The Wacker Neuson Group successfully started 2018 in the first quarter with sales growth of over nine percent to EUR 371 million (Q1 / 17: EUR 339 million).
Sales increased in all regions and business areas. The main drivers were the sustained high demand from the European and North American construction industry and the good development of the Weidemann and Kramer brands in agriculture. Adjusted for currency effects, the sales increase was even 14 percent over the previous year. Negative currency developments, particularly the weakness of the US dollar against the euro, led to translation effects of EUR -16 million on sales.
The currently tense situation of some suppliers is a challenge for manufacturers of construction and agricultural machinery. Delivery bottlenecks on the supplier side lead to delays in delivery to customers.
In Europe, where the group does the largest share of its business with 72 percent, sales rose by eight percent in the first quarter of 2018 to EUR 268 million (Q1 / 17: EUR 248 million). Sales growth in the Americas region was even stronger than in Europe: With an increase of 13 percent, sales increased to 92 million euros (Q1 / 17: 81 million euros). Adjusted for currency effects, the increase was 29 percent. “In the USA, we benefited, among other things, from the high investment activity of the rental chains in the field of construction site technology, including generators and heaters, and from the good sales of our compact loaders produced in the USA,” explains Martin Lehner, CEO of Wacker Neuson SE. In the Asia-Pacific region, sales increased by 16 percent to eleven million euros (Q1 / 17: 10 million euros). Adjusted for currency effects, the increase was 26 percent. China in particular developed strongly, where the group started series production of mini excavators in January 2018.
Earnings significantly higher than last year
Earnings before interest and taxes (EBIT) rose significantly in the first quarter by 61 percent to EUR 23 million (Q1 / 17: EUR 14 million), which corresponds to an EBIT margin of 6.2 percent (Q1 / 17: 4, 2 percent). While the increased sales and the improved cost structure had a positive impact on earnings, an unfavorable mix of products and regions and delays in production had a dampening effect on earnings.
Price adjustments for construction equipment and compact machines
Increased raw material prices, personnel and transport expenses as well as new requirements for machines with regard to environmental and health protection have increased the costs for the group. As the company strives to offer the usual product and service quality at fair prices, the Group will raise sales prices across all product areas and Group brands from July 1, 2018. Due to ongoing optimization of internal processes, only part of the cost increases are passed on to customers.
Financing of the “Strategy 2022” secured
Wacker Neuson established the medium-term financing of the group at the end of March 2018. “In addition to the successful placement of a promissory note loan of US $ 100 million in the USA, we have agreed medium-term lines of credit with a total of EUR 75 million with three banks, thereby securing the growth strategy 2022,” said CFO Wilfried Trepels.
Forecast for 2018 confirmed
“In April we presented many new products and market innovations to our customers and business partners at this year’s largest construction machinery trade fair, INTERMAT in Paris. The mood in the industry is very positive, ”explains Martin Lehner. Wacker Neuson caused a sensation with its new electric excavators and vibratory plates, with which the company completes its range of emission-free products for urban construction sites. With the range of the “zero emission line”, Wacker Neuson is the first manufacturer worldwide to offer a complete product range so that it can process an entire small construction site with zero emissions and reduced noise. The company confirms its forecast for the 2018 financial year and expects an increase in sales of eight to eleven Percent to EUR 1.65 to 1.70 billion (2017: EUR 1.53 billion) and an EBIT margin in the range of 9.0 to 10.0 percent. However, it remains to be seen how the situation in the supplier industry will change and the currency rates – especially the US dollar – will develop.
For the upcoming general meeting of the company on May 30, 2018 in Munich, the Management Board and the Supervisory Board propose a dividend of EUR 0.60 per share, which corresponds to an increase of ten cents compared to the previous year.