Wacker Neuson reported €1.38 billion (about U.S. $1.53) in revenue for 2015 compared to €1.28 billion in 2014, a 7-percent revenue jump, despite difficult market conditions.
Business performance in 2015 mirrored the high levels of volatility that shaped various industries, the company said. During the first half of the year, revenue developed positively, growing 14 percent year over year. However, conditions declined in the second half of the year, with revenue only 0.7 percent higher than in the second half of 2014.
The continuing slump in the raw materials industry negatively impacted key sales markets for the Munich-based manufacturer in Brazil, Chile, Russia, South Africa, Canada, the United States and Austria.
“The oil-and-gas industry is currently facing an existential crisis and many companies have already been forced to cease operations,” said Cem Peksaglam, CEO of Wacker Neuson SE. “This is an important sector for us in North America. The crisis has been largely triggered by the squeeze on oil prices, which dropped to a 10-year low, making it impossible for companies to cost-effectively extract raw materials in this region.”
The compact equipment segment was the primary growth driver in 2015 for Wacker Neuson, with revenue increasing 15 percent in this segment. Revenue from light equipment was 1 percent down year over year. When adjusted to discount currency effects, the contraction was 9 percent. In the services segment, including service and spare parts, revenue increased 4 percent. Compact equipment accounted for around 50 percent of group revenue, with light equipment 30 percent and the service segment for 20 percent.
Earnings were negatively impacted by crises in emerging markets and industries. Earnings before interest and taxes (EBIT) dropped 24 percent to €103.6 million, with the EBIT margin declining 7.5 percent year over year. However, Wacker Neuson did meet its forecast, which had been revised downward in October to €1.35 billion to €1.40 billion in revenue, with an EBIT margin of 7 to 8 percent.
EBITDA was €171.3 million, a 12.7-percent year-over-year slide.
Wacker Neuson has cautious expectations for 2016 although it continues to have expansion plans. “Unfortunately, the weak growth in Q4 2015 continued into the first weeks of 2016,” said Peksaglam. “The agricultural and energy sectors are still distressed and we do not expect this situation to improve permanently in the coming months. 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 aa 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.”
The group expects 2016 revenue of between €1.40 and €1.45 billion, between 2 and 5 percent higher year over year, with a similar EBIT range. The company plans to invest about €100 million, slightly less than in 2015.
Wacker Neuson will be showcasing numerous new products at Bauma in Munich including alternative drive technologies, including zero-emissions products such as a new electric track dumper and an electric wheel loader from Kramer.
