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Manitowoc Company (MTW)Stock (Farm and Construction Machinery Industry, Manufacturing Industry, Agriculture Industry, Farm & Construction Machinery Industry)
 Manitowoc's other two divisions - food service (7%) and marine sales (8.9%) - have also grown in the last five years.[3] Ship building, repair, and maintenance, like crane construction, is heavily impacted by economic conditions, including shipping volume moving through the Great Lakes and St. Lawrence Seaway (MTW's 3 shipyards are located on the Great Lakes). The food service group, which manufactures commercial refrigerators and ice machines, sells mainly to lodging and restaurant customers, whose sales are largely dependent on discretionary consumer spending. So although Manitowoc has a diverse portfolio of businesses, all three of its divisions are heavily exposed to economic cycles. [edit] Business OverviewManitowoc's business is divided into three principal businesses. 
[edit] Overall FinancialsThe following charts[13] show Manitowoc's sales and earnings from operations over the past three years.  
Growing at a more modest pace between 2006 and 2007, the Foodservice Group delivered a 5.5% rise in revenue. This division benefited from higher sales volume and increased pricing, along with the acquisition of McCann's[16]. The Marine Group's net revenue grew 13.6% in 2007 compared to 2006. Sales increased primarily due to completion of two Navy projects and construction of several tug and barge combination projects[17]. [edit] Geographic DistributionManitowoc operates manufacturing and service sites throughout the globe, with 51.4% of revenue being generated abroad. The following picture[18] from the company's website highlights the locations of Manitowoc's facilities.
As one can observe, most of the overseas' facilities deal with the Crane Group's operations. The Marine group only operates in the Midwest of the United States and the Foodservice group has a few locations outside North America. Europe has several facilities, and accounted for 30.3% of 2007 sales[19]. Net sales in Asia were third at 7.5% and the Middle East accounted for 4.6% of net sales in 2007[20]. [edit] Key Trends and Forces[edit] Global spending on infrastructure directly impacts Manitowoc's sales growth.Rapid economic growth in Emerging Markets has led to new infrastructure projects (power plants, roads, bridges, high-rise buildings, etc.), and this in turn supports demand for cranes. Manitowoc Company expects its crane segment sales to grow by 20% in 2008[21]. In 2007, Merrill Lynch upped its forecast of infrastructure spending in developing countries over the next three years to $1 trillion dollars from a previous estimate of $705 billion. Merrill Lynch sees countries, especially China, mobilizing their vast savings into these projects.[22] More mature markets, such as the United States and countries in Western Europe, are more focused on rebuilding and maintaining their infrastructures, but this still represents a significant amount of spending. In 2007, the United States passed a bill to spend $284 billion over the next six years for highway, energy, and mass transit infrastructure[23]. These developed governments help maintain a constant demand for equipment and after-market services for Manitowoc. [edit] Demand for Commercial and Residential Construction affects Manitowoc's revenue and income.Expanding growth in economies tends to boost demand for construction of residential and/or commercial properties. An upswing in construction helps Manitowoc sell more equipment, but an economic downturn hurts Manitowoc. As the housing market softened in the United States, Manitowoc's boom truck crane sales suffered a decline in domestic revenue from 2006 to 2007[24]. However, commercial construction remained relatively steady and prevented a further drop in revenue. Manitowoc reported that U.S. nonresidential construction grew 9% in 2007 and believes the upswing in commercial construction should continue through at least 2009[25]. Manitowoc's business plan is to increase its geographic distribution of sales and increase after-market service revenue in order to diminish the cyclical swings in profits.[26] [edit] Competition for Emerging Markets is increasingIn addition to Manitowoc, large companies such as Terex (TEX) and Caterpillar (CAT) have focused attention on expanding operations in these fast growing markets. Terex added its second crane manufacturing sites in China during 2007[27]. In addition, local companies in the Emerging Markets are expanding operations. Companies like state-owned China National Building Materials Group manufactures cranes that compete with Manitowoc's equipment[28]. If supply exceeds demand, profits margins for cranes and after-market service contracts will fall. [edit] Demand for Bulk Commodities and Consumer Discretionary Spending impacts Manitowoc's other business interests.MTW's food service equipment customers are restaurants and hotels. Should consumers dine out less due to a weak economy or less discretionary funds, then Manitowoc's customers will be less inclined to upgrade or buy a new freezer and/or ice maker. However, changing demographics could boost demand for restaurants and travel. Retiring baby boomers will want to eat out and stay in hotels more often, which promotes expansions in restaurants and lodging. In turn, this growth helps increase sales by Manitowoc's food service group. Meanwhile, slowing consumer spending translates to less goods being shipped and a reduction in steel demand (sales of appliances and cars fall). If less trade volume is moving through the United States ports then there will decreased demand for ship maintenance and repair as fewer ships operate. Manitowoc is specifically exposed to volume passing through the Mid West ports as all three of its shipyards are located on the Great Lakes. Increased need for bulk commodities, such as iron ore (used in steel) and coal improves shipping volume on the Great Lakes[29]. [edit] CompetitionManitowoc's three main businesses are not directly related, and as a result, no single competitor competes with Manitowoc in all three business segments. The crane group accounts for the largest portion of MTW's revenue and competes with the large equipment manufacturer, Terex (TEX). This business segment also faces competition from several smaller private firms, like Tadano and Manitex. Manitowoc has earned the #1 global market share for several types of cranes, such as rough terrain and high-capacity lattice boom crawler cranes[30]. Manitowoc's food service group competes in a $22 billion global market that averages growth of 3-5% per year[31]. Manitowoc has been able to exceed this growth rate by roughly 3% through high replacement sales made to customers[32]. The marine group of Manitowoc is the largest ship builder and repairer on the Great Lakes[33]. Manitowoc competes primarily with firms that have shipyards that are also located on the Great Lakes and St. Lawrence Seaway system for commercial contracts. Government contracts are less geographically restricted[34]. Competitors include Atlantic Marine, Fraser Shipyards, and Port Weller Drydocks[35].
 Manitowoc Company2004 Data 2005 Data 2006 Data 2007 Data 2008 Data Most Recent Data Available [edit] Sales and International GrowthThis table[41] compares sales and markets for large companies in the Farm and Construction Machinery Industry.
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