Wacker Neuson Profit Climbs in 2Q

August 21, 2014

Wacker Neuson posted a profit increase in the second quarter of 2014, with revenue remaining at the same level as the previous year, while confirming its forecast for fiscal 2014.

Wacker Neuson reported revenue of €328.4 million for the second quarter of 2014, bringing the group close to the record figure reported for the prior-year period (€329.0 million). Adjusted to discount currency fluctuations, revenue increased by 2 percent.

The company reported a marked increase in earnings compared to the previous year. Profit before interest and tax (EBIT) reached €41.3 million in the second quarter of 2014, an increase of 41 percent compared to the previous year. The group’s EBIT margin thus grew from 8.9 to 12.6 percent, with the EBITDA margin increasing from 13.6 to 17.3 percent.

The first six months of 2014 saw revenue grow by 6 percent on the previous year to €620.0 million. This was a new record high for the group. Adjusted to discount currency fluctuations, Wacker Neuson achieved a 9 percent growth in revenue.

“We were able to further expand our market position in Europe, boosting revenue here by 10 percent,” said Cem Peksaglam, CEO of Wacker Neuson SE. “We also reported growth in North America. However, South America and Asia-Pacific developed below our expectations due to falling demand and currency fluctuations.”

The compact equipment segment proved to be a key growth driver, with revenue increasing 13 percent.

“Business with our Weidemann and Kramer branded equipment also developed well. Our success here arises from the fact that our innovative machines are meeting the need to increase efficiency and productivity in the agricultural sector. Our double-digit increase in revenue from agricultural equipment is further confirmation that we are on the right path with our strategy to diversify into this area,” Peksaglam said.

The light equipment segment posted a 5 percent decrease in revenue due to a drop in demand and currency fluctuations. Adjusted to discount these fluctuations, revenue remained slightly above the previous year’s level. Revenue in the services segment grew by 10 percent.

Profit before interest, tax, depreciation and amortization (EBITDA) grew 33 percent to €93.0 million. This corresponds to an EBITDA margin of 15 percent. EBIT increased by 57 percent to €63.4 million, leading to an improved EBIT margin of 10.2 percent.

“Strong traction from established markets in Europe and North America, plus the momentum from our current strategy path are all set to benefit our business over the current year,” Peksaglam said. “Our order books are full and order intake for compact equipment up to the end of June was 30 percent higher than the same time last year.”

The group is still predicting total revenue for the year of €1.25 to 1.30 billion (2013: €1.16 billion). The EBITDA margin should still be on target at 13 to 14 percent (2013: 13.2 percent) with EBIT expected to lie between 8 and 9 percent (2013: 8.2 percent). The group has earmarked around €85 million (2013: €87 million) for investments in fiscal 2014. €53 million of this has already been invested in the first six months of the year.