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Wacker Neuson remains on Expansion Path in 2014

MUNICH/GERMANY, April 2, 2014 -  In spite of difficult market conditions, Munich-based light and compact construction equipment manufacturer Wacker Neuson managed to further increase Group revenue and profitability in 2013. Having reached its targets for 2013, Wacker Neuson now aims to remain on this growth path through 2014.

EUR 1.16 Billion in Revenue

In keeping with its growth strategy, the Group focused on increasing market penetration of light and compact equipment in its core European and US markets, as well as actively developing specific new markets. Group revenue rose 6 percent to EUR 1,159.5 million (2012: EUR 1,091.7 million). These figures were dampened by currency fluctuations. Adjusted to discount these effects, revenue would have risen 8 percent.

“We were able to further expand our market position, both in German speaking countries and abroad, even managing to report growth in partly declining markets. This confirms that our strategy is yielding the right results,” explains Cem Peksaglam, CEO of Wacker Neuson SE. This growth was powered by all business segments. The Americas region experienced the largest rise in revenue, with an increase of 8 percent on the previous year (adjusted to discount currency fluctuations: 12 percent).

The Group’s largest market, Europe, also recorded an increase in revenue, with figures 6 percent higher than the previous year. Revenue in the light equipment segment rose by 2 percent compared with the previous year (adjusted to discount currency fluctuations: 6 percent), while the compact equipment segment grew by 12 percent and the services segment (including repair and replacement) by 4 percent. The first quarter of 2013 got off to a weak start due to harsh weather conditions, which had a dampening effect on demand. However, the Group reported a significant rise in both revenue and profit relative to the previous year for each of the subsequent quarters. In Q4 2013, revenue rose 6 percent on Q4 2012 (adjusted to discount currency fluctuations: 10 percent), increasing from EUR 279.1 million to EUR 297.1 million.

Wacker Neuson headquarter

Wacker Neuson headquarter. | photo: Wacker Neuson

Improved Profitability

Group profit before interest, tax, depreciation and amortization (EBITDA) rose 8.3 percent to reach EUR 153.4 million. The EBITDA margin also increased to 13.2 percent (2012: EUR 141.7 million; 13.0 percent). Wacker Neuson’s success in this area was largely attributable to various, systematic efficiency-focused measures and Group synergies.

Profit before interest and tax (EBIT) increased 12 percent to EUR 94.7 million, corresponding to an EBIT margin of 8.2 percent (2012: EUR 84.9 million; 7.8 percent). At EUR 28 million, Q4 2013 EBIT for the Group was an impressive 79 percent higher than the previous Q4 2012 figure (Q4 2012: EUR 16 million).
The Group’s net profit for the year amounted to EUR 61.2 million (2012: EUR 54.1 million). This means that earnings per share are 13 percent higher at EUR 0.87 (2012: EUR 0.77)

Further Internationalization

Economic power is rapidly growing in many emerging nations. Here also, rising salary levels are driving a switch to more productive construction equipment and machinery. Infrastructure expansion and improvement projects also offer great business opportunities for Wacker Neuson. “Our long-term aim is to increase the revenue share of markets beyond Europe, which currently account for 29 percent of total revenue. We would like to see this figure rise to around 50 percent. Emerging markets promise great potential  at the moment they account for around one eighth of our revenue,” outlines Peksaglam.

Wacker Neuson is already moving in this direction, as proven by developments in its compact equipment segment. “Our strategy to extend our existing compact sales platform beyond Europe to reach international markets is already paying dividends. Here we achieved compact revenue growth outside Europe of 40 percent in 2013,” Peksaglam continues. The Group sees particular potential in emerging markets in South America and South-East Asia, as well as in China, Russia and Turkey.

Further Revenue Growth expected in 2014

Wacker Neuson remains optimistic for 2014. “If the positive trends recorded in the first few weeks and months continue throughout the year, we can expect revenue to reach between EUR 1,250 and 1,300 million, with an EBITDA margin of 13 to 14 percent,” states Peksaglam. The EBIT margin is expected to lie between 8 and 9 percent. These figures are not adjusted to discount currency fluctuations. For fiscal 2014, Wacker Neuson has earmarked around EUR 85 million in total for investments (2013: EUR 87 million).
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