08.09.2020

First half loss for Haulotte

French aerial lift and telehandler manufacturer Haulotte has issued its first half results.

Total revenues for the period were €222.7 million, down 35 percent on the same period last year, with equipment sales falling 36 percent to €195.6 million, rental down 38 percent to €6.8 million, and service down 21 percent to €20.3 million. Most of the drop off came in the second quarter where revenues dipped 50 percent.

In terms of regional breakdown, European sales came in 39 percent lower, with most countries posting a very sharp declines in the second quarter. In Asia-Pacific revenues were 23 lower, in spite of a sharp rebound in sales in the Chinese market during the second quarter – the only significant market to post positive growth in the quarter. In North American market sales held up a little better than expected, particularly for aerial work platforms, after coming in 28 percent lower than in the same period last year. In South America however, sales plummeted 47 percent, with declines in all markets.

Last year’s fist half pre-tax profit of €121.6 million turned into an €8.2 million loss this year, but €8.86 million of this was down to currency losses, compared to a €1.02 million gain last year. Net debt increased 16 percent to €140.9 million.

The company statement said: “The Covid-19 health crisis has impacted the vast majority of the group's activities in all regions of the world since the beginning of 2020. The first effects were felt in China in January, forcing the group to close its commercial and industrial activities in the country, then from March in Europe and then in April North and South America. Against this unprecedented backdrop, Haulotte posted half year sales of €222.7 million, down 35 percent compared to the first half of 2019 which was a record half year for the business, the second quarter showed a 50 percent drop in business compared to 2019.”

“In this unprecedented context, Haulotte submitted to all of the lenders of the syndicated loan a request for a waiver of the bank covenants for two periods - June and December 2020 - and a request for an extension for an additional year of the maturity. These requests were unanimously accepted and without any condition on. Therefore, the maturity date of the contract has been changed to July 17, 2025."

“In a very uncertain environment, where the lack of visibility remains a reality, Haulotte forecasts a decline in sales of 25 to 30 percent in 2020 and a current operating income - excluding exchange gain and loss - that should remain positive at year end."

Vertikal Comment

By the measure of many manufacturers this is not such a bad result, although the second quarter is in line with others. Clearly the Chinese market has provided a second quarter boost, or we might have seen declines closer to 70 percent in the period.

How the company does in the second half will depend very much on the commercial practices it follows. Manufacturers will be zoning in with sharp pencils on every order but given the febrile atmosphere many buying decisions are likely to be last minute ones, so those with the inventory in place and commercial policies that make it easy to deal with will win the day. The next six months are not for the faint hearted or cautious.