The latest financial results for 1651 Wacker Neuson reveal strong demand for compact construction machines. The firm has reported revenue in excess of €1 billion for the first nine months of 2015. This marks an increase in business activity compared to the same period last year and a record high for the group. In light of the downturn in key markets in the third quarter, the company revised its forecast for 2015 downwards. However, it still expects to achieve record revenue business levels for 2015.
Group revenue for the first nine months of 2015 rose 8.7% compared to the previous year to reach €1.0174 billion. Revenue was €936.2 million for the same period in 2014.
“Bolstered above all by strong performance over the first six months of the year, this is a good figure in light of the difficult conditions that are affecting the construction equipment industry as a whole,” explained Cem Peksaglam, CEO of Wacker Neuson SE.
Group revenue for Q3 2015 was 1.6% lower than the prior-year figure at €311.0 million as against €316.2 million for 2014. At €107.2 million, revenue from the light equipment segment increased 1.2% however compared with the previous year. When adjusted to discount currency effects, however, this figure was below last year’s figure. Revenue from the compact equipment segment amounted to €136.4 million, a decrease of 5.4%. Revenue for the services segment, which includes the Group’s spare parts business, increased 4.3% relative to the prior-year quarter.
The industries in which the Wacker Neuson Group distributes its products and services can be volatile. The fall in revenue in the third quarter was primarily influenced by external factors and had a negative impact on cost ratios. Profit before interest and tax (EBIT) for the third quarter fell 61.3% to €15.5 million compared with €40.1 million from the previous year. This corresponds to an EBIT margin of 5% compared with 12.7% for the previous year. It should be noted, however, that the prior-year quarter was an unusually strong period for revenue and earnings. Major orders, an advantageous regional and product mix and clearly favorable currency gains positively influenced the Group’s performance here. In contrast, currency gains declined markedly in the third quarter of 2015. “The strong US dollar made exports from our two production sites in the US more expensive. This had a negative effect on our profit levels. Profitability in South America, especially in Brazil, developed unfavorably under the pressure
of the escalating local crises. The sharp depreciation in local currencies in recent months had a clear impact on revenue and earnings,” adds Peksaglam.
EBIT for the first nine months of the year declined 21.5% to €81.2 million compared with €103.5 million in 2014. The EBIT margin amounted to 8% compared with 11.1% in 2014.
The Group says is taking action to counter the current market squeeze. “As part of our day-to-day approach to business, we are firmly committed not only to strict cost control, but also to targeted implementation of cost-optimisation programs and further improvements in the quality and efficiency of processes across all areas of the company.
The Group recently adjusted its forecast for the current year as a result of these latest business developments. It expects Group revenue to amount to between €1.35 and €1.4 billion compared with €1.28 billion in 2014. The EBIT margin meanwhile is expected to range between 7% and 8% compared with 10.6% in 2014. The Group has implemented measures to reduce inventory.
The company plans to announce its forecast for the coming year in March 2016 when it publishes its results for 2015.
Group revenue for the first nine months of 2015 rose 8.7% compared to the previous year to reach €1.0174 billion. Revenue was €936.2 million for the same period in 2014.
“Bolstered above all by strong performance over the first six months of the year, this is a good figure in light of the difficult conditions that are affecting the construction equipment industry as a whole,” explained Cem Peksaglam, CEO of Wacker Neuson SE.
Group revenue for Q3 2015 was 1.6% lower than the prior-year figure at €311.0 million as against €316.2 million for 2014. At €107.2 million, revenue from the light equipment segment increased 1.2% however compared with the previous year. When adjusted to discount currency effects, however, this figure was below last year’s figure. Revenue from the compact equipment segment amounted to €136.4 million, a decrease of 5.4%. Revenue for the services segment, which includes the Group’s spare parts business, increased 4.3% relative to the prior-year quarter.
The industries in which the Wacker Neuson Group distributes its products and services can be volatile. The fall in revenue in the third quarter was primarily influenced by external factors and had a negative impact on cost ratios. Profit before interest and tax (EBIT) for the third quarter fell 61.3% to €15.5 million compared with €40.1 million from the previous year. This corresponds to an EBIT margin of 5% compared with 12.7% for the previous year. It should be noted, however, that the prior-year quarter was an unusually strong period for revenue and earnings. Major orders, an advantageous regional and product mix and clearly favorable currency gains positively influenced the Group’s performance here. In contrast, currency gains declined markedly in the third quarter of 2015. “The strong US dollar made exports from our two production sites in the US more expensive. This had a negative effect on our profit levels. Profitability in South America, especially in Brazil, developed unfavorably under the pressure
of the escalating local crises. The sharp depreciation in local currencies in recent months had a clear impact on revenue and earnings,” adds Peksaglam.
EBIT for the first nine months of the year declined 21.5% to €81.2 million compared with €103.5 million in 2014. The EBIT margin amounted to 8% compared with 11.1% in 2014.
The Group says is taking action to counter the current market squeeze. “As part of our day-to-day approach to business, we are firmly committed not only to strict cost control, but also to targeted implementation of cost-optimisation programs and further improvements in the quality and efficiency of processes across all areas of the company.
The Group recently adjusted its forecast for the current year as a result of these latest business developments. It expects Group revenue to amount to between €1.35 and €1.4 billion compared with €1.28 billion in 2014. The EBIT margin meanwhile is expected to range between 7% and 8% compared with 10.6% in 2014. The Group has implemented measures to reduce inventory.
The company plans to announce its forecast for the coming year in March 2016 when it publishes its results for 2015.
