Manitowoc Company, Inc. (The)

Good morning, ladies and gentlemen. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Manitowoc First Quarter 2024 Earnings Conference Call. And I would now like to turn the call over to Ion Warner, Senior Vice President, Marketing and Investor Relations. You may begin your conference.

Good morning, everyone, and welcome to the Manitowoc Conference Call to review the company's first quarter 2024 financial performance and business updates. as outlined in last evening's press release. Participating on the call today are Aaron Ravenscroft, President and Chief Executive Officer, and Brian Regan, Executive Vice President and Chief Financial Officer. Today's webcast includes a slide presentation, which can be found in the investor relations section of our website under events and presentations. We will reserve time for questions and answers after our prepared remarks. I would like to request that you limit your questions to one and a follow-up and return to the queue to ensure everyone has an opportunity to ask their questions. Please turn to slide two. Please note our safe harbor statement in the material provided for this call. During today's call, forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 are made based on the company's current assessment of its markets and other factors that affect its business. However, actual results could differ materially from any implied or actual projections due to one or more of the factors, among others, described in the company's latest SEC filings. The Manifest Law Company does not undertake any obligation to update or revise any forward-looking statement, whether the result of new information, future events, or other circumstances. And with that, I'll now turn the call over to Eric.

Thank you, Ion, and good morning, everyone. Please turn to slide three. Today, I'd like to start with my update on market conditions. Our orders for the first quarter were up 6% year-over-year. Total Black Dog ended the period at a strong $971 million. And the U.S. screen activity around the country remains strong. Utilization and rental rates continue to hold up, and although short-term is a bit mired by the election cycle, the overall outlook remains positive. With this in perspective, I recently spent a day with the owner of a large crane rental house who's been in the business for more than 50 years, and he told me that he's seeing more work coming than he's ever seen. Of course, we all see the announcements around new semiconductor projects, but this fellow indicated that data storage centers, rail, and power generation were driving his regional markets. It'll be interesting to see how this plays into decision-making over the next couple of quarters, but I view the medium and long-term outlook in the U.S. favorably. Turning to Europe, the tower crane market remains very challenging. Our machine orders for tower cranes decreased 34% during the first quarter of 2024. Our data suggests that the tower crane market is operating at 2009 levels. In spite of this difficult environment for machine orders, our aftermarket sales have held up relatively steady. The CEC or Committee for European Construction Equipment recently published their annual economic report. The report suggests that the overall European construction market will stabilize in 2024 and start to recover in 2025, driven by government investment in renewable energies and industrial infrastructure. In addition, there's a huge housing shortage and we have already seen some of the large crane rental houses start to sell off their older assets outside of the region. Finally, I would add that the comparables should start to get easier in the third quarter, which is normally the basis for recovery. There's no doubt that mortgage rates have been far more inelastic in Europe than they've been in the United States. The current mortgage rate in France is around 4%. I believe that even a modest reduction in these rates would provide some relief and a basis for recovery in the residential and market. As it relates to mobile cranes, demand in Europe is stable. We have surely seen a wide variation of behaviors from customers across Europe. But on the whole, activity is positive. Italy and Poland have been particularly good for us, and we saw some green shoots in France during April. Utilization remains good at the crane rental houses, and folks are actively managing their fleets. Heading into the next couple of quarters, we have a pretty strong order book, which is always a good sign. Moving to the Middle East, our orders for the first quarter increased more than 10% year over year. Quoting activity remains at an all-time high, driven by investments in Saudi Vision 2030, and Qatar's Northfield expansion project for natural gas. Although the timing of big orders isn't always easy to forecast in this region, the strong demand is broad-based in nature, and we expect this to continue for the foreseeable future. Not surprisingly, however, Chinese competition in the Middle East has started to heat up, and we're starting to see pricing pressure. Lastly, Asia Pacific remains dominated by the storm clouds over China's construction market. Although we've seen some bright spots in Hong Kong and Singapore, In South Korea, the tower crane market has slowed, but it's been offset by good demand in the mobile crane market. And lastly, Australia continues to chug along. Please move to slide four. Just to briefly touch on the Manitowoc Way, I visited our French facilities a couple weeks ago, and they've never looked better. In spite of the volume reductions, the team remains extremely motivated, and I'm very proud of how they continue to manage the things that they can control in a very difficult environment. On this slide, I've shown three great achievements at our Char-U factory. At Manitowoc, we always strive to eliminate forklifts at our plants to improve safety. Given the size of our parks, there isn't always a good alternative. As you can see in the picture on the left, however, the team is now using some very basic equipment to move large masts on the shop floor, which eliminates the hazards created by forklifts. The center picture shows a drum that the team developed in three months. This will be the heart and soul of the large 64-meter-ton luffing crane that the team is developing to serve major Saudi projects and future European nuclear projects. And lastly, the picture on the right is a remanufactured mask for a large top-sewing crane. A key differentiating factor for Potong cranes is that we use a pin system to erect and assemble masks, which is significantly faster than the typical bolt system that our competitors use. These pinholes wear out over time. Since the team started on this initiative roughly 12 months ago, they've been able to reduce our cost for remanufactured masks by 56%. This is quickly becoming a viable aftermarket product offering that we've dreamed about for more than 25 years. With that, I'll pass it over to Brian for a financial update.