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Wacker Neuson increases revenue, profits

Wednesday, 15 Aug 2018 ( #885 ) - Munich, Germany
News Story
The Wacker Neuson Group reported a marked rise in revenue and earnings during the first six months of 2018. Revenue for the first half of 2018 rose 8% percent to a new record high of EUR825 million (USD941.14 million). Adjusted for currency effects, this corresponds to an increase of 12%.

Revenue growth was driven primarily by continued high levels of demand in the construction market and strong performance in the European agricultural sector. Bottlenecks among some suppliers prevented machines from being completed for customer orders and this had a dampening effect. Furthermore, unfavourable currency developments, in particular the US dollar’s weakness against the Euro, resulted in negative translation effects.

In Europe, which is the group’s largest sales market, revenue for the first half of 2018 rose 8% and the region’s share of group revenue remained unchanged at 73%. "Our strong performance in this region was fueled by a buoyant construction market, positive development of our Kramer and Weidemann brands in the agricultural sector, and growth in our services segment which includes our maintenance and spare parts business," explains CEO Martin Lehner.

Revenue for the Americas region rose 9% despite the weak US dollar. When adjusted for currency effects, revenue rose 21%. A high level of investment activity among rental chains in North America and strong sales of compact equipment had a positive effect on business. "Our skid steer loaders manufactured in the US are key products in our compact equipment portfolio, helping us to win more market share in the region with other products such as excavators and dumpers," adds Lehner.

Revenue in the Asia Pacific rose 4%, negatively impacted by the strong Euro which also squeezed growth figures here. Adjusted for currency effects, revenue rose 11%.  

Profit before interest and tax (EBIT) grew by a substantial 28% to reach EUR78 million (USD89 million) in the first half year, resulting from the rise in revenue coupled with strict cost control measures and improvements to internal processes. However, increased material prices had a dampening effect, as did material bottlenecks among suppliers, which disrupted workflows at production facilities. Productivity was also affected by ongoing restructuring initiatives across US production plants and the start of production at the new factory in Pinghu, China.

"Due to the current healthy situation on international construction and agricultural markets, our most important target markets are intact and our order books are well filled," Lehner notes. The company has confirmed its guidance for fiscal 2018 and expects revenue to rise by 8 to 11%. Performance could, however, be affected by "the challenging situation with suppliers and future exchange rate developments, especially in relation to the US dollar".
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