15.02.2012

Genie up 63%

Terex AWP/Genie finished 2011 with revenues up 63 percent with a strong improvement in profitability.

Total revenues for the year to the end of December were $1.75 billion almost 63 percent. Operating income for the same period jumped over thirty fold from $2.8 million in 2010 to $86.3 million last year.

The fourth quarter remained strong with revenues climbing 27.6 percent to $437.4 million, while operating income more than doubled from $11 million to $26.2 million. This due to the higher volumes, offset by an unfavourable product mix, higher component costs and a ‘supplier quality problem’ that cost $2.5 million. The company’s order book as of the end of the year was $634.8 million- more than double what it was at the end of 2010.

The company said: “Rental utilisation and rental rates achieved by our customers continues to increase in most regions and have been particularly strong in North America. In addition, the company has seen increased volume from independent rental firms during the fourth quarter of 2011 and into 2012. Increases in fleet age have also led many rental companies to replace equipment. The company also saw strong growth in Europe as rental companies continued to replace machinery when needed as their utilisation has been good, and rental rates have been increasing but at a slower rate than in North America.”

The Terex group as a whole saw revenues rise by almost 48 percent to $6.5 billion, while last year’s pre-tax loss of $238.3 million turned into a profit this year of $85.4 million.

In the fourth quarter revenues grew 47 percent to $1.957 billion, although without the addition of the Demag Cranes acquisition, growth would have been closer to 20 percent.

In terms of profitability in the quarter Terex made a pre-tax loss of $8.6 million, compared to a loss during the same period of 2010 of $376 million. The loss was wholly due to a number of one off costs, including a $22.1 million acquisition write down, $15.6 million of restructuring charges and over $5 million of ‘supplier quality problems’.

Chief executive Ron DeFeo said: “During 2011, we made significant investments and improvements and implemented actions to set us on a course toward improved profitability in 2012 and beyond. We have seen further recovery in many of our end markets as utilisation rates improve and existing fleets age. This is consistent with an overall improving construction and economic environment. Emerging economies continue to grow most rapidly, along with solid performance in North America. This has helped offset some of the continuing weakness in several European markets.”

“The cost reduction initiatives during 2010 and 2011 have resulted in an improved cost structure as we begin 2012. During this past year we fought to maintain and in many cases grew our market shares resulting in increased production rates at many of our facilities. Given the severity of the economic crisis in 2009 and 2010 in our product categories, re-establishing base production levels and facility utilisation rates were required to improve profitability. Our on-going goal is to establish a leaner, more customer responsive organisation. These efforts have allowed us to improve output with a reduced manufacturing space of approximately seven percent.”

“From a segment perspective, we continue to see recovery in most of our end markets. In our Aerial Work Platforms (AWP) business, we see strong demand and a growing backlog from a more diverse mix of customers. More than half of our North American net sales for aerials came from smaller independent rental customers in the fourth quarter of 2011. We also expect margins to be meaningfully improved in 2012 as 2011 pricing actions take hold.”

“Turning now to our 2012 expectations, we see continued demand for new equipment, and estimate that we are in the second year of a multiple year recovery. Overall, our focus for 2012 will be on profit improvement and cash generation as opposed to net sales growth. During 2011, net sales growth was important, as it provided us more consistent run rates and we were able to solidify, if not improve our market shares. In general, however, we were unable to offset increases from our suppliers through pricing actions, which is common during the first year of a recovery. We expect this will be different in 2012.