Record high for Wacker Neuson
By Thomas Allen09 August 2018
Revenue is reported to have reached a record high for Wacker Neuson in the first half of 2018.
The Germany-based light and compact equipment manufacturer’s results for the period showed that revenue rose by 8% to €825 million, compared to €764 million in the first half of 2017. Adjusted for currency effects, this corresponds to an increase of 12%.
Wacker Neuson attributed this growth primarily to continued high levels of demand in the construction market, as well as strong a performance in the European agricultural sector.
In Europe in particular – the company’s largest sales market, accounting for 73% of the group’s revenue – revenue for the first half of the year was up 8% to €599 million, compared to €556 million in the equivalent period of 2017.
Martin Lehner, CEO of Wacker Neuson, said, “Our strong performance in this region was fueled by a buoyant construction market, positive development of our Kramer and Weidemann brands in the agricultural sector and growth in our services segment, which includes our maintenance and spare parts business.”
In the Americas, revenue rose by 9% to €202 million, from the €185 million recorded in the first half of 2017. However, when adjusted for currency effects, revenue rose by 21%, showing that the weak US dollar had a particularly strong impact in this region.
It was said that a high level of investment activity among rental chains in North America and strong sales of compact equipment had a positive effect on business.
Revenue in the Asia-Pacific region also grew by 4% to €24 million, compared to €23 million in the same period of last year. Production has now started at the company’s new factory in Pinghu, China.
The positive developments in revenue were accompanied by a significant rise in profitability. EBIT (earnings before interest and tax) improved by 28% to €78 million, compared to €61 million in the first half of last year. The EBIT margin stood at 9.5%, up from 8% in the same period of 2017.
Profitability was said to have been positively impacted by a combination of rising revenue, strict cost control measures and improvements to internal processes. However, material prices had a dampening effect, as did material bottlenecks among suppliers, which caused disruption to workflows at production facilities.
The financial results were also helped by the sale of a real-estate company held by the group, which generated a profit before tax of €5.4 million. The industrial property that was sold was no longer required following the construction of the group’s new R&D (research and development) centre for light equipment in Reichertshofen, Germany.
In light of the positive results, Wacker Neuson confirmed its guidance for the fiscal year 2018.
Lehner said, “Due to the current healthy situation on international construction and agricultural markets, our most important target markets are intact and our order books are well filled.”