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Manitou Group — Interim / Quarterly Report 2011
Oct 17, 2011
1503_ir_2011-10-17_7b293705-89fe-43e0-8dcb-09f4ef144b03.pdf
Interim / Quarterly Report
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2011 HALF-YEAR REPORT
HALF-YEAR REPORT
AS AT 30/06/11
| Business review | 3 | |
|---|---|---|
| 01 | 1.1 Sales performance | 3 |
| 1.2 Consolidated income statement | 4 | |
| 1.3 Consolidated balance sheet | 6 | |
| 1.4 Review of the Group's main companies | 7 | |
| 1.5 Outlook for 2011 | 9 | |
| 1.6 Post closing events subsequent to 30/06/2011 | 9 | |
| 1.7 Main risks and uncertainties in the remaining 6 months of the fiscal year | 9 | |
| 1.8 Shareholder structure and share performance | 12 | |
| 1.9 Information related to accounting standards and consolidation methods | 13 | |
| 1.10 Other information | 13 | |
| Changes in the presentation of the financial statements | 15 | |
| 02 | 2.1 Objectives of the changes | 15 |
| 2.2 Explanation of reporting line items | 15 | |
| 2.3 Financial indicators | 17 | |
| 2.4 Comparability of figures | 17 | |
| 2.5 Review and approval of changes | 17 | |
| Consolidated financial statements | 18 | |
| 03 | 3.1 Statement of comprehensive income | 18 |
| 3.2 Consolidated balance sheet | 20 | |
| 3.3 Consolidated statement of changes in shareholders' equity | 22 | |
| 3.4 Consolidated statement of cash flows | 23 | |
| 3.5 Information on operating segments | 24 | |
| 3.6 Manitou Group consolidation scope as at 30.06.2011 | 26 | |
| 3.7 Notes to the consolidated financial statements as at 30.06.2011 | 27 | |
| Statutory auditors' review report on first half-year financial | ||
| 04 | information for 2011 | 40 |
| 05 | Statement of the person responsible for the document | 42 |
| Business review |
3 | |
|---|---|---|
| 01 | 1.1 Sales performance | 3 |
| 1.2 Consolidated income statement | 4 | |
| 1.3 Consolidated balance sheet | 6 | |
| 1.4 Review of the Group's main companies | 7 | |
| 1.5 Outlook for 2011 | 9 | |
| 1.6 Post closing events subsequent to 30/06/2011 | 9 | |
| 1.7 Main risks and uncertainties in the remaining 6 months of the fiscal year | 9 | |
| 1.8 Shareholder structure and share performance | 12 | |
| 1.9 Information related to accounting standards and consolidation methods | 13 | |
| 1.10 Other information | 13 |
1 BUSINESS REVIEW
1.1 SALES PERFORMANCE
The first half of 2011 confirmed the Manitou Group's recovery with a return to profitability both overall and in each of its three divisions. That performance was even more remarkable in that it took place in a context of major strain on the operating structure in place to support the acceleration. Despite these obstacles, the Group managed to achieve revenue growth of 45% over the first half of 2010, to reach €561.6 million. Manitou, which had restored operating break-even in late 2010, thus completed its financial recovery by reporting a 2.7% net margin.
The improvement in the financial position was further strengthened by the merger of Manitou BF with its holding company, SFERT, in June 2011. The transaction was intended to strengthen and ensure the continuity of Manitou's controlling shareholder structure, and the related cash contribution also allowed the Group to increase shareholders' equity by €40.9 million and reduce debt by €36.6 million.
| Sales H1 2010 | Sales H1 2011 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| France | Europe | USA | Rest of world |
Total | € Millions % of total |
France | Europe | USA | Other regions |
Total |
| 95 | 138 | 12 | 29 | 274 | RTH | 128 | 213 | 18 | 39 | 397 |
| 25% | 36% | 3% | 7% | 71% | 23% | 38% | 3% | 7% | 71% | |
| 41 | 13 | 2 | 4 | 59 | IMH | 54 | 13 | 2 | 5 | 74 |
| 10% | 3% | 1% | 1% | 15% | 10% | 2% | 0% | 1% | 13% | |
| 1 | 15 | 34 | 5 | 54 | CE | 1 | 20 | 62 | 8 | 91 |
| 0% | 4% | 9% | 1% | 14% | 0% | 4% | 11% | 1% | 16% | |
| 136 | 166 | 48 | 37 | 387 | Total | 182 | 246 | 82 | 52 | 562 |
| 35% | 43% | 12% | 10% | 100% | 32% | 44% | 15% | 9% | 100% |
SALES PERFORMANCE BY DIVISION AND GEOGRAPHICAL REGION
SALES PERFORMANCE BY DIVISION
Sales performance – Rough Terrain Handling (RTH) Division
The Rough Terrain Handling division generated sales of €397.1 million, an increase of 45% as compared to the first half of 2010.
The construction business benefited from strong demand driven by the return of the regional renters of the platforms and masted forklift trucks businesses. Growth was particularly strong in Central and Eastern Europe, Russia and South America.
The agricultural sector improved due to favourable pricing conditions and the equipment renewal cycle. Growth was particularly strong in Central Europe, Northern Europe, Russia, Italy and the Benelux countries.
Finally, sales of spare parts continue to grow as a result of the global return to the use of equipment in all sectors.
The division reported 34% sales growth in France, 55% in other European countries, 48% in North and South America and 33% in the rest of the world.
Sales performance in the Industrial Material Handling (IMH) division
At €73.8 million, the IMH division's sales were up by 24% as compared to the first half of 2010. Deliveries of Toyota industrial forklifts were sharply higher in France, which also benefits from the mast sub-contracting business. The warehousing equipment business remained penalised however by the completion of the relocation of its production centre in Saint-Ouen l'Aumône (95) to the Beaupréau site (49).
The division reported that sales were up by 32% in France, down by 1% in the rest of Europe and by 5% in North and South America, and up by 45% in the rest of the world.
Sales performance – Compact Equipment (CE) division
The division's sales continued to recover, increasing by 68% year on year to €90.6 million during the first half of 2011. In North America, sales benefited from the replacement of skidsteers in the agricultural sector and the recovery in the leasing of telehandlers. In Europe and the rest of the world, the division benefited from both a more favourable economic environment and the acceleration of the implementation of marketing synergies related to the expansion of the distribution network for Compact Equipment through the historical Manitou dealers.
The division reported 124% growth in France, 30% in other European countries, 84% in North and South America and 69% in the rest of world.
1.2 CONSOLIDATED INCOME STATEMENT
GROUP INCOME STATEMENT
| In millions of euros | H1 2010 | H1 2011 | |
|---|---|---|---|
| Sales | 387.1 | 561.6 | |
| Gross profit | 55.5 | 84.9 | |
| % of sales | 14.3% | 15.1% | |
| Net operating income (loss) from recurring activities | (5.2) | 22.8 | |
| % of sales | -1.3% | 4.1% | |
| Restructuring costs | (2.0) | (1.6) | |
| Manitou-SFERT merger | 4.1 | ||
| Net operating income (loss) | (7.3) | 25.3 | |
| Net income (loss) attributable to the Parent Company | (14.3) | 15.0 |
Gross margin increased by 0.8 percentage points to 15.1% as compared to June 2010. Increased volumes contributed to a 5.1% improvement in the margin due to the increased absorption of overhead costs and the increase in production capacity utilisation.
Gross margin was also adversely impacted by four types of effects:
-
First, an unfavourable mix, which resulted in 1.0 percent decrease in the weight of the spare parts business as compared to machinery sales;
-
The margin was also squeezed by 0.7 percentage points due to material price increases which, were only partially passed on to customers given the length of the backlog;
-
An unfavourable basis of comparison, whereby changes in provisions on inventories and warranties reduced margin by 2.2 points; and
-
A 0.4 percentage point increase in certain operating costs, which were tightly controlled during the previous period.
After research and development costs and sales and administrative expenses, the Group generated operating income before non-recurring items of €22.8 million, compared with a €5.2 million loss in the first half of 2010.
Non-recurring expenses consisted of the costs of the reorganisation implemented within the IMH division for the relocation of the production site for warehousing products from Saint-Ouenl'Aumône, in the Paris region, to the Beaupréau site in Maine et Loire.
The Manitou-SFERT merger approved by the Extraordinary Shareholders' Meeting on June 9 led to the recognition of a €4.1 million net non-recurring profit, the origin of which is detailed in the section on the Manitou-SFERT merger.
Net financial expense of €4.6 million reflects an improvement of €1.5 million resulting from the continued decline in the Group's debt during the period.
Finally, net income attributable to the Parent Company amounted to €15.0 million, or 2.7% of sales, compared to a loss of €14.2 in the first half of 2010.
INCOME STATEMENT BY DIVISION
| In millions of euros | RTH | IMH | CE | H1'10 | RTH | IMH | CE | H1'11 |
|---|---|---|---|---|---|---|---|---|
| Sales | 273.9 | 59.2 | 53.9 | 387.1 | 397.1 | 73.8 | 90.6 | 561.6 |
| Gross profit | 41.9 | 9.3 | 4.3 | 55.5 | 59.0 | 10.2 | 14.1 | 84.9 |
| % of sales | 15.3% | 15.7% | 8.0% | 14.3% | 14.9% | 13.8% | 15.6% | 15.1% |
| Research, selling & admin. | 32.7 | 10.9 | 17.2 | 60.7 | 38.3 | 9.9 | 15.7 | 62.1 |
| % of sales | 11.9% | 18.3% | 31.9% | 15.7% | 9.6% | 13.4% | 17.3% | 11.1% |
| Net operating income (loss) | ||||||||
| from recurring activities | 9.2 | (1.6) | (12.9) | (5.2) | 20.7 | 0.3 | 1.7 | 22.8 |
| % of sales | 3.4% | (2.7%) | (23.8%) | (1.3%) | 5.2% | 0.4% | 1.9% | 4.1% |
| Non-recurring operating | ||||||||
| expenses | 0.0 | (2.0) | (2.0) | (0.1) | (0.2) | (1.3) | (1.5) | |
| Manitou-SFERT merger | 0.0 | 4.1 | ||||||
| Net operating income (loss) | 9.2 | (3.6) | (12.9) | (7.3) | 20.7 | 0.1 | 0.5 | 25.3 |
| % of sales | 3.4% | (6.1%) | (23.8%) | (1.9%) | 5.2% | 0.1% | 0.5% | 4.5% |
The Rough Terrain Handling division (RTH) generated sales of €397.1 million, an increase of 45% as compared to the first half of 2010 despite procurement constraints from suppliers. The improvement in profitability continues to be impacted by pressures on pricing, the difficult ramp-up of operations, the unfavourable impact of low opening balances (impairment provisions on inventories, guarantees) and the costs associated with the technical difficulties experienced by suppliers. The operating margin increased from 3.4% to 5.2%, strengthened by the higher volumes.
The Industrial Material Handling division (IMH) recorded sales of €73.8 million, an increase of 24% compared to the first half of 2010. The division, which has been mobilised to transfer its warehousing business to the Beaupréau site in the Maine et Loire department of France, has, above all, reported growth in its distribution business in France. After two difficult years and despite the mix, the division has succeeded in restoring its profitability and is beginning to benefit from the increased strength of its new production facilities.
The Compact Equipment division (CE) profited fully from the 68% year-on-year growth in its sales during the first half of 2011. Gross margin, which was boosted by the increase in volumes and favourable price trends, increased from 8% to 17.3%. The improvement in profitability was also driven by a reduction in selling expenses (end of the 2009-2010 crisis in trade receivables) which permitted it to generate a positive operating margin of 0.5%, or 1.9% excluding non-recurring items related to the combination of the previous Gehl and Manitou organisations in North America and Europe.
1.3 CONSOLIDATED BALANCE SHEET
BALANCE SHEET TRENDS
Balance sheet trends included the following developments:
An increase in working capital from operations in the first half of 14.9% to €294.2 million, well below the growth in sales (+24% in H1 2011 versus H2 2010);
Strengthening of capital through a capital increase of €48.3 million, €40.9 million of which was related to the merger of Manitou BF-SFERT carried out in June of 2011. Other changes in equity included notably €15.2 million in income for the period, offset in part by €9.5 million in negative translation differences;
A reduction in net debt of 33.5% in the first half to €92.4 million, which helped strengthen the Group's balance sheet. Of the €46.5 million decrease, €36.6 million was provided by SFERT's cash holdings at the time of its merger with Manitou BF. Gearing thus reached 24%, compared to 42% at the end of December 2010. The significant improvement in the Group's financial structure will result in a 150 basis-point reduction in syndicated financing costs as from 1st October 2011.
Investments in tangible and intangible assets of €8.7 million included €2.9 million in intangible assets (including €1.7 million in development costs), €2.1 million in the rental fleet, and €3.7 million in other tangible fixed assets.
The main projects carried out during the quarter concerned:
-
€1 million for the Beaupréau production site, to set it up as the IMH division's headquarters and main production site, and which will now include the former production activities of the Saint Ouen l'Aumône site.
-
€1.2 million in IT systems, including the migration of Manitou BF's spare parts and services businesses towards the Group's ERP system.
MANITOU BF-SFERT MERGER
The Extraordinary Shareholders' Meeting in June approved the proposed reorganisation of the family ownership structure submitted by Manitou's family shareholders. The memorandum of understanding between the family members enabled Manitou to merge with its family holding company (SFERT) and the signature of a 6-year shareholders agreement.
These transactions will strengthen Manitou by confirming the continuity of family control and through the €46.2 million contribution in assets from the SFERT balance sheet. They also contribute to stabilising family ownership by simplifying control structures and have facilitated the transmission to the "new generations" carried out in July 2011.
The assets contributed by SFERT included a 42% stake in Manitou BF (those shares were cancelled following the merger), €36.6 million in cash, and 100% of the equity of G. Lucas, a company specialising in breeding equipment.
The accounting treatment at 09.06.2011 related to the merger generated negative goodwill of €5.4 million which was recorded in the financial statements at 30.06.2011. The negative goodwill was mainly due to the difference between the valuation used in the merger agreement for the Manitou BF shares contributed by SFERT and the market price of Manitou BF shares on the transaction date. In April 2011, within the framework of the proposed merger, independent experts valued the Manitou BF share at €24 based on market projections, while the actual share price of €20.65 at 09.06.2011 was used to record the transaction, in accordance with IFRS3.
In the end, the merger had a net positive impact of €4.1 million on income in the first half of 2011. That amount corresponds to negative goodwill of €5.4 million less expenses related to the transaction. It has been reported as non-recurring income and was not allocated to the divisions.
1.4 REVIEW OF THE GROUP'S MAIN COMPANIES
MANITOU BF (IFRS)
430, rue de l'Aubinière, Ancenis - France
Business:
Group headquarters
Distribution of all Group products in France and those countries where Manitou does not have a distribution subsidiary.
Design and assembly of telehandlers and certain masted forklift trucks.
Distribution platform for spare parts.
| IFRS | H1 2010 | 2010 | H1 2011 |
|---|---|---|---|
| Sales | €249.2m | €543.2m | €386.3m |
| Net income | €13.2m | €12.4m | €18.9m |
| Headcount at end of period | 1,330 | 1,354 | 1,473 |
MANITOU AMERICAS
West Bend, Wisconsin 53095, United States
Manitou Americas resulted from the merger of Manitou North America Inc. and Gehl Company Inc. at the end of March 2011.
A wholly-owned subsidiary of Manitou BF
Business:
Distribution of all Group products within the United States and Compact Equipment products in countries not covered by the Group's sales subsidiaries.
Design and assembly of compact equipment. Headquartered in West Bend, Wisconsin, the company, has three production facilities in Yanktown and Madison, South Dakota and Waco, Texas, and a distribution platform for spare parts in Belvidere, Illinois.
| IFRS | H1 2010(1) | 2010(1) | H1 2011 |
|---|---|---|---|
| Sales | €53.2m | €130.5m | €97.5m |
| Net income (loss) | (€4.5m) | (€10.2m) | €9.5m |
| Headcount at end of period | 512 | 556 | 692 |
(1) Manitou Americas pro forma including Gehl Company and Manitou North America.
MANITOU COSTRUZIONI INDUSTRIALI SRL
Via Emilia - Cavazzoni 41013 Castelfranco, Italy
A wholly-owned subsidiary of Manitou BF
Business:
Distribution of all Group products within Italy.
Design, assembly and distribution of rough terrain fixed and rotating telescopic forklift trucks, and high capacity telescopic forklift trucks.
| IFRS | H1 2010 | 2010 | H1 2011 |
|---|---|---|---|
| Sales | €68.4m | €145.5m | €94.8m |
| Net income | €3.3m | €7.2m | €6.2m |
| Headcount at end of period | 238 | 235 | 233 |
MANITOU UK LTD
Ebblake Industrial Estate
Verwood, Dorset, BH 31 6BB, United Kingdom
99.4%-owned subsidiary of Manitou BF
Business: The distribution of Group products in the United Kingdom and Ireland.
| IFRS | H1 2010 | 2010 | H1 2011 |
|---|---|---|---|
| Sales | €29.3m | €58.3m | €40.1m |
| Net income | €0.3m | €0.9m | €1.3m |
| Headcount at end of period | 40 | 40 | 40 |
MANITOU BENELUX SA
Chaussée de Wavre - Zoning Industriel 1360 Perwez - Belgium
A 98.0%-owned subsidiary of Manitou BF
Business: Distribution of Group products in Belgium, the Netherlands, and Luxembourg.
| IFRS | H1 2010 | 2010 | H1 2011 |
|---|---|---|---|
| Sales | €21.2m | €44.2m | €38.1m |
| Net income | €0.6m | €0.6m | €1.7m |
| Headcount at end of period | 21 | 21 | 20 |
COMPAGNIE FRANÇAISE DE MANUTENTION SAS
510, Boulevard Pierre et Marie Curie 44152 Ancenis Cedex - France
A wholly-owned subsidiary of Manitou BF
Business:
Exclusive distribution of Toyota industrial forklift trucks and Toyota and Manitou warehousing equipment in France, and maintenance of a fleet of industrial forklifts for PCA Peugeot Citroën in Rennes and Aulnay.
| IFRS | H1 2010 | 2010 | H1 2011 |
|---|---|---|---|
| Sales | €24.8m | €56.7m | €34.8m |
| Net income (loss) | (€0.2m) | €0.4m | €0.9m |
| Headcount at end of period | 126 | 126 | 130 |
1.5 OUTLOOK FOR 2011
The level of backlog confirms that sales in H2 should be very close to those of H1, yielding a 30% growth rate for the full year. Operating income will depend chiefly upon suppliers' delays and the progress made with certain technical issues, as well as global economic conditions, which directly impacts users' confidence in the implementation of their investment projects.
The 2011 outlook remains the same with an operating margin of 4 to 5%
1.6 POST CLOSING EVENTS SUBSEQUENT TO 30.06.2011
Stock options
The Board of directors meeting of 26.07.2011 granted 255,650 stock options to senior executives of the Parent Company and certain subsidiaries. The 8-year plan vests at a rate of 25% per year over a 4-year period, subject to the physical presence of the beneficiary and performance criteria regarding share price and Group profitability.
Manitou Southern Africa shareholders' agreement
During the first half of 2011, the minority shareholder of Manitou Southern Africa informed Manitou BF of its wish to exercise its minority put option. Manitou BF acquired the 20% equity investment held by the minority shareholder in July 2011 and now owns 100% of Manitou Southern Africa.
1.7 MAIN RISKS AND UNCERTAINTIES IN THE REMAINING 6 MONTHS OF THE FISCAL YEAR
This report includes certain assumptions and expectations which, by nature, may not ultimately turn out to be accurate. Key risks and uncertainties regarding the remaining six months of the year that have been identified are presented below. They could have a negative effect on the Group's balance sheet structure, income, outlook and share price.
OPERATIONAL RISKS
Risks related to markets and the Group's businesses
The current financial stress and sovereign debt crisis could affect the recovery reported during the first half year. The construction, agricultural and industrial markets in which Manitou operates are cyclical and sensitive to global economic conditions.
Supplier-related risks
The operational and financial difficulties encountered by the industrial sector since the 2008 crisis have increased Manitou's exposure to a risk of dependence on its suppliers. The biggest challenges are concentrated in the RTH division and, to a much lesser extent, in the CE division for motors. Engine manufacturers are facing significant difficulties in coping simultaneously with the recovery of demand and their adherence to the new anti-pollution standards either already in force or to be introduced. The RTH and CE divisions have introduced programs to broaden or provide alternative sources of supply for engines to address this situation. Implementation of these programs is going to entail additional costs and developments during the second half-year period.
Industrial risks
The difficulties in obtaining raw materials and components can affect the Group's industrial organisation, slow production rates and generate production inefficiencies.
BUSINESS RISKS
Customer risks
The length and size of the crisis weighs heavily on the weakest customers. Although it has a highlydiversified customer base, the Group remains exposed to the default of certain customers.
Financing receivables risk
Until September 2010, Manitou Americas financed sales made by its dealers to end users, reporting those receivables on its own balance sheet. The transactions involved terms of around 3 to 5 years. The terms provided increase the risk of customer default, especially during cycles of economic slowdown.
Risk of non-renewal of large contracts
At 30.06.2011, Manitou had two major contracts which, if not renewed upon expiry, could affect the Group's financial position and operating income. The contracts concerned are the following:
A contract related to the sub-contracting of mast assembly for Toyota Industrial Equipment, which accounted for sales of €13.7 million in 2010. The assembly contract, which has been in effect since 1995, was renewed in July of 2007 to cover the entire production life of the Toyota Tonero line of trucks. Without attempting to judge the expected life of the Tonero, the previous line lasted about 6 to 7 years. A new version of masts will also be launched during 2011 as a replacement for the previous generation.
An exclusive distribution contract for Toyota industrial handling equipment within France was awarded to the "Compagnie Française de Manutention (CFM)" subsidiary and has been effective since 1972. That distribution contract was renewed in June 2009 for the period in process up to 2012. In 2010, CFM generated €56.7 million in sales and net income of €0.4 million.
FINANCIAL RISKS
Liquidity risk
Long-term financial resources are centralised in Manitou BF. The financing agreement of the Parent Company includes financial covenants and "material adverse change" and "cross default" clauses which may limit the potential use of or affect the terms of credit lines. It includes "negative pledge" clauses containing thresholds and exemptions as well as an obligation to "side pocket" \$45 million of financing from Manitou Americas.
Finally, Manitou BF had €48 million in available standard bank overdraft lines on the day this report was published.
| Facility | Compliance with covenants on 30.06.11 |
Maturity | Amount in drawing currency |
Amount in euros |
Unused on 30.06.11 |
Used on 30.06.11 |
Less than 1 year |
From 1 to 5 years |
|---|---|---|---|---|---|---|---|---|
| In millions | ||||||||
| Term loan A | Yes | 4.09.2013 | €116m | 116 | 116 | 27 | 89 | |
| Revolving facility B | Yes | 4.09.2013 | €40m | 40 | 40 | |||
| Revolving facility C* | Yes | 4.09.2013 | \$45m | 32 | 32 | |||
| Overdrafts | N/A | N/A | €50m | 50 | 50 | |||
| Total | 238 | 125 |
Maturities of assets and liabilities related to financing activities as at 30 June 2011
* Multi-currency facility in \$ or € equivalent
Summary of conditions attached to borrowing facilities
| H1 2011 | H2 2011 | H1 2012 | H2 2012 | H1 2013 | |
|---|---|---|---|---|---|
| Facilities A / B | - Gearing < 1 | - Gearing < 1 | - Gearing < 1 | - Gearing < 1 | - Gearing < 1 |
| - Leverage < 6 | - Leverage < 4.2 | - Leverage < 3 | - Leverage < 2.5 | - Leverage < 2.5 | |
| - Cap on investments excluding rental fleet |
- Cap on investments excluding rental fleet |
- Cap on investments excluding rental fleet |
- Cap on investments excluding rental fleet |
- Cap on investments excluding rental fleet |
|
| -Cap on acquisitions |
-Cap on acquisitions |
- Cap on acquisitions |
- Cap on acquisitions |
- Cap on acquisitions |
|
| - Manitou Americas financing capped at \$45m |
- Manitou Americas financing capped at \$45m |
- Manitou Americas financing capped at \$45m |
- Manitou Americas financing capped at \$45m |
- Manitou Americas financing capped at \$45m |
|
| - Excess cash flow | - Excess cash flow | - Excess cash flow | - Excess cash flow | - Excess cash flow | |
| Facility C | Like A and B + Dailly cross guarantee covering Manitou BF |
Like A and B + Dailly cross guarantee covering Manitou BF |
Like A and B + Dailly cross guarantee covering Manitou BF |
Like A and B + Dailly cross guarantee covering Manitou BF |
Like A and B + Dailly cross guarantee covering Manitou BF |
| receivables | receivables | receivables | receivables | receivables |
Exchange rate risk
A significant change in exchange rates could have an effect on the Manitou Group's results through the impact on the translation of the currencies that it generates and through the pressure it might place on sales prices in certain geographic regions.
During the first half of 2011, the Manitou Group invoiced approximately 26% of its sales in foreign currencies, mainly in US dollars (13%), pounds sterling (7%), South African rands (2%) and Australian dollars (2%), the other currencies being Singapore dollars and Chinese yuan.
At the end of June, currency hedges were used to cover the net expected exposure for the second half of 2011 and a portion of the first half of 2012 to the US dollar, pound sterling, Australian dollar and rand.
1.8 SHAREHOLDER STRUCTURE AND SHARE PERFORMANCE
CAPITAL
The Company has share capital of 39,547,824 euros, consisting of 39,547,824 shares with a par value of one euro per share.
The merger of SFERT in June 2011 had the following impact on capital:
| Capital before merger | €37,567,540 |
|---|---|
| Increase as compensation for SFERT's contributions | €17,782,040 |
| Cancellation of Manitou BF shares contributed by SFERT | €15,801,756 |
| Capital after merger | €39,547,824 |
TREASURY SHARES
At 30 June 2011, the Company held 312,496 shares for a total value of €9.5 million, or an average unit price of €30.52 per share. On the same date, 286,000 shares were allocated to senior executives of the Parent Company and subsidiaries in connection with the granting of stock options in accordance with powers granted at Extraordinary Shareholders' Meetings. The remaining balance of 26,496 shares was allocated to a liquidity-providing account.
STOCK OPTIONS
The Board of directors meeting of 26.07.2011 granted 255,650 stock options to senior executives of the Parent Company and certain subsidiaries. The 8-year plan vests at a rate of 25% per year over a 4-year period, subject to the physical presence of the beneficiary and performance criteria regarding share price and Group profitability.
SHARE PRICE TRENDS
Based on a closing value of €17.31 at 31 December 2010, the share price hit its lowest level on 11 January 2011 at €16.03 before reaching its highest level on 7 February 2011 at €24.99 and closing at the end of the half year at €20.95.
During the first half year an average of 28,734 shares were traded per session, versus 22,424 during the first half of 2010.
Share price and trading volumes
| Period | Volume | High (€) | Low (€) | Month-end (€) | Market Capitalisation (€m) |
|---|---|---|---|---|---|
| January 2010 | 422,838 | 11.39 | 10.07 | 10.07 | 378 |
| February | 195,872 | 10.40 | 8.91 | 9.19 | 345 |
| March | 421,540 | 10.99 | 9.20 | 10.80 | 406 |
| April | 908,697 | 14.29 | 10.58 | 13.39 | 503 |
| May | 626,910 | 14.20 | 11.15 | 12.60 | 473 |
| June 2010 | 249,532 | 13.80 | 12.11 | 12.25 | 460 |
| H1 2010 Total/High/Low | 2,825,389 | 14.29 | 8.91 | ||
| July 2010 | 285,031 | 13.38 | 11.45 | 12.80 | 481 |
| August | 298,059 | 13.14 | 11.52 | 12.23 | 459 |
| September | 317,490 | 12.77 | 11.65 | 12.05 | 453 |
| October | 568,304 | 15.38 | 11.70 | 15.15 | 569 |
| November | 334,706 | 16.24 | 13.65 | 14.87 | 559 |
| December 2010 | 719,622 | 17.69 | 14.63 | 17.31 | 650 |
| 2010 Total/High/Low | 5,348,601 | 17.69 | 8.91 | ||
| January 2011 | 611,148 | 21.07 | 16.03 | 20.99 | 789 |
| February | 912,754 | 24.99 | 20.90 | 23.85 | 896 |
| March | 799,990 | 24.97 | 20.03 | 21.40 | 804 |
| April | 526,879 | 23.33 | 20.17 | 22.83 | 858 |
| May | 354,930 | 23.60 | 21.15 | 21.79 | 819 |
| June(1) | 443,578 | 21.80 | 19.00 | 20.95 | 829 |
| H1 2011 Total/High/Low | 3,649,279 | 24.99 | 16.03 |
(1) June 2011 is based upon 39,547,824 shares
1.9 INFORMATION RELATED TO ACCOUNTING STANDARDS AND CONSOLIDATION METHODS
The condensed interim financial statements related to the 6-month period ended 30 June 2011 of the Manitou Group have been prepared in accordance with IAS 34 "Interim Financial Reporting".
1.10 OTHER INFORMATION
ERIC LAMBERT JOINS MANITOU AS PRESIDENT OF THE RTH DIVISION
Eric Lambert joined the Group Manitou on 23 May 2011 to assume the presidency of the RTH division. A graduate of the Ecole Polytechnique (X88) and the Ecole Nationale des Ponts et Chaussées (1993), he previously held various responsibilities within the Alstom and Renault groups.
CHANGES IN THE GROUP'S LEGAL STRUCTURE
The following changes took place during the period:
-
Merger of Aumont BSBH into Manitou BF (January);
-
Merger of Manitou North America into Gehl Company, and change in name of new entity to Manitou Americas (March);
-
Merger of SFERT into Manitou BF (June).
OUTSOURCING MANAGEMENT
As a major regional contractor, last spring Manitou BF was requested to sign a charter promoted by the Ministry of Finance and credit mediation. It lists 10 commitments related to responsible purchasing:
1) Ensure financial equity with suppliers;
- 2) Promote collaboration between large customers and strategic suppliers;
- 3) Reduce risk of reciprocal dependence;
- 4) Involve major customers in their industry network;
- 5) Assess total cost of purchases;
- 6) Incorporate environmental issues;
- 7) Ensure the territorial responsibility of the company;
- 8) Purchasing: both a function and a process;
- 9) Purchasing function is responsible for overall management of supplier relations;
- 10) Establish a coherent compensation policy for purchasing personnel.
02 Changes in the presentation of the financial statements
- 2.1 Objectives of the changes
- 2.2 Explanation of reporting line items
- 2.3 Financial indicators
- 2.4 Comparability of figures
- 2.5 Review and approval of changes
2 CHANGES IN THE PRESENTATION OF THE FINANCIAL STATEMENTS
2.1 OBJECTIVES OF THE CHANGES
The restructuring of the Group into three divisions announced in March 2009 led Manitou to reconfigure all of its management and reporting systems in order to:
- Obtain information sourced from and structured by division;
- Make the financial statements easier to read, and pertinent to operating personnel;
- Manage a common indicator for performance measurement;
- Make financial information more accessible to foreign managers and investors.
In order to better respond to all these criteria, Group management decided to change the presentation of the financial statements from one by nature to one by function.
2.2 EXPLANATION OF REPORTING LINE ITEMS
SALES
Sales comprise primarily revenue from sales of new handling equipment (assembled within the Group or acquired from third parties) and spare parts and attachments, and revenue from subcontracts for industrial forklift truck masts, equipment rentals, equipment park management services and other miscellaneous services.
COST OF SALES
Cost of sales consists of the cost of goods and services sold, which includes the cost of materials and components, labour directly attributable to the goods or services, and all the related operating costs of the production and logistics activities. Also included in the cost of sales are the amortisation of intangibles and depreciation of equipment and materials allocated to production activities, the costs of contractual guarantees, and impairment provisions on inventories.
GROSS MARGIN
Gross margin on cost of sales is the difference between sales and the cost of sales.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs consist of personnel expenses for persons assigned to the innovation, development, design, prototyping and improvement of products. The businesses frequently call on external service providers and use specialised equipment and materials, the depreciation of which is allocated to the function.
Research and development activities that meet the criteria of feasibility and innovation can be capitalised as an intangible asset and subsequently amortised as a cost of sales. Those expenses not meeting the capitalisation criteria are recorded directly as expenses.
SALES AND MARKETING COSTS
Selling costs consist primarily of personnel expenses and related costs allocated to the sales development, dealer network coordination, marketing, and technical departments. Sales commissions, advertising expense, trade shows, insurance expense, commercial guarantees, travel expenses and the depreciation of associated infrastructure are also included on this line.
ADMINISTRATIVE COSTS
Administrative costs consist mainly of personnel expense and the costs associated with the support functions (Human Resources, Finance, General Secretary, etc.). The depreciation of the infrastructure associated with these functions is also included.
NON-RECURRING INCOME AND EXPENSES
Non-recurring income and expenses include the following items:
- Any impairment recorded
- Restructuring costs,
- Other transactions affecting consolidated shares.
OPERATING INCOME
Operating income includes all recurring and non-recurring items described above. It remains comparable to the operating income previously reported by the Group.
FINANCING RECEIVABLES
Sales financing receivables consist of financing provided to end users to purchase Group products. These customers are either large accounts or, most often, Manitou dealer customers. The terms of financing may go out as far as 60 months.
The on-balance sheet financing of equipment purchases was attributable mainly to Gehl prior to its acquisition by Manitou. Since September 2010, this method of financing has been replaced by a partnership with a third-party financial institution. The new partnership, which excludes any investment by Manitou or recourse on accounts financed, no longer has any impact on the Group balance sheet and income statement. The residual portion of the remaining receivables mainly consists of accounts put in place by Gehl prior to September 2010.
2.3 FINANCIAL INDICATORS
NET DEBT
Net debt is the difference between the sum of current and non-current financial liabilities and current financial assets including cash and cash equivalents.
GEARING
The financial ratio equal to net debt divided by shareholders' equity.
LEVERAGE
A ratio that is calculated by dividing the net debt at the end of the period by the rolling 12 month EBITDA. It permits debt to be expressed in number of years of EBITDA.
WORKING CAPITAL FROM OPERATIONS
Inventories and work in process + Trade receivables – Trade accounts payable - Other current liabilities.
Working capital from operations excludes sales financing receivables, which do not change proportionally to operating revenues.
2.4 COMPARABILITY OF FIGURES
The changes to the presentation of the financial statements have no impact on the following income statement aggregates, which remain completely identical to the definitions used previously:
- Sales;
- Current operating result;
- Operating result;
- Interest Income/expense;
- Taxes;
- Minority interests;
- Net income;
- Net income attributable to the Parent Company
2.5 REVIEW AND APPROVAL OF CHANGES
The proposed changes to the presentation of the financial statements were overseen by the Finance Department. The specifications were approved in advance by the Executive and Audit committees. The entire project was also conducted in close cooperation with the Statutory auditors and led to a review of the specifications and the new procedures, as well as specific work to review the new consolidation tool and to reformat the 2010 financial statements using the new presentation.
| Consolidated financial statements | 18 | |
|---|---|---|
| 3.1 Statement of comprehensive income | 18 | |
| 03 | 3.2 Consolidated balance sheet | 20 |
| 3.3 Consolidated statement of changes in shareholders' equity | 22 | |
| 3.4 Consolidated statement of cash flows | 23 | |
| 3.5 Information on operating segments | 24 | |
| 3.6 Manitou Group consolidation scope as at 30.06.2011 | 26 | |
| 3.7 Notes to the consolidated financial statements as at 30.06.2011 | 27 |
3 CONSOLIDATED FINANCIAL STATEMENTS
3.1 STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED INCOME STATEMENT
| In € thousands | 30.06.2010 | 31.12.2010 | 30.06.2011 |
|---|---|---|---|
| Sales | 387 110 | 838 309 | 561 568 |
| Cost of goods & services sold | -331 598 | -715 896 | -476 681 |
| Research & development costs | -8 845 | -16 460 | -8 629 |
| Selling, marketing and service expenses | -31 729 | -63 797 | -30 753 |
| Administrative expenses | -21 543 | -40 074 | -20 953 |
| Other operating income and expenses | 1 395 | 2 168 | -1 798 |
| CURRENT OPERATING RESULT | -5 209 | 4 250 | 22 754 |
| Impairment of assets | 0 | 0 | 0 |
| Other non-recurring income and expenses | -2 045 | -2 241 | 2 543 |
| OPERATING RESULT | -7 253 | 2 009 | 25 297 |
| Financial income | 5 804 | 8 445 | 6 087 |
| Financial expenses | -11 974 | -21 101 | -10 733 |
| Net financial expenses | -6 170 | -12 656 | -4 646 |
| Share of profits of associates | 888 | 1 097 | 487 |
| CONSOLIDATED INCOME (LOSS) BEFORE TAX | -12 535 | -9 550 | 21 137 |
| Income taxes | -1 712 | -7 115 | -5 982 |
| NET INCOME (LOSS) | -14 247 | -16 664 | 15 155 |
| Parent company shareholders' share | -14 323 | -16 681 | 15 039 |
| Minority interests share | 76 | 17 | 116 |
| Earnings per share (in euros) | |||
| 30.06.2010 | 31.12.2010 | 30.06.2011 | |
| Earnings per share | -0,39 | -0,45 | 0,40 |
| Fully diluted earnings per share | -0,39 | -0,45 | 0,40 |
OTHER COMPONENTS OF COMPREHENSIVE INCOME AND EXPENSE
| In € thousands | 30.06.2010 | 31.12.2010 | 30.06.2011 |
|---|---|---|---|
| INCOME (LOSS) FOR THE YEAR | -14 247 | -16 664 | 15 155 |
| Adjustements in the fair value of available-for-sale financial assets | 0 | 0 | 0 |
| Of which booked to equity Of which transferred to income of the year |
0 0 |
0 0 |
0 0 |
| Translation differences arising on foreign activities | 20 848 | 12 040 | -9 489 |
| Group share | 20 777 | 11 962 | -9 477 |
| Minority interests | 71 | 78 | -12 |
| Actuarial gains (losses) on defined benefits plans Group share |
-3 625 -3 623 |
-658 -658 |
401 401 |
| Minority interests | -2 | 0 | 0 |
| Interest rates hedging instruments Group share |
-205 -205 |
906 906 |
862 862 |
| Minority interests | 0 | 0 | 0 |
| TOTAL OTHER COMPONENTS OF COMPREHENSIVE INCOME | 17 018 | 12 288 | -8 226 |
| TOTAL COMPREHENSIVE INCOME | 2 771 | -4 376 | 6 929 |
| GROUP SHARE | 2 626 | -4 471 | 6 825 |
| MINORITY INTERESTS | 145 | 95 | 104 |
3.2 STATEMENT OF FINANCIAL POSITION ASSETS
| Net amount | |||
|---|---|---|---|
| In € thousands | Notes | 31.12.2010 | 30.06.2011 |
| NON-CURRENT ASSETS | |||
| PROPERTY, PLANT AND EQUIPMENT | Note 3 | 150 042 | 138 515 |
| INVESTMENT PROPERTY | 4 033 | ||
| GOODWILL | Note 2 | 1 257 | 1 257 |
| INTANGIBLE ASSETS | Note 2 | 31 757 | 31 447 |
| INVESTMENTS IN ASSOCIATES | 19 355 | 18 738 | |
| NON-CURRENT FINANCE CONTRACT RECEIVABLES | Note 9 | 18 335 | 11 906 |
| DEFERRED TAX ASSETS | 5 966 | 5 176 | |
| NON-CURRENT FINANCIAL ASSETS | Note 6 | 714 | 5 854 |
| OTHER NON-CURRENT ASSETS | 3 776 | 3 207 | |
| 231 202 | 220 134 | ||
| CURRENT ASSETS | |||
| INVENTORIES & WORK IN PROGRESS | Note 7 | 221 037 | 257 894 |
| TRADE RECEIVABLES | Note 8 | 187 763 | 221 781 |
| NON-CURRENT FINANCE CONTRACT RECEIVABLES | Note 9 | 54 196 | 32 725 |
| OTHER RECEIVABLES | |||
| Current income tax | 26 187 | 25 699 | |
| Other receivables | 25 379 | 28 446 | |
| CURRENT FINANCIAL ASSETS | Note 6 | 364 | 2 215 |
| CASH AND CASH EQUIVALENTS | Note 6 | 54 105 | 72 870 |
| 569 031 | 641 630 | ||
| TOTAL ASSETS | 800 233 | 861 764 |
LIABILITIES AND EQUITY
| In € thousands | Net amount | ||
|---|---|---|---|
| 31.12.2010 | 30.06.2011 | ||
| Share capital | Note 10 | 37 568 | 39 548 |
| Share premiums | 439 | 44 631 | |
| Treasury shares | -9 679 | -9 537 | |
| Consolidated reserves | 333 830 | 313 552 | |
| Translation differences | -12 818 | -22 291 | |
| Ne profit (loss) – Group share | -16 681 | 15 039 | |
| SHAREHOLDERS' EQUITY | 332 659 | 380 942 | |
| MINORITY INTERESTS | 177 | 168 | |
| TOTAL EQUITY | 332 836 | 381 110 | |
| NON-CURRENT LIAIBILITIES | |||
| NON-CURRENT PROVISIONS | Note 11 | 30 635 | 36 782 |
| OTHER NON-CURRENT LIABILITIES | 1 159 | 358 | |
| DEFERRED TAX LIABILITIES | 14 423 | 12 093 | |
| NON-CURRENT LIABILITIES | |||
| Loans and other financial liabilities | Note 6 | 104 244 | 97 924 |
| 150 461 | 147 157 | ||
| CURRENT LIABILITIES | |||
| CURRENT PROVISIONS | Note 11 | 20 050 | 21 331 |
| TRADE ACCOUNTS PAYABLE | 140 263 | 170 807 | |
| OTHER CURRENT LIABILITIES | |||
| Current income tax | 6 826 | 12 818 | |
| Other liabilities | 60 681 | 58 970 | |
| CURRENT FINANCIAL LIABILITIES | Note 6 | 89 116 | 69 571 |
| 316 936 | 333 497 | ||
| TOTAL LIABILITIES | 800 233 | 861 764 |
3.3 CHANGES IN SHAREHOLDER'S EQUITY
| In € thousands | Share capital |
Sare premiums |
Treasury shares |
Réserves | Group net profit |
Translation differences |
Revaluation surplus |
TOTAL SHAREHOLDERS' EQUITY (Group share) |
Minority interests |
TOTAL EQUITY |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 31.12.2009 | 37 568 | 439 | -14 439 | 465 592 | -131 320 | -24 776 | 908 | 333 973 | 331 | 334 304 |
| Income for the year 2009 | -131 320 | 131 320 | 0 | 0 | ||||||
| Income for H1 2010 | -14 323 | -14 323 | 76 | -14 247 | ||||||
| Dividends | 0 | -93 | -93 | |||||||
| Changes in translation difference | 20 777 | 20 777 | 71 | 20 848 | ||||||
| Valuation difference under IFRS | -152 | -152 | -152 | |||||||
| Treasury shares | -19 | 53 | 34 | 34 | ||||||
| Actuarial (gain) losses on defined benefits plan | -3 623 | -3 623 | -2 | -3 625 | ||||||
| Change in consolidation scope & other | -6 | -6 | -79 | -85 | ||||||
| Shareholders' agreements | 12 | 12 | -72 | -60 | ||||||
| Balance at 30.06.2010 | 37 568 | 439 | -14 458 | 330 556 | -14 323 | -3 999 | 908 | 336 692 | 232 | 336 924 |
| Income for H2 2009 | -2 358 | -2 358 | -59 | -2 417 | ||||||
| Dividends | 0 | -27 | -27 | |||||||
| Change in translation difference | -8 815 | -8 815 | 7 | -8 808 | ||||||
| Valuation difference under IFRS | 1 323 | 1 323 | 1 323 | |||||||
| Treasury shares | 4 779 | -1 911 | 2 868 | 2 868 | ||||||
| Change in consolidation scope & other | -16 | 0 | -16 | 2 | -14 | |||||
| Actuarial (gain) losses on defined benefits plan | 2 965 | 2 965 | 2 | 2 967 | ||||||
| Shareholders' agreements | 0 | 0 | 20 | 20 | ||||||
| Balance at 31.12.2010 | 37 568 | 439 | -9 679 | 332 917 | -16 681 | -12 814 | 908 | 332 659 | 177 | 332 836 |
| Income for the year 2010 | -16 681 | 16 681 | 0 | 0 | ||||||
| Income for H1 2011 | 15 039 | 15 039 | 116 | 15 155 | ||||||
| SFERT merger | 1 980 | 44 192 | -5 285 | 40 887 | 40 887 | |||||
| Dividends | 0 | -24 | -24 | |||||||
| Change in translation difference | -9 477 | -9 477 | -12 | -9 489 | ||||||
| Valuation difference under IFRS | 1 514 | 1 514 | 1 514 | |||||||
| Treasury shares | 142 | -223 | -81 | -81 | ||||||
| Actuarial (gain) losses on defined benefits plan | 401 | 401 | 0 | 401 | ||||||
| Change in consolidation scope & other | 0 | 0 | 0 | 0 | ||||||
| Shareholders' agreements | 0 | 0 | -89 | -89 | ||||||
| Balance at 30.06.2011 | 39 548 | 44 631 | -9 537 | 312 643 | 15 039 | -22 291 | 908 | 380 942 | 168 | 381 110 |
3.4 CASH FLOW STATEMENT
| In € thousands | 30.06.2011 | 30.06.2010 |
|---|---|---|
| INCOME (LOSS) FOR THE YEAR | 15 155 | -14 247 |
| Less share of profits of associates | -487 | -888 |
| Elimination of income and expense with no effect on operating cash flow and not linked to operating activities |
||
| + Amortisation and depreciation |
15 487 | 16 482 |
| - Provisions and impairment |
7 855 | -8 452 |
| - Change in deferred taxes |
-2 513 | 601 |
| +/- Income (loss) from non-current asset disposal |
-171 | 370 |
| - Change in capitalized leased machines |
-2 083 | -6 617 |
| +/- Other |
-4 633 | 259 |
| EARNINGS BEFORE DEPRECIATION AND AMORTISATION | 28 611 | -12 492 |
| Changes in cash flows from operating activities | ||
| +/- Change in inventories |
-44 108 | 8 254 |
| +/- Change in trade receivables |
-36 997 | -16 492 |
| +/- Change in finance contracts receivables |
28 114 | 33 360 |
| +/- Change in other operating receivables |
-3 529 | -7 107 |
| +/- Change in trade accounts payable |
32 686 | 56 589 |
| +/- Change in other operating liabilities |
-1 215 | 9 709 |
| +/- Changes in taxes payable and receivable |
5 623 | 8 736 |
| +/- Change in liabilities linked to finance contracts receivables |
-15 855 | -16 794 |
| CASH FLOW FROM OPERATING ACTIVITIES | -6 670 | 63 763 |
| Changes in cash flows from investing activities | ||
| + Proceeds from sale of property, plant and equipment |
901 | 107 |
| + Proceeds from sale of long-term investments |
43 | |
| - Purchase of intangible assets, property, plant and equipment (excl. rental fleet) |
-6 675 | -4 650 |
| - Decrease (increase) of other financial assets |
-655 | 0 |
| - Acquisition of subsidiaries or minority interests |
-1 234 | |
| + Dividends received from associates |
847 | 0 |
| CASH FLOW FROM INVESTING ACTIVITIES | -5 539 | -5 777 |
| Changes in cash flows from financing activities | ||
| + Merger |
36 585 | |
| - Dividends paid |
-18 | -93 |
| +/- Purchase / sale of treasury shares |
145 | 62 |
| +/- Change in financial liabilities |
-14 282 | -61 018 |
| +/- Other |
2 309 | -3 003 |
| CASH FLOW FROM FINANCING ACTIVITIES | 24 739 | -64 052 |
| NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND BANK OVERDRAFTS | 12 530 | -6 066 |
| Cash, cash equivalents and bank overdrafts at beginning of the year | 51 411 | 72 060 |
| Exchange gains / (losses) on cash and bank overdrafts | -245 | 2 801 |
| CASH, CASH EQUIVALENTS, AND BANK OVERDRAFTS AT END OF THE YEAR A LA CLÔTURE |
63 696 | 68 795 |
| CURRENT FINANCIAL ASSETS (REMINDER) | 2 215 | 324 |
RECLASSIFICATIONS IN THE CASH FLOW STATEMENT
Certain reclassifications have been made in the cash flow statement as of 30.06.2010. The primary impacts were the following:
Rental fleet investments:
Equipment capitalised for rental were reclassified from the cash flows from investing activities to the cash flows from operating activities under the line item "changes in capitalized leased machines" (impact as at 30.06.2010, €6,617 thousand).
Changes in taxes payable and receivable:
Changes in taxes payable and receivable were recorded on a separate line item within the changes in working capital in the amount of €8,736 thousand as of 30.06.2010.
3.5 INFORMATION ON OPERATING SEGMENTS
The Group is organised into three divisions:
- Rough Terrain Handling division (RTH): assembly and distribution of rough terrain handling equipment.
- Industrial Material Handling division (IMH): assembly and distribution of industrial handling and warehousing equipment.
- Compact Equipment division (CE): assembly and distribution of compact equipment (equipment assembled by Manitou Americas).
Income and expenses relating to the merger with SFERT that occurred on 09.06.2011 have not been allocated to the various divisions and are included in the "Other" column.
Assets, cash flows and liabilities are not allocated to the individual divisions, as the operating segment information used by the Group's management does not include those items.
INCOME STATEMENT BY DIVISION
30.06.2011
| In € thousands | Rough Terrain Handling (RTH) |
Industrial Material Handling (IMH) |
Compact Equipment (CE) |
Other | Total |
|---|---|---|---|---|---|
| Sales | 397 142 | 73 836 | 90 591 | 561 568 | |
| Cost of goods & services sold | -338 152 | -63 642 | -74 887 | -476 680 | |
| Research and development costs | -5 399 | -1 517 | -1 714 | -8 629 | |
| Selling, marketing and service expenses | -19 951 | -4 526 | -6 276 | -30 753 | |
| Administrative expenses | -11 096 | -3 690 | -6 167 | -20 953 | |
| Other operating income and expense | -1 808 | -186 | 195 | -1 799 | |
| CURRENT OPERATING RESULT | 20 737 | 276 | 1 742 | 0 | 22 754 |
| Impairment of assets | 0 | ||||
| Other non recurring income and expenses | -67 | -186 | -1 263 | 4 059 | 2 543 |
| OPERATING RESULT | 20 670 | 90 | 479 | 4 059 | 25 297 |
30.06.2010
| In € thousands | Rough Terrain Handling (RTH) |
Industrial Material Handling (IMH) |
Compact Equipment (CE) |
Total |
|---|---|---|---|---|
| Sales | 273 927 | 59 246 | 53 936 | 387 110 |
| Cost of goods & services sold | -232 038 | -49 953 | -49 607 | -331 598 |
| Research and development costs | -6 346 | -966 | -1 533 | -8 845 |
| Selling, marketing and service expenses | -18 808 | -4 517 | -8 405 | -31 729 |
| Administrative expenses | -8 585 | -5 530 | -7 427 | -21 543 |
| Other operating income and expense | 1 112 | 112 | 172 | 1 396 |
| CURRENT OPERATING RESULT | 9 263 | -1 608 | -12 864 | -5 209 |
| Impairment of assets | 0 | |||
| Other non recurring income and expenses | -8 | -2 037 | -2 045 | |
| OPERATING RESULT | 9 255 | -3 645 | -12 864 | -7 253 |
SALES BY DIVISION AND GEOGRAPHIC REGION
| 30.06.2011 | |||||
|---|---|---|---|---|---|
| In thousands of euros | France | Europe | Americas | Rest of world | TOTAL |
| RTH | 127,565 | 213,134 | 17,878 | 38,565 | 397,142 |
| IMH | 53,656 | 12,760 | 1,955 | 5,465 | 73,836 |
| CE | 1,006 | 19,835 | 61,820 | 7,930 | 90,591 |
| TOTAL | 182,227 | 245,729 | 81,653 | 51,960 | 561,568 |
| 30.06.2010 | |||||
|---|---|---|---|---|---|
| In thousands of euros | France | Europe | Americas | Rest of world | TOTAL |
| RTH | 95,363 | 137,507 | 12,115 | 28,943 | 273,928 |
| IMH | 40,535 | 12,881 | 2,060 | 3,770 | 59,246 |
| CE | 450 | 15,293 | 33,514 | 4,679 | 53,936 |
| TOTAL | 136,348 | 165,681 | 47,689 | 37,392 | 387,110 |
3.6 MANITOU GROUP CONSOLIDATION SCOPE AS AT 30.06.2011
| PARENT COMPANY | SUBSIDIARIES | ||||
|---|---|---|---|---|---|
| MANITOU BF SA | COMPAGNIE FRANCAISE DE MANUTENTION | ||||
| Share capital: 39 547 824 EUR | 100% | Share capital: 1 320 000 EUR | |||
| 430, rue de l'Aubinière | 510, bd Pierre et Marie Curie - 44150 ANCENIS, France | ||||
| 44150 ANCENIS, France | CIE INDUSTRIELLE DE MATERIELS DE MANUTENTION | ||||
| 100% | Share capital: 1 800 000 EUR | ||||
| Route de Challain-la-Potherie - 49440 CANDE, France | |||||
| 100% | MLM | ||||
| Share capital: 1 800 000 EUR Av. du Vert-Galant - 95130 SAINT-OUEN-L'AUMONE, France |
|||||
| MANITOU AMERICAS Inc | GEHL POWER PRODUCTS, Inc. | ||||
| 100% | Share capital: 361 101 000 USD | 100% | Share capital: 100 USD | ||
| WEST BEND, Wisconsin, USA | YANKTON, South-Dakota, USA | ||||
| MUSTANG MANUFACTURING COMPANY, Inc. | |||||
| 100% | Share capital: 15 USD | ||||
| OWATONNA, Minnesota, USA | |||||
| 100% | COMPACT EQUIPMENT ATTACHMENTS, Inc. Share capital: 1 USD |
||||
| CEDARBURG, Wisconsin, USA | |||||
| GEHL EUROPE GmbH | |||||
| 100% | Share capital: 1 950 000 EUR | ||||
| NEUENKIRCHEN, Germany | |||||
| GEHL Receivables II, LLC | |||||
| 100% | Share capital: 1 000 USD | ||||
| WEST BEND, Wisconsin, USA | |||||
| 100% | GEHL Funding, LLC | ||||
| Share capital: 1 000 USD WEST BEND, Wisconsin, USA |
|||||
| MANITOU UK Ltd. | PLEDGEMEAD | ||||
| 99,4% | Share capital: 230 000 GBP | 100% | Share capital 10 000 GBP | ||
| VERWOOD, United-Kingdom | VERWOOD, United-Kingdom | ||||
| MANITOU COSTRUZIONI INDUSTRIALI Srl | OMCI ATTACHMENTS Srl | ||||
| 100% | Share capital: 5 000 000 EUR | 100% | Share capital 50 000 EUR | ||
| CASTELFRANCO EMILIA, Italy MANITOU BENELUX SA |
CASTELFRANCO EMILIA, Italy | ||||
| 98% | Share capital: 500 000 EUR | 100% | DE LADDERSPECIALIST B.V. Share capital 117 418 EUR |
||
| PERWEZ, Belgium | GOES, Netherland | ||||
| MANITOU PORTUGAL SA | EPL CENTRO | ||||
| 100% | Share capital: 600 000 EUR | 57,0% | Share capital: 50 000 EUR | ||
| VILLA FRANCA, Portugal | POMBAL, Portugal | ||||
| MANITOU DEUTSCHLAND GmbH | |||||
| 100% | Share capital: 800 000 EUR | ||||
| OBER-MÖRLEN, Germany GEHL EUROPE GmbH |
|||||
| 100% | Share capital: 1 950 000 EUR | ||||
| NEUENKIRCHEN, Germany | |||||
| MANITOU ASIA PTE Ltd. | |||||
| 100% | Share capital: 400 000 SGD | ||||
| Singapore | |||||
| MANITOU SOUTHERN AFRICA PTY Ltd. | |||||
| 100% | Share capital: 796 875 ZAR SPARTAN EXTENSION, South Africa |
||||
| MANITOU AUSTRALIA PTY Ltd. | |||||
| 86% | Share capital: 400 000 AUD | ||||
| ALEXANDRIA, Australia | |||||
| MANITOU HANGZHOU MATERIAL HANDLING Co Ltd. | |||||
| 100% | Share capital: 5 400 000 USD | ||||
| HANGZHOU, China | |||||
| 100% | SL MANITOU MANUTENCION ESPANA | ||||
| Share capital: 200 000 EUR MADRID, Spain |
|||||
| CHARIOTS ELEVATEURS MANITOU CANADA Inc. | |||||
| 100% | Share capital: 20 000 CAD | ||||
| MONTREAL, Canada | |||||
| MANITOU VOSTOK LLC | |||||
| 100% | Share capital: 350 000 RUB | ||||
| BELGOROD, Russia | |||||
| 100% | MANITOU POLSKA Sp z.o.o. Share capital: 200 000 PLN |
||||
| OBORKINI, Poland | |||||
| MANITOU TR | |||||
| 99,6% | Share capital: 250 000 000 000 TRL | ||||
| ISTANBUL, Turkey | |||||
| MANITOU FINANCE FRANCE SAS | |||||
| 49% | Share capital 19 600 000 EUR | ||||
| PUTEAUX, France MANITOU FINANCE Ltd. |
|||||
| 49% | Share capital 2 000 000 GBP | ||||
| BASINGSTOKE, United kingdom | |||||
| ALGOMAT | |||||
| 30,4% | Share capital 20 000 000 DZD | ||||
| ALGIERS, Algeria | |||||
| HANGZHOU MANITOU MACHINERY EQUIPMENT Co Ltd. | |||||
| 50% | Share capital 3 000 000 USD |
3.7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 30.06.2011
GENERAL INFORMATION
Corporate identity
Manitou BF SA is a French public limited company (société anonyme) with a Board of directors, with capital of €39,547,824 consisting of 39,547,824 fully-paid shares with a par value of €1 per share. The shares are listed in compartment "B" of Euronext Paris.
The headquarters of the Parent, which is also the main production site of the Group, is: 430, rue de l'Aubinière, BP 10249, 44158 Ancenis Cedex - France
The Company is registered with the Trade and Companies Registry in Nantes under number: RCS Nantes - 857 802 508 - SIRET number: 857 802 508 00047 - APE code: 292 D / APE-NAF 2822Z
Financial information related to the approval of the financial statements
The consolidated financial statements of the Manitou Group were approved by the Board of directors on 19.09.2011.
Changes in the consolidation scope
On 9 June 2011 Manitou BF merged with its Parent Company SFERT (see note 2).
During the first half of 2011, the Group also continued its restructuring:
- Aumont BSBH was merged with Manitou BF,
- Manitou North America was absorbed by Manitou Americas (formerly Gehl).
The Group also acquired 75% of the shares of SAVIM, which at 30.06.2011 were classified as available-for-sale financial assets.
NOTE 1 - ACCOUNTING PRINCIPLES
Note 1.1 Standards and interpretations applied
The condensed interim financial statements related to the 6-month period ended 30 June 2011 of the Manitou Group have been prepared in accordance with IAS 34 "Interim Financial Reporting".
The condensed financial statements do not include all information required by IFRS for the preparation of annual financial statements, and should be read in conjunction with the Group consolidated financial statements prepared in accordance with IFRS as adopted by the European Union in respect of the period ended 31 December 2010.
The accounting methods applied are consistent with those applied in the annual financial statements at 31 December 2010, with the exception of the changes mentioned below.
NEW STANDARDS FOR WHICH IMPLMENTATION IS REQUIRED FOR THE 2011 FINANCIAL STATEMENTS
The following standards, interpretations and amendments applicable to periods beginning on or after 1st January 2011 and published in the Official Journal as of the half-year reporting date were also applied for the first time at 30.06.2011:
- Annual Improvements to IFRS in 2010;
- Revised IAS 24 "Related Party Disclosures";
- The amendment to IFRIC 14 related to the limit on a defined benefit plan asset, minimum funding requirements and their interaction (IAS 19),
- IFRIC 19 interpretation, "Extinguishing liabilities with equity instruments".
The initial application of these standards, amendments and interpretations had no material impact on the financial statements as at 30.06.2011.
NEW TEXTS ADOPTED BY THE EUROPEAN UNION APPLICABLE IN ADVANCE
The Manitou Group has not applied any standard or interpretation in advance.
The main areas requiring judgments and estimates in the preparation of the interim financial statements are identical to those described in note 1.2 of the consolidated financial statements at 31.12.2010.
The interim consolidated financial statements at 30.06.2011 and the accompanying notes have been approved by the Manitou BF Board of directors.
Note 1.2 Presentation of financial statements: income statement by function
The restructuring of the Group into three divisions announced in March 2009 led Manitou to reconfigure all of its management and reporting systems in order to:
- Obtain information sourced from and structured by division;
- Make the financial statements easier to read, and pertinent to operating personnel;
- Manage a common indicator for performance measurement;
- Make financial information more accessible to foreign managers and investors.
In order to better respond to all these criteria, Group management decided to change the presentation of the financial statements from one by nature to one by function.
The changes to the presentation of the financial statements have no impact on certain income statement aggregates which remain totally identical to the definitions previously used. The following are the line items referred to:
-
Sales
-
Current operating result
- Operating result
- Interest Income/expense
- Taxes
- Share of profits from associates
- Net income
- Net income attributable to the Parent Company
DEFINITION OF THE MAIN LINE ITEMS OF THE INCOME STATEMENT BY FUNCTION
Sales
Sales comprise primarily revenue from sales of new handling equipment (assembled within the Group or acquired from third parties) and spare parts and attachments, and revenue from subcontracts for industrial forklift truck masts, equipment rentals, equipment park management services and other miscellaneous services.
Cost of goods and services sold
Cost of sales consists of the cost of goods and services sold, which includes the cost of materials and components, labour directly attributable to the goods or services, and all the related operating costs of the production and logistics activities. Also included in the cost of sales are the amortisation of intangibles and depreciation of equipment and materials allocated to production activities, the costs of contractual guarantees, and impairment provisions on inventories.
Gross margin
Gross margin on cost of sales is the difference between sales and the cost of sales.
Research and development costs
Research and development costs consist of personnel expenses for persons assigned to the innovation, development, design, prototyping and improvement of products. The businesses frequently call on external service providers and use specialised equipment and materials, the depreciation of which is allocated to the function.
Research and development activities that meet the criteria of feasibility and innovation can be capitalised as an intangible asset and subsequently amortised as a cost of sales. Those expenses not meeting the capitalisation criteria are recorded directly as expenses.
Sales and marketing costs
Selling costs consist primarily of personnel expenses and related costs allocated to the sales development, dealer network coordination, marketing, and technical departments. Sales commissions, advertising expense, trade shows, insurance expense, sales guarantees, travel expenses and the depreciation of associated infrastructure are also included on this line.
Administrative costs
Administrative costs mainly consist of personnel expense and the costs associated with the support functions (Human Resources, Finance, the General Secretary, etc…). The amortisation of the infrastructure associated with these functions is also included.
Non-recurring income / expenses
The non-recurring income and expenses include the following items:
- any impairment recorded
- restructuring costs,
- other transactions on consolidated shares.
NOTE 2 - CHANGES IN THE CONSOLIDATION SCOPE
A merger through the absorption by Manitou of its family holding company (SFERT) was approved at the Extraordinary Shareholders' Meeting of 9 June 2011. This reorganisation of the family concert and simplification of the Manitou control structure contributes to simplifying the family control structure and will facilitate transmission to the new generations.
This also has the effect of strengthening Manitou by providing €46.2 million of net assets at the date of the transaction, consisting primarily of the following:
-
€36.6 million in liquid assets (cash and cash equivalents);
-
€5.1 million in AFS securities,
- €4.0 million in investment property.
Given the parity used in the merger agreement and the price of the Manitou BF shares at the time of the transaction, the Group's financial statements reported negative goodwill of €5.4 million at 30.06.2011 (other non-recurring operating income and expenses).
NOTE 3 - GOODWILL AND INTANGIBLE ASSETS
3.1 Change in net book value
| Gross value | |||||||
|---|---|---|---|---|---|---|---|
| In thousands of euros | 31.12.2010 | Addition | Removal | Changes in scope & other |
Translation differences |
30.06.2011 | |
| Goodwill | 61,580 | (4,866) | 56,714 | ||||
| Development costs | 27,233 | 1,660 | (185) | 28,708 | |||
| Trademarks | 23,949 | (1,808) | 22,141 | ||||
| Other intangible assets | 54,735 | 1,213 | (1) | (1,936) | 54,011 | ||
| Total intangible assets | 105,917 | 2,873 | (1) (3,929) 104,860 |
||||
| Amortisation and impairment | |||||||
| In thousands of euros | 31.12.2010 | Increase | Decrease | Changes in scope & other |
Translation differences |
30.06.2011 | |
| Goodwill | (60,323) | 4,866 | (55,457) | ||||
| Development costs | (9,177) | (1,458) | 55 | 6 | (10,574) | ||
| Trademarks | (23,949) | 1,808 | (22,141) |
Other intangible assets (41 033) (1 447) (55) 1,837 (40,698)
Total intangible assets (74,159) (2,905) 3,651 (73,413)
| Net value | |||
|---|---|---|---|
| In thousands of euros | 31.12.2010 | 30.06.2011 | |
| Goodwill | 1,257 | 1,257 | |
| Development costs Trademarks |
18,056 | 18,134 | |
| Other intangible assets | 13,702 | 13,313 | |
| Total intangible assets | 31,758 | 31,447 |
The primary investments during the period concern development costs and the completion of Group ERP implementation in France.
As a reminder, impairment losses on intangible assets excluding goodwill at 30.06.2011 were as follows:
| In thousands of euros | 30.06.2011 |
|---|---|
| Development costs | (288) |
| Trademarks | (22,141) |
| Other intangible assets | (21,509) |
| Total impairment losses | (43,938) |
3.2 Analysis of goodwill at the end of the period
| Net value | |||
|---|---|---|---|
| In thousands of euros | 31.12.2010 | 30.06.2011 | |
| CIE INDUSTRIELLE DE MATERIELS DE MANUTENTION | 34 | 34 | |
| EMPILHADORES DE PORTUGAL SA | 70 | 70 | |
| EPL CENTRO | 6 | 6 | |
| DLS | 964 | 964 | |
| OMCI ATTACHMENTS | 174 | 174 | |
| BTMI | 9 | 9 | |
| TOTAL | 1,257 | 1,257 |
3.3 Impairment of goodwill
No evidence of impairment was noted during the period and no impairment tests were performed.
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT
| Gross value | |||||||
|---|---|---|---|---|---|---|---|
| In thousands of euros | 31.12.2010 | Additions | Disposals | Translation differences |
Changes in scope & other |
30.06.2011 | |
| Land | 23,380 | 394 | (306) | (1) | 23,467 | ||
| Buildings | 122,983 | 359 | (2,194) | 50 | 121,198 | ||
| Plant and equipment | 130,591 | 876 | (856) | (1,888) | 696 | 129,419 | |
| Other property, plant and equipment | 55,791 | 3,106 | (281) | (702) | (1,577) | 56,337 | |
| Construction in progress | 803 | 1,093 | (39) | (955) | 902 | ||
| TOTAL | 333,548 | 5,828 | (1,137) | (5,129) | (1,787) | 331,323 | |
| In thousands of euros | 31.12.2010 | Increases | Decreases | Translation differences |
Changes in scope & other |
30.06.2011 | |
| Land | (4,861) | (208) | 25 | (5,044) | |||
| Buildings | (54,296) | (2,754) | 607 | (28) | (56,471) | ||
| Plant and equipment | (88,615) | (6,548) | 177 | 856 | 6 | (94,124) | |
| Other property, plant and equipment | (35,734) | (3,211) | 229 | 381 | 1,196 | (37,139) | |
| Construction in progress | (30) | (30) | |||||
| TOTAL | (183,506) | (12,721) | 406 | 1,869 | 1,144 | (192,808) | |
| Net value | |||||||
| In thousands of euros | 31.12.2010 | 30.06.2011 | |||||
| Land | 18,519 | 18,423 | |||||
| Buildings | 68,687 | 64,727 | |||||
| Plant and equipment | 41,976 | 35,295 | |||||
| Other property, plant and equipment | 20,057 | 19,198 | |||||
| Construction in progress | 803 | 872 | |||||
| Advances and prepayments |
TOTAL 150,042 138,515
Investments during the period were mainly related to the rental fleet (€2.1 million).
NOTE 5 - IMPAIRMENT OF INTANGIBLE AND TANGIBLE ASSETS
As no evidence of impairment appeared since 31.12.2010, no new impairment tests were performed. The impairment recorded by Gehl during the half-year period was monitored. New business assumptions available to the Group at 30.06.2011 confirmed the amounts recorded as impairment at 31.12.2010.
NOTE 6 - FINANCIAL INSTRUMENTS
| 31.12.2010 | ||||
|---|---|---|---|---|
| In thousands of euros | Securities available for sale |
Loans and receivables |
Fair value reported through the income statement |
Total 31.12.2010 |
| Non-current financial assets | 14 | 700 | 714 | |
| Current financial assets | 364 | 364 | ||
| Cash and cash equivalents Receivables on financing granted to end customers – |
54,105 | 54,105 | ||
| non-current portion | 18,335 | 18,335 | ||
| Other non-current assets | 3,776 | 3,776 | ||
| Trade accounts receivable Receivables on financing granted to end customers – |
187,763 | 187,763 | ||
| non-current portion | 54,196 | 54,196 | ||
| Other receivables | 25,379 | 25,379 | ||
| TOTAL | 14 | 289,449 | 55,169 | 344,632 |
6.1 Reconciliation of balance sheet items - assets
| 30.06.2011 | ||||
|---|---|---|---|---|
| In thousands of euros | Securities available for sale |
Loans and receivables |
Fair value reported through the income statement |
Total 30.06.2011 |
| Non-current financial assets | 4,827 | 1,027 | 5,854 | |
| Current financial assets | 2,215 | 2,215 | ||
| Cash and cash equivalents | 72,870 | 72,870 | ||
| Receivables on financing granted to end customers – | 11,906 | |||
| non-current portion | 11,906 | |||
| Other non-current assets | 3,207 | 3,207 | ||
| Trade accounts receivable | 221,781 | 221,781 | ||
| Receivables on financing granted to end customers – | 32,725 | |||
| non-current portion | 32,725 | |||
| Other receivables | 28,446 | 28,446 | ||
| TOTAL | 4,827 | 298,065 | 76,112 | 379,004 |
6.2 Reconciliation of balance sheet items - liabilities
The various categories of liabilities at 30.06.2011 are as follows. Financial liabilities are detailed in note 6.3 below.
| In thousands of euros | 31.12.2010 | 30.06.2011 |
|---|---|---|
| Non-current financial liabilities | 104,244 | 97,924 |
| Other non-current liabilities | 1,159 | 358 |
| Current financial liabilities | 89,116 | 69,571 |
| Trade accounts payable (1) | 140,263 | 170,807 |
| Other current liabilities (a) | 60,681 | 58,970 |
| TOTAL | 395,462 | 397,630 |
(1) Advance payments received from customers reported in the balance sheet at 31.12.2010 have been reclassified from "Trade payables" to "Other current liabilities" in the amount of €1,883 thousand.
6.3 Current and non-current financial liabilities
| Current | Non-current | |||
|---|---|---|---|---|
| In thousands of euros | 31.12.2010 | 30.06.2011 | 31.12.2010 | 30.06.2011 |
| Short-term financing and bank overdrafts | 2,688 | 9,173 | ||
| Bank loans | 37,173 | 27,029 | 84,310 | 83,483 |
| Financing lease liabilities | 4,274 | 4,343 | 6,499 | 5,704 |
| Liability related securitisation programme with recourse |
41,490 | 26,043 | 10,372 | 6,511 |
| Derivative liabilities - interest rate | 2,788 | 1,474 | ||
| Other borrowings | 937 | 540 | 275 | 752 |
| TOTAL | 86,562 | 67,128 | 104,244 | 97,924 |
| Shareholder agreements and liabilities on stock option plan (cash-settled) |
2,554 | 2,443 | ||
| TOTAL | 89,116 | 69,571 | 104,244 | 97,924 |
Bank loans include mainly a syndicated amortising term loan with an initial value of €210 million, set up to finance the acquisition of Gehl and recorded at an amortised cost of €110 million as at 30.06.2011 (€26 million in short-term financial debt and €84 million in medium- and long-term financial debt).
Besides the bank loan, which is amortisable on a straight-line basis over a five year period, this credit agreement includes a revolving line of credit for €40 million, as well as a multi-currency line of credit for 45 million US dollars or the equivalent in euros with a secured guarantee against the company's accounts receivable.
The contract is subject to the following restrictive covenants:
- Gearing ratio (net debt(1)/equity) of less than one over the life of the loan;
- A decreasing leverage ratio (EBITDA(2)/net debt) as at 30.06.2011 (<6 at 30.06.2011, 4.2 at 31.12.2011, between 3 and 2.5 afterwards)
At 30.06.2011, net debt to equity (gearing) was 24%.
(1) Under the terms of the loan agreement, net debt and shareholders' equity have been restated for impacts related to the shareholder agreements.
(2) EBITDA: operating income before depreciation, amortisation and asset impairments.
NOTE 7 - INVENTORY
Gross value
| In thousands of euros | 31.12.2010 | Changes in scope and reclassifications |
Movements | Translation differences |
30.06.2011 |
|---|---|---|---|---|---|
| Raw materials | 85,636 | 21,359 | -1,653 | 105,341 | |
| WIP | 21,021 | 6,113 | -321 | 26,813 | |
| Finished products | 73,231 | 1,401 | 12,756 | -1,654 | 85,735 |
| Goods | 62,242 | -761 | 3,884 | -1,897 | 63,468 |
| TOTAL | 242,130 | 640 | 44,112 | -5,525 | 281,357 |
Provisions
| In thousands of euros | 31.12.2010 | Changes in scope and reclassifications |
Movements | Translation differences |
30.06.2011 |
|---|---|---|---|---|---|
| Raw materials | -9,632 | -1,934 | 60 | -11,506 | |
| WIP | -163 | -14 | -177 | ||
| Finished products Goods |
-964 -10,334 |
-992 992 |
80 -783 |
65 156 |
-1,811 -9,969 |
| TOTAL | -21,093 | -2,651 | 281 | -23,463 |
Net value
| In thousands of euros | 31.12.2010 | Changes in scope and reclassifications |
Movements | Translation differences |
30.06.2011 |
|---|---|---|---|---|---|
| Raw materials | 76,004 | 19,425 | -1,593 | 93,835 | |
| WIP | 20,858 | 6,099 | -321 | 26,636 | |
| Finished products | 72,267 | 409 | 12,836 | -1,589 | 83,924 |
| Goods | 51,908 | 231 | 3,101 | -1,741 | 53,499 |
| TOTAL | 221,037 | 640 | 41,461 | -5,244 | 257,894 |
Inventories at 30.06.2011 include a correction of €1.2 million related to the incorporation of certain transportation expenses into the inventory valuation. This correction has been recorded in full in the income statement for the half-year period under "Cost of goods and services sold". The correction impacted primarily the Compact Equipment division.
NOTE 8 - ACCOUNTS RECEIVABLE
| In thousands of euros | 31.12.2010 | Changes in scope and reclassifications |
Movements Translation differences |
30.06.2011 | |
|---|---|---|---|---|---|
| CURRENT | |||||
| Accounts receivable - gross | 203,292 | 37,559 | -5,454 | 235,397 | |
| Accounts receivable - impairment | -15 529 | 730 | 321 | 862 | -13,616 |
| Accounts receivable - net | 187,763 | 221,781 | |||
| NON-CURRENT | |||||
| Accounts receivable - gross | 3,524 | -561 | 2,963 | ||
| Accounts receivable - impairment | |||||
| Accounts receivable - net | 3,524 | 2,963 | |||
| TOTAL | 191,287 | 224,744 |
NOTE 9 - RECEIVABLES ON SALES FINANCING
Receivables related to sales financing granted to end customers are reported on this line. These receivables concern either sales made via financing leases or, in the case of Gehl, the sales financing to end customers.
| In thousands of euros | 31.12.2010 | Changes in scope & other |
Movements | Translation differences |
30.06.2011 |
|---|---|---|---|---|---|
| Gross | |||||
| Receivables on financing leases Receivables on financing granted to end |
4,660 | -211 | -161 | 4 288 | |
| customers | 91,942 | -27,917 | -6,127 | 57 898 | |
| Receivables on sales financing | 96,602 | -28,128 | -6,288 | 62,186 | |
| Impairment | |||||
| Receivables on financing leases Receivables on financing granted to |
-14 | 14 | |||
| customers | -24,057 | 4,827 | 1,675 | -17,555 | |
| Receivables on sales financing | -24,071 | 4,841 | 1,675 | -17,555 | |
| Net | |||||
| Receivables on financing leases Receivables on financing granted to end |
4,646 | -197 | -161 | 4,288 | |
| customers | 67,885 | -23,090 | -4,452 | 40,343 | |
| Receivables on sales financing - Net | 72,531 | -23,287 | -4,613 | 44,631 | |
| Of which | |||||
| Non-current | 18,335 | 11,906 | |||
| Current | 54,196 | 32,725 |
Receivables related to sales financing granted to end customers concern only Gehl. At 30.06.2011 they included €30 million of receivables sold with recourse and therefore reported on the Group balance sheet.
NOTE 10 – SHARE CAPITAL
10.1 Share capital
In consideration for the net contribution made by SFERT (see note 2), Manitou increased its share capital by creating 17,782,040 new, fully-paid shares with a par value of €1 per share. These new shares were allocated to the SFERT shareholders at a rate of 45.83 Manitou shares for 1 SFERT share. The assets transferred by the company purchased (SFERT) included 15,801,756 shares of the acquiring company. As Manitou, the acquiring company, did not intend to keep the shares, it immediately reduced the Company's capital by €15,801,756, bringing Manitou's capital to €39,547,824 after the transaction.
10.2 Treasury shares
| 31.12.2010 | % of share capital |
30.06.2011 | % of share capital |
|
|---|---|---|---|---|
| Number of shares: | ||||
| Held at opening (share repurchase program) | 462,500 | 311,000 | 0.82% | |
| Stock options exercised | -25,000 | |||
| Capital reduction by cancellation of treasury shares (Combined Shareholders' Meeting of 04.06.2009) |
-151,500 | |||
| Held at closing (share repurchase program) | 311,000 | 0.82% | 286,000 | 0.72% |
| Stock options coverage | ||||
| Liquidity contract | 31,624 | 26,496 | ||
| Total treasury shares held | 342,624 | 0.91% | 312,496 | 0.79% |
The cost of the shares purchased, the proceeds from the sale of the shares sold and the result associated with the cancellation of treasury shares were recognised as a reduction and an increase of net worth.
Treasury shares do not have dividend rights.
10.3 STOCK OPTIONS GRANTED
No new stock option plan was granted in the first half of 2011.
At 30.06.2011, expenses for stock option plans put in place in previous years amounted to €203 thousand.
NOTE 11 - PROVISIONS
11.1 Provisions
| In thousands of euros | 31.12.2010 | Less than one year |
More than one year |
30.06.2011 | Less than one year |
More than one year |
|---|---|---|---|---|---|---|
| Provisions - excluding post-employment benefits | ||||||
| Warranty provisions Provisions for other risks |
15,719 11 663 27,382 |
12,940 5,761 18,701 |
2,779 5,902 8,681 |
24,070 13,405 37,475 |
13,832 6,921 20,753 |
10,238 6,484 16,722 |
| Employee benefits | 23,303 | 1,350 | 21,953 | 20,638 | 578 | 20,060 |
| TOTAL | 50,686 | 20,051 | 30,635 | 58,113 | 21,331 | 36,782 |
11.2 Changes in provisions - excluding employee benefits
| In thousands of euros | 31.12.2010 | Increases | Releases of provisions used |
Releases of provisions unused |
Reclassed | Translation differences |
30.06.2011 |
|---|---|---|---|---|---|---|---|
| Warranty provisions | 15,719 | 12,098 | -3,392 | -50 | -305 | 24,070 | |
| Provisions for other risks | 11,663 | 4,434 | -1,903 | -362 | 65 | -492 | 13,405 |
| TOTAL | 27,382 | 16,532 | -5,295 | -412 | 65 | -797 | 37,475 |
Warranty
Amounts recorded when creating or reversing provisions for warranties are included in "Cost of goods and services sold" or "Selling, marketing and service expenses" in the income statement, depending on their nature.
Miscellaneous risks
Miscellaneous risks reflect primarily trade and labour disputes.
Note 12 - POST EMPLOYMENT BENEFITS
The actuarial assumptions used to determine the current value of the liability and the fair value of the financial assets are identical to those used at 31.12.2010, with the exception of the discount rate by region as reported below:
| 31.12.2010 | ||||||
|---|---|---|---|---|---|---|
| France | United Kingdom | Italy | United States | |||
| Discount rate | 5.25% | 5.50% | 5.25% | 5.00% | ||
| 30.06.2011 | ||||||
| France | United Kingdom | Italy | United States | |||
| Discount rate | 5.60% 5.60% |
5.60% | 5.10% |
NOTE 13 - INCOME TAXES
In accordance with IAS 34, income tax expense was determined by applying the estimated average annual tax rate for the current fiscal year.
NOTE 14 - RISK MANAGEMENT
The Manitou Group's risk management policy is described in section 1.7 "Main risks and uncertainties for the remaining 6 months of the year" of the business review.
NOTE 15 - TRANSACTIONS WITH RELATED PARTIES
During the first half of 2011, the main transactions with companies consolidated using the equity method were:
| 30.06.2010 | 30.06.2011 | ||
|---|---|---|---|
| In thousands of euros | Income | Income | |
| Toyota Industrial Equipment SA | 6,517 | NA | |
| Algomat | 1,144 | 1,274 | |
| Hangzhou Manitou Equipment Machinery Co Ltd | 67 | 624 | |
| Manitou Finance France SAS | 1 | 1 | |
| Manitou Finance Ltd | 23,308 | 29,229 | |
NOTE 16 - POST CLOSING EVENTS
STOCK OPTIONS
The Board of directors meeting of 26.07.2011 granted 255,650 stock options to senior executives of the Parent Company and certain subsidiaries. The 8-year plan vests at a rate of 25% per year over a 4-year period, subject to the physical presence of the beneficiary and performance criteria regarding share price and Group profitability.
MANITOU SOUTHERN AFRICA SHAREHOLDERS' AGREEMENT
During the first half of 2011, the minority shareholder of Manitou Southern Africa informed Manitou BF of its wish to exercise its minority put option. Manitou BF acquired the 20% equity investment held by the minority shareholder in July of 2011 and now owns 100% of Manitou Southern Africa.
04 Statutory auditors' review report on first half-year financial information for 2011 40
4 STATUTORY AUDITORS' REVIEW REPORT
PERIOD FROM JANUARY 1, 2011 TO JUNE 30, 2011
This is a free translation into English of the Statutory auditors' review report issued in French and is provided solely for the convenience of English speaking readers. This report includes information relating to the specific verification of information presented in the Group's interim management report. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.
To the Shareholders,
In compliance with the assignment entrusted to us by your Shareholders' Meeting and in accordance with the requirements of article L. 451-1-2 of the French Monetary and Financial Code ("Code monétaire et financier"), we hereby report to you on:
-
the review of the accompanying condensed half-year consolidated financial statements of Manitou BF, for the period ending June 30, 2011,
-
the verification of the information contained in the interim management report.
These condensed half-year consolidated financial statements are the responsibility of the Board of directors. Our role is to express a conclusion on these financial statements based on our review.
4.1 CONCLUSION ON THE FINANCIAL STATEMENTS
We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 - standard of the IFRS as adopted by the European Union applicable to interim financial information.
Without qualifying our conclusion, we draw your attention to following notes to the half-year consolidated financial statements :
-
The note 1.2 « Presentation of financial statements : income statement by destination » which sets out the change in the presentation of financial statements (from a presentation by nature to a presentation by destination) and which defines main items of the profit and loss statement by destination,
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The note 2 « Changes in the consolidation scope » which sets out the consequences on half-year financial statements of the acquisition merger by Manitou BF of its holding company SFERT.
4.2 SPECIFIC VERIFICATION
We have also verified the information presented in the interim management report commenting the condensed half-year consolidated financial statements subject to our review. We have no matters to report as to its fair presentation its and consistency with the condensed half-year consolidated financial statements.
Orvault and Nantes, September 19, 2011
The Statutory auditors French original signed by
RSM Secovec Deloitte & Associés Jean-Michel Picaud Thierry de Gennes
5 STATEMENT OF THE PERSON RESPONSIBLE FOR THE DOCUMENT
PERSON RESPONSIBLE FOR THE HALF-YEAR REPORT
Jean-Christopher Giroux, President & Chief Executive Officer
I hereby affirm that, to the best of my knowledge, the condensed consolidated half-year financial statements have been prepared in accordance with all applicable accounting standards and present a true and fair view of the assets, financial position and income of the company and all companies included in the Manitou BF consolidation scope, and that the accompanying half-year business review presents an accurate and true picture of the information provided such as the major events, their impact on the half-year financial statements, a description of the main risks and uncertainties for the remaining six months of the year and the main transactions with related parties.
Ancenis, September 19, 2011