International light and compact equipment manufacturer Wacker Neuson Group achieved record results for 2014 across most key performance indicators, the company reports.
The group met its increased profit and the revenue forecast, despite challenging market conditions. Group revenue increased 11% to a record €1.28 billion, up from €1.16 billion in 2013 and in line with the company’s forecast.
“Adjusted by currency effects, this corresponds to a growth of 12%,” a company statement said.
Business in Central Europe and North America was comparatively robust while South America was weaker than expected.
“The fact that our business in Europe grew by 12% despite regional weaknesses shows that our strategy is delivering,” said Cem Peksaglam, chief executive of Wacker Neuson SE.
Revenue for the Americas grew by 9%, or 11% when adjusted by currency effects, while revenue in the Asia-Pacific region increased by 8%, also 11% when adjusted by currency effects. All regions achieved double-digit growth relative to the previous year in local currencies, the year-end report noted.
By business segment, compact equipment was again the growth driver, contributing 47% of group revenue. This was 17% more than its contribution to 2013 group sales.
The group said it is seeing new users in the agricultural and construction sectors. “Companies in the gardening and landscaping sectors as well as municipal bodies and other industries are also investing in compact, powerful machines which increase the efficiency of their operations,” said Peksaglam.
The light equipment segment accounted for 32% of revenue, up by 4% from 2013. Revenue in the services segment – which includes service and spare parts – increased by 10% and accounted for 21% of group sales.
Net profit for the period came to €92 million (2013: €61 million). Net earnings per share grew 49% to €1.3 (2013: €0.87) – a record high for the group.
The financial statement said the increase in profitability was due to the “group’s progress in the execution of its strategy, a favorable regional and product mix across the light and compact equipment segments and savings from ongoing cost and process optimisation measures across the group”.
Last year the group relocated production of skid steer loaders from its Austrian plant in Hörsching to an existing plant near Milwaukee, in the US state of Wisconsin for a greater focus on the North American market -- the largest for this product group. “We want to grow fastest outside of Europe and have identified enormous potential here,” said Peksaglam.
“Our long-term goal is to increase the revenue we generate outside of Europe from the current level of 29% to around 40%. This does not mean that we will be neglecting the European market. We still see many opportunities for expanding our business here too.”
To increase sales and distribution of light and compact equipment in emerging markets such as South America and Asia, last year the group established sales affiliates in Peru, Colombia and China.
The group is optimistic for 2015, despite challenging conditions in diverse markets such as Russia, Chile and Brazil. “As long as 2015 does not bring any further economic, financial or currency-related crises, we expect to grow between 9% and 13% in revenue to amount between €1.4 billion and €1.45 billion,” said Peksaglam. “If market expectations regarding the pause in growth in the agricultural business materialise in 2015, we will compensate for this in other segments.”
Earnings before interest and taxes (EBIT) margin is expected to be between 9.5-10.5% in 2015. Around €95 million has been set aside for investments during the year (2014: €90 million).
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