• In the third quarter 2007 PALFLINGER once again reports record results
• Demand for all PALFINGER systems remains strong
• Investments in the increase of capacities and efficiency are continued
• Continued growth expected for 2008





Bergheim, Salzburg, 8 November 2007

The PALFINGER Group continued to pursue its growth strategy during the first three quarters 2007. The uninterrupted strong demand for all systems, which resulted in a high order intake, supported PALFINGER in expanding its position in the market for loading, lifting, and handling solutions and in reporting record results once again.

Revenue rose to EUR 504.6 million, which is 15.4 percent above the figure of EUR 437.2 million for the same period of the previous year. EBIT rose by 23.8 percent to EUR 73.3 million, up from EUR 59.3 million in the same period of 2006. The EBIT margin amounted to 14.5 percent as compared to 13.6 percent in the previous year.

The main contributors to this favourable development of revenues and earnings were the crane business in Europe and the high capacity utilisation in production areas. “Our markets have continued to grow strongly during the last nine months and still show sufficient potential. Significant improvements as compared to the previous year could be achieved primarily in our main area, CRANES, but also in SERVICES and in the RAILWAY segment”, details CEO Wolfgang Anzengruber. “We are, however, particularly pleased with the positive tendencies in the HYDRAULIC SYSTEMS area. In the third quarter we have achieved sustainable turnaround in the PALIFT product division on the basis of the European market”, says Anzengruber.

The operating cash flow increased from EUR 38.2 million in the same period of the previous year to EUR 49.0 million in the period under review. The high investment volume in 2007 resulted in a reduction of free cash flow from EUR 26.9 million in the first three quarters 2006 to EUR 3.7 million in the period under review. The equity ratio remained almost unchanged at a high level of 57.8 percent. The gearing ratio rose from 6.8 percent to 14.2 percent due to the comprehensive investment programme.

Strong demand resulted in a continued scarcity of capacities and a tight materials situation. Although measures such as the deployment of additional suppliers are already effective, bottlenecks still occur. In this context, PALFINGER not only faced increases in material prices, but also higher contract-awarding costs in order to work to capacity. Against the backdrop of the positive state of the economy, the increase in personnel capacities, in particular in Bulgaria and Slovenia, poses an additional challenge.

In 2006 PALFINGER started the largest investment programme in the history of the Company, which provides for investments in capacity expansion and in the further improvement of efficiency and quality in the total amount of around EUR 80 million by the end of 2008. A subsequent second extension programme for the years 2008 to 2010 was approved by the Supervisory Board in September in order to take into account the continuously growing global market demand and to shorten delivery times drastically in the future. By the end of the year 2007 the first measures will be reflected in a capacity increase of around 20 percent as compared to the same period in 2006, thus enabling a further increase in output.

In the third quarter 2007 the complete takeover of the Croatian supplier PiR metal d.o.o. was carried out successfully. In India, a distribution joint venture agreement was entered into with one of the leading automobile trading companies, Western Auto L.L.C. Dubai. This investment serves the purpose of creating, at an early point in time, a foundation for successfully positioning PALFINGER in this dynamic growth market.

Outlook
As the results for the fourth quarter 2007 will also show a clear improvement as compared to the same period in 2006, management again expects record revenues and earnings for the entire financial year 2007.

At the end of October PALFINGER took over the German company MBB Liftsystems AG, one of the global leaders in tail lift manufacturing. The acquisition was made subject to the approval of the competent antitrust authorities. It is a further important step in the Company’s internationalisation and diversification strategy. The integration of MBB will result in an increase in the Group’s revenue by around 10 percent. MBB will be part of the TAIL LIFT division and will give stronger weight to the HYDRAULIC SYSTEMS and SERVICES segment in the future.

PALFINGER assumes that the market environment will remain strong during 2008, which will be reflected in an increasing order intake and in a repeated growth in revenues and earnings.