01.08.2023

Strong first half for Genie

Aerial lift and telehandler manufacturer Genie / Terex AWP has reported a strong first half.

First Half

Total revenues for the six months to the end of June were $1.51 billion, up 27 percent on the same period last year, with both Genie and Terex Utilities contributing.
The backlog /order book at the end of June was $2.67 billion, down five percent on this time last year, but still at historically high levels.
Operating profit more than doubled to $324 million.

Second Quarter

Revenues in the second quarter jumped more than 38 percent to $824.9 million, although Order intake slipped eight percent to $513 million.
Operating profit almost tripled to $133.6 million.

As a result of the strong performance and the strong order book, the company has increased its
full year revenue forecast from $2.7-$2.8 billion to $2.9 billion eight percent higher than its previous top end estimates. It also expects margins to continue to improve.

The company says that the second quarter benefited from the improved supply chain, higher demand and the price increases it has implemented. Profits benefited the incremental margin improvements, from higher sales volume, price increases, favourable product mix, cost reduction initiatives and manufacturing efficiencies, partially offset by cost increases.

Chief executive John Garrison said: "The Terex team delivered another quarter of outstanding performance. I want to thank our team members for their continued commitment to our Zero Harm safety culture and for improving deliveries to our customers and dealers. We successfully overcame supply chain challenges to deliver a 30 percent increase in sales over the prior year. Our team delivered innovative new products combined with disciplined pricing, expense management and manufacturing efficiency initiatives.”

"Terex continues to be exceptionally well positioned to provide solutions to meet the increasing requirements of our customers and dealers. We continue to see growing evidence of onshoring in North America manufacturing and an increased focus by global players to achieve their sustainability goals. Our Utilities team is helping customers meet rising challenges related to ongoing infrastructure modernisation, which remains critical to driving electrification and reducing carbon emissions. The Genie team has been executing extremely well, introducing innovative new products, taking significant cost reduction actions to streamline operations to increase profitability while ensuring the product transfers to our new permanent Monterrey facility remain on track. Looking ahead, we are increasing our full year revenue and operating margin guidance ranges for both MP and AWP as a result of their strong performance."

Vertikal Comment

Another excellent result from a leading aerial lift manufacturer - the results are thanks to improved production efficiencies due the easing supply chain, and possibly additional capacity currently being added in Monterey. The slippage in order intake and backlog is interesting, Genie is certainly not alone in this, most other manufacturers have seen record order books ease due to a little caution creeping into the market and long lead times. This is likely to bounce back in the second half as the major rental companies look to reduce rising average age of their fleets and as a consequence of acquisitions.

The key challenge to both Genie and JLG is what happens when the market does soften, especially in North America, given that the number of major competitors has increased and they continue to gain strength in overseas markets.

Having said that this is a great result, with the promise of an excellent full year and strong start to 2024.