Issue link: http://read.dmtmag.com/i/674548
I DA U N I V E R S A L M ay -J u n e 2 0 1 6 15 TRENDS AND TIDBITS Munich-based construc- tion equipment manufacturer Wacker Neuson reported growth in revenue for fi scal 2015, despite diffi cult market conditions. However, a company state- ment said profi t dipped due to crises in key industries and regions, leading to "a cautious revenue and earnings forecast for 2016." Group revenue was €1.38 billion for 2015, up seven percent on €1.28 billion for 2014. When adjusted to discount currency eff ects, revenue grew by three percent. During the fi rst half of the year, revenue grew 14 percent on the same period 2014. But "the situation declined markedly in the second half of the year, with revenue just 0.7 percent higher than the prior-year level." e continued slump in the raw materials industry negatively impacted key sales markets for the Group in Brazil, Chile, Russia, South Africa, Canada, the U.S. and Australia. " e oil and gas industry is currently facing an existential crisis, and many companies have already been forced to cease operations," said Cem Peksaglam, chief executive of Wacker Neuson. " is is an important sector for us in North America. e crisis has been largely triggered by the squeeze on oil prices, which dropped to a 10-year low, making it impossible for compa- nies to cost-eff ectively extract raw materials in this region." e downturn in the agricul- tural equipment sector le its mark on the compact equip- ment segment. Nevertheless, the compact equipment segment again proved to be the main growth driver in 2015, with revenue increasing by 15 percent. Revenue from light equip- ment was one percent below the prior-year fi gure. When adjusted to discount currency eff ects, it actually contracted by nine percent. In the services segment, which includes the service and spare parts business, revenue grew by four percent. Compact equipment accounted overall for around half of group revenue, light equipment for 30 percent and the services segment for 20 percent. Earnings were negatively impacted by the situation in crisis-hit emerging markets and industries, as well as by increasing pressure on prices and margins. Profi t before interest and tax (EBIT) decreased by 24 percent to €103.6 million. e EBIT margin dropped to 7.5 percent (previous year: €136.2 million; 10.6 percent). However, the group managed to meet its forecast, which it had revised downward in October (revenue: €1.35 billion to €1.40 billion; EBIT margin between seven percent and eight percent). At €171.3 million, profi t before interest, tax, deprecia- tion and amortization (EBITDA) for the period under review fell by 12.7 percent relative to 2014. e EBITDA margin was posted at 12.5 percent (2014: €196.3 million; 15.3 percent). Profi t for the period amounted to €66.2 million (2014: €91.5 million). "In the medium term, we expect to achieve annual cost savings in the double-digit million range as a result of procurement synergies, central- ized logistics processes, a strong focus on lean management and standardization across all areas of the business," said Peksaglam. But the group has earmarked around €100 million for invest- ments in 2016, down from €118 million in 2015. Despite cautious expectations for 2016, the group said it aims to remain on its expansion path. "Unfortunately, the weak growth in Q4 2015 continued into the fi rst weeks of 2016. e agricul- tural and energy sectors are still distressed, and we do not expect this situation to improve perma- nently in the coming months," said Peksaglam. "In North America, we do not expect to see any signifi cant growth impetus until the second half of the year at the earliest due to the oil and gas crisis, which is having a negative impact on the light and compact construc- tion equipment business. In Europe, the picture for 2016 is more positive for us, at least in the construction sector. Current order intake for compact equip- ment is promising here." Revenue for 2016 is expected to be between €1.40 billion and €1.45 billion—between two percent and fi ve percent on 2014. EBIT margin is expected to be between seven percent and eight percent, same as the previous year. ● www.worldhighways.com, 4/16 Wacker Neuson Sees 7% Revenue Growth for 2015, but Remains Cautious Trends continued on page 17