through the acquisition of the majority of Demag Cranes AG by Terex Corporation. We were of course following the situation very closely, but decided after a thorough assessment not to issue a competing offer. Several factors contributed to this conclusion, including historical performance and a predominantly European asset base that did not, in our view, warrant the required price when the world’s industrial growth is more and more driven by emerging markets, the uncertain economic outlook, especially within the euro-zone, and uncertainty over potential anti-trust risks.”