Manitowoc at 16th Annual Midwest Ideas Conference: Strategic Shift to Aftermarket

On Wednesday, 27 August 2025, Manitowoc Company Inc (NYSE:MTW) presented at the 16th Annual Midwest Ideas Conference, highlighting its strategic transformation from a product-focused entity to a customer-oriented business. While the company aims for significant growth, challenges such as potential impacts from steel tariffs and a high leverage ratio persist.

Key Takeaways

• Manitowoc aims to increase revenue from $2.2 billion to $3 billion through organic growth, acquisitions, and market expansion.
• The company is focusing on growing non-new machine sales to $1 billion, with a 35% gross margin.
• Manitowoc has reduced costs by over $100 million since 2016 and is implementing the Cranes+50 strategy to double non-new machine sales.
• Electrification of cranes is under exploration, focusing on hybrid models, especially in Europe and Australia.
• The company’s leverage ratio is currently around 4 times, with a target to reduce it to 3 times.

Financial Results

• Revenue Growth:

- Target revenue of $3 billion, up from $2.2 billion.

- Non-new machine sales target of $1 billion, from $650 million currently.

• Cost Reductions:

- Over $100 million in cost reductions since 2016.

• Cyclical Recovery:

- European tower crane market recovery expected to contribute to EBITDA growth.

• Acquisitions:

- Acquired H&E crane business and Aspen Equipment for $180 million, generating over $35 million in EBITDA.

Operational Updates

• Business Transformation:

- Shift from a product-focused to a customer-oriented business model.

- Emphasis on growing aftermarket services by adding locations and increasing service technicians.

• Expansion:

- New locations in Denver, Aiken, Kansas City, Madrid, Poland, and Barnsley, UK.

- Upgraded facilities in Nashville, Baton Rouge, Phoenix, Paris, and Australia.

• Rental Fleet:

- Strategy focused on supporting customers with rental purchase options (RPOs).

Future Outlook

• Growth Drivers:

- Secular growth from infrastructure spending, data centers, and electricity infrastructure.

- Cyclical recovery in the European tower crane market.

- Continued pursuit of acquisitions in adjacent territories.

• Electrification:

- Development of hybrid and electric cranes, focusing on technical challenges like battery weight.

Q&A Highlights

• Electrification Challenges:

- Regional variations in electrification, with a focus on hybrid technology.

- Limited success with pure electric vehicles due to counterweight and axle loading issues.

For a deeper understanding, readers are encouraged to refer to the full transcript below.

Full transcript - 16th Annual Midwest Ideas Conference:

Dave, Advisor, Three Part Advisors: Happy to have the Manitowoc company here, trades on New York and NYSE. They’ve been a client of ours for about a year and a half, maybe two years now, and really enjoyed working with them. You know, this is a name that, we think is an opportune time to be looking at it. The crane cycle has been really rough this last decade or so, but we think we’re either at or near the bottom of the cycle. The stock’s trading 25%, 30% below tangible book.

So it’s a good time to be looking at it. So I’ll turn it over to Aaron to talk about the story.

Aaron, Manitowoc: Super. Thank you very much, Dave. And thank you to the three part advisors for inviting us today. Starting with our safe harbor statement, of course, if anyone has any questions, please reach out to Ion Warner, he’d be happy to walk you through that. Why are we here today?

So why invest in Manitowoc? When we meet with investors, there’s really two conversations that we have. One is really around the crane cycle and trying to time the crane cycle, which I’ll touch on those points today. I think that the summary there is always difficult to time that market and try to predict when it goes up and down, especially ever since the bust in 02/2009. Fortunately though, I think we have a much better story to tell relative to our valuation and where we’re trying to move the company long term.

We’ve been transforming the business from a product company into a much more customer oriented business that’s focused on the aftermarket. So today, we’ll walk you through how we plan to grow our revenue from 2,200,000,000 to $3,000,000,000 Some of that will be organic growth, some of it will be M and A, and of course, some of it will be supported by growth in the market. But the major component of that and probably the largest component in terms of driving our EBITDA and our ROIC is growing our non new machine sales. That’s our aftermarket business. So when we started this initiative, we were around $376,000,000 and today we’re around $650,000,000 on a trailing twelve month basis.

So we’ve made good progress, but we still have a long way to go to get to our $1,000,000,000 goal. So Manitowoc, who is Manitowoc? We were founded in 1902. We started building cranes in the 1920s. And really, it really kicked off, I’d say, in the early two thousand, we bought the Poton business and Grove business.

This is when we became a full line provider of cranes products. Of course, we had our aftermarket through our dealerships, which was primarily parts. But really, the focus of the business has been around the machines themselves, the big red machines that you see on projects on bridges around The United States. The two major takeaways that I’d ask you to note here on this slide is that, first, if you look back over the last twenty years, we’ve put over 100,000 machines into the market. So lots of opportunity for aftermarket, whether it be parts or service or even used in rebuilds.

A big portion of that, of course, came during that boom in the ’six, ’seven, ’eight period, which means there’s a lot of older machines out there that require a lot of support. The other point I’d point you to is our number of field service techs. So today, we have more than four sixty field service techs. So that’s a dramatic change from the way that Manitowoc was organized historically with our dealership. So we’ve been going more and more direct and that’s really been a critical part of us getting closer to our customers.

I mean quickly just a quick history, short term history since 2016. And so in 2016, we spun off our foodservice business. At that point, it was a real battle to become a sustainable standalone crane company. So we spent the next four or five years really focused on repositioning our manufacturing footprint and our cost position removed well more than $100,000,000 during that time. And then to 2020, which happened to coincide with COVID is when we really started to turn the corner, become aftermarket focused and launched our Cranes plus 50 strategy, which has been to double our non new machine sales starting in that low 400s.

And since then, we’ve reestablished a target of $1,000,000,000 given our quick gains on that. And before I jump into really the revenue bridge, which is the main portion of the presentation, I want to talk a little bit about the foundation of Manitowoc, really going back to 2016 when we implemented the Manitowoc Way. As you can imagine, this is a critical element of us really driving our optimization out on the shop floor, doing Kaizens through the Manitowoc Way. But this has been a much bigger story for us. And anything that we go to improve, and we’re very focused on continuous improvement every single day, To me, I look at like sort of losing weight.

If you don’t get on the scale every day and you don’t exercise every day, you can’t expect to lose any weight. Well, this is the very exact same thing in terms of continuous improvement. We use these tools, of course, the shop floor, but also in the back offices. It’s been instrumental in our improvements in terms of safety. We’re below one in terms of RIR.

And I think right now we’re on track to set a new record for us. So knock on wood that things continue to go as they are. But a lot of effort was put into our SLAM process, safety observations and a lot of that’s been driven just by continuous improvement. We’ve also used it around our environmental initiatives, which has been a great opportunity for us to find more cost savings. And of course we used it in new product development and today we use it in our aftermarket not only to set up new service centers but also how we bring machines in and out for service and other opportunities we see as we start to implement and use AI.

This slide here really walks you through our blueprint for long term growth. So you can see there’s really four main drivers to push us from 2,200,000,000.0 to 3,000,000,000. First, of course, is secular growth and all the infrastructure spending that we’re seeing around the world today. Second, we’ll take you through the cyclical recovery. One, the overall just market and what the cycle looks like for us.

But also we’ll dig into the European tower crane market, which has been on a cyclical downturn for the last couple of years. We’ve started to see that turn and we’ll walk you through that. We’ve also done some acquisitions that have had not just non new machine sales, but also in terms of our overall revenue. And then lastly, we’ll spend a lot of time on our organic growth initiatives. So starting with our secular growth, I’m sure everyone has read lots of print on all the data centers that are going up.

Of course, that’s great business for us. That’s all built by cranes. But I think the bigger opportunity that we see is just the need for more electricity in The United States. We all know that the issues, whether it be in the power stations or in the actual development of of of power, we’re agnostic, quite frankly. Whether it be solar, wind, nuclear, coal, pick your poison, that’s gonna require a lot of cranes.

I would say, of course, we lean towards nuclear because I think it’s the most efficient in driving the amount of electricity that’s going to be required, whether it be data centers or EV. But that’s also very good for the crane business because those are long term projects that use a lot of cranes. So we see those as a huge opportunity. Of course, there is the CHIPS Act and continuation of trying to localize semiconductor factories. If you have the opportunity to pull up any of the pictures of, for instance, the TMC project down in Arizona, you’ll see lots of cranes on those projects.

So all of those initiatives bode well for us. When we look at Europe, there’s a huge need for housing. We’ve seen initiatives not only in The UK, but also even bigger in Germany where they need 300,000 flats per year for several years to catch up. So Europe is way behind in housing. That’s excellent for our tire crane business and one of the things we see sort of driving the business, which I’ll get into in a couple of slides.

And then lastly, in The Middle East, of course, there’s been Saudi Vision 02/1930, a lot of print on this one. We were probably at the line before anybody back in February ’23. But it’s not just the famous Neom project, but there’s projects all over Saudi where they’re trying to really revolutionize their communities through these big investments, and they’ve got big activities, whether it be the World Cup in 2034 or some of the Asian Games in 2029. So we’ve been big beneficiaries of those projects, and we’ve also started to see more projects to kick off in The UAE. For one, they wanna double their or nearly double their population by 2,030.

But also, there’s a need for their new airport, which I think is three or four times bigger than the current airport. That project we would expect maybe to see some action on next year. And then recently there was the big data center projects that were announced by President Trump. So we see sort of infrastructure growing, which is a good change for us. Unfortunately, I would say it’s a little bit slower coming on than we had hoped, especially on the back of the infrastructure investments in The United States.

But huge opportunity, I think this will be a long term driver for our business. Moving to just the cyclical recovery, the slide shows you our revenue for the last twenty years. I’m not suggesting this is exact data, but more directional at least, but you can see obviously the huge boom in February. But even when you look at twenty twelve and twenty thirteen and even after inflation, we have not returned to unit volumes that we saw ten, fifteen years ago. So we still have a long way to go.

The other thing that I would add is if you look at the value per machine, it’s significantly higher today than it would have been in say 2007 or even in 2013. So people are using much larger cranes, which means they come with higher value. Then of course, the inflation we saw the last couple of years. But if you adjust for those, would say from a unit volume perspective from our point of view, we still have a long way to go before we see anything like what we saw even in 2012 or 2013. Digging into this a little bit.

So the last couple of years, we’ve been fighting the European tower cranes cyclical downturn that would and we expected it would have occurred in 2020. But with COVID and the stimulus actions that occur at that point, basically it rebounded dramatically in late twenty twenty and early twenty twenty one. And then it wasn’t until 2022 or 2023. So we’ve run a few several quarters, couple of years where the business had declined. I’d say this is a much more predictable or typical cycle, which is something we haven’t seen in my ten years at Manitowoc.

But in terms of the Tower Crane business, in the last four quarters, we’ve been up year over year. So again, I think it’s as simple as we got easy comps, we start to build back. And of course, there’s been some good news in Europe, whether it be the housing projects that they’re working on in The UK or the German infrastructure fund that was created a few months ago, I think it’s GBP £500,000,000 for infrastructure in Germany. They’ve also pushed through accelerated depreciation program. So all those things we see is really driving Europe.

So of course, lifts all boats in Europe. But even in France, which was hit the hardest, we’ve seen 20% improvement in terms of permits for residential construction. So overall things we feel really good about where the tower crane business is going in Europe. And yes, I think we’re well on our way to recovery, which is great news. The other thing I’d add is that from sort of peak to trough, the last go around, it probably shaved roughly $50,000,000 of EBITDA from our results.

So not that we expect a huge impact this year in terms of EBITDA as it just starts to turn, but really as we get into next year. And as a reminder, that’s our highest product margin business. So we’re looking forward to the improvement in that business. Moving into our M and A. So we sort of look at M and A in two different buckets.

One is your traditional acquisitions of businesses. We did two big deals in 2021. We bought the H and E crane business as well as Aspen equipment. So that we bought that for about $180,000,000 We got at the time we’d said $30,000,000 in EBITDA. Since then we’ve said we’ve got over 35,000,000 And today I’m happy to say that we beat all of our models essentially on those deals growing the aftermarket organically after getting a hold of those businesses.

But then on the back of those we found adjacent territories, which are really like home territory acquisitions. So these are instances where folks are interested in giving up the line or the contract that they have for distribution, whether it be that green territory, the Bergen territory, even the Yellow territory and the Carolinas and Georgia. Those are areas where we would have basically done an asset deal to take someone’s machine. Very accretive acquisitions. At the same time, we set up greenfield locations, typically more locations, more field service folks to really empower the team and grow those businesses.

So we’ve made quick progress in terms of the map. We’ve also done very similar deals in Europe. Turning our focus to the aftermarket. So as I said, our goal is to grow our non new machine sales to $1,000,000,000 Today, we’re around $650,000,000 When we started, we were around $400,000,000 This is really critical to our overall strategy because the gross margins are 35%. So it’s a big change in terms of our mix, but also way less cyclical.

And I would say, I get into some other slides here, much more stickiness to the customer and our ability to constantly get growth and bring more value to our customers. This is just a quick history of the last five years. So you can see we’ve continued to grow our aftermarket as a percentage of sales. We don’t always focus on that just given the cyclicality of the crane business. But in this instance, I think we’re we’ve been relatively flat in overall revenue.

It’s a decent metric. But as I say, we’re really focused on how do we drive that to $1,000,000,000 at 35%. That’s $350,000,000 in gross margin. If you look at where we are today I think in 2014 our total gross profit was $375,000,000 So again a big change in terms of our mix, major driver to our EBITDA growth and our ROIC targets. So just how do we grow the business once we get a hold of the territories?

One, it’s all about how do we add and upgrade locations. Two, growing our service tech population, as I said in one of the first slides, that to me is the real glue that drives our business. There’s plenty of parts that are on a crane that we don’t produce that we buy somewhere else. And if we’re not doing a great job with the customer and helping them, it’s easy for those shops to go out and and maybe not easy, but it it forces them into the option of going and finding those parts elsewhere. So it’s critical that our service techs and our parts service sales folks are constantly representing us in front of being in front of those depot managers to support what they need.

To me, this is a metric that we constantly track in terms of how many service techs we have what their utilization is. For one, it’s how we continue to grow our profits, but also it’s how we drive the rest of the business. Number three is selling more used and rebuilds. So it’s not unusual for us to do trade ins sort of like the automotive industry. Typically when we sell those used machines, we would change we do a trade in for instance in Europe and move that machine to say Latin America or The United States.

The other opportunity we have for used sales is around our rental fleet. So rental obviously is a small portion of our business. Again, it’s how do we support our customers. Sometimes it’s pure rental, other times it’s RPOs. But that’s a good factory, let’s say, used machines.

That’s one of our biggest opportunities in terms of a margin perspective. And number four, we continuously add new products and accessories. Again, at all of our locations, we try to be as entrepreneurial as possible. And the and the quest is really how do you add more value to the the depot managers? How do you make their life easier?

I mean my big pitch to all of our branch managers is sort of like the Fastenal pitch. How do you go in and really support the customers? I grew up in manufacturing twenty some years ago as a supervisor and you know we we welcomed the Fastenal folks with open hands because they were going to deal with our D items that weren’t easy for us to deal with. So I see that exact same opportunity for us. How do you really help the depot managers?

You imagine those folks have very complicated assets they’re trying to manage and deploy every single day for taxi projects on one hand and of course you’ve got crane operators on the other hand. That’s their main focus, not broken down machines or machines that need to be repaired. So from my point of view, the better we can do of helping them and making their lives easier, the much easier just for us to grow our aftermarket. And then lastly, really culminating through all those initiatives is how we grow our parts. So you can see from the graph, parts are the largest portion of our aftermarket.

We continue to grow that. I do believe us being close in front of customers, they want to buy our parts from us. It’s much easier for them. It’s our job to make it easy for them. So just looking at some how we’re growing our market penetration.

So in The United States you see we’ve added locations in Denver, Aiken, South Carolina, Kansas City. We upgraded the locations in Nashville, Baton Rouge and Phoenix. So again, it’s not just a matter of having the field service techs, but also having the base to do the work and having places to bring in machines. So it’s been great that we’ve added those locations. You can see our headcount growth has been up almost 40%.

I’d say Europe is a little bit further behind in terms of where we want to be in terms of our branches and behavior because those have been traditionally sales codes where, hey, we sell Poton or we sell Grove. So we’re really in the process of changing our mindset to be servicing the customer, providing all the lift solutions that we can, making life easier for customers. So there we’ve added several number of service techs but also locations in Madrid. We upgraded our facility in Paris. So in the old days, we had a small warehouse just outside Paris today.

We have a full blown workshop, which has been great. And then we added a location in Barnsley, UK and most recently added location in Poland. So a lot of opportunity for us to grow organically regardless of sort of where our balance sheet is, adding locations and service techs is something that we’ve been pushing hard on as we know that our leverage is too high to do acquisitions at this point. So very focused on how we continue to grow that business. And what’s not on the map, we had locations in Peru and we upgraded our locations in Australia.

So this is a very global initiative for us. And again, we’re trying to transform the business from being product oriented to really customer focused and service oriented. Just touching on the rental fleet, we get a lot of questions. This gives you a profile in terms of the ROI. So good returns on this business.

To me, it’s not going to be a huge element of our business just because of the math. If you get 2% on the OEC on a monthly rental rate, it’s going be hard to drive revenue without a huge amount of capital. But we do see opportunities for us to support customers with some rental cranes. Again, this is sort of supplementing their fleets as needed. We do not rent cranes with crane operators.

We’re bare rental. Again, it’s purely to support the crane rental houses. And in most instances, it’s RPOs. So there are several large crane rental houses that would prefer to do an RPO. So they’ll rent the machine for say the first year or two before they actually finance it and take it in as a sale.

So this has allowed us to get into some some new accounts that we hadn’t been in historically because we weren’t in the rental world. I think a good example of this would be if you look at the tower crane business, someone like a Bouygues. Bouygues is a massive multinational construction company out of France. They have their own rental fleet, but they’ll get on projects where they maybe need 25 cranes. Maybe they have models for the first 20.

And they’re sitting saying I don’t want to add five more of the same model to screw up my portfolio of machines, can I rent them from you? In the old days we would say no and in most cases we’d lose those orders. But today we’re trying to be aggressive and support them as they need the rental units. The other thing I’d add is, must be five years ago now, we turned one of our service locations in Germany into a brownfield rental location for service and for supporting rental essentially. And so by entering those long term contracts like for instance in France or Italy, today we know when those cranes come off rent.

If we don’t sell them then we have a place to put them and we roll them into our German rental fleet. So that’s been given us a lot more confidence to go after this business. So as I say though, it’s very opportunistic and all about supporting our customers. And in terms of the next two slides here, EBITDA and ROIC, really this has been driven by the strategy. So if we execute and we get the revenue growth, the volume growth that we expect, which is not huge quite frankly, we’re going to get much more operating leverage.

So that’s one part of driving our EBITDA. But the other element of this is really the mix that we have. So major improvement when we move to more non new machine sales. And of course, as I said, the tower crane world where peak to trough, we lost $50,000,000 in EBITDA. We expect that to come back as the volume comes back.

So moving to ROIC, very similar story here. It will follow EBITDA, quite frankly. In terms of working capital management, the big opportunity that I see is long term as we get scale and building out our distribution or our internal sales organization, we don’t require all the inventory that’s currently in The United States, our distributors. So just to put that a different way, when we look at our inventory and we add sort of these adjacent territories in most instances, let’s say we buy $10,000,000 of inventory, we’ll just turn around and sell that because we don’t need that in terms of how we manage our local inventory. So I think long term that’s going be a good opportunity for us to drive our ROIC as well as the shift mix, mix shift.

And then finally, in terms of capital allocation, as we said at the end of our last earnings call, we’re around four times leverage, which is higher than we’d like. So we’re working hard to get back down to that three before we would really consider stock buybacks or even acquisitions. But when you look at the way we’ve allocated capital the last several years, really focused on how we drive the business, whether it’s aftermarket or if it’s adding to our rental fleet or adding to our branches in terms of inventory, it’s all about investing in the business. So we’re well positioned to support our customers. It’s unfortunate in terms of where our leverage is because based on where our stock price is, we think it’s attractive and we would be buying back shares if we were in a better balance sheet position.

But just given the cyclicality of the crane business, we try to lean on conservative side. I wanted to touch on our full year guidance that we gave on August 7. So at that earnings call, we guided everyone to the low end of our adjusted EBITDA range, net 120 range. Since then, there have been more steel derivative tariffs that were announced. So last week, I think there were well over 400 items that were announced and we expect more to come in September and November.

And even between those points, I think there’s a chance that we’ll continue to see. So this is something that we are constantly tracking and assessing. Unfortunately, it’s not as straightforward as you think. Pouring through all the HTS codes on a machine that’s got 6,000 components is quite the task for our team, but this is something that I wanted to raise relative to our guidance that wasn’t considered in August 7. And we just have to wait and see how some of these play out.

In some instances, there’ll be some good guys and some instances will be bad guys. And what I mean by that is there are lots of machines that we make in The United States. So if as imports get tariff that would be beneficial to us. Of course, we import a lot of machines from Europe in terms of all terrains and towers which would be a negative. But these are this is the current environment and the things that we’re working through.

So as I said from the beginning, why invest in Manitowoc? Of course, there’s always the crane cycle that we want to talk about. We can’t control what the cycle is. I feel like I’ve spent nine years trying to predict or guess when the market’s going to turn and I’ve been wrong every time. But the one thing we can control is in terms of how we grow our business and execute our business, transforming ourselves from being this product company into something that’s customer oriented and service focused has already driven great gains for us.

Thank God for the acquisitions we made that have been very successful in this period of time of inflation. So we feel very strongly about our strategy and moving in the right direction. We’ve just got to continue to hit singles and doubles in terms of growing our aftermarket and we strongly believe that’ll drive our business and our value proposition for our shares. So with that, I’ll open up to any questions you may have. Yeah.

The question is around the electrification of cranes. So sort of it varies by region, it varies by machines. We have we’ve been very focused on hybrids and understanding hybrid technology. So we’re we’ve we developed the concept altering crane for the European market, and that’s where I really see the advantages. Benelux has been very focused on some EVs, Scandinavia.

And then interesting, literally on the other side of the world in the mines down in Australia, those are the areas where we’ve seen the most interest. Thus far, I would say that nobody has really done a great job of providing the right machine. The the difficulty with a pure EV machine is the fact that you’ve got counterweights and trying to manage the weights of the machines and the axle loading. That’s probably the hardest thing that our our engineers fight with in terms of just developing a normal crane. So I’ve we see that as a real struggle to to cope completely battery driven.

But we have seen good success and good interest out of our hybrid machines. We had one at BAMA last year and the feedback was great. We’ve got the one machine that lasts, let’s say, the longest where you can do a complete shift. But I think that would be much more opportunistic. I don’t think it is a full scale change in terms of the industry.

Any other questions? Okay. Thank you very much. Hope everyone has a great day.

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