Terex reports overall growth led by port equipment and AWP

7 November 2011

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Terex’s Q3, 2011 results signaled overall growth, as net sales of $1803.6m represented a 67.7% year on year increase. It improved crane sales in almost every crane category this quarter and also in the category of aerial work platforms. It boosted net figures with its new Materials Handling and Port Solutions segment formed by acquiring Demag Cranes.

Stable net cranes sales figures went alongside improved crane production, up 47.4% to $543.6m in Q3 over $368.7m this time last year. The three highest regional performers in terms of their contribution to net sales this quarter were Western Europe (33%), Asia (28%) and North America (16%).

Improving crane production allowed Terex to deliver more large mobile cranes and port equipment, it said. Terex shrunk its backlog in 2011: while the backlog increased 7% year-on-year from $719m to $776m this quarter it decreased 15% from $918m last quarter.

Terex further doubled its year-on-year net sales figures for the crane segment in its home market of the US. These were buoyed by high sales of rough terrains, straddle carriers and boom trucks, Terex said. Globally, demand improved for crawlers, port equipment and tower cranes.

While Asia remains Terex’s second biggest regional market for cranes in terms of net sales and a stable market, boom truck demand slackened in China. “[…] Stronger demand also occurred in China, India, and Germany. However, our truck cranes business in China experienced a significant decrease in demand,” said Ronald M. DeFeo, Terex’s chairman and CEO.

Terex’s acquisition of Demag made a considerable impact on net sales, with the new segment netting $256m in sales, drawn in part from services and spare parts sold in Germany and other Western European countries due to summer factory servicing requirements. Without Demag, net sales increased 44% but with it, they increased 67.7%.

DeFeo was optimistic about the impact of the Demag Cranes acquisition as the company begins negotiating a domination and profit and loss transfer agreement and an integration planning process. He said, “We expect benefits from these efforts to offset a portion of the increased purchase accounting amortization in 2012.”

Sales of aerial work platforms increased 58.9% in Q3 over this time last year because of large rental companies replacing fleets, rentals, and increased sales to Europe and the Middle East. DeFeo said, ”We are optimistic about the rest of the year and 2012 for AWP as we are having earlier than normal conversations with customers who have indicated a willingness and need to purchase more equipment.”

Terex noted end markets were recovering with some inconsistency. “Our longer-term outlook is for continued growth in many of our key product categories and end markets,” DeFeo said.

He predicted the company’s AWP and port equipment segments will bring in business in the future. “While we are mindful of the continuing economic uncertainty, we continue to believe that the overall market conditions support growth led by our AWP business, mainly in North America, and our Port Equipment business globally. We will continue to be focused on margin expansion and continued cash generation.”