Wacker Neuson Expects Further Growth and Increased Returns in 2011

In 2010, the economic upturn in Europe and the Americas revived key target markets for Wacker Neuson: construction and — as the year progressed — also agriculture. The group benefited from an increase in demand for light and compact equipment. Customer investments were fueled by the need to replace existing equipment and by government-funded infrastructure programs. 

All business segments developed positively in 2010, resulting in group revenue of EUR 757.9 million for the period, a 27 percent rise on the previous year’s figure of EUR 597.0 million. Above-average growth in the fourth quarter played a key role. At EUR 206.3 million, Q4 revenue was 34 percent up on the same quarter the previous year (EUR 154.2 million). This was primarily driven by a significant leap in revenue from compact equipment plus steady, strong demand for light equipment, which is an early mover in economic cycles. Profit before interest, tax, depreciation and amortization (EBITDA) amounted to EUR 77.8 million (previous year: EUR 27.2 million). The EBITDA margin was 10.3 percent, compared with 4.6 percent in the previous year.

“Our strong performance in 2010 enabled us to exceed our own forecasts,” explains Richard Mayer, spokesperson for the Executive Board of Wacker Neuson SE. “It also shows that we took the right approach during the economic crisis by setting our sights on the upswing and adjusting our costs structures flexibly, but not at all costs. This enabled us to keep employee expertise in the company — and we are now reaping the benefits of this as business picks up. Looking forward, I also believe that this will help us achieve above-average earnings growth.”

Impact of the Earthquake in Japan
The devastating repercussions from the earthquake in Japan could affect some of the company’s suppliers in this region in the short term. This, in turn, could lead to production delays at Wacker Neuson. “We will continue to closely monitor the situation among our suppliers in the region. However, we do know that our suppliers’ facilities in Japan are not directly affected,” states Günther Binder.

Optimistic Outlook for the Current Fiscal Year
The Executive Board remains committed to its forecast for 2011. “Our solid order backlog for compact equipment, which at December 31, 2010, was over 350 percent up on the same date last year, plus dynamic trends in the first weeks of the current year, give us every reason to expect positive business growth in 2011. We anticipate that revenue will rise by at least 15 percent and our EBITDA margin will reach at least 12 percent. Our forecast, however, is qualified by the assumption that the situation in Japan does not deteriorate,” outlines Richard Mayer.

Investments in Profitable Growth through 2013
Over the current fiscal year, the group intends to invest around EUR 100.0 million in total in property, plant and equipment, including a new production facility in Hörsching (near Linz), Austria. A continued rise in demand for compact equipment would most likely push the existing plant in Linz — the Austrian competence center for excavators, dumpers and skid steer loaders — to its capacity limits.

The Group’s strong financial position will enable it to implement its strategies and reach its goals of further growth — at an international level in particular. The Group plans to return to its 2007 pre-crisis revenue level by the year 2013. Following the drop in customer investments over the last three years, the group expects the backlog to fuel expenditure in 2011 and 2012 — for rental fleets also. The global trend to expand and improve infrastructure (such as road, rail and telecommunication networks) and building modernization projects offer great opportunities for the company’s business model. In addition, the compact equipment portfolio, especially compact excavators and wheel loaders, is still at the beginning of its market lifecycle worldwide — so the group foresees the greatest growth potential in this segment.

The company will also consider additional acquisitions and partnerships in the medium term to strengthen its product offering, provide added value to its customers or expand its international footprint.