New strategic plan for Manitou
Manitou has updated its five year ‘New Horizons 2025’ strategy - as you might expect - with its key points, familiar to what most large corporations aspire to, consisting:
- Exceed customer expectations with value added services
- Drive the green transition for a sustainable business model
- Boost performance with streamlined operations
- Build our success on one united team, with Data as a game changer and innovation as our DNA
The measurable objectives for the new plan to be achieved by 2025 include:
- Revenues of more than €2.5 billion – excluding acquisitions
- A recurring operating profit of more than eight percent of sales
- Recurring earnings before interest, tax, depreciation and amortisation of more than 10 percent of sales
In addition, the company expects to invest around €460 million during that time.
As of part of the new plan Manitou will now report in two divisions: Products and Services/Solutions. This means that the Material Handling & Access (MH&A) operation, which makes up the bulk of the business in terms of revenues and profits, will now combine with the Compact Equipment operation which is largely made up of US based Gehl. This new Products division will be chaired by the current president of MH&A Elisabeth Ausimour
Chief executive Michel Denis said: “2020 marked the world by a health and then economic crisis of unknown magnitude. Throughout the year, the group focused on protecting its employees, adapting its operations, optimising customer relations and its financial performance. We start the year 2021, reorganised and reshaped, with a new roadmap ‘New Horizons 2025’ full of ambitions and challenges. The very good order intake dynamic observed during the third quarter was strongly amplified at the end of the year. However, the uncertainties resulting from a very unclear sanitary and economic environment remain strong.”
This is all rather predictable and hinges around being moving closer to customers in order to make them happier, while being more efficient and ‘greener’ though innovations both in terms of product development and service provision. It will involve sales growth from levels forecast for 2020 of almost 60 percent – however it is only 20 percent above the €2.1 billion achieved in 2019 – so perfectly achievable, depending on the global economy. In terms of profitability however, it will need to pick up the pace considerably on the current expectations for 2020 but in 2019 it achieved 8.9 percent so…once again perfectly achievable.
If it was not for the events of the past 10 months this plan for 2025 would look as though the management was ‘sandbagging’ – setting an easily achievable target – by the management. But as they point out the next year or two remain uncertain. Much will also depend on whether the innovation and new environmental changes are expected to increase or reduce costs.
It will be interesting to follow the progress.