20.02.2013

Genie up 20%

Terex Aerial Work Platforms/Genie has reported its full year results, with total revenues up 20 percent on the year.

Revenues were $2.1 billion, with an operating income of $228 million, 2.6 times higher than in the same period last year. The backlog/order book at the end of December was almost identical to where it was at the end of 2011 at $652.3 million, but up 73 percent from the levels reported at the end of the third quarter.

Looking at the fourth quarter, sales improved five percent to $459.4 million, while operating profits improved 60 percent to $42.6 million.

The improved revenues are mostly down to fleet replacements in North America and higher prices, although product support sales also contributed to the increase. The result was partially offset by lower sales of telehandlers due to planned production shutdowns for a model switchover that is now completed.

The Terex group as a whole saw full year revenues rise 12.5 percent to $7.3 billion, while pre-tax profits jumped almost 85 percent to $155.6 million.

Terex chief executive Ron Defeo said: “We made significant progress in 2012. Our primary goals were margin improvement, cash generation and the integration of Demag Cranes. We made excellent advancement in these areas and more during the year. We were impacted in the second half of the year by challenging end markets in Europe and Asia but we still meaningfully improved our profitability, generated approximately $554 million of free cash flow, restructured and reduced our debt, and began to realize integration savings as planned.”

“We are optimistic about our business as we begin 2013. We are seeing improvements in many of our end-markets and believe the macro-economic uncertainty that affected our fourth quarter performance will abate by the middle of 2013. Three segments performed well in 2012 and we expect this to continue in 2013. Our Aerial Work Platforms (AWP) segment is continuing to benefit from North American rental channel demand.”

“Cranes performance is expected to remain strong in North America and in certain developing market regions. Cranes delivered double digit operating margin in the fourth quarter of 2012.”

“We have made good progress with the integration of our Materials Handling & Port Solutions segment. Full year 2012 EBITDA as adjusted for MHPS was approximately $101 million. Benefits are expected from cost synergies globally to help offset weak European markets. In 2013, we expect to exceed the originally targeted $35 million in annual savings and weak markets should stabilise later in the year. The benefits of the big port projects we have won are also expected to be seen in our results in the back half of 2013 and 2014.”

“While balancing the different demand environments in each of our businesses, we are expecting net sales in 2013 of between $7.9 billion and $8.3 billion and expect to generate more than $500 million in free cash flow, with an aim to further reduce outstanding indebtedness.”

“Over the past several years, we have been diversifying and repositioning our business portfolio to strengthen the competitiveness of our company. We have moved from what was predominantly a mining and construction equipment company to a more diverse provider of lifting and material handling solutions that serve numerous end markets where we have leadership positions. We have established a 2015 earnings per share goal of $5 from $10 billion in net sales and with a 15 percent return on invested capital. We believe these targets can be achieved through organic growth and operational improvements.”

Vertikal Comment

This is another solid set of numbers from Terex AWP/Genie only slightly tempered by the slower parts of the third to fourth quarter that most companies in the sector experienced. In spite of this the company managed to rebuild its backlog from its depleted state at the end of September.

With the market growing for both economic improvement and increasing penetration of the work at height sector, expect 2013 to be another solid year for the company.