Earlier this year SHV announced the intention to divest Mammoet. As mentioned earlier, the process was discontinued due to no matching buyer. Going forward, the intent to divest Mammoet remains and the focus will continue to be to execute Mammoet’s strategy.
Mammoet enjoyed a strong 2023 thanks to an uptick in global activity, underpinned by operational improvements, an optimised geographical footprint, and the successful exit from Russia.
The energy transition also represented a significant external driver, with Mammoet experiencing fast growth in renewables and other sources of green energy including wind, nuclear, and hydrogen. Mammoet continues to support the global energy transition by reducing its dependency on the oil & gas sector and increasing its share of renewable energy projects. Government stimulation packages are supporting growth in green projects, although a temporary slowdown is expected in the offshore wind sector as manufacturers experience supply chain difficulties.
In terms of the heavy lift industry, most players have had to manage the challenge of labour shortages in addition to the impact of rising steel prices on investments in equipment. This resulted in a general increase in fleet usage as the industry limited fleet expansions to preserve cash. Inflationary pressure remained constant over the year, although Mammoet was able to protect margins by passing on price increases to customers. Overall, there were no major shifts in the competitive landscape.
Moving forward, the Group will continue to focus on the existing strategy that has been working well so far. A particular focus will be placed on reducing the asset base, improving asset utilisation, and increasing operating margins. At the same time, Mammoet will continue steering efforts towards increasing cash generation and reducing its costs base across the organisation whilst reducing organisational complexity.
Optimisation of the company’s geographical footprint is making good progress with the winding down of positions in regions offering limited growth potential. The launch of Mammoet International Projects (MIP) has also proven very successful, bringing in a number of large projects while generating higher margins through a smaller asset base. Serving clients on an ‘in-and-out' basis has also allowed projects to be executed more efficiently and cost-effectively.
The Sherpa programme, aimed at replacing Mammoet’s current ERP infrastructure, remains on track. The programme is expected to reduce costs, increase asset utilisation rates, and improve project and personnel planning. The Group is also working to reduce its exposure to outstanding claims. The Amuriyah and New York Wheel cases are still ongoing and therefore had no financial impact on 2023 results.
Finally, as mentioned earlier in this annual report, the full exit from Russia was finally completed by the middle of the year. With most assets successfully repatriated to Europe, the financial impact in 2023 has been limited.
Thanks to a stable order book and a healthy project pipeline, the company remains confident of achieving its topline ambitions for the years to come.
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