Rise in Orders Makes Wacker Neuson SE Optimistic for 2010
Wacker Neuson SE is one of the true global manufacturing giants of light and compact equipment. With over 30 affiliates and more than 180 sales and service stations across the globe, the new company offers a unique product portfolio when it comes to small machinery (wheel loaders, mini excavators, site dumpers, compaction equipment and onward).
The company recently noted its optimism in a 2010 blog, now confirming it with equipment orders in the first quarter. Wacker Neuson SE has seen its Q1 revenue and earnings rise significantly over the same period last year. However, the harsh winter in its core region Europe had a negative impact on business. Order intake has nevertheless improved significantly, reflecting the current economic upswing. The group said it has maintained its financial and asset position and confirmed its forecast for fiscal 2010. Yet, development during the first quarter of 2010 was varied across the Wacker Neuson Group.
“Equipment sales and our rental business in Central and Eastern Europe were negatively impacted by the harsh winter in Europe, which is a key region for us. However, the start of the construction season in March brought strong momentum to our business,” states Dr.-Ing. Georg Sick, CEO and President of Wacker Neuson SE.
An upturn in light equipment sales, strong performance in Asia and continued recovery in the United States fuelled a 9.5 percent rise in revenue, which totaled EUR 150.3 million compared to EUR 137.3 million for the same period last year.
“Orders for compact equipment for the construction and agricultural sectors were up around 60 percent on the fourth quarter of 2009,” explained Sick. “However, our prediction that individual suppliers would run into difficulties in the event of an upturn in business also proved accurate. This led to an increase in production costs, which depressed earnings.”
Despite this, profit before interest, tax, depreciation and amortization (EBITDA) rose to EUR 3.7 million (previous year: EUR 12.3 million) and quarterly losses amounted to EUR 5.7 million (previous year: EUR 16.6 million). Overall, the construction industry developed positively during the first quarter of 2010. This trend was reflected at Bauma, the world’s largest construction trade fair.
“The exhibition was a resounding success for the Wacker Neuson Group. Customer feedback on our products was outstanding and the number of contracts we concluded during the fair was up 25 percent on our boom year 2007,” continued Sick.
With an equity ratio of 78.9 percent, the Wacker Neuson Group’s financial and asset position remains very healthy. Fuelled by the improved order situation, working capital amounted to EUR 233.1 million, a rise of 7.0 percent relative to December 31, 2009. As expected, the company’s net cash position, which totaled EUR 24.9 million at December 31, 2009, was turned into a slight net financial debt of EUR 2.0 million. Manpower capacity was increased without incurring additional costs. This was primarily achieved by reducing short-time work at the production facilities in Germany and Austria from around 15 percent (December 31, 2009) to around seven percent.
“We will be ending short-time work measures in May based on the current order situation,” explained Sick.
The Wacker Neuson Group continues to predict that the construction and agricultural markets will remain on growth paths and that this trend will gather pace during the second half of the year.
“We are seeing clear signs of recovery, especially in the United States, which is why we remain committed to launching compact equipment in the U.S. market and establishing a network of exclusive Wacker Neuson dealers,” emphasized Sick. “We will also be expanding this concept to South America and the Middle East.”