Wacker Neuson remains optimistic despite first quarter fall

Wacker Neuson’s first quarter revenues fell by 6.2% to €257.1 million with the company blaming weakness in the European economy and poor weather, which delayed some projects. Profits were down 62.5% to €6.4 million.

Europe remains Wacker Neuson’s biggest market, representing 70% of its business, and revenues here fell by 8%. Sales were down 2% in the Americas and up 2% in Asia Pacific.

The Munich based company said it expected business conditions to improve over the rest of the year following and its revenues and profit targets for the year are unchanged. Wacker’s strong performance in the first quarter of 2012 also made it a difficult for year-on-year comparisons.

Revenue from the light equipment and compact equipment segments fell by 8% and 9%, respectively, while revenues from after sales service, rental (in Central Europe) and used equipment rose by 3%.

“Ongoing financial problems across Europe are making it difficult to plan construction projects and making our customers reticent to invest,” said Cem Peksaglam, CEO of Wacker Neuson. “Business in the US also developed below our expectations in the first quarter of the year. However, we are confident that things will pick up over the course of the year.”

Wacker said a long winter delayed the start of the construction season in the northern hemisphere, while some customers delayed investments until the bauma show in April.

“The weak first quarter of 2013 shows just how volatile our industry has become”, added Mr Peksaglam, “In 2012, we saw revenue rise by 29% whereas this year, we have seen revenue fall. We have to make our production processes even more flexible and leverage synergies more actively across all areas of the Group to absorb these extreme fluctuations more effectively.

“Europe is a very diverse market, varying dramatically from region to region. This is something that all players – from manufacturers through dealers to customers – have to deal with. The overall positive mood at bauma together with developments in recent weeks give us every reason to be optimistic about the remainder of the year.”

The overall forecast for the year remains unchanged, with revenue expected to increase to around €1.2 billion, from €1091 million in 2012, and for the EBITDA margin to exceed 13.0%. EBITYDA margin in the first quarter was 9.7%.