05.02.2010

Manitou second half better than the first

Manitou, the French based telehandler and aerial lift manufacturer has reported full year revenues for 2009, down 54 percent to €684 million, although the company sees signs of a modest improvement with the fourth quarter declines down 39 percent overall.

Looking at the full year revenues, France fell 51 percent to €243 million, the rest of Europe was down 56 percent to €300 million. The greatest declines were in the Americas, where sales fell 65 percent to just €72.2 million, this in spite of the fact Gehl contributed revenues for the whole year, compared to a single quarter in the prior year.

Revenues from the rest of the world were down 44 percent to just under €70 million.

Manitou says that it is currently restructuring its Gehl operations towards a leaner management structure “due to the changed circumstances and the expressed desire of certain key executives to move ahead with other career plans. The transition to a new management structure will be undertaken with full consideration of the best interests of Gehl Company, its customers, partners and employees.”

Gehl and Manitou are continuing discussions with the company’s lenders in order to find a long-term solution to the technical default on its loan covenants. Manitou believes that Gehl’s better than expected performance in January, 2010 may help the parties reach an agreement.

Jean-Christophe Giroux, Manitou’s chief executive said: “We’re pleased to see
that we’ve eventually bottomed out, with Q4 showing some evidence for organic growthagain. We’re also very pleased with the results of our inventory pushout program last December, which has been structured as a one-off mark-down on selected machines, and got a great response from our customer base. This helped turn the page over a 2009 year.”

“Such low market conditions will still reflect on a negative operating performance in the second half, although far better than the first. Last but not least we believe our gearing will be much better, thanks to intensive cash generation and debt repayment.”

The company says that it expects the first half of 2010 to be flat in terms of growth, with a more positive trend likely in the second half as rental ‘de-fleeting’ comes to an end and dealer inventories are exhausted. On top of this the company feels it will benefit from planned new product introductions. Overall it expects to post mid to high single digit revenue growth for the year.


Vertikal Comment

Overall there are no big surprises here and Manitou has probably fared no worse than its two largest competitors when it comes to telehandler sales. However its ‘adventure’ in the USA has been a disaster.

The company purchased Gehl in September 2008, not only did the timing prove to be less than fortunate, but the company paid way over the odds for the business as has been confirmed during 2009. At the time Manitou said that the price was the same as an offer that Gehl had turned down a year earlier and that it was holding the offer price in order to ensure that the management team not only remained on board, but that they were happy and motivated.

Happy is probably far too gloomy a word for how the Gehl shareholders/managers must have felt by the time the deal was completed. And now it seems that at least some members of that management team are moving on following the performance since then.

While the Gehl deal looked overgenerous at the time, and a sign of Manitou’s ‘nice’ approach to doing business, it now looks totally foolhardy. The Gehl effect has not only seen a major upheaval in what was otherwise a strong and experienced management team at Manitou, but it has split the Braud family and must surely be an ongoing distraction for senior managers?

Manitou still has a great deal to do to get ‘back on track’ however it has a very solid set of assets, with an excellent product range, strong distributor network and brand recognition and plenty of growth opportunities for many of its product lines. If the group can clear up Gehl’s financial position the new management team can use 2010 to get back to focusing in the future.

2010 will be a pivotal year in the telehandler market with major opportunities for those companies that follow the best strategies. At the start of the recession Manitou, JCB and JLG were the worldwide market leaders, probably in that order, with Merlo coming up behind. Will this be the same when the market returns? It is at times like this that such hierarchies are changed. Watch this space.