Market environment remains difficult for MAN
Group Interim Financial Report for Q2/2013
The MAN Group’s figures for the first six months of 2013 were down on the prior-year level. This is primarily due to the economic environment, which remains difficult. MAN is still not seeing any significant recovery in the global economy. In particular, the euro zone — which is extremely important to MAN’s business — is still in recession. As a result, customers in both the Commercial Vehicles and the Power Engineering business areas are continuing to postpone capital expenditures or are investing much less. As a result, the European commercial vehicles market contracted significantly in the first six months of the current fiscal year, as expected. By contrast, demand for commercial vehicles picked up again in Brazil.
As in the Commercial Vehicles business area, MAN is continuing to see a difficult market environment in Power Engineering. Alongside ongoing economic uncertainties in this business area, too, many customers are still having difficulty securing financing for larger projects. This is leading to delays in awarding contracts. In addition, MAN was faced with very high project-related provisions in the Power Plants strategic business unit and lower revenue in the license business.
The strained market situation naturally impacted order intake. In the Commercial Vehicles business area, this was down 6% year-on-year in the first half of 2013, at approximately €6.1 billion. However, order intake picked up again in the second quarter, rising by €128 million compared with the first quarter.
While orders received by MAN Truck & Bus declined by 11% in the first half of 2013 to €4.5 billion, MAN Latin America recorded a 11% rise over the same period, to €1.6 billion.
Order intake in the Power Engineering business area decreased by 7% in the first six months to €1.8 billion. MAN Diesel & Turbo’s orders declined to €1.6 billion. Renk generated an order intake of €237 million, down 16% on the extremely good prior-year figure. The MAN Group’s order intake in the first two quarters of 2013 was therefore €7.7 billion, a decrease of 7%.
By contrast, the MAN Group’s revenue only declined slightly. At €7.5 billion, it was down 2% on the first half of the last fiscal year. This is due to a 7% decrease in the Power Engineering business area. The improvement at MAN Latin America led to a slight 1% increase in the Commercial Vehicles business area.
By contrast, the MAN Group recorded a small operating loss of €10 million in the first half of 2013, which corresponds to a return on sales of –0.1%. This is primarily attributable to the decline in the Power Engineering business area, which recorded an operating loss of €193 million. This was largely due to very high provisions for a major project in the Power Plants strategic business unit that has not yet been completed.
MAN recorded an operating profit of €142 million in the Commercial Vehicles business area in the first six months. Of this figure, €35 million was attributable to MAN Truck & Bus. MAN Latin America generated an operating profit of €107 million during the period.
As expected, the second quarter of 2013 was better than the first. Nevertheless, much will depend on how quickly the global economy recovers from the uncertainties triggered by the euro crisis, for example.