22.07.2004

Demag and Genie post strong first half sales

Terex has announced a strong first half result with sales for the group up by 20 percent to $2.4 billion. Net income rose to $76 million from a loss of almost $40 million for the same period last year. Exluding exceptionals, which included a number of favourable gains this year, the net income comparison is $69.3 to $40 million last year: An improvement of almost 60 per cent.

Terex Cranes

Terex Cranes continued to do better than plan with invoiced sales for the second quarter marginally above the 2003 level at $276 million. Sales for the first half were $486 billion within five percent of 2003's record, in spite of last years disposals and the major reduction of the inherited used equipment inventory. Terex crane look as though they are on track to achieve full year sales close to the billion dollars achieved in 2003, against a plan in the region of $800 million.

The company’s backlog at the end of June was $285 million compared to $153 million in 2003.

“The Terex Cranes group continues to show progress across its portfolio of businesses,” commented Steve Filipov, President – Terex Cranes. “While North America remains a difficult market, we have made progress with regard to profitability and expect to continue to see modest improvements heading into 2005. Our international cranes businesses, most notably Terex-Demag, delivered improved operating margins on reduced net sales, mainly attributed to the lower volume of used crane sales in 2004. The tower crane business, although the smallest crane operating group, produced superb results for the quarter.”

Filipov added, “We remain optimistic about Terex Cranes’ future prospects. We continue to see the precursors of a stabilizing market in North America, a market that has seen an approximate 70% downturn in demand since 2000. We will continue to focus on cost containment and are positioning our franchise to be a major participant in a crane market recovery that we expect in 2005.”

Terex Aerials - Genie

Terex aerials, predominantly the Genie business, continued its strong first quarter showing with sales up by almost 30 percent in the first half to $406 million, with the second quarter showing an even stronger improvement.

Margins and profits in the aerial business were all up significantly, with gross margins now over 21 per cent and an operating income for the half year of $53.9 million an increase of over 40 per cent on 2003, making the aerials business one of the most profitable in the group. Backlogs rose steeply from $21 million last year to $115 this year.

The aerials business not only saw significant revenue improvements in North America, but also saw sales in the UK, Germany and France rise significantly.

“We are very pleased with our second quarter results,” said Bob Wilkerson, President – Terex Aerial Work Platforms. “Our sales were up meaningfully compared to the second quarter of 2003. While cost pressures from many of our suppliers, particularly steel, negatively impacted our gross margin, our operating margin continued its positive trend as favorable volume leverage more than offset increased material costs. We also experienced strong top-line growth in the material handler product, demonstrating some early success of the realignment that had the Genie management team taking responsibility for this product line.”

Wilkerson added, “As we look forward, we expect the favorable performance trend to continue, especially given the increasing order backlog. As our customers continue to demonstrate improved financial performance, we expect many will look to expand their rental fleets to take advantage of the increase in demand for light duty rental equipment. The increase in our current performance continues to be mainly driven by replacement demand, as rental companies have stopped aging their fleets. Additionally, we continue to strengthen our geographic reach, most notably in Europe, where we have seen strengthening product demand in the United Kingdom, France and Germany