02.11.2022

Higher margins for Genie

Terex and its Genie AWP have published their third quarter results, which show operating profit rising faster than sales.

Year to Date

Revenues for the nine months to the end of September were $1.81 billion, up 10.5 percent on the same period last year. Terex said that Terex Utilities sales were particularly strong while Genie sales overall show greater growth levels at constant exchange rates.

Operating profit improved by 12 percent to $142.2 million, thanks to higher prices and tight cost control. The company said: “The increase was primarily due to price realisation necessary to mitigate rising costs and higher demand driven by fleet replacement and end market growth for aerial work platform.”

Third Quarter
Third quarter revenues increased 16 percent to $662.6 million, while operating profits leapt 82 percent to $63.5 million. As a result of the strong improvement and a strong order book the company has nudged its full year forecasts up to the top end of its original estimates at $2.4 billion.

The backlog/order book at the end of September was $2.72 billion, compared to $1.89 billion at the same point last year.

Terex Group

Year to date revenues for Terex as a whole were $3.2 billion an 11 percent increase, while pre-tax profits grew by 33 percent to $260.8 million.

Chief executive John Garrison said: "We are pleased with our strong financial performance in the quarter as a result of continued progress on our strategy and the relentless focus of our team members to deliver our products and solutions to customers and dealers. We grew sales 21% when adjusting for FX rates and ended the quarter with total backlog of $3.9 billion, an increase of 33% year over year and a clear indication of the strength of demand from our customers."

"We remain focused on executing our multi-year growth plan and continue to invest in new technologies and products across our businesses. In our Materials Processing segment, we expanded the capabilities of our growing environmental business with the recent acquisition of ZenRobotics, allowing us to deploy robot technologies that pick, sort and recycle waste material. In addition, our Genie team continued to execute their product electrification plans with the introduction of a new lithium-ion battery option for the line of GS E-Drive slab scissor lifts. We are proud of our execution this quarter despite continued global supply chain disruptions, significant inflationary pressures and foreign exchange rate volatility. Our globally recognised brands, industry-leading and innovative new products, backlog, and strong balance sheet position us well to successfully navigate the near term macro challenges and deliver long term value."

Vertikal Comment

This is a decent set of numbers from Genie, which tend to reflect the strong market and long lead times than a particularly special performance form Genie. The company has managed to increase prices on confirmed orders, something that is exceptionally hard to do and therefore usually avoided. It may though have cost it a customer or two.

As with other manufacturers the challenge now is to overcome supply chain issues in order to reduce the backlog and improve manufacturing efficiencies. Assuming the market remains, buoyant Genie should have a strong fourth quarter and a decent 2023.

The challenge will come when the market slows, as it surely will at some point. It will then be possible to see what market share has been lost to rapidly growing Chinese manufacturers, and more critically how much of that business might revert back to Genie and other western suppliers, once it becomes a buyers’ market again. Only time will tell.

Terex Cranes
Sadly, we cannot see the Terex crane numbers since the business was absorbed into the Material Processing division.