Wacker Neuson feels Q3 squeeze

Manufacturer Wacker Neuson reported record revenues for first nine months of 2015, but said a tough third quarter had reined in its profit expectations for the full-year.

Revenues stood at €1.02 billion for the nine months to the end of September, up 8.7% year-on-year, while earnings before interest and taxes (EBIT) fell 21.5% to €81 million.

For the third quarter, revenues were down 4.4% year-on-year to €311 million, while EBIT sank 61% to €15.5 million.

In Europe, revenues for the first nine months of the year rose 6% compared with the previous year. At 72%, this region accounted for the lion’s share of the manufacturer’s total revenues.

Currency effects had a major impact on performance in the Americas and Asia-Pacific, according to the company. In the Americas, the Wacker Neuson Group reported nominal revenue growth of 15.4% for the nine-month period, but when adjusted to discount currency effects, revenues for this region remained at the same level as the previous year.

Nine-month revenues for the Asia-Pacific region were 22.6% higher than the figure reported last year, but up 12% percent when adjusted for currency effects.

Revenues for the compact equipment segment increased by 14.8% for the nine-month period, while revenues from light equipment increased 3.6%, and services revenues were up 4.3%.

Third quarter dip

Wacker Neuson said revenues and profits in the three months to the end of September were hit by a drop in demand in developing markets, and in markets dependent on raw material prices (for example, Canada, the US, Australia, Chile and South Africa).

CEO Cem Peksaglam said, “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.”

As a result of third quarter developments, Wacker Neuson adjusted its forecast for the full-year. Mr Peksaglam explained, “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.”

The company said it expected full-year revenues to reach between €1.35 billion and €1.40 billion and the EBIT margin to range between 7% and 8%.