The Manitowoc Company, Inc. (MTW) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presented a mixed picture. Positive aspects included strong order growth, especially in tower cranes, and a significant backlog increase. However, challenges such as economic uncertainties, tariff impacts, currency headwinds, and EPA settlement payments negatively affect cash flow. Management's lack of specific guidance and operational challenges further balance the positives. Given the combination of strong demand in certain markets and financial headwinds, the stock price is likely to remain stable, leading to a neutral rating.
Key Financial Performance
Non-new machine sales $690 million, a 10% increase year-over-year. This growth was attributed to the expansion of the aftermarket footprint, including new locations and increased field service technicians.
Orders $803 million in Q4, up 56% year-over-year. This increase was driven by whole goods stocking orders in the Americas and improved European tower crane demand.
Backlog $794 million at year-end, up 22% year-over-year. This growth reflects strong order activity and improved market sentiment in Europe and Asia Pacific.
Net sales $677 million in Q4, up 14% year-over-year. Growth was supported by strong shipments in North America, European tower cranes, and non-new machine sales.
Adjusted EBITDA $40 million in Q4, up $5 million year-over-year, representing a margin of 5.8%. Tariffs negatively impacted results by $4 million.
Full-year net sales $2.24 billion, with non-new machine sales contributing $690 million (10% increase year-over-year). Growth was driven by the CRANES+50 strategy.
Adjusted EBITDA (full year) $122 million, with a margin decline of 50 basis points to 5.4%. This was due to higher SG&A and incremental tariff costs, partially offset by stronger European tower crane results.
Free cash flow (Q4) $78 million, achieved through meaningful progress in reducing working capital.
Free cash flow (full year) $30 million (excluding EPA matter payments). Payments of $45 million related to the EPA matter negatively impacted cash flow.
Net leverage 3.15x at year-end, with total liquidity of $298 million.
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Operating Highlights
New product launches: Launched 11 new cranes in 2025, including the GRT550 rough terrain, a 5-axle hybrid all-terrain crane, and the MCR 815, the largest luffing tower crane sold. Plans to unveil two more cranes in March 2026: an 80-ton boom truck and an 8-axle 700-ton all-terrain crane.
Record sales of MCT 2205: Sold 19 units of the MCT 2205, the largest topless tower crane produced by the company.
Regional market performance: Middle East remains strong but with tightening cash flow. Europe and Asia Pacific show improving momentum and sentiment. The Americas market is complicated due to tariffs, but a rebound is expected with stabilizing tariffs and declining interest rates.
Order growth: Generated $803 million in orders in Q4 2025, up 56% year-over-year. Backlog increased to $794 million, up 22% from the prior year.
Aftermarket expansion: Expanded aftermarket footprint in the U.S. (North Carolina, South Carolina, Georgia, Nashville, Phoenix, Baton Rouge) and internationally (Sydney, Australia, and two locations in France). Grew field service technician population to over 500.
Operational efficiency: Achieved a recordable injury rate (RIR) of 0.94, the lowest in company history. Reduced first aid incidents by 10% year-over-year.
CRANES+50 strategy: Continued progress with plans for new locations in Portugal, Mexico, Chile, and France. Announced a new distribution agreement with Hiab to represent their products across 13 states.
Restructuring plan: Implemented a restructuring plan projected to save $10 million in 2026, aimed at offsetting inflation and foreign currency headwinds.
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Risk or Challenges
Tariff Situation: The tariff situation in the U.S. remains fluid, reversing customer sentiment and causing delays in crane orders. Tariffs had a gross unfavorable impact of $39 million for the year, and the company had to mitigate these through pricing and sourcing actions.
Rental Rates: Rental rates for cranes have remained flat, which is a concern as the cost of new cranes is increasing. This could impact the ability of crane operators to justify new purchases or fleet renewals.
Middle East Market Conditions: In Saudi Arabia, cash flow is tightening, making stakeholders nervous. Additionally, some projects, such as the Stargate data center project in Abu Dhabi, are moving slower than anticipated.
Economic Uncertainty in the Americas: The American market is described as complicated, with customers delaying orders due to economic uncertainties and the tariff environment. This has led to a lag in orders for two quarters.
Foreign Currency Headwinds: Foreign currency fluctuations, particularly in South Korea, are still a challenge despite some optimism in the region.
EPA Settlement Payments: The company had to make payments of approximately $45 million associated with the settlement of an EPA matter, negatively impacting cash flows.
Aging Fleet and Market Demand: Fleets continue to age, and while a major refresh is expected at some point, the current delay in fleet renewals poses a risk to future demand.
Restructuring Costs: The company implemented a restructuring plan to streamline operations, with projected savings of $10 million in 2026. However, this also indicates operational challenges requiring cost-cutting measures.
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Guidance & Outlook
CRANES+50 strategy: Continued expansion with new locations planned in Portugal, Mexico, Chile, and France. Hiring of additional field service technicians. New distribution agreement with Hiab to represent their products across 13 states.
New product development: Launch of 11 new cranes in 2025, including the GRT550 rough terrain, a 5-axle hybrid all-terrain crane, and the MCR 815 luffing tower crane. Plans to unveil two more cranes at CONEXPO in March 2026.
Net sales: Expected to range between $2.25 billion and $2.35 billion in 2026.
Adjusted EBITDA: Projected between $125 million and $150 million in 2026.
Free cash flow: Projected to be between $40 million and $65 million in 2026, including $45 million to $50 million in capital expenditures.
European tower crane market: Expected to continue driving growth in 2026.
Non-new machine business: Continued growth anticipated, contributing to improved results in 2026.
Restructuring plan: Projected savings of roughly $10 million in 2026 to offset inflation and foreign currency headwinds.
Net leverage: Expected to improve to below 3x during 2026.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How should we think about the sales growth by region for 2026? Which regions are expected to show the highest growth, and what products are contributing?
A:The tower crane business is expected to continue strong growth into 2026, acting as a tailwind. The U.S. market is mixed, with good orders and backlog but facing headwinds from tariffs, prompting restructuring actions.
Q:Can you elaborate on the CRANES+50 strategy and its cadence through 2026?
A:The cadence is expected to remain flat across quarters, with variations in used equipment sales. Non-new machine sales are in a good position due to added technicians and locations. However, tariffs have impacted the movement of units from Europe to the U.S. Used equipment sales had a strong Q4, but revenue from used sales is expected to decline next year, potentially improving margins.
Q:What are your orders in January?
A:Orders in January were approximately $225 million. The winter campaign for tower cranes was successful, marking the first strong winter campaign in years. North America saw large stocking orders in Q4, leading to a slight decline in January. Demand for large RTs and crawlers remained strong.
Q:Can you provide an update on the Manitowoc Way and the implementation of lean at the company?
A:The Manitowoc Way is categorized into three areas: shop floor, office, and company-wide. On the shop floor, significant progress has been made with techniques like SMED and robot programming. In the office, AI is being explored for data analysis, with some small wins but no major breakthroughs yet. Company-wide, efforts are focused on improving MGX, aftermarket, and non-new machine sales, with an emphasis on sharing lessons learned and enhancing customer experience.
Q:How do you see the first quarter looking in terms of seasonality?
A:While no quarterly guidance is provided, Q2 and Q4 are generally the strongest quarters. Q1 is expected to face headwinds from tariffs, FX impacts, and restructuring actions, leading to a weaker performance relative to the rest of the year.
Q:Review of Unclear Management Responses
A:Management avoided providing specific quarterly guidance for Q1 and used general terms like 'headwinds' and 'impacts' without detailed numerical breakdowns. Additionally, while discussing the Manitowoc Way, the response lacked specific measurable outcomes or timelines for the initiatives mentioned.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Asia Pacific
CEO award
Carolina
EPA matter
Europe
Investor Relations
Manitowoc
Phase
Slide result
Tariffs
axle
basis
boom truck
crane work
dealer
headwind
injury
leverage liquidity
line expectation
machine sale
market machine
population
product
progress CRANES
remark
saving
sentiment
tariff
terrain crane
ton
tower crane
MTW Transcript
The Manitowoc Company, Inc. (MTW) Q4 2025 Earnings Call Transcript
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The earnings call presented a mixed picture. Positive aspects included strong order growth, especially in tower cranes, and a significant backlog increase. However, challenges such as economic uncertainties, tariff impacts, currency headwinds, and EPA settlement payments negatively affect cash flow. Management's lack of specific guidance and operational challenges further balance the positives. Given the combination of strong demand in certain markets and financial headwinds, the stock price is likely to remain stable, leading to a neutral rating.
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The earnings call highlights several challenges: a decrease in adjusted EBITDA, increased SG&A expenses, and a higher net leverage ratio. Despite a slight increase in orders and a stable backlog, the company's cautious outlook, tariff impacts, and reduced free cash flow expectation negatively affect sentiment. The Q&A reveals concerns about demand elasticity and unclear mitigation strategies, further dampening sentiment. Without a market cap, the stock's reaction is uncertain, but overall, the sentiment is negative, likely resulting in a stock price decrease between -2% to -8%.
MTW Slides
MTW Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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