American growth keeps Wacker Neuson on track
By Murray Pollok14 August 2012
Wacker Neuson said it remained on track for double digit revenue growth this year, with slowing sales in Europe in the second quarter offset by continued growth in the Americas.
The company also announced that it will combine its compact and light equipment divisions in order to maximise sales synergies. One consequence of this will be the departure in September of Richard Mayer, the long-time Wacker Neuson executive who was responsible for light equipment.
Wacker Neuson reported a 7% increase in sales to €284.2 million for the second quarter, with revenues in the Americas up 23% to €70.3 million. European sales were up just 1.8% to €203.5 million, which compared to growth of 29% in the first quarter of the year. The sales target for the year remains €1.1 billion, up from €991.6 million.
Wacker Neuson said European sales were adversely impacted by lower demand in both construction and agriculture and by the move to the new sub-14 t compact equipment plant in Hörsching, Austria, which delayed deliveries and increased costs. The company said workflows were now returning to normal.
"Demand in the European construction and agricultural industries slowed during the second quarter, which inevitably dampened revenue growth for this region," said Cem Peksaglam, chief executive officer of Wacker Neuson.
"By contrast, strong light and compact equipment sales in the Americas pushed revenue in this region up 23 percent on the previous year's quarter - a result that significantly exceeded our expectations. This development confirms that a broader international footprint enables us to absorb economic fluctuations more effectively."
Pre-tax profit in the second quarter fell by 38.7% to €20.8 million, although profits were stable for the first half of the year at €45.6 million.
Wacker Neuson has meanwhile decided to combine its light and compact product segments "in order to maximize synergies, in particular with regard to international expansion".
As a result, Richard Mayer, who was the member of the executive board responsible for light equipment, is leaving the company on 30 September. Martin Lehner, who is responsible for the compact equipment division, takes on responsibility for light equipment, in addition to his role as deputy CEO.
The manufacturer said it had reached "a mutual, amicable agreement" regarding Mr Mayer's departure.