Wacker Neuson’s HQ in Munich, Germany
The 1651 Wacker Neuson Group reported a slight drop in revenue and earnings for the first quarter of 2013 compared to the same three months of last year.
The German construction equipment manufacturer says that a weak European economy was one of the main factors that dampened demand for light and compact construction equipment in Q1 2013. In addition, the Group’s strong performance in first quarter of 2012 is said to have resulted in an above-average baseline for comparison.
At US$331.26 million (€257.1mn), Group revenue for the first three months of the year was down 6% on the “unusually strong” prior-year figure (Q1 2012 $353.03 million - €274mn). Revenue from the light equipment and compact equipment segments fell by 8% and 9% respectively. However, the services segment saw revenue rise by 3%.
As in the previous year’s quarter, agricultural machines accounted for around 17% of Group revenue. “Ongoing financial problems across Europe are making it difficult to plan construction projects and making our customers reticent to invest,” said Cem Peksaglam, CEO of Wacker Neuson. “Business in the US also developed below our expectations in the first quarter of the year. However, we are confident that things will pick up over the course of the year.”
A long winter is said by Munich-headquartered Wacker Neuson to have delayed the start of the construction season in the northern hemisphere. In addition, some customers put investments on hold until April [2013] so that they could purchase equipment at or immediately after688 Bauma, the world’s largest construction trade fair.
At around 70%, the Europe region continues to account for the lion’s share of Wacker Neuson revenue. Overall, revenue from Europe was 8% down on Q1 2012. Revenue from the Americas, the Group’s second largest market, fell by just 2%. In the Asia-Pacific region, Wacker Neuson reported a rise in revenue of 2%.
The drop in revenue and one-off items had a negative impact on profit figures. Profit before interest, tax, depreciation and amortization (EBITDA) fell 36.1% in the first three months of the year to €24.8 million. This corresponds to an EBITDA margin of 9.7% (prior-year quarter: €38.8 million; EBITDA margin of 14.2%).
“The weak first quarter of 2013 shows just how volatile our industry has become. In 2012 we saw revenue rise by 29%, whereas this year we have seen revenue fall. We have to make our production processes even more flexible and leverage synergies more actively across all areas of the Group to absorb these extreme fluctuations more effectively,” added Peksaglam.
Wacker Neuson’s product portfolio enjoys international reach. In the past three years alone, the Group has channeled over €300 million into new production facilities, efficient production processes, sales and service capabilities and ground-breaking product innovations. The Group is carving out new growth opportunities by increasing penetration in growth markets, above all South America, Eastern Europe, Africa and Asia. To make the most of this growth potential, it will further tailor its products and services to the conditions and requirements of different regions.
Increasing its presence in established markets such as North America and Europe is another Wacker Neuson focus. The Group says the markets offer growth opportunities even under the current difficult market conditions. “Europe is a very diverse market, varying dramatically from region to region. This is something that all players – from manufacturers through dealers to customers – have to deal with,” explained Peksaglam. “The overall positive mood at bauma, together with developments in recent weeks, gives us every reason to be optimistic about the remainder of the year.”
The overall Wacker Neuson forecast for the year remains unchanged, with revenue expected to increase to around €1.2 billion (2012: €1.091 billion) overall and the EBITDA margin to exceed 13.0% (2012: 13.0%).
The German construction equipment manufacturer says that a weak European economy was one of the main factors that dampened demand for light and compact construction equipment in Q1 2013. In addition, the Group’s strong performance in first quarter of 2012 is said to have resulted in an above-average baseline for comparison.
At US$331.26 million (€257.1mn), Group revenue for the first three months of the year was down 6% on the “unusually strong” prior-year figure (Q1 2012 $353.03 million - €274mn). Revenue from the light equipment and compact equipment segments fell by 8% and 9% respectively. However, the services segment saw revenue rise by 3%.
As in the previous year’s quarter, agricultural machines accounted for around 17% of Group revenue. “Ongoing financial problems across Europe are making it difficult to plan construction projects and making our customers reticent to invest,” said Cem Peksaglam, CEO of Wacker Neuson. “Business in the US also developed below our expectations in the first quarter of the year. However, we are confident that things will pick up over the course of the year.”
A long winter is said by Munich-headquartered Wacker Neuson to have delayed the start of the construction season in the northern hemisphere. In addition, some customers put investments on hold until April [2013] so that they could purchase equipment at or immediately after
At around 70%, the Europe region continues to account for the lion’s share of Wacker Neuson revenue. Overall, revenue from Europe was 8% down on Q1 2012. Revenue from the Americas, the Group’s second largest market, fell by just 2%. In the Asia-Pacific region, Wacker Neuson reported a rise in revenue of 2%.
The drop in revenue and one-off items had a negative impact on profit figures. Profit before interest, tax, depreciation and amortization (EBITDA) fell 36.1% in the first three months of the year to €24.8 million. This corresponds to an EBITDA margin of 9.7% (prior-year quarter: €38.8 million; EBITDA margin of 14.2%).
“The weak first quarter of 2013 shows just how volatile our industry has become. In 2012 we saw revenue rise by 29%, whereas this year we have seen revenue fall. We have to make our production processes even more flexible and leverage synergies more actively across all areas of the Group to absorb these extreme fluctuations more effectively,” added Peksaglam.
Wacker Neuson’s product portfolio enjoys international reach. In the past three years alone, the Group has channeled over €300 million into new production facilities, efficient production processes, sales and service capabilities and ground-breaking product innovations. The Group is carving out new growth opportunities by increasing penetration in growth markets, above all South America, Eastern Europe, Africa and Asia. To make the most of this growth potential, it will further tailor its products and services to the conditions and requirements of different regions.
Increasing its presence in established markets such as North America and Europe is another Wacker Neuson focus. The Group says the markets offer growth opportunities even under the current difficult market conditions. “Europe is a very diverse market, varying dramatically from region to region. This is something that all players – from manufacturers through dealers to customers – have to deal with,” explained Peksaglam. “The overall positive mood at bauma, together with developments in recent weeks, gives us every reason to be optimistic about the remainder of the year.”
The overall Wacker Neuson forecast for the year remains unchanged, with revenue expected to increase to around €1.2 billion (2012: €1.091 billion) overall and the EBITDA margin to exceed 13.0% (2012: 13.0%).
