MUNICH -- German engineering group MAN AG raised its orders outlook for the year on Wednesday and said trucks division head Hakan Samuelsson would replace Chief Executive Rudolf Rupprecht when he steps down.
Rupprecht told shareholders at the firm's annual meeting that new orders in 2004 were expected to come close to double-digit growth in percentage terms compared with 2003, with sales growing slightly more slowly.
MAN had previously forecast growth of six percent for new orders and sales. The company repeated its forecast of a pre-tax profit of 400 million euros ($487.5 million) this year, up from 261 million in 2003.
Orders from January to May jumped 22 percent from the year-ago period to 6.2 billion euros and raced up 34 percent in May alone, Rupprecht said. Both domestic and foreign business had fuelled growth.
Sales in the first five months of the year rose 10 percent to 5.2 billion euros.
"With these figures, one can expect that the forecasts for the current year will have to be revised upwards," Frankfurt brokerage ICF Kursmakler said in a note, adding that it saw short-term upside potential to 34 euros per share.
"Shareholders are receiving a 25 percent higher dividend and the stock is far away from its lows," a representative for the German shareholders' rights group DSW said during the AGM. "I can only agree with Mr. Rupprecht that the course has been correctly set at MAN."
Rupprecht, who is due to step down at the end of the year, reaffirmed previous guidance that the printing machinery business MAN Roland would return to profit in 2004 after posting a pre-tax loss of 37 million euro last year.
Nevertheless, the company plans to spin off its loss-making sheetfed offset printing machine activities into a separate business which could be sold or merged off, Rupprecht said.
Since a sale to the two German rivals Heidelberger Druckmaschinen and Koenig & Bauer would probably not be approved by cartel authorities, the business would have to achieve value in order to appeal to potential finance investors. No talks had yet been held.
He added that the company was striving to return to being the second-most profitable truckmaker in Europe behind Scania.
"We are by all means on the way to taking second place once again," Rupprecht said, although CEO-elect Samuelsson told journalists later that this could take a couple of years.
The 53-year-old Swede, who spent most of his career at Scania, took over as MAN's head of commercial vehicles in July 2000 and had to start revamping the business almost immediately.
Samuelsson does not intend to make any radical changes in strategy, including a break-up of the conglomerate, when he takes over in January next year, he said on the sidelines of the annual meeting.
He rejected reports that conditions had been made by employee representatives concerning his appointment, saying neither he nor the board had placed demands on his acceptance of the post.
Anton Weinmann, a 48 year-old board member at MAN commercial vehicles, will replace Samuelsson.