17.03.2017

Wacker Neuson slips back

German telehandler and compact equipment manufacture Wacker Neuson has reported its full year results with marginally lower revenues and a sharper drop in pre-tax profits.

Total revenues for the year were one percent lower at €1.36 billion, while pre-tax profits dropped 16.5 percent to €81.4 million. Revenues in Europe and the Far East/Asia were higher, while offset by lower sales in North America. The company is however optimistic for the year ahead.

In the fourth quarter revenues fell 2.8 percent to €347.9 million while pre-tax profits fell more than 10 percent to €16.4 million.

Chief executive Cem Peksaglam said: “2016 was a challenging year for the majority of international equipment manufacturers, with companies reporting regional losses in revenue and earnings. We were also unable to escape the difficulties in our markets. Our business in North America was particularly hard hit with revenue from light equipment in the region contracting in particular in 2016. In addition to this, demand for compact equipment in the European agricultural sector was weak. Our core region Europe was our revenue driver in 2016 and we broke the billion Euro revenue threshold for the first time here. This enabled us to keep overall revenue at the same level as the previous year.”

“Despite economic headwinds, we initiated important projects last year to create an even more solid foundation for our future success. We continued to expand our international reach in 2016, by opening a new production plant in Brazil and by starting construction on a production facility in China. We firmly believe that a regional presence – on both the development and production front – is essential to successfully develop these fast-growing markets in the long term.”

“The group also implemented other forward-looking projects, including the consolidation of the spare parts business from all compact equipment plants in Europe at a central warehouse in Nuremberg, the launch of a new e-commerce platform for dealers and end customers, the expansion of the zero-emissions product line and the relocation of the R&D centre for light equipment from Munich to the production site at Reichertshofen. As such, the group was able to strengthen its organisation and performance as a whole to more effectively master the increasing global challenges over the coming years.”

Vertikal Comment

A reasonable result from Wacker Neuson, given the challenges in parts of Asia and North America where it has a strong presence – the German market performed particularly well and it has plenty of scope to improve sales in the rest of Europe by strengthening its distribution and marketing- its telehandler products are excellent - it just needs to spread the word to a wider audience.
Progress in the USA was boosted in recent weeks by a major presence at Conexpo and the stronger dollar will of course help this year along with the proposed infrastructure spending and higher confidence to invest.

All in all things look quite positive for the company.