Wacker Neuson profits jump
By Helen Wright12 August 2011
A surge in global demand for compact and light construction equipment drove a 35% year-on-year increase in first half revenues at German manufacturer Wacker Neuson to €478.7 million.
First half profits jumped to €31.5 million, compared to €5.2 million in the first six months of 2010, while in the second quarter, the company's revenue and earnings before interest, tax, depreciation and amortization (EBITDA) grew 30% and 69% respectively - the highest figures since the 2007 merger between Wacker Construction Equipment and Neuson Kramer Baumaschinen.
The compact equipment segment proved a major growth driver throughout the first half, generating revenue of €202.4 million, an increase of 61.5% on the previous year. Revenue in the light equipment segment was up 26% year-on-year at €183.7 million during the first six months of 2011.
Wacker Neuson pointed to favourable weather conditions in the US and Europe, which brought an early start to the construction season in these regions. The April to June season is also traditionally a high point in the construction season cycle, with demand for equipment accelerating in the summer months.
The company increased its full-year 2011 forecast on the back of the results and now expects revenue to total between €910 million and €930 million, compared to the previous forecast of €880 million to €920 million.
CFO Günther Binder said, "The first half-year is typically our strongest period. However, all signs remain positive for the second half of the year. Even if economic growth cools in our core markets, we expect demand for our products to remain high, bolstered in part by our sales strategies." He added that the company aimed to generate at least €1 billion in revenue in 2012.
And Wacker Neuson is also expanding its production facilities. Construction of a new factory in Hörshing, Austria, began on 8 June this year. The €65 million compact equipment production facility will have 50,000m2 of space and is set to be in operation by mid-2012.
Meanwhile, the company also said that deputy chairman of the supervisory board Dr Ulrich Wacker had stepped down due to health reasons. Dr Wacker, who was at the head of Wacker Construction Equipment for over 30 years before the 2007 merger, was described as the primary driving force behind the expansion of the group and its brand.
Dr Mattias Bruse, founding partner of German law firm Pöllath & Partners, has been appointed to replace Dr Wacker on the supervisory board for the interim period until the next annual general meeting.