Manitou: 2020 Half-year results

  • H1 20 net sales of762m down-35% vs. H1 19 and -35% on a comparable basis*
  • Q2 order intake on equipment of180m vs. 286m in Q2 19
  • Order book on equipment at the end of Q2 20 of555m vs. 643m in Q2 19
  • Recurring operating income at30.1m (3.9%) vs. 90.1m (7.7%) in H1 19
  • EBITDA148m (6.3%) vs. 107m in H1 19
  • Net income at13.5m vs. 60.1m in H1 19
  • Taking into account the COVID-19 crisis and its economic consequences, the outlook for 2020 is for an annual turnover of around 1.5 billion
  • Outlook for current operating income in the 2.7% to 3.2% range for 2020

/Ancenis, 30 July 2020 - The Board of Directors of Manitou BF, meeting on this day, closed the accounts for

the first half of 2020.

Michel Denis, Chief Executive Officer, said :"The first half of 2020 was highlighted by the sudden COVID-19 crisis that has been disrupting our markets since mid-March, resulting in a 35% drop in our sales compared to a record first half of 2019.

As soon as the health crisis emerged, we reacted very quickly to implement health and operational measures to protect our employees and continue to meet the urgent needs of our customers. A crisis management steering committee was immediately activated to define the direction and priority actions to be implemented. We established constant communication with our teams, stakeholders and Board of Directors. The agility and reactivity of our employees enabled us to maintain support to our customers and users throughout the period, particularly in terms of spare parts and technical assistance. On the industrial side, we were able, from mid-April, to gradually restart the French and Italian plants' production lines by introducing strict health and safety procedures. Significant production re-planning work has been carried out with our customers and suppliers in order to be able to deliver the most urgent orders. This was particularly the case for those in the agricultural sector or in remote geographical areas whose seasonality required shipment before the summer shutdown.

All of these measures helped us to get through this very difficult period in the best possible way and we have now returned to a market order adjusted to the current volumes of activity in our markets.

On the financial level, we have deployed measures from the beginning of the crisis to reduce all of our expenses and investments, implemented measures to reduce working hours and certain government aid in order to protect the group's cash flow and sustainability as much as possible. These measures were reinforced by the Board of Directors' decision not to proceed with the payment of the 30m dividend that had been announced a few weeks before the health crisis erupted. The group ended the half-year with a current operating profit of 3.9% of sales.

After suffering an air pocket from mid-March to mid-May, the recovery was encouraging in June. The agricultural market remains the most buoyant, while the industrial and construction sectors recorded more significant decreases, particularly among rental companies, whose business outlook for the remaining part of 2020 and 2021 is still gloomy.

On the strength of the upturn at the end of the quarter, the group ended the first half of the year with an order book of 555m, which enables us to estimate a sales outlook for 2020 that is around 30% lower than in 2019 and, in the absence of any further deterioration in the global economic context, a current operating profit in the range of 2.7% to 3.2%.

We also believe that the crisis we are going through, will have economic consequences beyond 2020 and that our current operating income target of more than 8% of sales under the Ambition 2022 plan will not be achieved by the initial target date.

MHA

CEP

S&S

Total

MHA

CEP

S&S

Total

In millions of euros

H1 19

H1 19

H1 19

H1 19

H1 20

H1 20

H1 20

H1 20

Var.

Net sales

829,9

178,4

155,2

1 163,5

496,5

123,2

141,9

761,6

-35%

Sales margin

124,1

24,4

43,9

192,4

60,9

7,4

42,1

110,3

-43%

Sales margin as a % of sales

15,0%

13,7%

28,3%

16,5%

12,3%

6,0%

29,6%

14,5%

Recurring Operating Income

71,6

3,9

14,6

90,1

20,6

-7,6

17,1

30,1

-67%

Recurring Op. Income as a % of sales

8,6%

2,2%

9,4%

7,7%

4,1%

-6,1%

12,0%

3,9%

Operating Income

71,0

3,7

14,4

89,1

19,7

-9,7

16,9

26,9

-70%

Net income attributable to the group

n/a

n/a

n/a

59,7

n/a

n/a

n/a

13,5

-77%

Net debt excluding IFRS 16

185,4

164,0

-12%

Net debt including IFRS 16

201,4

178,8

Shareholder's equity

625,4

682,3

+9%

2

30%

24%

% Gearingexcluding IFRS 16

2

32%

26%

% Gearingincluding IFRS 16

Working capital

596

591

-1%

Percentage figures in brackets express a percentage of turnover.

Half-year financial statements and Statutory Auditors' review report available online on the company website (in French) Auditing procedures performed

  • like for like, at constant scope and exchange rate:
    • for 2019 acquisitions (Mawsley Machinery Ltd at the end of October 2019), subtraction of their contribution, from January 1st to March 31, 2020. There is no exit in 2019. There is no acquisition nor exit in 2020.
    • application of the prior year's exchange rate
  • EBITDA:Earnings before interest, taxes, depreciation, and amortization, restated from IFRS 16 impact

2Gearing : Financial ratio measuring the net debt divided by shareholders' equity

/Sales trend

Sales by division

In million of euros

Quarter

Half-year

Q2 2019

Q2 2020

%

H1 2019

H1 2020

%

MHA

433

213

-51%

830

496

-40%

CEP

94

60

-37%

178

123

-31%

S&S

75

68

-9%

155

142

-9%

Total

602

341

-43%

1 163

762

-35%

Sales by geographic region

In million of euros

Quarter

Half-year

Q2 2019

Q2 2020

%

H1 2019

H1 2020

%

Southern Europe

184

122

-34%

398

274

-31%

Northern Europe

248

121

-51%

454

272

-40%

Americas

117

68

-41%

209

148

-29%

APAM

53

29

-45%

103

68

-34%

Total

602

341

-43%

1 163

762

-35%

  • Review by division

The MHA - Material Handling & Access Division achieved sales of 496.5m, down 40.2% over 6 months compared to an exceptional basis in 2019. The MHA division was strongly impacted by the COVID-19 pandemic. Its sales declined in all geographical areas, particularly in Northern Europe and APAM, in all its markets (construction, agriculture, industries).

The division's margin on cost of sales amounted to 60.9m, down 50.9% compared with the 1st half of 2019. It was impacted by the decline in activity and a 2.7 points deterioration in the margin rate following the production shutdown and the implementation of health measures when business recovered. The shutdown of production sites and the deployment of partial activity measures enabled the group to reduce indirect costs by 10.3m and limit the impact of the decline in activity.

The MHA division's current operating income decreased by 51.1m (-71.3%) to 20.6m (4.1% of sales) compared with 71.6m in the 1st half of 2019 (8.6% of sales).

Taking advantage of the 2019 launch of new telescopic product lines in India, the division will stop its assembly activity in Brazil at the end of August, while continuing its commercial development in that country.

The CEP - Compact Equipment Products Division recorded sales of 123.2m, down 30.9% over 6 months (-32.1% at constant exchange rates and scope). The division was impacted by the COVID-19 pandemic, particularly in the US and APAM zones and Telehandlers products.

The margin on cost of sales reached 7.4 million, divided by 3 compared to the first half of 2019. This decline is explained by the impact of this crisis on the activity and the 7.7 points drop in the margin rate. It was penalized by an unfavorable product mix, sales efforts and higher fixed production costs.

Taking these items into account, the CEP division's current operating income decreased and showed a loss of -7.6 million (- 6.1% of sales) compared with 3.9 million in the 1st half of 2019 (2.2% of sales).

The division's financial situation, combined with the lack of any prospect of a short-term upturn, led to a reduction of around 100 positions in North America and India. As of July 1st, most of the savings from this plan will be allocated to the CEP division.

With revenue of 141.9m, the Services & Solutions Division (S&S) recorded a decline of 8.6% over 6 months (-10.7% at constant exchange rates and scope), impacted by the COVID-19 pandemic. Business declined in all geographical areas, particularly in the APAM zone, as well as in all of its markets, with the exception of services and rental activities, which are more resilient in the current crisis period.

This decrease led to a 1.9m reduction in the margin on cost of sales compared with the 1st half of 2019, to

42.1 m. The impact of the decline in business was limited by a 1.3 point increase in the margin on cost of sales. This improvement is the consequence of the change in the product mix.

Administrative, commercial, marketing and service expenses were reduced by 14.8% (4.4m) following the implementation of savings measures and partial activity.

As a result of these measures, the division's profitability came to 17.1m (12.0% of sales), up 2.5m in the first half of 2019 (14.6m, or 9.4% of sales).

ISIN code: FR0000038606

Indices: CAC ALL SHARES, CAC ALL-TRADABLE, CAC INDUSTRIALS, CAC MID & SMALL, CAC SMALL,

EN FAMILY BUSINESS

October 28, 2020 (after market closing)

Q3 2020 Sales Revenues

Manitou Group is a worldwide reference in the handling, access platforms, and earthmoving. By improving workplace conditions, safety, and performance, our environment remains renewable and sustainable for mankind.

Through its 3 iconic brands-Manitou, Gehl, and Mustang by Manitou-the group develops, manufactures, and provides equipment and services for the construction, agriculture, and industrial markets.

By constantly innovating its products & services, Manitou Group constantly adds value to exceed its stakeholders' expectations.

Always attuned to its customers via its expert network of over 1,050 dealers, the group continues to be true to its roots by keeping its headquarters in France. That focus, which powered sales to 2.1 billion in 2019, informs its talented worldwide team of 4,600 whose passion ceaselessly motivates the group.

EXTRACT OF THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 30 JUNE 2020

1.1 CONSOLIDATED INCOME STATEMENT

in thousands of euros

2019

H1 2019

H1 2020

Net Sales

2 093 577

1 163 487

761 626

Cost of goods & services sold

-1 747 509

-971 099

-651 357

Research and development costs

-27 732

-14 576

-12 579

Selling, Marketing & Service expenses

-113 504

-58 339

-45 790

Administrative expenses

-61 170

-29 505

-24 239

Other operating income and expenses

4 946

103

2 416

Recurring operating profit

148 609

90 071

30 077

Non-recurring operating income and expenses

-2 534

-945

-3 225

Operating Income

146 074

89 125

26 852

Share of profits of associates

2 192

957

1 011

Operating Income including Net Income from associates

148 267

90 082

27 863

Financial income

37 617

24 094

35 348

Financial expenses

-45 144

-26 736

-40 874

Financial Result

-7527

-2641

-5526

Income before tax

140 740

87 441

22 337

Income Taxes

-44 982

-27 359

-8 791

Net Income

95 757

60 081

13 545

Attributable to equity holders of the parent

95 625

59 742

13 459

Attributable to non-controlling interests

132

337

86

Earnings per share (in euros)

2019

H1 2019

H1 2020

Net income attributable to the equity holders of the parent

2,50

1,56

0,35

Diluted earnings per share

2,50

1,56

0,35

1.2 OTHER COMPONENTS OF COMPREHENSIVE INCOME AND EXPENSE & COMPREHENSIVE INCOME

in thousands of euros

2019

H1 2019

H1 2020

Income (loss) for the year

95 757

60 079

13 545

Adjustments to fair value of the financial assets

131

143

20

Translation differences arising on foreign activities

6 861

2 228

-4 691

Interest rate hedging and exchange instruments

-2 715

433

2 701

Items that will be reclassified to profit or loss in subsequent periods

4 277

2 803

-1969

Actuarial gains (losses) on defined benefits plans

-2 282

-3 605

4 999

Items that will not be reclassified to profit or loss in subsequent periods

-2282

-3605

4 999

Total gains and losses recognized directly in other components of comprehensive income

1 995

-802

3 029

Comprehensive income

97 752

59 278

16 575

Attributable to equity holders of the parent

97 417

58 879

17 258

Attributable to non-controlling interests

335

399

-683

Manitou group I 2020 Half-year financial report extract

1.3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS

Goodwill

Intangible assets

Tangible assets

Right-of-use of leased assets Investments in associates Sales financing receivables Other non-current assets Deferred tax assets

Non-currentassets

Inventories & work in progress Net trade receivables Current income tax

Other curent assets

Cash and cash equivalents

Net amount as of

in thousands of euros December 31, 2019

June 30, 2020

288

288

54 705

58 314

211 593

212 187

16 461

13 522

16 986

17 499

7 738

6 146

11 346

14 474

17 581

15 102

336 698

337 531

589 745

540 540

380 438

324 215

7 990

8 880

47 536

51 477

22 333

107 728

Current assets

1 048 043

1 032 841

Non-currentassets held for sale

0

0

Total assets

1 384 740

1 370 371

LIABILITIES

Net amount as of

in thousands of euros

December 31, 2019

June 30, 2020

Share capital

39 668

39 668

Share premiums

46 098

46 098

Treasury shares

-23 714

-23 713

Reserves and profit for the year - equity holder of the parent

596 779

614 414

Equity attributable to owners of parent

658 831

676 468

Non-controlling interests

5 815

5 831

Total Equity

664 646

682 298

Non-current provisions Non-current financial liabilities Non-current lease debts Other non-current liabilities Deferred tax liabilities

Non-currentliabilities

Current provisions Current financial liabilities Current lease debts Trade payables Current income tax Other current liabilities

48 862

46 053

149 726

146 416

12 269

9 864

3 088

2 590

1 751

2 380

215 696

207 304

18 964

19 202

64 722

128 765

5 602

4 873

253 446

178 243

4 087

2 769

157 579

146 917

Current liabilities

504 399

480 769

Total equity & liabilities

1 384 740

1 370 371

Manitou group I 2020 Half-year financial report extract

1.4 CONSOLIDATED SHAREHOLDERS' EQUITY AS AT JUNE 30, 2020

Total equity

Share

Cumulative

Attribuable to

Non-

translation

Treasury

Consolidated

equity holders

Share capital

premium

controlling

Total

adjustment

shares

reserves

of the parent

account

interests

company

in thousands of euros

As of december 31, 2018

39 668

46 098

1 723

-24018

533 503

592 389

4 585

596 974

Impact of new standards

-1 193

-1 190

-3

-1 193

As of january 1, 2019

39 668

46 098

1 723

-24018

532 311

591 199

4 582

595 781

Gains and losses recognized in equity

2 228

-3 030

-863

62

-802

Net income

60 079

59 742

337

60 079

Comprehensive income

2 228

57 049

58 879

399

59 277

Stock option plan-related expenses

Dividends paid

-29 867

-29 763

-104

-29 867

Treasury shares

60

-60

Capital increase

Changes in control of

437

437

437

consolidated entities

Acquisition and disposal of minority

-5

-117

112

-5

interests' shares

Purchase commitments for minority

interests' shares

Change in translation reserves

-437

-437

-437

Other

182

182

182

As of june 30, 2019

39 668

46 098

3 514

-23958

560 047

620 381

4 989

625 370

Impact of new standards

190

191

-1

190

As of july 1, 2019

39 668

46 098

3 514

-23958

560 237

620 572

4 988

625 560

Gains and losses recognized in equity

4 633

-1 837

2 656

141

2 797

Net income

35 676

35 881

-205

35 676

Comprehensive income

4 633

33 839

38 536

-64

38 472

Stock option plan-related expenses

Dividends paid

-295

-276

-19

-295

Treasury shares

244

-244

Capital increase

Changes in control of

172

-15

187

172

consolidated entities

Acquisition and disposal of minority

-3

-2

-1

-3

interests' shares

Purchase commitments for minority

723

723

723

interests' shares

Change in translation reserves

Other

17

17

17

As of december 31, 2019

39 668

46 098

8 148

-23714

594 446

658 831

5 815

664 646

Impact of new standards

As of january 1, 2020

39 668

46 098

8 148

-23714

594 446

658 831

5 815

664 646

Gains and losses recognized in equity

-4 692

7 720

3 799

-769

3 029

Net income

13 545

13 459

86

13 545

Comprehensive income

-4 692

21 265

17 258

-683

16 575

Stock option plan-related expenses

Dividends paid

Treasury shares

1

1

1

Capital increase

Changes in control of

consolidated entities

Acquisition and disposal of minority

interests' shares

Purchase commitments for minority

690

690

690

interests' shares

Change in translation reserves

Other

386

378

8

386

As of june 30, 2020

39 668

46 098

3 456

-23713

616 789

676 468

5 831

682 298

Manitou group I 2020 Half-year financial report extract

1.5 CASH FLOW STATEMENT AS AT JUNE 30, 2020

in thousands of euros

2019

H1 2019

H1 2020

Net Income

95 757

60 079

13 545

Income from equity affiliates net of dividends

1 375

1 497

-1 012

Amortizations and depreciations

46 022

21 511

24 934

Provisions and impairments

3 829

1 885

637

Income tax expense (current and deferred)

44 982

27 359

8 791

Other non-cash income and expenses

135

485

401

Cash flow operations

192 100

112 816

47 296

Taxes paid

-48 265

-12 751

-10 266

Change in working capital requirement

-56 134

-65 607

15 994

Change in capitalized lease machines

-21 060

-11 332

-4 418

Cash flow from operating activities

66 641

23 126

48 605

Proceeds from sales of intangible assets

-20 864

-9 647

-9 386

Proceeds from sales of tangible assets

-50 243

-19 502

-15 734

Change in fixed assets payables

2 761

474

-2 724

Disposals of property, plant and equipment and intangible assets

882

470

68

Acquisitions of investments in obtaining control

-2 668

-459

0

Disposals of investments with loss of control

0

0

0

Others

-25

-429

-461

Cash flow from investing activities

-70157

-29093

-28238

Capital increase

171

0

0

Dividends paid

-30 162

-29 866

0

Purchase of treasury shares

0

-163

0

Repurchase of non-controlling interests

0

0

0

Change in others financials liabilities and assets

32 430

98 873

91 604

Payement of finance lease liabilities

-5 178

-2 661

-3 143

Others

1 098

-1 268

-3 230

Cash flow from financing activities

-1641

64 915

85 231

Net increase (decrease) in cash, cash equivalents, and bank overdrafts

-5157

58 948

105 598

Cash, cash equivalents and bank overdrafts at beginning of the year

-609

-609

-4 997

Exchange gains (losses) on cash and bank overdrafts

769

467

966

Cash, cash equivalents and bank overdrafts at end of year

-4997

58 806

101 567

Manitou group I 2020 Half-year financial report extract

1.6 EXTRACT FROM THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 30 JUNE 2020

1.6.1 HALF YEAR FINANCIAL STATEMENTS AND COVID-19 IMPACT

The half-year financial statements, which do not make it possible to prejudge the full year, take into account all the accounting entries at the end of the period considered necessary by the Group's management to give a true and fair view of the information presented.

Income and expenses related to the Covid-19 epidemic are recognized in recurring operating income and expenses, with the exception of income and expenses that are usually recognized in non-current income in accordance with previously applied accounting principles.

Impairment tests of R&D-related intangible assets are carried out in the second half of the year as part of budget preparation. Impairment tests are carried out at the half-yearly close only in the event of an unfavorable trend in certain indicators.

With the Covid-19 crisis, value tests were undertaken on the main capitalized R&D costs on the basis of revised budgets and discount rates. These tests did not reveal any impairment at June 30, 2020. An additional 10% decrease in revenue would not result in the recognition of an impairment loss.

The Group has not carried out any tests on tangible assets, consisting mainly of land, buildings and industrial equipment. To date, the value of these assets is not called into question by the current epidemic.

Other asset items (inventories, trade receivables, etc.) have been valued in accordance with the Group rules. The current epidemic did not have a significant impact on the value of these items at June 30, 2020.

Actuarial valuation assumptions were refreshed at the end of June in order to update the amount of provisions for pensions and employee benefits.

1.6.2 HIGHLIGHTS

COVID-19 CRISIS

The worldwide spread of Covid-19 during the first half of 2020 had and still has an impact over the Group's sales, down to 35% in the first half of 2020, and on our production capacities.

PRODUCTION SHUTDOWN

As early as March, the Group put in place emergency health measures and decided to close production sites in France, Italy and India. In the United States, production activities were maintained throughout the period.

Spare parts and service activities were maintained and distribution activities continued at a slower rate.

These production shutdowns were followed, as soon as possible, by the setting up of partial activity, particularly in France and Italy. The Group has also generalized home office.

Since mid-April, after reorganizing processes in line with health constraints, production has gradually restarted in France and Italy.

Since May, all sites have resumed production. For support functions, partial activity was maintained in France to adapt to the market downturn.

Despite productivity problems linked to health measures, current production capacities are in line with the Group's order book and, given seasonality, respond to a particularly strong demand from the agricultural market.

IMPLEMENTATION OF THE "RESILIENCE" PROGRAM

To deal with this crisis and the downturn in business, the Group has set up the "Resilience" plan. This plan is based on 4 pillars:

  • Operator safety and the restarting of operations, with the deployment of new safety standards and the adaptation of our processes to deliver the Group's customers,
  • Activity, with the adaptation of deliveries and the order book, the objective of satisfying urgent requests and the agricultural and industrial markets, and the search for additional markets and orders,
  • Cash flow with the securing of financing and the reduction of investments and projects,
  • Reducing costs to adapt to sales and production volumes, with a plan to reduce overheads and personnel costs. Thus, the Group has implemented partial activity measures and employee departure plans in the United States, India and South Africa.

Manitou group I 2020 Half-year financial report extract

FINANCIAL ACTIVITIES

To accompany the downturn in business, the Group implemented partial activity measures in France and similar measures in other countries as soon as possible. Over the period, the total value of recorded aid amounts to € 7.7 million. Manitou BF is the main beneficiary of those aids with € 6.0 million, of which € 1.5 million is awaiting payment at June 30, 2020.

As part of the "Resilience" plan, the employee departure measures generated non-current restructuring costs amounting to € 2.5 million.

At June 30, 2020, the main current costs incurred in connection with the Covid-19 epidemic amounted to € 0.8 million. They correspond to costs relating to the implementation of health measures and donations to support medical teams.

In order to secure its financing and liquidity risks in the current context, the Group drew down an additional credit line of € 110 million in March 2020 expiring in September 2020.

The Group has also obtained payment deferrals for social security charges and taxes for a total amount of € 6.9 million.

The Annual General Meeting of 18 June 2020, on the proposal of the Board of Directors, decided to waive the proposed dividend payment of €0.78 per share that was initially announced at the time of publication of the 2019 annual results.

1.6.3 OPERATIONAL DATA

INFORMATION ON OPERATING SEGMENTS

The Group is organized around three divisions, two product divisions and a service division:

  • The MHA - Material Handling and Access product division optimizes the development and production of telehandlers, rough-terrain and industrial forklifts, truck-mounted forklifts and aerial working platforms branded Manitou
  • The CEP - Compact Equipment Products division optimizes the development and production of skidsteer loaders, track loaders, articulated loaders, backhoe loaders and telehandlers branded Gehl and Mustang
  • The S&S - Services & Solutions, Service division includes service activities to support sales (financing approaches, warranty contracts, maintenance contracts, full service, fleet management, etc.), after-sales (parts, technical training, warranty management, fleet management, etc.) and services to end users (geo-location, user training, advice, etc.). The mission of the division is to develop service offers to meet the needs of each of our customers in our value chain and to increase resilient sales revenue for the Group

These three divisions design and assemble the products and services which are distributed by the sales and marketing organisation to dealers and the Group's major accounts in 140 countries.

In accordance with IFRS 8, the information by operating segment is prepared on the basis of operating reports submitted to the Group management. This information is prepared in accordance with the IFRS applicable to consolidated financial statements.

CONSOLIDATED INCOME STATEMENT BY DIVISION

MHA

CEP

S&S

Material Handling and

Compact Equipment

TOTAL

Services & Solutions

Access

Products

in thousands of euros

30.06.2019

30.06.2020

30.06.2019

30.06.2020

30.06.2019

30.06.2020

30.06.2019

30.06.2020

Net Sales

829 883

496 461

178 382

123 230

155 222

141 936

1 163 487

761 626

Cost of goods & services sold

-705 816

-435 602

-153 975

-115 880

-111 309

-99 875

-971 099

-651 357

Gross margin

124 068

60 859

24 407

7 350

43 913

42 060

192 388

110 269

As a %

15,0%

12,3%

13,7%

6,0%

28,3%

29,6%

16,5%

14,5%

R&D expenses

-11 155

-9 308

-3 429

-3 271

8

0

-14 576

-12 579

Selling, Marketing & Service expenses

-24 475

-18 899

-9 247

-6 039

-24 617

-20 852

-58 339

-45 790

Administrative expenses

-17 235

-13 521

-7 741

-6 222

-4 530

-4 496

-29 505

-24 239

Other operating income and expenses

431

1 436

-128

621

-200

359

103

2 416

Recurring operating profit

71 634

20 566

3 862

-7560

14 575

17 071

90 071

30 077

As a %

8,6%

4,1%

2,2%

-6,1%

9,4%

12,0%

7,7%

3,9%

Non-recurring operating income and expenses

-603

-912

-194

-2 168

-149

-145

-945

-3 225

Operating Income

71 031

19 654

3 668

-9729

14 427

16 926

89 125

26 852

As a %

8,6%

4,0%

2,1%

-7,9%

9,3%

11,9%

7,7%

3,5%

Share of profits of associates

-2

-1

0

0

958

1 012

957

1 011

Operating Income including Net Income from

associates

71 029

19 653

3 668

-9729

15 385

17 939

90 082

27 863

Manitou group I 2020 Half-year financial report extract

CONSOLIDATED SALES BY DIVISION AND GEOGRAPHIC REGION

Net sales H1 2019

Net sales H1 2020

Southern

Northern

in millions of

Southern

Northern

Americas

APAM

TOTAL

euros

Americas

APAM

TOTAL

Europe

Europe

Europe

Europe

and % of total

328,4

383,0

57,9

60,5

829,9

MHA

215,6

202,0

41,2

37,7

496,5

28%

33%

5%

5%

71%

28%

27%

5%

5%

65%

10,9

21,7

124,6

21,1

178,4

CEP

8,0

20,4

80,1

14,7

123,2

1%

2%

11%

2%

15%

1%

3%

11%

2%

16%

58,6

49,3

26,3

21,0

155,2

S&S

50,3

50,0

26,2

15,3

141,9

5%

4%

2%

2%

13%

7%

7%

3%

2%

19%

398,0

454,0

208,8

102,7

1163,5

TOTAL

273,9

272,5

147,6

67,7

761,6

34%

39%

18%

9%

100%

36%

36%

19%

9%

100%

1.6.4 CONTINGENT LIABILITIES

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 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, also relating to certain features concerning the overload cut-off control system of certain telescopic forklift trucks. This summons 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. The summons for this third patent has been the subject of joint proceedings in the United Kingdom but remains separate in France.

In 2018, 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.

1. In France, legal proceedings on the litigation relating to the first two patents continued during the first half of 2020, but have not yet been resolved.

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.

On the occasion of the same incident, Manitou BF had proposed in the alternative, if the judge considered the request for prohibition to be well-founded, the establishment of a bank guarantee of 470,000 euros for the two patents as a replacement for the prohibitions. This proposal became irrelevant for the first patent, for which the judge did not pronounce a prohibition. JCB requested that this guarantee, if ordered, be 30 million euros (also for the two patents) on the basis of the expert opinion it had produced estimating its damages at 160 million euros (for the two patents). This proposal was not accepted by the judge, nor was JCB's request for a penalty payment of 100 000 euros per day of delay, the penalty payment ordered by the judge being EUR 1 000 per infringement, the decision having emphasized that the damage alleged by the plaintiff relates to the overload cut-off control system alone and not to the machine as a whole.

2. In the United Kingdom, no progress was made in the course of 2018 as JCB did not carry out any due diligence in this respect. A case management conference was held in January 2019 after JCB finally performed its due diligence. The litigation schedule has been established. However, the hearing originally scheduled for October 2020 has been postponed due to the lengthening of the trial, resulting from the addition of the third patent in the proceedings, the first available date being November 2021.

Manitou group I 2020 Half-year financial report extract

3. 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 expertise measures are still underway in the first half of 2020.

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 30 January 2020. JCB has not appealed against this decision.

Manitou Group remains in complete disagreement with JCB's allegations and continues to defend itself with the utmost vigor.

The financial risk that may be incurred is difficult to estimate reliably at this stage of the procedures. Moreover, a significant outflow of resources in respect of these claims seems unlikely in view of the elements put forward by Manitou Group to defend itself. Consequently, no provision for these claims has been recognized in the group's financial statements.

1.6.5 POST-CLOSINGEVENTS

Taking advantage of the 2019 launch of new telescopic product lines in India, the MHA division will stop its assembly activity in Brazil at the end of August, while continuing its commercial development in that country.

To the best of the company's knowledge, there are no other significant events subsequent to the closing date of the condensed consolidated financial statements for the six months ended June 30, 2020 by the Board of Directors on July 30, 2020.

Manitou group I 2020 Half-year financial report extract

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Manitou BF SA published this content on 30 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2020 18:05:06 UTC