15.11.2013

Wacker hits new record

Austrian telehandler and compact equipment manufacturer Wacker Neuson has reported a strong third quarter

Total revenues for the nine months were up 6.1 percent at €862.4 million a new record for the company. Revenues climbed sharpest in Europe – up seven percent and the Americas – up just under six percent, while Asia/Pacific slipped over 10 percent thanks to slower sales in China, Australia and New Zealand. Pre-tax profits fell 3.9 percent to €61.4 million.

Looking at the third quarter revenues were €276.3 million 8.6 percent higher than a year ago, with Europe up 12.8 percent, Americas up 3.3 percent and Asia –Pacific down 28 percent. Pre-tax profits jumped 35.2 percent to €24.6 million.

The company says that it anticipates full year revenues of around €1.2 billion – around 10 percent higher than for 2012.

Chief executive Cem Peksaglam said: “When viewed against negative trends in certain markets, we can be satisfied with this growth. We reported a 13 percent rise in revenue in Europe alone in the third quarter and were able to expand our market share, in many cases in markets that were actually contracting”.

“We are taking targeted measures to expand our presence in Europe and the Americas and are also broadening our industry focus. In addition to our core business, we are expanding our reach in other markets. This is the right path forward for the group, as demonstrated by the 21 percent rise in compact equipment revenue relative to the previous year. The services segment reported a seven percent increase on the previous year. Revenue from the light equipment segment fell by two percent in Q3. The light equipment business was particularly hard hit by currency fluctuations. When adjusted to discount currency fluctuations, revenue generated by this segment increased by five percent.”

Vertikal Comment

This is a good set of results from the Austrian producer, but most importantly it reflects how important it is to maintain a strong focus on ones ‘home’ market and not to get too carried away with all the hype about emerging markets. Yes it is important to be building a strong base in places like China and South America, but if you are an American or a European producer it is essential that you maintain a strong base at home.

A number of companies are in danger of a gold rush mentality of investing too high a proportion of their resources on these new markets to the point of appearing to neglect, or at least take for granted the very markets that fund these excursions. They do so at their peril.