Wacker Neuson SE : remains on growth path

Munich, 11-Nov-2014 The Wacker Neuson Group reported a significant rise in revenue and profit for the third quarter of 2014. Sales of light and compact equipment were driven primarily by an upturn in business in North America and by the Group's broad sales platform in Europe. Reflecting its firm commitment to continued internationalization, the Wacker Neuson Group is planning its first production line for compact equipment in the US.

Strong profit in third quarter of 2014
Group revenue for the third quarter of 2014 amounted to EUR 316.2 million, an increase of 14 percent relative to the previous year (Q3 2013: EUR 276.3 million). "The fact that we have been able to deliver such strong results in this uncertain and volatile climate is down to our unwavering commitment to our growth strategy. Here we are focusing not only on diversifying our target markets but also on extending our international reach," explains Cem Peksaglam, CEO of Wacker Neuson SE. Numerous new product launches in 2014 also contributed to the Group's sustained market success. These include new zero-emissions battery-powered rammers and a zero-emissions compact electric wheel loader. "Our strict cost control measures and ongoing efforts to improve and streamline processes across all lines of business also bolstered our earnings performance," highlights Peksaglam. Profit before interest, tax, depreciation and amortization (EBITDA) grew 34 percent to EUR 55.1 million, resulting in an EBITDA margin of 17.4 percent (Q3 2013: EUR 41.2 million; 14.9 percent). At EUR 40.1 million, profit before interest and tax (EBIT) rose 51 percent, which corresponds to an EBIT margin of 12.7 percent (Q3 2013: EUR 26.5 million; 9.6 percent).

All regions contributed to revenue growth in the third quarter of 2014. Europe reported a plus of 14 percent while the Americas and Asia-Pacific both saw revenue rise by 16 percent. "The US construction industry is clearly picking up," continues Peksaglam. "Demand is also rising among industrial firms and the energy sector in North America. This had a positive impact on the light equipment segment during the third quarter, with revenue generated from equipment such as generators, heaters, light towers and compaction equipment growing 12 percent relative to the prior-year period. This positive trend is set to continue in North America. Markets in South America, however, are likely to remain weak." The Americas region currently accounts for 24 percent of Group revenue. In line with its internationalization strategy, the Group plans to relocate the production of skid steer loaders from its facility in the Austrian town of Hörsching to its site in Menomonee Falls (near Milwaukee, Wisconsin). "In future, we will be developing and producing skid steer loaders in North America as this is the market in which we have identified the greatest sales potential. The move aligns perfectly with our strategic principle of manufacturing products 'in the region for the region'," elaborates Peksaglam. This will be the first time that the Group has manufactured compact equipment outside of Europe. The relocation will not result in any layoffs in Hörsching, as the Group will be redeploying personnel and free capacity at the site to other products.

Record figures for the first nine months of 2014
Revenue for the first nine months of 2014 increased 9 percent to EUR 936.2 million (9M 2013: EUR 862.4 million). This corresponds to a rise of 11 percent when adjusted to discount currency fluctuations. "Once again, our compact equipment segment was a key revenue driver this year. Revenue from this segment grew 17 percent in the first nine months of the year, and by an impressive 25 percent in the third quarter. Our strategy to expand our international footprint and diversify our target markets also boosted our performance here," confirms Peksaglam. The light equipment segment, which has a very broad global footprint, reported a rise in revenue of just 0.2 percent (4.2 percent when adjusted to discount currency fluctuations). Business here was primarily impacted by a strong euro, although falling demand in key markets also dampened segment performance. The EBITDA margin rose to 15.8 percent (9M 2013: 12.9 percent) and the EBIT margin to 11.1 percent (9M 2013: 7.8 percent).

Revised earnings forecast
The Group's performance in October indicates that the positive trends in the first nine months of 2014 are set to continue. In light of this development, the Executive Board revised its profit forecast for 2014 as a whole upwards on November 4. The Group now expects an EBITDA margin of between 14.5 and 15.5 percent (previously between 13 and 14 percent; 2013: 13.2 percent) and an EBIT margin of between 10 and 11 percent (previously between 8 and 9 percent; 2013: 8.2 percent). The revised forecast factors in the dip in profitability typically associated with the fourth quarter. The Executive Board confirms its previous Group revenue forecast for fiscal 2014, estimated between EUR 1.25 and 1.30 billion (2013: EUR 1.16 billion).

The company will be announcing its forecast for the coming fiscal year in March 2015, following the publication of its figures for 2014.

Table: Revenue and earnings