Manitou first half year declines
By Euan Youdale31 July 2020
Manitou Group’s sales were down 35% in the first half of 2020, to €762 million, compared to the first half of 2019, while, in the second quarter, group sales dropped 41%, compared to the same period in 2019.
In its Material Handling & Access division (MHA), half year sales were down 40.2% to €496.5m, compared to a record first half in 2019. Sales declined in all geographical areas, particularly in Northern Europe and APAM, and across all markets - construction, agriculture and industrial.
The division’s operating income decreased by 71.3% to €20.6m, or 4.1% of sales, compared with €71.6m in the first half of 2019, or 8.6% of sales. In the second quarter sales in the MHA division were down 51% to €213 million, compared to the same period in 2019.
Following the launch of MHA’s new telescopic product lines in India, the company announced that the division’s assembly activities in Brazil will be stopped at the end of August.
The Compact Equipment Products division (CEP) recorded sales of €123.2m, down 30.9%. The division was impacted particularly in the US and APAM zones and for telehandler products.
The division’s operating income showed a loss of €7.6 million, or -6.1% of sales, compared with a profit of €3.9 million in the first half of 2019, or 2.2% of sales. The division’s financial situation, combined with the lack of any prospect of a short-term upturn, led to a reduction of around 100 positions in North America and India. Most of the savings from this plan will be allocated to the CEP division.
With revenue of €141.9m, the Services & Solutions Division (S&S) recorded a decline of 8.6%. Administrative, commercial, marketing and service expenses were reduced by 14.8%, or €4.4 million, following the implementaton of savings measures and partial activity. As a result of these measures, the division saw profit of €17.1m, or 12% of sales, up €2.5m in the first half of 2019.
On the strength of an upturn at the end of the quarter, the group ended the first half of the year with an order book of €555m, which enabled it forecast total 2020 sales at around 30% lower than in 2019 and, in the absence of any further deterioration in the global economy, an operating profit in the range of 2.7% to 3.2%.
Manitou’s CEO Michel Denis, said, “We believe that the crisis we are going through, will have economic consequences beyond 2020 and that our current operating income target of more than 8% of sales under the Ambition 2022 plan will not be achieved by the initial target date.”
On a financial level, the manufacturer took measures from the beginning of the crisis to reduce expenses and investments, reinforced by the Board of Directors’ decision not to proceed with the payment of the €30m dividend that had been announced a few weeks before the health crisis erupted.
Denis added, “After suffering an air pocket from mid-March to mid-May, the recovery was encouraging in June. The agricultural market remains the most buoyant, while the industrial and construction sectors recorded more significant decreases, particularly among rental companies, whose business outlook for the remaining part of 2020 and 2021 is still gloomy.”