Conference Transcript - MTW 2026-08-26

Dave, Host

All right, we'll go ahead and get started with our next presentation. I'm really happy and excited to have the Manitowoc company here. Trades on the NYC MTW. This is a client of three-part advisors, and I actually work on this account with Aaron and his team. It's been really a great transformation story, really kind of shifting the revenue mix into a business that's higher margin, higher returns, more recurring and less cyclical. and then we're actually just saw what was a great print in this last quarter with a really nice increase in the order rates which is hopefully indicating a recover from what's been what I feel like maybe the longest downturn cycle down cycle rather in the crane industry history so with that I'll turn it over to Aaron so the timing is right thank you Dave I good morning everyone I'm i'm aaron ravenscroft i'm the ceo of manitowoc with me is brian regan our cfo and ion warner

Speaker 3

who runs our investor relations moving to slide two slide three okay so just to kick us off here to get level set to me manitowoc has been around for well over 100 years but we've really been transforming the business over the last six years i joined the business in 2016 when we spun off our food services business then i took over as ceo in 2000 amidst of covid and that's really we spent the first three or four years uh reducing our cost we took 150 million dollars out of the business and really changing relative to not just the spin off the business but also get ourselves in a much more sustainable standpoint get to a spot where we could uh do some acquisitions so in 2000 when i took over and this is really when we started our aftermarket strategy and shift the business we know at some point we'll have a cycle and we'll see a lot of volume increases when that comes i don't know 10 years ago i would have tried to guess but at this point i've given up on trying to to guess that but we're controlling what we can control and my tagline to everyone is we spent 100 years focused on the most volatile cyclical lowest margin portion of the crane industry and the aftermarket the lifting solutions element of our business is really uh for the nice stable piece of the businesses and that's really been the emphasis of our business what i'm going to take you through today uh slide four here is just a summary of our business so well over two billion dollars in revenue. We've got a very global footprint, nine manufacturing locations. As I'll go to the size, we've increased our location significantly over the last five years with not only acquisitions but through organic growth. Very focused on growing our field service network as well as our aftermarket sales folks. So I would say historically, you know, we sold big toys for big boys, million dollar machines. We were, you know, whale hunters. We'd love to go chase the big order whereas today we're really shifting to be focused on the jewelry of the business and chasing those onesie twosie type orders supporting our customers and quite frankly serving our customers so I would have told you five years ago the majority of my time was spent with the owners of many of these businesses of our customers or today I'm happy to say that we're spending a lot more time with the folks who actually run the service centers if you can imagine someone who's running a service center not only responsible for some very expensive kit they're trying to drive their utilization but folks who run cranes is a tough business so they're they're cast characters and we've got to find ways to help those the service managers really drive their business and take things off their hands and make their lives easier I view that as just as similar as when I was a supervisor in a shop floor working with Fastenal there's a lot of activities are out there that can be done to make your lives easier so you can focus on the real core of your business and that's how I see Manitowoc as we move forward as you can see we've sold over a hundred thousand machines in the last 20 years that are out in the field so lots of opportunity for us I mean I think that's probably the blessing of the big boom in 2008 and 9 was all of the machines that went out in the field and as we'll go through in a couple slides there's an opportunity for a refresh but until that comes we see that as an opportunity to continuously grow not just our parts but also our service so slide 5 is just the Manitowoc way this been a big part of how we've driven the culture since i joined the company in 26 2016 very focused on the implementation of the of the toyota production system a real culture of continuous improvement and to me this example really signifies everything that we're about at mantuaq so we recently had a kaizen at our willemsham facility so firstly uh the picture of the crane in the back is an eight axle crane that will sell for several million dollars we started to engineer that a couple years ago it's got hundreds of thousands of engineering hours behind it uh it'll lift 700 tons and it drives down the road so there's a lot of rigging associated with it and safety so number one at manitowocca is how do we improve our safety initially we designed this kaizen to improve how we actually do the lifts on the jibs and the mega wings at our actual locations where we're going to be testing machine because we're in a business where any accident could be a fatality given the the nature of the size and of weights and the heights that we deal with so we're going to run a kaizen to make sure that we really knew how to deal with this piece of equipment at our own location and then that quickly evolved into how do we do it more productively we ended up inviting customers to work with us as well as some suppliers and so we had this real cross-functional team of doing a kaizen to say okay when we start to sell the eight axle crane how do we tell folks to actually rig up the piece of equipment to do it number one in a safe way but then number two in a productive way so we had a big group of people giving us insights on hey when this units out in the field because time is money when you're rigging no one's paying you to rig up the machine but it could take an eight hour shift so at the conclusion of it i think we had over well over 100 action items and uh we had several new products we designed we actually have come out with a kit that we'll sell we've never sold a kit before to actually rig our own equipment so if you think about just like lifting the counterweights off um we've just left that to folks who've been in the crane business for 100 years we never actually engineered how we do those lifts so a lot more emphasis on safety around the world and so we're trying to take advantage of that and uh do it up front and create some aftermarket products at the same time so big thank you to the customers that attended uh this kaizen event uh slide six is what we call the crane cycle so this is our sales i think it's directionally correct relative to what you've seen and how this the the business has cycled through the last 20 some years uh the first thing i'd say It's not inflation adjusted, so when you look at our more recent revenue, what looks like growth, I mean, a good bit of that is the tariffs and the inflation we've had. So it's been about 10 years where the market has been pretty depressed. If you look at the rental fleets around the world, they're typically in that sort of 15-year average age fleet, which means you've got a lot of machines that are 25 and 30 years old. The maintenance would be eating you alive. So we see this as a huge opportunity at some point where they're gonna refresh the fleet when that comes you never can tell definitely our orders have been great the last three quarters and feel really good about where the business is going with just the nature of construction around the world these days but in the meantime we're very focused on how do we break that cycle and for us to break the cycle number one it's how do we grow our aftermarket which we'll go through some slides we're well over 700 million dollars in aftermarket when we started I think we were 375 six years ago so that'll flatten out the curve for us and be much more predictable for us and then the other element of this is by us buying our dealers a lot of folks don't realize that just the nature of the crane business and the build schedules we actually will create these booms and busts as folks try to get on our build schedules so a good example is if you look back to 2009 we had a billion dollar of cancellations in the first quarter that's entirely driven by dealer cancellations so this This is a situation where dealers are, when lead times start to get long, dealers are chasing to get on the build schedule, and you're taking orders that are a few years Today, Manitowoc, we typically try to keep that within a 12-month window, protects us against inflation and some of the other tariffs that we've seen in the last few years. But the other element of that is trying to avoid these massive booms and busts, because typically what happens is when the market gets really hot, which you would have seen in sort of 06 and 07 dealers again are sort of a run on a bank to get on the build schedule to make sure they're able to get units then all of a sudden they wake up one day and their balance sheets are full and they turn the faucet off and you see the drop that's why the crane business can just change so dramatically so for us internally we're very focused on let's make sure we're managing our build schedules appropriately let's not get things too far ahead of us and say this we're in that scenario right now today with the boom in data centers There's strong demand for large crawler cranes were actually sold out for 2027 But we have not opened our build schedules for 2028. So again, we're trying to keep that window You know as tight to actual production times and costs of when we're bringing inventory as possible So for us that makes it a lot easier for us to manage the business quite frankly, too So we're not chasing booms and busts But this is the bane of my existence. How do we break the cycle? And I think we've already made some good gains in just five years So focusing on the aftermarket, we launched, I think we officially launched Crane's Plus 50 maybe in 2021 or 22 in terms of the name, but internally we've been talking about how do we grow our aftermarket. We've been two big acquisitions in 21 of two of our dealers in the United States. As I say, when we started this program, our aftermarket was around $375 million. At the time, I think we set a target of about $750 million, and then we adjusted it up to a billion but from my point of view we need to get to a position where our aftermarket is half of our machine half of our total sales and I think that's very doable from what we've seen in our current businesses and we look at other dealers that someday we'd like to acquire over time so what's driving that business well let's see let me why don't we go to the next slide here so this is a breakdown we get a lot of questions we use the term non new machine sales internally it works well externally it's not as great I mean typically this is just our aftermarket but this gives you some idea of the buckets that we have so obviously we were always pretty heavy into the part sales but we didn't get a whole lot of service so that has been a huge part of what we're trying to do is grow our service network that's really the glue that keeps it all together if you're on the crane doing the service work you're gonna get all the parts and you're gonna get a lot of ancillary parts and a lot of times the other thing that you see with our cranes is we buy a lot of equipment that goes on our cranes whether it's the drivetrain or the the engines or the tires if we're not johnny on the spot chances are folks are going to go get that those support pieces uh somewhere else especially in places like europe so being on top of the machine and really tracking the machine makes a lot more stickiness in terms of our aftermarket the other big changes i'd say since that period of time is around used well when i start with rental so we do a little bit of rental this somewhat is the manufacturing site for our for our used sales so it's a combination of things when I think about used. One is we typically like to keep our rental fleet young, sort of two or three years old. We do a lot of RPOs that I'll get into, which are more like leasing for two years before someone buys the crane and then we turn around and sell it and that becomes a used sale. So that's one element of what's driven our used. And then the other is we've become more aggressive around trade-ins, particularly in Europe. So we'll trade in some cranes, altering cranes in Europe, and then we'll actually bring them to South America and the United States. And that's how we've been competing with the Chinese, for instance, in Latin America, is by getting used machines that are a couple years old out of place like Germany on a trade-in, on a new, and then taking it down to South America where we'll enjoy clipping all the coupons off of our very big bond. But in terms of rental, and I've got another slide a lot of folks ask us about the financial side of it, and from a revenue standpoint, it's never going to be massive. I mean, you're talking about a 2% monthly rental rate on a multi-million dollar machine. So from a revenue growth, we don't see the opportunity, but really, because of the depreciation, amortization, you see a nice contribution to EBITDA. And then, of course, when we sell those machines, the returns are good. In terms of us becoming a real total lifting solutions company, you know, there's really four big buckets that we're working on. One is to increase our footprint. We need more locations around the world. We need to get closer to our customers. We need a home for our field service techs and a place that we can rebuild if we need Secondly, we need to constantly grow our aftermarket team. and so there's a lot of elements that go into this but first is how do we get more field service technicians and then second is how do we get more aftermarket salespeople I think when I joined Manitowoc in 2016 I think maybe we had three aftermarket salespeople we call them PSSRs parts and service representatives these are really folks I would say historically we're more field service sort of oriented and trying to support the customer with technical issues now we're really trying to gear those folks up to be more proactive and to engage with some of the products and retrofits that i'll show you in the coming slide and of course we also need to increase our used sales team to support what we're doing on the rentals and the trade-ins from an aftermarket portfolio so now that we're more engaged with folks that are actually doing the day-to-day lifting we see more and more opportunities and i've got some slides that i'll walk through through and then on the last on the last slide but it was just leveraging technology. We started a few years back with telematics, just like your Apple phone gets updates and you don't really know it. We can do the same with cranes. In the old days, you had to literally take a laptop, physical laptop, and plug it into the crane. You'd see field service folks would have like 20 of these laptops, because you had a laptop for every machine, you'd have them in their vans. Then evolved to thumbnails, and then today, we're really working hard that if you get into a Wi-Fi zone that you can download your new software. so most vehicles are the same way you pull into your house and it gives you the option to accept the updated software so very similar in terms of the way it works for cranes and then the other side of this is the i'll talk about service max in a bit but it says how do we track cranes from when they're born to when they die so believe it or not we sold 100 000 cranes all over the world but the only way we would really know that where they were is if someone was keeping an excel sheet so and we don't really know what the maintenance is and what our level of support has been on the machine so this is really the key of introducing service max for our team so starting with our footprint you know when we go back to 2001 we added several locations with the acquisitions but as our balance sheet has been tight the last few years we've been very focused or on organic growth so you can see we had locations in the Americas and Dender Aiken South Carolina Kansas City Nashville was an upgrade Baton Rouge was a is a great market for us I think when we we had a shared place with h&e we had two bays now we have a new location with six bays so this is how we're really driving our field service and aftermarket is just literally giving our team more capabilities to support our customers more recently we added a location in peru and in chile and we currently have one that will be open next month in monterey mexico so lots of opportunities for us there in terms of europe we've added locations madrid paris we barnsley uk and warsaw and we've got a few underway in Portugal and France at the moment so and then lastly in terms of what we've done down in Sydney Australia we've always had a location there we just are in the process of adding a location in Brisbane to support all the work that will happen around the Olympics and then Melbourne is a great market where we've never really participated so even though we haven't been an acquisition mode we have been taking over more and more territory in some instances where we've not had any representation in other instances it's where we've had poor representation and we've canceled some dealers and just decided to go direct in every instances i'd say we're typically break even on a new location in the first year but it really takes four or five years to get the location going the way you'd like it to go it's really generating decent numbers so in terms of increasing our team again we saw a big jump between 2020 and 2021 driven by the acquisitions but you can see we've added over 200 field service techs in the last five years organically so again this is at every location challenging folks that i mean i think forever even today i still go to locations and i'll ask folks well how many field service techs do you have they'll say 10 i'll say okay when are you going to have it doubled because in the old days it was just easy for us being because it's like oh i can't go find a field service tech that's macgyver and so we didn't fill the position so now we've been very aggressive in terms of the layers of folks that we're recruiting so we'll We'll take folks in from high school or vo-tech schools. We'll train them literally from scratch. We'll also take folks that are sort of medium level, maybe they're experts on diesel mechanics or electricians. And of course, if we can snag a few old school crane guys, that's fantastic, but they're hard to come by these days. So we're very focused on our training efforts. I would say that when we were just a manufacturer, we weren't so great at training because we didn't realize just how challenging it was. it could take you three years to get someone through all the training and that was a really good qualified person so we've got some quick start programs this is also a big element of when we talk about some of the other products that we'll service it's good for us to be able to sometimes we'll rebuild or fix a an awp or a fire truck or a vacuum truck those are great projects for us because we're allowed to take you know it allows us to take our folks that are more i'd say apprentice level and get them hours on machines doing some basic work and get them skilled up and then here you see we've got a mobile training center that we showed off at con expo it's been traveling around the world because historically had to go to the factories to get all the training so now we're trying to get out into the field and get closer to where not only our field service techs are but also supports our dealers field service techs and many of our customers have large populations of field service techs so the more knowledgeable they are about our machines the far better off we are considering how complicated they are with the systems they've got talk a little bit about our aftermarket portfolio and a lot of times everyone thinks about just the parts that are on the machines if you look here at the top left-hand corner so just for the crowd on the internet we're on slide 12 this is a project that we just released last week this is a retrofit basically it's replacing old school screens with a more modern screen so many of those old screens they've sort of dimmed down or you can't actually really see so we're launching but to me that's a perfect example where we've taken pssrs and say hey now you have a reason to go call everybody we know everybody who owns most of these rts let's call them up and chase them down and get in front of some crane operators we'll run some trials we'll go to the union locations where they're actually chaining operators and probably make some donations but again that's a simple upgrade for us but it gives us an opportunity to go out and really press the flesh and show our value to our customers i some other good examples here like wire rope and rigging there would be no wire rope or rigging if it wasn't for the folks that invented cranes 100 years ago we put them all on inspect them on our machines but historically we've not really supported in the aftermarket it's one of the only wearables when it comes to rigging I mean typically again we're the ones that are designing the lifts on how to take say a counterweight off of our crane so we see these as all good opportunities for us to support our customers anchorage beams so with every tower crane that is erected that is braced against a large building which would be pretty much any facility you know if you go to the Middle East you see these everywhere they either go up through the elevator shaft or they're braced against the side of a building um we started making our own modular anchorage beams um to help our in the old days we would just sell to a crane rental house and say good luck you know you're basically going to go lift you might call our lift solutions teams and they would help with some engineering but we didn't really give them the products to support them with this sort of work um two of my favorites are the tower crane urinal and the hydraulic pinning so we've been making tower cranes for 75 years we'd sell you the crane and if you're lucky we give you a bucket or we would give you a bottle to go upstairs 30 meters where you're going to sit all day long we recently now that we're actually in the business of putting people in cranes we you know we found some solutions to the urinal issue uh this is one that turns urine into mist so at least the guys can go to the bathroom we're working on one for the ladies um it sounds ridiculous but it actually changes the life of the poor person and that's sitting in that cab all day long and then the one on the bottom is for pinning so our masks are pinned together which means that you'll have a field service tech erecting a crane it'll be 30 meters in the air tied off swinging a sledgehammer to insert these pins into the mast not exactly the guy you want to pick on at the bar tonight that's definitely the person you want to walk away from so we've launched some hydraulic pinning systems to make it easier and safer for them we've also designed internally our own manual slide system that is just way safer and easier because even when we're attacking all of our own safety challenges we've got a lot of folks they're having ergonomic issues from swinging a sledgehammer their whole life so some nice solutions that the team has put together and then finally here on the right hand side we have a distribution agreement with hyab so these are knuckle boom cranes uh it's a great synergy with our boom truck business uh these are again a little bit easier machines than let's say an all-terrain crane so it helps us develop our field service techs and many of the same customers whether it's utilities or tree handling and those sorts of things so really a good fit for us i'd say we're just starting to gain momentum maybe we've had that contract for six months i had a review with the team yesterday and quotes are coming in now you know millions per month so i think that's a good sign and then another company we work closely with is extreme they make heavy-duty telehandlers we got into this business because anytime you're in a crane operator field you've got these heavy-duty telehandlers just move counterweight so they go really well with our cranes and it's been a natural sale for us and then on the bottom are batteries so with our tower cranes it's hard to hook up to the grid a lot of time you have generators and that's pretty expensive of course if you're in europe and you're looking at diesel fuel of like 12 a gallon you're looking for all alternatives you have the same issue in places like um south korea i think we've got a trial in australia we've sold a few of them so again in the old days we would have never considered that product and today we're selling it on a pretty regular basis again making it easier for someone to tie into the grid again the old days it would have been given us your address of the project will ship your crane and not really you know it's your job to figure out how you hook up to the grid the grid has become really really problematic if you want to hook up to the grid in france or in paris it's going to say you six to 12 months i mean i don't think anyone's going to accept that so the batteries are a nice cheap solution that is really value added for folks and saves and then lastly in technologies as i sort of alluded to on service max we used to track our machines by excel at best with service max so basically they were bought by ptc ptc is someone that we've used as a supplier for years on our engineering so all of the cad systems it's really under ptc we really like this solution because number one when they bought service max they were going to be able to tie in the aftermarket with the new engineering drawings that's always a challenge for manufacturing businesses how do you take a traditional drawing and actually get it over to a bill of material where someone can do something with it in the field we thought that was fantastic and then the other element of this is just the ai aspects of it so if you think about it we'll sell i don't know 300 plus all-terrain cranes this year across seven different models. I bet we'll sell, I don't know, 50, 5250. So it's a five-axle, 250-ton crane. Of those 50, though, they'll probably be shipped to 30 different countries speaking 20 different languages. So a lot of times we have folks who are fixing these machines, but we don't know the best way to fix them because they've done it in French or German or Spanish or Portuguese or Australian. So the beauty of this system is once we've get it and And we've started to implement the modules of it down the road, you'll be able to, because of AI, be able to go basically, oh, okay, how'd you fix the boom on a 5250? And it'll go in and take all the information out in whatever language it is and repeat back to basically how you've tapped into the agent. So we see huge opportunity here, but of course, it's going to take us years of using it and inputting it. And in the meantime, we've started to move all of our sort of service documents and any information we have into another AI agent that will help our field service folks. So we're very focused on how do we get our less skilled field service folks at the highest levels as fast as possible, or if nothing else, at least they're able to tap in to much better information than they would be today. And then on the right, this is a picture of our remote control unit for tower cranes in So this is something that we've been working on quietly. Currently, so we have a PVC there or a test site that's a couple miles down the road. You can actually sit on that crane that's inside of the factory or this simulator. It's not a simulator, but it looks like you're at the arcades or something, but you can sit there and actually run the crane that's three miles away. We see that as an opportunity for tower cranes down the line, and we've just continued to play with the technology and understand what are the pros and the cons and those sorts of things, because theoretically you could run multiple tower cranes with one operator from a location like this so this is something that we think customers are going to want but it's going to take us some time to get there we're returning now that we've talked about aftermarket talking about the core business itself we see a lot of tailwinds as we look forward just in terms of the infrastructure spending that's out there we see a lot of activity at the moment around data centers and semiconductors some of the things we talked about on our last earnings call um you know we we built a data center in abu dhabi i would say that's been and sort of stalled out with the situation with Iran. I would expect that to come back when that comes online. But we've been building data centers all over the world. That's been good for the crane business. Sometimes it's crawler cranes, sometimes it's tower cranes, depending on where they do the construction or how they do it in the world. The other thing is semiconductor's been huge for us. Korea's a very large market for our tower cranes. We've been very, very active. If you haven't read the news on what SK Hynix and Samsung are doing, they're making huge investments for the next 30 years. in addition to building the semiconductor plants they'll have to build really communities around those factories at the big samsung fab 5 project right now at the peak there'll be 75 000 employees on that site alone doing all the construction at its peak so that's an insane number of people i was there a couple months ago i think there were 60 or 70 cranes already in the air and brian and i will go in a couple months and i wouldn't be surprised if there's 100 cranes just on that one project so a lot of activity um you know airports have been good for us there's some big airport projects uh in uh uae that we're currently working on stadiums have been good for us i think the areas that really have surprised me have been really mining and oil i mean in the old days when i was in the mining industry if you ever heard of copper over four dollars you're going to see lots of green fields and brown fields there has been some political issues in south america that have slowed that down but with the latest elections we see that ramping up. We've already seen some beginning orders, I would say, in that space. Mining is really good for us. Even if the Chinese are competing with the Chinese in South America, typically at large mining projects, they want Western machines. So that's a good opportunity for us. And of course, oil and gas. Again, normally when oil is at $80 or $100, a lot of crane activity, we haven't seen anything really come from oil. And we expect some really good action in oil once the Strait of Hormuz situation is settled. Saudi Aramco, for one, has got a lot of work that they need to be done, even irrelevant of the worst situation. And then the last one I would just touch on, power transmission. That continues to go, I mean, there's years and years of work around the United States to improve the grid. And then nuclear, we've started to see some projects in Europe really come online. We're on the Hinckley site in the UK. There's a couple more nuclear projects coming down the pike in the UK as well as France. so we really are starting to see some nice support of behind the business and that's the real key that we've always said everyone asks me what are the economic indicators that we track quite frankly i don't really track any of them other than residential construction in europe for the permitting because there's never a direct correlation our customers buy off confidence so we got fleets that are as old as they are they need long projects where they're seeing good utilization and so that's the beauty of some of these data center and semiconductor projects where large crane rental houses are now on projects where they're not chasing maybe two projects a day. They've got one project where the cranes are going to sit for the next. I've heard projects as long as 10 years being discussed. So that is the type of activity that gives great utilization and confidence where folks are ready to refresh their fleets. But when you're quoting day by day by day in your hand to mouth, it's pretty tough to make multi-million dollar decisions. But we're We're starting to see that break free, and I'm very optimistic about where things will Turning to capital allocation, so of course we did the two acquisitions back in 21. We have added to our rental fleet through CapEx, and I've got a slide next here, so we've got about $60 million there, and then we do have a share repurchase program. I mean, for us, it's always this fine balance between where our leverage is. We were up over three last year, and we're now down below three. probably through the cycle we need to be below two but we really want to strengthen our balance sheet and be ready to do deals so we would see share repurchases as more opportunistic i wish our leverage was lower 12 months ago when the stock was much lower we would have been more active but we really wanted to get our balance sheet back in a good spot in terms of rental fleet i should stick this slide in here a lot of folks ask us what does the returns on that so it is accretive to our our roic we see this as a big driver for our return invested capital long term um a lot of times what we're doing would be rpos so typically that would go two years where we rent the crane it's i'd call it financing for lack of a better word and then they buy the unit once they've got they've depreciated got the value down so those instances is good we also like to keep young fleets there's a lot of bigger projects like you'll see in europe we'll rent some some cranes on a bigger project maybe it's there for six or 12 months and when it comes off the project we either put it on our rental fleet or we sell it but in every one of these instances brian and i are tracking all the assets and we always see the best returns quite frankly out of these used machines that we sell just because we're operating at our cost and then of course you get a couple years of depreciation so um there is the the cash the cash outflay outflow in the beginning years but good returns as time goes by and lastly just to talk about our acquisitions that we did we spent 180 million dollars for those deals at the time we told you that we had about 30 million dollars in EBITDA I think our last 12 months is 45 million or a little bit over 45 million dollars in EBITDA so the returns are fantastic again how do we drive our ROIC we see this is a huge opportunity for us we also see this as an opportunity for synergies. Now that we have about 40% or 45% of the US, any future dealer that we would likely buy, we probably would not need all of their rental fleet or all of their inventory. So we're now starting to really gain scale. Now to put it another way, if you added up all of the inventory that sits at all of our dealers in the United States, it's a lot more than what you would need if you had just sort of one entity managing all that, because you've got all these different buyers trying to manage your build schedule. So we see that as a good opportunity but yeah and all these instances the acquisitions have been very good for us and then the last couple sides here just what we've put in the deck the last couple years how are we going to drive the business when you think about the revenue side of it non-new machine sales has been very important for us to drive sales of course we would like to get some acquisition growth here but we do think that when you have some secular recovery and some secular growth we'll get some natural volume from the market since we've been down for so long in terms of the but quite frankly it's a big change and you know shift and mix we're generating 35 gross margins from those non-new machine sales so that mixed change has been great for us you really can't see it in our p l the last couple years because of the the inflation and tariffs so we're finally starting to see some recovery there we see that as a good opportunity of course there's a lot of machines that we make in the united states where we're competing against folks that are shipping in from whether it be japan or germany we think there's gonna be some uh uh margin expansion there and of course any volume that we would get i mean most of our locations were running at one shift so we see a lot of opportunity to drive more hours through our locations given our fixed costs that would be good leverage for us so with all that to got put together our goal is a 12 percent ebitda then essentially roic if you drive the ebitda would follow as i said there's some different opportunities we see around working capital management particularly through the acquisitions i think this year we're in a good spot in terms of where we're driving our inventory for working capital um but if we do all the things in the prior slides this this should follow so just to sort of bring us home here just talk about i no longer see manitowoc as a crane company we're really a lift solutions business i mean we'll always make cranes but when you start to think about our be able to generate over half of our revenue from uh from aftermarket i mean we're very we're much more focused in the lift solution space and how we help our customers rather than just selling new cranes to owners so we've grown our non-new machine sales since 2020 by 85 84 percent you know we've done that through all those four elements that i walked you through earlier we've got 47 branches and 50s just around the corner same thing with our field service folks so we're constantly really layering in the resources that we need to continue to drive our aftermarket at the moment our backlog is well over a billion so you know if you look at our orders for the last three quarters have been very strong it's really tough to sit here and make a comment in terms of the third quarter because august is always so slow for us that's all the european shutdowns um but uh just in generally speaking sentiment is has been as high as i've seen it since i've been with the company in the last 10 and a half years and then in terms of our balance sheet again we're back to where we'd like to be we've got our leverage where it will be and that will continue to improve as we close the year we get more quarters with higher EBITDA um and it'll post a spot to where we can start to have a little more fun with acquisitions and trying to upgrade our balance sheet more so with that i'll open up to any questions you might have so the question is around europe you specifically talking about towers or mobiles or just in general yeah so the for the folks online the question is around what do we see really around europe so uh within the tower crane business you think about we had a normal cycle down and we've seen i think seven quarters of relative growth i mean we didn't have the year over growth this last quarter but that was i think very specific to some issues but we see the market continuing to strengthen at this point i wouldn't say that it's robust it's more of a recovery because of easy comps which i'm okay with that because you don't want to just have a massive boom overnight either so there are still huge housing shortages that need to be dealt with we've got an election coming up in france that always has some effect on the way people behave but we see it as continuing to move in the right direction um mobile cranes has been a little bit flatter i would say and it historically has been flattish. I would say the biggest change for mobile cranes really sits in Germany the last couple of years, where it's been down, which is really unusual. Usually Germany's always a steady-eddy market for us. But so now we're really waiting for the Prime Minister's economic plans to really kick in. I mean, they've done the right things. We hear a lot of positive comments from our team in Germany relative to what they're trying to do around economics. But again, when you go to the, I think I was in the Netherlands where you're paying over $12 a gallon of gas. So that's a pretty tough comp for everyone to deal with. But I think we really need to get beyond the situation in the Middle East, get some recovery there, and Europe will come. I mean, I think the real good news is the fact that Spain's been doing very well. You've got housing shortages in Spain that no one ever dreamed would ever happen again. You've got some of the smaller markets in the south that have been doing well. So if you can get Germany going again, I think that'll lift all boats. From my point of view, it's in a slow recovery mode. Yeah, so the question is just around the hybridization or battery, using batteries to drive mobile So I would say we're fast followers. It's a very complicated situation. So the only place you really, I mean, for a lot, like we had a hybrid crane a couple years ago, our first one, I guess now was four years ago at Bama. Everyone's super excited about it. And then you said, okay, well, what are you willing to pay? Well, the same price. Well, it's not the same price. So, you know, you went through that period of time when folks had to realize what's it really going to cost? There are definitely markets like in Scandinavia, the Benelox Mining industry in Australia that they really want and are willing to pay for it And there's some incentives for them to do when they put when they Execute projects We've had a great project where we've been going head-to-head with all the competitors At one of the largest crane rental houses out of the Netherlands. We feel really good about our position we've got the one machine that will give you a full day's worth of work but we've been taking it slow because we really want to make sure that we're on the right path and we're not just throwing a lot of money at nice ideas i think that they will give us opportunities in some of those specific markets um but we're still a long way i mean the dilemma you really have is just how do you move the thing around you've got axle loadings if you look at the tower cranes like the all-terrain cranes they're so designed specifically to cover off bridges and figure out how you either get the you know you dolly the boom to get across the bridge now all of a sudden you start throwing batteries on there and they weigh so much you change all of the engineering so we're taking it slowly to make sure it's the right place to be same thing we had a hybrid crawler crane same thing we had crane days everyone loved it everyone said oh this is going to be great next to hospitals because it's so quiet then when you start talking about the price then all of a sudden mum's the word i mean that's just the reality of the situation so one more question yes so the question is we no coverage in northeast or the west coast of the united states so all those empty spaces would we have dealers yeah okay well thank you very much we appreciate your time today have a good day