29.07.2022

Strong sales - lower profits for Manitou

French manufacturer Manitou has published its half year results, with strong sales but lower profits.

First Half
Total revenues for the first six months increased nine percent to €1.06 billion, with strong sales in all regions except Northern Europe, where revenues were flat.

Looking at a breakdown of the numbers: New machine sales were eight percent higher at €865.8 million, while invoicing for parts and services improved 14 percent to €191 million.
Order intake for the six months was €1.43 billion, down 15 percent on last year.
The order book/backlog at the end of June was €3.55 billion almost double what it was at the end of June 2021.

Half year revenues by region were:

Southern Europe €367 million +17%
Northern Europe € 386 million -1%
Americas €201 million + 15%
Asia Pacific € 103 million +13%
Total €1.06 billion +9%

second quarter
Total revenues in the second quarter were €607, a jump of 22 percent on the same period last year, made up of €511 million of new product sales - an increase of 23 percent - plus parts and services revenues of €96 million up 14 percent on the year. Order intake was €791 down just over eight percent on last year.

Quarterly revenues by region

Southern Europe €220 million +34%
Northern Europe € 222 million 13%
Americas €111 million + 27%
Asia Pacific € 53 million +7%
Total €606 million +22%

Chief executive Michel Denis said : "Thanks to a strong acceleration of our production and deliveries in the second quarter, the Group closed the half year with a nine percent growth in revenues compared to June 2021. Our supply chain continues to be disrupted by capacity, availability and shipping problems which continues to encourage our customers to secure their future supplies by taking orders at a consistently high level, which is reflected in our order book. The sudden acceleration of inflation, particularly for steel, has led to a significant deterioration in margins. The measures put in place to deal with are having an effect, but gradually, given the depth of our order book. In addition, the Services & Solutions division has confirmed its strong development and operational performance."

"The teams are very committed to adapting to these operational and inflationary constraints while remaining fully mobilised on our major challenges of energy, industrial, digital and service transformation. For the first half year, recurring operating income stood at 4.3 percent of revenues, down sharply from the profitability achieved in June 2021. which was the highest level since 2008. For the 2022 fiscal year, we maintain our expectation of revenue growth in excess of 20 percent compared to 2021. This expectation does not include any assumption of restricted access to energy. In addition, the strong uncertainties regarding raw material inflation and, more generally, the economic context do not allow us to anticipate our operating margin level for the 2022 fiscal year at this time."

Vertikal Comment

As with most manufacturers in the current environment Manitou is seeing very strong sales, at the same time as component and other costs are soaring, thus eroding profitability. However, the current supply chain issues will not last forever, and unless the world moves into a longer term inflationary cycle, raw material prices will eventually stabilise and maybe even come down a little, as they have in the past.

In the meantime manufacturers simply have do the best they can, building their customer base, distribution networks, brand awareness and product development and as long as they remain in the black and cash positive, while maintaining a modest debt burden - as is the case with Manitou - they will not only weather the storm but also be in a position to take advantage of opportunities as they arise – some created by short term policies and strategic errors that some competitors are sure to make.

Manitou does appear to be in a good place at the momentum in terms of product development, production capabilities and market position etc….
All in all, a positive first half in spite of the lower profits.