Manitou Group — Earnings Release 2022

Mar 2, 2023

PRESS RELEASE

2022 annual results

• FY'22 Net sales of €m 2,362, +26% vs. FY'21 (+23% like for like⁽¹⁾) $\bullet$
• Recurring operating income at €m 84.6 (3.6%) vs. €m 123.7 (6.6%) in 2021 $\bullet$
• EBITDA⁽²⁾ at €m 130 (5.5%) vs. €m 167 (8.9%) in 2021 $\bullet$
• Net income group part at €m 55 vs. €m 87 in 2021 $\bullet$
• Net debt⁽³⁾ at $\epsilon$ m 213, gearing⁽³⁾ at 27%, leverage⁽³⁾ at 1.6
• $\bullet$ Dividend payment proposition at $€0.63$ per share
• Expected revenue growth in 2023 up around 20% compared to 2022 $\bullet$
• Expected recurring operating income rate in 2023 up around 100 basis points $\bullet$

Ancenis, March 02, 2023 - Michel Denis, President & CEO, stated: "The year 2022 was marked by strong revenue growth in a context of very dynamic markets and a very deep order book. The tensions on the supply chain and the inflation were very strong. The commitment of the teams enabled us to overcome the supply chain difficulties and to significantly accelerate production. Inflation was immediately reflected in sales prices, but with a time lag effect due to the depth of the order book. This situation caused a significant cyclical squeeze on margins. Recurring operating income amounted to $€84.6$ million, or 3.6% of revenues.

In this difficult context, the group has made progress on its roadmap. The year 2022 was marked by our commitment to a low-carbon trajectory validated in June by the SBTi and supported by the launch of our first electric telehandlers, by the acquisition of a company producing batteries, and by the presentation of our hydrogen strategy and our first hydrogen prototype.

In services, we intensified our digitalization efforts, acquired two companies in Finland and Italy, and strengthened the capacities of our parts distribution platforms.

In terms of products, we have renewed our core construction range developed on a new shared platform, accelerated innovation, inaugurated our new aerial work platforms plant in France and launched a massive plan to expand the industrial capacities of our two American production sites.

Finally, we continued to hire and develop our teams, strengthening their skills and diversity.

The demand from our markets and the depth of our order book lead us to anticipate revenue growth of around 20% in 2023, despite constant pressure on our supply chain and an increase in the recurring operating income as a percentage of sales of around 100 basis points, thanks to an improvement in the second half."

	Product	S&S		Product	S&S
	division	division	Total	division	division	Total
in millions of $\epsilon$	2021	2021	2021	2022	2022	2022	Var.
Net sales	1,534.8	339.8	1,874.6	1,971.8	389.9	2,361.6	$+26%$
Sales margin	223.9	92.5	316.3	204.1	108.2	312.3	$-1%$
Sales margin as a % of sales	14.6%	27.2%	16.9%	10.4%	27.8%	13.2%
Recurring operating Income	91.3	32.5	123.7	43.7	41.0	84.6	$-32%$
Recurring op. income as a % of
sales	5.9%	9.6%	6.6%	2.2%	10.5%	3.6%
Operating income	87.2	32.0	119.2	41.5	40.8	82.3	$-31%$
Net income attributable to the
group			86.8			54.7	$-37\%$
Net debt excluding IFRS 16			$-18.5$			213.4
Net debt including IFRS 16			3.0			234.4
Shareholder's equity			751.3			791.6	$+5%$
% Gearing excluding IFRS 16			$-2%$			27%
% Gearing including IFRS 16			$0\%$			30%
Working capital requirement			473			700	$+48%$

Percentage data in parentheses expresses a percentage of revenue. Audit procedures performed by the auditors.

Business review by division

The Product division reported revenue of €1,972 million in 2022, up 28% compared to 2021 (+25% at constant exchange rates and scope). Growth was disrupted by supply chain tensions and, at the beginning of the year, by the health crisis. Operations focused on accelerating production rates, supply chain management, R&D investments and capacity expansions in progress in France and the United States. The sales margin of the division came to €204.1 million, down 9% on the year-earlier period. The sales margin as a percentage of sales deteriorated by 4.2 points, impacted by inflation in raw materials and energy. Given the depth of the order book, the major sales price increases announced had a partial effect in 2022, and the very high invoicing in Q4 concerned old low-margin orders. The R&D costs increased by €7.6 million with the continuation of innovation programs in order to achieve the objectives of the Group's carbon trajectory. The structural costs also rose by 18% (+€19.7 million) to support projects and were impacted by inflation. Thus, the recurring operating income of the Product division is down by €47.6 million (-52%) to €43.7 million (2.2% of revenues) compared with €91.3 million in 2021 (5.9% of revenues).

In order to limit overly high expectations of orders for 2024, these are now being opened gradually with dealers.

The Services & Solutions (S&S) division recorded revenue growth of 15% for the year (+11% at constant exchange rates and scope). The division benefited from very strong market demand, with tensions over availability and prices in the distribution of spare parts. It is also increasing the capacity of its logistics platforms and continuing to strengthen its service offerings. Business grew in all geographic regions, particularly in the Americas and Northern Europe, as well as in all of its activities, in particular in the used machines. The sales margin was up by €15.7 million (+17%) to €108.2 million compared with 2021. This increase is explained by the growth in activity and a 0.5 point improvement in the sales margin as a percentage of sales. The pricing policy enabled the division to limit the impact of inflation. The administrative, selling, marketing and service expenses were contained in an inflationary environment, with an increase of 10.9% (+€6.6 m). As a result, the division's profitability came to €41.0 million (10.5% of revenues), up by €8.5 million compared with FY 2021 (€32.5 million, or 9.6% of revenues).

Dividend proposed at the next Shareholders' meeting

The Board of directors has decided to propose to the Annual general shareholders' meeting, to be held on June 15, 2023, the payment of a dividend of €0.63 per share.

Glossarv

• (1) like for like, at constant scope and exchange rate:
• scope: for the company Lifttek acquired in May 2022, restatement from the date of its acquisition to December 31, 2022. No company exited the scope in 2022. There is no acquisition nor exit in 2021.
• application of the exchange rate of the previous year on the aggregates of the current year
• (2) EBITDA: Earnings before interest, taxes, depreciation, and amortization, restated from IFRS 16 impact
• (3) Net debt, gearing and leverage: excluding lease commitments IFRS 16

Order book

• The order book corresponds to machine orders received and not yet delivered, for which the group:
• has not vet provided the promised machines to the customer.
• has not yet received consideration and has not yet been entitled to consideration.

These orders are delivered within less than one year (excluding exceptional periods as experienced by the Group since 2021) and may be canceled.

The order book may vary due to changes in consolidation scope, adjustments, and foreign currency translation effects.

In order to limit the effects of inflation, the group has integrated in H1 2022 mechanisms for adjusting its sales prices at the time of delivery. These mechanisms will influence the valuation of the orderbook on equipment, which is booked and valued at the price on the day the order is placed.

The Group has also introduced a new policy of gradually opening the order intake horizons of H2 2024 for dealers in order to limit the effects of anticipation without an end market customer.

ISIN code: FR0000038606 Indices: CAC ALL SHARES, CAC ALL-TRADABLE, CAC INDUSTRIALS, CAC MID & SMALL, CAC SMALL, EN FAMILY BUSINESS

FORTHCOMING EVENT

April 25, 2023 (after market closing) Q1'23 sales revenues

Company information is available at www.manitou-group.com Shareholder information: communication.financiere@manitou-group.com

As a world reference in the handling, aerial work platform and earth moving sectors, Manitou Group's mission is to improve working conditions, safety and performance around the world, while protecting people and their environment. Through its flagship brands - Manitou and Gehl - the group designs, produces, distributes and services equipment for construction, agriculture and industry. By placing innovation at the heart of its development, Manitou Group constantly seeks to bring value to all its
stakeholders. Through the expertise of its network of 90 examplement in France. It achieved a 2022 turnover of €2.4 billion and brings together 5,000 talented people worldwide, all driven by a shared passion.

FINANCIAL EXTRACT 2022

1. STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED INCOME STATEMENT

	In thousands of euros	2021	2022
Net sales		1874583	2 3 6 1 6 2 7
Cost of goods & services sold		$-1558238$	$-2049278$
Research & development costs		$-27356$	$-34924$
Selling, marketing and services expenses		$-108200$	$-127376$
Administrative expenses		$-59585$	$-66659$
Other operating income and expenses		2 5 4 3	1 2 4 7
Recurring operating income		123 747	84 638
Non-recurring operating income and expenses		$-4560$	$-2357$
Operating income		119 188	82 2 81
Share of profits of associates		2875	1986
Operating income including Net income from associates		122 063	84 267
Financial income		23773	38 007
Financial expenses		$-29648$	$-42270$
Financial result		$-5875$	$-4263$
Income before tax		116 188	80 004
Income taxes		$-29178$	$-24950$
Net income		87009	55 0 54
Attributable to equity holders of the parent		86 757	54725
Attributable to non-controlling equity interests		252	329

EARNINGS PER SHARE (IN EUROS)

	2021	2022
Net income attributable to the equity holders of the parent
Diluted earnings per share

OTHER COMPONENTS OF COMPREHENSIVE INCOME AND EXPENSES & COMPREHENSIVE INCOME

	In thousands of euros	2021	2022
Income (loss) of the year		87009	55 054
Items that will be reclassified to profit of loss in subsequent periods
Adjustments to fair value of the financial assets		$-439$	$-71$
Translation differences arising on foreign activities		19 3 6 2	9422
Interest rate hedging and exchange instruments		$-1993$	4069
Tax impacts		582	$-1034$
Items that will not be reclassified to profit or loss in subsequent periods
Actuarial gains (losses) on defined benefits plans		3605	5943
Tax impacts		$-1228$	$-1507$
Total gains and losses recognized directly in other components of comprehensive income		19890	16822
Comprehensive income of the year		106899	71877
Attributable to equity holders of the parent		106 246	71 609
Attributable to non-controlling interests		654	268

2. CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS

	In thousands of euros	December 31, 2021	Net amount as of December 31, 2022
Goodwill		566	3 2 2 1
Intangible assets		62 112	69 665
Tangible assets		219 614	256 436
Right-of-use of leased assets		20 064	19 2 28
Investments in associates		18818	19 160
Sales financing receivables		4469	2 3 4 3
Other non-current assets		17806	12 654
Deferred tax assets		17 261	13 062
Non-current assets		360 712	395 770
Inventories & work in progress		532 285	717978
Net trade receivables		326 312	488 635
Current income tax		13 4 68	10 0 84
Other current assets		78 4 65	89 978
Cash and cash equivalents		194 305	60 704
Assets held for sale		$\circ$	$\circ$
Current assets		1 144 836	1 3 6 7 3 7 9
Total assets		1505547	1763148

EQUITY & LIABILITIES

	In thousands of euros	December 31, 2021	Net amount as of December 31, 2022
Share capital		39 668	39 6 68
Share premiums		46 098	46 098
Treasury shares		$-2398$	$-23820$
Reserves and profit for the year - equity holder of the parent		688 476	728 874
Equity attributable to owners of parent		750 244	790 821
Non-controlling interests		1019	759
Total Equity		751 263	791 579
Non-current provisions		43 344	34 8 33
Non-current financial liabilities		126 638	138 759
Non-current lease debts		16 433	14 973
Other non-current liabilities		5 3 0 7	6654
Deferred tax liabilities		7605	4086
Non-current liabilities		199 327	199 304
Current provisions		26 222	26 7 27
Current financial liabilities		51 686	142 622
Current lease debts		5091	6006
Trade payables		312 589	420 341
Current income tax		2 0 0 3	4 4 3 7
Other current liabilities		157 367	172 132
Current liabilities		554 957	772 265
Total equity & liabilities		1505547	1763148

3. CONSOLIDATED SHAREHOLDERS' EQUITY

CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY

	Share	Share	Cumulative translation	Treasury	Consolidated	Attribuable to equity holders of the parent	Non- controlling
In thousands of euros As of december 31,	capital	premium	adjustment	shares	reserves	company	interest	Total equity
2020	39 668	46 098	$-12665$	$-23799$	613 866	663 167	6780	669 947
Impact of new standards
As of january 1, 2021	39 668	46 098	$-12665$	$-23799$	613 866	663 167	6780	669 947
Gains and losses recognized in equity			19 15 2		530	19682	207	19890
Net income					86 563	86 5 63	446	87009
Comprehensive income	$\circ$	0	19 15 2	$\circ$	87093	106 246	654	106 899
Stock option plan- related expenses
Dividends paid					$-22966$	$-22966$	-9	$-22975$
Treasury shares				$-199$	58	$-141$		$-141$
Capital increase
Changes in control of consolidated entities
Acquisition and disposal
of minority interests' shares			$-2120$		5 6 1 2	3 4 9 2	$-6485$	$-2993$
Purchase commitments
for minority interests' shares
Other					447	447	80	526
As of December 31, 2021	39 668	46 098	4 3 6 7	$-23998$	684 109	750 244	1019	751 263
Impact of new standards
As of January 1, 2022	39 668	46 098	4 3 6 7	$-23998$	684 109	750 244	1019	751 263
Gains and losses recognized in equity			9461		7423	16 8 8 4	-61	16822
Net income					54725	54725	329	55 054
Comprehensive income	$\circ$	0	9461	$\mathbf 0$	62 148	71 609	268	71877
Stock option plan- related expenses						$\circ$		$\circ$
Dividends paid					$-30614$	$-30614$	$-53$	$-30667$
Treasury shares				178	-89	90		90
Capital increase								$\circ$
Changes in control of consolidated entities						$\mathbf 0$		0
Acquisition and disposal of minority interests' shares			$-7$		64	57	$-268$	$-212$
Purchase commitments for minority interests' shares						$\bigcirc$		$\circ$
Other					$-565$	$-565$	$-206$	$-771$
As of december 31, 2021	39 668	46 098	13821	$-23820$	715 054	790 820	759	791 579

4. CASH FLOW STATEMENT

	In thousands of euros	December 31, 2021	December 31, 2022
Net income		87009	55 0 54
Income from equity affiliates net of dividends		$-25$	$-1503$
Amortizations and depreciations		53 791	54 911
Provisions and impairments		8637	3673
Income tax expense (current and deferred)		29 178	24 950
Other non-cash income and expenses		$-448$	$-87$
Cash flow operations		178 142	136 998
Tax paid		$-27706$	$-20842$
Change in working capital requirement		$-1036$	$-209501$
Change in capitalized lease machines		$-19413$	$-11122$
Net cash flow from operating activities		129 986	$-104466$
Proceeds from sales of intangible assets		$-20325$	$-20839$
Proceeds from sales of tangible assets		$-31530$	$-72693$
Change in fixed assets payables		503	1076
Disposals of tangible and intangible assets		10 447	598
Acquisitions of investments in obtaining control, net of cash acquired		$\Omega$	$-3274$
Disposals of investments with loss of control, net of cash transferred		$\overline{0}$	$\Omega$
Others		$-717$	$-862$
Net cash flow from investing activities		$-41621$	$-95994$
Capital increase		$\Omega$	$\Omega$
Dividends paid		$-22976$	$-30667$
Purchase of treasury shares		$-199$	178
Repurchase of non-controlling interests		$-2993$	$-212$
Change in others financials liabilities and assets		13 967	64 634
Payment of finance lease liabilities		$-5940$	$-6405$
Others		$-1630$	$-4567$
Net cash flow from financing activities		$-19771$	22 961
Net increase (decrease) in cash, cash equivalents, and bank overdrafts		68 5 94	$-177499$
Cash, cash equivalents and bank overdrafts at beginning of the year		119818	192 712
Exchange gains (losses) on cash and bank overdrafts		4 3 0 0	783
Cash, cash equivalents and bank overdrafts at end of year		192 712	15 9 96

5. EXTRACT FROM THE NOTES OF THE CONSOLIDATED FINANCIAL STATEMENTS OF THE UNIVERSAL REGISTRATION DOCUMENT

CHANGE IN SCOPE

In May 2022, Manitou Group acquired a stake of 86% in its Finnish dealer Lifttek, based near Helsinki.

Lifttek is a company specialised in the import, the sale and after-sale service of lifting equipement, with a strong focus on Manitou products. Its customers are mainly machine rental companies, construction and agriculture companies.

With a turnover of 7.4 million of euros in 2022, the company has 30 employees and 3 sites in the Vantaa (Helsinki area) and Tampere cities.

Lifttek is fully consolidated since May 2, 2022.

Call and put options have been entered into with minority shareholders on 14% of the capital. The Group takes these options in the percentage interest's calculation, which is 100% at December 31, 2022. A discounted liabilities of 0.9 million of euros has been recognised.

RUSSIAN-UKRAINIAN WAR

The Russian-Ukrainian war has limited repercussions on the Group's activity, which suspended its shipments of machines to Russia and Belarus from the first days of the conflict.

In 2021, the group's revenue in Russia, Ukraine and Belarus was around 4% of its consolidated revenue. The order book in this same zone was around 6% of the order book at December 31, 2021.

The group doesn't provide directly from Ukraine, Belarus or Russia. To date, despite increasing pressure on the provision of raw materials and components, the group hasn't had any difficulties in obtaining components specifically from its suppliers that could be impacted by the war in Ukraine.

The emergence of the conflict is contributing to the acceleration of inflation in energy and raw materials that has been observed for several months. These increases have impacts on the Group's profitability.

The group has a subsidiary in Russia. Since March 2022, the sales of this subsidiary have been limitated to the distribution of spare parts. At the date of publication of this report, the group has no customer risks to its activities in these countries and the financial situation of the subsidiary should satisfy its liquidity needs for the whole of 2023.

MONITORING OF LITIGATION FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS

In May 2017, Manitou Group was sued by JC Bamford Excavators Limited (JCB) in France, the United Kingdom and then Italy for alleged infringement of two European patents and one UK patent (respectively European patent EP 1 532 065 B2(EP 065) its equivalent UK Patent GB 2 390 595 B (GB565) and European patent EP 2 263 965 B9) relating to certain features concerning the overload cut-off control system of certain telescopic forklift trucks manufactured and/or marketed in these three countries

In May 2017, the plaintiff filed a claim in the French court for a provision of 20 million euros, to be increased to 50 million euros in June 2018. The financial claims before the English court were not quantified and are still not quantified at the date of publication of this report, but the summons indicates that for procedural purposes the commercial value of the claim is estimated to be in excess off 10 million. For Italy, the summons does not specify any quantified claim.

In December 2018, JCB served Manitou Group with a new patent infringement suit in France and the United Kingdom relating to a third European patent (EP 2 616 382 B3 (EP 382), also relating to certain features concerning the overload cut-off control system of certain telescopic forklift trucks. This summons in France takes up the request for a provision in the amount of 50 million euros, subsequently increased to 100 million euros in its last conclusions communicated in May 2020. To date it is not yet quantified in the UK The summons for this third patent has been the subject of joint proceedings in the United Kingdom but remains separate in France.

In 2018, in the French proceeding, JCB had produced an expert opinion estimating its damages of 160 million euros for the first two patents. At the end of 2019, in the first main proceedings, JCB increased its damage assessment to 190 million euros in its final conclusions. This increase is due to an update of the injury in its duration, which according to JCB is until March 2019. This assessment also includes the estimated injury under the third patent.

In France, in the context of a procedural incident in 2018, JCB applied for preliminary injunctions against Manitou BF. A decision was issued by the Pre-Trial Judge on 31 January 2019, which dismissed the applicant's request for preliminary injunction on the first patent on which JCB based its allegations and, regarding the second patent, prohibited Manitou BF from manufacturing, offering for sale, renting and owning an old configuration of certain telescopic forklift trucks. This decision has no impact on Manitou BF's business as it relates to the ordering system for certain models produced and sold before August 2017 which are therefore no longer manufactured by Manitou BF, as underlined in the order. Manitou BF immediately appealed this decision in order to challenge the prohibition order in so far as it related only to a configuration that Manitou had ceased to produce for 18 months. This immediate appeal on the grounds of abuse of authority was held to be inadmissible, reserving the possibility of appeal with judgment on the merits

In 2020, the legal proceedings on the merits of the dispute relating to the first two patents continued. On February 26, 2021, the Paris Court of Justice ("Tribunal Judiciaire") ruled, in first instance, on the French part relating to these first two patents.

Under the terms of this decision, the Tribunal invalidated the French part of the second patent in its entirety rendering ineffective the January 31, 2019 preliminary injunction order against Manitou BF. Then, JCB tried unsuccessfully to limit its 2nd patent to the EPO (European Patent Office), which rejected its limitation claim on October 4th, 2021. JCB didn't appeal against this decision.

The Court also invalidated most of the claims of the French part of the first patent (EP 065). The Court found that only two claims of the French part of the first patent were infringed by three models of equipment from an old configuration which is no longer marketed by Manitou BF since May 2017. Manitou challenges this decision while noting that it has no impact on its business as this old configuration is no longer marketed.

Given the very residual character of the infringement upheld, the Court ordered Manitou BF to pay the plaintiff the total sum of 150,000 euros for the loss suffered, rejecting the claim of JCB, which was claiming a loss of 190 million euros. The Court's decision reinforces the position of Manitou, which has always contested the merits of the plaintiff's action and the disproportionate nature of its claims. JCB and Manitou BF appealed against this decision.

JCB and Manitou BF have appealed this decision and the appeal process is ongoing. The procedural schedule has been postponed to 2023. To date the procedural schedule does not allow a decision by the Court of Appeal to be considered before 2024. It should also be noted that Manitou had initiated an action for annulment of the seizure-infringement carried out by JCB within the framework of this procedure. The judge responded favorably to MANITOU's request on June 29, 2022; the June 2017 JCB infringement seizure was invalidated. Following the decision of the Paris Court of Appeal of June 29, 2022 confirming the nullity of the seizureinfringement, JCB decided to appeal to the Court of Cassation on November 29, 2022.

The parallel proceeding relating to the third patent is still ongoing, and the court hearing will take place in October 2023.

Following the decision of the Paris Court of Justice of February 26, 2012, which confirms the group's positions, an expense of 0.2 million euros had been recorded for the first patent in 2020 and no provision was recognized in title of the second patent.

For the third patent, in the state of progress of the procedures in France, the financial risk likely to be incurred is still difficult to estimate reliably. In addition, a significant outflow of resources under this request seems unlikely given the elements put forward by the Manitou group to defend itself. Consequently, no provision for this request has been recorded in the group's accounts.

In the United-Kingdom, a case management conference was held in January 2019 after JCB finally performed its due diligence. The litigation schedule has been established and the hearing originally scheduled for October 2020 has been postponed due to the increased length of the trial resulting from the addition of the third patent in the proceeding. According to this new schedule, the case has been pleaded before the High Court of Justice in November 2021. On July 5, 2022, the High Court of London delivered its first instance decision in the infringement dispute between J. C. Bamford Excavators Ltd (JCB) and Manitou BF and Manitou UK Ltd. Three JCB patents examined in the trial have been fully disabled:

• the European patent EP 1 532 065 B2 (EP 065) and its British equivalent GB 2 390 595B (GB 595);
• and the European patent EP 2 263 965 B9 (EP 965).

As a result, all infringement actions brought by JCB against Manitou based on these three patents have been dismissed.

Furthermore, the Court considered that the European patent EP 2 616 382 B3 (EP 382) was valid and that consequently certain configurations of certain telehandlers which were sold in Great Britain were infringing.

Manitou appealed this judgment in January 2023.

The financial consequences of this decision will only be known in 2023 following compensation proceedings to be held during the year. To date Manitou Group is not able to make a reliable estimate of indemnification. Consequently, no provision has been recorded in the group's accounts for this risk

In Italy, the proceedings on the merits relating to these first two patents remain in a preliminary phase, the appointment of a court expert was pronounced at the end of 2019 and the court expert measures are still in progress at the closing date. The expert report was sent to the judge on October 27, 2022, on which the judge should rule by the end of 2023.

In Italy, JCB had also requested interim injunctions against Manitou's Italian subsidiary on the second and third patents. This request was rejected by the Italian courts by decision of January 30, 2020. JCB has not appealed this decision.

Given the progress of the proceedings, a significant outflow of resources in respect of this claim seems unlikely in respect of the matters put forward by Manitou Group to defend itself. Consequently, no provision for this claim has been recognized in the group's financial statements.

The group will continue to firmly defend itself against infringement allegations of three patents claimed by JCB.

INFORMATION ON OPERATING SEGMENTS

CONSOLIDATED INCOME STATEMENT BY DIVISION

The information on operating segments is communicated on the basis of the group operational organization, with two divisions:

• the Product division includes all French, Italian, American, and Indian production sites dedicated in particular to telehandlers, industrial masted forklift trucks and all-terrain trucks, truck-mounted forklifts, aerial work platforms, compact wheel loaders, compact track loaders, and articulated compact loaders, backhoe loaders and telescopic loaders. Its mission is to optimize the development and production of Manitou, Gehl, and Mustang by Manitou brand name products.
• the S&S (Services & Solutions) division includes service activities to support sales (financing approaches, warranty contracts, maintenance and full service contracts, fleet management, etc.), after-sales services (spare parts, technical training, warranty contract management, used equipment management, etc.) and services to end users (geolocation, user training, advice, etc.). The aim of this division is to create service offers to meet the expectations of each of our customers in our value chain and increase the resilience of group sales.

These two divisions design and assemble the products and services that are distributed by the sales and marketing organization to dealers and the group's major accounts in 140 countries.

	Product division		S&S division		TOTAL
In thousands of euros	2021	2022	2021	2022	2021	2022
Net Sales	1534832	1971774	339 751	389 854	1874583	2 3 6 1 6 2 7
Cost of goods & services sold	$-1310977$	$-1767637$	$-247261$	$-281641$	$-1558238$	$-2049278$
Gross margin	223 855	204 137	92 490	108 213	316 345	312 349
As a %	14,6%	10,4%	27,2%	27,8%	16,9%	13,2%
Research & development costs	$-27356$	$-34924$	0	$\Omega$	$-27356$	$-34924$
Selling, marketing & service expenses	$-59214$	$-71779$	$-48986$	$-555597$	$-108200$	$-127376$
Administrative expenses	$-48181$	$-55287$	$-11403$	$-11371$	$-59585$	$-66659$
Other operating income and expenses	2 1 8 5	1525	359	$-278$	2543	1 2 4 7
Recurring operating profit	91 289	43 671	32 459	40 967	123 747	84 638
As a %	5,9%	2,2%	9,6%	10,5%	6,6%	3,6%
Non-recurring operating income and expenses	$-4083$	$-2188$	$-476$	$-168$	$-4560$	$-2357$
Operating income	87 205	41 4 83	31982	40798	119 188	82 281
As a %	5,7%	2,1%	9,4%	10,5%	6,4%	3,5%
Share of profits of associates	$\circ$	$\Omega$	2875	1986	2875	1986
Operating Income including Net Income from associates	87 206	41 4 83	34 857	42785	122 063	84 267

The spare parts and accessories distribution business, which is integrated within the Services & Solutions division, benefits from services provided by the Product division (R&D, qualification of parts, qualification of suppliers), the already existing basis of sold units, as well as the brand name recognition built by those divisions.

In order to compensate for all of these benefits, the group's divisional reporting includes fees from the Services & Solutions division to the Product division. This fee is calculated based on comparable indicators of external independent spare parts distributors for which the median operating income over a five year period amounted to 3.90% in Europe and the US, the main regions in which the S&S division operates. That fee is included in the line item «Cost of goods and services sold» of each division, which therefore includes the charges related to goods and services sold plus or minus the interdivision fees.

Assets, cash flows or even liabilities are not allocated to the individual divisions, as the operating segment information used by the group's management does not incorporate those various item.

NET SALES BY DIVISION AND GEOGRAPHICAL REGION

		Net sales 2021						Net sales 2022
SOUTHERN EUROPE	NORTHERN EUROPE	AMERICAS	APAM*	TOTAL	in millions of euros and % of total	SOUTHERN EUROPE	NORTHERN EUROPE	AMERICAS	APAM*	TOTAL
485	628	276	146	1535	Product	690	733	364	185	1972
26%	33%	15%	8%	82%	division	29%	31%	15%	8%	83%
117	122	58	42	340	S&S	140	130	72	48	390
6%	7%	3%	2%	18%	division	6%	5%	3%	2%	17%
602	750	335	188	1875		830	862	436	233	2 3 6 2
32%	40%	18%	10%	100%	TOTAL	35%	37%	18%	10%	100%

* Asia, Pacific, Africa, Middle East

POST-CLOSING EVENTS

ACQUISITION OF MAJORITY STAKE IN EASYLI

In January 2023, the group acquired a stake of 82% in EasyLi, a specialised company in the design and production of lithium-ion batteries. For the group, this transaction enables to acquire specific skills as part of its energy transition. Based in Poitiers (France), EasyLi has 25 employees and recorded a revenue of 1 million of euros in 2022.

ACQUISITION OF THE ITALIAN COMPANY GI.ERRE SRL

On March 1, 2023, the group acquired all the shares of the Italian company GI.ERRE SRL, based in Castelfranco in Italy and specialised in service activities for Manitou products.

GI.ERRE had a revenue of 4 million of euros in 2022 and has 14 employees.

SIGNING OF AN EXCLUSIVE PARTNERSHIP WITH KILOUTOU FOR THE FIRST RETROFIT PROJECT

In February 2023, the group annouced the signing of an exclusive 12months partnership with Kiloutou, a major player in the European rental market, to offer electrification kits for used Manitou thermic telescopic forklifts. The retrofit will extend the life of the equipments while reducing its environmental impacts, in particular, its carbone emissions, in line with the commitments of the two groups in their respective CSR roadmaps.

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