Wacker Neuson SE: Wacker Neuson remains on expansion path in 2014

Wacker Neuson SE / Key word(s): Final Results/Forecast

31.03.2014 / 07:55

Wacker Neuson remains on expansion path in 2014

(Munich, March 31, 2014) In spite of difficult market conditions, Munich-based light and compact construction equipment manufacturer Wacker Neuson managed to further increase Group revenue and profitability in 2013. Having reached its targets for 2013, Wacker Neuson now aims to remain on this growth path through 2014.

EUR 1.16 billion in revenue
In keeping with its growth strategy, the Group focused on increasing market penetration of light and compact equipment in its core European and US markets, as well as actively developing specific new markets. Group revenue rose 6 percent to EUR 1,159.5 million (2012: EUR 1,091.7 million). These figures were dampened by currency fluctuations. Adjusted to discount these effects, revenue would have risen 8 percent. "We were able to further expand our market position, both in German speaking countries and abroad, even managing to report growth in partly declining markets. This confirms that our strategy is yielding the right results," explains Cem Peksaglam, CEO of Wacker Neuson SE. This growth was powered by all business segments. The Americas region experienced the largest rise in revenue, with an increase of 8 percent on the previous year (adjusted to discount currency fluctuations: 12 percent). The Group's largest market, Europe, also recorded an increase in revenue, with figures 6 percent higher than the previous year. Revenue in the light equipment segment rose by 2 percent compared with the previous year (adjusted to discount currency fluctuations: 6 percent), while the compact equipment segment grew by 12 percent and the services segment (including repair and replacement) by 4 percent. The first quarter of 2013 got off to a weak start due to harsh weather conditions, which had a dampening effect on demand. However, the Group reported a significant rise in both revenue and profit relative to the previous year for each of the subsequent quarters. In Q4 2013, revenue rose 6 percent on Q4 2012 (adjusted to discount currency fluctuations: 10 percent), increasing from EUR 279.1 million to EUR 297.1 million.

Improved profitability
Group profit before interest, tax, depreciation and amortization (EBITDA) rose 8.3 percent to reach EUR 153.4 million. The EBITDA margin also increased to 13.2 percent (2012: EUR 141.7 million; 13.0 percent). Wacker Neuson's success in this area was largely attributable to various, systematic efficiency-focused measures and Group synergies.

Profit before interest and tax (EBIT) increased 12 percent to EUR 94.7 million, corresponding to an EBIT margin of 8.2 percent (2012: EUR 84.9 million; 7.8 percent). At EUR 28 million, Q4 2013 EBIT for the Group was an impressive 79 percent higher than the previous Q4 2012 figure (Q4 2012: EUR 16 million).

The Group's net profit for the year amounted to EUR 61.2 million (2012: EUR 54.1 million). This means that earnings per share are 13 percent higher at EUR 0.87 (2012: EUR 0.77).

Proposal for the appropriation of net profit
In order to give shareholders reasonable participation in the company's success over the past year, the Executive and Supervisory Boards will be proposing a dividend payout of EUR 0.40 per share at the AGM on May 27, 2014 (2012: EUR 0.30). The distribution ratio of approximately 46 percent of Group profit for the period is in line with the Group's long-term dividend policy (2012: 39 percent).

Positive free cash flow
In 2013, cash flow from operating activities rose significantly to EUR 132.6 million
(2012: EUR 13.6 million). This generated a positive free cash flow of EUR 56.7 million (2012: EUR -86.3 million).

Further internationalization
Economic power is rapidly growing in many emerging nations. Here also, rising salary levels are driving a switch to more productive construction equipment and machinery. Infrastructure expansion and improvement projects also offer great business opportunities for Wacker Neuson. "Our long-term aim is to increase the revenue share of markets beyond Europe, which currently account for 29 percent of total revenue. We would like to see this figure rise to around 50 percent. Emerging markets promise great potential ( at the moment they account for around one eighth of our revenue," outlines Peksaglam.

Wacker Neuson is already moving in this direction, as proven by developments in its compact equipment segment. "Our strategy to extend our existing compact sales platform beyond Europe to reach international markets is already paying dividends. Here we achieved compact revenue growth outside Europe of 40 percent in 2013," Peksaglam continues. The Group sees particular potential in emerging markets in South America and South-East Asia, as well as in China, Russia and Turkey.

Strategy based on sustainable growth
"We intend to continue to benefit from megatrends and expect global population growth, increasing urbanization, above-average growth in emerging economies and rising mechanization in construction and agricultural industries to drive demand for our products," says Peksaglam. At Wacker Neuson, sustainable profitable growth also involves measuring and managing soft factors that will secure the Group's success in the long term. To ensure this, the Group has started establishing a professional sustainability management system. Wacker Neuson will be deploying environmental and energy management systems at its various sites in the coming years. This will allow the Group to collect and evaluate data (for example, energy efficiency values) and implement suitable measures for improvement. The Group will be publishing its first sustainability brochure called "Thinking ahead. Sustainability at the Wacker Neuson Group." together with the 2013 annual report. It plans to release its first Group-wide sustainability report in 2015.

Further revenue growth expected in 2014
Wacker Neuson remains optimistic for 2014. "If the positive trends recorded in the first few weeks and months continue throughout the year, we can expect revenue to reach between EUR 1,250 and 1,300 million, with an EBITDA margin of 13 to 14 percent," states Peksaglam. The EBIT margin is expected to lie between 8 and 9 percent. These figures are not adjusted to discount currency fluctuations. For fiscal 2014, Wacker Neuson has earmarked around EUR 85 million in total for investments (2013: EUR 87 million).

Table: Revenue and earnings

in EUR million
EBITDA margin as a %14.3%11.2%+3.1 PP13.2%13.0%+0.2 PP
EBIT margin as a %9.4%5.6%+3.8 PP8.2%7.8%+0.4 PP

Your contact partner:
Wacker Neuson SE
Katrin Yvonne Neuffer
Head of Corporate Communication /
Investor Relations
Preussenstrasse 41
80809 Munich, Germany
Phone: +49-(0)89-35402-173

About Wacker Neuson: The Wacker Neuson Group is a leading manufacturer of light and compact equipment with over 40 affiliates, 140 sales and service stations and more than 12,000 sales and service partners across the globe. The Group can trace its roots back to 1848. Wacker Neuson is the partner of choice among professional users in construction, gardening, landscaping and agriculture, as well as among municipal bodies and companies in industries such as recycling and energy. It also offers a global spare parts service. The Wacker Neuson Group includes the product brands Wacker Neuson, Kramer and Weidemann. In 2013, the Group achieved revenue of EUR 1.16 billion and employed over 4,100 people worldwide.

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