MAN reports tough 2015; strengthens in Middle East
MAN reports halving of revenue and orders in Latin America in 2015, but buoyancy in its truck and bus business in the Middle East
The MAN Group has reported a decline in its overall fortunes in the fiscal year of 2015, having been impacted by near 50% drop in business for MAN Latin America that has underscored the importance of the growth of MAN Truck & Bus in markets like the Middle East.
Overall, the MAN Group’s order intake in fiscal 2015 was down 6% year-on-year at $16bn, while its sales revenue was 4% lower year-on-year at $15.3bn.
Across its commercial vehicles (CV) activities, MAN’s order intake was 4% lower than the previous year’s figure at $12.3bn, impacted by a 50% decline in orders for MAN Latin America due to economic conditions in Brazil, and in spite of a 9% increase in orders for MAN Truck & Bus.
MAN Truck & Bus also exhibited 7% year-on-year growth in its sales revenue to hit $10bn – out of a total of $11.2bn across its CV activities – as its unit sales increased by 8% to 79,222 vehicles.
“Despite the year 2015 being challenging for all the sectors of the economy due to the oil prices, we have maintained and improved our overall position in the Middle East region in 2015,” commented Franz Freiherr von Redwitz, managing director of MAN Truck & Bus Middle East.
“This sets up a good platform for us and we will continue to provide our customers with innovative products and reliable support from our valued distributors to be their preferred partner in 2016.”
MAN Truck & Bus recorded an operating profit before ‘special items’ of $229m, but $206m in restructuring costs related to the reorganisation of the division’s operations reduced the final tally to $22.3m.
“The most important new measure is the future growth program to strengthen the long-term competitiveness of MAN Truck & Bus. It includes reorganizing truck production and streamlining administration,” explained Joachim Drees, CEO of MAN.
“Additionally, capital expenditures are being reviewed and workflows are being examined and enhanced. We have initiated or stepped up measures to increase profitability in all divisions. Our goal is to deliver significant results from optimised products and components, as well as procurement.”
Moving forward, this will likely involve the rationalising MAN Latin America, which recorded an operating loss of $134m in fiscal 2015 on the back of a decline in its revenue to $1.1bn and a halving of unit sales to 24,472 vehicles – leading to an operating deficit of $113m across MAN CV activities.
Despite this, the MAN Group maintained an operating profit of $103m at a group level, though its margins slimming to a 0.7% operating return on sales due to both the decline in MAN Latin America and the restructuring costs incurred by MAN Truck & Bus.