31.10.2017

Another good quarter for Terex Cranes

Terex Cranes has posted a positive set of numbers for the third quarter in terms of revenue growth and reduced losses.

Looking first at the nine months to the end of September, revenues were nine percent lower than for the same period in 2016 at $869.6 million, while last year’s operating loss of $41.5 million was cut to $19.6 million.

In the third quarter however, sales increased seven percent to $301.9 million, while the last year's operating loss of $12.1 million was cut to just $1.3 million this year.

Terex as a whole saw nine month revenues fall four percent to $3.3 billion, but managed to more than double pre-tax profits to $86.6 million. Third quarter revenues were almost five percent higher at $1.11 billion, while pre-tax profits were quadrupled to $56.7 million.

Chief executive John Garrison said: “Our third quarter financial results demonstrate the accelerating momentum across Terex. All three segments increased sales, improved operating margin and grew backlog. Aerial Work Platforms grew in North America and Europe, and expanded its operating margin. Cranes continued to be profitable in the third quarter, realising benefits from its restructuring programme. Materials Processing continued its excellent performance, growing sales and operating margin for the fourth consecutive quarter.”

“Having completed the first element of our strategy - focusing the portfolio on our three core segments, our strategy deployment efforts are concentrated on simplifying the Company and implementing our Execute to Win business system. Footprint consolidation progress in the quarter included completing the sale of manufacturing locations in Jinan, China and Bierbach, Germany. A fundamental component of Execute to Win is improving our commercial capabilities. In addition to enhancing our performance management tools and increasing process discipline in sales pipeline and account management we made key additions to our commercial leadership team.”

“We continue to follow our disciplined capital allocation strategy. We monetised our remaining holdings of Konecranes shares for proceeds of $221 million, bringing the total consideration received by Terex for the disposition of MHPS to approximately $1.6 billion. This demonstrates the significant value to Terex shareholders that was created by the sale of our MHPS segment. In addition, we repurchased 6.4 million Terex shares for $254 million in the third quarter, bringing the total to 22.3 million shares repurchased for $770 million for the first nine months of the year.”

“Considering our year to date results, our current view of market dynamics, operational expectations for the fourth quarter, and our capital market actions, we are increasing our full year adjusted earnings per share guidance to $1.20 to $1.30.”

Vertikal Comment

As Terex Cranes has increasingly appeared to morph into Demag mobile cranes the company has gained some positive momentum - particularly for its European built product line - not only in terms of orders booked and revenues achieved, but also in spirit. Last week the company unveiled its new AC45 City, taking it back into a growing market sector that it used to dominate, while announcing a slew of new products that are currently in development.

While the company will start 2018 in much better shape, it is likely to see most of the real benefits to its reorganisaiton and re-positioning during the second half than in the first, as new products come on stream. In the meantime it will also be looking to win back some market share for its North American built cranes in what has been a tough market.

All said and done the future at Terex Cranes is looking much brighter.