Will Manitowoc Company Inc. Stock Recover in 2016?

The Presentation inside:

Slide 0

Will Manitowoc Company Inc. Stock Recover in 2016? Image sources: Manitowoc

Slide 1

2015: A terrible year for Manitowoc

Slide 2

Manitowoc’s dismal operational performance is largely to blame Why the stock crashed

Slide 3

Plunging profits

Slide 4

The worst in the industry

Slide 5

So why did Manitowoc’s sales and profits tumble in 2015?

Slide 6

The company faced many headwinds Plunging oil prices hurt demand for off-highway cranes from the oil & gas sector Persistent weakness in key international markets like Asia and the Middle East hurt crane sales Lower capital spending by restaurant chains hurt demand for foodservice equipment Start-up problems with Kitchencare range hurt foodservice margins Currency fluctuations: a stronger dollar = lower international revenues when converted. Hurt both cranes and foodservice segments

Slide 7

While Manitowoc’s foodservice business appears to be turning around, the outlook for cranes looks grim going forward What lies ahead

Slide 8

Challenges aplenty Declining manufacturing activity in China and devaluation of the yuan = lower demand for cranes Oil could fall further as supply > demand and OPEC is standing its ground Growth in key international markets like Brazil and China remains uncertain Dollar remains strong

Slide 9

Troubling signs Manitowoc’s crane orders and backlog slipped 40% and 12% year over year, respectively, in Q3. Operating margin fell to 1% from 7.3%. Outlook for 2015: 15%-20% drop in crane sales and flat foodservice revenue. Management expects 2016 to “be a challenging year.” Aggressive restructuring underway, indicating greater pain ahead.

Slide 10

Foolish takeaway: A risky bet Too many headwinds, no major growth catalyst in sight Stock is expensive at 36 times trailing P/E Company on track to split into two this running quarter. But deteriorating end markets could mean little shareholder value in a standalone cranes company

Slide 11
