30.04.2008

Manitou up 7.4%

Manitou the French based manufacturer of telescopic handlers and aerial lifts has reported first quarter sales up by 7.4 percent to €357 million. However the result masks a far stronger performance in terms of volumes.

Sales in France grew by 12.3 percent, while sales to other European markets were flat. A large contributor to this was a €6.5 million foreign currency loss, linked to the fall in sterling. Underlying volume grew by 11.6 percent. Sales to other regions grew by a very healthy 19.2 percent,

The first quarter of 2007 included €6.9 million of OEM revenues from Case New Holland under the badging contract that ended in mid 2007. Sales to Southern Europe, in particular, Spain were also down significantly.

Sales of Rough Terrain fork trucks grew by 9.2 percent, while sales of aerial lifts were flat.

With a fall off of order intake in Western Europe during March, and the ongoing strength of the Euro, the company has adjusted its full year expectations down from 10 percent growth to eight to 10 percent.

It also says that if the financial and economic situation does not change, along with the weak Sterling and a rise in steel and oil based products it will expect gross margins to be hit by around 1.6 percent and if it persists, for group net profits to take a 10 percent negative hit.

Vertikal Comment

The UK represents almost 10 percent of Manitou’s revenues, so the sharp depreciation in the rate of Sterling against the euro is painful. However it suffers a double whammy in that its principal competitor is JCB which produces all of its European telehandlers in Sterling.

Given JCB’s aggressive sales and marketing efforts this not only undermines Manitou’s UK profits, but also puts a brake on its ability to increase prices elsewhere in Europe in response to rising raw material costs.

On the access side, Manitou saw a substantial increase in revenues last year, some of it helped by long deliveries from other manufacturers. With orders from major rental companies down in the first three months, the company did very well to hold its revenues.

With new product launches planned for later in the year and the European aerial lift rental market likely to bounce back from its hesitant first quarter start, Manitou should see a resumption of growth in its aerial lift sales, if not in the second quarter then at lest in the second half.

Its full year forecasts look realistic while leaving room to beat them if all goes well and Sterling bounces back against the Euro as expected.