Manitou affected by economic downturn
Wednesday, 8 April 2009
Manitou's 2008 results have been negatively affected by the business downturn in the second half of 2008 and its recent acquisition of US company Gehl for EUR235 million (USD311 million).
Its net sales for 2008, which included Gehl from 1 November 2008, totaled EUR1.278 billion (USD1.693 billion), an increase of 1.4%. Gehl's contribution to sales over two months was EUR20 million (USD26.5 million), which partly offset the EUR24 million (USD31.7 million) negative impact of exchange rate fluctuations.
In the fourth quarter, the sharp downturn in business negatively impacted sales which recorded a 6.6% growth at the end of September.
Manitou attributes its "stable level of sales" to marketshare gain globally in 2008, the group's "solid business model" and its position in the rough-terrain materials handling sector.
Operating profit before goodwill impairment totaled EUR97 million (USD128.6 million), a gross margin of 7.6%. For the first half of 2008, the group achieved a 10.5% margin with EUR76 million (USD100.8 million) operating profit, in line with the 2007 level. Business conditions and the Gehl acquisition affected the operating margin for the second half of the year.
The group's net profit for 2008 was EUR4 million (USD5.3 million) after EUR52 million (USD68.9 million) in goodwill impairment related to Gehl. Net profit before goodwill impairment decreased by 35.2% to EUR56 million (USD74.3 million) in 2008, corresponding to EUR1.47 (USD1.95) in earnings per share compared to EUR2.28 (USD3.02) the previous year.
In its outlook for 2009, Manitou predicts a drop in consolidated sales, including Gehl, which could slump by 40% and result in an operating loss.
Manitou's strategy for weathering the crisis involves a EUR20 million (USD26.5 million) plan, which will improve cash-flow generation and reduce net debt by about EUR150 million (USD198.9 million) by the end of 2009. The plan is based on a significant lowering of the breakeven point achieved through adapting operating costs and general overheads and by reducing staff numbers.
Around 650 jobs out of a 3,300-strong workforce were cut at the end of 2008.
Manitou says it has mobilised a significant portion of its credit lines to substantially increase cash flow and avoid the risk of insufficient liquidity in the medium term.
The group adds that it is pursuing discussions with its banking partners in the US and Europe to secure the financing of Gehl due to the negative impact of the financial crisis on its financial statements for the year ended 31 December 2008.