Terex Corporation has reported record sales for 2000 of $2.07bn, up 11.4% on 1999. But the contribution from lifting equipment declined slightly. And net profit for the group fell 45% to $95.1m.
In the fourth quarter Terex Corp. made a net loss of $700,000 on sales down 9% to $446.6m.
Sales in the Terex Lifting segment in 2000 failed to pass the billion dollar target that president Fil Filipov predicted for the division two years ago. They fell back slightly from 1999’s $941.3m to $924.0m. Operating profits were down from 1999’s $100.1m to $94.8m in 2000.
With sales in the Earthmoving segment rising from $878.9m to $1,099.5m, Lifting is no longer the biggest or the most profitable segment of the group.
The decline in Terex Lifting’s sales was blamed on foreign exchange rates, continued softness in the hydraulic mobile crane business and a $57m decline in aerial work platform sales, a business Terex pulled back from in late 1999 with the closure of its Milwaukee facility. Excluding the impact of foreign exchange, Lifting revenues would have been higher in 2000 than in 1999, the company said.
Terex Lifting’s operating expenses as a percentage of revenues increased slightly from 6.3% in 1999 to 6.5% in 2000 as a result of additional investment in sales and marketing support. Gross margins in the Lifting segment also drifted slightly from 16.9% to 16.8%.
The year-end backlog (orders in hand) stood at $111.7m compared with $167m a year previously.
Lifting operations that posted strong performance in 2000 included: utility aerial devices and tower cranes in North America; tower cranes, container stackers and telescopic material handlers in Europe; and utility cranes (Frannas) in Australia. Operating profit, excluding the impact of the closing of the Milwaukee facility in last year’s results, declined from $100.1m in 1999 to $94.8m in 2000. The decrease was led mainly by declining volumes and lower margins in the hydraulic crane segment, offset by higher volumes, lower operating costs and improved margins in the utility aerial device segment.
“We had a good year despite the fact that the business environment became more challenging as the year progressed,” said Fil Filipov. “We found new ways to develop and grow our business profitably and to improve our market penetration. Despite the fact that several of our hydraulic crane customers were affected by a lack of capital and substantially reduced their purchases, we protected our market share.” Group chairman and CEO Ron DeFeo said: “We expect to continue facing a challenging business environment in 2001, especially in North America. Higher interest rates during all of 2000 and a declining confidence level in the economy have contributed to an increasing hesitancy from our customers to commit capital for new equipment purchases, as they wait to see where interest rates settle. This environment, which deteriorated during the fourth quarter of last year, is expected to continue during the first half of 2001.”
