Wacker Neuson SE Reports Most Successful Quarter Since Over Two Years

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Strong growth of business and earnings
Development during the first quarter of 2011 was extremely positive across the Wacker Neuson Group. With EUR 211.8 million, the Group increased revenue by 40.9 percent relative to the same quarter last year (EUR 150.3 million). Revenue was also up on the equivalent figure for Q4 2010 (EUR 206.3 million). In terms of revenue, Q1 2011 has been the Group’s most successful quarter since over two years. "This spring, favorable weather allowed the construction season to get off to an early start in our core regions of Europe and the U.S.," explains Richard Mayer, spokesperson for the Executive Board of Wacker Neuson SE. This drove light equipment sales up 44 percent, compact equipment sales up 54 percent and sales in the services segment up 19 percent. Group earnings grew even faster than sales. Profit before interest, tax, depreciation and amortization (EBITDA) rose to EUR 25.9 million during the first quarter. This corresponds to an EBITDA margin of 12.2 percent (previous year’s quarter: EUR 3.7 million; EBITDA margin: 2.4 percent). Profit for the period amounted to EUR 9.0 million (previous year’s quarter: EUR -5.7 million). Events in Japan did not have a negative impact on the Group as we have been able to fall back on our own inventory, supplementing with components from European interim depots and utilizing faster logistics paths.

"Revenue for the first quarter of 2011 almost matches that of Q1 2008 (EUR 228.2 million), our benchmark for pre-crisis figures. We are pleased to report that our gross profit margin has already returned to our high pre-crisis level. This growth was fuelled by our success in lowering fixed costs significantly. As revenue increases over the year, this will continue to strengthen our earnings potential," continues Mayer. "Following the successful implementation of SAP in the first quarter of 2011, we are now working almost exclusively with a uniform IT system. Furthermore, at the forthcoming AGM, we intend to propose that Wacker Neuson SE be transitioned to a holding structure. This new structure will enable us to raise efficiency levels even further," reports Mayer.

Leveraging strong financial and asset position to capitalize on upswing
With an equity ratio before minority interests of 76.1 percent, the Wacker Neuson Group’s financial and asset position remains very healthy. Net financial debt totaled EUR 41.8 million at the close of the quarter (December 31, 2010: EUR 13.7 million). "We are currently utilizing the strong financial position we established in previous years due to uncertainties on the financial markets. Our strong balance sheet structure gives us the financial position to increase our working capital and finance our planned investments," reports Günther Binder, CFO of Wacker Neuson SE. "Once our new production facility for excavators, dumpers and skid-steer loaders in Austria is finalized, we will have the capacity we need to reach our ambitious growth targets for 2012 and beyond," continues Binder.

High new orders for agricultural machines
The rise in revenue relative to the same period last year was largely fuelled by continued strong demand for light equipment in the U.S. and strengthened by increased investments from major rental chains. "Following the crisis, the light equipment segment was the first which showed signs of recovery. The fact that this revival is proving to be of a rather lasting than a short-term nature is – in our view – a very positive indicator," states Mayer.

The Group is also leveraging existing sales synergies, using its sales network to distribute its compact equipment portfolio to more and more markets outside of Europe. Demand for compact equipment is developing particularly well, for example, in France, Sweden, Poland, the Czech Republic, South Africa and Brazil. Accumulated new orders for the construction and agricultural sectors remain on a growth path, with figures at March 31, 2011 over 40 percent up on the same period last year.

As expected, the order backlog for compact equipment for the construction and agricultural industries returned to normal levels as delivery bottlenecks eased. The order backlog at the closing date was around 140 percent up on the prior-year’s figure (December 31, 2010: +350 percent).

Accumulated new orders grew especially rapidly in the first quarter, with orders for agricultural machines increasing by 60 percent relative to the same quarter last year. Fuelled by rising incomes among agricultural landholders, demand for Weidemann equipment is rising as operators are looking to capitalize on the efficiency-enhancing potential of these innovative, well-designed machines.

Forecast review – return to pre-crisis levels one year earlier than anticipated
In light of the strong results of Q1 2011 and the continued positive business outlook, the Wacker Neuson Group has reviewed its forecast for the entire fiscal year. It now expects revenue to climb to between EUR 880 and 920 million (which corresponds to a growth rate of between 16 and 21 percent) and the EBITDA margin to settle between 12 and 13 percent. Previously, the Group had projected that revenue would rise at least 15 percent to EUR 870 million relative to 2010’s figure (previous year: EUR 757.9 million) and that the EBITDA margin would be at least 12 percent (previous year: 10.3 percent).

From today’s perspective and assuming the market continues to develop positively, the company expects to exceed pre-crisis revenue levels (the merged Wacker Neuson Group reported pro-forma revenue of around EUR 1 billion in 2007) one year earlier than anticipated in 2012. The company also expects to achieve an EBITDA margin of 15 percent when it reaches the 1 billion mark.

About Wacker Neuson
Wacker Neuson SE is a global manufacturer of light and compact equipment. With over 30 affiliates and more than 180 locations across the globe, the company offers an exceptionally broad portfolio of products and services. Manufacturing activities are distributed across three German, one Austrian, two American and one Philippine production sites. Almost all products manufactured by the company are branded Wacker Neuson. The only exceptions to this in Europe are Kramer Allrad products and Weidemann-branded agricultural machinery. With over 300 product categories and complementary rental, spare parts and repair services, Wacker Neuson is the partner of choice among professional users in construction, gardening, landscaping and agriculture, as well as among municipal bodies and companies in the industrial and recycling sectors.