Manitou Half-Year Sales up 1% over 2015 | Construction News

Manitou Group reports that for the first half of 2016 sales revenues reached €689 million (US$ 771.7 million), a +1% increase compared to the first half of 2015, (3% at constant exchange rates).

In addition, second-quarter equipment orders reached €276 million (US$ 309.1), up 9.5% compared to €252 million (US$ 282.2 million) in the same period last year.

The company's order backlog at the end of the half year stood at €304 million (US$ 340.5 million) versus €281 million (US$ 314.7 million) at the same time in 2015.

In addition, Manitou's recurring operating income of €39 million (US$ 43.7 million) represented 5.6 % of sales, versus €31 million (US$ 34.7 million) or 4.5% of sales) in the first half of 2015.

Net income stood at €23 million (US$ 25.8 million), compared to €17 million (US$ 19.0 million) in 2015.

Michel Denis, president & chief executive officer said: "Sales revenues increasing by 5% in Q2 compared to 2015 permitted us to close the first half of the year with a 3% increase of sales at constant exchange rates. Southern Europe, which includes France, drove our good performance while the North American region was still strongly decreasing. From a market point of view, we achieved strong growth in the construction sector, especially business with rental companies and dealers boosted by the impact of the Macron law in France. Conversely the agricultural business suffered from the worldwide drop in milk prices and other commodities."

Denis added, "This first half of the year should be one more milestone for the improvement of our profitability with a 110-basis-points increase of our recurring operating income. This good beginning of the year combined with a stronger order book puts us ahead of our planned roadmap. This is most welcome in an environment where the agricultural business shows no sign of improvement in the short-term, where markets are exposed to the impact of Brexit, and in which the seasonality of production rates might not be as favorable as in H1."

Denis concluded, "This situation permits us to confirm sales growth prospects of around 2% in 2016 with an improved recurring operating income of approximately 50 basis points compared to December 2015."

Business review by division

The Material Handling and Access Division (MHA) achieved half-year sales of €475 million, a +13% increase at constant exchange rates compared to H1 2015. The business activity benefited from the acceleration of the construction business in Southern Europe, more pronounced in France due to the Macron law. The industrial sector showed good performance while the agricultural sector decreased due to still very low price levels of milk and agricultural commodities.

The division very strongly improved its profitability leveraged by the business growth and the operational and financial control. The division's operating income amounted to 7.4% of sales compared to 4.3% in 2015.  

The Compact Equipment Products Division (CEP) achieved sales of €103 million, a decrease of -29% compared to H1 2015. For the record, this same decrease was -42% at the end of Q1 2016 compared to Q1 2015. The business activity in North America remained hit by the weak business activity of rental companies, a decreasing agricultural sector and the dollar pressure on products exported outside the US.

The competitive pressure and the extent of the volume decrease in Q1 did not permit the division to achieve its break-even point over the half-year period. The recurring operating income amounted to -2.5% of sales compared to 4.7% in H1 2015.

With sales of €111 million, the Services and Solutions Division (S&S) reported an increase of 1% in its business activity (3% at constant exchange rates). The division continued developing and restructuring new service offers and new tools.

The work performed on the division's fundamentals will permit the continued improvement of its financial profile with a 4.7% recurring operating income of sales compared to 4.1% in H1 2015.

2016 Outlook

Manitou confirms its outlook for an increase in sales of 2% and an improved recurring operating income of approximately 50 basis points.