Speaking on the results, Leon Goosen, the CEO of Bell, indicated that the company is pleased to report a reasonable result for the period, despite tough operating and economic conditions in many of the markets in which Bell operates. “The strong and diversified position that we occupy globally has been advantageous in countering the more difficult operating geographies,” he says.
He adds that North America remains a key area for growth for the group, with its products having been very well accepted in that market. The potential to grow the dealer network and market share as a result is therefore good. “In this mature and highly competitive market, our focus is on supporting the dealer network to ensure that we have the correct levels of support for sustained growth.”
Goosen says while the South American market is a small currently, the group is expanding its footprint in terms of trucks, forestry and sugar handling equipment. The South East Asia and Oceania markets continue to show solid growth.
The group experienced modest growth in revenue in markets other than South Africa. “However, global demand was not as strong as anticipated,” Goosen explains, which had led to higher than planned inventory and debt levels and a resultant increase in financing costs. Production volumes have been decreased in line with expected demand. “We are expecting that inventory and debt levels will normalise in the coming months.”
South Africa remains a primary market for the group, where the full product and service line is positioned for eventual market recovery. “During the period under review the South African economy remained weak and we saw trading conditions deteriorate further on the back of prolonged economic uncertainty and a lack of much anticipated economic stimulus.”
In Africa the Bell African dealer network experienced stronger sales, particularly in Botswana and Tanzania. In Europe, demand in the UK remains strong but weakness in the British Pound impacted margins. A number of specific projects merit an optimistic view for this region and Bell continues to monitor the Brexit situation and its impact on future equipment demand.
“The rest of the European dealer network continues to perform well, with pleasing growth in Germany, France and Russia, with the group’s products again being well received at Bauma Munich, the premier global exhibition for construction and mining equipment in Europe.”
Goosen says that the expansion of Bell’s German factory in Eisenach-Kindel continues on target with manufacturing of components commencing in the fourth quarter. “The implementation of SAP systems in both the factory and the European Logistics Centre has settled down with the advantages of an integrated system now being experienced by customers. “
The Board declared a dividend of 20 cents per share, equal to the interim dividend last year. In order to align segment reporting with the way business is undertaken, the group has streamlined its four previous segments into three comprising i) Manufacturing, Assembly, Logistics and Dealer Sales Operations, ii) Direct Sales Operations and iii) Other.
Outlook
“We acknowledge the current volatility around the global and local economy and the impact this can have on commodities and understand the knock-on effect on our business. Diversifying across different markets and geographies and being able to respond quickly to changes are important components of mitigating this risk,” says Goosen.
Bell continues to entrench itself as the leading global ADT specialist with an increased product range and entering new markets and is exploring other global material handling niche products and markets on the back of the Matriarch acquisition as well as the launch of its re-designed tri-wheeler machines.
Goosen concludes that in southern Africa Bell’s partnerships with other global OEMs positioned the group well as a full range material handling supplier for when the market recovers. “Our ongoing processes towards further improving our B-BBEE levels in South Africa will be to the advantage of our customers and ourselves in this regard.”