The board of directors of Manitou BF has reported record revenue in the second quarter of 2018 and a strong first half of the year.
Michel Denis, President and Chief Executive Officer, stated: "The Group achieved another record quarter and revenue growth of 17% compared to H1 2017. Business was buoyant in all geographies and in our three markets of construction, agriculture and industries. Order intake for the second quarter was sustained and increased compared to Q2 2017 if we exclude the exceptional effects generated in France by the end of the tax law on equipment over-amortization in April 2017. In this very favorable environment, the Manitou group continued to expand its products range, gain market shares and increase its production rate. Growth made great demands on the operational chain, which remained tense but under control. The increase in production rates enabled us to accelerate the reduction of the depth of the order book, something we want to continue, in order to be more responsive to our customers.
"All these factors led to close the semester with a current operating income of 6.7% of sales revenue, an increase of 70 basis points. At constant scope and exchange rate, current operating income was 7.0% of sales revenue. Business prospects remain positive, with markets that we still see well oriented in all regions. At this stage, the impact of changes in import duties in certain countries resulted in an increase in production costs in the United States which, like all American manufacturers, we pass on to our customers.
"The performance achieved in the first half-year, the favorable economic context and the size of our order book allow us to confirm our expectations of sales revenue growth of more than 15% for the financial year, and a growth in current operating income of around 80 basis points compared to 2017, or around 6.8%."
The MHA - Material Handling & Access Division achieved half-year revenue of €653m, an increase of +16% compared to H1 2017, +18% at constant exchange rates and scope. Growth was particularly strong in construction and agriculture. Excluding the impact of the €55m increase in orders received in Q2 2017 to be delivered from 2018 as a result of the ending of the tax law on depreciation in France, order intake has increased compared to Q2 2017.
The operational teams continued to increase production speeds against a backdrop of tension in the operational chain, helped by the successful migration of their main ERP.
The sales price increases implemented since 2017, the effects of which were delayed by the depth of the order book, allowed a more consistent alignment of sales prices with purchase prices. In addition, the volume growth effect offset the negative exchange rate effects as well as the additional costs required by growth. Profit from recurring operations was 7.4% of sales, up by 40 basis points compared to H1 2017. The CEP - Compact Equipment Products Division achieved revenue of €151m, a rise of +29% compared to H1 2017, +30% at constant exchange rates and scope.
Business was sustained in all markets. In North America, growth of the rental companies was strong, as was their order intake. Growth was also very dynamic in Europe, as well as in the APAM region. In the United States, strong business growth was achieved despite an environment in which the shortage of manpower and tensions in the supply chain are constraints and cost factors.
In India, the division continued to progress, with the launch during the quarter of its first skidsteer developed for emerging countries, just one year after the acquisition of the manufacturing site. The positive impact of the very strong level of growth was amplified by the performance of the dollar, which enabled the division to improve the competitiveness of products exported from American factories. These factors meant that the division's negative operating result of 1.9% of sales revenue in H1 2017 improved to a positive result of 2.4% of sales revenue, representing an increase of 430 basis points in just one year.
With a turnover of 137 M€, the Services & Solutions Division (S&S) recorded a +9% increase in its activity, +10% at constant exchange rates and scope. Continuing the trend of previous quarters, service, rental and used machines activities recorded the strongest development. The spare parts and attachments activities continued to grow, based on a favorable context and continued commercial development efforts.
The recurring operating profit as a percentage of revenue was set at 8.2%, down by 40 basis points in view of the changes in the scope of consolidation and continued deployment of resources required for the division's future development.
