Jean-Christophe Giroux, Manitou President & Chief Executive Officer, declared: “2010 has been a true rebound, with order intake up 60% vs. 2009. This was first driven by prior year catch-up situations but gradually gained strength from improving market conditions.
At the same time, we’ve put financial issues to bed: net debt has been almost cut by two for the second year in a row and working cap has even decreased by 14% while revenue went up 23%.
Our day-to-day challenge is now to deliver on a growing backlog, with a variety of supplier situations putting lines and leadtimes at risk almost on a daily basis. This will probably weigh on the recovery of operating margins already exposed to components increases – either from raw material prices or new regulatory constraints. While this appears to be an industry-wide situation, it also highlights certain internal weaknesses which we now fully focus on as we will need to grow our throughput by 25-30% per annum for the next couple of years.
We believe we have entered a new growth cycle, with customer fleets being first renewed then extended, while new usages and markets will progressively open up exciting new business opportunities. 2011 is a first step into this new cycle, which should confirm our financial and operational recovery.”
Divisional Review
• The Rough Terrain Handling (RTH) Division generated €586m of revenue in 2010, a 21% growth over 2009 (€485m). The Construction segment has shown a strong rebound, driven by the end of dealers’ destocking and rental firms’ defleeting. The Agriculture segment shows a modest progression over 2009, mainly from customer renewals. The Spare Parts business also benefitted indirectly from machines being used more, and over longer lifetimes. Even under strong pressure from an operational perspective, RTH could sustain its level of gross margin in 2010 and delivered an encouraging €25.8m profit (4.4% margin) on a full-year basis vs. a -€18.7m loss last year.
• The Industrial Material Handling (IMH) Division posted revenue of €124m, identical to
last year’s. Growth in France (including 2 points of market share) has been offset by certain distribution activities being discontinued abroad, representing 4% of IMH revenue. In France, IMH revisited in 2010 its manufacturing model, with Warehousing activities being transferred from the Paris area to Beaupréau (new IMH HQ). Before associated restructuring charges, IMH maintained an identical operating result vs. 2009 at -€3.6m.
• With revenue of €128m vs. €75m last year, the Compact Equipment (CE) Division posted a +71% rebound driven by the end of dealers’ destocking, a better Ag environment in the US and growing synergies from Manitou dealers. The division enjoyed back-to-normal gross margins at 30.5% when 2009 had been affected by prior year destocking rebates. Also, maximum attention to fixed costs helped CE’s operational recovery with OP at -€18m (vs. -€59m last year) while preserving growth capabilities that are now fueled by a clarified financing situation.
“Manitou Up!”
Manitou presented in January 2011 a new operating plan “Manitou Up!” for its growth
development. The initiative aims at:
• Creating growth in new markets, by forming scalable beachheads;
• Stimulating growth in mature markets, by raising the dealers’ barrier;
• Enabling growth, by shifting processes from reactiveness to anticipation;
• Guaranteeing growth, by ensuring best-in-class cost, leadtimes and quality.
This plan is designed to accompany Manitou all along the new growth cycle, focusing both on the group’s ability to capture it and to deliver it.
2011 Outlook
With constraints clearly shifted from demand to supply, business predictability remains delicate whether for revenue or margin ramp-up. With a 20% revenue growth over 2010, Manitou aims at delivering low-to-mid single digit margin and at posting positive net earnings on a full year basis.
