26.10.2015

Slower quarter for Wacker Neuson

German telehandler manufacturer Wacker Neuson has reported a tough third quarter but remains on target for a record year

Total revenues for the nine months was just over €1 billion 8.7 percent up on last year –or four percent if currency factors are taken out. The company has yet to publish its full quarterly report, but Profit before Interest and Tax was €81.2 million, down 21.5 percent on last year.

In the third quarter total revenues were €311 million 1.6 percent lower than in the same period last year- 4.4 percent at constant currency exchange rates. Profit before Tax and Interest fell 61 percent to €15.5 million.

Looking at the third quarter breakdown, Europe was four percent lower at €220 million, the Americas were up by more than three percent to €79.2 million, but actually fell over seven percent in local currencies, due to the weakness of the Euro against the dollar). Sales in Asia Pacific jumped 22.6 percent to €11.4 million.

Sales of Compact Equipment, which includes telehandlers fell by more than five percent to €136.4 million, while Light Equipment edged up 1.2 percent to €107.2 million entirely due to currency factors.

In spite of the slower quarter, the company still expects to reach record revenue levels for the year as a whole when it achieved €1.28 billion with pre-tax profits of €130 million. It will though struggle to reach last year’s profit level, let alone beat it.

Chief executive Cem Peksaglam said: “Revenue for the first quarter of the year rose by an impressive 11 percent and by an even stronger 16 percent in Q2. This was followed by an unexpectedly pronounced slowdown in demand in the third quarter. Revenue in September fell markedly compared with the previous year. As a result, revenue for the third quarter lies below the same figure for the previous year, which was a strong period for the group. Nevertheless, this is the first year that we have been able to report revenue in excess of €1 billion for the first nine months of the year”.

“During the first half of the year, and in the second quarter in particular, there were signs that many crisis-hit markets were starting to recover. The third quarter, however, showed us just how volatile the situation is at the moment. This trend was especially pronounced in September. It is particularly disappointing that we are now feeling the effects of the crisis in the agricultural sector, compounding weak market performance in construction, raw materials and energy. Demand is falling in emerging and mature economies alike and so we can no longer view these crises as being restricted to specific regions”.

“We do not believe that we will be able to fully compensate for market downturns during the fourth quarter. This has led us to revise our revenue and profit forecasts. Our performance in recent years, however, shows that Wacker Neuson remains ideally positioned, both strategically and operationally, to master current and also future market challenges.”

Vertikal Comment

While these numbers reflect the challenges most other manufacturers faced in the third quarter, it has to be remembered that we are comparing this year’s profit numbers with an exceptional result last year, when profits jumped almost 55 percent. The company is still doing very well indeed and is well placed to continue to grow after this current pause.

The company’s telehandlers are beginning to generate some very positive feedback from customers, while the current line is still limited. This gives the company tremendous upside potential from the launch of larger models, not to mention the potential to increase its geographic coverage.