19.02.2014

Solid year for Genie

Terex AWP/Genie has reported a strong result for 2013, with sales up over 22 percent, while profits increased over 54 percent.

Total revenues for the year were $2.13 billion, over 22 percent higher than in 2012 thanks to a strong second half. Operating profits jumped over 54 percent to $325.8 million. Looking at the fourth quarter, revenues increased by 31 percent to $482 million, while operating profits doubled to $71.5 million. The only negative sign in numbers is the order book which shrank by 42 percent to just $294.4 million, most likely due to the late placement of orders by the larger US rental companies.

The Terex group as a whole saw revenues remain flat, up just over a percent to $7.08 billion, although the fourth quarter saw growth of 12 percent, and pre-tax profits for the 12 months more than doubled to $291.3 million. Net debt at the end of the period was down marginally at $1.95 billion.

Chief executive Ron DeFeo said: “Overall, 2013 was a good year and I am pleased with the improvements and progress underway at Terex. This past year was a tale of two halves, with the second half of the year significantly stronger than the first half. Our performance in the second half was fueled by the continued strength of our Aerial Work Platforms segment and a turnaround in Materials Handling & Port Solutions. Our focus throughout the year on strengthening margins and driving financial efficiency helped deliver a strong close to the year.”

“Operationally, aerial work platforms is continuing to benefit from strong North American rental demand plus a noticeable pickup in Latin America and European performance. Additionally, the Materials Processing segment performance remains solid, delivering double digit operating margin in 2013 despite a relatively soft demand environment. Our Cranes segment failed to realise the growth that we had anticipated entering 2013. While new product launches did provide some growth, markets such as Australia, Europe and Latin America were more challenging than anticipated.”

“During 2013, we made investments and implemented actions to set us on a course toward increased profitability in 2014 and beyond. We enter 2014 with optimism around our businesses and expectations to deliver improved financial results. Much of this optimism stems from our continued focus on internal areas of improvement, such as our capital structure initiatives and business simplification, as well as the year over year benefits anticipated from the restructuring efforts undertaken in 2013.”

“Our 2014 guidance reflects the benefits of internal cost initiatives, capital structure improvements and some anticipated net sales growth. We see some signs of improvement in many parts of the world, although this is tempered with some continued market uncertainty, particularly in developing markets. Overall, we believe that the global economy will be stronger in 2014, but still modest when viewed against historic demand levels.”

Vertikal Comment

This is another excellent result from Genie, which is benefiting from growth in most of its volume markets – still North America and Europe as well as some significant business from some emerging markets. This should continue as the western economies recover and underlying demand for powered access continues to grow.

Some of this gain is likely to be offset as smaller competitors take market share in some high volume and niche product sectors, in some markets. However with both Genie and JLG holding such dominant positions in the overall market, they are able to continue to edge prices upwards at the same time as they use their size to gain further cost efficiencies.

But they do need rental companies to pass on the effects of higher purchase costs to end users through higher rates and be careful not to be seen as exploitative or unresponsive.

With this caveat in mind, the next few years look very bright.