The Manitowoc Company (NYSE: MTW) outlined its strategic shift toward aftermarket services and non-new machine sales during the 17th Annual Midwest IDEAS Conference on Wednesday, detailing progress in transforming its revenue mix toward higher-margin, recurring business segments.
Chief Executive Officer Aaron Ravenscroft highlighted that aftermarket revenue has grown from approximately $375 million in 2016 to over $700 million currently, with a stated target of reaching $1 billion. This expansion reflects a deliberate pivot away from the company’s historical focus on new equipment sales, which Ravenscroft described as the "most volatile, cyclical, lowest margin portion of the crane industry."
The company reported annual revenue exceeding $2 billion and a backlog surpassing $1 billion, supported by a global footprint of nine manufacturing locations and 47 branches, with plans to expand to 50 branches. Ravenscroft noted that non-new machine sales have grown 84% since 2020, now accounting for roughly half of total revenue. Aftermarket operations, which carry gross margins of about 35%, are positioned as a stabilizing force amid cyclical industry conditions.
Manitowoc’s stock has gained 95% over the past year and 62% year-to-date, trading at $19.52 at Wednesday’s close, with a market capitalization of $704 million. The company has reduced leverage from above 3.0x to below 3.0x, targeting a sub-2.0x ratio through the cycle. Cost reductions since 2016 total $150 million, while capital expenditures for the rental fleet stand at approximately $60 million.
Large crawler crane capacity remains sold out through 2027 due to strong demand from data center construction, though Ravenscroft indicated that 2028 build schedules have not yet opened. The global crane fleet averages around 15 years in age, with some units operating for 25 to 30 years. The company has added over 200 field service technicians organically over the past five years, with training programs spanning roughly three years.
Ravenscroft emphasized the company’s shift toward smaller, recurring orders rather than large-scale equipment sales, describing the transformation as a move toward the "jewelry of the business." He characterized Europe’s market as being in a "slow recovery mode," while noting that the company operates as a "fast follower" in hybrid and battery technologies rather than a technology leader.
