The Wacker Neuson Group says that its financial performance continues to develop positively in the third quarter of 2021. The revenue for the third quarter was 18.1% higher than for the same period in 2020, reaching €461.4 million compared with €390.8 million for the same period in 2020. Meanwhile, the EBIT has almost doubled at €44.7 million, compared with €22.8 million for the same period in 2020.
However,material shortages and the resulting interruptions to production curbed growth although the group largely managed to avoid extended production shutdowns. Profit before interest and tax (EBIT) almost doubled and the EBIT margin reached 9.7%, compared with 5.8% for the same period in 2020.
“The third quarter was a successful but also very difficult three months for us. Supply chain strains and repeated disruptions were major challenges for our teams, suppliers and business partners – and there are still no signs of easing. Our enormous efforts have paid off, however, and I would like to thank everyone who has contributed to this strong result,” commented Dr Karl Tragl, CEO of the Wacker Neuson Group.
Group revenue for the first nine months of the year amounted to €1.3897 billion, a rise of 17% over the €1.1875 billion achieved for the first nine months in 2020. The EBIT for the first nine months increased to €144.8 million while the EBIT margin is reported at 10.4%, compared with €73.2 million at an EBIT margin of 6.2% for the first nine months of 2020.
Business developed well in Europe and the Americas, where the group reported clear double-digit gains for the third quarter respectively. In the Europe segment, which accounts for 79% of the group total, saw revenue for the third quarter rise 16.8% to €362.2 million, compared with €310 million for the same period in 2020. In the construction sector, sales to Germany, Austria and Switzerland proved robust. Business developed at an even faster pace in the UK and France, where the Group reported major double-digit gains in both markets.
Revenue for the Americas in the third quarter amounted to €84.3 million. This corresponds to a rise of 27.9% over the €65.9 million for the same period in 2020. The group benefitted here from developments including a rebound in the worksite technology product business and significant gains with excavators and wheel loaders. Business in Canada developed well with the group already exceeding pre-pandemic levels. By contrast, business in Asia-Pacific stagnated. Revenue here was on a par with the prior-year quarter at €14.9 million. Although the positive H1 performance in Australia continued into the third quarter, a downturn in the excavator market in China impacted developments in the region.
The sharp increase in EBIT was driven by a rise in sales volume flanked by cost control measures. A rise in prices for raw materials, components and shipping had an increasingly dampening effect over the course of the year. In addition, material shortages and the resulting production disruptions and rework efforts all had a negative impact on productivity.
The group’s strategic goal is to sustainably reduce the net working capital ratio expressed as a percentage of revenue to 30% or lower. Following significant progress in recent quarters, the net working capital ratio was again within the target range at the close of the nine-month. Inventory levels of finished machines decreased sharply. Conversely, levels of unfinished machines more than doubled since the start of the year as a result of overstretched and repeatedly interrupted supply chains.
Gearing is reported at 3.8%. Order intake continued to develop in the third quarter. However, with material reserves depleted across the group and its supply chains, the executive board expects increased production downtime in the fourth quarter. In addition, the rising prices for raw materials, components and shipping will have a greater impact than in recent months. Taking into consideration the development of business to date, the prevailing conditions and the opportunities and risks facing the Wacker Neuson Group, the Executive Board has nevertheless recently raised its revenue and earnings guidance for 2021 as a whole. Revenue is now projected in the range between €1.775 and €1.825 billion, while the EBIT margin is expected to lie between 9.3% and 9.7%.
