Wacker Neuson Optimistic for 2012

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In line with its growth strategy, Wacker Neuson focused on increasing market penetration for its light and compact equipment offering in its core markets in Europe and North America in 2011. At EUR 991.6 million (previous year: EUR 757.9 million), Group revenue was up by 30.8 percent, making 2011 the best fiscal year in the company’s history. Wacker Neuson has thus achieved its goal of returning to 2007 pre-crisis figures even earlier than expected. The euro and debt crises had hardly any impact on business performance in 2011. "Our commitment to retain our core workforce and to keep crucial expertise in the company during the economic crisis is paying off now. We are now in a position to seize market opportunities quickly. In just two years, we have increased revenue by an impressive 66 percent," explains Cem Peksaglam, CEO of Wacker Neuson.

This growth was powered by the entire Group, with double-digit revenue increases across all business segments. From a geographical standpoint, the Americas region performed particularly well, reporting a 37 percent rise in revenue compared with the previous year. Europe also put in a strong performance with an impressive revenue jump of 30 percent. The compact equipment business segment reported the most dynamic revenue trend, with a 52 percent rise on the previous year. Agricultural machinery is accounting for an increasingly large share of the revenue mix, rising from 12 percent in 2010 to 16 percent last year. Revenue in the light equipment segment was up 25 percent on the previous year. North America proved to be a particularly strong driver here, with revenue from utility products – above all generators and light towers – experiencing exceptional growth.

Increased profitability
The Group also increased its profitability significantly in 2011. At EUR 162.6 million, profit before interest, tax, depreciation and amortization (EBITDA) more than doubled, resulting in an EBITDA margin of 16.4 percent (previous year: 10.3 percent). At EUR 85.8 million, net profit for the period was 3.5 times higher than the prior-year figure (previous year: EUR 23.9 million). Earnings per share totaled EUR 1.22 (previous year: EUR 0.34). The transition to a holding organization has created a more transparent, homogenous structure throughout the Group. This, together with the Group-wide roll-out of a standardized enterprise resource planning system, is enabling the company to optimize internal processes and gradually reach its efficiency goals.

Strong financial position
With an equity ratio (before minority interests) of around 75 percent and gearing of just 10 percent at the closing date, the Group’s financials and assets remain strong. This healthy position was confirmed in February 2012 when the Group successfully placed a Schuldschein loan in the amount of EUR 120 million at attractive conditions. The loan will initially be used to redeem short-term lines of credit, while at the same time providing the Group with the financial security and headroom to pursue its expansion plans.

As scheduled, production of excavators, dumpers and skid steer loaders will start in just a few weeks at the Group’s new site in the Austrian town of Hörsching, near Linz. The investment triples Wacker Neuson’s production capacity for compact equipment and will allow to meet rising demand. This move means that all of the Group’s production facilities for compact equipment have been constructed in the last six years and are thus state-of-the-art.

Double-digit revenue growth expected in 2012
Uncertainty regarding developments in the European construction sector still remain due to the debt situation in a number of countries. Nevertheless, demand for light and compact equipment is set to rise, driven by the global trend for increased investments in infrastructure and maintenance. Wacker Neuson is thus optimistic about 2012. "The current fiscal year got off to a good start. We are confident that our company can absorb economic fluctuations best possible thanks to our financial stability and diversified business base," states Peksaglam. "We have set ambitious growth targets for the coming years – and we intend to achieve these," he continues. "We have defined a variety of action items aimed at profitable growth, in particular expanding our our international footprint and bringing our innovative product and service offering to a wider market."

During the coming years, the Wacker Neuson Group’s strategy will focus on establishing and expanding sales and service structures in Europe and North America, as well as in dynamic geographies such as South America and Asia. Wacker Neuson sees major growth opportunities in emerging markets. Today, these economies only account for around 13 percent of revenue. "In China, we are currently expanding our light equipment portfolio for the mid-price segment. We will unveil our new offering to the large crowds expected at ‘bauma China 2012’ in Shanghai," explains Peksaglam.

Assuming market trends remain positive, the Executive Board predicts overall revenue for fiscal 2012 of around EUR 1.1 billion and an EBITDA margin of at least 15 percent. It also expects double-digit revenue growth in 2013, with the same high levels of profitability. These forecasts take into consideration the slight squeeze on mid-term margins associated with the effort and expense involved in expansion. However, the company regards expansion activities as an investment in its future success. "Our growth strategy is based on a strong foundation comprising our healthy financial standing, innovation leadership and strong market position flanked by a high level of brand awareness in our core markets. We will also continue to evaluate alliances and acquisitions with a view to enhancing our product portfolio and to expand our international footprint," highlights Peksaglam. The company aims to maintain its sound balance sheet structure with a high equity ratio.

For the current fiscal year, Wacker Neuson has earmarked around EUR 100 million in total for investments (2011: EUR 106 million).

About Wacker Neuson
The Wacker Neuson Group is a leading manufacturer of light and compact equipment with more than 40 affiliates and more than 140 sales and service stations across the globe. Manufacturing activities are distributed across three sites in Germany, one in Austria, a components manufacturing plant in Serbia, two sites in the U.S. and one in the Philippines. Products manufactured by the company are branded Wacker Neuson. In Europe, the Group also distributes compact equipment under the brand names Kramer Allrad and Weidemann (agricultural machinery). With over 300 product categories and a global spare parts service, Wacker Neuson is the partner of choice among professional users in a wide range of industries including the construction, gardening, landscaping and agriculture sectors, as well as among municipal bodies and companies in the industrial, recycling and energy sectors.