Wacker Neuson posts double-digit growth despite economic slowdown

Wacker Neuson, a leading light and compact equipment manufacturer, remains on course for strong growth despite increasing signs of a general economic slowdown.
November 10, 2023
Wacker Neuson is on course for strong full-year growth after an impressive first nine months of trading. Pic: Wacker Neuson
Wacker Neuson is on course for strong full-year growth after an impressive first nine months of trading. Pic: Wacker Neuson

The German group’s revenue in the first nine months increased by 22.7% year-on-year to €2,013.9mn (2022: €1,641mn). At EUR 240.4 million, earnings before interest and taxes (EBIT) again showed eye-catching growth of 66.3% to €240.4mn (2022: €144.6mn). Wacker Neuson’s EBIT margin after nine months stood at 11.9%.

Looking at the third quarter separately, the EBIT margin declined in line with expectations to 9.8% (Q3 2022: 10%). The decline in EBIT margin over the year, which is in line with expectations, is mainly attributable to the extraordinary earnings effects already published in the first two quarters of 2023 from the disposal of non-current assets no longer required for operations (around €15mn) and the sale of intangible assets (around €11mn), as well as the emerging economic slowdown.

"Following exceptional revenue and earnings growth in the previous fiscal year and also in the first half of the year, the economic slowdown we anticipated is now materialising in a weakening of demand," explains Dr. Karl Tragl, CEO of Wacker Neuson Group. "As it is currently impossible to estimate the duration and depth of the slowdown, it presents a particular challenge to adapt our production, purchasing and sales to the rapidly changing market conditions."

As in previous quarters, Wacker Neuson’s core markets in Europe and North America were characterised by significant double-digit growth, although a slowdown in momentum accompanied this. In the Europe (EMEA) region, revenue increased by 21.2%  to €1,506.1mn (2022: €1,242.2mn). Overall, the third quarter saw a noticeable cooling of the pace of growth in all submarkets in the region compared to previous quarters. On the product side, demand continued, particularly for wheel loaders and telehandlers. Momentum also weakened the attractive market for compact equipment for the agricultural sector under the Kramer and Weidemann brands. However, overall revenue in the Agriculture segment continued to rise significantly by 51.4% to €481.5mn (2022: €318mn).

The Americas region continued to show increased growth momentum compared to the European markets over the first nine months. Revenue in the region rose by 34.2% to €447.1mn (2022: €333.1mn). Although growth thus remained well into double digits, this sales region also showed weaker development momentum in the third quarter. The decline of the US dollar against the euro had an additional dampening effect in the third quarter. Nevertheless, demand in the North American market remains good across all sales channels, particularly for construction site equipment and excavators.

In Asia-Pacific, revenue declined 7.6% to €60.7mn in the first nine months (2022: €65.7mn). This mainly accounts for the markets of China and Southeast Asia. In the Australian market, which showed a strong development in demand in the first half of the year, the economic environment also dampened in the third quarter. Exchange rate effects also, says Wacker Neuson, contributed significantly to the decline in revenue in the third quarter. Adjusted for foreign exchange, the region's revenue was almost level with the previous year.

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