Manitou encouraged by June recovery

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Manitou Group has published its half-year results. Numbers were unsurprisingly affected by the Covid-19 pandemic, but the report ended on an optimistic note, with strong signs of recovery in June and a largely-unaffected agricultural market.

  •   H1 20 net sales of €762m down-35% vs. H1 19 and -35% on a comparable basis
  •   Q2 order intake on equipment of €180m vs. €286m in Q2 19
  •   Order book on equipment at the end of Q2 20 of €555m vs. €643m in Q2 19
  •   Recurring operating income at €30.1m (3.9%) vs. €90.1m (7.7%) in H1 19
  •   EBITDA1 €48m (6.3%) vs. €107m in H1 19
  •   Net income at €13.5m vs. €60.1m in H1 19
  •   Taking into account the COVID-19 crisis and its economic consequences, the outlook for 2020 is for an annual turnover of around €1.5 billion
  •   Outlook for current operating income in the 2.7% to 3.2% range for 2020

A full statement from CEO, Michel Denis:

“The first half of 2020 was highlighted by the Covid-19 crisis that has been disrupting our markets since mid-March, resulting in a 35% drop in our sales compared to a record first half of 2019.

“As soon as the health crisis emerged, we reacted very quickly to implement health and operational measures to protect our employees and continue to meet the urgent needs of our customers. A crisis management steering committee was immediately activated to define the direction and priority actions to be implemented. We established constant communication with our teams, stakeholders and Board of Directors. The agility and reactivity of our employees enabled us to maintain support to our customers and users throughout the period, particularly in terms of spare parts and technical assistance. On the industrial side, we were able, from mid-April, to gradually restart the French and Italian plants’ production lines by introducing strict health and safety procedures. Significant production re-planning work has been carried out with our customers and suppliers in order to be able to deliver the most urgent orders. This was particularly the case for those in the agricultural sector or in remote geographical areas whose seasonality required shipment before the summer shutdown.

“All of these measures helped us to get through this very difficult period in the best possible way and we have now returned to a market order adjusted to the current volumes of activity in our markets.

“On the financial level, we have deployed measures from the beginning of the crisis to reduce all of our expenses and investments, implemented measures to reduce working hours and certain government aid in order to protect the group’s cash flow and sustainability as much as possible. These measures were reinforced by the Board of Directors’ decision not to proceed with the payment of the €30m dividend that had been announced a few weeks before the health crisis erupted. The group ended the half-year with a current operating profit of 3.9% of sales.

“After suffering an air pocket from mid-March to mid-May, the recovery was encouraging in June. The agricultural market remains the most buoyant, while the industrial and construction sectors recorded more significant decreases, particularly among rental companies, whose business outlook for the remaining part of 2020 and 2021 is still gloomy.

“On the strength of the upturn at the end of the quarter, the group ended the first half of the year with an order book of €555m, which enables us to estimate a sales outlook for 2020 that is around 30% lower than in 2019 and, in the absence of any further deterioration in the global economic context, a current operating profit in the range of 2.7% to 3.2%.

“We also believe that the crisis we are going through, will have economic consequences beyond 2020 and that our current operating income target of more than 8% of sales under the Ambition 2022 plan will not be achieved by the initial target date.”

MHA

CEP

S&S

Total

MHA

CEP

S&S

Total

In millions of euros

H1 19

H1 19

H1 19

H1 19

H1 20

H1 20

H1 20

H1 20

Var.

Net sales

829,9

178,4

155,2

1 163,5

496,5

123,2

141,9

761,6

-35%

Sales margin

124,1

24,4

43,9

192,4

60,9

7,4

42,1

110,3

-43%

Sales margin as a % of sales

15,0%

13,7%

28,3%

16,5%

12,3%

6,0%

29,6%

14,5%

Recurring Operating Income

71,6

3,9

14,6

90,1

20,6

-7,6

17,1

30,1

-67%

Recurring Op. Income as a % of sales

8,6%

2,2%

9,4%

7,7%

4,1%

-6,1%

12,0%

3,9%

Operating Income

71,0

3,7

14,4

89,1

19,7

-9,7

16,9

26,9

-70%

Net income attributable to the group

n/a

n/a

n/a

59,7

n/a

n/a

n/a

13,5

-77%

Net debt excluding IFRS 16

185,4

164,0

-12%

Net debt including IFRS 16

201,4

178,8

Shareholder’s equity

625,4

682,3

+9%

% Gearing2 excluding IFRS 16

30%

24%

% Gearing2 including IFRS 16

32%

26%

Working capital

596

591

-1%

 

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About Author

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Saul Wordsworth is deputy editor of the iVT brand - which includes digital and print editions of a quarterly magazine and Off-Highway Annual, as well as ivtinternational.com. He is a keen cyclist and lives in north London.

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