24.07.2007

Manitou reports strong growth

Manitou the French based telescopic handler and powered access manufacturer has reported first half results which show revenues of €671 million, an increase of 14.8 percent on the same period in 2006.

The results mask difficulties the company has experienced with the supply of “certain components”, the net effects has been an increase in the company’s order book by 50 percent, at a time when the order intake increased by only 20 percent.

The resulting lag in shipping/invoicing is not expected to have any impact on full year 2007. but it has weakened the first half while strengthening the second half.

The EU continues to represent most of the company’s sales at 87 percent, with France making up 37 percent of that.

Manitou says that trading conditions were strong in all economic sectors and geographical markets served by the Group with the exception of North
America.

Manitou also reached an agreement last week to change its manufacturing relationship with Toyota. Manitou will reduce its holding in Ancenis based TIE (Toyota Industrial Equipment) from 40 percent to 20 percent.

TIE was formed in 1995 by the two companies for the purpose of manufacturing
and assembling Toyota forklift-trucks in France.

At the same time Manitou will invest €9 million in a new manufacturing unit with an annual production capacity to make up to 20,000 forklift masts for Toyota fro a new range of forklifts due to be launched later this year.

At the end of 2006 Manitou, through its subsidiary CFM, and Toyota renewed their agreement for the distribution of Toyota branded forklift-trucks in France, for a period of four years.

Vertikal Comment

Manitou is an extraordinarily conservative company in most respects, it predicted revenue growth for 2007 of 10 percent after a 14.5 percent spurt in 2006, with all indications in its major market pointing upwards and its largest competitor threatening to double production.
The company’s share of the USA market is so small that even a steep decline in the telehandler market there has little impact on its global numbers.

And given that American telehandlers are not saleable in Europe at any price, the weak demand and low dollar was never a risk.

It now seems that while the company has seen an excellent start to the year in terms of orders, it has only been able to gain limited benefits from the strong market due to component delivery bottlenecks.

This is often a symptom of overly conservative forecasting. A very correct company such as Manitou is almost certain to tie its build forecast and procurement programme to its financial outlook statement.

So when that forecast is blown out of the water by high demand, the company’s buyers must scramble to procure extra quantities of components at the last minute.

Given that the telehandler industry draws its major components from a very small pool of shared suppliers, and given that JCB, JLG/Cat, Terex and a number of the Italian producers are all determined to win more market share, it is not hard to see why the said components might not have been readily available.

While Manitou has still significantly exceeded its financial plan in the first half of 2007, and is clearly in a position to completely demolish its full year plan, it will have lost market share and possibly irritated a few dealers and customers with longer lead times than has been the norm?

Perhaps Manitou needs to take a leaf from the Haulotte book of production supply, where the buyers and production team seem to instinctively know when Alexandre Saubot is being conservative with his forecasts so that they prepare for much stronger revenues than the official line would justify?