Wacker Neuson : optimistic for 2017

At EUR 1.36 billion, revenue for 2016 at previous year's level
2016 was a challenging year for the majority of international equipment manufacturers, with companies reporting regional losses in revenue and earnings 'We were also unable to escape the difficulties in our markets. Our business in North America was particularly hard hit with revenue from light equipment in the region contracting in particular in 2016. In addition to this, demand for compact equipment in the European agricultural sector was weak,' explains Cem Peksaglam, CEO of Wacker Neuson SE. 'Our core region Europe was our revenue driver in 2016 and we broke the billion-euro revenue threshold for the first time here. This enabled us to keep overall revenue at the same level as the previous year,' adds Peksaglam.

At EUR 1.36 billion, Group revenue for 2016 was 0.3 percent higher than the prior year when adjusted to discount currency effects. Nominal revenue was 1 percent lower than the previous year (2015: EUR 1.38 billion).

Profitability trends
Profit was negatively affected by crises in emerging markets and industries as well as a number of one-off effects. Profit before interest and tax (EBIT) contracted 15 percent to EUR 88.1 million. The EBIT margin dropped to 6.5 percent (2015: EUR 103.6 million; 7.5 percent). The Group was therefore able to meet the lower range of its adjusted forecast from August 2016. Group profit amounted to EUR 56.8 million (2015: EUR 66.2 million). Net earnings per share came to EUR 0.81 (2015: EUR 0.94).

The Group made a number of key investments in 2016. 'Despite economic headwinds, we initiated important projects last year to create an even more solid foundation for our future success. We continued to expand our international reach in 2016, by opening a new production plant in Brazil and by starting construction on a production facility in China. We firmly believe that a regional presence - on both the development and production front - is essential to successfully develop these fast-growing markets in the long term,' says Peksaglam. The Group also implemented other forward-looking projects, including the consolidation of the spare parts business from all compact equipment plants in Europe at a central warehouse in Nuremberg, the launch of a new e-commerce platform for dealers and end customers, the expansion of the zero-emissions product line and the relocation of the R&D center for light equipment from Munich to the production site at Reichertshofen. As such, the Group was able to strengthen its organization and performance as a whole to more effectively master the increasing global challenges over the coming years.

Dividend proposal
The Executive Board and Supervisory Board will propose a dividend of EUR 0.50 per eligible share at the AGM to be held on May 30, 2017 in Munich. This is the same as the dividend payouts made in the previous two years and corresponds to a total payout in the amount of EUR 35.1 million. This, in turn, represents a distribution ratio of approximately 62 percent based on Group profit 2016. 'This underscores our commitment to ensuring continuity for our shareholders, even during a strained period in company history,' explains Peksaglam.

Optimistic outlook for 2017
The Group has its sights set on further expansion and expects to develop positively in 2017. 'We are optimistic about 2017 because customer confidence has increased overall. We believe that key markets such as North America will start to develop much more positively for us,' continues Peksaglam. 'Our markets are without doubt cyclical and we are used to peaks and troughs. After a challenging past 18 months, we expect 2017 to be a year of growth for us - also in terms of earnings. Our order books are very healthy,' concludes Peksaglam.

The company expects revenue for 2017 to range between EUR 1.40 and EUR 1.45 billion (corresponds to revenue growth of between 3 and 7 percent relative to the previous year) and the EBIT margin to rise to between 7.5 and 8.5 percent (2016: 6.5 percent). For 2017, the Group has earmarked around EUR 120 million in total for investments (2016: EUR 107 million).

Table: Revenue and earnings