Wacker Neuson TH412 telehandler

Munich-based equipment manufacturer Wacker Neuson has reported growth in revenue for fiscal 2015, despite difficult market conditions.

Revenues for 2015 reached EUR1.38 billion (USD1.53 billion), up 7% from 2014. When adjusted to discount currency effects, revenue grew by 3%.

Business performance in 2015 mirrored the high levels of volatility that shaped various industries. During the first half of the year, revenue developed very positively, growing 14% relative to the previous year. However, the situation declined markedly in the second half of the year, with revenue just 0.7% higher than the prior-year level.

The continued slump in the raw materials industry negatively impacted key sales in Brazil, Chile, Russia, South Africa, Canada, the US and Australia.

While revenues rose, profits dropped 24% due to slumps in the emerging markets and industries and increasing pressure on prices and margins. Profit before interest and tax (EBIT) decreased by 24% to EUR103.6 million (USD115 million).

The group is focusing more than ever on strict cost controls, targeted cost optimisation programs and process efficiency gains. "In the medium term, we expect to achieve annual cost savings in the double-digit million range as a result of procurement synergies, centralised logistics processes, a strong focus on lean management and standardisation across all areas of the business," says CEO Cem Peksaglam. "We will also be leveraging our aftermarket business to develop revenue and earnings potential," he adds.

Despite cautious expectations for 2016, the group aims to remain on its expansion path. "Unfortunately, the weak growth in Q4, 2015 continued into the first weeks of 2016. The agricultural and energy sectors are still distressed and we do not expect this situation to improve permanently in the coming months," Peksaglam explains. "In North America, we do not expect to see any significant growth impetus until the second half of the year at the earliest, due to the oil and gas crisis which is having a negative impact on the light and compact construction equipment business. In Europe, the picture for 2016 is more positive for us, at least in the construction sector. Current order intake for compact equipment is promising here."