Manitou Reports Progress Despite Environment Changes in First Half of 2012
Manitou Group reports its first half of 2012 revenue is up 20 percent to €672m ($846.9 million), when compared to H1’11. Operating profit was also up 22 percent in this first half of this year, and net income increased 40 percent. Net debt was €147m ($185.3 million) vs. €86m ($108.4 million) at the end of 2011, which is a reflection of the company ramping up in the first half of the year plus the engine pre-buy.
The Rough Terrain Handling (RTH) Division generated €473m ($596.1 million) of revenue in H1 2012, a 19 percent growth over H1 2011. Important efforts have been done in a difficult operational environment to reduce lead times and revisit processes. RTH is also affected by inflation on raw materials, the cost increase effects of the new engine regulation and a less favorable product mix. Enhanced by volume effects, the operation profit grew up to €23.1m ($29.1 million), representing a margin of 4.9 percent vs. 5.2 percent in H1 2011.
The Industrial Material Handling (IMH) Division posted revenue of €84m ($105.9 million), a 14% growth over H1 2011. The launch of new MI range, the stabilization of Beaupreau site and the reinforcement of commercial organization are key steps to reinforce Manitou industrial offer after the announcement of Toyota partnership evolution in 2013. The operating result reached €1.6m ($2 million) representing a margin of 1.9 percent vs. 0.1 percent in June 2011.
With revenue of €115m ($145 million), the Compact Equipment (CE) Division posted a +27 percent growth over the H1 2011. Evolving in a more complex environment (European economy, engine regulation, raw material increase and exchange rate development) CE reinforced its industrial means to secure the business ramp-up and prepare the new Yanmar partnership launch. The operating result reached €6.0m ($7.6 million) representing a 5.2 percent margin vs. 0.5 percent in H1 2011.
According to Jean-Christophe Giroux, Manitou president and CEO, the first half of 2012 has delivered good progress on the company's financial performance, despite the current economy. "At the same time, that progress has been slower than expected, as margins get affected by a combination of new elements, either current or more structural," he added.
On the current side, H1 registered some one-off costs due to the RTH division lead-time reduction effort, new product launches, and external events such as the Festival or Open Up. "It also suffered from certain difficult supplier situations and overall negative purchasing variances," Giroux said. "On the more structural side, we now face a fuller impact of new normative regulations, and need to accelerate our efforts to adapt to the new environment and industry realities."
While traditional cycles are now blurring into "volatile and contrasted situations," Giroux said it will not impact Manitou's strategy or ambition to double its size. "We just have to deploy greater flexibility and adapt to shifting horizons," he added. "And we are already adjusting our workforce and initiatives to match a possibly conservative demand plan for 2013, while sustaining all efforts to improve our operational performance.”