Wacker Neuson Has High Expectations for 2016 Despite Flat Q1
Wacker Neuson posted group revenue of €316.4 million, compared to €324.3 million in the first quarter of 2015. Adjusted to currency impact, the decrease was 1 percent.
CEO Cem Peksaglam said key markets have been in a state of crisis.
“In North America, the ongoing slump in demand in the raw materials and energy sectors negatively impacted our business, particularly in the worksite technology field,” Peksaglam said. “South America, and Brazil in particular, continues to be hit by political and economic uncertainties and shows no signs of picking up. By contrast, demand was high in the construction sector in central and northern Europe, and southern European countries improved on the previous year’s performance. However, as expected, trade in compact equipment for the agricultural sector remained below the prior-year level. This is due to extremely low prices for foodstuffs, above all, milk.”
Revenue in Europe, which accounts for 72 percent of Wacker Neuson’s revenue, declined 2 percent, while it declined 15 percent in the Americas region, primarily because of the crisis in the oil-and-gas sector. Also, the dollar’s strong rating had a dampening impact on the export of products manufactured in the United States.
However, Wacker Neuson posted strong results in the Asia Pacific region, where revenue nearly doubled.
“Our business is Asia developed very positively, even allowing for the favorable effect of one-off items on first-quarter revenue growth and we expect these to balance out in the course of the year,” Peksaglam said. “Whereas demand for machines is contracting overall in China, the market for our machinery is on a clear growth path.”
The compact equipment segment, which accounts for the largest share of Wacker Neuson revenue – 51 percent -- posted about the same revenue as the previous year. Light equipment, however, decreased 8 percent because of the downturn in the oil and gas sector as well as ongoing crises in some emerging markets.
Peksaglam was bullish about the company’s prospects for 2016, especially in light of its positive reception at the Bauma show in Munich, Germany, last month.
“The current order situation, a positive business trend in Europe, infrastructure programs in Germany, plus the positive mood evident among many national and international customers at the Bauma trade show indicate that business over the rest of the year, in particular the second half of the year, could compensate for a weak start in the first quarter,” he said.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.