26.02.2003

Terex Cranes reports 2002 net sales growth

Terex Cranes group has reported a net sales increase of US$226.9 million for 2002, despite Terex Corporation reporting a net sales loss of $132.5 million. The Crane group’s net sales hit $700.8 million for 2002, compared with a figure of $473.9 million reported in 2001. The group’s base activities was accountable for 7 per cent of the increase.

Terex said that the increase in the base businesses was largely accredited to growth in its boom truck business, its hydraulic crane business in Italy and a US Marine Corps telehandler contract. The group also said that the increase was partially offset by double-digit revenue declines in the US hydraulic crane market last year.

The Crane group also reported a net sales increase for the fourth quarter of 2002 to $267.4 million compared with a figure of US$88.7 million for the same period of 2001. Its core activities accounted for 30 per cent of the increase. The group said that extended shutdowns in the US hydraulic crane business in the fourth quarter of 2001 had a major impact on the year-over-year comparisons.

SG&A (Sales, General & Administrative) expenses increased to $20.5 million from $11.1 million in the fourth quarter of 2001, while excluding the impact of acquisitions meant a decrease to 6.8 per cent of sales. Placing acquisitions back into the equation, however, operating profit increased from $3.4 million to $7.3 million in 2001 and 2002 respectively. ‘Acquisitions’, ‘the current operating environment’ and ‘the write down of certain accounts receivable in the base businesses’ were held accountable for impacting the group’s operating margins in the fourth quarter of 2002.

Fil Filipov, president Terex Cranes commented: “The full year 2002 performance for the Terex Crane group benefited from the geographical and product diversification of our group. Our hydraulic crane business in the US continued to experience double digit revenue declines in line with industry trends, which impacted margins in this business, while our hydraulic crane business in Italy had a very strong year.

“Our lattice boom crane business was essentially flat and our boom truck business continued to show double-digit growth while taking advantage of ownership changes amongst our competitors.

“Demag has been a positive contributor to the group right from the beginning and has generated over $60 million in cash since the acquisition. We are well on our way to integrating Demag and remain comfortable with the $20 million in annualised cost savings announced on the date of the acquisition. The restructuring we launched in the fourth quarter for our European crane business is a step further to streamline manufacturing operations and leverage the Demag acquisition across the whole Terex Cranes Group.”

Meanwhile, Bob Wilkerson is pleased with the fourth quarter performance of the Terex Aerial Work Platforms group - representing the results of Genie Holdings and its subsidiaries since their acquisition by Terex in September last year. “Historically, this is our weakest quarter of the year, but the aggressive implementation of our integration plan and relentless focus on cost control is beginning to show up in the results.

Wilkerson reported sales for the quarter of $96.2 million which represents a slight increase compared with the corresponding period of 2001. “However, our margins improved significantly over the prior year,” said Wilkerson. “We remain very exited about the opportunities of being part of the Terex group and taking advantage of the best the two companies have to offer. As we progress with our integration plan we have identified further cost reduction initiatives.

“We also see significant opportunities to cross sell other Terex products through the Genie sales force and share best practices within the companies with respect to working capital management and manufacturing processes.”

Ron Defeo, Terex’s chairman and CEO said: “2002 was a year of building the company, setting the foundation that will allow us to compete and leverage the Terex franchise globally, and position the company for stronger growth when the economy recovers. 2003 will be a year focused on company fundamentals, integration of acquisitions, execution on cost saving initiatives, generation of free cash flow and debt reduction.”