07.11.2008

Manitou up 7%

Manitou, the French based telehandler and aerial lift manufacturer has reported revenues for the first nine months of 2008 of just over €1 billion, 6.60 percent higher than for the same period in 200. At constant exchange rates sales would have been up over eight percent.

The company sales that revenues slowed sharply in the third quarter, but were still three percent up on the third quarter of 2007.

Sales in France increased by 15 percent to €395 million, representing almost 40 percent of the group’s total. The rest of the EU was €454 - down 3.5 percent on the year, although if currency movements are stripped out – largely sterling/Euro – sales were only down one percent.
Spain was the hardest hit with sales down by 71 percent. Revenues from other areas increased by 21 percent to €152 million.

Manitou says that the rapid downturn in the construction market hit its order intake for telehandlers in the third quarter with orders plummeting by over 60 percent. However telehandler sales for the nine months were up 6.6 percent to €682 million, while industrial equipment increased almost 24 percent to €77 million and Aerial lifts remained steady at €68 million.

The company also says that it received a large number of requests to delay deliveries on the part of its distributors and dealers and some one-off order cancellations from markets “that dried up temporarily such as Russia and certain other central European countries” .

At the end of September Manitou’s order book for telehandlers was 3.5 months, compared to four months at the end of the first half. Over the summer it says it took preventive measures to avert a build-up in inventory which has resulted in a slight downturn in its inventories.

The company is taking further steps to cope with the slow down which include laying off 400 temporary staff and temporarily shutting down its production units.

As a result of the rapidly changing situation Manitou says it has concentrated on recovering its receivables rather than on generating new business.

Looking forward it says that sales are likely to decline by between 15 and 20 percent in the fourth quarter in spite of its order book.
This should though still allow it to post revenues similar to those of 2007 but with lower profits, which are likely to miss the company’s previous forecasts.

Revenues from Gehl, acquired in October will kick in this month, although a tough US market has resulted in a reduction in its expectations to $340 to $350 with a small profit before taking the costs of acquisition into consideration.

Vertikal Comment

This is a very good result from Manitou which in spite of its efforts to diversify is still very dependant on sales of telescopic handlers. It has clearly done well to maximise its strong position in France, helping compensate for the falls in Spain and the UK which are significant markets for the company and where the property driven slow down has hit hard, compounded by the falling rate of sterling.

The currency factors should begin to come out of the equation going forward as sterling stabilises and the Euro comes off its strong position to the dollar. The company’s 2008 results could also help consolidate the company’s claim to be the market leader in the telehandler market.

Manitou has also done well maintaining sales at its access division it will naturally be pushing hard now to step up efforts to expand its industrial division. The improving agricultural market will also have helped a little.

The acquisition of Gehl, while it looked expensive, could begin to look like a good move by the end of 2009, with the dollar strengthening and the North American construction market likely to pick up before markets such as Spain. It will also allow Manitou it to reduce its own costs in region.