Wacker Neuson SE has exceeded its fiscal 2008 forecasts for sales (at least €870 million — about U.S. $1.17 billion) as well as EBITDA margin after purchase price allocation (at least 11 percent) despite a significant market downturn in the second half of 2008, the company said last week.
The downturn “had a negative impact on light equipment sales, which then extended to compact equipment in the last six months of the year,” Dr. Georg Sick, CEO of Wacker Neuson SE said at the company’s annual report press conference. “We subsequently revised our forecast back in July 2008, and, thanks to our strict cost management strategy, we were still able to exceed this target.”
Sales rose 17.3 percent compared with €742.1 million the previous year, the merger accounting for much of the increase. EBITDA was €100.9 million (about U.S. $135.8 million) compared with 2007 EBITDA of €117 million, a 13.7-percent drop. EBITDA margin was 11.6 percent, compared with 15.8 percent in 2008.
After its first full year as the Wacker Neuson Group, the company said it is pleased with market penetration measures implemented, especially the launch of compact equipment in numerous countries, including the United States, through the company’s global sales network. The company opened a new affiliate in India, internal processes were streamlined, the sales system aligned with national requirements and a wide range of new products were launched.
Numerous cost-saving measures were implemented throughout the group in 2008 to align the company’s cost structure with prevailing market dynamics. “Our consistently high-equity ratio of 77.4 percent and net financial debt of just €59 million puts us in a good position,” said Sick. “We do not envisage financing difficulties.”
Sick said Wacker Neuson will be cautious in 2009 “especially as low demand levels in January and February have been further significantly compounded by the harsh winter,” he said. “Although we have intensified cost-saving measures, we cannot rule out negative quarterly results this year.” He added that Wacker Neuson would cut production capacity about 20 percent this year.
Sick added that the construction industry would not likely feel the benefits of various national action policies aimed at stabilizing economies until the end of 2009.