25.02.2019

Strong finish for Genie

Genie has reported strong fourth quarter and full year revenue growth, with a sharp rise in full year profits.

Full year revenues were $2.56 billion, an increase of 24 percent compared to 2017, while operating profit jumped 53 percent to $261 million. The company has also confirmed that with the sale of the Demag crane business - announced on Friday night – the Terex Utilities division will join Genie, which will also take over the shared manufacturing facility in Oklahoma City. The division is said to have revenues of around $400 million.

Looking at the fourth quarter revenues improved 19 percent to $535.5 million, thanks to strong growth in North America and the Asia Pacific region. Operating profit however, slipped 14 percent to $26.4 million due to higher material costs, including steel, thanks to direct and indirect tariffs, as well as an unfavourable product mix- Higher telehandler sales which carry smaller margins. Additional price increases at the start of 2019 should now compensate for the higher material costs.
Order intake in the quarter was $831 million, leaving the backlog/order book at the end of December at $868 million 14 percent higher than at the start of the year. If Terex Utilities order book is added in the backlog is $1.1 billion – an increase of 21 percent for the combined business.

Genie president Matt Fearon said: “Global markets for aerial work platforms are stable at healthy levels and our dedicated, passionate team will continue to meet the growing demand of our customers around the world. The Genie brand is synonymous with technological leadership and innovation. In 2019, we’re using the ANSI standard change as an opportunity to innovate and add customer value with the Genie XC family of booms that increases platform capacity allowing contractors to safely lift more workers, tools and equipment. These innovations are part of our long term product development strategy that will drive growth. Our Utilities team will remain focused on delivering best in class customer experiences by implementing our manufacturing strategy and executing new product and service development plans.”

Terex as a whole reported a 17.5 percent rise in full year revenues to $5.12 billion, while pre-tax profits increased 33 percent to $148.7 million. Fourth quarter sales were 16 percent higher at $1.23 billion, with a loss of $45.8 million compared to a profit for the same period last year of $25.4 million, due mostly to a non cash charge of $67 million related to the annuitization of its U.S. pension.

Terex chief executive John Garrison said: “Overall, our global team executed well in the fourth quarter, completing a strong year for Terex. In 2018 AWP grew sales 24 percent for the year and expanded operating margins by 200 basis points, while Cranes continued to make operational improvements and returned to profitability on an adjusted basis in the fourth quarter.”

“We continued to implement the Focus, Simplify and Execute to Win elements of our strategy and made significant progress in our Commercial Excellence, Lifecycle Solutions, and Strategic Sourcing priority areas. The sale of the Demag Mobile Crane business and the decision to exit the mobile crane product lines manufactured at our Oklahoma City facility, will dramatically improve Terex’s operating results by focusing the portfolio on our high performing businesses.”

Vertikal Comment

Overall an excellent result from Genie with a very strong year end order book. We can’t help wondering why the lower profits for the fourth quarter, but assume that it is down to a write down, or something extra in last years numbers? The conference call later today may well reveal that.

The addition of Terex Utilities to the Genie business makes eminent sense given that the business is also involved with working at height and has more in common with the aerial lift business than with cranes.

In summary Genie looks to be gaining some real momentum with a good number of new products launching this year and a very positive attitude. 2019 ought to be another year of strong growth.