Manitou holding its own in a tough environment

By Maria Hadlow07 November 2008

Manitou in friendly tender to buy outstanding Gehl shares

Manitou in friendly tender to buy outstanding Gehl shares

Manitou announced sales growth of 6.6% for the nine months to 30 September (up 8.4% at constant exchange rates) on turnover just over €1 billion, and even managed a 3% increase in the most recent quarter. However, it forecast a 20% fall in sales during the final quarter of the year.

Manitou said the rate of growth of its sales had fallen because of the rapid turndown in the construction market having spread to the main European countries and the unprecedented financial crisis affecting all regions.

Currency effects reduced sales by €16.6 million, of which €11.8 million was for £ sterling alone. Despite the sharp slowdown experienced in the third quarter, further strong sales growth was recorded in France (up 15%) and other EU countries (36%), apart from Spain, which was down 71%, and the UK, down 33%, due to telehandler's high levels of exposure to the property market.

Sales of aerial platforms for the first nine months of the year held steady at €68 million with rough terrain forklift sales up 6.7% and industrial equipment up 23.7%. Manitou had taken measures in the summer to avert a build-up of inventory and rein in customer risk. The result is a slight down turn in inventory and improvement in the recovery of trade debtor balances. At the end of September the group had cash of €45 million before taking into account the financing linked to the acquisition of Gehl.

Manitou has experienced a sharp fall in order intake for its telehandlers - down two thirds compared with the third quarter of 2007. Dealers and distributors are asking for deliveries to be delayed because they are stretched financially. One-off orders are being cancelled in markets that have dried up temporarily, such as Russia and other Central European Countries.

Manitou said it was now "focused on recovering trade debtor balances and other recievables rather than on generating business where there might be few guarantees of settlement."

Manitou predicts that the deterioration in the economic environment in Europe and persisting difficulties obtaining bank financing could result in sales in the fourth quarter declining by as much as 20%. Based on this assumption sales in 2008 would equal those in 2007 (when Manitou's access business grew 56%). However, Manitou would not achieve its predicted profitability.

Since the middle of the summer, Manitou has been implementing a cost saving plan to reduce external charges: gradually removing nearly 400 temporary staff, and carrying out temporary shut down of all its production units.

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