Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Manitowoc Co Inc (MTW, Financial) exceeded expectations with $471 million in revenue and $22 million in adjusted EBITDA for the first quarter of 2025.
- Orders were strong at $610 million, with a backlog just short of $800 million, indicating robust demand.
- Non-new machine sales increased by 11% year-over-year, reaching $161 million, showcasing growth in aftermarket sales.
- The company successfully integrated AI into its improvement processes, saving 2,000 man-hours and avoiding $400,000 in costs.
- European tower crane orders were up nearly 70% year-over-year, marking the third consecutive quarter of growth, signaling a market recovery.
Negative Points
- Net sales decreased by 5% year-over-year, indicating some challenges in maintaining sales momentum.
- Adjusted EBITDA margin decreased to 4.6%, a 31% decline year-over-year, reflecting pressure on profitability.
- The company faces $60 million in incremental costs due to tariffs, with mitigation plans covering only 80% to 90% of these costs.
- There is uncertainty regarding the impact of tariffs on demand and pricing, making it difficult to predict future financial performance.
- The Middle East saw a small year-over-year decline in first-quarter orders, indicating potential regional challenges.
Q & A Highlights
Q: Can you explain the mitigation strategies for the tariffs and whether this situation could benefit your pricing strategy?
A: Aaron Ravenscroft, President and CEO, explained that the mitigation strategies include price increases, surcharges, alternative sourcing, and vendor cooperation. The situation is seen as short-term, and while the tariff impact is significant, the overall pricing benefits are uncertain due to currency fluctuations.
Q: What is the breakdown of the $45 million tariff impact related to China, and what tariff levels are assumed?
A: Aaron Ravenscroft noted that the impact is not solely from China but also includes steel and aluminum tariffs. The exact breakdown is complex and depends on the mix of machines produced.
Q: What is driving the increased demand in Europe, and how does it compare to previous cycles?
A: Aaron Ravenscroft stated that the recovery is broad-based, with low dealer inventory and utilization driving demand. While the base was low, the market is moving in the right direction, but it is not yet at peak levels.
Q: Are higher raw material costs, such as steel and aluminum, factored into the $45 million tariff impact at Shady Grove?
A: Aaron Ravenscroft confirmed that higher raw material costs are part of the tariff impact calculations.
Q: Can you provide more details on the US non-residential construction market and crane utilization trends?
A: Aaron Ravenscroft highlighted strong utilization and ongoing large project announcements. The market reflects broader data trends, with data centers being particularly active.
Q: What are the drivers of growth in non-new machine sales, and what is the visibility for continued growth?
A: Aaron Ravenscroft mentioned broad-based growth, particularly in the European tower crane business. The expansion of service locations and field service technicians contributes to this growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
