Light and compact equipment manufacturer 1651 Wacker Neuson Group saw revenue and earnings for the third quarter of 2016 increase relative to 2015.
The company said that seen over a nine-month period, revenue remained at the prior-year level, balancing out the drop in earnings experienced during the first half of the year only partly.
Despite adverse market factors, including ongoing crises in many emerging markets and key industries such as the agricultural sector, the oil and gas industry and mining, group revenue for the third quarter of 2016 rose 2 % relative to the previous year to reach €315.7 million (Q3/2015: €311.0 million).
Adjusted to discount currency effects, this corresponds to an increase of 3%.
Revenue in the core market of Europe increased by 9% in the third quarter this year. This was driven primarily by stable demand from the construction sector in German-speaking countries as well as in France, Denmark, Sweden and the Benelux countries.
In contrast, revenue in the Americas decreased by 15%. “In North America, demand for new equipment is being dampened by high inventory levels among dealers and rental chains plus large volumes of used equipment circulating on the market at low prices,” the company said.
Despite growth in China, the group experienced falling demand in Australia and New Zealand. Revenue decreased by 23% in the Asia-Pacific region.
Earnings before interest and tax (EBIT) for the third quarter of 2016 increased 25% to €19.3 million (Q3/2015: €15.5 million). The EBIT margin rose to 6.1% (Q3/2015: 55). At €12 million, profit for the period was higher than in the previous year (Q3/2015: €8.5 million).
At the close of the first nine months of the year, group revenue was €1,013.5 million (9months/2015: €1,017.4 million).
During the year the group established new production sites in Brazil and, in future, will do so in China. It consolidated different spare parts services at its compact equipment production facilities in Europe to create a central warehouse in Nuremberg and also merged its R&D centre for light equipment from Munich with a production site in Reichertshofen. The group also launched an eCommerce platform.
However, “levels of uncertainty and volatility remain high in our markets”, said chief executive Cem Peksaglam. “Business in North and South America, which account for 21% of our group revenue, developed below our expectations as did markets in Australia and Africa. However, we expect Europe to remain a robust sales region overall.”
The company expects revenue and earnings for fiscal 2016 to come in at the lower end of its published forecast – between €1,375 million and €1,425 million; EBIT margin between 6.5-7.5%. It has earmarked around €120 million in total for investments for fiscal 2016 (2015: €118 million).
The company said that seen over a nine-month period, revenue remained at the prior-year level, balancing out the drop in earnings experienced during the first half of the year only partly.
Despite adverse market factors, including ongoing crises in many emerging markets and key industries such as the agricultural sector, the oil and gas industry and mining, group revenue for the third quarter of 2016 rose 2 % relative to the previous year to reach €315.7 million (Q3/2015: €311.0 million).
Adjusted to discount currency effects, this corresponds to an increase of 3%.
Revenue in the core market of Europe increased by 9% in the third quarter this year. This was driven primarily by stable demand from the construction sector in German-speaking countries as well as in France, Denmark, Sweden and the Benelux countries.
In contrast, revenue in the Americas decreased by 15%. “In North America, demand for new equipment is being dampened by high inventory levels among dealers and rental chains plus large volumes of used equipment circulating on the market at low prices,” the company said.
Despite growth in China, the group experienced falling demand in Australia and New Zealand. Revenue decreased by 23% in the Asia-Pacific region.
Earnings before interest and tax (EBIT) for the third quarter of 2016 increased 25% to €19.3 million (Q3/2015: €15.5 million). The EBIT margin rose to 6.1% (Q3/2015: 55). At €12 million, profit for the period was higher than in the previous year (Q3/2015: €8.5 million).
At the close of the first nine months of the year, group revenue was €1,013.5 million (9months/2015: €1,017.4 million).
During the year the group established new production sites in Brazil and, in future, will do so in China. It consolidated different spare parts services at its compact equipment production facilities in Europe to create a central warehouse in Nuremberg and also merged its R&D centre for light equipment from Munich with a production site in Reichertshofen. The group also launched an eCommerce platform.
However, “levels of uncertainty and volatility remain high in our markets”, said chief executive Cem Peksaglam. “Business in North and South America, which account for 21% of our group revenue, developed below our expectations as did markets in Australia and Africa. However, we expect Europe to remain a robust sales region overall.”
The company expects revenue and earnings for fiscal 2016 to come in at the lower end of its published forecast – between €1,375 million and €1,425 million; EBIT margin between 6.5-7.5%. It has earmarked around €120 million in total for investments for fiscal 2016 (2015: €118 million).
