Full recovery for Wacker Neuson
German telehandler and light equipment manufacturer Wacker Neuson has seen sales and profits rebound to pre-covid levels and better.
Revenues for the six months to the end of June was €928.3 million, an increase of 16.5 percent, with sales increasing substantially in all regions but particularly in Europe and Asia/Pacific. The Compact Equipment division - which includes telehandlers - saw sales increase 20 percent to €529.9 million, accounting for 57 percent of total sales.
Geographically, European sales increased 17 percent to €737.1 million, the Americas increased by 10 percent to €158.4 million and Asia Pacific grow by 50 percent to €32.8 million. Pre-tax profits for the half year were €97 million, two and a half times what it was a year ago. Net debt was cut by 35 percent to €79.4 million.
Moving on to the second quarter, total sales increased 28.1 percent to €494.3 million, with sales of compact equipment rising 36 percent to €288.3 million - 48 percent of the total. European revenues were €387.9 million, up 27 percent on the year, sales in the Americas improved 35 percent to €90.1 million, while Asia Pacific came in 13 percent higher at €16.3 million. Pre tax profits increased by a factor of 2.6 times to €53.3 million.
Chief executive Karl Tragl said: “The first half of the year was a success, but not easy. We are back in growth mode and have seen a rise in profitability plus strong cash generation. Demand for our products is developing dynamically but recent weeks have seen our supply chains severely overstretched, and in some cases, interrupted. This situation presents us with major productivity and delivery challenges. We would like to thank our entire team, who are working extremely hard every day to get as many machines as possible onto our production lines and delivered to our customers.”
“The situation with global supply chains will remain our biggest challenge for the foreseeable future. We need to maximize production flexibility, so we miss as few manufacturing windows as possible but are increasingly reaching the limits of what is feasible here. In addition to this, we are facing ever-rising prices for raw materials, components and shipping. We expect these developments to have a greater impact on revenue and earnings in the second half of the year. We are, however, delighted to see such strong demand for our products and services as this shows us, once again, that we are meeting our customers’ needs.”
Another bright set of results as the recovery from 2020 gathers pace, but yet another that highlights the very real challenges of component and raw material supply. This is almost certainly a pattern that will continue with maybe one or two exceptions such as Liebherr and JCB that produce many of their own components - although they will still be subject to raw material shortages and shipping challenges.
It seems that for the next six months or more the big challenge will shift from sales and distribution to supply chain management. Not to mention relationships with key suppliers. He who manages this aspect best will be king - at least for a while - how things change.
Back to Wacker Neuson though, the business has performed very well in recent years, but still has many opportunities to grow within several market sectors. Its telehandlers for example have a sparkling reputation - where they are sold - but the product line is small and geographic market penetration somewhat limited. The telehandler market is a tough one in which to expand market share, but the company has done well where it has good representation in the increasingly competitive compact sector. So who knows how well it might do with a broader range and greater active coverage?
Wacker Neuson also has a new chief executive in the form of Karl Tragl
who took over in June, and a new chief financial officer in Christoph Burkhard
. The two take up the baton in a good position, but they will have a fair few challenges to deal with in a changing environment.
All in all though, another excellent set of numbers.