09.02.2018

Order intake soars at Manitowoc

Manitowoc Cranes has published its full year results with a stronger fourth quarter and a surge in order intake.

Revenues for the full year were around two percent lower than 2016 at $1.58 billion, but order intake for the year surged 32 percent to $1.86 billion. The company says that sales improved both in North America and Europe. While margins improved and the company posted an operating profit, it was not quite enough to move into a positive pre-tax profit, however the pre-tax loss was reduced from $268.1 million last year to a loss of $39.5 million in 2017 - a good deal due to lower restructuring costs, but also due to a substantial improvement in gross profit/margins. The company will end on a positive note in terms of net profit after tax, thanks to a $49.5 million tax rebate.

Fourth quarter revenues improved 27 percent to $481 million, underpinned by a 78 percent increase in order intake to $620.2 million, taking the backlog/order book at the end of December to $606.6 million up 87 percent on the same point last year. The pre-tax loss for the quarter was reduced from $434.6 million last year to just $4.6 million this year.

Fourth quarter orders of $620.2 million increased 78% from the comparable period in 2016. Backlog totalled $606.6 million at December 31, 2017, an increase of 87 percent from the prior year ending backlog of $323.8 million.

Chief executive Barry Pennypacker said: “2017 was a pivotal year for Manitowoc. Despite a two percent decline in revenue we delivered a 313-basis point improvement in adjusted EBITDA margin, and operating cash flow improvement of over $200 million. Our net debt improved over $55 million vs prior year due to prudent cash management. These results clearly demonstrate strong operational improvements in the core business through the continued implementation of the principles of The Manitowoc Way.”

“During the fourth-quarter we saw an increase of 78 percent year over year in orders primarily driven by increasing customer sentiment in the North American market, coupled with continued market share gains in our key areas of focus. Looking ahead, as reflected in our guidance provided above, we expect profitability to continue to increase as we execute our strategic priorities.”

Vertikal Comment

This is a very encouraging set of numbers from a company that was truly struggling, the positive news runs through the results. What we do not know yet, is what products are driving the strong improvements. We do know that sales of Potain tower cranes have been picking up strongly, while you only need look at delivery and hand over reports on this web site to see that sales of larger Grove All Terrains are doing well. The big question concerns Manitowoc crawler crane sales prospects. The introduction of the Variable Position Counterweight systems certainly spurred renewed interest in the product line, while a rise in US infrastructure spending is likely to be spurring crawler crane utilisation and replacement purchases.

2018 will almost certainly see the company return to profit, while the longer term prospects are encouraging, although there is still work to be done in terms of brand appreciation, sales coverage and customer relations, while an improved trend at Terex Cranes adds additional competitive pressures. The ingredients are all there at Manitowoc, in terms of product, dealer network, brand awareness and product support infrastructure. Bringing the focus on people skills, the order intake results suggests that the company is increasingly getting this right.

The future looks bright.