Wacker Neuson SE — Annual Report 2008

Apr 2, 2009

Markets in motion. Strategy in place.

Annual Report 2008

Key fi gures

	20 08	20 07 2	Ch an ge
Sa les	1 87 0.3	74 2. 1	.3% 17
EB ITD A	10 0.9	11 7.0	- 1 3. 7%
EB IT	58 .0	78 .9	- 2 6.5 %
Pr ofi t f th iod or e p er	37 .4	54 .1	- 3 0.9 %
Nu mb of plo er em ye es	3, 66 5	3,6 59	0. 2%

1 With PPA

2 Including Q4 Neuson Kramer subgroup

Forecast exceeded. With sales totaling EUR 870.3 million (forecast: EUR 870 million) and an EBITDA margin of 11.6 percent (forecast: 11 percent), Wacker Neuson has exceeded its targets for fi scal 2008. This 17.3 percent rise in sales was primarily fuelled by the company's merger; profi t for the period is a more realistic indi cation of overall market trends.

For further information on key fi gures refer to pages 2-3.

Highlights 2008

Construction industry

During the course of 2008, we were able to further consolidate the market position of our Wacker Neuson and Kramer Allrad brands and successfully launch a number of new products worldwide. We particularly focused our efforts here on introducing compact equipment via our global sales and service network. However, the pronoun ced downturn in the global economy also had a negative impact on national construction industries in 2008, in particular in the US and Europe. As a result, 2008 also saw us implement various action plans to row against the crisis.

Agriculture

2008 was a good year for the European agricultural industry. Experts predict that the world population will continue to grow, fuelling increased demand for food and the need for larger holdings, which was good news for the agricultural industry – and for the Wacker Neuson Group.

Around 10 percent of Group sales were generated in the agricultural sector mainly with our Weidemann-brand products.

Wacker Neuson Magazine

The 2008 Annual Report is accompanied by the fi rst issue of our Wacker Neuson Magazine. Aimed at investors, customers, business partners – in fact anyone interested in fi nding out more about the company, this publication will give readers a regular and inter esting look behind the scenes at Wacker Neuson.

This issue gives you the low-down on the benefi ts of our high-quality products, reports on how Wacker Neuson bundles competencies to make the most of the synergies created by the merger, and looks at how we have aligned cost-saving measures with environ mental protection.

If you would like to receive a copy of the magazine by post or e-mail, simply drop us a line at: magazine@wackerneuson.com

To our Shareholders

• Figures at a glance | 2
• Management | 4
• Foreword by Management | 5
• Special report: Sound strategy for times of crisis | 8
• Report by Supervisory Board | 10
  • Corporate Governance | 16
  • Investor Relations | 23
    • Group Structure | 28
• Group Management Report | 29
• Consolidated Financial Statements | 70

Further Information

• Glossaries | 124
• Additional tables | 128
• Publishing Details/Financial Calendar | 130

Our business segments

Light Equipment	Compact Equipment	Services
With the business fi elds:	With the product groups:	With the business fi elds:
Concrete technology Soil and asphalt compaction Demolition Utility	Track and mobile excavators Wheel loaders Telehandlers Skid-steer loaders Dumpers	Service Rental (Central and Eastern Europe)1 1 In countries where we are not in direct competition with our key accounts.

Figures at a glance 2008

Wacker Neuson Group at December 31

in € million	2008	2007	2006
	with PPA1	including Q4
	(without PPA)	Neuson Kramer
Key fi gures
Sales	870.3	742.1	619.3
by region
Europe	676.2	520.7	391.1
Americas	166.9	196.1	205
Asia	27.2	25.3	23.2
by business segment2
Light Equipment	329.3	405.3	388.3
Compact Equipment	353.7	178.2	87.5
Services	187.3	158.6	143.5
EBITDA (without PPA)	100.9 (102.2)	117.0 (119.6)	100.2
Depreciation and amortization (without PPA)	43.0 (38.1)	38.1	23.6
EBIT (without PPA)	58.0 (64.1)	78.9 (90.4)	76.7
EBT	55.7	78.2	76.2
Profi t for the period (without PPA)	37.4 (a41.9)	54.1 (62.0)	48.5
Number of employees	3,665	3,659	2,837
Share
Earnings per share in €	0.53	1.10	1.19
Dividends per share in €	0.193	0.50	0.62
Key profi t fi gures
Gross profi t in %	33.7	38.1	41.3
EBITDA margin as a % (without PPA)	11.6 (11.7)	15.8 (16.1)	16.2
EBIT margin as a % (without PPA)	6.7 (7.4)	10.6 (12.2)	12.4
Key fi gures from the balance sheet
Property, plant and equipment	750.0	697.0	229.2
Current assets	428.6	517.5	245.8
Equity	911.8	912.7	282.4
Net fi nancial debt	59.0	- 43.1	45.1
Liabilities	266.8	301.8	192.6
Equity ratio as a %	77.4	75.2	59.5
Working capital	303.9	273.2	158.6
Cash fl ow
Cash fl ow from operating activities	31.1	55.0	49.1
Cash fl ow from investing activities	- 9.5	- 141.8	- 41.6
Cash fl ow from fi nancing activities	- 21.9	96.4	- 23.0
Free cash fl ow	23.4	62.1	22.6

PPA = Purchase price allocation. Purchase price allocation describes the process where purchase costs resulting from acquisitions

are allocated to individually acquired assets, liabilities and contingent liabilities, which are measured at fair value.

Consolidated sales after discounts

Dividend payment proposed at the AGM on May 28, 2009.

Additional information1

in € million	2008	2008	2008	2007	2007
					pro-forma
	without PPA2	PPA	with PPA	with PPA3	with PPA4
Sales	870.3	–	870.3	742.1	979.5
EBITDA	102.2	1.3	100.9	117.0	157.4
EBITDA margin as a %	11.7	–	11.6	15.8	16.1
EBIT	64.1	6.1	58.0	78.9	112.6
EBIT margin as a %	7.4	–	6.7	10.6	11.5
Profi t for the period	41.9	4.5	37.4	54.1	75.0

You will fi nd more information in the tables on pages 128-129.

PPA = Purchase price allocation. Purchase price allocation describes the process where purchase costs resulting from acquisitions are

allocated to individually acquired assets, liabilities and contingent liabilities, which are measured at fair value.

Including Q4 Neuson Kramer subgroup (start of consolidation: October 1, 2007).

4 Pro-forma fi gures: as if Wacker and Neuson Kramer subgroup had been consolidated for the entirety of fi scal 2007.

Effects from consolidation1

in € million	Jan. 1– Dec. 31, 2008	Factors effecting earnings1	PPA2	Jan. 1– Dec. 31, 2008
	Wacker Neuson with PPA			Wacker Neuson adjusted
EBITDA	100.9	15.4	1.3	117.6
thereof Neuson Kramer consolidation effects	–	15.1	1.3	117.3
EBITDA margin as a %	11.6	–	–	–
EBIT	58.0	14.0	6.1	78.1
EBIT margin as a %	6.7	–	–	–
Profi t for the period	37.4	10.82	4.5	52.7

Mainly proceeds from the sale of equipment that would normally have accrued to the company had the products been sold to third parties, but which were not realized. The reason was that these products were channeled into rental and demo fl eets as part of our investment policy to stock our fl eets with compact machines from our own production facilities.

Dividend payments made within the Group were not included.

Sales distribution

by region

in % (previous year)

Multi-year comparison sales in € million

870.3		2008
742.1		2007
619.3		2006
503.2		2005
411.2		2004
361.9		2003

For additional multi-year comparison data refer to page 129.

Wacker Neuson Management

"In times of crisis, we never lose sight of our core values. Busy times lie ahead – once investment bottlenecks start to clear worldwide. And when they do, we will be ready."

Dr.-Ing. Georg Sick, CEO and President. Member of Group management/the Executive Board since 1994. Legal matters, corporate communication, quality management and internal audit.

"We are currently launching compact equipment in the US. This portfolio puts our exclusive dealers in an excellent position to capitalize on positive momentum when markets recover."

Martin Lehner, Deputy CEO since October 2007. Responsible for the Compact Equipment business segment. Previously member of Group management/CEO at Neuson Kramer.

"More and more global dealers are keen to exclusively distribute our broad product portfolio – from electric breakers to 14-ton excavators. Demand for quality, competence and fl exibility is higher than ever."

Werner Schwind, Member of the Executive Board. Member of Group management/the Executive Board since 1993. Responsible for sales, rental, logistics, service and marketing.

"We have always focused on product and service quality as key value drivers for our customers. We will continue to build on these success factors – even in times of crisis."

Dipl.-Kfm. Richard Mayer, Member of the Executive Board. Member of Group management/the Executive Board since 1998. Responsible for the Light Equipment business segment.

"Securing liquidity is crucial in the current economic crisis. Our high equity ratio helps us achieve this. We aim to fund day-to-day operations with cash fl ow from operating activities."

Mag. Günther C. Binder, Member of the Executive Board since October 2007. Responsible for fi nance and IT. Previously member of Group management/CFO at Neuson Kramer.

Dear Ladies and Gentlemen,

2008 was the fi rst full fi scal year for the Wacker Neuson Group following the merger in 2007. We made solid progress in integrating the two companies over the past year. This was most evident to me in the excellent company-wide collaboration and the successful synchronization of business processes overall. The structural results thus far and the positive feedback we received from our customers confi rm the Executive Board's conviction that the merger was the right strategic move, helping to secure the long-term substance and success of our new organization.

Unfortunately, the fruits of our efforts to date have been overshadowed by the current economic crisis. The turbulence was predicted at an early stage by the capital market, and this quickly pulled down our share price in line with our peers. However, we are determined not to let current developments dampen our spirits. The response to the merger has been resoundingly positive among our customers, partners and employees. We remain as determined as ever to streng then the Group and make sure we are ideally poised to capitalize on the inevitable upswing, bolstered by the unique depth of our product portfolio. Despite the turbulence, we retained our strict focus on measures aimed at driving market penetration over the past year. Here we concentrated mainly on the worldwide launch of compact equipment acquired through the merger by means of our existing sales and service network.

To achieve this, we intensifi ed communication with our customers and partners, stepped up employee training and invested in our demo and rental fl eets. We largely stocked our rental fl eet in particular with compact machines from our own production facilities. We did this knowing that it would come at the expense of the short-term profi ts realized through external sales. So although the proceeds are spread over a four to six-year period, these rental investments nonetheless are another important milestone in the move to extend the market reach of our compact class. We were particularly successful in expanding the rental business in Central and Eastern Europe, especially in countries where we are not in direct competition with our key accounts.

To all intents and purposes, it was business as usual during the fi rst half of 2008. Predictably, light equipment sales were below the previous year's fi gure due to the credit crunch in the US. At the same time, it was a very different story for compact equipment. Still largely concentrated in Europe, this segment experienced dynamic growth. Looking back, I can now say that I am glad that we nonetheless began to gear the company for a rapid slowdown – also in this segment – mid-way through 2008.

Back in July, we revised our targets. We reduced projected sales to at least EUR 870 million and EBITDA margin (profi t before interest, tax, depreciation and amortization) following purchase price allocation to at least 11 percent. With an actual sales fi gure of EUR 870.3 million and an EBITDA margin of 11.6 percent, we managed to exceed these goals. Given that we were also on target the previous fi scal year, I hope that our performance during the year under review will fur ther strengthen confi dence in a company that is still a relative newcomer to the capital market.

At the start of the second half-year, Wacker Neuson quickly introduced various effi ciency measures to improve our cost structure and strengthen our fi nancial and earnings position. This included a hiring freeze, reassessment of current projects and investment plans, and can cel lation of numerous benefi ts and activities within the company. Unfortunately, we were none the less forced to close our production plant in Tredegar, Wales, UK and relocate wheel dumper production to our Linz site in Austria. At the start of the new fi scal year, we fi led the paperwork for short-time work to secure as many jobs as possible at our German sites in Reichertshofen and Pfullendorf as well as in Linz.

It was with great regret that we let our staff in Wales go. By the same token, many of our employ ees in Germany and Austria have also had to contend with a drop in earnings as a result of short-time work and other cost-cutting measures. However, we did not power down our research and development activities or our sales force. During the course of 2009, we plan to launch several new products as planned. On behalf of the Executive Board, I would like to thank all of our employees for their extraordinary solidarity and loyalty to the company. We also appreciate the personal stake they took in ensuring the success of the merger.

The experts agree that the long-term prospects for the international construction industry are good. Short term, however, they are dampened by the overall economic downturn, which is also impacting the international construction industry. In view of the current dramatic downward sales spiral, we are extremely cautious about the current fi scal year and are not issuing any sales and earnings forecasts at this stage.

We are in a position to meet our liquidity needs through a combination of our own liquid assets and the credit lines extended to Wacker Neuson by credit institutes. At present, we have drawn less than half of these lines. Given the uncertainty surrounding business prospects for 2009, maintaining liquidity is ultimately a priority for the company. This has also effected our dividend proposal. At the AGM in May 2009, we will propose a dividend of EUR 0.19 per eligible share which amounts to a payout of 32 percent of net earnings before purchase price allocation.

As the global economic climate is creating a massive backlog of infrastructure projects, we can expect a highly dynamic upswing for our business when the economy settles. In our view, the infrastructure programs initiated by numerous governments to break the investment deadlock will have an energizing effect on our markets, however in 2010 at the earliest.

What I can say for certain is that our company has learned how to manage crisis situations on both a national and international scale over the past decades. The following chapters will tell you how we have responded to times of crisis and what strategies have proven successful. Even if none of the crunches we faced in the past involved such a dramatic drop in sales, past experience still guides us in these turbulent markets, helping us to make the right decisions and keep our sights fi rmly set on the turnaround. If the signifi cant cost saving measures implemented so far are not suffi cient, and we are not even ruling out quarterly losses, we will need to consider further reaching options. However, we have to make sure to maintain employee loyalty and to be prepared for the upswing after the crisis.

Our high equity ratio of 77.4 percent, coupled with our comparably low net fi nancial dept of EUR 59.0 million, puts us in an ideal position to capitalize on the opportunities that nonetheless present themselves at a time like this. I refer, for example, to the growing service business or sales of our compact equipment for the agricultural industry. When the construction industry does pick up across the globe, we will be ready for action.

Dr.-Ing. Georg Sick CEO and President

Keeping a cool head in a crisis

The construction industry has always been characterized by peaks and troughs. And so we are no strangers to crises, especially with a company history stretching back to 1848. It has always been our policy to meet these challenges head on and row against the tide rather than simply reacting to prevailing conditions. This strategy has enabled us to set a successful course in the past, strengthen our competitive edge and enhance customer value to come out the other side of a crisis in an even stronger position.

Our ability to remain focused on our core success factors has seen us ride out the most turbulent of storms:

• 1. Best-in-class product and service quality
• 2. Proximity to customers
• 3. Flexible production processes
• 4. Sound fi nancial position
• 5. Global expansion

Our success is also built on strong brand awareness among end users plus a broad product portfolio offering maximum customer choice. Our ability to row against the tide has enabled us to win market shares in times of crisis.

Positive market development compared with previous year

1. High quality and a strong brand

Times of crisis usually lead to increased competition and rising pressure to reduce prices. However, we have only made minimal concessions to our pricing policy. And we have achieved this by continually focusing on best-in-class quality. Our customers have always been able to rely on our high-quality product portfolio, which we have continually expanded through customer-driven, innovative product launches.

2. Proximity to customers and unique service offering

We have always focused on strengthening our market presence, and getting closer to end customers and dealers alike. While many of our competitors have reduced their reach, we have been widening our sales network. After all, maintaining consistently high levels of service quality is crucial, especially when it comes to spare parts and maintenance. During the 1990s, we expanded our services segment to include the rental (Central and Eastern Europe) business fi eld. Since then, our direct sales model allows

At Wacker Neuson, we have established fl exible production processes that enable us to react quickly to market needs. Our concept of fl exibility also extends to employee training, ensuring our people have the skills to perform a wide range of tasks. As a result, we can avoid stock build-up – even if

4. Sound fi nancial position

Our fi nancial stability is built on two pillars: a high equity ratio and the ability to avoid unnecessary risks despite our proactive strategy. Even in times of crisis, we can continue to invest more than the amount of deprecation and amortization. This solid foundation is further bolstered by our strong sense of cost awareness – shared by all employees throughout the company.

5. Global expansion

We have been continually expanding our global footprint to reach new markets. Building on an early presence in the US and Asia dating back to the 1950s, we have since estab lished over 30 new affi liates across the globe. In 2005, our acquisition of the company Weidemann saw us enter the European agricultural industry.

1 Wacker Neuson sales compared with previous year

2 German construction equipment industry sales compared with previous year (source: German Engineering Federation, VDMA)

Report by Supervisory Board

Dear Ladies and Gentlemen,

Hans Neunteufel

Chairman

Center stage at the start of 2008 was the business of preparing resolutions to transform Wacker Neuson into a European company (SE) and change its name to Wacker Neuson SE. The second half of the year, however, was increasingly dominated by the global fi nancial crisis and its impact on our business. Yet despite this development, we were still able to increase sales and remain profi table. We would like to thank our employees in particular for this achievement. Their dedication and active sense of responsibility was a great support to company management over the year.

Cooperation between Supervisory and Executive Boards

In the period under review, the Supervisory Board performed the tasks assigned to it by law and the Articles of Incorporation and was satisfi ed that the company was properly managed (Corporate Governance). Furthermore, the Supervisory Board regularly advised the Executive Board on the management of the company and supervised management activities. It maintained continuous dialog with the Executive Board regarding business development and corporate strategy and was directly involved in all major decisions regarding the company.

In the run-up to and during its meetings, the Supervisory Board was brought up to date on business developments, changes in assets/liabilities, profi t and fi nances, fundamental issues regarding company planning, company strategy and other key measures by means of detailed written and verbal reports from the Executive Board. These reports were not only discussed in depth by the Supervisory Board during Supervisory Board meetings, they were also discussed with the Executive Board. Particular emphasis was placed on the company's strategic orientation during these joint discussions. Based on reports and information provided by the Executive Board, the Supervisory Board is satisfi ed that the company was properly managed.

Members of the Executive Board regularly took part in Supervisory Board meetings. When necessary, the committees also convened without the Executive Board. Once again, all Supervisory Board members attended more than half of the Supervisory Board Meetings in fi scal 2008.

Furthermore, the Executive Board provided the Supervisory Board with regular, comprehensive and timely information between meetings about current business trends as well as special or urgent projects. This information was made available in writing and also in person. Where neces sary, the Executive Board requested approval from the Supervisory Board for suggested courses of action. Together with the Executive Board, the Supervisory Board discussed and

examined in detail proposals that required Supervisory Board ratifi cation. The Supervisory Board voted on resolutions of this kind during scheduled meetings. In addition, the Executive Board submitted monthly reports on key fi nancial and economic fi gures. In instances where the Executive Board, or the CEO in particular, was not in direct communication with the Chairman of the Supervisory Board, the Chairman of the Supervisory Board maintained regular contact with the Executive Board, ensuring a continuous fl ow of information regarding the current business and fi nancial situation of the company and its holdings as well as major business transactions.

Main topics of Supervisory Board meetings in fi scal 2008

Throughout fi scal 2008, eight Supervisory Board meetings, four Audit Committee and three Presiding Committee meetings allowed the Supervisory Board to form a sound view of the work and policies of the Executive Board.

During these meetings, the Supervisory Board regularly focused on current business development of the Wacker Neuson Group and plans drawn up by Executive Board. Particular emphasis was placed on the fi nancial situation as well as the development of sales, costs and earnings. During the relevant meetings, any questions from the Supervisory Board that arose from the regular written and verbal reports were answered in full by the Executive Board. Supervisory Board meetings focused on the following items in particular:

At the meetings held on February 11, 2008 and March 4, 2008, the Supervisory Board focused its discussions on the legal transition of Wacker Construction Equipment AG to Wacker Neuson SE.

Following relevant preparations carried out by the Audit Committee, the Supervisory Board undertook a thorough examination of the Annual Financial Statements, the Consolidated Financial Statements and the Management Reports for Wacker Construction Equipment AG and the Group for fi scal 2007 in the Supervisory Board meeting to approve the fi nancial statements on April 7, 2008. In addition to the regular examinations performed in the run-up to this meeting, Supervisory Board members also raised numerous questions with the auditor present at the meeting and discussed these issues with him in detail. The Supervisory Board also ratifi ed the AGM agenda at this meeting.

In its meetings held on June 3, 2008 and July 4, 2008, the Supervisory Board focused its deliberations on the construction of the new headquarters in Munich (Germany) as well as the purchase of a tract of land and the possible construction of a new plant in Hörsching (Austria). Company- and Group-wide cost-cutting and restructuring measures were the main points on the agenda at the September 24, 2008 and November 6, 2008 meetings. Here, the Supervisory Board approved the closure of the manufacturing plant in Wales (UK) and the relocation of production to the Linz site in Austria. At the November 6, 2008 meeting, the Supervisory Board also dealt with publication of the forthcoming interim fi nancial report (quarterly report).

During its meeting on December 19, 2008, the Supervisory Board examined the business plan for fi scal 2009. Board members not only assessed the plan, but also discussed the associated opportunities and risks in detail with the Executive Board against the backdrop of the worsening general global economic situation.

The Supervisory Board also examined each of the monthly reports. During numerous meetings, it also addressed various planned acquisitions aimed at expanding the product portfolio, and assessed the Group sales strategy.

Changes in the composition of the executive bodies

During the period under review, there were no changes to the composition of the Supervisory and Executive Boards. On June 3, 2008, the AGM agreed to change the company's name and legal form to Wacker Neuson SE. This change came into effect after the end of the period under review, upon entry of the new company in the Register of Companies (Handelsregister) on February 18, 2009. The composition of Wacker Neuson SE's executive bodies is identical to that of Wacker Construction Equipment AG. The composition of the Supervisory Board committees also remains unchanged, as do the positions CEO and Chairman of the Supervisory Board.

Work performed by the Supervisory Board committees in fi scal 2008

The two Supervisory Board committees (the Presiding and Audit Committees) also continued their work during the period under review, thus helping the entire Supervisory Board to work more effi ciently.

The Audit Committee is made up of members of the Supervisory Board. During the February 10, 2008 and March 31, 2008 meetings, the Audit Committee prepared the Supervisory Board's resolution on the adoption of the Annual Financial Statements and the approval of the Consolidated Financial Statements for the year ending December 31, 2007. During its June 3, 2008 and August 11, 2008 meetings, the Audit Committee addressed general issues relating to risk management, compliance, auditing and internal auditing. The Presiding Committee dealt with

general matters regarding the Executive Board as well as human resources issues during its meetings. The chairmen of the committees reported on the work performed by the committees during the Supervisory Board's plenary meetings.

Risk assessment and compliance

The Supervisory Board is satisfi ed that the company's risk management policy meets the require ments set down in the German law on control and transparency in business (KonTraG), insurable risks are suffi ciently insured and operational, fi nancial and contractual risks are suffi ciently controlled by approval procedures and organizational processes. A detailed risk report ing system is in place throughout the Group and it is continuously maintained and further developed. The risk management system was also examined by the appointed auditing company, which confi rmed that the Executive Board had met the requirements of Section 91 (2) of the German Stock Corporation Law (AktG) and established a suitable early warning system capable of monitoring and identifying developments that could pose a threat to the company's continued existence as a going concern. During Supervisory Board meetings and personal conversations, the Executive Board informed the Supervisory Board of the current risk situation. The Supervisory and Executive Boards discussed all areas deemed to be risks during these sessions. The Audit Committee addressed compliance issues.

Corporate Governance

Both the Supervisory and Executive Boards are aware that good corporate governance is essential to protect shareholder interests and secure the company's long-term success. The Supervisory Board continuously monitored the further development of the German Corporate Governance Code and kept up to date with the capital market and corporate legislative framework. On March 23, 2009, the Executive and Supervisory Boards issued a new joint declaration of compliance with the German Corporate Governance Code pursuant to Section 161 AktG. The entire declaration has been made permanently available on the Company's website and is also printed in the annual report.

Annual and Consolidated Financial Statements for 2008

At the AGM on June 3, 2008, the auditing company Rölfs WP Partner AG, based in Munich, Germany, was appointed auditor for the company and Group for fi scal 2008. The Chairman of the Audit Committee commissioned the company in writing with the task of auditing the accounting standards. Before the Supervisory Board made its proposal to the AGM, the auditing company confi rmed its independence in writing to the Chairman of the Audit Committee.

The Annual Financial Statements for the year ending December 31, 2008 were prepared by the Executive Board in accordance with the German Commercial Code (HGB). The Consolidated Financial Statements for the year ending December 31, 2008 were also prepared by the Executive Board in line with IFRS as adopted in the EU and the additional requirements pursuant to Section 315a HGB. The auditing company Rölfs WP Partner AG has audited both sets of statements along with the books and approved them without qualifi cation.

Each member of the Supervisory Board received the audit documents for appraisal in a timely manner. Together with the Audit Committee, the entire Supervisory Board undertook a thorough examination of the Annual Financial Statements as well as the Consolidated Financial Statements, the Management Reports and the related party disclosures in conjunction with the audit reports. The documents were discussed in detail at the Audit Committee meeting on March 23, 2009 and at the Supervisory Board plenary meeting, also on March 23, 2009, with the Executive Board and in the presence of the auditors, who reported the main fi ndings of their audit and answered questions from Supervisory Board members. After its own close examination of the documents, the Supervisory Board raised no objections and endorses the results of the audit report. The Supervisory Board also approves the Management Reports and, in particular, the forecast regarding the company's further development.

The fi nal examination by the Supervisory Board revealed no grounds for objections. The Super visory Board has therefore endorsed the Annual Financial Statements, the Consolidated Financial Statements, the Management Report and Group Management Report prepared by the Exe cutive Board for the year ending December 31, 2008. The Annual Financial Statements have thus been duly approved.

The Supervisory Board also examined the Executive Board's suggested appropriation of profi t for fi scal 2008. It did not raise any objections and thus gives it its unqualifi ed consent.

Examination of the Executive Board report regarding relations with related entities (related party disclosures)

The Executive Board prepared a report on related party disclosures for fi scal 2008. This report contains in particular a declaration by the Executive Board about the legal transactions undertaken by Wacker Neuson SE (formerly: Wacker Construction Equipment AG). The Executive Board states that – to the best of its knowledge and based on the information known to the Executive Board at the time the transactions were entered into – that appropriate compensation was received in respect of all transactions outlined in the related party disclosures report. Audi ting company Rölfs WP Partner AG examined the related parted disclosures report and issued the following auditor's opinion:

"Based on our professional examination and evaluation, we confi rm that

1. the factual statements contained in the report are correct, and

2. the performance provided by the company in respect of the transactions listed in the report was not unreasonably high."

The Audit Committee and the entire Supervisory Board received the Executive Board's report on related party disclosures in a timely manner. The contents of the report and the assessment thereof by the auditors were read and understood by these bodies, and both documents and their results were examined and discussed with the Executive Board and the auditors. The Super visory Board endorses the auditor's assessment of the related party disclosures report. Based on the fi nal results of the discussions and its own examination of the related party disclosures, the Supervisory Board regards the Executive Board's conclusions to be true and accurate and has no objection to the closing statement by the Executive Board.

The turbulent global economic situation in no way inhibited the great personal dedication shown by management and all employees of the Wacker Neuson Group. On the contrary, the commitment, dedication and performance of our workforce – both on a day-to-day basis and under exceptional circumstances - were crucial factors behind the company's continued positive devel op ment during the period under review. The Supervisory Board would like to thank all employees and the Executive Board for their efforts here.

Munich, March 2009

Supervisory Board

Hans Neunteufel Chairman

Corporate Governance

Corporate Governance takes high priority at Wacker Neuson. Our Executive and Supervisory Boards see it as their responsibility to comply with principles ensuring responsible, professional and transparent company management, as stipulated in the German Corporate Governance Code. Our activities are geared towards secu ring our company's long-term success and increasing its value. Trust is a crucial element of our corporate culture – both between managers and staff and between the Executive and Supervisory Boards.

Role of executive bodies

The company's executive bodies are the Executive and Supervisory Boards and the AGM. The Executive Board represents the company to third parties and manages its companies in accor dance with legal regulations, the Articles of Incorporation and the rules of procedure for the Exe cutive Board. The Supervisory Board advises the Executive Board, monitors its activities and participates in key decisions.

Executive Board

The Executive Board currently comprises fi ve members. It is responsible for managing the company and represents it both legally and otherwise. The Executive Board develops the com pany's strategic orientation in collaboration with the Supervisory Board and ensures it is appro priately implemented. It is also responsible for establishing the company's business plan for the coming year and beyond as well as establishing legally required reports such as annual fi nancial statements, consolidated fi nancial statements and interim reports. In addition, the Exe cutive Board also ensures that a suitable risk control and management policy is in place and that regular, prompt and extensive reports are made to the Supervisory Board regarding all relevant issues relating to strategy, company planning, business developments, the risk situation and risk management.

The Executive Board's duties and areas of responsibility is governed by the rules of procedure for the Executive Board. Measures and transactions of fundamental importance are communicated to shareholders and the capital market in a timely manner, thus ensuring that decisionmaking processes remain transparent – also throughout the year – and capital market players are kept suffi ciently up to date. Major transactions must be approved by the Supervisory Board.

The Executive Board generally reaches decisions through resolution with a simple majority. Dr.-Ing. Georg Sick is Chairman of the Executive Board and Martin Lehner Deputy Chairman.

Supervisory Board

The Supervisory Board itself has six members. In accordance with the German One-Third Participation Act (Drittelbeteiligungsgesetz), four of these are shareholder representatives and two are employee representatives.

The Executive and Supervisory Boards' working relationship is based on a sense of mutual trust and the two bodies work closely together to ensure a sustainable increase in the company's value. The core areas of collaboration between the Executive and Supervisory Boards are detailed in the report by the Supervisory Board, which is part of this annual report (see page 10ff.).

Clear and transparent procedures and structures are an integral part of the monitoring and control processes defi ned in the rules of procedure for the Supervisory Board. The Supervisory Board has defi ned the Executive Board's reporting duties in further detail. The rules of procedure for the Supervisory Board, last amended in February 2009, refl ect the recommendations of the German Corporate Governance Code for Supervisory Boards.

Confl icts of interest between Executive and Supervisory Board members must be reported immediately to the Supervisory Board. No confl icts of this kind occurred.

The Supervisory Board has formed two committees. The responsibilities of the Presiding Committee particularly include submitting proposals for Executive Board appointments, terminations and mandate extensions; concluding, amending and terminating contracts with Executive Board members; and preparing meetings and handling ongoing business. The Presiding Committee members are Hans Neunteufel, Dr. Ulrich Wacker and Dr. Eberhard Kollmar. The Chairman of the Supervisory Board, Hans Neunteufel, also chairs the Presiding Committee. Intensive committee work

The Audit Committee appoints auditors to review the Annual and Consolidated Financial Statements, determines the focal points of the audit, negotiates the fee, receives the report and assesses the auditor's independence. It also supports and monitors the Executive Board regar ding accounting issues especially in relation to quarterly reports, risk management and compliance. The Audit Committee members are Dr. Eberhard Kollmar, Hans Neunteufel, Kurt Helletzgruber and Herbert Santl. It is chaired by Dr. Eberhard Kollmar, who has gained particularly in-depth knowledge and experience in the application of accounting rules and internal auditing through many years working as an attorney-at-law in the fi eld of economic law.

The Executive and Supervisory Boards view the German Corporate Governance Code as an important body of regulations. As a listed company with international shareholders, it is in our interests to make Germany a more attractive economic center for the global fi nancial community. As far as we are concerned, this also extends beyond the Code to include general principles of fairness, honesty and good conduct in our daily dealings with business partners. Last but not least, we also ensure our business activities comply with the legal provisions and offi cial regulations in all countries in which we are represented. We regularly brief our employees on the necessities and rules of responsible conduct. Corporate governance and compliance

Annual General Meeting (AGM)

Focus on shareholders

Shareholders exercise their rights, including voting rights, at the AGM. All shares in Wacker Neuson SE provide shareholders with full voting rights and are registered by name. Each share represents one vote. The AGM agenda plus the requisite reports and documents are published on the company's website.

Our AGM this year will take place in Munich on May 28. The Executive Board makes it easier for shareholders to exercise their voting rights at the AGM by offering the opportunity to delegate binding voting instructions to proxies named by the company. Information on how to vote by proxy will be included in the invitation to AGM meeting. These named proxies are also available at the AGM to shareholders present at the AGM. It is also possible to delegate voting rights to fi nancial institutions, shareholder associations and other third parties.

Accounting and auditing

The Consolidated Financial Statements of Wacker Neuson SE are prepared in line with the International Financial Reporting Standards (IFRS). The Annual Financial Statements, the Management Report and the Group Management Report are prepared in accordance with the German Commercial Code (HGB). Prior to proposing an auditor at the AGM, the Supervisory Board obtained a certifi cate of independence from the auditor in question. The auditor was requested by the chairman of the Audit Committee to immediately report all signifi cant fi ndings or incidents identifi ed during the audit and relating in the broadest sense to Supervisory Board duties, if these fi ndings or incidents could not be directly resolved.

Transparency

Active communication with external stakeholders

Regular, active dialog with our shareholders and interested members of the public is one of the cornerstones of our corporate governance policy. We aim for the greatest possible transparency, providing shareholders, fi nancial analysts, shareholder associations and the media with regular and prompt information about business trends and signifi cant changes within the company. We are fully committed to a policy of active and honest communication.

As stipulated by the German Securities Trading Act (WpHG) and German Corporate Governance Code, we provide information on our company's business development and fi nancial situation four times a year. This takes the form of three quarterly reports and one annual report. The Exe cutive Board also answers shareholder questions at the AGM. We also use our Internet platform as a way of keeping our stakeholders up to date. All our press and ad-hoc releases, fi nancial reports and our fi nancial calendar detailing important events are permanently available at www.wackerneuson.com. Interested parties can join our online distribution list to automatically receive company reports at regular intervals.

Director's dealings and signifi cant voting interests

Pursuant to Section 15a WpHG, Wacker Neuson SE publishes reports on directors' dealings as soon as these are received. The reports refer to securities transactions with regard to Wacker Neuson shares submitted by members of the Executive and Supervisory Boards as well as by natural and legal persons closely related to members of these bodies. This information is also disclosed on the company's website (www.wackerneuson.com) under Investor Relations/ Corporate Governance.

Pursuant to Section 21 WpHG, the company also publishes reports regarding the purchase or sale of signifi cant voting rights as soon as these are received, as well as reports on corresponding fi nancial instruments held in line with Section 25 WpHG on its website at www.wackerneuson.com, under Investor Relations/Company News.

Annual Document in line with Section 10 of the German Securities Prospectus Act (Wertpapierprospektgesetz)

The Annual Document pursuant to Section 10 (1) of the German Securities Prospectus Act is available at www.wackerneuson.com under Investor Relations/Corporate Governance.

Remuneration report in the corporate governance report

Main features of remuneration system for Executive Board Members At Wacker Neuson SE, our remuneration system is based on performance and results, refl ecting a corporate culture that rewards individual effort. The total remuneration package for Executive Board members is a combination of fi xed and results-indexed payments. The criteria for fair remuneration are determined in particular by the roles assigned to individual Board members, their personal performance and the performance of the Executive Board as a whole, as well as the fi nancial situation and the company's success and prospects, measured against the backdrop of market conditions.

Further information on the main features of the remuneration system of the Executive Board is included in the Group Management Report (page 64 in this annual report). The AGM approved a resolution not to publish remuneration details for individual Executive Board members in the interest of privacy. Total Executive Board remuneration is disclosed in the notes to the Consolidated Financial Statements in the section on executive bodies (page 119 in this annual report).

Remuneration of Supervisory Board Members Total Supervisory Board remuneration is also disclosed in the notes to the Consolidated Financial Statements in the section on executive bodies (page 120 in this annual report).

Declaration of compliance 2009

The Executive and Supervisory Boards of Wacker Neuson SE have thoroughly examined the recommendations of the German Corporate Governance Code and updated their declaration of compliance on March 23, 2009. The declaration also states which recommendations from the German Corporate Governance Code as amended on June 6, 2008 have not been complied with and gives reasons for these deviations.

The full declaration of compliance is as follows.

Declaration of compliance with the German Corporate Governance Code in accordance with Section 161 of the German Stock Corporation Law (AktG)

The German Corporate Governance Code contains recommendations and proposals for managing and monitoring German listed companies in relation to shareholders and the AGM, the Executive and Supervisory Boards, transparency, accounting and auditing. AktG requires the Executive and Supervisory Boards of listed companies to declare each year the recommendations with which they did or do not comply.

The Executive and Supervisory Boards identify with the aims of the German Corporate Governance Code, supporting responsible, transparent and sustainable management and governance geared towards increasing company value. The following describes how we implement the recommendations.

In accordance with Section 161 AktG, the Executive and Supervisory Boards of Wacker Neuson SE declare that the company complied with the recommendations issued by the German Corporate Governance Code Commission as amended on June 14, 2007 and published by the German Federal Ministry of Justice (BMJ) in the offi cial section of the electronic Federal Gazette on July 20, 2007, up to and including August 8, 2008, and that, from August 9, 2008, it complies and will continue to comply with the recommendations issued by the German Corporate Governance Code Commission as amended on June 6, 2008 and published on August 8, 2008, with the exceptions listed below.

The company has deviated and deviates from the Code's recommendations in the following respects:

1. Section 3.8: The company's directors and offi cers' (D&O) liability insurance policies for its Executive and Supervisory Boards have been concluded without a deductible. The company does not believe that a deductible would improve the sense of motivation and responsibility with which our Board members perform their duties. D&O insurance safeguards the company against substantial internal risks and protects the assets of members of its executive bodies only as a secondary function.

• 2. Section 4.2.2: The Presiding Committee approves the remuneration system for the Executive Board, including signifi cant contractual terms, and regularly examines the remuneration structure. Regular reports on the activities of the Supervisory Board committees, including the Presiding Committee, are provided at that Supervisory Board's plenary meeting. The Executive and Supervisory Boards do not see the need for any further resolutions or examination of the remuneration system structure in the Supervisory Board plenary meeting.
• 3. Section 4.2.3, para. 4 and 5: The recommendation that severance payments, including additional benefi ts, shall not exceed two year's remuneration (severance pay cap) if an Executive Board member's contract is terminated prematurely without good cause has only partially been complied with. The Supervisory Board is of the opinion that the existing rules in Executive Board members' contracts are appropriate and does not see the need to implement any changes here. Executive Board members' contracts do not contain agreements on severance pay in the event of a change of control.
• 4. Section 4.2.3, para. 6: The AGM is not informed separately about the main terms of and changes to the remuneration system for Executive Board members as this information is already disclosed in the Group Management Report, which is available to all shareholders.
• 5. Sections 4.2.4; 4.2.5; 5.4.7; para. 3, 7.1.3: The AGM has decided not to publish the income of each individual Executive Board member in the notes to the Annual and Consolidated Financial Statements. In line with this, the corporate governance report does not include a remuneration report. Remuneration details for individual Supervisory Board members will also not be published. The Executive and Supervisory Boards consider that the mandatory legal statements provide investors and the public with suffi cient information in this area.
• 6. Section 5.1.2, para. 2, sent 3: The Supervisory Board has not set an age limit for members of the Executive Board. The Supervisory Board members are convinced that indivi dual performance is the defi ning factor in suitability for company management.
• 7. Section 5.3.3: The Supervisory Board has not formed a nomination committee. The size of the Supervisory Board (four shareholder representatives) does not warrant a dedicated committee for proposing Supervisory Board candidates.

• 8. Section 5.4.3, sent. 1 and 3: For effi ciency reasons, the election of the Supervisory Board will continue to be by block or list voting, in accordance with legal requirements. So that the Supervisory Board can also continue to vote impartially for its chairperson, the proposed candidates will not be announced.

• 9. Section 5.4.4: The Executive and Supervisory Boards consider that in some cases, it may prove benefi cial for former Executive Board members to transfer to the Supervisory Board and even chair the Board or certain of its committees. The internal knowledge former Executive Board members have of company operations increases the effi ciency of Supervisory Board monitoring. As long as Supervisory Board membership is well-balanced in accordance with the Code, the Executive and Supervisory Boards do not see any disadvantage here.

• 10. Section 6.6: Share ownership by individual members of the executive bodies exceeding one percent of shares issued by the company has not been and will not be stated in the corporate governance report. The Executive Board is of the view that protecting personal and family privacy takes priority here. Disclosures of the acquisition and sale of company shares by members of the Executive and Supervisory Boards or related parties are made in accordance with legal requirements and published on the company website (as stipulated by Section 15aWpHG). This disclosure is not repeated in the corporate governance report.
• 11. Section 7.1.2, sent. 3: The company will publish the Consolidated Financial Statements (annual fi nancial report) for fi scal 2008 within the 90-day deadline for the fi rst time.

The company complied or complies in full with all other recommendations issued by the German Corporate Governance Code Commission as amended on June 6, 2008, published August 8, 2008 in the offi cial section of the electronic Federal Gazette.

Munich, March 2009

Wacker Neuson SE Executive and Supervisory Board

Dr.-Ing. Georg Sick Hans Neunteufel

This declaration of compliance is per manently available to share holders on the Wacker Neuson SE website at www.wackerneuson.com, and will be revised annually. Wacker Neuson SE will make outdated declarations available on its website for a period of at least fi ve years.

Investor Relations

We actively engaged in investor relations during fi scal 2008. Our efforts here were certainly fruitful, with six new fi nancial analysts now also covering our company. In June, we held our fi rst Annual General Meeting as a listed company in Munich, Germany, and in the fall we invited analysts and investors to our fi rst Capital Markets Day in the Kramer-Werke GmbH production plant in Pfullendorf. Obviously, however, it was not possible to prevent events on the fi nancial markets impacting the share price in 2008. Our shares are now listed under the new company name, Wacker Neuson SE.

International stock markets

In 2008, our stock-market performance was infl uenced by the fi nancial crisis, which began on the US subprime market in mid-2007 and then spilt over to the European fi nancial markets in 2008. Numerous banks encountered fi nancial diffi culties and had to be propped up or rescued by takeovers. The resultant loss of trust had a massive impact on the stock markets.

ISIN	DE000WACK012
WKN	WACK01
Trading symbol	WAC
Sector	Industrial
Stock category	Individual no-par-value nominal shares
Share capital	EUR 70,140,000
Number of authorized shares	70,140,000 shares
Stock exchange segment	Regulated market (Prime Standard), Frankfurt Stock Exchange
Initial listing	May 15, 2007
New shares listed for trading	19,140,000 shares
(as part of merger with Neuson Kramer)	February 8, 2008
Designated sponsor	Deutsche Bank

Share price shaped by fi nancial crisis

Share facts at a glance

Wacker Neuson SE shares are listed on the regulated Prime Standard segment of the Frankfurt Stock Exchange and the SDAX. The price followed a similar path to the overall German stock market trend (chart 1). The capital market began to anticipate knock-on effects of the US subprime crisis on the international construction industry as far back as fall 2007. At the start of 2008, our shares were trading at EUR 14.62. Skepticism towards construction companies then infl uenced our share price over the course of the year – as was also the case for other major equipment manufacturers within our segment. At the end of the second quarter, we adjusted our forecast for the reporting year due to indications of a downturn in orders over the remaining half-year.

1 Manitou acquired Gehl Company in October 2008. The sharp upturn in the Gehl share price shows that the yardsticks applied to evaluate the deal were the same as those prevailing prior to the financial crisis in May 2007. Gehl shares ceased trading on October 27, 2008.

WACKER DEUTZ AG MANITOU HAULOTTE

Key share indicators

Wacker Neuson share performance is summarized in the following:

in euros	2008	2007
High	14.62	29.30
Low	4.01	13.36
Average	9.37	21.39
End of year	6.19	14.62
Average trading volume in shares	153,348	203,874
Earnings per share	0.53	1.10
Dividend payment proposed	0.19	0.501
Distribution ratio (based on group profi t before PPA)	32	401
Market capitalization in € million	434.2	1,025.40

1 Including a bonus, based on the group profi t before purchase price allocation on pro-forma basis 2007 Construction stocks also came under pressure due to sales favoring more liquid securities. Chart 2 plots our share path against market trends since the start of 2008. The selected peer group consists of competitors in the compact equipment segment: the French telescopic handler producer Manitou, the American manufacturer Gehl (acquired by Manitou in October), and Haulotte, a French lifting equipment specialist. The share prices all display a similar trend.

At the end of 2008, the fi nal listing price of our shares was EUR 6.19. Nevertheless, a look at peer group development from October 2008 to today shows that, at around EUR 5, Wacker Neuson shares have signifi cantly outperformed other construction stocks (chart 3). However, in our view, shares in this sector can only be expected to recover when the capital market recognizes that the general economic climate has signifi cantly improved.

The fi rst AGM as a listed company on June 3, 2008 resolved to change the company's legal form to a Societas Europaea (SE) and its name to Wacker Neuson SE. Shareholders also approved the proposal by the Executive and Supervisory Boards to pay out a dividend of EUR 0.50 per eligible share. Executive and Supervisory Board members' actions were offi cially approved for fi scal 2007. Around 250 shareholders were represented at the AGM. AGM 2008

Executive and Supervisory Boards at the fi rst AGM as a listed company on June 3, 2008 in Munich.

Proposed dividend

Once again, our shareholders will benefi t from the success of the Wacker Neuson Group in fi scal 2008. In view of the current earnings trend, the Executive and Supervisory Boards will propose a dividend payment of EUR 0.19 per eligible share at the AGM on May 28, 2009. In total therefore, the company will be paying out EUR 13.33 million (compared with EUR 35.07 million last year). The distribution ratio pans out at 32 percent based on Group profi t for the year before purchase price allocation to the amount of EUR 41.9 million. This is in line with the Boards' longterm dividend policy and is higher than the 30 percent minimum (distribution ratio) communicated at the time of the IPO.

Share capital/number of authorized shares: 70.14 million as of March 20, 2009

Including Wacker-Werke GmbH & Co. KG, Wacker Familiengesellschaft mbH & Co. KG and VGC Invest GmbH

At December 31, 2008, family ownership of the company amounted to about 70 percent, both directly and by proxy. The Executive Board holds a further 2.4-percent direct stake. Finally, Dr.- Ing. Georg Sick, CEO and President, acquired a large number of shares in September 2008 at an average price of EUR 6.73. The remaining 29.2 percent of shares are in free fl oat. As far as the company is aware, around 63 percent of free fl oat is held mainly by European investors. Ownership structure

The 2008 ESPP was made available to those employees who did not have the opportunity to pur chase discounted stock at the time of IPO in May 2007. Within this program, around 100 employees acquired a total of 37,192 discounted shares between November 15 and December 31, 2008. The maximum number of shares subsidized was the same as an employee would have been able to purchase at a discount under certain limits imposed at the IPO. Employee Stock Purchase Plan (ESPP)

Number of analysts more than doubled

In fi scal 2008, we maintained ongoing, active communication with fi nancial market players. Our consistent aim has been to keep analysts and investors informed of company developments, our strategy, our business model, and the complexity of our markets. The Executive Board and IR department provided regular updates on current company developments. They accomplished this through a variety of channels, including the AGM, investor conferences and national and international roadshows.

As a particularly rewarding result of these active communication efforts, analysts' reports doubled in number in 2008, with six new banks deciding to cover the Wacker Neuson share. In February 2009, Commerzbank took the place of Dresdner Bank following the takeover.

Analyst coverage

as of February 28, 2009

2007

Crédit Agricole Cheuvreux S.A., Germany since May 31, 2007 Deutsche Bank AG since May 15, 2007 (IPO)) Sal. Oppenheim Research GmbH since May 15, 2007, IPO

UBS Deutschland AG since May 15, 2007, IPO) 2008

BHF-BANK Aktien gesellschaft since September 29, 2008

Dresdner Kleinwort Research GmbH since March 19, 2008; Commerzbank took the place of Dresdner Bank following the takeover

DZ BANK AG Deutsche-Genossenschaftsbank AG since September 4, 2008

Goldman Sachs International since March 12, 2008

Reuschel & Co. Privatbankiers (Trust Research) since June 2, 2008

SES Research GmbH since May 16, 2008

2009

Commerzbank Corporates & Markets Research since February 12, 2009

First place in "manager magazin" A wealth of up-to-date information is always available from our website, www.wackerneuson.com. This includes annual and quarterly reports, press releases and ad-hoc announcements, plus topical presentations. The German "manager magazin" offi cially acknow ledged the quality of our fi nancial communication, awarding us fi rst place in the stock market newcomers category of its Best Annual Reports 2007 competition.

First Capital Markets Day at Wacker Neuson

In February and March 2008, we commissioned an independent consulting company to run a perception study among institutional investors and analysts. This involved asking capital market players how they rated our fi nancial communication and the extent to which it meets their needs. We used the results of this study to further optimize our investor relations activities, and it will continue to be of assistance in expanding our fi nancial communication in line to meet stakeholder interests.

At the end of September 2008, over 20,000 visitors came to Pfullendorf, near Lake Constance in Germany, to attend the opening of the new production plant for our affi liate, Kramer-Werke GmbH. As part of the opening celebrations, we also held our fi rst Capital Markets Day on September 26, 2008. Here, the Executive Board and IR department provided analysts and investors with a wealth of fi rst-hand information on the compact equipment business segment, which has grown substantially through the merger. The program included presentations, plant tours and equipment demonstrations, as well as dialog with Kramer executives. And, to round it all off, our bravest guests even had the chance to try out some of our machinery for themselves.

Group Structure

Wacker Neuson SE*

Contents Group Management Report

I. About Wacker Neuson	30
II. General background	31
Overall economic trends	31
Overview of construction and
agricultural industries	32
General legal framework	34
Competitive position	34
III. Business development in fi scal 2008	35
IV. Profi t, fi nances and assets	39
Profi t	40
Finances	42
Assets	43
Summary of profi t, fi nances and assets	44
V. Reporting by region	44
Europe	45
Americas	46
Asia	46
VI. Reporting by business segment	47
Light equipment	47
Compact equipment	48
Services	48

VII. Other factors that impacted on results	49
Research and development	49
Production	50
Quality and sustainability	50
Purchasing	51
Logistics	51
Human resources	52
Sales and marketing	54
VIII. Risk report	54
IX. Information in accordance with Section
315 (4) of HGB	59
X. Remuneration framework	64
XI. Supplementary report	65
XII. Opportunities and outlook	66
Overall economic outlook	66
Outlook for construction and
agricultural industries	66
Opportunities and outlook for the
future development of Wacker Neuson SE	67
Development outlook by region	68
Development outlook by business segment	68
Company forecast	68
Summary forecast	69

The graphics and tables below are not part of the Group Management Report. They are provided for information purposes only and do not always align with the audited Consolidated Financial Statements.

Group Management Report

I. About Wacker Neuson

• Global leader in light and compact equipment
• International sales, consulting, and support network
• EBITDA as a key benchmark of performance

The Wacker Neuson Group develops, manufactures and distributes high-quality light and compact equipment to support and optimize customer construction processes around the globe. Wacker Neuson is the partner of choice among professional users in mainstream construction, gardening, landscaping and agriculture, as well as for municipal bodies and the industrial and recycling sectors. The Group now offers these customers over 300 product categories and extensive rental, spare parts and repair services.

Wacker Neuson has more than 180 sales and service stations in over 30 countries and currently around 5,200 dealerships in more than 12,400 locations, resulting in a dense consulting and support network. Our main aim is to complement our broad offering of high-quality products with the best possible service.

The Wacker Neuson Group organizes its products and servicesinto three business segments:

• Light equipment with four business fi elds that are aligned with our customers' business processes:
• Concrete technology
• Soil and asphalt compaction
• Demolition
• Utility
• Compact equipment
• Services with two business fi elds:
• After-market (repair and maintenance)
• Rental (Central and Eastern Europe)

The majority of products from our light and compact equipment segments are distributed under the "Wacker Neuson" brand. In the Europe region, we also distribute all-wheel drive wheel loaders and telescopic handlers from the compact equipment business segment under the "Kramer Allrad" brand, as well as articulated wheel loaders for the agricultural industry under the "Weidemann" brand. In the rest of the world, all Group products are "Wacker Neuson" branded.

This Group Management Report refl ects the results of the Wacker Neuson Group's global activities in fi scal 2008.

Organizational and legal structure

Wacker Neuson SE is a European company with its headquarters in Munich. It is registered in the German Register of Companies (Handelsregister) at the Munich Magistrate's Court under HRB 177839. The Company's shares have been listed since May 2007.

On June 3, 2008, the AGM resolved to rename the Company "Wacker Neuson SE" and change its legal form to a European company ("Societas Europaea"). The new company was entered in the Register of Companies on February 18, 2009. The legal charter of Wacker Neuson SE remains almost identical to that of Wacker Construction Equipment AG.

Consolidated Financial Statements of the Wacker Neuson Group are prepared in accordance with the International Financial Reporting Standards (IFRS). Forty-two companies, including the parent company, are fully consolidated in these statements. Furthermore, we have direct or indirect majority holdings in seven smaller companies which do not have a signifi cant impact on Wacker Neuson's business eitherindividually or collectively.

Wacker Neuson SE is the largest operating company in the Wacker Neuson Group and thus assumes a central role in the Group. As the parent company, it holds the shares in the members of the Wacker Neuson Group directly or indirectly and is represented in Germany through approximately 70 controlled sales and service stations. The parent company's Executive Board is responsible for managing the Group. As a rule, the executive bodies of the affi liates report directly to Group management.

Our segment reporting is divided into primary reporting by region (Europe, Americas and Asia) and secondary reporting by business segment (light equipment, compact equipment and services).

With the exception of our affi liates Kramer-Werke GmbH, Weidemann GmbH and Drillfi x AG, which retain their original names, all signifi cant operating affi liates now trade under the common name of "Wacker Neuson".

Corporate governance and value management

To guarantee an effective internal controlling system, the Wacker Neuson Group controlling department manages and monitors deviations between 'to be' and 'as is' fi gures from affi liates primarily based on their EBIT margins along with the development and tracking of necessary measures, and prepares the consolidated monthly reports for the Executive Board. Project decisions relating to changing market and customer requirements are taken by various committees composed of members of the Executive Board, plus representatives from company management, research and development, product management, quality management, service, and strategic procurement.

Due to our high level of investment activity in fi scal 2008 to secure our lasting growth, profi t before interest, tax, depreciation and amortization (EBITDA) is an important indi cator of company performance. Investments in expanding our rental pool in Central and Eastern Europe, in particular, initially result in high depreciation. Alongside ongoing rental income, the sale of rental equipment also makes a – delayed – contribution to earnings here. Rented light equipment is usually sold after an average of two to four years, compact equipment after an average of six.

II. General background

Overall economic trends

• Global downturn in 2008
• Overall economic climate negatively impacted by global fi nancial and credit crisis
• German economy on the brink of recession in second half of the year according to experts

The global economic climate deteriorated signifi cantly during the course of 2008, with numerous industries ex periencing a downturn at the end of the year. Joint surveys by leading economic research institutes have listed the following factors that – in addition to the global fi nancial and credit crisis – compounded this situation: a worldwide rise in infl ation fuelled by raw material prices, high energy prices, substantial real estate market price adjustments in numerous countries, and appreciation of the euro. Towards the end of the year, the outlook for the growth regions of Central and Eastern Europe, Russia, Latin America, Australia and Asia was also clouded. According to a report by the IMF (International Monetary Fund) published in February 2009, global GDP rose by 3.4 percent in 2008 (previous year: 5.2 percent) with world trade volume projected to grow at 4.1 percent (previous year: 7.2 percent).

GDP

Real change
from previous year in %	2008	2007
Germany	1.3	2.5
Europe
(Western and Central Europe)	1.4	2.9
Russia	6.3	8.1
USA	1.1	2.0
China	9.4	11.5
Japan	0.2	2.1

Source: Joint report from leading research institues

Changes key currencies against Euro

(Annual average rates)

			Change
1 Euro equals	2008	2007	in %
US dollar (USD)	1.4741	1.3790	+ 6.9%
British pound (GBP)	0.8038	0.6873	+ 17.0%
Swiss franc (CHF)	1.5786	1.6461	- 4.1%
Japanese yen (JPY)	151.4825	162.0433	- 6.5%

Source: Notes to the Consolidated Financial Statements

Economic developments in the US were particularly hard hit by the banking and subprime crisis, leading above all to increased unemployment and a drop in equipment and residential construction investments. Demand for goods from abroad also fell signifi cantly throughout the course of the year. This was further compounded by the US dollar's considerable drop in value in the fi rst six months of the year. According to experts, US GDP rose by 1.1 percent in real terms (previous year: 2.0 percent). Economic growth in 2008 only slowed slightly in Canada and Latin America. Brazil, Chile and Argentina in particular remained dynamic due to a number of reasons, including healthy domestic demand.

Economic experts report that emerging economies in Asia initially followed a stable, robust growth path in 2008, which leveled out toward the end of the year. Expansion levels in China slowed only slightly. Here, the GDP estimate is 9.4 percent (previous year: 11.5 percent). In Japan, experts predict a drop in exports for the fi rst time in three years due to a decrease in demand from the US and Europe. Real GDP growth is estimated at just 0.2 percent (previous year: 2.1 percent). In contrast, India is expected to have maintained a healthy rate of expansion, with a 7 percent real increase in GDP (previous year: 9 percent). Economic performance also remained strong in East Asia, with experts reckoning with an estimated real GDP growth of 4.5 percent (previous year: 5 percent).

The economic climate cooled dramatically in Europe over the course of the year. Developments on fi nance and real estate markets slowed growth in all euro-zone countries. The aggregated GDP growth rate in the European Union (EU) totaled 1.4 percent in real terms (previous year: 2.9 percent), and 0,9 percent in the euro zone (previous year: 2.6 percent). In Western Europe, export growth in particular declined, and GDP failed to increase any further. 2008 saw the end of years of economic upturn in Spain and Great

Britain. Prosperous economies in Eastern European EU member states also started to slag. Ifo predicted a real GDP growth rate of 4.6 percent here. GDP in Russia rose signifi cantly during the fi rst half of 2008, only to slow down toward the end of the year. Real GDP is expected to have grown by 6.3 percent (previous year: 8.1 percent).

The substantial downturn in growth in the German economy during 2008 was due in part to the appreciation of the euro plus a drastic drop in demand for capital equipment from abroad and a resultant fall in investment activities. A period of growth in the fi rst half of the year was followed by a period of decline in the subsequent six months. The German Federal Statistical Offi ce reports that the economy grew overall by just 1.3 percent (previous year: 2.5 percent).

Overview of construction and agricultural industries

• Global economic downturn has long-term impact on national construction industries
• Construction industries in the US and Europe particularly affected
• Following strong start to year, German construction industry faces increasingly pronounced drop in orders

The pronounced global economic downturn resulting from the subprime crisis also had a negative impact on national construction industries in 2008. US and European construction companies in particular have felt the long-term effects. The change in market dynamics led to increased competition in these regions.

Falling real estate prices in the US squeezed residential construction investment. The Association of Equipment Manufacturers (AEM) expects an 8.6 percent drop in US sales for 2008. For equipment weighing up to 3 tons (light equipment), the association is reckoning with a drop of 10.7 percent. Fewer building permits were issued and construction projects started for single-family houses in 2008. The U.S. Census Bureau reported a 22.8 percent year-onyear drop in residential construction investment at the end of November. In contrast, investments in non-residential and industrial construction rose by 9.2 percent over the same period. Total construction investment volume over the year was thus down 3.3 percent. At the end of November, residential construction accounted for 39.1 percent of total investment volume, and the non-residential and industrial segment for 60.9 percent.

Construction remained buoyant in Asia in 2008. The Olympic Games in Beijing fuelled construction investments in China. The construction sector in India also experienced an upturn, although growth rates slowed here towards the end of the year in comparison with the previous year.

In Europe, the mild 2007/2008 winter meant that a large number construction investment projects were pulled forward. According to the Euroconstruct network, the crisis hit the Western European construction market full force mid 2008. As a result, the number of building permits issued – an early indicator of construction demand – fell in many euro-zone countries. Revenue generated by the European construction industry was down 2.5 percent in 2008 (previousyear: up by 2.0 percent).

The European non-residential segment increased slightly, driven by commercial and underground construction, which was up 1.4 percent in 2008. Euroconstruct experts forecast a rise in European underground projects of around 2 percent, making 2008 the twelfth consecutive year of expansion in this segment. The European housing market deteriorated considerably during the course of the year. Value adjustments on real estate dampened construction activity and investments. Spain, Great Britain and Ireland in particular experienced a drop in new housing developments, as well as falling prices and increasing numbers of empty apartments and houses. Euroconstruct thus anticipates a downturn of 6.9 percent in European residential construction for 2008. The construction industry in Eastern Europe grew, fuelled by a number of factors including EU subsidies as well

as public funds aimed at extending infrastructure. Measures here include the expansion of road, rail and telecommunications networks.

The mild winter in Germany was a key driver of construction investments during the fi rst quarter of 2008. According to industry federations, revenue generated by the construction industry from January through October was up 7.3 percent on the same period for the previous year, primarily fuelled by commercial and public construction projects and investments. However, the construction industry in Germany followed a moderate growth path overall during 2008 due to the global downturn. Leading economic institutes expect construction investments to increase by a total of 2 percent and investments in residential construction to rise by 1.5 percent.

Euroconstruct reports a 2 percent rise in underground construction in Germany as a result of infrastructure projects. At the start of November, the German Association of Machinery and Plant Construction (VDMA) still anticipated revenue in construction and building materials to rise 8.6 percent to EUR 16.6 billion for 2008. However, order intake in the construction equipment sector in particular fell dramatically throughout the course of the year, with domestic orders for construction equipment dropping by more than 40 percent in November 2008.

Agricultural industry continues to gain in importance in 2008

Over the last few years, the agricultural industry has gained in importance worldwide. As the world's population increases, so does the need for food. This in turn drove demand for agricultural machinery in 2008, an effect particularly felt in Europe, South America and emerging economies in Asia. The rising importance of biofuels, in other words sourcing energy from renewable raw materials, is also accentuating this trend.

The structural shift in the agricultural industry is also playing a key role here, in particular in Eastern Europe. Agricultural operations are constantly decreasing in number while simultaneously becoming larger and more industrialized – a trend that is fuelling demand for machinery. The German agricultural machinery market has also seen double-digit growth rates over the last years. High demand for agricultural products has led German farmers to purchase new agricultural equipment. Simultaneously, producer prices (for

example for cereals) reached new heights at the start of 2008. In the US, however, prices for foodstuffs such as corn and wheat fell, while prices for fertilizer and animal feed rose.

General legal framework

• Protection for users and the environment
• Compliance with applicable regulations
• Integration of new regulations in process fl ows

As a global manufacturer and provider of light and compact equipment, Wacker Neuson must observe numerous national and international statutory guidelines governing environmental and user protection. These include provisions regulating exhaust gas emissions, ergonomics, noise and vibration-induced impact. There are many European directives and regulations in this area.

At Wacker, we implement new regulations and always aim to integrate these promptly in our process fl ows. During the period under review, we again ensured that new user and statutory requirements, such as environmental and user protection guidelines, were promptly integrated in our business processes. The Wacker Neuson WM 80 two-stroke engine used in our gasoline vibratory rammers and breakers is a prime example here. We signifi cantly reduced the engine's emissions levels, thus ensuring that it meets all current emissions guidelines worldwide. By reducing its hydrocarbon emissions (HC) by over 70 percent and carbon monoxide (CO) emissions by more than 50 percent, the engine is now well within the requirements set down in the August 2008 EU emissions directive. The requisite modifi cations to the engine's exhaust system and cylinder resulted in increased research and development costs as well as outlay for adjusting our production processes in the US.

In the year under review there were no changes to the legal or regulatory framework that had a major impact on business development.

Competitive position

• Focus on light and compact equipment
• Continued leading position in the international construction industry
• Additional pillar through business activities in the agricultural industry

There were no meaningful changes to the heterogeneous competitive landscape surrounding the Wacker Neuson Group during fi scal 2008. In our assessment, the majority of our competitors offers product ranges that focus exclusively on either light or compact equipment, in most cases only on individual lines within these product fi elds.

Developments on international construction markets led to a drop in order intake for almost all our competitors during the second half of 2008. Several manufacturers have reacted to the current situation by closing production sites and laying off staff, for example, or initiating and announcing similar measures. The competitive landscape in the compact equipment segment changed over the course of 2008. French manufacturer Manitou acquired its US competitor Gehl Company. Through this acquisition, Manitou hopes to gain access to the US market and benefi t from the demand for compact equipment for the construction and agricultural industries there.

Over the past fi scal year, the Wacker Neuson Group maintained its strong position against both international competitors and local providers. We continue to concentrate exclu sively on light and compact equipment, differentiating ourselves clearly from DIY and heavy equipment suppliers. Our customers are predominantly active in nonresidential construction. Again, around 70 percent of our products were used primarily in new developments and infrastructure repairs, including underground and roadwork, non-residential and overground projects, and work on energy, water and telecommunications services.

Deployment scenarios

	Non-residential/
Conditions for our products	residential construction
North America	65/35
South America	70/30
Europe	70/30
Asia	90/10
Oceania	60/40

February 2009

As a mid-sized company, we back up our high product and service standards with state-of-the-art production facilities, in-depth development and manufacturing know-how and an effi cient sales network. This solid foundation has enabled a number of our products to achieve an excellent market position worldwide.

The acquisition of the Weidemann Group in fi scal 2005 expan ded the Wacker Neuson Group's reach to certain segments within the agricultural machinery market. Weidemann GmbH's strong performance has enabled it to maintain its position as a leading provider of articulated wheel loaders for the agricultural industry in Central Europe. Our Kramer-Werke GmbH affi liate also develops and manufactures equipment for the agricultural industry – in this case telescopic handlers, which are distributed by CLAAS Global Sales GmbH, a German agricultural machinery supplier under the CLAAS brand.

The highly fragmented nature of the global construction equipment market and lack of offi cial statistics prevents us from providing a detailed and meaningful overview of market shares.

III. Business development in fi scal 2008

• Diffi cult market conditions impact business trends in the Wacker Neuson Group
• Stable performance in agricultural machinery
• Revised sales and EBITDA forecast reached

With the October 2007 merger with Neuson Kramer behind us, fi scal 2008 turned out to be a year of integration and market penetration. The fi rst full fi scal year for the Wacker Neuson Group started with business developing as anticipated. While our service offering remained popular throughout the year, demand for light and compact construction equipment fell steadily over the course of the year as a knock- on effect of the showdown in construction markets in the US and Europe. In July, we responded to this downturn by revising our sales forecast and margin for profi t before interest, tax, depreciation and amortization (EBITDA) – originally before purchase price allocation – and succeeded in surpassing our adjusted goals through a consistent cost control policy.

Long-term growth remains the focus of our strategies

The reporting period witnessed important progress in the implementation of our forward-looking growth strategy. Our main focuses here were on measures resulting from the merger with Neuson Kramer. These included the launch of compact equipment in selected countries through our existing sales and service network, the expansion of rental business in Central and Eastern Europe by stocking our rental pool with products from our own production lines and modifying the color of light and compact equipment to align with the new corporate design.

We forged ahead with the regional expansion of the Wacker Neuson Group and improved both the distribution system and the service offering in line with market demands. In the light equipment and compact equipment segments, we launched various new products and enhanced our product

portfolio to meet evolving customer needs. Wacker also made internal process improvements, for example in production and logistics, reducing sales, research, development and administration costs expressed as a percentage of revenue to 27.0 percent (previous year: 28.2 percent).

Overall, we were thus successful in exploiting the market opportunities as arose under the prevailing economic and construction climate. We managed to expand our market position, thanks to a strong business model that is built on strong innovative drive, high product, rental and service quality, reliable spare parts business, effi cient business processes, integrated customer care through our decentralized sales and service network, and, last but not least, qualitydriven market leadership.

Unsatisfactory results

Due to the sluggish global economy and the sharp downturn on international construction markets in the US and Western Europe, we adjusted our earnings projections downwards towards the middle of the year. Actual results aligned with these adjusted fi gures. As anticipated, product sales in the light equipment segment remained below the previous year's level as a consequence of the US subprime crisis, which began to have an impact in the fourth quarter of fi scal 2007. Unit sales of light equipment thus dropped sharply in the US and particularly in Western European countries, such as Spain and Great Britain, where rental chains form the bulk of our customer base. Revenue losses also resulted from the increased severity of last winter in comparison with the previous year and further devaluation of the US dollar.

On target1

	Target 2008	Actual 2008
Sales in ¤ million	min. 870.0	870.3
EBITDA margin in %	min. 11.0	11.6
Capital expenditure in € million	appr. 100.0	101.8
Net fi nancial debt	appr. 50.0	59.0

1 After purchase price allocation (PPA)

In contrast, the lively demand experienced by the compact equipment business segment in the previous year continued into the spring. However, this demand fell steadily over the second half of 2008, with market trends strongly impacting customer order patterns.

To compensate for falling demand, we introduced a series of cost-cutting measures over the course of the year to keep selling expenses, R&D expenses and administrative costs in line with dwindling sales fi gures. Price increases also helped to counter market trends. We increased light equipment prices everywhere but the US by 3 percent from January 1, 2008. In the compact equipment business segment, we increased prices for Weidemann GmbH products by an average of 4.5 percent from January 1, 2008, due to higher material prices – raw materials included. Effective January 1, 2008, we increased the prices of wheel loaders and telescopic handlers by 3 percent and, effective April 1, 2008, we increased the prices of excavators, skid-steer loaders and dumpers by between 1.5 and 4.0 percent.

At the beginning of 2008, we anticipated that sales for the Wacker Neuson Group would break the billion-euro mark and aimed to achieve profi t before interest, tax, depreciation and amortization (EBITDA) following purchase price allocation with a margin of at least 17 percent. These estimates were based on plans made in the run-up to the IPO in May 2007. Although steady growth in sales in the early months of the year gave us reason to stick to this fore cast, we responded to changing market dynamics and the threat of a business downturn towards the middle of the year and revised our forecast on July 31, 2008, aiming for sales of at least EUR 870 million and an EBITDA margin following purchase price allocation of at least 11 percent. This forecast was achieved through consistent cost management.

In fi scal 2008, the Wacker Neuson Group recorded sales growth of 17.3 percent to EUR 870.3 million (previous year: EUR 742.1 million) as a result of the merger. EBITDA following purchase price allocation fell 13.7 percent from EUR 117.0 million to EUR 100.9 million. The EBITDA margin following purchase price allocation thus amounted to 11.6 percent (previous year: 15.8 percent).

Lively demand for agricultural products from Weidemann GmbH

Our affi liate Weidemann GmbH enjoyed positive results last year. Sales grew 27.0 percent from EUR 84.7 million to EUR 107.5 million as a result of brisk demand from the agricultural industry. Our business also benefi ted from the tendency towardslarger holdings and the associated rise in rationalization investments.

Acquired in 2006, Ground Heaters, Inc., a leading player in the North American market for portable hydronic heating equipment for the construction industry with headquarters in Spring Lake, Michigan, US, was integrated in the business of the Group's American affi liate, Wacker Neuson Corporation,during the course of the year and is no longer reported separately.

Our merger partner Neuson Kramer was consolidated for the fi rst time on October 1, 2007. Fiscal 2008 was therefore the fi rst fully integrated fi scal year. The Neuson Kramer subgroup felt in particular the effects of falling demand for compact equipment in the second half of 2008. Sales (Expen diture Format) over the entire fi scal year nonetheless increased 2.5 percent from EUR 329.9 million (for the period from February 1 through December 31, 2007) to EUR 338.2 million. Profi t before interest, tax, depreciation and amortization (EBITDA) fell 19.7 percent to EUR 47.0 million (previous year: EUR 58.6 million). This corresponded to an EBITDA margin of 13.9 percent (previous year: 17.8 percent).

Key fi gures Neuson Kramer subgroup

in ¤ K	2008	20071
Sales	338,199	329,924
EBITDA	47,040	58,591
EBIT	40,274	54,511
Profi t before discontinued
operations and minority interests	26,470	35,617

1 11 months only (February 1– December 31)

New affi liate in India

During the fi rst quarter of 2008, our new affi liate, Wacker Neuson Equipment Private Ltd., opened according to plan. Headquartered in Bangalore, India, this affi liate will work with several sales and service stations across the country to distribute the company's extensive product and service offering.

Construction work successfully completed

All Wacker Neuson Group construction work was com pleted as planned. Our European training center at the Reichertshofen production site and new manufacturing plant in Manila (Philippines) commenced operations at the start of 2008, close behind completion of the new Weidemann GmbH plant in Korbach in November 2007. The Manila plant signifi cantly expands our production capacity, allowing us to meet medium-term growth in demand on the Asian market quickly and effi ciently.

The second quarter saw completion of the facilities in both Pfullendorf (Germany) and Norton Shores (US) ahead of the scheduled production start-up date. Products manufactured in Norton Shores include portable hydronic heating equipment and light towers. The investment volume totaled around USD 10.0 million. If necessary, this production plant can be expanded to meet future increases in demand.

Our affi liate Kramer-Werke GmbH's new plant in Pfullendorf supplies wheel loaders and telescopic handlers with allwheel steering. The new site has more than doubled the production capacity of the previous Kramer site in Überlingen. The Wacker Neuson Group earmarked over EUR 30 million for investment in the new 30,000 m2 production site, approximately EUR 20 million of which was spent in 2008.

In Munich, demolition of old factory facilities was completed, making space for the new research and development center and company headquarters. Construction work began in July 2008 and will be completed in stages between now and 2011.

At its meeting on July 4, 2008, the Supervisory and Executive Boards jointly resolved to purchase a site in the Austrian district of Hörsching, in close proximity to Linz airport. This could potentially be used for a new manufacturing plant to replace the previous production facility. The company has not yet decided whether to proceed with the construction work.

At a Supervisory Board meeting on November 6, 2008, the Executive and Supervisory Boards resolved to close their production plant in Tredegar (Wales, Great Britain) due to the downturn in demand for four-wheel dumpers. The Group is transferring production from Tredegar to its plant in Linz (Austria). This process will be completed in spring 2009 and the Group company Wacker Neuson Rhymney Ltd. will then be dissolved. The shutdown in Wales resulted in around 90 job losses and costs of ap proxi mately EUR 1 million. Group management took care to devise socially responsible solutions for the staff affected by the layoffs.

Key resolutions at the 2008 AGM

During the AGM on June 3, 2008 in Munich, shareholders approved the proposal of the Executive and Supervisory Boards to change the company's legal form to a Societas Europaea (SE) and its name to Wacker Neuson SE. The necessary legal steps to execute this were taken during the course of the fi scal year. The name was entered in the German Register of Companies on February 18, 2009.

The shareholders also approved the proposal to pay out a dividend of EUR 0.27 along with a bonus of EUR 0.23, which brings the total to EUR 0.50 per eligible share (for a total number of 70.14 million eligible shares) compared with EUR 0.62 last year (for a total of 39.15 million eligible shares). In total therefore, the company will be paying out EUR 35.07 million (previous year: EUR 24.27 million). Executive and Supervisory Board members' actions were offi cially approved for fi scal 2007.

Dividend per share in € (for fi scal year)

2008	2007	2006	2005
0.191	0.50	0.38	0.27

1 Dividend payment proposed at the AGM on May 28, 2009

Active capital market communication and share trends

In fi scal 2008, the Executive Board regularly made an active effort to keep stakeholders updated on current company developments. They accomplished this through a variety of channels, including the AGM, investor conferences and national and international roadshows. Our Internet presence was expanded for analysts and investors. Share price trends in 2008 refl ected current developments on the international fi nancial markets. While our share was listed at EUR 14.62 at the start of the year, it had fallen to EUR 6.19 year-end.

Implementation of an employee stock program

During the course of the year, the Executive and Supervisory Boards resolved to launch an Employee Stock Purchase Plan for employees who did not have the opportunity to pur chase discounted stock at the time of the IPO in May 2007. This applies to all employees at non-German affi liates and Kramer-Werke GmbH. All Wacker Neuson Group employees – with the exception of those already able to pur chase discounted shares at the IPO – received a net sub sidy of 15 per cent from their employer on the purchase of company stock. Any applic able income tax and social secu rity contributions pay able on that amount are covered by the company. The maxi mum number of shares subsidized was the same as the employee would have been able to purchase at a discounted rate under the specifi c limits imposed at the IPO. Around 100 employees availed of this program between November 15 and December 31, 2008. A total of 37,192 shares have thus been purchased under this program.

Additional information1

in € million	2008	2008	2008	2007	2007
					pro-forma
	without PPA2	PPA	with PPA	with PPA3	with PPA4
Sales	870.3	–	870.3	742.1	979.5
EBITDA	102.2	1.3	100.9	117.0	157.4
EBITDA margin as a %	11.7	–	11.6	15.8	16.1
EBIT	64.1	6.1	58.0	78.9	112.6
EBIT margin as a %	7.4	–	6.7	10.6	11.5
Profi t for the period	41.9	4.5	37.4	54.1	75.0

You will fi nd more information in the table on pages 128-129.

PPA = Purchase price allocation. Purchase price allocation describes the process where purchase costs resulting from acquisitions are allocated to individually acquired assets, liabilities and contingent liabilities, which are measured at fair value.

3 Including Q4 Neuson Kramer subgroup (start of consolidation: October 1, 2007)

4 Pro-forma fi gures: as if Wacker and Neuson Kramer subgroup had been consolidated for the entirety of fi scal 2007.

IV. Profi t, fi nances and assets

The report on profi t, fi nances and assets covers a total of 42 Group companies including the Group parent, Wacker Neuson SE (previous year: 43).

Following initial consolidation of our merger partner Neuson Kramer on October 1, 2007, the results of Neuson Kramer were consolidated in full for the fi rst time as of the fi rst quarter of 2008. This explanation of profi t, fi nances and assets/liabilities presents the accumulated Wacker Neuson Group fi nancial data for the entire fi nancial year, taking purchase price allocation into account, and contrasts it with Wacker subgroup fi nancial data for fi scal 2007, includ ing fourth-quarter fi gures from the Neuson Kramer subgroup. For comparison, we also include fi scal 2007 pro-forma fi gures following purchase price allocation for key indicators, thus presenting the Group as if it had been consolidated for the entirety of fi scal 2007.

In the IFRS consolidated fi nancial statements, the assets of the Neuson Kramer subgroup were realized at fair value as of October 1, 2007 as part of the initial consolidation. This resulted in an increase in the cost of sales under inventories plus increased depreciation and amortization under order volume and technology, for instance. The impact of these changes became effective in fi scal 2008 and are referred to as effects of purchase price allocation in the following.

Results for the previous fi scal year were also infl uenced by the high levels of Group investment and sales activities. A signifi cant volume of compact equipment from our own production facilities was delivered to the rental and demo fl eets of other Group-owned companies. As a result, this equipment did not generate the proceeds that would normally be achieved through sales to external companies in the period under review.

Income Statement 2008

in comparison to 2007 and 2007 pro-forma

in € K	2008	2007	2007
		incl. Q4
		Neuson Kramer	pro-forma
	with PPA	with PPA	with PPA
Revenue	870,331	742,062	979,534
Cost of sales	- 576,885	- 459,530	- 633,080
Gross profi t	293,446	282,532	346,454
Sales and service expenses	- 156,486	- 140,090	- 153,542
Research and development expenses	- 25,056	- 20,810	- 26,719
General administrative expenses	- 53,487	- 48,289	- 60,505
Other income	11,023	8,421	11,042
Other expenses	- 11,451	- 2,859	- 4,098
Profi t before interest and tax (EBIT)	57,989	78,905	112,632
Financial result	- 2,308	- 660	- 2,178
Profi t before tax (EBT)	55,681	78,245	110,454
Taxes on income	- 17,576	- 24,142	- 34,928
Profi t for the period before minority interests	38,105	54,103	75,526
Minority interests	- 716	23	- 484
Result from discontinued operations	0	0	- 3
Profi t for the period	37,389	54,126	75,039
Depreciation and amortization	42,954	38,083	44,783
EBITDA	100,943	116,988	157,415

Profi t

• Revenue growth following the merger
• Fall in sales, research, development and ad ministration costs expressed as a percentage of revenue
• Profi t affected by market dynamics

Wacker Neuson Group revenue and earnings refl ected the adverse market developments in fi scal 2008. Nevertheless, revenue grew 17.3 percent to EUR 870.3 million as a result of the merger (previous year: EUR 742.1 million). Adjusted to discount currency fl uctuations, this corresponds to an increase of 20.2 percent. Based on pro-forma fi gures, sales for the consolidated Group amounted to EUR 979.5 million in 2007.

The cost of sales rose to EUR 576.9 million (previous year: EUR 459.5 million). This is attributable to the merger. Over the course of the year, we were able to absorb the H1 price increases in raw materials, particularly steel, mainly thanks to long-term contracts. Based on pro-forma fi gures, the cost of sales for the consolidated Group amounted to EUR 633.1 million the previous year.

Gross profi t on revenue grew as a result of the merger to EUR 293.4 million (previous year: EUR 282.5 million). The gross profi t margin amounted to 33.7 percent (previous year: 38.1 percent). This reduction is attributable to the increased role played by the compact equipment business segment, which typically realizes a lower gross profi t margin but also reports lower selling expenses. The margins here are also lower than in the light equipment segment due to a multiplestage sales system in the agricultural market. Based on pro-forma fi gures, gross profi t for the consolidated Group amounted to EUR 346.5 million in 2007 (gross profi t margin: 35.4 percent).

Fall in administrative costs expressed as a percentage of revenue

We introduced and implemented cost-cutting measures in the second half of fi scal 2008 to align cost structures with the downturn in business activities. The full impact of these cost-effi ciency measures will not be felt till fi scal 2009. Expressed as a percentage of revenue, selling expenses, plus R&D and administrative costs were nevertheless down to 27.0 percent (previous year: 28.2 percent).

Selling expenses rose by 11.7 percent to EUR 156.5 million (previous year: EUR 140.1 million). This increase is attributable to the merger and new hires to support our expanding sales and rental activities, particularly in Eastern Europe. Here it should be noted that the selling expenses as a percentage of revenue have dropped to 18.0 percent for the new merged company relative to the Wacker Group for the same period last year as a result of the dealer network operated by Neuson Kramer (previous year: 18.9 percent). Based on pro-forma fi gures, sales and service expenses amounted to EUR 153.5 million in the previous year.

Research and development costs were up 20.4 percent to EUR 25.1 million (previous year: EUR 20.8 million) due to the merger. A total of EUR 3,7 million in development costs was capitalized by all manufacturing companies in the past fi scal year. In relation to sales, the R&D ratio rose slightly to 2.9 percent, in comparison with 2.8 percent the previous year. Based on pro-forma fi gures, the consolidated Group's expenditure in this area amounted to EUR 26.7 million in the previous year.

General administrative costs increased by 10.8 percent to EUR 53.5 million (previous year: EUR 48.3 million) as a result of an increase in the workforce following the merger, the expansion of activities in Eastern Europe and merger costs, including those involved in renaming the affi liates to "Wacker Neuson". Expressed as percentage of revenue, administrative costs were at 6.1 percent (previous year: 6.5 percent). Based on pro-forma fi gures, the administrative expenses for the consolidated Group amounted to EUR 60.5 million in the previous year.

Administrative expenses

as % of sales

2008	6.1
2007	6.5

Sales, development and administration costs

as % of sales

2008	27.0
2007	28.2

The 30.9 percent increase in other operating income to EUR 11.0 million (previous year: EUR 8.4 million) is attributable to a rise in exchange rate gains.

Other operating expenses grew to EUR 11.5 million (previous year: EUR 2.9 million). The difference is attributable to exchange losses of EUR 6 million on the previous year and a value adjustment on real estate held by the English Group member Wacker Neuson Rhymney Ltd.

Profi t impacted by downturn in unit sales, stocking of our own rental and demo fl eets and purchase price allocation

Taking purchase price allocation into account, profi t before interest, tax, depreciation and amortization (EBITDA) fell 13.7 percent from EUR 117.0 million to EUR 100.9 million in spite of the merger. The EBITDA margin amounted to 11.6 per cent (previous year: 15.8 percent). Discounting purchase price allocation, EBITDA decreased to EUR 102.2 million (previous year: EUR 119.6 million), resulting in an EBITDA margin of 11.7 percent. The effects of purchase price allocation totaled EUR 1.3 million. Based on pro-forma fi gures, consolidated EBITDA in the previous year amounted to EUR 157.4 million (EBITDA margin: 16.1 percent).

Depreciation and amortization increased 12.8 percent to EUR 43.0 million (previous year: EUR 38.1 million). This was primarily due to the merger, increased investment in the Central and Eastern European rental business, capacity expansion and purchase price allocation. Based on pro-forma fi gures, depreciation and amortization for the consolidated Group amounted to EUR 44.8 million in the previous year.

Profi t before interest and tax (EBIT) taking purchase price allocation into account dropped 26.5 percent to EUR 58.0 million (previous year: EUR 78.9 million). The EBIT mar gin dropped to 6.7 percent (previous year: 10.6 percent). The effects of purchase price allocation amounted to EUR 6.1 million. Discounting purchase price allocation, EBIT decreased to EUR 64.1 million (previous year: EUR 90.4 million), corresponding to an EBIT margin of 7.4 percent. Based on pro-forma fi gures, consolidated EBIT amounted to EUR 112.6 million in the previous year (EBIT margin: 11.5 percent).

Earnings were impacted particularly by exchange rate fl uctuations as well as by the effects of the elimination of interim profi t and merger costs. The euro's advance against the dollar in comparison with the previous year with an average exchange rate of EUR 1 to USD 1.4741 (previous year: EUR 1 to USD 1.3790) and the exchange rate fl uctuations of other currencies had an impact on profi t to the tune of 2.6 million.

The fi nancial result amounted to EUR - 2.3 million (previous year: EUR - 0.7 million). This result is attributable to the high volatility of the fi nancial markets and its impact on company investments. Profi t before tax (EBT) fell 28.8 percent to EUR 55.7 million (previous year: EUR 78.2 million). Based on pro-forma fi gures, the consolidated fi nancial result amounted to EUR - 2.2 million in the previous year and EBT was EUR 110.5 million.

Tax expenditure decreased to EUR 17.6 million (previous year: 24.1). The tax ratio increased slightly to 31.6 percent from 30.9 percent the previous year.

Allowing for purchase price allocation, profi t for the period amounted to EUR 37.4 million, 30.9 percent below the previous year's result of EUR 54.1 million. The effects of purchase price allocation totaled EUR 4.5 million. Based on pro-forma fi gures, the consolidated profi t amounted to EUR 75.0 million in the previous year.

Based on a weighted average number of ordinary shares in circulation during the period of 70.14 million, earnings per share totaled EUR 0.53 (previous year: EUR 1.10 with 49.2 million shares).

In view of the current market climate's impact on earnings, the Executive and Supervisory Boards of Wacker Neuson SE will propose a dividend of EUR 0.19 per eligible share at the AGM on May 28, 2009 (based on a total of 70.14 million eligible shares). Last year the company paid out EUR 0.50 for each of its eligible shares. In total therefore, the company will be paying out EUR 13.33 million (compared with EUR 35.07 million last year). The distribution ratio pans out at approximately 32 percent based on the Group profi t before purchase price allocation in the amount of EUR 41.9 million.

Finances

• Stable liquidity situation within the Group
• Future credit lines and terms confi rmed
• Reduction of working capital planned

Financial management at the Wacker Neuson Group strikes a healthy balance between fi nancial security, return on equity and earnings. As part of this policy, we draw on set balance sheet ratios and key indicators to manage our fi nancing needs.

Our aim is to fund day-to-day operations with operative cash fl ow as far as possible. We invest any fi nancial surplus promptly and securely to capitalize on the prevailing interest rates and use such funds subsequently to fi nance further growth. For investments, depending on the type in question, we make targeted use of special fi nancing options.

The Wacker Neuson Group uses standard fi nancial instruments such as foreign exchange forward contracts and interest rate swaps exclusively for hedging purposes and to minimize risks. Financial instruments without a corresponding underlying transaction are not carried out.

Liquidity management's main objective is to ensure fi nancial solvency

The main objective of liquidity management is to ensure the fi nancial solvency of the Wacker Neuson Group at all times. To this end, the Wacker Group maintains a cash pool in which almost all its companies participate. The accumulated cash pool balance provides participants with necessary fi nancial resources up to an individually fi xed limit. Participants who make positive deposits receive interest equivalent to market conditions for the respective currency.

Cash fl ow and liquidity

Cash fl ow from operating activities reached EUR 31.1 mil lion at the end of the fi scal year (previous year: EUR 55.0 million).

Cash fl ow from investment activities came to EUR - 9.5 million in the reporting period (previous year: EUR - 141.8 mil lion). The following factors in particular contributed to this drop: proceeds from the sale of marketable securities, acquired the previous year for EUR 85.7 million, plus the high level of investment activity. We invested EUR 93.1 mil lion in property, plant and equipment in fi scal 2008 (previous year: EUR 81.6 million). This included both the expansion of the sales and rental station network in Eastern Europe, and the replacement of compact equipment in the rental fl eet with high-quality proprietary products, which alone accounted for investments to the sum of EUR 34.0 million. It also refl ects ongoing measures to expand capacity at new manu facturing plants in Norton Shores (US) and Pfullendorf (Germany), as well as the construction of a new research and development center in Munich (Germany). When considering these fi gures, it should be noted that only investments that have been paid are recognized in the cash fl ow from investment activities. Items from fi scal 2007 that were not paid until fi scal 2008 have been added to investments per fi xed asset schedule. Investments per fi xed asset schedule, including the merger, amounted to EUR 90.6 million in fi scal 2008 (previous year: EUR 108.1 million).

Investments (extract)

in € million	2008
Expansion of rental business in Central and Eastern Europe	34.0
Construction of new production plant for Ground Heaters, Inc, Norton Shores, USA	6.4
Construction of Kramer Allrad new production plant in Pfullendorf, Germany	34.8
Construction of new research and develop ment center in Munich, Germany	5.5

Cash fl ow from fi nancing activities totaled EUR - 21.9 million (previous year: EUR 96.4 million). The previous year's fi gure was primarily due to the issue of new shares generating net proceeds to the value of EUR 165 million. Outlays included dividend payments of EUR 35.3 million and longterm bank-loan repayments amounting to EUR 5.4 million, accompanied by new, short-term loans to the value of EUR 19.1 million.

Free cash fl ow totaled EUR 23.4 million in the last fi scal year (previous year: EUR 62.1 million). Free cash fl ow is made up of cash fl ow from operating activities, and from investment activities without changes to the consolidation structure, plus amounts accruing from the issue of new shares including the costs of raising capital. Cash holdings fell in 2008 from EUR 38.8 million to EUR 37.3 million.

Statement of free cash fl ow changes

in € K	2008	2007
Cash fl ow from operating activities	31,133	54,980
Cash fl ow from investment activities	- 9,469	- 141,754
Change in consolidation structure	+ 1,771	- 10,572
Costs of procuring capital	- 69	- 5,582
Issue of new shares	0	+ 165,000
Free cash fl ow	23,366	62,072

Current liquidity needs can be met through a combination of our own liquid assets and the credit lines extended to Wacker Neuson by credit institutes. At the closing date, less than half of all short- and long-term credit lines had been drawn.

Despite the current fi nancial crisis, the Group still has suffi cient credit lines from German and international credit institutions to meet future liquidity requirements. These can be drawn on as and when required. The distribution of total borrowings among multiple banks means we are not dependent on individual lenders. This is an effective response to fi nancial market uncertainty, guarding us against the risk of collapse of a credit institute and the associated loss of a credit line. We are also seeing higher interest charges as a result of increased bank margins, although these should be partly compensated for by the lower interest rate level.

In addition to reducing the working capital, the balance sheet structure offers further options for securing liquidity insofar as these are deemed necessary.

Working capital

At EUR 303.9 million, working capital was up 11.9 percent in comparison with December 31, 2007 (previous year: EUR 273.2 million) due to the merger. Inventory increased to EUR 217.0 million (previous year: EUR 175.1 million) due to the global slowdown in product demand, particularly in the compact equipment business segment. Trade payables dropped 48.8 percent to EUR 32.3 million (previous year: EUR 63.1 million), thanks primarily to the speed with which production was able to respond to the downturn in demand. Trade receivables consequently dropped 26.1 percent to EUR 119.2 million (previous year: EUR 161.2 million). Working capital fell in relation to sales from 36.8 percent in the previous year to 34.9 percent.

Assets

• Balance sheet total slightly down
• Share capital unchanged
• Long-term borrowings down

The balance sheet total fell during the last fi scal year to EUR 1,178.6 million (previous year: EUR 1,214.5 million).

Assets rose to EUR 703.6 million (previous year: EUR 651.5 million). This is due in particular to an increase in property, plant and equipment to EUR 272.9 million (previous year: EUR 221.9 million). The slight increase in goodwill to EUR 326.1 million (previous year: EUR 325.7 million) is attributable to the effects of foreign currency fl uctuations. Intangible assets fell to EUR 98.4 million (previous year: EUR 100.2 million).

Finished products increased to EUR 159.1 million (previous year: EUR 114.0 million) due to the global slowdown in product demand. Current assets dropped to EUR 428.6 million (previous year: EUR 517.5 million) due to changes in marketable securities.

High equity ratio

Equity remained almost unchanged in the reporting period at EUR 911.8 million (at December 31, 2007: EUR 912.7 million).

The company's share capital remained constant at EUR 70.14 million. This resulted in an equity ratio of 77.4 percent (at December 31, 2007: 75.2 percent). In our view, it is thus still at a high level for the industry.

Total non-current liabilities dropped 6.6 percent to EUR 100.1 million (previous year: EUR 107.1 million). While longterm borrowings dropped to EUR 38.8 million (previous year: EUR 44.2 million), primarily attributable to repayment of bank loans, long-term provisions at EUR 29.3 million remained at almost the same level as last year (previous year: EUR 29.2 million). Deferred tax posted as liabilities dropped to EUR 32.0 million (previous year: EUR 33.7 million).

At EUR 166.7 million, total current liabilities are down 14.4 per cent (previous year: EUR 194.6 million). This is mainly due to a fall in trade payables.

Balance sheet structure
Assets
in € million
2008	63.6%	36.4%	1,178.6
2007	57.4%	42.6%	1,214.5
	Non-current assets Current assets
Equity and liabilities
in € million
2008	77.4%	14.1% 8.5%	1,178.6
2007	75.2%	16.0% 8.8%	1,214.5
Equity	Non-current liabilities	Current liabilities

The net fi nancial debt at December 31, 2008 amounted to EUR 59 million (balance at December 31, 2007: + 43.1 net fi nancial assets). To calculate net fi nancial debt, please refer to item 30 in the notes, "Risk Management/Capital Management".

Net fi nancial debt

in € K	Dec. 31, 2008	Dec. 31, 2007
Non-current liabilities	- 38,845	- 44,219
Current borrowings from banks	- 81,742	- 72,103
Current portion of non-current
liabilities	- 5,876	- 6,073
Marketable securities	+ 1,894	+ 88,656
Cash and cash equivalents	+ 65,600	+ 76,816
Total	- 58,969	43,077

Summary of profi t, fi nances and assets

In summary, Group management welcomes the results for the last fi scal year as further strengthening the company's healthy fi nancial position. Despite the challenging market situation, the Wacker Neuson Group's fi nancial position is healthy, based on a relatively high equity ratio and a low net fi nancial debt compared with its peers.

V. Reporting by region

• Market dynamics affect product sales in the Europe and Americas regions
• Healthy demand for services
• Lively demand from the agricultural industry

With its broad product portfolio and high-quality services, the Wacker Neuson Group not only supplies construction companies who use the equipment themselves, but also dealers, rental organizations and importers across the globe. Our segment reporting provides an overview of business development divided into primary reporting by region (Europe, Americas and Asia) and secondary reporting by business segment (light equipment, compact equipment and services).

While sales in the Asia region and services segment developed positively, sales in the Europe and Americas regions and the light equipment and compact equipment segments were negatively impacted by market trends.

Europe

Sales by region: Europe in € K

Europe was again the strongest sales driver in fi scal 2008. Fueled by the merger, sales rose 29.9 percent to EUR 676.2 million (previous year: EUR 520.7 million). Segment profi t before interest and tax (EBIT) fell from EUR 50.9 million to EUR 45.8 million (- 10.0 percent).

Investments by European construction companies dwindle

The negative market trends resulting from the US subprime crisis shifted increasingly to Europe as the year wore on, hitting Western Europe's leading construction markets in Spain and Great Britain with full force. Caution increased among construction companies across Europe and orders were deferred or even canceled. In addition, the relatively mild winter meant that major infrastructure projects were completed ahead of schedule, resulting in time lags with respect to follow-up projects. Heightened competition and increasing price erosion were the result. Although demand for light equipment remained below the previous year's level throughout the entire year, demand for compact equipment targeted at the construction industry did not start to fall until the second half of 2008. The reporting period nevertheless saw healthy demand in this region both for services and for compact equipment targeted at the agricultural industry, in particular.

Almost all affi liates in this region therefore saw sales fall in fi scal 2008. Our strong market presence, the depth and breadth of our product portfolio and superior rental, spare parts and repair services provided business momentum however, as did the positive results from Weidemann GmbH for products for the agricultural industry.

Positive performance in Eastern Europe

Performance was positive in Switzerland, Austria, Eastern Europe and South Africa. In June, the UEFA European Soccer Championship was responsible at times for stopping construction work on Austrian infrastructure projects nationwide.

In Eastern Europe, our affi liates benefi ted increasingly from healthy levels of construction activity, particularly infrastructure, modernization and residential construction projects. Our Russian affi liate saw a leap in sales of over 30.0 percent. To exploit market potential, we will continue to expand our sales activities and rental operations in Eastern Europe. New service stations were opened in Ceske Budejovice and Ostrau in the Czech Republic, in Szcecin, Krakow, Warsaw and Lodz in Poland as well as in St. Petersburg in Russia.

The construction industry experienced a slowdown in fi scal 2008 in all Scandinavian countries apart from Sweden. Demand for portable hydronic heating equipment recently launched was healthy in the utility business fi eld.

The sales teams at our French, Spanish and Hungarian affi liates are now also responsible for distributing compact equipment. Our affi liate in South Africa benefi ted from renewed growth in the construction industry. Exports to the Middle East were slightly up on the previous year.

German business remains stable and healthy

Once again, Germany achieved the strongest sales in the Europe region last fi scal year. Business was initially very brisk on the German market. Despite ongoing construction work and numerous plans for commercial, highway and underground projects, construction activities fell steadily during the course of the year. This had a negative impact on the sale and rental of light and construction equipment. We nevertheless managed to hold onto our leading market position, ensuring customer proximity with over 70 sales and service stations. Other factors that had a positive impact include new products and our improved service offering.

Americas

Sales by region: Americas in € K

As the year wore on, development in the Americas region was infl uenced more and more by the fl uctuating euro/dollar parity and uncertainties on the US real estate and mortgage market. This resulted in a sharp drop in residential construction – stable investment levels in non-residential construction were unable to compensate for this adverse trend.

Despite increased sales efforts, overall sales fell 14.9 percent in fi scal 2008 to EUR 166.9 million (previous year: EUR 196.1 million). Segment profi t before interest and tax (EBIT) totaled EUR 11.6 million (previous year: EUR 25.8 million). However, adjusted to refl ect exchange rate fl uctuations, sales in the Americas fell 9.0 percent. As in previous years, our US affi liate yielded the lion's share of sales in the US. Considered in the local currency (US dollars), the US production and sales affi liate, Wacker Neuson Corporation, recorded revenue only 11.5 percent below the previous year's level, despite increased exports to Europe and Asia.

For our US affi liate, fi scal 2008 was furthermore characterized by numerous measures to launch compact equipment on the American market, including trade fairs showcasing our products and training courses. We are pleased to report that during the course of the year, the number of dealer distribution agreements for Wacker Neuson US products increased to over 30. In light of this development, we decided to rethink plans to establish a service station network on a franchise basis under our EQUIPRO start-up concept, and instead to entrust Wacker Neuson's new dealers with service delivery.

Demand for portable hydronic heating equipment from our US subsidiary, Ground Heaters, Inc., was healthy. Ground Heaters, Inc., which was acquired in 2006, ceased to exist as an independent entity on December 8, 2008 and was liquidated. Business activities were not affected, however, and were taken over by our affi liate Wacker Neuson Corporation.

Positive trend in Canada and South America

Performance was positive in Canada. Performance was also positive in South America due to state-subsidized infra structure projects and a fl ourishing mining industry. In Mexico, the impact of the US subprime crisis led to a downturn in business over the course of the year. In Canada, we concluded an agreement with the 4-Way Equipment Rentals company for distribution of our complete product portfolio.

Asia

in € K

Sales by region: Asia in € K

2008	27,242
2007	25,349

EBIT by region: Asia

2008	1,393
2007	3,105

Asia remains a growth market for Wacker Neuson, although serious demand for light and compact equipment is not expected to kick in until the usual fi ve to ten years have lapsed since the initial infrastructure projects. The company is systematically preparing for rising demand and opened an affi liate in India in fi scal 2008.

Sales growth in Asia

In the Asia region, sales were up 7.5 percent on the previous year, from EUR 25.3 million to EUR 27.2 million. Segment profi t before interest and tax (EBIT) fell 55.1 percent to EUR 1.4 million (previous year: EUR 3.1 million).

Thanks to national infrastructure projects to expand the highway and railroad network, we enjoyed an increasingly positive trend in this region over the course of the year, although exchange rate fl uctuations had an impact on re venue fi gures. In order to capitalize more effectively on the positive construction climate in this area, we strengthened our market presence in China by stepping up sales activities during the course of the year. Sales in China grew 47.0 percent despite a building freeze in major cities before and during the Olympic Games in Beijing.

Performance also remained positive in Australia and New Zealand, but was down slightly in Japan and Thailand.

VI. Reporting by business segment

• Product sales in both light and compact equipment affected by market dynamics
• Services segment performs well
• Agricultural industry performs well

Sales in the light and compact equipment segments was negatively impacted by market trends in fi scal 2008. The popularity of our service offering in the market is refl ected in higher revenue from the services business segment.

Sales by business segment

in € K	2008	2007
Light Equipment	331,352	408,170
Compact Equipment	355,979	179,480
Services	188,507	159,657
Minus cash discounts	5,507	5,245
= Total sales	870,331	742,062

Light equipment

The light equipment segment covers the Wacker Neuson Group's activities within the business fi elds of concrete technology, soil and asphalt compaction, demolition and utility and covers the manufacture and sale of light equipment weighing up to approximately three metric tons. This is our core business, targeting professional light equipment users in mainstream construction, gardening and land s caping worldwide. Our customers are predominantly active in non-residential construction and mainly use our products in new developments and infrastructure repairs, but also in structural and commercial projects. Production is demanddriven with short delivery times of between 24 and 48 hours. The company therefore does not have an order backlog for this segment.

Sales before discounts in this business segment fell 18.8 per cent from EUR 408.2 million to EUR 331.4 million. This is attributable to decreased unit sales of new equipment to ma jor customers, mainly in the US, Spain, France and Great Britain.

Since the Neuson Kramer subgroup does not produce light equipment, this is refl ected in the Wacker subgroup fi gures. Following the merger, this segment accounts for 37.8 percent of total sales (before discounts) (previous year: 54.6 percent).

New products

We expanded our portfolio by launching 63 new products or product variants worldwide (previous year: 47). We introduced a number of technical innovations that comply with all the latest environmental and user protection sta tutory guidelines. Following in the footsteps of large breakers, we also reduced hand-arm vibrations from reversible vibratory plates. The company also launched an entirely redesigned version of the self-constructed two-stroke WM 80 engine for gasoline vibratory rammers and breakers. This engine satisfi es all global emission guidelines.

In the concrete technology business fi eld, new launches included a new line of internal vibrators, new walk-behind and ride-on trowels as well as a rebar cutter product group. In the demolition business fi eld, we launched a new range of fl oor saws and a new cut-off saw, whereas in the utility business segment, we introduced a range of new mobile generators and a portable hydronic heater.

Compact equipment

The compact equipment business segment covers the manufacture and sale of compact machinery weighing up to approximately 14 metric tons. In addition to all-wheel and articulated wheel loaders, the compact equipment segment features compact excavators, skid-steer loaders, telescopic handlers and dumpers as well as attachments.

This segment recorded sales of EUR 356.0 million before discounts and including results from the Neuson Kramer subgroup – up 98.3 percent from EUR 179.5 million the previous year. In line with this, the proportion of total sales (before discounts) contributed by the compact equipment segment rose following the merger from 24.0 percent in the previous year to 40.6 percent. However, it should be noted that some of this compact equipment was used to stock our own rental pool and build up demo fl eets, so this por tion of sales was not included in Group sales. It should also be noted that stocking our own rental pool does not in any way contribute to operating income. This will be achieved in the future by renting out these products.

Performance in this business segment was characterized by very positive sales in the fi rst half of 2008 and a rapid fall in demand as a result of prevailing market trends in the second half. Increasing reluctance to invest among rental companies and major customers resulted in the deferment and cancellation of orders. We are countering this development through special fi nancing programs. At the closing date on December 31, 2008, accumulated orders for com pact equipment for the construction and agricultural indus tries was thus 25 percent below the equivalent fi gure for the previous year.

Compact products launched through the existing sales network

During the period under review, we also focused on laun ching compact equipment via our global sales and service network, primarily in Spain, Switzerland, Austra lia and the US. Customer feedback on our high-quality products has been very positive in these countries.

We continue to innovate and improve the quality of this extensive portfolio, encompassing around 40 models. The Group's proven Kippmatic technology was taken to the next level for compact excavators with the vertical digging system (VDS). This system enables the chassis to navigate differences in surface heights during excavation work. During the course of the year, two new skid-steer loader models and a number of new telescopic handler and wheel loader machine variants were launched under the Kramer Allrad and Weidemann brands.

Growing demand for products for the agricultural industry

Following the completion of Weidemann GmbH's new pro duction facility in Korbach at the end of 2007, 2008 witnessed increased effi ciency in the production of arti culated wheel loaders for the construction and agri cultural industries as well as in the production of proven Hoftrac products for the agricultural industry. Thanks to strong demand fueled by modernization and rationalization investments from the agricultural industry, Weidemann GmbH sales grew 27.0 percent to EUR 107.5 million (pre vious year: EUR 84.7 million). Weidemann GmbH also introduced SAP on January 1, 2009. Demand was also positive for telescopic handlers from Kramer GmbH, dis tributed by CLAAS Global Sales GmbH.

Services

The services business segment encompasses the Wacker Neuson Group's after-market (repair and maintenance) and rental business fi elds, each covering both light and compact equipment.

Sales before discounts in this segment increased by 18.1 per cent as a result of the merger, to EUR 188.5 million (previous year: EUR 159.7 million). This segment's share of total sales (before discounts) was thus 21.5 percent following the merger (previous year: 21.4 percent).

Services resonate strongly among customers

In the after-market business fi eld, our activities in the traditional repair and spare parts segment were once again right on track in 2008. We reduced lead times for repairs, improved our equipment pickup and delivery service from and to construction sites, intensifi ed training for our service staff and opened a number of new sales and service stations. We were able to hold our own against independent workshops and construction machinery dealers. Sales in this business fi eld grew from EUR 104.0 million to EUR 133.8 million (+ 28.7 percent). Training for service staff remains a high priority at Wacker Neuson. We also continued expanding our service business over the reporting period, particularly in Eastern Europe.

Growing demand for rental equipment in Central and Eastern Europe

The rental business in Central and Eastern Europe remained stable during the year under review, despite the diffi cult market conditions. Sales leveled out at around EUR 54.7 million, just 0.9 percent lower than the previous year's level of EUR 55.2 million. Our strategy of equipping existing sales and service stations with more rental equipment and setting up new stations, particularly in Eastern Europe, is paying off here. In total, we invested EUR 34.0 million in replacing rental equipment and expanding our rental busi ness in Central and Eastern Europe with products from Wacker Neuson production plants.

Developments over the past year again confi rmed that our customers view renting as a useful supplement to purchasing. Companies are attracted by the fl exibility and attractive cost structure of renting. The trend for short-term contracts became more pronounced, with the number of daily rentals outweighing that of monthly or longer-term rentals. We have continued our strategy of supplying more rental equipment to sales and service stations and meeting the full spectrum of customer requirements with a wider product offering.

VII.Other factors that impacted on results

Research and development

• New products and product variants developed
• Numerous new patent applications
• Construction of a new research and development center in Munich has commenced

The company's research and development (R&D) departments are responsible for designing new products and continually enhancing existing models. Both lines of activity are inspired solely by end user needs. Our wide product offering enables operators to maximize the effi ciency of construction processes, whether the machinery be bought or rented. Our development work over the last fi scal year was also aimed at lowering manufacturing costs. Our new and improved products combine high quality with costeffective deployment. We also consider ourselves pioneers for product safety and operator protection.

The development departments for products in the light equipment segment are located in Munich (Germany), Milwaukee (US) and Manila (the Philippines). Products in the compact equipment segment under the Weidemann brand are developed at Weidemann GmbH headquarters in Diemelsee-Flechtdorf, with compact products under the Kramer Allrad and Wacker Neuson brands being developed at the respective production plants in Pfullendorf and Linz.

The number of employees in the R&D departments for the last fi scal year was lower than the previous year, with just 261 employees (previous year: 270 employees). The R&D payroll mainly consists of mechanical engineers, technical engineers, technical drawers and other skilled workers.

As we design basic versions for the global market and con tinually adapt them to meet country-specifi c requirements, we offer a vast range of product variants. In 2008, we launched 63 new developments and product variants world wide (previous year: around 47). R&D expenditure for the reporting period rose 20.4 percent to EUR 25.1 million (pre vious year: EUR 20.8 million). This brought our R&D cost ratio up to 2.9 percent (previous year: 2.8 percent).

Over the last fi scal year, we fi led a total of 58 new trademark rights worldwide (previous year: 69 patents). 87 new trademark rights were awarded (previous year: 47 patents).

We develop our employees through seminars on project management and design engineering, as well as exter nal training courses. We also continued the expansion of our testing department by adding cutting-edge measurement and test stations.

The research and development center in Munich currently under construction and due to be completed in 2011 will help to maintain a strong innovative drive and secure the high quality of our products in the light equipment segment.

Research and development expenditure in € million

Production

• Production output fl exibly adapted to demand
• Group-wide effi ciency gains
• Short-time working introduced

The market-related fall in demand for our products in fi scal 2008 resulted in a gradual drop in the utilization of our manufacturing facilities. This decline affected the fourth quarter of 2008 in particular. Our plants in Reichertshofen (Germany), Milwaukee, Spring Lake (both in the US) and Manila (the Philippines) – all sites where products in the light equipment segment are produced – were affected, as were manufacturing facilities for the compact equipment segment in Linz-Leonding (Austria) and Tredegar (Wales). Utilization of production plants owned by our affi liates Weidemann GmbH in Korbach and Kramer Werke GmbH in Pfullendorf refl ected market dynamics in fi scal 2008, thanks to the fact that these plants produce agricultural products.

Our strategy of fl exibility proved a success in this situation. It allowed us to compensate for the economic downturn by lowering costs. We achieved this by employing fewer temporary workers, as well as reducing vacation and fl exitime accounts. Market developments prompted us to close our production plant in Tredegar (Wales, Great Britain) and relocate production of our four-wheel dumpers to Linz

(Austria). In addition to these measures, short-time work will be initiated from fi scal 2009 in Reichertshofen and Linz, followed by Pfullendorf. As of December 31, 2008, we had 517 employees at these production sites (previous year: 511). As of the same date, a total of 1,031 employees were involved in production across the entire Group (previous year: 1,072).

Process improvements implemented

As part of the move to align our processes, we also held discussions with our suppliers. In addition, we have again improved our production and logistics processes to further reduce machining and wait times, and aligned our machinery pool with market requirements.

Increased inventory

We reacted quickly to falling demand for our products by reducing output in our production plants. Despite our fl exible structure, inventory nonetheless increased. How ever, we are able to produce single machines cost-effectively. Each machine that leaves one of our production plants is tested and the results documented for quality assurance purposes.

We stepped up efforts to integrate spare parts production for the Group member Weidemann in the Reichertshofen plant. A total of 900 parts have already been introduced. We are currently considering partial transfer of spare parts production for Group member Kramer-Werke GmbH. The focus factory also took on contract work for the Groupowned steelwork company, Wacker Neuson Kragujevac d.o.o. in Serbia.

Quality and sustainability

• Increased awareness surrounding sustainability
• Systematic implementation of quality processes
• Certifi ed quality management system

Over the past few years, the Wacker Neuson Group has been working to raise awareness in the company around the importance of sustainability in our business dealings. In 2008, we continued our systematic implementation of international, national and local legislation and regula tions concerning user safety and environmental protection. We introduced measures to improve the ergonomics of our products, and to reduce fuel consumption, vibrationinduced impact and noise emissions.

We observe the guidelines governing general emissions, ex haust gas included, plus water and soil protection. As part of his drive, we reduced emissions from our vibra tory rammer and gasoline breaker motors to below the statutory levels. We also minimized our environmental footprint through eco-friendly recycling of materials and resources and separation of potential recyclables in production and administration.

Quality management system confi rmed by audit

We document our underlying processes and benchmarking systems in our quality management system, certified to DIN EN ISO 9001/2000. This covers the light and compact equipment business segments for the Group headquarters in Munich, production plant in Reichertshofen, logistics center in Karlsfeld and all sales regions in Germany. In the fi rst half of fi scal 2008, an external audit reconfi rmed that our quality management system is comprehensive and effective.

Purchasing

• Materials requirement adapted to production volume
• Reduction of materials costs through standard agreements
• Cushioning against fl uctuations in raw material prices

Procurement in 2008 had to contend with extreme volatility on the raw materials market. While the fi rst half of 2008 was marked by overheating and extreme asking prices, particularly in the energy, metal and steel markets, the situ ation improved signifi cantly in the later half of the year.

Thanks to mainly long-term purchase agreements, the procurement department at the Wacker Neuson Group was able to curb the effects of raw material price increases on earnings.

The light and compact equipment segments have both coordinated their procurement activities. To capitalize on the synergies created by the bundling of demand, pro duction sites from both segments have defi ned a "lead buyer" concept. The positive effects of the merger with Neuson Kramer are already evident in a number of Group tender projects. The terms negotiated in this way are then freely available to all plants. We have expanded the ac ti vities of our company

in Serbia, which produces steelwork components for the compact equipment segment and delivers these to other Wacker Neuson Group members.

Logistics

• Rapid availability of products and spare parts
• Internal processes and supply structures improved
• Positive effects of the merger

The Wacker Neuson Group logistics centers for new pro ducts, spare parts and accessories are located in Karlsfeld (Germany), Germantown, (Milwaukee, US) and Hong Kong (China). Weidemann GmbH spare parts logistics is integrated in the Karlsfeld center. Our dispatch system for new products and spare parts in the compact equipment segment is decentralized, shipping directly from the plants in Linz and Pfullendorf. New products from Weidemann GmbH are shipped from the Korbach plant.

Inventory stock remained stable at our Karlsfeld logistics center, reaching EUR 30.0 million (previous year: EUR 29.6 million) at the end of fiscal 2008. Altogether, this center's current capacity lies at around 14,400 new machines (previous year: 16,600) and around 22,000 different spare parts (previous year: 22,400). Inventory stock at our US logistics centers and in Hong Kong as well as inventory stock in plants producing compact equipment, rose by 40 percent to previous year.

We were able to handle the workload with a total headcount of 293 (previous year: 271) across all locations in fiscal 2008. We continued to concentrate on production planning effi ciencies at the logistics centers and high fl exibility at the focus factories on our production sites. The increase in staff numbers can be explained by new hires in the Americas region to drive expansion of the compact equipment segment.

Together with the Wacker Neuson ex works plants in Linz, the Kramer plants in Pfullendorf and Weidemann plant in Korbach, the company put out a tender for all compact equipment shipments in the Group in the fall. The company expects effi ciency gains in this area due to the consolidation of shipments post-merger.

Human resources

• Recruitment drive to expand rental business
• Emphasis on employee development
• Training for young people actively supported

Human resources work in the Wacker Neuson Group over the last fi scal year concentrated on the merger with Neuson Kramer, employee development, and – particularly in the latter half of the year – measures aimed at securing jobs.

As of December 31, 2008, the company employed a total of 3,665 people (previous year: 3,659). These fi gures do not refl ect the actual number of people employed. They are calculated by converting the number of positions within the company into full-time jobs. At the end of the year, personnel costs totaled EUR 191.5 million (previous year: EUR 167.8 million). The increase is a direct result of the merger.

Among Wacker Neuson Group employees, 2,693 employees or 73.5 percent of all employees were employed in Europe as of the balance sheet date (previous year: 2,683). 740 were employed in the Americas region (previous year: 738), with 232 in the Asia region (previous year: 238). In Germany, headcount grew to 1,708 in fi scal 2008 (previous year: 1,651), and the number employed in the US was 658 at the end of the year (previous year: 663). New hires were particularly concentrated in the Europe region in the service sector due to the expansion of the Group's rental business, as well as in the Americas region in the logistics sector due to the expansion of the compact segment. In the areas of sales and administration, the number of employees remained almost constant. At the same time, employee numbers were reduced in the production sector by not replacing positions that became available and by closing the plant in Wales.

Headcount by region

in % (previous year)

Europe	73.5 (73.3)
Americas	20.2 (20.2)
Asia	6.3 (21.4)

Employees by sector

in %

Management	1.2
Administration	8
Sales	22.4
Service	18.3
Logistics	8
Production	37
Other	5.1

Human resources fi gures

Group-wide human resources reporting is currently being further expanded. Relative to 2007, we were able to provide a larger number of human resource indicators in the period under review. The following Group fi gures are only based on approximately 77 percent of the total workforce, relative to 2,875 employees in our production companies (number of people employed: 3.739)

December 31, 2008	2008
Key fi gures1
Part time employees in %	3.86
Number of trainees	161
Quota of trainees in %	5.60
Expenses for personnel development in € K	appr. 800,000
Average age in years	39.92
Number of men/women (proportion in %)	2,374 (82.57)/ 501(17.43)
Number of years with the company	10.70
Fluctuation in %	15.34
Fluctuation
(excl. shutdown of Welsh plant) in %	12.13
Sickness rate in %	2.78

Figures only based on 77 percent of total workforce

Skilled staff for strong performance

During the last fi scal year, we were able to continue our policy of matching the right person with the right job to maintain our strong competitive position on the international market. In fi scal 2008, we continued to accept employees with sound technical training for our technical access program, where they could go on to qualify as construction machinists, helping us to meet growing demand for service employees in the affi liates.

We provided intensive training for 161 young people in industrial or business posts or within the framework of practical training programs at technical or vocational colleges. The student training quota for the last fi scal year was 5.6 percent worldwide. In 2008, 39 trainees completed their training, with 32 of these offered positions in the company, a takeup rate of 82 percent.

In Manila, we continued to provide training in collaboration with the Don Bosco Institute. Here we are currently training 20 young people from low-income families along the same lines as the German dual training system (previous year: 20 young people).

Age structure

number of employees in %

16 – 20			4.8
21 – 30			21.2
31 – 40			24.9
41 – 50			27.4
51 – 60			18.1
above 60			3.6

Training and voluntary benefi ts

The Wacker Neuson Group has always placed great im portance on employee development and ongoing education and will continue to do so. For this reason, expansion of the Wacker Neuson Academy was further promoted in 2008. The Academy was able to offer and run around 130 courses. Approximately 2,200 participants from the company and customer employees took up this offer.

In 2008, we focused on internal training and development measures in sales and technology. We also held courses in foreign languages, occupational safety and health. Our staff development expenditure for the Group as a whole over the last fi scal year totaled around EUR 0.8 million (pre vious year: EUR 0.9 million).

We offer our employees in Germany numerous voluntary benefi ts, as well as the opportunity to participate in an employee-funded, insurance-based company pension plan. Depending on their location, we provide various means of support for employees across the Group, inclu ding grants, healthcare initiatives and insurance-based company retirement benefi ts. As of December 31, 2008, the parent company had agreements on part-time work in place with 41 employees close to retirement age (previous year: 39).

On March 31, 2008, the parent company left the employers' association of the Bavarian electrical and metalworking industries, Bayerische Metall- und Elektroindustrie e.V. or VBM, and switched to Bayerische Unternehmensverband Metall- und Elektro e.V. or BayME, which is not tied to collective bargaining agreements. This move should simp lify the agreement of company-specifi c solutions with regard to working hours, fl exible working arrangements and retirement benefi ts for employees.

Adjusting capacity

During 2008, a number of agreements were made between company management and works councils at the various production sites to try countering the economic downturn. Employee work accounts were extended at some sites. In addition, temporary staff were layed off and overtime and holiday accounts were reduced to prepare production sites in Reichertshofen, Pfullendorf and Linz (Austria) for the start of short-time work in January 2009.

The closure of the four-wheel dumper production plant in Tredegar (Wales, Great Britain) caused the loss of a total of 90 jobs. Group management found socially responsible solutions for the affected employees.

Due to the global recession, staff numbers have also been cut at other production sites. In other words, production staff (excluding temporary staff) was reduced by 3.9 percent worldwide.

Number of employees (Group)1 as of December 31, 2008

2008	20072	20063	20054	2004
3,665	3,659	2,837	2,630	2,224

1 By number of full-time jobs

2 Through the merger with Neuson Kramer

3 Through Ground Heaters acquisition

4 Through Weidemann acquisition

Sales and marketing

• Customer loyalty measures implemented
• Encouraging feedback at construction equipment trade fairs
• Sales and training activities strengthened

The Wacker Neuson Group's sales and marketing activities over the last fi scal year aimed to provide customers and business partners with convincing proof of the quality and performance of our products and services, thus increasing customer loyalty to the company. We implemented this strategy both in person and via a range of communication tools.

After the merger with Neuson Kramer Baumaschinen AG (now Wacker Neuson Beteiligungs GmbH) in 2007, the focus in 2008 was on implementing a new corporate design and the accompanying standardization of colors for equipment and machinery under the new Wacker Neuson brand. We also worked intensively to redesign all com munication and marketing tools and to communicate the new brand image to all target groups. Once again, we are particularly focused on positioning Wacker Neuson as a premium brand with a high-quality range of light and compact equipment, fl anked by a comprehensive service offering.

Key enablers here included brochures, product information sheets, press releases, expanded Internet communication, plus presentation of our offering at exhibitions and trade fairs. Our most important trade fairs in Germany last year were Nordbau in Neumünster and GaLaBau in Nuremberg, the international trade fair for the design, construction and maintenance of urban, green and open space. At a European level, we attended fairs in Spain, Great Britain and Italy. In the US, we showcased the 14 compact models earmarked for launch in the US at a number of trade fairs. Highlights included a booth at the largest trade fair in the Americas, Conexpo/CON-AGG in March in Las Vegas (US). A steady fl ow of visitors to our stands at all trade fairs enabled numerous discussions with our customers. Weide mann GmbH presented its products at a number of agri cultural trade fairs in Europe. Our comprehensive product and service offering under the Wacker Neuson and Kramer Allrad brands (the latter applies to Europe only) resonated strongly among customers. The number of actual deals closed at the trade fairs increased in comparison with pre vious years.

The number of employees in sales and service worldwide grew over the past year to 1,491 (previous year: 1,473). This enabled us to maintain a high level of service quality again and offer tailored sales and service solutions, aligned with the specifi c requirements of customers and their markets. We offered major customers particularly attractive fi nancing programs for compact equipment.

Work was completed on our training center at the Reichertshofen production site at the beginning of 2008. In the reporting year, we thus began to train both our own sales and service teams and our customers in the correct deployment of our products, showing – regardless of the weather – how our equipment and services can help optimize construction processes.

VIII. Risk report

Notes on the risk management system

In fi scal 2008, the Wacker Neuson Group continued to implement its risk management system as a key steering tool for business decisions and processes. This system covers planning for each of the core business segments, comprehensive Group reporting on all business processes and affi liates to provide every decision-maker with regular analysis, discussion and evaluation, process defi nitions for all business segments, and Group auditing.

The risk management handbook outlines the Group's goals, its risk policy in terms of defi ning, assessing and quantifying potential risks, and the nature and procedures of the risk management system with roles and responsibilities regarding analyzing, monitoring and communicating identifi ed risks. This allows us to derive suitable measures to actively counteract known risks.

Risk categorization

Risk class	Risk exposure1
To be observed	0 to 50,000 EUR
To be monitored	50,000 Euro to 125,000 EUR
Major	125,000 EUR and more

1 Risk exposure = (probability/100) x impact

Our risk reporting system lists and describes each individual risk identifi ed in our lines of business. We examine the situation every quarter and add newly identifi ed risks if necessary. The controlling department also surveys the affi liates and departments at the Group headquarters. Follow ing checking for completeness and plausibility, the data gathered is aggregated.

We then assess the risks using both quantitative and qualitative methods that are uniform throughout the Group, allowing comparison across the various business units and beyond. The risks are evaluated according to probability of occurrence and potential damages. The resulting values are derived and prioritized on the basis of current and projected accounting fi gures. This provides objectivity in determining damages. Following this process, the risk report is generated and presented for acknowledgement by the Executive Board.

Risk probability in %

Category	Degree of probability in the following year
Low	0 to 5
Medium	5 to 20
High	20 to 50
Very high	50 to 100

The Group's comprehensive risk management system also includes systematic fi nancial risk management. We have defi ned Group guidelines and policies for certain activities such as dealing with foreign currency risks, interest rate risks and credit risks, the use of derivative and other fi nancial instruments and the use of liquidity surpluses.

Risks

As of December 31, 2008, the company identifi ed the following signifi cant risks to the Wacker Neuson Group that could have a negative impact on business development:

Environment and industry risks

(risks related to the overall economic situation, procurement and retail markets, locations and countries) The Wacker Neuson Group is dependent on the general economic climate and international construction industry trends and on developments in the agricultural industry as they impact on the Weidemann GmbH affi liate and – to a lesser extent – on the Kramer-Werke GmbH affi liate.

As a result of the current macroeconomic climate and construction industry trends, the Group is increasingly exposed to negative dynamics on its core markets. Due to the global recession, the company notes a growing risk that the drop in product sales in both light and compact equipment due to changed customer order patterns will continue throu ghout the remainder of fi scal 2009 and beyond. At December 31, 2008, accumulated orders for compact equip ment for the construction and agricultural industries were 25 percent below the equivalent fi gure for the previous year. It is to be assumed that this gap will widen further as the propensity to invest continues to fall in response to increasingly stringent bank lending policies. The company is mitigating these risks by adopting proactive go-to-market strategies in the regions and stepping up activities in growth segments such as agriculture, and in dynamic markets such as Eastern Europe and Asia.

Global cost-cutting measures such as a hiring freeze were also implemented. Following the reduction of holiday accounts and temporary staff as well as the expansion of our fl exible working schemes at all production sites in fi scal 2008, we implemented short-time work at our German plants in Reichertshofen and Pfullendorf (Kramer-Werke GmbH) and our Austrian plant in Linz at the start of fi scal 2009. Should these measures prove to be insuffi cient, we cannot rule out staff rationalization measures.

Falling demand for products has led to an increase in stock, and subsequently working capital. The company has fl exibly adapted productivity levels and implemented measures to reduce inventories, including attractive fi nancing packages for major customers in the compact equipment segment. However, continued downturn in sales could lead to an increase in fi nancing costs for working capital. Profi t levels are at risk if the measures implemented do not have suffi cient impact and if the cost savings fail to keep pace with any further drops in sales or if we are unable to reduce inventory in synch with any further drops in sales.

Further downturn in the European and German construction industry may have a stronger negative impact on demand for Wacker Neuson Group products and services than currently expected. The same applies to the agri cultural industry. Although a downturn in this area is not expected at this stage, a slump here would affect the results of Weidemann GmbH in the long term and – to a lesser extent – Kramer-Werke GmbH. We regularly monitor our cost structure and investment measures to assess the potential impact on our profi t, fi nances and assets.

In the US, experts feared that the subprime crisis, which is having a particularly negative impact on private residential construction, will now have a knock-on effect on the nonresidential sector, including highway, underground and commercial construction projects. However, the US govern ment is planning an investment program to boost the construction industry, which could mitigate the effects of the sluggish economic and depressed construction climate on our business prospects in the Americas region. We are countering the risks we face in this region by actively pushing our go-to-market strategy, launching new products – particularly compact equipment – and establishing a Wacker Neuson dealer network.

The Wacker Neuson Group is also affected by the seasonal fl uctuations. Sales may therefore fl uctuate during the year.

The international nature of our business means our company is exposed to political, national economic and other risks.

We face tough international competition. While we have decided to maintain the price strategy accepted by our customers, global competitors are increasingly offering discounts. This may mean we lose market share.

Strategic business risks

(risks arising from business decisions, investments, entering new markets, launching new products and acquiring and integrating new companies) As part of our long-term strategy, we are expanding the compactequipment segment, as well as our sales and service network and the rental business in Central and Eastern Europe. This involves investments, which may not necessarily be recouped. Unforeseeable risks can also arise within individual projects and delay execution. We are countering this by adapting our timing to current market dynamics, carefully examining all planned investments and possible risks and pursuing a lean project management policy.

The company is also exposed to risks in connection with its ongoing international expansion activities. If we do not expand as planned, this could have a negative impact on our long-term growth strategy.

We will continue with this strategy by expanding the compact equipment segment in fi scal 2009 and establishing our light and compact equipment offering for the construction industry under the Wacker Neuson brand and launching Wacker Neuson-branded compact equipment in the Americas region and, in the medium term, Asia. We have identifi ed customer demand here, but there is nevertheless a risk that products under the Wacker Neuson brand will not achieve the desired level of market penetration. We are minimizing this risk through intensive sales and training activities.

The merger with Neuson Kramer has positioned the company as a major global player in the light and compact equipment market. There is a risk of delays in the global distribution of compact equipment through our existing sales and service network. Risks also arise from harmonizing national sales channels comprising direct sales and dealer networks. Failure to align these channels may lead to the loss of sales partners in Europe. We are countering this by maintaining close ties with our sales partners.

We also consider acquisitions to enhance our product portfolio, and these are carefully assessed. However, errors in estimating the risks entailed in an acquisition can have a negative impact on Group business development and growth prospects.

During the last fi scal year, the Wacker Neuson Group decided to close the production plant in Tredegar (Wales, UK) and transfer production of four-wheel dumpers to Linz in Austria. This process will be completed in spring 2009. If this move is not completed on time, there is a risk of delays in product deliveries to customers. The company is countering this risk by implementing an effi cient project management policy.

Kramer-Werke GmbH produces telescopic handlers for CLAAS Global Sales GmbH, which CLAAS then distributes to the agricultural industry under its own name. There is a risk that the contracting company could end this partnership or reduce the number of orders. To combat this, Kramer-Werke GmbH actively manages its relationship with CLAAS and con tinually improves its processes and the quality of its products.

Our company's customer and supplier structure varies according to country. Within an individual country, the loss of a major customer can have a serious impact on demand for products and services from the affi liate concerned. In addition, the loss of a supplier or delayed delivery of parts and accessories can threaten an affi liate's individual sales targets. We are countering this risk by expanding our sales activities, making ongoing improvements to supplier structures and concluding standard agreements.

Demand on the international market is becoming increasingly concentrated due to mergers among our customer base. Customer takeovers by fi nancial investors are also possible here. This type of development can have positive or negative impacts on our unit sales and revenue, which it is not yet possible to assess. The Wacker Neuson Group is countering this risk through close customer communication and further building its brand.

We are continuing to stock our rental and demo fl eets with compact equipment. The income from renting this equipment will be distributed over the subsequent four to six years. There is a risk that the planned proceeds from the sale of demo products and end-of-life equipment from the rental pool and the proceeds from the rental of new ma chines will not materialize. We are minimizing this risk by actively driving the sales and rental business.

The value of goodwill and indefi nite-lived brands is verifi ed during the annual impairment test. For this purpose, the book value is compared with the fair value. The fair value is determined using the discounted cash fl ow method. Value is impaired if the fair value, less selling costs, is lower than the book value. Impairment losses did not need to be written down in fi scal 2008. It is currently unclear whether this will also be the case in fi scal 2009. However, should the compact equipment segment in particular not develop as planned, write-downs on goodwill may become necessary in future as a result of an impairment test.

Planned company restructuring measures could prove diffi cult, time-consuming or cost-intensive, or entail tax and other disadvantages for shareholders.

Performance-related risks

(risks associated with procurement, production, sales, and research and development) There is a risk that our company might not be able to achieve

planned revenue and profi ts if individual distri bution partners do not sell the expected volumes of our products. We are countering this by pursuing a contact management policy tailored to the needs of our sales partners.

The Group requires components and raw materials to manufacture its products – particularly steel, aluminum and copper. Our production uses structural steel components and precast parts, for instance, as well as hydraulic and chassis components containing varying amounts of crude steel. Prices for energy and key raw materials are currently subject to extreme fl uctuations. The evolution of raw mate rial prices and their impact on manufacturing costs are still diffi cult to predict. The company thus prefers contracts to its advantage. So it is in a position to take advantage of any potential falls in price.

Wacker Neuson also relies on third-party components and raw materials being free of defects and meeting the relevant specifi cations and quality standards. Defects here can result in quality problems as well as delays to our production processes and therefore to our shipments. We address this risk with our quality management system, which also covers supplier relations.

In view of the market conditions, we cannot exclude that certain of our current customers may face fi nancial diffi culties, possibly culminating in insolvency. This in turn would lead to a rise in accounts receivable and a subsequent increased risk of a default. We counteract the risk of changes in individual customers' payment patterns through our active accounts receivable management policy.

The Wacker Neuson Group depends on developing new products and introducing these to the market in good time. Here it is essential to comply with national and international guidelines and new legislation and to observe them in our product development. If this does not continue to happen, our competitive position and growth opportunities may be impaired. The company's research and development department therefore continuously works to develop new products and enhance our existing portfolio, always align ing its activities with market demands and observing applicable regulations, laws and directives.

Financial risks

(risks associated with fi nancial instruments, exchange rate and interest fl uctuations and fi nancing)

The Wacker Neuson Group operates worldwide and therefore generates part of its revenue in currencies other than the Euro. Exchange rate fl uctuations could therefore affect the company's key results. The Group implements currency hedging to counter the effects of negative exchange rate trends. Wherever possible, we pursue natural hedging policies.

We use standard fi nancial instruments such as interest rate swaps and foreign exchange forward contracts and options exclusively for hedging purposes and to minimize risks. To acquire Weidemann GmbH in 2005, we arranged a URIBORbased loan with a fi xed margin and semi-annual interest and principal payments. 100 percent of the inter est risk on the outstanding loan is hedged by a fi nancial derivative (forward interest-rate swap).

The international fi nancial market crisis has increased the risk of banks calling short-term loans, forcing their customers to take out loans at higher interest rates to ensure liquidity. There is also a risk that the collapse of a national credit institute could result in the loss of bank balances or credit lines by a company in the Wacker Neuson Group. The company is mitigating this risk with an active investment and banking policy.

Legal risks

(risks related to pending legal proceedings, patent and trademark law, and tax law)

A potential risk is that the company may be unable to protect its intellectual property suffi ciently, which could impair its competitive ability. We are counteracting this risk through intensive patent and intellectual property management.

Warranties and product liability claims can result in claims for damages and injunctions. We are minimizing this risk by taking the greatest of care in the development and manufacture of our products and in the drafting of contracts, and also through the systematic enforcement of those contracts. The Group also minimizes the risk of disputes with third parties over intellectual property rights through extensive prior investigations and research.

No legal proceedings are currently underway or pending that might pose signifi cant risks to the Wacker Neuson Group's fi nancial situation. The Group has concluded in surance policies worldwide to protect against liability risks and potential damages attributable to the company.

Other risks

(risks associated with human resources, IT and the environment)

The company uses numerous IT systems in logistics, procurement and production. Failure of these systems could negatively impact on our production and goods fl ow and lead to loss of sales. SAP systems are currently being rolled out in several areas. We are pursuing a strict project management policy to counter risks that can occur during the implementation of global systems as well as to prevent additional costs.

Increasingly strict regulations to reduce noise and environmental impact and measures to ensure user protection can entail additional costs for the Wacker Neuson Group. We counteract risks from increasing legal obligations through active and prompt implementation.

Despite current market developments, the Wacker Neuson Group is looking to recruit qualifi ed mechanical engineers as appropriate. A downturn in the labor market could prevent us covering our need for qualifi ed staff. The com pany is countering this risk with dedicated recruitment efforts.

Summary of Group risk situation

(assessment of risk situation by the Executive Board) Due to the economic trends described here, the company has identifi ed more risks than in the previous year.

Viewed in terms of percentage of overall risk, our main risks lie in the performance-related and fi nancial categories. Together, these represent around 91 percent of the total risk to our Group.

We are not currently aware of any other signifi cant risks to the Group. Furthermore, we have not identifi ed any individual or collective risks to our continued existence as a going concern that might negatively affect individual companies within the Group or the Group as whole in the foreseeable future.

Distribution of risk1

in % (previous year)

	Percentage share
Risk category	of total risk
Performance-related risks	54.0 (71.0)
Financial risks	37.4 (13.8)
Strategic business risks	2.6 (4.9)
Other risks	3.6 (5.9)
Environment and industry risks	1.1 (3.8)
Legal risks	1.2 (0.6)

1 Differences attributable to rounding

IX. Information in accordance with Section 315 (4) and Section 289 (4) of the German Commercial Code (HGB) as well as the Executive Board report in accordance with Section 120 (3) sentence 2 of the AktG (German Stock Corporation Act)

According to Section 315 (4) of the HGB, listed companies must disclose information on the composition of capital, shareholders' rights and restrictions, participating interests and corporate bodies that may be relevant for takeovers in the Group Management Report. The same information must also be disclosed in the Management Report, pur suant to Section 289 (4) of the HGB. Furthermore, according to Section 120 (3) sentence 2 of the AktG, the ExecutiveBoard must submit a report containing this information to the AGM. The following contains a summary of the infor mation pursuant to Section 315 (4) and Section 289 (4) of the HGB as well as the corresponding explanatory comments pursuant to Section 120 (3) sentence 2 of the AktG.

Composition of subscribed capital

At December 31, 2008, the company's share capital amounted to EUR 70,140,000, divided into 70,140,000 individual no-par-value nominal shares, each representing a proportionate amount of the share capital of EUR 1 according to Article 3 (2) of the Articles of Incorporation of Wacker Construction Equipment AG. There is only one type of share; all shares are vested with the same rights and obligations as outlined in detail in particular under Sections 12, 53a, 188 ff and 186 of the AktG. Each share entitles the bearer to one vote at the AGM. Any treasury shares held by the company do not entitle it to any rights (Section 71b AktG). Under the terms of Section 67 (2) of the AktG, registered shares only confer shareholder rights vis-à-vis the company to those shareholders entered as such in the stock register.

Restrictions affecting voting rights or the transfer of shares

Information on the pool agreement

There is a pool agreement between some shareholders and companies of the Wacker family on the one hand, and companies and shareholders of Neuson on the other. Prior to each AGM of Wacker Neuson SE, the pool members decide how to exercise voting and petition rights in the meeting. Each pool member undertakes to exercise their voting and petition rights in the AGM in line with the pool's decisions, or to have these rights exercised in this manner. If the pool does not reach a decision, with regard to a resolution on the allocation of annual profi ts, adoption of the annual fi nancial statements by the AGM, approval of Executive and Supervisory Board members' actions, appointment of the auditor, upholding minority interests and compulsory changes to the Articles of Incorporation as a result of changes to legislation or jurisdiction, the pool members have the right to freely exercise their voting rights. In all other cases, the pool members must vote to reject the proposal. The Neuson shareholders appoint two members to the Super visory Board, and the Wacker share holders appoint two further members to the Supervisory Board.

Shares can be transferred without restriction to spouses, registered partners, pool members' children, children adopted when they were minors by pool members, siblings, foundations set up by pool members that are either charitable foundations or in which the benefi ciaries and the

controlling members of the management board satisfy the afore mentioned criteria, and companies where the direct or indirect shareholders also satisfy the aforementioned criteria are. If shares are transferred to any such persons, they must join the pool agreement. If shares are transferred to third parties, either for a fee or free of charge, the other pool members have the right to acquire these shares. If the shares are to be sold to third parties off the stock exchange, all of the other pool members have a preferential purchase right. If a pool member intends to transfer shares in such a way that more than 50 percent of voting rights in Wacker Neuson SE would be held by third parties who do not satisfy the criteria defi ning those individuals to whom transfers can be freely made, the remaining pool members have the right to also sell their shares. If a pool member is excluded from the pool for good reason, the other pool members have a right to acquire the shares or a preferential purchase right. This also applies if a pool member ceases to qualify as a pool member.

Information on the partnership agreement of Wacker Familiengesellschaft mbH & Co. KG

Part of the Wacker family shareholders hold part of their shares via Wacker Familiengesellschaft mbH & Co. KG, which in turn also holds shares via Wacker-Werke GmbH & Co. KG. Economic ownership of the shares is attributed to the Wacker family shareholders.

The pool agreement has precedence over the regulations of the partnership agreement as long as Wacker Familiengesellschaft mbH & Co. KG is party to the above pool agreement. A partners' meeting is held prior to every AGM of Wacker Neuson SE. In this meeting, the Wacker family shareholders defi ne how they will vote and exercise their petitioning rights. However, votes in the AGM are to be cast in line with the pool's decisions. Two of the Wacker family shareholders have the right to propose one member of the Supervisory Board each to the shareholders, this member is then to be elected by the remainder.

Only the acquisition and preferential purchase rights in the pool agreement apply to family members who are party to the pool agreement. In the case of a sale by a family member who is not a pool member, acquisition and pre ferential purchase rights apply if shares are sold to third parties who do not fulfi ll the criteria defi ning those indivi duals to whom shares can be freely transferred set forth in the abovementioned pool agreement. If a family shareholder

exits the company as a result of a termination, the remaining pool members have a preferential purchase right to buy the shares for a period of two years from the date this shareholder exits the company. In addition, the partners' meeting can resolve that the exiting family shareholder does not receive compensation in cash but in the form of the shares to which they are fi nancially entitled. After May 14, 2012, each exiting family member can demand to receive their compensation in the form of the shares to which they are fi nancially entitled.

Pool agreement between Lehner and Neuson shareholders

The Lehner shareholders have issued a Neuson shareholder with power of attorney with regard to the shares they ac quired prior to the merger and during the merger between the company and Neuson Kramer Baumaschinen AG (now Wacker Neuson Beteiligungs GmbH). The Neuson shareholder is independently responsible for exercising these voting rights. He is not subject to any instructions, and will always exercise these in the same way as for the shares that he himself holds. These shares are thus subject to the restrictions of the pool agreement mentioned above.

The Neuson shareholder has a preferential purchase right to buy these shares in the event of a transfer to entities other than the Neuson shareholder or to Lehner shareholders.

Shares that part of the Executive Board members received as part of their remuneration

Three of the members of the Executive Board have received shares in the company as part of their remuneration. The company has an unrestricted, preferential purchase or acquisition right over some of these shares in the event that they are transferred.

The Executive Board is not aware of any restrictions affecting voting rights or the transfer of shares.

Direct or indirect participating interests in equity that exceed ten percent of voting rights

The Executive Board is aware of the following direct or indirect participating interests in the share capital of the company that exceed 10 percent of voting rights at December 31, 2008:

	Direct share	Voting rights allocated	Percentage of voting
in % at Dec. 31, 2008	of voting rights	to the stakeholder1	rights in total1
Stakeholder with duty to disclose interest
Wacker Familiengesellschaft mbH & Co. KG	5.29%	59.09%	64.38%
Wacker-Werke GmbH & Co. KG	29.07%	35.31%	64.38%
IWZ AG		64.38%	64.38%
VGC Invest GmbH	5.06%	64.38%	69.43%
Christian Wacker	0.46%	64.38%	64.84%
Dr. Ulrich Wacker		69.43%	69.43%
Andreas Wacker	0.46%	64.38%	64.84%
Barbara von Schoeler	0.26%	64.38%	64.64%
Petra Martin		64.38%	64.38%
Dr. Andrea Steinle		64.38%	64.38%
Ralph Wacker	0.46%	64.38%	64.84%
Susanne Wacker-Waldmann	0.46%	64.38%	64.84%
Benedikt von Schoeler		64.38%	64.38%
Jennifer von Schoeler		64.38%	64.38%
Leonard von Schoeler		64.38%	64.38%
AW Holding Inc.		64.38%	64.38%
Alexander Wacker		64.38%	64.38%
Trustee		64.38%	64.38%
Vicky Schlagböhmer		64.38%	64.38%
Christiane Wacker		64.38%	64.38%
Georg Wacker		64.38%	64.38%
Baufortschritt - Ingenieur gesellschaft mbH		64.38%	64.38%
PIN Privatstiftung	0.00001%	64.38%	64.38%
NEUSON Industries GmbH	0.00001%	64.38%	64.38%
Hans Neunteufel	0.00001%	64.38%	64.38%
NEUSON Ecotec GmbH	29.01%	35.37%	64.38%
Martin Lehner	0.46%	64.04%	64.51%
Adolf Lehner	0.33%	64.04%	64.38%
Herta Lehner	0.33%	64.04%	64.38%

1 Votes bounded through the synidcate agreement (see page 59) are added together

Bearers of shares with extraordinary rights that grant the holders controlling powers

There are no shares with extraordinary rights that grant the holders controlling powers.

Type of control of voting rights if employees hold participating interests and if they do not directly exercise their controlling rights.

The company's employees can exercise the controlling rights due to them from shares directly, as is the case for other shareholders, according to statutory provisions and the Articles of Incorporation.

Statutory provisions and provisions of the Articles of Incorporation regarding the appointment and dismissal of members of the Executive Board and changes to the Articles of Incorporation

Members of the Executive Board are appointed and dismissed according to Sections 84 and 85 of the AktG. According to Article 5 (1) of the Articles of Incorporation of Wacker Construction Equipment AG, the Executive Board of Wacker Construction Equipment AG comprises one or several members. The Supervisory Board deter mines the number of members of the Executive Board (Article 5 (2) sentence 1 of the Articles of Incorporation). The Supervisory Board appoints and dismisses members of the Executive Board. Members of the Executive Board of Wacker Construction Equipment AG are appointed for a maximum period of fi ve years (Sections 84, 85 of the AktG). The Supervisory Board can appoint a Chairman of the Exe cutive Board, a Deputy Chairman of the Executive Board and a Spokesperson for the Executive Board (Article 5 (2) sentence 2 of the Articles of Incorporation).

Sections 179 ff of the AktG must be observed in the event of changes to the Articles of Incorporation. The AGM resolves on changes to the Articles of Incorporation (Sec tions 119 (1) No. 5 and 179 (1) of the AktG). The Supervisory Board is authorized to resolve changes to the Articles of Incorporation that only affect the wording (Article 14 of the Articles of Incorporation). Resolutions by the AGM of Wacker Construction Equipment AG are passed with a simple majority of votes cast and, to the extent that the law requires a majority of capital represented in addition to a majority of votes cast, with a simple majority of the share capital represented when the resolution is passed to the extent that mandatory statutory regulations require a larger majority of votes cast or capital represented; votes withheld do not count as votes cast (Article 20 (1) of the Articles of Incorporation).

The Executive Board's powers, in particular with regard to the possibility of issuing or buying back shares

Treasury shares

By way of a resolution by the AGM on June 3, 2008, the Executive Board is authorized, with the prior approval of the Supervisory Board, to acquire 7,014,000 treasury shares via the stock exchange by December 2, 2009. This acquisition may also be performed by one of the com pany's group companies or for its or their account by third parties. In so doing, the shares acquired as a result of this authorization together with other shares in the company that it has already acquired and still holds may not at any time total more than 10 percent of the existing share capital. Shares may not be purchased for the purpose of trading company shares on the stock exchange.

The compensation paid by the company per registered share (without incidental acquisition costs) may not be more than 10 percent higher or lower than the arithmetic average of the closing prices for shares in the company in XETRA trading (or a comparable successor system) on the Frankfurt Stock Exchange on the last fi ve stock market days prior to the date on which the undertaking to acquire the shares was entered into. The authorization can be exercised in whole or in parts, in the latter case also on multiple occasions.

The Executive Board may also redeem the treasury shares still to be acquired without a renewed resolution by the AGM with the permission of the Supervisory Board. The authorization can be exercised in whole or in parts, in the latter case also on multiple occasions. The redemption is performed such that the share capital is not changed, but that the proportion the other shares represent in the share capital is increased in accordance Section 8 (3) of the AktG (Section 237 (3) No. 3 of the AktG). The Executive Board is authorized to change the number of shares in the Articles of Incorporation accordingly.

The Executive Board is authorized, with the approval of the Supervisory Board, to use shares in the company that were acquired as a result of the above authorization as (partial) compensation as part of mergers or to acquire companies, participating interests in companies or parts of companies. The acquired treasury shares may also be sold to Executive Board members and members of executive bodies of associated companies within the framework of an executive profi t-share model, which has yet to be approved by the Supervisory Board. The Supervisory Board will determine the extent to which shares will be sold to members of the Executive Board within the framework of this plan when deciding on the overall executive profi t-share model. In addition, the Executive Board is authorized, with the ap proval of the Supervisory Board, to sell the treasury shares still to be acquired at a price that is not substantially lower than

the stock market price on the date of the sale. The price at which shares in the company can be sold may not be more than 5 percent lower than the arithmetic average of the closing prices of shares in the company in XETRA trading (or a comparable successor system) at Frankfurt Stock Exchange on the last fi ve stock market days prior to the date of the general sale. In this case, the number of the shares to be sold together with the new shares that were issued after this authorization was issued excluding subscription rights in accordance with Section 186 (3) sentence 4 of the AktG, and together with treasury shares already sold, may not exceed 10 percent of the company's share capital which exists on the date the resolution by the AGM came into effect. The authorization to redeem/sell shares can be availed of in full or in several partial amounts. The share holders subscription rights to treasury shares in the com pany is excluded to the extent that these shares are re deemed or old according to the above authorizations.

Authorized Capital I

According to Article 3 (3) of the Articles of Incorporation of Wacker Construction Equipment AG, the Executive Board is authorized to increase the company's share capital by April 12, 2012, with the approval of the Supervisory Board, by issuing new, registered shares against cash contributions, in full or in partial amounts, on one or several occasions, however at the most by a maximum of EUR 1,000,000 (Authorized Capital I).

Shareholders' statutory subscription rights are excluded:

• If employees of the company and its affi liates and executive bodies of affi liates (to the extent that these are not simultaneously members of the company's Executive Board) are offered shares at an issue price that is 15 percent lower than the issue price;
• For fractional amounts;
• Otherwise, if the issue price of the new shares is not signifi cantly below the company's market price and the new shares issued to the exclusion of subscription rights do not exceed a total of 10 percent of the share capital, neither at the time the authorization takes effect, nor at the time of exercising. Shares must be added to the above 10 percent threshold that are issued or are to be issued to service options or convertible bonds to the extent that the bonds are issued in corresponding ap plication of Section 186 (3) sentence 4 of the AktG excluding subscription rights; in addition the sale of treasury shares is

to be added if the sale was made as a result of a valid authorization to sell treasury shares that applied on the date that Authorized Capital I came into effect in corresponding application of Section 186 (3) sentence 4 of the AktG excluding subscription rights.

Subject to the approval of the Supervisory Board, the Executive Board also decides on the content of the respec tive share rights and the other conditions of the share issue including the issuing amount.

Authorized Capital II

According to Article 3 (4) of the Articles of Incorporation of Wacker Construction Equipment AG, the Executive Board is authorized to increase the company's share capital by April 12, 2012, with the approval of the Supervisory Board, by issuing new, registered shares against noncash con tributions, in full or in partial amounts, on one or several oc casions, however at the most by a maximum of EUR 5,360,000 (Authorized Capital II).

The shareholders' statutory subscription rights are excluded to grant shares against the contribution of companies and participating interests in companies or parts of companies to the company.

Subject to the approval of the Supervisory Board, the Exe cutive Board also decides on the content of the respective share rights and the other conditions of the share issue including the issuing amount.

The authorized capital amounts described above refl ect the practices typical of listed businesses similar to the company. They are not intended to obstruct takeover bids.

Key company agreements that are subject to a change of control clause following a takeover bid and the resulting impact

The company has the following key agreements with companies that are subject to a change of control clause:

The conditions of the master credit agreement in the original amount of EUR 50 million to fi nance the acquisition of the Weidemann Group in 2005 include an extraordinary right on the part of the lender to terminate the credit line in the event of a change to the company's shareholder structure.

A credit agreement for a revolving line of credit for EUR 65 million to fi nance working capital requirements for the company grants the lender the right to extraordinary termi nation of the agreement if there is a change of control at the company. According to the credit agreement, there is a change of control if a different person acquires or takes over at least 50.01 percent of voting rights in the company, or ascertains that they hold this amount. Voting rights are allocated in accordance with Section 30 of the Wertpapier-Übernahmegesetz (WpÜG – German Acquisition and Takeover Act).

A further credit agreement for a revolving line in the amount of EUR 10 million to fi nance working capital requirements for the company grants the lender the right to terminate the agreement at any time if the shareholder families no longer jointly hold at least 50.01 percent of shares in the company.

Compensation agreements between the company and the members of the Executive Board or its employees for the event of a takeover offer.

There is no such agreement.

During the period under review, the Executive Board had no reason to address issues concerning a takeover; or engage with disclosure details stipulated under the German Takeover Directive Implementation Act (Übernahmerichtlinie-Umsetzungsgesetz). The Executive Board therefore does not see the need to add further details to the information provided above.

X. Remuneration framework

Information on the Executive Board

According to the Vorstandsvergütungs-Offenlegungsgesetz (German Executive Board Remuneration Disclosure Act), listed companies must disclose individualized information on the Executive Board's remuneration in the notes to the annual and consolidated fi nancial statements, broken down into performance-related and non-performance related components as well as long-term incentives. The Act sti pulates that information may be withheld if the AGM resolves this with a majority of 75 percent of votes cast. This type of resolution can be passed for a maximum period of fi ve years. The company has availed of this opportunity for fi scal years 2006 to 2010 by way of a resolution by the AGM on May 15, 2006.

The Executive Board's remuneration is defi ned by the Super visory Board's Executive Committee and reviewed at regular intervals. Defi ning the structure and amount of the remuneration is based on the company's size and eco nomic position as well as the tasks and performance of the members of the Executive Board.

The Executive Board's remuneration comprises:

• A fi xed annual basic salary
• A variable annual salary
• Special bonus
• Transitional pay, compensation upon an early exit
• Remuneration in the case of accident, illness or death
• Non-cash remuneration and other additional remuneration
• A pension commitment

The individual remuneration components are as follows:

The annual fi xed salary is paid in equal monthly installments.

The variable salary is based on consolidated earnings after taxes, taken from the approved consolidated fi nancial statements for the respective fi scal year. An upper threshold for the variable remuneration has been agreed in the same amount for all Executive Board members.

Members of the Executive Board also receive a special bonus. For part of the Executive Board, this bonus is tied to fi nancing the purchase of company shares within the framework of an executive profi t-share model with a view to binding the Executive Board members to the company in the long term. The other members of the Board shall receive the special bonus during the interim period pending introduction of a new executive profi t-share model.

If the Executive Board members' employment contract is terminated prematurely, but not for good cause, the members of the Executive Board each receive compensa tion in the amount of their average discounted annual remuneration for the remainder of the contractual period including their variable remuneration and the special bonus. If the contract is terminated after the age of 55 and prior to the member reaching the age of 61, the members of the Executive Board may claim transitional payments.

If they are temporarily prevented from working through no fault of their own, members of the Executive Board continue to receive their fi xed annual salary and bonus for a limited period. Widows and dependant children receive corresponding payments for a limited period.

The non-cash remuneration and other remuneration includes a subsidy for private life insurance, premiums for life insurance in favor of the Executive Board members, premiums for accident insurance, the use of a company car, etc.

The members of the Executive Board receive an old-age pension for life upon reaching the age of 61 unless the employment relationship with the company was terminated for good cause that is the fault of the Executive Board member. In addition, an invalidity pension is paid in the event of disability or professional incapacity, and a widow's and orphans' pension is paid in the event of death. Other remuneration may also be added to these amounts payable.

Information on the Supervisory Board

According to the Articles of Incorporation, members of the Supervisory Board receive remuneration determined by the AGM. By way of a resolution dated July 4, 2003 (in the wording of the resolutions dated May 15, 2006 and April 13, 2007), the Annual General Meeting set fi xed and variable remuneration for the members of the Supervisory Board for each fi scal year. The fi xed remuneration for each individual member of the Supervisory Board totals EUR 20,000. The Chairman of the Supervisory Board receives twice this amount, and his/her Deputy receives 1 ½ times the fi xed remuneration. Members of committees receive an additional remuneration, with the Chairman of each committee receiving twice the regular committee remuneration. In addition, the members of the Supervisory Board receive a meeting fee for each Supervisory Board meeting in which they participate.

The variable remuneration for the individual members of the Supervisory Board is based on the consolidated earnings after taxes. It is capped at 1 ½ times their respective fi xed remuneration. It is calculated in line with the company's approved consolidated fi nancial statements taking Section 113 (3) of the AktG into account. Meeting fees are added to the variable remuneration. In addition, members of the Supervisory Board are reimbursed for their out-of-pocket expenses and any VAT that may be due on their remuneration and out-of-pocket expenses.

XI. Supplementary report

Events/transactions of particular importance since the reporting date

On June 3, 2008, the AGM approved changing the legal form of the company to a European company (Societas Europaea, SE) and renaming it Wacker Neuson SE. On January 14, 2009, the Executive Board of the former Wacker Con struction Equipment AG together with a committee of 23 employee representatives from the company's affi liates and operations in 17 different European countries, signed an agreement outlining the procedural guidelines involved in informing and consulting employees in Europe as well as em ployee participation in the future Wacker Neuson SE Super visory Board. Mr. Herbert Santl and Mr. Elvis Schwarz mair were appointed to the Wacker Neuson SE Supervisory Board as employee representatives. In the constituent mee ting of the Wacker Neuson SE Supervisory Board on February 11, 2009, the former members of the Wacker Con struction Equipment AG Executive Board were ap pointed to the Executive Board of Wacker Neuson SE. Wacker Neuson SE was entered in Register of Companies on February 18, 2009. Wacker Neuson SE's legal charter remains almost identical to that of Wacker Construction Equipment AG.

On March 12, 2009 Wacker Neuson Linz GmbH (Austria), an affi liate of Wacker Neuson SE, purchased an approxi ma tely 160,000 m2 tract of land in the district of Hörsching (Austria). The company has thus executed its option agreement to purchase the site, which was due to expire at the end of March, 2009. The purchase price is approximately EUR 9.2 million. The construction of a new production plant will not commence before 2010.

Impact on profi t, fi nances and assets

Despite the above mentioned exception the aforementioned development does not have any infl uence on profi t, fi nan ces and assets.

XII. Opportunities and outlook for future development of the Wacker Neuson Group

Overall economic outlook

• Global impact of fi nancial crisis
• Uncertainty over the duration of fi nancial crisis
• Governments shore up economy

Experts anticipate 2009 to be characterized by a worldwide recession and only forecast an upturn in the global economy in the coming year if the banking sector can be stabilized worldwide. This would not only ease infl ation, but also strengthen consumer purchasing power and corporate investment patterns. According to IMF experts, real global gross domestic product (GDP) for 2009 is set to rise by just 0.5 percent. World trade volume is expected to fall by 2.8 percent. Countries with major fi nancing or construction sectors and whose economic growth is pri marily linked to exports are set to be hit particularly hard here. Falling raw material prices and policy actions initiated by national governments may stimulate local economies.

According to economic experts, several real economies including Brazil, Russia, India and China (BRIC) may again experience robust growth rates in 2009. However, this economic upturn is also expected to be slowed by a num ber of factors such as falling exports and investments. Economic forecasts for Asia, Oceania, plus Central and Latin America have been adjusted downwards.

Experts in the US expect the economy to remain extremely weak. The US central bank also anticipates a further downturn in the US economy in 2009, and does not see brighter prospects before 2010. According to the Ifo Institute, GDP in 2009 is set to fall by 1 percent in real terms. Experts predict a real-term decrease in GDP of 0.3 percent for Canada, compared with a 3.1 percent rise in Central and Latin America.

The Asian economy is set to remain stable, although a slight downturn is expected for East Asia and China due to tapering exports. Average annual growth for the Asia region is forecast at 3.0 percent until 2010. The outlook for China, however, is signifi cantly healthier, with real GDP set to grow by 7.5 percent, fuelled by a range of factors including the expansion of infrastructure projects. In India and Asian emerging economies, growth is expected to slow down.

Prospects for almost all EU states are less than optimistic for 2009. The economic climate has cooled dramatically in this region. The EU Commission anticipates a recession and expects that EU GDP will contract 1.8 percent in 2009, recovering somewhat in 2010. Central and Eastern European countries are also set to experience a sluggish climate in 2009. Furthermore, experts expect increasingly stringent lending policies, which will further dampen companies' propensity to invest. Real GDP in Europe is expected to fall by 1.1 percent.

The crisis on the international fi nancial markets and the threat of global recession are a particular threat to Germany due to its almost unique dependence on the global eco nomy. Due to the country's heavy reliance on exports, the EU Commission and the German government expect Ger many to enter a hard-hitting recession and GDP to shrink around 2.5 percent. Deutsche Bank puts this fi gure even higher at fi ve percent. The situation is not set to improve until 2010.

Outlook for construction and agricultural industries

• Construction industry dependent on dynamics of economy as a whole
• Stable prospects for the agricultural industry
• High demand worldwide for construction work

The prospects for the construction industry for 2009 are dampened by the threat of global recession, despite the fact that numerous infrastructural investments are pending worldwide, including road, rail, transport and telecommunications projects. A number of governments have already included measures aimed at promoting infrastructure and public education in their economic recovery plans, which will provide impetus for the construction industry. However, experts across the globe are predicting that real estate prices will drop signifi cantly, which will cause construction investment to drop. In the long term, prospects for nonresidential construction in particular are good. The Organization for Economic Co-operation and Development (OECD) estimates the worldwide demand for infrastructural investment at USD 70,000 billion.

If the American construction industry is to recover, the real estate market must stabilize. Although investment in residential construction is due to decrease in 2009, at just 1.6 percent the rate of decline is less severe than that experienced over the past two years. A number of indicators point to a decrease in non-residential construction over the course of 2009. This means that a lot will depend on how quickly the investment program agreed by the US Congress to the value of approximately USD 800 billion can be channeled into the construction and improvement of highway and bridge infrastructure. The Association of Equipment Manufacturers (AEM) predicts a fall of 1.9 percent in the demand for light equipment in the US in 2009.

In India, construction industry sales are expected to qua d ruple to USD 13 billion by 2015, due to increased demand for compact equipment to support infrastructure projects. In 2009 in China, approximately USD 3 billion is due to be invested in infrastructure projects.

A downturn is forecast for the European construction industry in 2009. Experts from Euroconstruct predict that the European construction market will shrink in 2009 by 4.3 percent. This fi gure is estimated at 4.8 percent for Western Europe. Only commercial and underground construction are expected to develop positively, with the help of vital infrastructure projects aimed at road and rail networks, telecommunication services, water supplies, renovation and modernization works, public education buildings, and climate and environmental protection. Euroconstruct's experts predict declines in the non-residential construction market of 3.6 percent in 2009 and 0.6 percent in 2010. The outlook is particularly bleak for the non-residential construction market in Western Europe, with a fall of 4 per cent predicted for 2009 and a further drop of 0.8 percent in 2010. In Central and Eastern Europe, growth in 2009 will drop to 2.5 percent. Growth will also be stunted in European underground construction in 2009, estimated at just 0.5 percent. In 2010 and 2011, an average growth rate of 3.7 percent respectively is expected. The negative trend on the European housing market will continue in 2009. Euro construct's experts forecast a drop in residential construction of 7.1 percent. For 2010, they predict a fall of 0.5 per cent. Experts predict an end to the crisis in the European housing market in 2011 at the earliest.

In Germany, experts predict that construction investments in 2009 will be put on hold and the market will contract. Forecasts show that 2009 revenue will match the previous year's level and investment in construction will drop by about 0.6 percent in 2009. Investment in commercial construction is expected to decline by 1.3 percent. Invest ments in residential construction are expected to fall by

0.9 percent. The economic action plan initiated by the German government could help relieve the investment deadlock at municipal level. Projects to improve municipal infrastructure, extend and reconstruct highways, and improve telecommunications and the rail network may also provide impetus. Euroconstruct predict a 0.5 percent growth in underground construction in Germany through 2010 and 2011. Nonresidential construction is predicted to fall by 0.3 percent in 2009, but show an average annual growth of 0.5 percent bet ween 2009 and 2011. The outlook for the renovation and modernization sectors in the years from 2009 to 2011 is moderately positive.

Opportunities in the agricultural industry

Experts' outlook for the agricultural industry is positive, in spite of the negative prospects in the construction industry, as agriculture is subject to different cycles. The agricultural industry is also gaining in weight as an economic driver in certain countries as the demand for food and alternative fuels continues to grow. This is fuelling demand for technical production equipment. However, the VDMA forecasts a slight drop in sales of agricultural machinery for 2009, with worldwide growth not expected until 2010 and 2011.

The VDMA predicts that the current structural shift prompting a decrease in the number of agricultural holdings and an increase in size of those holdings will continue at the present rate. The pressure to increase production of foodstuffs and animal feed, as well as renewable resources remains high. Experts therefore predict an increase in the mechanization of land cultivation, which will drive worldwide demand for agricultural machinery in the long term.

Opportunities and outlook for the future development of Wacker Neuson SE

• Effi cient business model
• Medium and long-term growth opportunities, despite market uncertainty
• Business developments hard to predict for 2009 at the present time

The Wacker Neuson Group is adhering to its long-term growth strategy and is well-positioned with its current business model. To achieve the goals set down in our business strategy, we intend to invest wisely and drive growth across all regions and business segments.

In view of the predicted general economic recession and unfavorable outlook for the international construction industry, we are cautious with regard to projections for the 2009 fi nancial year. We are therefore focusing especially on adapting our organizational structure and internal processes to refl ect current market dynamics.

Development outlook by region

The Wacker Neuson Group aims to strengthen its leading market position as a provider of light and compact equipment to the construction and agricultural industries worldwide. To promote growth in all regions, we are systematically aligning our activities with local market requirements. This is aimed at meeting growing customer demands for individual sales, rental and service solutions that align with local market dynamics on the one hand, and at gaining new customers on the other.

Due to the recession in the construction industry, we ex pect a challenging business climate in Europe in 2009 and anticipate increased competition. Eastern Europe is the area where we see the most opportunities for 2009, particularly due to increasing state-sponsored investment in infrastructural projects. We also identify potential in the expansion of our launch strategy for compact equipment in countries where we have not sold this equipment in the past, as well as in the expansion of our rental business in Central and Eastern Europe. The Wacker Neuson Group continues to concentrate on improving internal processes, not only in the areas of production and logistics, but also in the tighter alignment of our sales and service network with market requirements.

In the Americas region (particularly in the US), we anticipate that conditions will remain diffi cult during the 2009 fi nancial year, due to the ongoing subprime crisis. Nevertheless, we aim to continue actively implementing measures to introduce compact equipment in the US and expand our net work of exclusive Wacker Neuson dealers.

It remains to be seen to what extent the global economic downturn will affect the Asia region. We aim to capitalize on the current positive construction industry climate in this region, including the infrastructure segment. In particular, we will continue to expand our sales networks in China and India to enhance our market position as a provider of highquality products and services.

Development outlook by business segment

The Wacker Neuson Group's aim for fi scal 2009 and be yond is to consolidate its strong market position. We will be focusing strongly on changing customer needs, as well as service offerings tailored to market dynamics.

We are adapting our product portfolio to further enhance our leading market position. To this end, we will be introducing new, high-quality products and product var iants in the light and compact equipment segments to meet concrete customer demands. These products will be designed to meet the latest user safety and environmental protection requirements. We will also continue to introduce compact equipment via our existing worldwide sales and service network.

The agricultural industry is tending towards larger holdings in Europe, which is fueling a rise in rationalization investments. This is fl anked by increases in EU agricultural subsidies, and we are keen to capitalize on the additional opportunities this is opening up for agricultural products under our Weidemann brand over the coming years.

Development in our services business segment is extremely positive. Here we are focusing on adapting the rental business in Central and Eastern Europe, as well as aligning our sales and service network with current market dynamics and customer requirements. We intend to further develop our service offering to refl ect evolving customer needs, particularly in the spare parts and repairs business.

Company forecast

Capitalizing on medium and long-term opportunities In our view, long-term prospects for the Wacker Neuson Group are good, even if short-term prospects are overshadowed by the economic downturn. The Executive Board does not expect the comprehensive economic recovery plans to have any positive effect on the construction in dus try until the end of 2009 at the earliest, despite increased demand for construction projects in the infrastructure sector.

The company is prepared for the fact that the anticipated worldwide downturn in the construction industry may well last into 2010 and may continue to impact on customer ordering patterns against the backdrop of intensifi ed competition. Noteworthy here is the fact that the 2008/2009 winter period in the Europe region was more severe than the same period the previous year. Due to this market uncertainty, it is diffi cult to precisely predict sales or profi t before interest, tax, depreciation and amortization (EBITDA). We have thus decided not to publish a forecast for 2009, but expect a drop in sales and earnings.

Taking a long-term view, opportunities in the construction industry will arise from climate change and a greater focus on environmental policies. The rise in weather-related damage, coupled with the necessary cleanup and repair work, will increasingly place the spotlight on preventive measures. This will be fl anked by roadway reconstruction projects, more effi cient repair procedures and redevelopment of residential property with a view to increasing energy effi ciency. Our global presence and proximity to our cus tomers in key target markets, as well as the renowned quality of our products and services, particularly after the merger, give us added confi dence in our ability to con tinue expanding our leading global position in the medium to long term.

In the medium term, we will also consider strategic acquisitions where these enhance our product portfolio to the benefi t of our customers and increase our opportunities for international expansion.

In the current fi scal year, we want to place particular focus on securing our strong fi nance and asset status. For this reason, we have signifi cantly reduced planned investments. In 2009 we plan to invest approximately EUR 60 million compared with EUR 101.8 million in fi scal 2008. Measures aimed at reducing costs have been initiated in a number of areas and are being implemented. This includes extending fl exibility in terms of working hours, short-time working and deferral of investment projects. We are also planning to further reduce our sales and administration costs.

Planned investments (extract)

in € million	2009
Expansion of rental business in Central and Eastern Europe	10.0
Construction of new center for research and development in Munich, Germany	16.0
Purchase of land in Hoersching, Austria	9.2
Investments for improving production processes	4.0
Expansion of sales and service station	5.0

The Wacker Neuson Group is fi nancially stable, showing liquidity of EUR 67.5 million and an equity ratio of 77.4 percent. We aim to keep net debt as close as possible to last year's level. We also plan to lower our working capital.

At the AGM in Munich, May 28, 2009, the Executive and Super visory Boards will propose a dividend of EUR 0.19 per eligible share. This ensures the continuance of our dividend policy, but also refl ects current market dynamics.

Summary forecast

Due to diffi cult market conditions, we are expecting sales and earnings to fall in the current fi scal year. However, we forecast that the investment deadlock will begin to ease from 2010 onwards, which will lead to renewed demand for construction projects and therefore construction equip ment. Our product portfolio and service offering are still in demand on the market. We are determined to consolidateand expand our market position in order to emerge strength ened from these times of crisis.

Munich, March 23, 2009

Wacker Neuson SE, Munich, Germany (Wacker Construction Equipment AG until February 18, 2009)

Executive Board

Dr.-Ing. Georg Sick (CEO and President)

Martin Lehner (Deputy CEO)

Günther Binder

Richard Mayer

Werner Schwind

Contents

	Income Statement	71
	Balance Sheet	72
	Cash Flow Statement	74
	Statement of Changes in Equity	75
	Segmentation	76
	Notes to the Consolidated Financial
	Statements	78
	General information on accounting
	standards	78
	Accounting and valuation methods	83
	Explanatory comments on the
	income statement	89
1	Revenue	89
2	Other income	89
3	Personnel expenses	89
4	Other operating expenses	89
5	Financial result	90
6	Taxes on income	90
7	Earnings per share	91
	Explanatory comments on the
	balance sheet	92
8	Property, plant and equipment	92
9	Investment properties	93
	10 Intangible assets	93
	11 Other investments and other
	non-current assets	97
	12 Inventories	97
	13 Trade receivables	97
	14 Marketable securities	98

15 Other current assets	98
16 Cash and cash equivalents	99
17 Equity	99
18 Provisions for pensions and
similar obligations	101
19 Other provisions	105
20 Financial liabilities	106
21 Trade payables	107
22 Other current liabilities	107
23 Derivative fi nancial instruments	108
Other information	109
24 Contingent liabilities	109
25 Other fi nancial liabilities	110
26 Additional information on
fi nancial instruments	112
27 Events since reporting date	114
28 Segmentation	115
29 Cash fl ow statement	115
30 Risk management	116
31 Acquisitions and disposals	118
32 Overview of equity investments in
non-consolidated companies	119
33 Executive bodies	119
34 Related party disclosures	120
35 Auditor's fee	122
36 Declaration regarding the German
Corporate Governance Codex	122
37 Release for publication	122
Responsibility Statement	122
Unqualifi ed Auditor's Opinion	123

Income Statement

For the period from January 1 through December 31

in € K	Notes	Jan. 1- Dec. 31, 2008	Jan. 1- Dec. 31, 20071
Revenue	(1)	870,331	742,062
Cost of sales		- 576,885	- 459,530
Gross profi t		293,446	282,532
Sales and service expenses		- 156,486	- 140,090
Research and development expenses		- 25,056	- 20,810
General administrative expenses		- 53,487	- 48,289
Other income	(2)	11,023	8,421
Other expenses	(4)	- 11,451	- 2,859
Profi t before interest and tax (EBIT)		57,989	78,905
Financial result	(5)	- 2,308	- 660
Profi t before tax (EBT)		55,681	78,245
Taxes on income	(6)	- 17,576	- 24,142
Profi t for the period before minority interests		38,105	54,103
Minority interests		- 716	23
Profi t for the period		37,389	54,126
Earnings per share (in euros) (diluted and undiluted)	(7)	0.53	1.10

Balance Sheet Balance at December 31

in € K	Notes	Dec. 31, 2008	Dec. 31, 20071
Assets
Property, plant and equipment	(8)	272,934	221,869
Investment property	(9)	2,708	2,105
Goodwill	(10)	326,059	325,676
Intangible assets	(10)	98,438	100,220
Other investments	(11)	3,420	1,649
Deferred taxes	(6)	13,450	10,994
Other long-term assets	(11)	32,999	34,523
Total long-term assets		750,008	697,036
Inventories	(12)	217,030	175,130
Trade receivables	(13)	119,188	161,211
Marketable securities	(14)	1,894	88,656
Current tax receivables		10,402	3,492
Other current assets	(15)	14,489	12,169
Cash and cash equivalents	(16)	65,600	76,816
Total current assets		428,603	517,474
Total assets		1,178,611	1,214,510

in € K	Notes	Dec. 31, 2008	Dec. 31, 20071
Equity and liabilities
Subscribed capital	(17)	70,140	70,140
Other reserves	(17)	582,516	586,186
Retained earnings	(17)	256,432	254,113
Equity before minority interests		909,088	910,439
Minority interests		2,731	2,280
Total equity		911,819	912,719
Long-term borrowings	(20)	38,845	44,219
Deferred taxes	(6)	31,989	33,724
Long-term provisions	(18)(19)	29,288	29,200
Total non-current liabilities		100,122	107,143
Trade payables	(21)	32,290	63,084
Short-term borrowings from banks	(20)	81,742	72,103
Current portion of long-term borrowings	(20)	5,876	6,073
Short-term provisions	(19)	11,112	9,324
Current tax payable		466	1,366
Other liabilities	(22)	35,184	42,698
Total current liabilities		166,670	194,648
Total liabilities		1,178,611	1,214,510

Cash Flow Statement

For the period from January 1 through December 31

in € K	Jan. 1- Dec. 31, 2008	Jan. 1- Dec. 31, 20072
EBT	55,681	78,245
Depreciation and amortization	42,954	38,083
Other major non-cash income	0	- 1,640
Foreign exchange result	- 3,852	- 8,139
Gains/losses from sale of intangible assets and property, plant and equipment	- 29	48
Book value from the disposal of rental equipment	3,044	3,423
Gains/losses from derivatives (cash fl ow hedging)	452	- 93
Financial result	2,308	660
Changes in inventories	- 41,900	- 14,879
Changes in trade receivables and other assets	41,771	4,798
Changes in provisions	1,876	- 503
Changes in trade payables and other liabilities	- 33,475	- 3,196
Interest paid	- 8,136	- 7,854
Income tax paid	- 29,561	- 33,973
Cash fl ow from operating activities	31,133	54,980
Purchase of property, plant and equipment	- 93,134	- 81,571
Purchase of intangible assets	- 8,654	- 2,469
Proceeds from the sale of property, plant and equipment and intangible assets	1,440	895
Purchase of marketable securities	0	- 122,078
Proceeds received on the sale of marketable securities	85,647	46,987
Change in consolidation structure	- 1,771	10,572
Interest received	6,976	5,910
Cash fl ow from investing activities	- 9,469	- 141,754
Issue of new shares	0	165,000
Costs of procuring capital	- 69	- 5,582
Dividends	- 35,335	- 24,273
Proceeds/income from short-term borrowings	19,119	12,183
Repayment of long-term borrowings	- 5,400	- 50,606
Payment of fi nance lease liabilities	- 173	- 306
Cash fl ow from fi nancing activities	- 21,858	96,416
Increase/decrease in cash and cash equivalents	- 194	9,642
Effect of exchange rates on cash and cash equivalents	- 1,259	1,106
Change in cash and cash equivalents	- 1,453	10,748
Cash and cash equivalents at beginning of period1	38,792	28,044
Cash and cash equivalents at end of period1	37,339	38,792

Borrowings from banks from the group's cash pool accounts are netted.

Statement of Changes in Equity

Balance at December 31

							Equity
	Sub		Exchange	Other			before
	scribed	Capital	differ	neutral	Retained	Treasury	minority	Minority	Total
in € K	capital	reserves	ences	changes	earnings	shares	interests	interests	equity
Balance at
December 31, 2006	43,500	72,330	- 21,526	501	224,260	- 36,691	282,374	0	282,374
Exchange differences	0	0	- 11,319	0	0	0	- 11,319	0	- 11,319
Other neutral changes	0	0	0	80	0	0	80		80
Subtotal							- 11,239	0	- 11,239
Profi t for the period	0	0	0	0	54,126	0	54,126	- 23	54,103
Total profi t for the period							42,887	- 23	42,864
Dividends	0	0	0	0	- 24,273	0	- 24,273	0	- 24,273
Issue of new shares (IPO)	7,500	157,500	0	0	0	0	165,000	0	165,000
Contribution of
Neuson Kramer	19,140	394,202	0	0	0	36,691	450,033	2,303	452,336
Costs of procuring capital	0	- 5,582	0	0	0	0	- 5,582	0	- 5,582
Balance at
December 31, 20071	70,140	618,450	- 32,845	581	254,113	0	910,439	2,280	912,719
Exchange differences	0	0	- 4,069	0	0	0	- 4,069	0	- 4,069
Other neutral changes	0	0	0	452	0	0	452		452
Subtotal							- 3,617	0	- 3,617
Profi t for the period	0	0	0	0	37,389	0	37,389	716	38,105
Total profi t for the period							33,772	716	34,488
Dividends	0	0	0	0	- 35,070	0	- 35,070	- 265	- 35,335
Costs of procuring capital	0	- 53	0	0	0	0	- 53	0	- 53
Balance at
December 31, 2008	70,140	618,397	- 36,914	1,033	256,432	0	909,088	2,731	911,819

For the period from January 1 through December 31

Primary segmentation (geographical segments)

in € K	Europe	Americas	Asia	Consolidation	Group
2008
Segment revenue
Total external sales	928,489	246,175	38,610
Less intrasegment sales	- 207,716	- 35,799	- 1,881
	720,773	210,376	36,729
Intersegment sales	- 44,620	- 43,440	- 9,487	0
Total	676,153	166,936	27,242		870,331
Segment result (EBIT)
From continuing business segments	45,774	11,599	1,393
From discontinued business segments	0	0	0
Total	45,774	11,599	1,393	- 777	57,989
Other information
Investments	88,025	7,080	1,840	0	96,945
Depreciation and amortization	37,979	4,351	624	0	42,954
Non-cash expenses	5,489	2,096	54	0	7,639
Balance sheet
Segment assets	908,956	142,340	22,710	- 24,227	1,049,779
Segment liabilities	81,760	22,607	3,744	- 4,687	103,424

in € K	Europe	Americas	Asia	Consolidation	Group
2007
Segment revenue
Total external sales	694,179	282,535	42,861
Less intrasegment sales	- 142,771	- 32,756	- 1,838
	551,408	249,779	41,023
Intersegment sales	- 30,750	- 53,724	- 15,674
Total	520,658	196,055	25,349	0	742,062
Segment result (EBIT)
From continuing business segments	50,884	25,761	3,105
From discontinued business
segments	0	0	0
Total	50,884	25,761	3,105	- 845	78,905
Other information
Investments	471,045	10,333	2,989	0	484,367
Depreciation and amortization	32,686	4,833	562	0	38,081
Non-cash expenses	2,979	1,697	322	0	4,998
Balance sheet
Segment assets	862,144	126,602	20,934	- 13,034	996,646
Segment liabilities	108,848	22,234	3,030	- 628	133,484

Secondary segmentation (business segments)

in € K	2008	20071
Segment revenue from external customers
Light equipment	331,352	408,170
Compact equipment	355,979	179,480
Services	188,507	159,657
	875,838	747,307
Less cash discounts	- 5,507	- 5,245
Total	870,331	742,062

Notes to the Consolidated Financial Statements

General information on accounting standards

Wacker Neuson SE (formerly: Wacker Construction Equipment AG) has its headquarters in Munich, Germany, at Preussenstrasse 41, and is registered in the local German Register of Companies in Munich ("Handelsregister München") under Section B, No. 177839 (formerly: No. 144236).

Trading in the company's shares commenced on May 2007 in the Prime Standard segment of the German stock exchange on the regulated market. The company has been listed in the SDAX since September 2007.

The fi nancial statements for fi scal 2008 (which include previous year fi gures) were prepared in accordance with the International Accounting Standards (IAS) as approved and published by the International Accounting Standards Board (IASB) and the International Financial Reporting Standards (IFRS) as interpreted by the Standing Interpretations Committee (SIC) and International Financial Reporting Interpretations Committee (IFRIC) as adopted by the EU, and the additional requirements of the German Commercial Code (HGB) set forth in Section 315a (1). All valid and binding standards for fi scal 2008 have been applied and give a true and fair view of the assets, liabilities, fi nancial position and profi t and loss of the Group.

For the following statements, the Group primarily applies IFRIC 14 (IAS 19 – The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and their Interaction). This has no effect on the assets, liabilities, fi nancial position and profi t and loss of the Group.

IFRS 8 (Operating Segments) was issued on November 30, 2006, by the IASB and adopted by the European Union (EU) on November 21, 2007, and will be mandatory for fi scal years starting on or after January 1, 2009. IFRS 8 regulates fi nancial and descriptive reporting of information relating to segments required to disclose information on their operations. In these Consolidated Financial Statements, the Group reports its segments in accordance with IAS 14. These are structured geographically according to the headquarters of each affi liate. This approach

refl ects the company's management structures and represents the risk and profi t structure of its operations worldwide. Application of IFRS 8 (which the Group will use for fi scal years starting on or after January 1, 2009) would not result in any fundamental changes in segment structure based on affi liate head quarters, but would result in additional explanations and notes.

On October 15, 2008, the EU endorsed amendments to IAS 39 und IFRS 7. This allows companies to reclassify certain fi nancial instruments as of July 1, 2008. The early, elective application of these amendments did not have an affect on the Consolidated Financial Statements of the Group.

IAS 23 (Borrowing Costs) was endorsed by the EU on October 10, 2008. This standard supersedes the revised IAS 23 dating from 1993 and must be applied to fi scal years beginning on or after January 1, 2009. The Group has not applied the revisions in IAS 23 to the current consolidated fi nancial statements. It is not expected that the application of IAS 23 will have a material effect on the assets, liabilities, fi nancial position and profi t and loss of the Group.

The following amendments were endorsed by the EU on December 16, 2008: amendments to IFRS 2 (Share-Based Payments) must be applied to fi nancial statements covering fi scal years beginning on or after January 1, 2009; and IFRIC 13 (Customer Loyalty Programs) must be applied to fi nancial statements covering fi scal years beginning on or after July 1 2008. The Group has chosen to apply these new elective regulations to its consolidated fi nancial statements for 2008. This did not result in any changes to the consolidated fi nancial statements.

IAS 1 (Presentation of Financial Statements, as revised in 2007) was endorsed by the EU on December 17, 2008. This standard supersedes the previous version of IAS 1 and must be applied to fi scal years beginning on or after January 1, 2009. The Group has not applied the revisions in IAS 1 to the current consolidated fi nancial statements. Application would result in changes to the presentation of the consolidated fi nancial statements but would not, however, fundamentally alter the presentation of assets, liabilities, fi nancial position and profi t and loss of the Group.

The EU endorsed further amendments to IAS 1 (Presentation of Financial Statements) and IAS 32 (Financial Instruments: Presentation) in January 2009: These amendments concern companies which have issued puttable fi nancial instruments or fi nancial instruments which give rise to a claim to company assets on liquidation and must be applied to fi scal years beginning on or after January 1, 2009. The Group has not applied the new regulations to the current consolidated fi nancial statements. Application would not have had any impact on the consolidated fi nancial statements.

Amendments to IFRS 1 (First Time Adoption of International Financial Reporting Standards) and to IAS 27 (Consolidated and Separate Financial Statements) were also endorsed by the EU in January 2009. These concern the recognition of costs of an investment in an affi liate or jointly controlled company. The amendments must be applied to fi scal years beginning on or after January 1, 2009. The Group has not applied the new regulations to the current consolidated fi nancial statements. Application would not have had any impact on the consolidated fi nancial statements.

The following amendments to standards or interpretations have not yet been adopted by the EU and are unlikely to result in substantial changes to future consolidated fi nancial statements:

• Amendment to IFRS 3 (Business Combinations) mainly affecting the introduction of an accounting policy choice to measure non-controlling interests (full goodwill method); this amendment must be applied to fi scal years beginning on or after July 1, 2009;
• Amendment to IAS 39 (Financial Instruments: Recognition and Measurement) to facilitate the recognition of a hedging relationship when hedging against exposures arising from fi nancial instruments; this amendment must be applied to fi scal years beginning on or after July 1, 2009;

• IFRIC 12 (Defi nition of Service Concession Arrangements) addresses arrangements whereby a government or other public sector body contracts with a private operator to provide a public service (roads, hospitals, utilities, etc.). IFRS requires that this interpretation is applied to fi scal years beginning as of January 1, 2008 but it has not yet been legally endorsed by the EU and may not be applied to the current fi nancial statements;

• IFRIC 15 (Agreements for the Construction of Real Estate) standardizes accounting practice for the recognition of revenue by real estate developers for sales of real estate units; this amendment must be applied to fi scal years beginning on or after January 1, 2009;

• IFRIC 16 (Hedges of a Net Investment in a Foreign Operation) clarifi es issues arising from IAS 21 (Foreign Exchange Rates) and IAS 39 (Financial Instruments: Recognition and Measurement) and must be applied to fi scal years beginning on or after October 1, 2008;
• IFRIC 17 (Distributions of Non-Cash Assets to Owners) addresses the distribution of dividends to company owners in non-fi nancial form and must be applied to fi scal years beginning on or after July 1, 2009;
• IFRIC 18 (Transfers of Assets from Customers) is particularly relevant to utilities and must be applied to fi scal years beginning on or after July 1, 2009.

The Consolidated Financial Statements of the Group comprise the consolidated income statement, the consolidated balance sheet, the notes to the Consolidated Financial Statements, the consolidated cash fl ow statement, as well as the consolidated statement of changes in equity. In addition, a Group Management Report was prepared in accordance with Section 315a HGB.

The Consolidated Financial Statements have been prepared in euros. The fi gures are presented in thousand euros (EUR K), rounded to the nearest thousand, unless otherwise stated.

The consolidated income statement was prepared in the "costof-sales" format.

Line of business

With its roots dating back to 1848, the company is now a leading global manufacturer of high-quality light construction equipment (weighing up to approximately 3 tons) and compact construction equipment (weighing up to approximately 14 tons). Wacker Neuson provides a comprehensive one-stop offering, extending from development and production through sales and rentals to repairs and service. The entire product portfolio comprises over 300 product groups. Following the merger with the former Neuson Kramer Baumaschinen AG (now Wacker Neuson Beteiligungs GmbH) and its affi liates in 2007, the new consolidated Wacker Neuson Group started offering its products and services under the new main brand "Wacker Neuson"

in 2008. The company will also continue to market some compact equipment under the "Weidemann" and "Kramer Allrad" brands in the future. Furthermore, the company CLAAS Global Sales GmbH, which now has an indirect 5.1 percent stake in Kramer-Werke GmbH, distributes teles copic loaders developed and manufactured by Kramer in the agricultural industry under the brand "CLAAS" based on distribution agreement concluded with Kramer-Werke GmbH.

Closing date

The closing date for all companies included in the Consolidated Financial Statements is December 31 of the respective year. The current accounting period is January 1, 2008 through December 31, 2008.

Consolidation structure

In addition to the parent company, Wacker Neuson SE (formerly: Wacker Construction Equipment AG), the Consolidated Financial Statements include the following entities in which the company has the following direct or indirect shareholdings:

Company Name	City	Country	Direct	Indirect	Segment
Drillfi x AG	Volketswil (near Zurich)	Switzerland	100%		Europe
Nippon Wacker Co., Ltd.	Tokyo	Japan	100%		Asia
Wacker Neuson Equipment Private Ltd.	Bangalore	India	100%		Asia
Wacker Machinery Limited	Dublin	Ireland	100%		Europe
Wacker Neuson Beteiligungs GmbH	Leonding (near Linz)	Austria	100%		Europe
Wacker Neuson Linz GmbH	Leonding (near Linz)	Austria	100%		Europe
Wacker Neuson Rhymney Ltd.	Tredegar	Great Britain	100%		Europe
Kramer-Werke GmbH	Pfullendorf	Germany	95%		Europe
PADEM Grundstücks-Vermietungs gesellschaft mbH & Co. Objekt Gutmadingen KG	Düsseldorf	Germany	95%	90%	Europe
STG Stahl- und Maschinenbautechnik Gutmadingen GmbH	Geisingen	Germany	100%	95%	Europe
Wacker Neuson Finance Immorent GmbH	Leonding (near Linz)	Austria	98%		Europe
Wacker Neuson AB	Södra Sandby (near Malmö)	Sweden	100%		Europe
Wacker Neuson AG	Volketswil (near Zurich)	Switzerland	100%		Europe
Wacker Neuson AS	Hagan (near Oslo)	Norway	100%		Europe
Wacker Neuson A/S	Karlslunde	Denmark	100%		Europe
Wacker Neuson B.V.	Amersfoort	Netherlands	100%		Europe
Wacker Neuson Corporation	Menomonee Falls (near Milwaukee)	USA	100%		Americas
EQUIPRO Inc.	Germantown (near Milwaukee)	USA	100%		Americas
Wacker Neuson GmbH	Moscow	Russia	100%		Europe
Wacker Neuson GmbH	Vienna	Austria	100%		Europe
Wacker Neuson Kft.	Törökbálint (near Budapest)	Hungary	100%		Europe
Wacker Neuson Limited	Hong Kong	China	100%		Asia
Wacker Neuson Machinery Trading ( Shenzhen) Ltd. Co.	Shenzhen	China	100%		Asia
Wacker Neuson Limited	Samutprakarn (near Bangkok)	Thailand	100%		Asia
Wacker Neuson Ltda.	Huechuraba (near Santiago)	Chile	100%		Americas
Wacker Neuson Ltd.	Mississauga (near Toronto)	Canada	100%		Americas
Wacker Neuson Ltd.	Waltham Cross (near London)	Great Britain	100%		Europe
Wacker Neuson Limited	Auckland	New Zealand	100%		Asia

Company Name	City	Country	Direct	Indirect	Segment
Wacker Neuson Makina Limited ˛Sirketi	Küçükbakkalköy (near Istanbul)	Turkey	100%		Europe
Wacker Neuson Manila, Inc.	Dasmariñas (near Manila)	Philippines	100%		Asia
Wacker Neuson Máquinas Ltda.	Jundiaí (near São Paulo)	Brazil	100%		Americas
Wacker Neuson Oy	Kerava (near Helsinki)	Finland	100%		Europe
Wacker Neuson Pty Ltd	Springvale (near Melbourne)	Australia	100%		Asien
Wacker Neuson (Pty) Ltd	Florida (near Johannesburg)	South Africa	100%		Europe
Wacker Neuson S.A.	Torrejón de Ardoz (near Madrid)	Spain	100%		Europe
Wacker Neuson S.A. de C.V.	Mexiko City	Mexico	100%		Americas
Wacker Neuson S.A.S.	Brie-Comte-Robert (near Paris)	France	100%		Europe
Wacker Neuson Sp. z o.o.	Jawczyce (near Warsaw)	Poland	100%		Europe
Wacker Neuson srl con socio unico	San Giorgio di Piano (near Bologna)	Italy	100%		Europe
Wacker Neuson s.r.o.	Prag	Czech Republic	100%		Europe
Weidemann GmbH	Diemelsee-Flechtdorf	Germany	100%		Europe

The following companies are not included in the consolidation structure:

Company Name	Country	Direct	Indirect
Wacker Neuson
Kragujevac d.o.o.	Serbia	100%
Wacker Neuson
Lapovo d.o.o.	Serbia	100%
NK Administration
Limited	Great Britain	100%
Kramer-Allrad of
North America Inc.	USA	100%	95%
Kramer-Allrad
France S.A.R.L	France	100%	95%
Wacker Neuson
Immobilien GmbH	Germany	100%	95%
Wacker Neuson
Wohnungsbau GmbH	Germany	100%	95%

Originally a wholly owned subsidiary of the Wacker Neuson Corporation, Ground Heaters, Inc., in Spring Lake, Michigan (USA) was liquidated on December 8, 2008. All business operations have been transferred to the original parent company Wacker Neuson Corporation.

The following legal changes were made or approved vis-à-vis the company structure in fi scal 2008:

With effect as of March 1, 2008, the affi liate Wacker Neuson GmbH in Vienna purchased the entire business operations of Stambach Baumaschinen GesmbH, also a consolidated company of the Wacker Neuson Group. The asset deal between Wacker Neuson GmbH as the purchaser and Stambach Baumaschinen GesmbH as the seller does not classify as a business combination under IFRS 3, as both companies are under the common control of Wacker Neuson SE (formerly: Wacker Construction Equipment AG).

On June 30, 2008, Stambach Baumaschinen GesmbH was incorporated into Neuson Baumaschinen GmbH. The name and legal form of Neuson Baumaschinen GmbH has in the meantime been changed to Wacker Neuson Linz GmbH.

The company established a new affi liate in India in the fi rst quarter of 2008. During the course of 2008, this affi liate did not have any signifi cant impact on the assets, liabilities, fi nancial position and profi t and loss of the Group.

At the end of second quarter, the legal form and name of Neuson Kramer Baumaschinen AG were changed to Wacker Neuson Beteiligungs GmbH. This took place as part of the integration of the Neuson Kramer subgroup.

Furthermore, another affi liate was established in Serbia ( Wacker Neuson Lapovo d.o.o) during the second quarter. This involved an outlay of EUR 1.5 million. During the course of 2008, this affi liate did not have any signifi cant impact on the assets, liabilities, fi nancial position and profi t and loss of the Group. It will supply the Group with structural steel components.

The merger of Neuson Finance GmbH in Linz with Wacker Neuson Linz GmbH was executed on October 31, 2008.

During the AGM on June 3, 2008 in Munich, shareholders approved the proposal to change the company's legal form to an SE (Societas Europaea) and its name to Wacker Neuson SE. The majority of affi liates have renamed to Wacker Neuson as a result of this change.

The following restructuring alignments were also approved: liquidation of the dormant company Wacker Machinery Ltd. in Ireland; plus a merger between French-based NK Administration S.r.l., which has been in liquidation since 2005, and Wacker Neuson SAS in France.

On November 6, 2008, the Executive and Supervisory Boards resolved to close the production plant in Tredegar (Wales, Great Britain), thus dissolving the Group member Wacker Neuson Rhymney Ltd. Production of Wacker Neuson fourwheel dumpers is to be transferred to the Austrian plant in Linz.

Consolidation principles

The Consolidated Financial Statements are based on the annual fi nancial statements of the companies included, which were prepared in accordance with IFRS.

The annual fi nancial statements of the consolidated domestic and foreign companies were prepared according to the uniform accounting and valuation methods applied by the company.

Equity was consolidated according to the acquisition method. For the fi rst consolidation of subsidiaries acquired after January 1, 2003, all identifi able assets, liabilities and contingent liabilities of the acquired companies are recognized at fair values.

After reevaluation of all hidden assets and liabilities of companies acquired after January 1, 2003, any credit balances remaining are capitalized as goodwill resulting from the equity consolidation and are subjected to an annual impairment test.

Intercompany receivables and payables as well as purchases and sales between consolidated Group companies are eliminated. Group inventories and fi xed assets are adjusted to refl ect intercompany profi ts.

Consolidation transactions affecting income are subject to deferred tax. Deferred tax assets and deferred tax liabilities are set off against each other, provided that the term of payment and the creditors are the same.

Exchange differences

The annual fi nancial statements of the foreign affi liates have been translated into euros according to the concept of the functional currency. The functional currency is taken to refer to the relevant national currency, with the exception of the Philippines (US dollar). Thus, assets and liabilities are translated at the spot rates of exchange effective at the balance sheet date, whereas the items of the income statement are translated at the average annual rates of exchange.

Exchange differences arising from the application of different exchange rates for balance sheet and income statement are recorded directly as a separate item of equity so they have no impact on the fi nancial result.

1 Euro equals		2008	2007	2008	2007
		Annual average rates		Rates at balance sheet date
Australia	AUD	1.7492	1.6361	2.0257	1.6775
Brazil	BRL	2.6881	2.6604	3.2843	2.6205
Chile	CLP	777.9500	719.4833	900.4000	732.4000
Denmark	DKK	7.4556	7.4511	7.4518	7.4581
UK	GBP	0.8038	0.6873	0.9600	0.7346
Hong Kong	HKD	11.4731	10.7562	10.8323	11.4760
India	INR	64.3776	–	68.4300	–
Japan	JPY	151.4825	162.0433	126.4000	165.0000
Canada	CAD	1.5655	1.4651	1.7160	1.4440
Mexico	MXN	16.4258	15.0650	19.3500	16.0700
New Zealand	NZD	2.0929	1.8621	2.4177	1.9003
Norway	NOK	8.2841	8.0027	9.7900	7.9650
Philippines	USD	1.4741	1.3790	1.3977	1.4716
Poland	PLN	3.5383	3.7834	4.1823	3.5928
Russia	RUB	36.8383	34.8396	42.2650	35.9950
Sweden	SEK	9.6855	9.2628	10.9150	9.4350
Switzerland	CHF	1.5786	1.6461	1.4860	1.6557
South Africa	ZAR	12.1115	9.6862	13.1698	10.0300
Thailand	THB	49.0758	44.3608	48.8550	43.8250
Czech Republic	CZK	24.9833	27.6900	26.5850	26.5750
Turkey	TRY	1.9196	1.7826	2.1520	1.7135
Hungary	HUF	250.9683	251.3558	264.5050	252.3250
USA	USD	1.4741	1.3790	1.3977	1.4716

Concerning exchange differences without effects on profi ts, please refer to the statement of changes in equity.

Accounting and valuation methods

Realization of profi ts

For contracts for the sales of goods, profi ts are realized when the goods have been delivered (passing of risk), whereas profi ts arising from the provision of services are realized on completion of the contracted work. Operating expenses are recognized when the service has been rendered, or at the date the costs are incurred. Interest income is accrued based on the outstanding principal of the loan and the applicable interest rates. The borrowing costs are recognized in the period in which they are incurred according to the benchmark method.

Property, plant and equipment

In accordance with IAS 16, tangible assets are valued at acquisition costs less scheduled straight-line depreciation. For a limited number of existing items, the declining balance method for depreciation was employed.

The individual tangible asset groups are depreciated over the following useful lives, applying the straight-line depreciation method:

in years	Useful life
Land and buildings	5 – 66
Machinery and equipment	2 – 10
Offi ce and other equipment	3 – 20

Financing costs are not capitalized.

Investment properties

Land and buildings held for the purpose of generating rental revenue are disclosed at net book value, whereby the respective useful life employed for depreciation (straight-line, according to pro rata temporis) corresponds to fi xed assets in use.

Goodwill/acquisitions

Acquisitions are reported according to the acquisition method. Consequently, income of the acquired company is included in the Consolidated Financial Statements of the Group starting from the date of acquisition. For foreign companies that are acquired or founded, related acquisition costs are converted to euros at the spot rate effective at the date of purchase.

The disclosed goodwill undergoes an impairment value test at the end of the accounting period in order to verify the value of the amount reported on the balance sheet. In accordance with IFRS 3/IAS 36, the goodwill is not subject to scheduled straight-line amortization.

Intangible assets

Other intangible assets are capitalized at acquisition cost and amortized on a straight-line basis assuming a projected useful life of three years for software or the individual lifetimes of the respective patents, licenses, technologies and order volumes. Intangible assets having an unlimited useful life are not subject to amortization but are tested for impairment at least once a year.

Financing costs are not capitalized.

Leases

When the Group is the lessee

Leasing transactions regarding tangible assets in which the Group as the lessee bears all material risks and rewards from the use of the leased object are treated as fi nance leases according to IAS 17. In such cases, the lessee recognizes the leased object as an asset in the balance sheet and the payment obligation of future lease installments is disclosed as a liability item. Treatment as a fi nance lease leads to a depreciation expense on the income statement, dependent upon the useful life of the leased object, and the related interest expense.

All other leasing contracts are classifi ed as operating leases. In such cases, the leasing installments or the rental payments are shown as an expense in the income statement.

When the Group is the lessor

Leasing contracts are classifi ed as fi nance leases if the lease agreement transfers all material risks and rewards associated with the leased object to the lessee. All other leasing contracts are classifi ed as operating leases. Amounts to be paid by lessees resulting from fi nance leases are entered as receivables in the amount of the net investment value ensuing from the leasing contract. Income from fi nance lease contracts is distributed across accounting periods in such a way that that regular periodic interest is recognized on the outstanding net investment value resulting from leasing contracts. Rental income from operating lease contracts is distributed and refl ected in the balance sheet on a straight-line basis over the duration of the relevant leasing contract. Initial direct costs attributable to the negotiation and conclusion of a leasing contract are to be allocated to the book value of the leased asset and distributed on a straight-line basis over the duration of the leasing contract.

Inventories

Inventories of work in process and fi nished products, as well as raw materials and supplies, are valued at their acquisition and manufacturing costs respectively, in accordance with IAS 2. As far as the acquisition and manufacturing costs of inventories are above fair value, they will be written down to net realizable value at the balance sheet date. The net realizable value is the estimated sales price under normal business conditions, less the estimated manufacturing and sales costs. To the extent that the net realizable value of formerly written-down inventories has increased, corresponding write-ups will be made.

In determining acquisition costs, incidental acquisition costs are added, and rebates to purchase prices are deducted.

Manufacturing costs include all expenses which are allocable directly or indirectly to the manufacturing process. Borrowing costs are not included in manufacturing costs.

Acquisition and manufacturing costs for inventories were, for the main part, determined assuming that those assets which were acquired fi rst will also be consumed fi rst (FIFO method). The moving average cost procedure is also used to simplify the valuation procedure.

Production orders are not included.

Financial instruments and hedging transactions

Financial instruments are contracts which include a payment claim. In accordance with the regulations of IAS 32, they comprise non-derivative fi nancial instruments such as trade receivables and trade payables, or other receivables and payables resulting from fi nancing transactions. They also include derivative fi nancial instruments which are employed to hedge against currency risks, interest risks or price fl uctuations.

Derivative fi nancial instruments

The Wacker Neuson Group utilizes fi nancial instruments such as foreign exchange forward contracts as well as interest rate swaps exclusively for hedging purposes and for the minimization of risks. Financial instruments without a corresponding underlying transaction are not carried out.

Derivative fi nancial instruments are utilized to hedge against interest rate risks and exchange rate risks. The goal of hedging activities is to reduce risks arising from variable interest rate borrowing and future transactions in foreign currencies. Their maturities are termed to match the terms of the corresponding underlying transactions, and range from several months to several years.

Derivative fi nancial instruments are capitalized initially at acquisition cost when the contract is entered into. Subsequently, they are valued at fair value as of the closing date.

The fair value of derivative fi nancial instruments is the price at which one party would assume the rights and/or obligations from another party. The fair values are based on market information available at the balance sheet date applying valuation methods customary in the market as follows:

• Forward exchange contracts are evaluated by applying the market rates of transactions monitored.
• Interest rate contracts are valued by discounting the expected cash fl ow over the remaining maturity, whereby current interest rate curves are taken as the basis.

Recognition of gains and losses from derivative fi nancial instruments is subject to the requirements for hedge accounting as set forth in IAS 39. To this end, upon initiation of such a transaction, both the hedging instrument and the underlying transaction are compared and the goals for risk management and the underlying strategy are documented. The Group verifi es initially and continually whether or not the derivatives in a hedging relationship will effectively compensate for the changes in cash fl ow of the underlying transactions. Derivative fi nancial instruments that do not satisfy hedge accounting requirements are allocated to the assets or liabilities held for trading and designated at fair value through profi t or loss when fi rst recognized and in subsequent fi scal years. Profi ts and losses realized through fair value fl uctuations are immediately recognized.

The forward exchange contracts and interest rate swaps employed by the Group are treated as cash fl ow hedges in the balance sheet where changes in fair value are recorded directly in equity. The other forward exchange contracts do not satisfy formal hedge accounting requirements and are recognized in the balance sheet as being held for trading.

Non-derivative fi nancial instruments

Non-derivative fi nancial instruments as disclosed on the assets side of the balance sheet comprise investments, marketable securities and receivables. These items are valued either at amortized costs or at fair value (marketable securities). Assets are recognized in the balance sheet for the fi rst time when a Group company becomes a party to a contract. Financial assets are recognized as of the day of performance. Assets are derecognized upon transfer of ownership or ex piration of contractual rights to cash fl ows.

The carrying amounts of assets valued at amortized cost are verifi ed if there are any indications that the book value exceeds the useful value or the net realizable value (impairment test). Should the book value exceed the net realizable value, the asset is written down.

Trade receivables and other receivables are recognized at their nominal values less allowance for doubtful accounts based on the probable default risk. Long-term receivables are discounted at standard interest rates.

Credit balances with fi nancial institutions are recognized at their nominal values. Liabilities are valued at their nominal values or at their higher repayment amounts effective at the closing date. Long-term liabilities for which either no interest payments or below-market interest payments are to be made and the amounts of which fall due after more than one year are discounted as of the balance sheet date. Financial liabilities are recognized in the balance sheet for the fi rst time when a Group company becomes a party to a contract. Financial liabilities are derecognized when paid.

Research and development

Research costs are expensed in the consolidated income statement in the period in which they are incurred. Development costs are capitalized provided that the total development costs fulfi ll IAS 38.57 requirements. These capitalized development costs are written down over a period of six years for assets capitalized in 2008. Development costs capitalized in previous years are written down over a period of four to fi ve years. Amortization is taken using the straight-line method.

Marketable securities

Marketable securities are recognized at fair value through profi t or loss if they are held for trading or designated at fair value through profi t or loss. Marketable securities are classifi ed under the category "held for trading" if they were primarily obtained for the purpose of sale in the short term. When fi rst recognized, marketable securities are designated at fair value through profi t or loss if they are part of a group of fi nancial assets that are managed under a documented risk management or investment strategy and if their performance is evaluated based on their current fair value, and information about this portfolio's performance is distributed internally.

Trade receivables and assets

Both trade receivables and other assets are principally valued at amortized costs. They are, as a rule, valued at nominal value prior to allowances for uncollectible accounts, and are classifi ed in the category "loans and receivables", provided they are fi nancial instruments. Allowances are recognized for the full amount for those receivables and other current assets for which there is a high probability of default. Furthermore, general credit, interest and cash discount risks are recognized.

Cash and cash equivalents

Cash and cash equivalents belong to the category "loans and receivables" and are recognized at current value, which for liquid funds in euro is equivalent to the nominal value.

Government subsidies

Government subsidies are only recognized if there is reasonable assurance that the funding will be approved and that the company fulfi ls the relevant criteria. Expense-related subsidies are recognized by reducing the book value of the asset. The subsidy is then recognized as income through a reduced writedown value over the duration of the depreciable asset's useful life.

Pensions and similar obligations

Provisions for pensions and similar obligations from defi ned benefi t plans are recognized following the Projected Unit Credit Method, taking into consideration future adjustments in remuneration payments and in pensions in compliance with the regulations as set forth in IAS 19.

Pension obligations in Germany are calculated using the demographic tables for 2005 G developed by Prof. Klaus Heubeck.

Pension obligations abroad are calculated using accounting principles and parameters specifi c to the corresponding country.

Provisions for pensions as disclosed in the balance sheet are calculated from the value of the actual pension obligations less the fair value of plan assets as of the balance sheet date. Actuarial gains and losses are recognized according to the 10 percent corridor rule.

Service cost for vested rights to future pension payments results from the changes in the present value of the obligation.

The interest portion of the increase in pension provisions is, for the main part, disclosed under fi nancial results.

Payments under defi ned contribution plans are recognized directly as an expense.

Other provisions

Other provisions are recognized in accordance with IAS 37 when a present legal or constructive obligation as a result of a past event exists, when it is probable that an outfl ow of resources with economic benefi ts will be required to settle the obligation, and when a reliable estimate of the amount of the obligation can be made. Other provisions are made for all recognizable obligations. Valuation and recognition are based on the best estimate of the amounts involved.

Other provisions are set up for all recognizable risks as well as for all contingent liabilities in the amount of the probable occurrence. Long-term provisions, for the main part, accumulate interest at a rate of 4.5 percent or 5.5 percent per annum.

Financial liabilities

Financial liabilities are recognized at amortized cost by applying the effective interest method and are disclosed under fi nancial liabilities recognized at amortized cost.

Deferred taxes

With respect to temporary differences between valuations for tax purposes and balance sheet purposes, for consolidation transactions affecting income as well as for tax loss carryforwards, deferred tax assets and liabilities are recognized.

Deferred tax assets concerning tax loss carry-forwards have been recognized only to the extent to which reductions are likely to arise. There was no deferred tax recognized for loss carryforwards in the current year.

Deferred tax is calculated at the tax rate valid or approved at the balance sheet date of the company likely to be affected by the deferral.

Material discretionary decisions, estimates and assumptions

In preparing the fi nancial statements, it has been necessary to make estimates and assumptions which may infl uence the amounts and disclosure of assets and liabilities recognized on the balance sheet, income and expenses as well as contingent liabilities. The estimates are based on past experience and other assumptions deemed to be suitable under the given circumstances. The actual values can deviate from these estimates. The estimates and assumptions are regularly verifi ed and modifi ed where necessary.

The following signifi cant estimates and related assumptions, together with the uncertainties associated with the accounting and valuation methods applied are crucial in understanding the underlying risks of the fi nancial report and the impact these estimates, assumptions and uncertainties could have on the Consolidated Financial Statements.

Goodwill

An assessment is carried out each year by the Group to determine whether the value of goodwill has been impaired. Additional assessments are performed if there are grounds to consider impairment has taken place. To this end, the recoverable amount of the cash-generating unit must be estimated. This corresponds to the higher of fair value less cost to sell and value in use. Determining fair value less cost to sell involves making adjustments and estimates regarding the forecast and discounting of future cash fl ows. Although management is of the opinion that the assumptions underlying calculation of the recoverable amount are suitable, unforeseeable changes could result in impairment, which may negatively impact the assets, liabilities, fi nancial position and profi t and loss of the Group. The book value of goodwill amounted to EUR K 326,059 at the closing date. Refer to the section on intangible assets in these notes for detailed information on the calculation of value impairments.

Useful lives of tangible assets and other intangible assets

At the end of each fi scal year, the Group assesses the estimated useful lives of tangible assets and other intangible assets. Estimations did not need to be reviewed in 2008.

Value of tangible assets and other intangible assets

At each closing date, the Group must determine whether there are any grounds to assume that the book value of a tangible asset or an item under other intangible assets has been impaired. In this case, the recoverable amount of the asset in question is estimated. The recoverable amount corresponds to the higher of fair value less cost to sell and value in use. Value in use is determined based on the discounted future cash fl ows of the relevant asset. Estimating discounted future cash fl ows involves making key assumptions, in particular regarding future sales prices and volumes, costs and discount rates. Although management is of the opinion that the assessment of relevant expected useful lives, of the general economic climate and market trends within the industries in which the Group operates, and of discounted future cash fl ows are suitable, a change to current assumptions or to current circumstances may render it necessary to review this analysis. This could r esult in additional value impairments or write-ups in the future should the trends identifi ed by management turn around or if the assumptions and estimates turn out to be incorrect.

Taxes on income and earnings

At each closing date, the Group determines whether the probability of future tax benefi ts is suffi cient to justify deferred tax assets. To this end, management must assess the tax benefi ts resulting from existing tax strategies and income to be taxed in the future, as well as take further positive and negative factors into consideration. The recognized deferred tax assets may be lower if the estimates regarding taxable income and the tax benefi ts realizable through available tax strategies are lowered, or should changes to current tax legislation restrict the timeframe or feasibility of future tax benefi ts. Refer to the section on taxes on income in these notes for more detailed information.

Employee benefi ts

Pensions and similar obligations are calculated in accordance with actuarial valuations. These valuations are based on a number of factors including statistical values in order to anticipate future events. These factors include actuarial assumptions such as the discount rate, expected return on plan asset, expected salary increases and mortality rates. These actuarial assumptions can deviate considerably from the actual obligations as a result of changed market and economic conditions, resulting in a change in the associated future outlay.

Legal risks

Certain Group companies are involved in legal disputes. The outcome of these disputes could have a substantial impact on the assets, liabilities, fi nancial position and profi t or loss of the Group. Company management regularly analyses the current information available about these cases and recognizes provisions to cover probable obligations. Assessments are performed by internal and external lawyers. When reaching a decision on the need to recognize provisions, company manage ment takes suffi cient account of the probability of an unfavorable outcome and takes due care to estimate the amount of the obligation suffi ciently reliably.

Explanatory comments on the income statement

1 Revenue

2 Other income

With respect to the presentation and composition of sales by geographic regions and by business segments, please refer to the segment report.

The item wages and salaries includes redundancy payments to the following extent:

in € K	2008	2007
Redundancy payments	1,091	935

The average number of employees is as follows:

in € K	2008	2007
Foreign exchange gains	7,168	2,727
Proceeds from sale of property,
plant and equipment	601	403
Insurance reimbursements	215	370
Recovery of receivables
written off	71	75
Rental income on
investment Property	557	103
Other income	2,411	4,743
Total	11,023	8,421

3 Personnel expenses

The expenses for pensions include the expense for pension benefi ts without the interest portion of the additions to provisions for pensions which is recognized under fi nancial results.

Personnel expenses are composed as follows:

in € K	2008	2007
Wages and salaries	150,812	130,869
Social security contributions	30,761	23,414
Other personnel costs	7,595	9,138
Expenses for pensions	2,293	4,351
Total	191,461	167,772

in € K 2008 2007 Management 44 44 Administration 293 294 Sales 820 818 Service 650 630 Logistics 282 270 Production and technology 1,395 1,435 Other 177 162 Total 3,661 3,653

4 Other operating expenses

in € K	2008	2007
Losses on the disposal of
property, plant and equipment	578	371
Realized exchange losses	8,243	2,268
Other expenses	2,630	220
Total	11,451	2,859

Expenses from the reevaluation of a tract of land at Wacker Neuson Rhymney Ltd. amounting to EUR K 1,662 were realized for the current fi scal year. Following the decision to close the production plant in Tradegar, surveyors were commissioned to perform a property assessment. The fi ndings resulted in a reevaluation. The company is assigned to the Europe segment.

5 Financial result

in € K	2008	2007
Interest and similar income	7,213	5,618
Unrealized gains and losses	- 1,956	505
Income on disposals of fi nancial
assets	650	1,368
Interest and similar expenses	- 8,215	- 8,151
Total	- 2,308	- 660

Interest expenses include expenses for interest resulting from fi nance lease contracts in the amount of EUR K 69 (previous year: EUR K 72). Interest income from fi nance leases in the amount of EUR K 1,424 (previous year: EUR K 640) is included in interest and similar income.

Profi t/loss arising from changes in the fair value of derivative fi nancial instruments as part of cash fl ow hedging was recognized under equity during the fi scal year with no effect on income.

Reconciliation of calculated tax to actual tax expense:

in € K	2008	2007
EBT	55,681	78,245
Tax at the applicable tax rate : 29.46% (previous year: 38.29%)	16,403	29,960
Change in tax rate (Germany)	0	- 4,660
Variance in tax rates	- 905	- 388
Tax effects of non-deductible ex penses and tax-exempt income	870	1,063
Other	1,208	- 1,833
Total	17,576	24,142

The calculated taxes on income result by applying the Group's unifi ed tax rate of 29.46 percent (previous year: 38.29 percent) to profi t before tax (EBT).

We have based our tax assessment for the current year on a corporate income tax rate of 15 percent and a solidarity surcharge of 5.5 percent. Trade tax on income is no longer deductible for the assessment concerning corporate income tax and trade tax. Trade tax is set at a uniform 3.5 percent.

6 Taxes on income

The expense for taxes on income is composed of as follows:

in € K	2008	2007
Current tax expense	22,169	29,073
Deferred tax expense	- 4,593	- 4,931
Total	17,576	24,142

In the previous year, the tax rate for the parent company was based on a rate of 16.19 percent for trade tax on income (rate of assessment: 386.36 percent), the corporate income tax rate amounted to 25 percent and the solidarity surcharge 5.5 percent. The tax rate was calculated by taking into account the deductibility of trade tax on income for the assessment concerning corporate income tax.

Actual netted income tax receivables on the closing date amounted to EUR K 9,936 (previous year: EUR K 2,126).

Deferred tax assets and liabilities are allocated to the following balance sheet items:

in € K	2008	2007
Deferred tax assets
Provisions for pensions	343	1,063
Property, plant and equipment	4,722	1,827
Loss carry-forwards	511	265
Inventories	6,890	6,580
Other	480	809
Liabilities	297	359
Receivables	207	91
Total	13,450	10,994
Deferred tax liabilities
Other intangible assets	- 23,690	- 24,797
Property, plant and equipment	- 8,311	- 7,762
Inventories	- 1,315	- 2,446
Provisions for pensions	920	1,144
Other	407	137

Deferred tax recognized in the consolidated balance sheet arises from the deferred tax as booked by the individual companies. Deferred tax assets and liabilities were netted at the level of the individual company as appropriate. This netting is accounted for in the above table by the positive amounts under the heading deferred tax liabilities.

The tax losses that were not utilized and for which no deferred tax entitlement was recognized in the balance sheet amount to EUR K 15,135 (previous year: EUR K 12,571).

With respect to deferred tax assets, EUR K 311 (previous year: EUR K 241) are allocable to individual companies which incurred losses in the current or prior reporting period. The reason for the capitalization lies in the improved earnings situation in the years following.

Deferred taxes from derivative fi nancial instruments and marketable securities held for the purpose of trading (applies to previous year) in the amount of EUR K 477 (previous year: EUR K 240) were recognized directly in equity.

7 Earnings per share

	2008	2007
Earnings of the current period attributable to shareholders in € K	37,389	54,126
Weighted average number of shares outstanding during current period in thousand shares	70,140	49,249
Undiluted earnings per share in €	0.53	1.10
Diluted earnings per share in €	0.53	1.10

According to IAS 33, the earnings per share are the result of the division of earnings for the current period attributable to the shareholders of the company by the weighted average number of shares outstanding.

Explanatory comments on the balance sheet

8 Property, plant and equipment

				Payments
		Machinery	Offi ce	on account/
	Land and	and	and other	Assets under
in € K	buildings	equipment	equipment	construction	Total
Acquisition costs
Balance at January 1, 2008	152,209	155,734	54,954	31,289	394,186
Currency translation differences	- 1,132	2,531	- 797	435	1,037
Additions	16,276	42,600	10,044	21,720	90,640
Retirements	- 2,212	- 15,210	- 4,004	- 27	- 21,453
Transfers	31,022	2,680	811	- 39,604	- 5,091
Balance at December 31, 2008	196,163	188,335	61,008	13,813	459,319
Accumulated depreciation
Balance at January 1, 2008	48,712	84,995	38,610	0	172,317
Currency translation differences	- 421	1,626	- 649	0	556
Additions	6,380	22,406	5,720	0	34,506
Retirements	- 1,739	- 11,741	- 3,393	0	- 16,873
Transfers	- 3,902	- 158	- 61	0	- 4,121
Balance at December 31, 2008	49,030	97,128	40,227	0	186,385
Balance at December 31, 2007	103,497	70,739	16,344	31,289	221,869
Balance at December 31, 2008	147,133	91,207	20,781	13,813	272,934

				Payments
		Machinery	Offi ce	on account/
	Land and	and	and other	Assets under
in € K	buildings	equipment	equipment	construction	Total
Acquisition costs
Balance at January 1, 2007	116,380	147,476	52,844	9,453	326,153
Currency translation differences	- 2,474	- 3,770	- 1,128	- 84	- 7,456
Additions from change in consolidation structure	25,521	541	3,181	4,812	34,055
Additions	4,820	31,982	6,182	31,040	74,024
Retirements	- 116	- 25,314	- 7,011	- 140	- 32,581
Transfers	8,078	4,819	886	- 13,792	- 9
Balance at December 31, 2007	152,209	155,734	54,954	31,289	394,186
Accumulated depreciation
Balance at January 1, 2007	46,506	90,520	41,601	0	178,627
Currency translation differences	- 861	- 2,802	- 889	0	- 4,552
Additions	3,167	18,865	4,498	0	26,530
Retirements	- 100	- 21,588	- 6,600	0	- 28,288
Transfers	0	0	0	0	0
Balance at December 31, 2007	48,712	84,995	38,610	0	172,317
Balance at December 31, 2006	69,874	56,956	11,243	9,453	147,526
Balance at December 31, 2007	103,497	70,739	16,344	31,289	221,869

Amounts recognized for land and buildings as well as offi ce and other equipment include the book values of fi nance leasing contracts. Machinery and equipment includes rental equipment.

An affi liate received EUR K 539 in the form of an economic development grant in conjunction with the acquisition of a tract of land. On receipt of the payment, the grant was offset against the purchase price of the tangible asset.

9 Investment properties

The table below shows the development of the investment properties during the years 2007 and 2008:

in € K	2008	2007
Acquisition costs
Balance at January 1	2,147	38
Currency translation differences	- 8	- 3
Additions from change in consolidation structure	0	2,112
Additions	0	0
Retirements	0	0
Transfers	4,902	0
Balance at December 31	7,041	2,147
Accumulated depreciation
Balance at January 1	42	0
Additions	170	42
Retirements	0	0
Transfers	4,121	0
Balance at December 31	4,333	42
Book value on January 1	2,105	38
Book value on December 31	2,708	2,105

In April 2006, Wacker Neuson (Pty) Ltd. rented an undeveloped tract of its land in Florida, South Africa, to a third party. A fi veyear contract with an option to extend was concluded. An additional tract of developed land in Gutmadingen is now also disclosed as investment property as a result of the 2007 merger with the Neuson Kramer Group. This land is rented to a third party. Kramer-Werke GmbH has pulled out of its previous location in Überlingen to move to its new plant in Pfullendorf. The old premises was put up for rent as of January 1, 2009.

The property in South Africa is currently valued at EUR K 273. This amount was calculated based on offi cial market prices. The fair value of the land in Gutmadingen was assessed by an independent surveyor on September 30, 2007 using the German income approach. The site is valued at EUR 2.1 million. The building has a useful life of 17 years and is amortized using the straight-line method. The fair value of the land in Überlingen was assessed by an independent surveyor on September 30, 2007, using the German comparative approach (for the value of the land) and the German income approach. The total fair value amounts to EUR K 13,195. The building has a useful life of 50 years and is amortized using the straight-line method.

The profi t derived from investment property is shown in the table below:

in € K	2008	2007
Rental income	557	103
Depreciation and amortization	- 170	- 42
Other expenses	- 3	- 134
Total	384	- 73

10 Intangible assets

a) Goodwill

The goodwill results from the acquisition of Weidemann GmbH in fi scal 2005 and Ground Heaters, Inc. in fi scal 2006 plus the goodwill resulting from the merger with the Neuson Kramer Group in fi scal 2007. Goodwill developed as follows:

in € K	Book value after acquisition
As at Jan. 1, 2008	325,676
Net assets due to minority interests	7
Foreign currency fl uctuations	376
Goodwill as at Dec. 31, 2008	326,059

In accordance with the regulations as set forth in IFRS 3/ IAS 36, goodwill was not subject to scheduled amortization. The goodwill recognized on the Weidemann GmbH balance sheet, which was already fully amortized, was transferred. The goodwill originally recognized in the balance sheet of the subgroup of the Neuson Kramer Group was incorporated in the goodwill disclosed by the Neuson Kramer Group as part of the initial consolidation process.

b) Other intangible assets

		Other	Internally
	Licenses and	intangible	produced intan	Payments on
in € K	similar rights	assets	gible assets	account	Total
Acquisition costs
Balance at January 1, 2008	16,568	101,293	3,883	196	121,940
Currency translation differences	221	239	2	9	471
Additions from acquisitions	0	0	0	0	0
Additions	2,620	0	1,075	2,602	6,297
Retirements	- 714	0	0	- 2	- 716
Transfers	240	0	136	- 187	189
Balance at December 31, 2008	18,935	101,532	5,096	2,618	128,181
Accumulated amortization
Balance at January 1, 2008	10,487	10,894	339	0	21,720
Currency translation differences	208	70	0	0	278
Additions	1,639	5,351	1,288	0	8,278
Retirements	- 533	0	0	0	- 533
Transfers	0	0	0	0	0
Balance at December 31, 2008	11,801	16,315	1,627	0	29,743
Book value on December 31, 2007	6,081	90,399	3,544	196	100,220
Book value on December 31, 2008	7,134	85,217	3,469	2,618	98,438

		Other	Internally
	Licenses and	intangible	produced intan	Payments on
in € K	similar rights	assets	gible assets	account	Total
Acquisition costs
Balance at January 1, 2007	12,221	30,689	0	177	43,087
Currency translation differences	- 588	- 530	0	- 17	- 1,135
Additions from acquisitions	786	71,134	3,458	0	75,378
Additions	4,233	0	425	160	4,818
Retirements	- 193	0	0	- 24	- 217
Transfers	109	0	0	- 100	9
Balance at December 31, 2007	16,568	101,293	3,883	196	121,940
Accumulated amortization
Balance at January 1, 2007	9,852	1,088	0	0	10,940
Currency translation differences	- 504	- 83	0	0	- 587
Additions	1,281	9,889	339	0	11,509
Retirements	- 142	0	0	0	- 142
Transfers	0	0	0	0	0
Balance at December 31, 2007	10,487	10,894	339	0	21,720
Book value on December 31, 2006	2,369	29,601	0	177	32,147
Book value on December 31, 2007	6,081	90,399	3,544	196	100,220

The down-payments effected relate primarily to development costs for projects not yet completed at the closing date.

Other intangible assets have useful lives ranging from three to twenty years. They are amortized on a scheduled straight-line basis over the respective useful lives.

Furthermore, other intangible assets have a value of EUR K 22,000 for the brand name "Weidemann" resulting from the acquisition of Weidemann GmbH in 2005. Due to the strong market position of Weidemann GmbH, the brand name and trademark are considered to have an indefi nite useful life.

Following the merger with the Neuson Kramer Group, EUR K 42,838 was recognized for the brand name. This is also considered to have an indefi nite useful life due to the com pany's strong market position. Wacker Neuson SE (formerly: Wacker Construction Equipment AG) does not own the " Neuson" logo. This is owned by the PIN Private Trust (PIN Privatstiftung), which is part of the group founded by Chairman of the Supervisory Board Hans Neunteufel. Subject to certain assumptions, however, the company has an exclusive, irrevocable and unlimited license to use this brand in conjunction with the name "Wacker". In addition to the brand, technology in the amount of EUR K 16,995 is also disclosed as a signifi cant intangible asset.

The expected useful lives and residual book values of other intangible assets are as follows:

in € K	Book value on Dec. 31, 2008 in € K	Book value on Dec. 31, 2007 in € K	Useful life
Order volume	–	1,309	–
Brand	64,838	64,838	indefi nite
Technology	16,995	20,648	< 5 years
Customer base	3,384	3,604	9 years
Total	85,217	90,399

Intangible assets created internally refer to capitalized development costs.

Depreciation and amortization

Depreciation and amortization amounts are included in the pertinent positions reported on the income statement: cost of sales, sales and service expenses, research & development expenses as well as general administrative expenses.

c) Impairment of goodwill and other intangible assets with indefi nite useful lives

The goodwill and indefi nite-lived Weidemann and Neuson brands obtained through the acquisition of Weidemann and the merger with Neuson were allocated for impairment testing to the following cash-generating units within the Americas or European segments, which are obliged to disclose reporting information:

• Wacker Neuson Corporation (subgroup/USA)
• Weidemann GmbH (Germany)
• Wacker Neuson Beteiligungs GmbH (formerly: Neuson Kramer Baumaschinen AG) (subgroup/Austria)

The pro-rata book values break down as follows:

in € K	2008	2007
Weidemann GmbH
Book value of goodwill	24,592	24,592
Book value of the indefi nite-lived
brand	22,000	22,000
Wacker Neuson Corporation
Book value of goodwill	7,479	7,103
Book value of the indefi nite-lived
brand	–	–
Wacker Neuson
Beteiligungs GmbH
Book value of goodwill	293,988	293,981
Book value of the indefi nite-lived
brand	42,838	42,838
Total
Book value of goodwill	326,059	325,676
Book value of the indefi nite
lived brand	64,838	64,838

The value of goodwill and indefi nite-lived brands is verifi ed during the annual impairment test. For this purpose, the book value is compared with the fair value less cost to sell (value in use previous year). The fair value less cost to sell is determined using the discounted cash fl ow method. Value is impaired if fair value less cost to sell is lower than the book value. Impairment losses did not need to be written down in fi scal 2008.

The calculation of fair value less cost to sell is based on assumptions, which in turn are dependent on the following uncertain estimates:

• Free cash fl ow
• Discount rates
• Price increases for raw materials and supplies
• Underlying growth rates for cash-fl ow predictions outside of the budget period

Free cash fl ow – Free cash fl ow is determined using a detailed planning phase from 2009 to 2018. Growth rates are determined for the fi rst three budget years (up to 2011) based on market conditions. Adjustments were made based on distribution plans. When performing the goodwill impairment test, it is assumed that the entire distributable cash fl ow is paid out each fi scal year. Distributable cash fl ow refers to free cash fl ow after interest payments, tax shields and increases and reductions in borrowing capital. Care is taken to ensure that the cash fl ow distribution does not reduce the share capital. After 2011, management anticipates results and growth rates that more strongly align with past values. In other words, management does not yet expect the company to achieve the balanced position as assumed in the perpetual annuity assessment by the year 2012. The detailed planning phase from 2012 to 2018 was therefore derived from past company fi gures. This was based on assumed sales growth of 3.75 percent per annum from 2012 to 2018.

Discount rates – Discount rates refl ect management's assess ment of the risks associated with cash-generating units. It includes a risk-free and risk-weighted rate. The weighted average cost of capital (WACC) after tax at a uniform rate of 8.10 percent was applied. Last year, WACC before tax was applied on the basis of the value in use. The tax rate in the previous year was 12.67 percent for Wacker Neuson Beteiligungs GmbH, 12.8 percent for Weidemann GmbH and 15.42 percent for Wacker Neuson Corporation.

Price increases of raw materials – Past price fl uctuations are used as indicators for estimating future price developments.

Projecting growth rates – Management and affi liates estimate growth rates based on local market dynamics. No growth rate has been projected for perpetual annuity. However, infl ation has been projected at 2 percent.

11 Other investments and other non-current assets

In total, participating interests in the amount of EUR K 3,420 (book value) are held. The companies in question are not consolidated. For further details, please see the information on the consolidation structure in the general information on accounting standards.

Other non-current assets are composed of the following components:

in € K	Dec. 31, 2008	Dec. 31, 2007
Loans	139	83
Investment securities	2,870	1,656
Interest rate swap	0	832
Long-term trade receivables	25,780	28,293
Other long-term assets	4,210	3,659
Total	32,999	34,523

The long-term trade receivables mainly result from hirepurchase agreements and fi nance leases.

12 Inventories

Inventories are composed of the following components:

in € K	Dec. 31, 2008	Dec. 31, 2007
Raw materials and supplies	49,525	49,937
Work in progress	8,430	11,212
Finished goods	159,075	113,981
Total	217,030	175,130

An expense of EUR K 551,492 (previous year: EUR K 435,274) was recorded as acquisition and manufacturing costs for inventories.

Of the reported inventories, EUR K 35,265 (previous year: EUR K 11,114) are recognized at net realizable value. Writedowns of inventories recognized as an expense amount to EUR K 6,336 in the reporting period (previous year: EUR K 1,863).

Write-ups of inventories recognized as an expense amount to EUR K 0 in the reporting period (previous year: EUR K 0).

Similar to 2007, no inventories were pledged as collateral for liabilities during the period under review.

13 Trade receivables

Trade receivables have the following components:

in € K	Dec. 31, 2008	Dec. 31, 2007
Trade receivables at nominal value	125,820	166,201
Less allowance for doubtful accounts	- 6,632	- 4,990
Total	119,188	161,211

As of December 31, 2008, trade receivables (at nominal value) were broken down as follows:

in € K	Dec. 31, 2008	Dec. 31, 2007
Trade receivables	125,820	166,201
Nominal value of trade receiv ables written down or not due	116,201	124,296
Overdue at nominal value but not written down < 30 days	3,978	22,502
Overdue at nominal value but not written down 30 – 90 days	3,420	13,211
Overdue at nominal value but not written down > 90 days	2,221	6,192

Allowance for doubtful accounts developed as follows:

in € K	2008
Balance at January 1, 2008	4,990
Exchange rate differences	- 140
Additions	3,189
Amortization/depreciation	- 847
Reversals	- 565
Discounts	5
Balance at December 31, 2008	6,632

Trade receivables are derived from trading with a large number of companies from different industries and regions. Regular credit checks verify the fi nancial stability of receivables. Allowances for doubtful accounts are made where necessary.

The current value is a reasonable approximation of the book value since all receivables are due within less than one year.

In fi scal 2007, receivables from fi nance leases in the amount of EUR K 1,734 were disclosed under other current assets. These receivables stemmed directly from an affi liate's original transaction and are disclosed under trade receivables for fi scal 2008. The previous year's value has been adjusted accordingly.

14 Marketable securities

Marketable securities comprise bearer shares in funds, promissory notes and bonds. In fi scal 2008, the Group holds marketable securities totaling EUR K 1,894 (previous year: EUR K 88,656).

In the period under review, all marketable securities are attributable to Wacker Neuson Linz GmbH in the form of a security fl oater in the amount of EUR K 1,894 (previous year: EUR K 11,330). As these shares are acquired with the expectation that they will be quickly resold, they are recognized at fair value in the category "held for trading" in accordance with IAS 39. The book value shown represents the Group's maximum default risk.

The bearer shares in funds and promissory notes in the amount of EUR K 77,272 that were attributable to the company in fi scal 2007, jointly defi ned as an investment portfolio and recognized "at fair value through profi t or loss" in accordance with IAS 39, were sold in the period under review.

In fi scal 2007, bonds in the amount of EUR K 54 were attributable to the Austrian affi liate Wacker Neuson GmbH, Vienna. Classifi ed as "available for sale" in accordance with IAS 39 and valued at market price, these bonds were also sold in the period under review.

Refer to section 26 outlining additional information on fi nancial instruments in these notes for information regarding net profi ts and losses from these fi nancial instruments.

15 Other current assets

in € K	Dec. 31, 2008	Dec. 31, 2007
Value-added tax	2,919	4,092
Advance payments	3,981	4,594
Travel advances	156	193
Derivatives	2,150	0
Receivables from associated companies	2,140	955
Receivables from employees	595	0
Other	2,548	2,335
Total	14,489	12,169

Receivables from associated companies include receivables from non-consolidated interests (see general information on accounting standards/consolidation structure) and receivables from shareholders.

The asset values of the pension liability insurance were offset against provisions. The fair value is a reasonable approximation of the book value since all items have a maturity of less than one year.

Receivables from fi nance leases in the amount of EUR K 1,734 were disclosed in fi scal 2007. These receivables accrue to an affi liate directly from an original transaction and were reclassifi ed as trade receivables in the period under review (refer to the section on trade receivables in these notes).

16 Cash and cash equivalents

in € K	Dec. 31, 2008	Dec. 31, 2007
Petty cash	179	207
Bank balances	61,855	74,008
Cash deposits	3,566	2,601
Total	65,600	76,816

Cash on hand and bank balances in foreign currencies are converted at the spot rates. Differences in valuation between acquisition cost and current value were posted under other investment income or under investment expense.

Interest accrued at variable rates on the daily cash bank balances. Depending on the company's liquidity requirements, short-term, term accounts running for periods ranging from one day to three months were set up. The term money yielded interest at the prevailing rates.

17 Equity

Equity amounting to EUR K 70,140 is divided into 70,140,000 individual no-par-value nominal shares, each representing EUR 1.00 of the share capital, and was fully paid-in at the closing date of the Consolidated Financial Statements.

The company did not hold any treasury shares on the closing date.

The following shareholders held a direct interest exceeding 5 percent of the company stock in 2008 or 2007:

		2008	2007
	in %	in € K	in %	in € K
Wacker-Werke GmbH & Co. KG	29.1	20,391	29.1	20,391
Neuson Ecotec GmbH	29.0	20,349	29.0	20,349
Wacker Familiengesell schaft mbH & Co. KG	5.3	3,710	5.3	3,710
VGC Invest GmbH	5.1	3,546	–	–
Total	68.5	47,996	63.4	44,450

In addition to share capital, the components of equity are as follows:

in € K	Dec. 31, 2008	Dec. 31, 2007
Capital reserves	618,397	618,450
Other neutral assets	1,033	581
Exchange rate differences	- 36,914	- 32,845
Total	582,516	586,186

The capital reserves primarily result from share premiums in con nection with the IPO and the merger with Wacker Neuson Beteiligungs GmbH (formerly Neuson Kramer Baumaschinen AG).

At the AGM of April 13, 2007 the Executive Board was vested with the right – subject to the consent of the Supervisory Board – to increase the share capital of the company on or before April 12, 2012 by a total of up to EUR 1,000,000 in whole or in part, on one or more occasions, by issuing new registered shares against contributions in cash (authorized capital I).

Shareholders' statutory subscription rights are excluded:

• If employees of the company and its affi liates and executive bodies of affi liates (to the extent that these are not simultaneously members of the company's Executive Board) are offered shares at an issue price that is 15 percent lower than the issue price;
• with respect to fractional amounts;
• if the issue price of the new shares is not signifi cantly below the company's market price and the new shares issued to the exclusion of subscription rights do not exceed a total of 10 percent of the share capital.

A further resolution was also passed at the AGM on April 13, 2007, vesting the Executive Board with the right – subject to the consent of the Supervisory Board – to increase the share capital of the company on or before April 12, 2012 by a total of up to EUR 24,500,000 in whole or in part, on one or more occasions, by issuing new registered shares against contributions in kind (authorized capital II). The authorized capital II option was partially utilized to conclude the merger Wacker Neuson Beteiligungs GmbH (formerly Neuson Kramer Baumaschinen AG). As a result, the Supervisory Board amended the corresponding entry under Article 3, Paragraph 4 of the Articles of Incorporation, following resolutions passed on

September 23, 2007 and October 18, 2007 to the effect that authorized capital II now amounts to EUR 5,360,000. The authorized capital in the wording valid until April 13, 2007 was annulled.

The statutory subscription rights of shareholders are excluded if companies, interests or company divisions are to be contributed in exchange for shares in the company.

Restrictions regarding voting rights or the transfer of shares:

Information on the pool agreement

There is a pool agreement between some shareholders and companies of the Wacker family on the one hand and companies shareholders of Neuson on the other. Prior to each AGM of the company, the pool members decide how to exercise voting and petition rights in the meeting. Each pool member undertakes to exercise their voting and petition rights in the AGM in line with the pool's decisions, or to have these rights exercised in this manner. If the pool does not reach a decision with regard to a resolution on the allocation of annual profi ts, adoption of the annual fi nancial statements by the AGM, approval of Executive and Supervisory Board members' actions, appointment of the auditor, upholding minority interests and compulsory changes to the Articles of Incorporation as a result of changes to legislation or jurisdiction, the pool members have the right to freely exercise their voting rights. In all other cases, the pool members must vote to reject the proposal. The Neuson shareholders appoint two members to the Supervisory Board, and the Wacker shareholders appoint two further members to the Supervisory Board.

Shares can be transferred without restriction to spouses, registered partners, pool members' children, children adopted when they were minors by pool members, siblings, foundations set up by pool members that are either charitable foundations or in which the benefi ciaries and the controlling members of the management board satisfy the aforementioned criteria, and companies where the direct or indirect shareholders also satisfy the aforementioned criteria. If shares are transferred to any such persons, they must join the pool agreement. If shares are transferred to third parties, either for a fee or free of charge, the other pool members have the right to acquire these shares. If the shares are to be sold to third parties off the stock exchange, all of the other pool members have a preferential purchase right. If a pool member intends to transfer shares in such a way that more than 50 percent of voting rights in the company would be

held by third parties who do not satisfy the criteria defi ning those individuals to whom transfers can be freely made, the remaining pool members have the right to also sell their shares. If a pool member is excluded from the pool for good reason, the other pool members have a right to acquire the shares or a preferential purchase right. This also applies if a pool member ceases to qualify as a pool member.

Information on the partnership agreement of Wacker Familiengesellschaft mbH & Co. KG

Part of the Wacker family shareholders hold part of their shares via Wacker Familiengesellschaft mbH & Co. KG, which in turn also holds shares via Wacker-Werke GmbH & Co. KG. Economic ownership of the shares is attributed to the Wacker family shareholders.

The pool agreement has precedence over the regulations of the partnership agreement as long as Wacker Familiengesellschaft mbH & Co. KG is party to the above pool agreement. A partners' meeting is held prior to every company AGM. In this meeting, the Wacker family shareholders defi ne how they will vote and exercise their petitioning rights. However, votes in the AGM are to be cast in line with the pool's decisions. Two of the Wacker family shareholders have the right to propose one member of the Supervisory Board each to the shareholders, this member is then to be elected by the remainder.

Only the acquisition and preferential purchase rights in the pool agreement apply to family members who are party to the pool agreement. In the case of a sale by a family member who is not a pool member, acquisition and preferential purchase rights apply if shares are sold to third parties who do not fulfi ll the criteria defi ning those individuals to whom shares can be freely transferred set forth in the abovementioned pool agreement. If a family shareholder exits the company as a result of a termination, the remaining pool members have a preferential purchase right to buy the shares for a period of two years from the date this shareholder exits the company. In addition, the partners' meeting can resolve that the exiting family shareholder does not receive compensation in cash but in the form of the shares to which they are fi nancially entitled. After May 14, 2012, each exiting family member can demand to receive their compensation in the form of the shares to which they are fi nancially entitled.

Pool agreement between Lehner and Neuson shareholders

The Lehner shareholders have issued a Neuson shareholder with power of attorney with regard to the shares they acquired prior to the merger and during the merger between the company and Wacker Neuson Beteiligungs GmbH (formerly Neuson Kramer Baumaschinen AG). The Neuson shareholder is independently responsible for exercising these voting rights, is not bound by any instructions, and will always exercise them in the same way as for the shares that he himself holds. These shares are thus subject to the restrictions of the aforementioned pool agreement.

The Neuson shareholder has a preferential purchase right to buy these shares in the event of a transfer to entities other than the Neuson shareholder or to Lehner shareholders.

Shares that part of the Executive Board members receive as part of their remuneration

Three of the members of the Executive Board have received shares in the company as part of their remuneration. The company has an unrestricted, preferential purchase or acquisition right over some of these shares in the event that they are transferred.

Development of treasury shares:

in € K	Dec. 31, 2008	Dec. 31, 2007
Treasury shares
Balance at January 1	0	- 36,691
Purchase of treasury shares	0	0
Sale of treasury shares	0	36,691
Balance at December 31	0	0

Retained earnings developed as follows:

in € K	Dec. 31, 2008	Dec. 31, 2007
Balance at January 1	254,113	224,260
Dividend for the respective
fi scal year	- 35,070	- 24,273
Profi t for the period	37,389	54,126
Balance at at December 31	256,432	254,113

Dividends paid in 2008 amounted to EUR K 35,070 (EUR 0.50 per share) (previous year: EUR K 24,273, EUR 0.62 per share).

18 Provisions for pensions and similar obligations

Composition:

in € K	Dec. 31, 2008	Dec. 31, 2007
Provisions for pension obligations	22,138	21,888
Provisions for other obligations to employees	2,048	1,774
Total	24,186	23,662

Within the company there are different types of retirement benefi t schemes worldwide for old age and surviving dependants' pensions. Most of the schemes provide for the payment of fi xed lump-sum amounts. The others are defi ned retirement plans with a pension paid from retirement until death. The amounts to be paid are based on the respective employee's level (both with respect to salary as well as hierarchy) as well as her/his years of service to the company.

The parent company has entered into a legally binding obligation to provide post-employment benefi ts to those employees who entered company service before 1985 according to the benefi ts scheme last amended on January 15, 1985. In accordance with the benefi ts scheme, the companies provide a lumpsum payment to eligible employees after completing employment with the company:

• upon reaching the age of 65
• upon the receipt of early retirement benefi ts from the national pension scheme
• upon the occurrence of a permanent occupational disability after having attained the age of 60 and
• after the death of the employee to the surviving spouse.

Furthermore, pension commitments due to enter into effect as of retirement age also exist vis-à-vis Executive Board members as well as former executive and shareholders.

For the remaining domestic and foreign companies, the schemes partly provide for a lump-sum payment which is based on the salary at retirement age multiplied by a factor based on years of service with the company and partly for pension payments from retirement until death based on the employee's earnings to those who fulfi ll the time-of-service requirements, which differ from country to country.

Foreign affi liates also have defi ned contribution plans. In such cases, the respective company makes contributions to an insurance scheme either because of legal requirements or contracted agreements. There is no further obligation for the company beyond these payments. The periodic contributions are recognized as an expense under profi t before interest and tax (EBIT) in the respective year.

Provisions for the defi ned benefi t plans are calculated using the Projected Unit Credit Method. Valuation is based on the legal, economic and tax factors in the respective countries. The expected service cost and accrued interest as well as anticipated returns from the pension assets are taken into account when calculating the costs of pensions for performance-oriented pension schemes. Actuarial gains and losses are recognized according to the 10 percent corridor method.

The actuarial valuation of the present values of pension obligations as of the balance sheet date is based on the following parameters and assumptions. These parameters are also applied in calculating the pension expenditures for the following year. Consequently the expense calculations are based on the following premises:

	in	2008	2007
Benefi t plans for parent company
Discount rate	%	6.50	5.50
Future pension increases expected	%	2.00	1.75
Expected return on plan assets	%	4.00	4.00
Retirement age	years	60	60
Other benefi t plans1
Discount rate	%	6.43	5.47
Future pension increases expected	%	3.08	2.30
Expected return on plan assets	%	3.01	3.01
Retirement age	years	61	64

1 Weighted average of the individual benefi t schemes Pension obligations are distributed across schemes that are not fi nanced through funds as well as schemes that are entirely or partially fi nanced through funds as follows:

in € K	2008	2007
Provisions for pension plans, not funded	17,554	19,061
Provisions for pension plans, fully or partly funded	8,397	8,545
Total	25,951	27,606

The changes in the present value of pension obligations and of plan assets are as follows:

in € K	2008	2007
Balance at January 1	27,606	14,137
Changes in consolidation structure	0	16,489
Current service costs	1,193	852
Interest expense	1,457	716
Actuarial gains/losses	- 2,915	- 1,784
Changes in exchange rates	211	- 189
Paid benefi ts	- 1,592	- 709
Curtailments and settlements	- 9	- 1,906
Present value of obligations
at December 31	25,951	27,606

in € K	2008	2007
Changes in fair value of plan assets
Balance at January 1	3,496	2,698
Expected return on plan assets	148	119
Actuarial gains/losses	- 81	122
Changes in exchange rate	- 9	- 26
Employer's contributions	608	601
Curtailments and settlements	- 24	- 18
Plan assets at December 31	4,138	3,496

in € K	2008	2007
Obligation net of plan assets	21,813	24,110
Actuarial gains/losses not yet recognized	2,244	- 585
Plan surplus	129	137
Accruals for pensions at December 31	24,186	23,662

The losses above and beyond the 10 percent corridor are amortized over the average remaining years until retirement – some 17 years in Germany's case. Amortization in 2007 and 2008 is part of total pension expense.

Plan assets primarily comprise pension liability insurance where future payments are pledged in favor of the entitled recipient.

Pension expenses are as follows:

in € K	2008	2007
Current service costs	1,193	852
Interest expense	1,457	716
Expected return on plan assets	- 147	- 119
Actuarial gains/losses	12	96
Result of curtailments and
settlements	- 28	118
Pension expense from defi ned
benefi t plans	2,487	1,663
Pension expense from defi ned
contribution plans	570	789
Total pension expense	3,057	2,452

Interest expense ensuing from pension obligations is recognized in the fi nancial result. The remaining pension expense is part of personnel costs shown in the appropriate functional line of the income statement.

The valuation date for the current value of fund assets and the present value of obligations is December 31 for each year. The base value for the calculation of unaccrued interest concerning pension obligations is the present value of obligations as of January 1. The base value for the anticipated return on fund assets is the current value as of January 1; transfers during the year are accounted for on a pro rata basis.

The contributions expected to be made to German fund assets in 2009 amount to EUR 0.6 million.

The following overview shows the projected pension pay-outs for the coming fi ve years:

in € K

Due in 2009	1,532
Due in 2010	1,582
Due in 2011	1,645
Due in 2012	1,789
Due in 2013	1,852

The following actual return on plan assets was recognized for the 2007 and 2008 fi scal years:

in € K	2008	2007
Actual return on plan assets	61	224

Only the Wacker Neuson Corporation (USA) plan requires the payment of healthcare contributions. The following table shows the effects of a one percentage point increase or reduction in healthcare costs:

		2008		2007
in € K	Additions	Reversals	Additions	Reversals
Effect on service cost and interest
expense	16	- 13	23	- 19
Effect on the present value
of pension obligations	39	- 33	30	- 25

The following information applies to the period 2004 through 2008:

in € K	2008	2007	2006	2005	2004
Present value of performance-oriented
obligations	25,951	27,606	14,137	15,333	12,909
Fair value of the plan assets	4,138	3,496	2,698	3,307	2,614
Plan surplus/defi cit	21,813	24,110	11,439	12,026	10,295
Experience adjustments
Of which: plan liabilities	129	80	24	13	- 7
Of which: plan assets	83	110	- 184	0	0

19 Other provisions

The provisions are as follows:

in € K	Balance Jan. 1, 2008	Currency	Utilization	Additions	Reversals	Balance Dec. 31, 2008
Provisions
Warranties	5,274	- 143	1,327	3,482	372	6,914
Obligations towards employees	5,524	- 57	2,389	3,056	185	5,949
Professional fees	668	- 6	682	420	39	361
Litigation costs	508	7	12	101	215	389
Other provisions	2,888	- 19	1,659	1,752	361	2,601
Total	14,862	- 218	6,069	8,811	1,172	16,214

	Balance	Changes in consolidation structure/				Balance
in € K	Jan. 1, 2007	Currency	Utilization	Additions	Reversals	Dec. 31, 2007
Provisions
Warranties	3,524	1,604	2,452	2,620	22	5,274
Obligations towards employees	5,871	444	2,553	1,842	80	5,524
Professional fees	486	- 1	441	668	44	668
Litigation costs	288	87	25	161	3	508
Other provisions	1,888	246	742	1,562	66	2,888
Total	12,057	2,380	6,213	6,853	215	14,862

The due dates of the above provisions are distributed as follows.

in € K	Short-term (< 1 year)	Long-term (> 1 year)	Balance Dec. 31, 2008
Provisions
Warranties	5,538	1,376	6,914
Obligations towards employees	2,621	3,328	5,949
Professional fees	361	0	361
Litigation costs	166	223	389
Other provisions	2,426	175	2,601
Total	11,112	5,102	16,214

in € K	Short-term (< 1 year)	Long-term (> 1 year)	Balance Dec. 31, 2007
Provisions
Warranties	3,896	1,378	5,274
Obligations towards employees	2,928	2,596	5,524
Professional fees	668	0	668
Litigation costs	212	296	508
Other provisions	1,620	1,268	2,888
Total	9,324	5,538	14,862

The increase in discount amounts for long-term provisions from December 31, 2007 through December 31, 2008 amounts to EUR K 10 (2007: EUR K 34) for obligations towards employees based on the respectively valid assessment basis.

Obligations towards employees includes provisions for employees nearing pension age who are working part-time and for whom claims for reimbursement against the German tax offi ce amount to EUR K 186 in 2008 and EUR K 230 in 2007.

20 Financial liabilities

Financial liabilities comprise the amounts recognized under the balance sheet items non-current liabilities (EUR K 38,845); short-term borrowings from banks (EUR K 81,742); and current portion of long-term borrowings (EUR K 5,876):

in € K	Dec. 31, 2008	Up to 1 year	1 to 5 years	Over 5 years
Loans	105,967	87,385	14,698	3,884
Bonds	19,138	0	19,138	0
Liabilities from fi nance leases	717	142	375	200
Other long-term liabilities	641	91	550	0
Total	126,463	87,618	34,761	4,084

in € K	Dec. 31, 2007	Up to 1 year	1 to 5 years	Over 5 years
Loans	101,824	77,731	24,093	0
Bonds	18,826	0	18,826	0
Liabilities from fi nance leases	821	163	338	320
Other long-term liabilities	924	282	642	0
Total	122,395	78,176	43,899	320

Borrowings from banks

Borrowings from banks mainly comprise the following items:

• Group cash pool: EUR K 28,261 (previous year: EUR K 38,024) with variable interest rates that are continuously adjusted to refl ect market interest rates.
• GBP loan: EUR K 10,000 (previous year: EUR K 0), interest rate 4.15 percent, due in less than 1 year, credit line EUR K 15,000.
• Current account lines in USD: EUR K 17,306 (previous year: EUR K 0), interest rate 1-month US Libor plus 1.5 percent, due in less than 1 year, credit line USD K 80,000.

• Loans in Brazilian reals: EUR K 3,128 (previous year: EUR K 3,649), interest rate 20.5 – 21.8 percent, due in less than 1 year.

• Export incentive credit line (KRR credit line): EUR K 10,000 (previous year: EUR K 10,000), interest rate 5.2 percent, exten ded automatically every year unless terminated on March 31. This credit is used exclusively to fi nance receivables from export trade. Amounts accruing to the bank under this loan agreement are secured by a global debt assignment provision and a bill of surety.

• A loan contract to fi nance the purchase of Weidemann GmbH: EUR K 18,600 (previous year: EUR K 24,000), principal repayments twice yearly at EUR K 2,700, interest rate optional 1-, 3-, 6- or 12-month Euribor plus 0.65 percent, expiring June 30, 2012. The loan contract contains a clause under which the company is bound to pledge their shares held in Weidemann GmbH to the bank as security should circumstances arise or become public that would justify the issuing of a higher risk assessment by the bank.
• Long-term loan: EUR K 5,257, fi xed interest rate 6 percent, due in less than 1 year.

The company also has the following credit lines at two German banks that have not been drawn: EUR 10 million, on which sum interest payments are due with Euribor plus 0.5 percent (opened in 2008), as well as EUR 20 million, on which sum interest payments are due with 3-month Euribor plus 0.5 percent. During the fi rst half of every year, another bank extends an additional credit line of EUR 50 million.

The book values of borrowings from banks with variable and fi xed interest rates were reported in the following currencies (equivalent in euros):

in € K	2008	2007
Euro	67,681	76,301
US-\$	19,303	12,215
CHF	0	3,967
PLN	4,327	0
JPY	82	2,152
GBP	10,000	0
AUD	0	532
HKD	0	1,431
BRL	3,128	3,649
Diverse	1,446	1,577
Total	105,967	101,824

The fair values of fi nancial liabilities are reasonable approximations of the book values.

Bonds

Wacker Neuson Linz GmbH (legal successor to Neuson Finance GmbH) has issued two bonds amounting to a total nominal value of EUR 20 million (book value: EUR K 19,138). These are listed on the multilateral trading platform Third Market of the Vienna Stock Exchange (Multilateral Trading System, MTF).

Bond

One bond has been arranged by an Austrian bank. It has a total nominal value of EUR 10 million and an original term of fi ve years. The maturity date of this bond is September 8, 2010. The effective annual gross interest rate amounts to 3.41 percent.

Bundled bond

The bundled bond issued by Wacker Neuson Linz GmbH together with other issuers has a total nominal value of EUR 30 million, of which EUR 10 million is allocable to Wacker Neuson Linz GmbH. The maturity date of this bond is September 30, 2012. The effective annual gross interest rate amounts to 3.76 percent.

21 Trade payables

As of December 31, 2008, trade payables (at book value) were broken down as follows:

in € K	2008	2007
Trade payables	32,290	63,084
Book value due < 30 days	24,254	42,689
Book value due 30–90 days	6,970	16,160
Book value due > 90 days	1,066	4,235

Interest does not accrue on trade payables.

22 Other current liabilities

in € K	2008	2007
Advance payments received	761	887
Other accruals	8,216	9,285
Deferred taxes	4,450	10,823
Value added tax	2,949	4,278
Personnel
(wages/salaries, vacation, etc.)	11,459	13,653
Other	7,349	3,772
Total	35,184	42,698

The other accruals/deferrals in 2008 consist mainly of costs for preparing the annual fi nancial statements, outstanding invoices, rebates and sales commissions, return obligations, warranty deposits and interest liabilities. Customers' credit balances are also included under this item.

The fair values of the short-term borrowings are reasonable approximations of the book values.

23 Derivative fi nancial instruments

Derivative fi nancial instruments treated according to the hedge accounting criteria

The nominal amounts and market values of derivative fi nancial instruments that satisfy hedge accounting criteria are recognized as follows as per December 31, 2008 and 2007:

		2008		2007
in € K	Nominal Value	Market Value	Nominal Value	Market Value
Assets
Currency hedges	10,023	1,573	0	0
Interest hedges	0	0	24,000	832
Commodity hedges	0	0	0	0
Total	10,023	1,573	24,000	832
Liabilities
Currency hedges	0	0	0	0
Interest hedges	18,600	62	0	0
Commodity hedges	0	0	24	8
Total	18,600	62	24	8

The market values recognized in equity without effects on profi ts and associated deferred tax developed as follows during the fi scal year:

The maturities of derivative fi nancial instruments are as follows:

	Market	Deferred	Carried
in € K	values	taxes	under equity
Assets
Balance at Jan. 1, 2008	832	- 245	587
+/- not refl ected in income	1,165	- 384	781
+/- refl ected in income	- 424	134	- 290
Balance at Dec. 31, 2008	1,573	- 495	1,078
Equity and liabilities
Balance at Jan. 1, 2007	8	- 3	5
+/- not refl ected in income	62	- 18	44
+/- refl ected in income	- 8	3	- 5
Balance at Dec. 31, 2008	62	- 18	44

in € K	Up to 1 year	1 to 5 years	Over 5 years
		Nominal Value
Assets
Currency hedges	10,023	0	0
Interest hedges	0	0	0
Commodity
hedges	0	0	0
Total	10,023	0	0
Liabilities
Currency hedges	0	0	0
Interest hedges	5,400	13,200	0
Commodity
hedges	0	0	0
Total	5,400	13,200	0

Derivative fi nancial instruments not treated according to the hedge accounting criteria

The derivatives concluded to hedge future foreign-exchange transactions (underlying transaction) as outlined in the following do not satisfy formal hedge accounting criteria and are therefore classifi ed as "held for trading" and recognized at fair value through profi t or loss. They developed as follows during the fi scal year:

		2008		2007
	Nominal	Market	Nominal	Market
in € K	Value	Value	Value	Value
Assets
Currency hedges	8,752	577	0	0
Total	8,752	577	0	0
Liabilities
Currency hedges	11,729	121	0	0
Total	11,729	121	0	0

The maturities of derivative fi nancial instruments without hedge accounting are as follows:

in € K	Up to 1 year	1 to 5 years	Over 5 years
		Nominal Value
Assets
Currency hedges	8,752	0	0
Total	8,752	0	0
Liabilities
Currency hedges	11,729
Total	11,729	0	0

The offsetting values from the underlying transactions are not included in determining the market value of the derivative fi nancial instruments. Thus, they do not represent the value that the companies would achieve from both the underlying transaction and hedging contract. The book values of derivatives correspond to the market values and there is no (material) exposure to credit risks, since all derivative contracts were entered into with banks that have a top credit rating.

Refer to the section on additional information on fi nancial instruments in these notes for information regarding net profi ts and losses from these fi nancial instruments.

Other information

24 Contingent liabilities

Contingent liabilities, on the one hand, represent possible obligations that may be incurred depending on the outcome of a future event or events which are of an uncertain nature and not wholly within the control of the company. On the other hand, contingent liabilities represent present obligations for which payment is not probable or the amount of the obligation cannot be determined with suffi cient reliability.

The Group has undersigned the following guarantees:

in € K	Dec. 31, 2008	Dec. 31, 2007
Guarantees	910	337

Furthermore, the company is liable to the amount of EUR K 4,091 (previous year: EUR K 4,091) in connection with a contract with the city of Munich to develop a property.

In addition to the above-mentioned contingent liabilities, the Group undersigns various fi nancial guarantees (sureties). It is highly unlikely, however, that these will be exercised. Therefore no value was booked.

The Group is liable for the following fi nancial guarantees:

in € K	Dec. 31, 2008	Dec. 31, 2007
Financial guarantees
Book value	0	0
Nominal value	3,030	3,952

The fi nancial guarantees include an agreement between the affi liate Wacker Neuson Maquinas Ltda. (Brazil) and a bank. The agreement was concluded to enable the Wacker Corporation to provide customers with fi nancing options. The bank charges the affi liate for these transactions. The charges are calculated based on the purchase agreement (0.5 percent to 1.0 percent). In the event of default, the affi liate is obliged to settle the outstanding receivables plus interest. Interest rates range between 11 percent and 14 percent. At the balance sheet date, the value of receivables fi nanced by the bank amounted to EUR K 2,760 (previous year: EUR K 3,649).

25 Other fi nancial liabilities

a) Obligations for equipment rental and service The terms of the obligations for rental equipment and service contracts are as follows:

in € K	Dec. 31, 2008
Obligations due within 1 year	10,834
Obligations due in 1 to 5 years	18,800
Obligations due in more than 5 years	7,557
Total	37,191

b) Lease obligations

Finance lease obligations

Finance leasing contracts mainly concern the purchase of offi ce and other equipment and real estate.

The following table lists the net book values of the relevant assets at the closing date.

in € K	Dec. 31, 2008	Dec. 31, 2007
Offi ce and other equipment	112	109
Buildings	828	887
Total	940	996

Lease contracts for offi ce and other equipment contain, for the most part, a purchase option at the end of the basic term of the lease which is also to be exercised. The fi nance lease contract concerns the purchase of a self-occupied administration building by the Hungarian affi liate which will terminate in 2015.

Future minimum lease payments discounted to present value are presented in the following table:

in € K 2008	Up to 1 year	1 to 5 years	Over 5 years	Total
Future minimum lease payments (nominal)	148	398	213	759
Less Discount	- 6	- 23	- 13	- 42
Present value	142	375	200	717

Discount rate	3.23 – 5.95%
---------------	--------------

in € K 2007	Up to 1 year	1 to 5 years	Over 5 years	Total
Future minimum lease payments (nominal)	171	360	339	870
Less Discount	- 8	- 22	- 19	- 49
Present value	163	338	320	821

Discount rate	5.00 – 10.32%
---------------	---------------

To the extent that the company is the lessor and has sold machines by way of fi nance lease, the receivable is capitalized to the amount of the net investment value ensuing from the leasing contract. The sales proceeds are recognized in accordance with IAS 17.

The present values at closing date are as follows:

in € K 2008	Up to 1 year	1 to 5 years	Over 5 years	Total
Outstanding min. lease-payments	413	12,579	0	12,992
+ non-guaranteed residual value (nominal)	668	2,644	0	3,312
= Gross investment	1,081	15,223	0	16,304
- Unrealized investment income	- 14	- 1,631	0	- 1,645
= Net investment (present value)	1,067	13,592	0	14,659
- Present value of non-guaranteed residual values	- 668	- 2,644	0	- 3,312
= Present value of minimum lease payments	399	10,948	0	11,347

in € K 2007	Up to 1 year	1 to 5 years	Over 5 years	Total
Outstanding min. lease-payments	1,115	16,896	0	18,011
+ non-guaranteed residual value (nominal)	726	3,460	0	4,186
= Gross investment	1,841	20,356	0	22,197
- Unrealized investment income	- 107	- 4,728	0	- 4,835
= Net investment (present value)	1,734	15,628	0	17,362
- Present value of non-guaranteed residual values	- 726	- 3,460	0	- 4,186
= Present value of minimum lease payments	1,008	12,168	0	13,176

Operating leases

Insofar as a Wacker Group entity acts as a lessee, the lease payments are recognized as an expense over the term of the lease on a straight-line basis.

This essentially refers to leased vehicles, computer hardware and other offi ce equipment.

Outstanding commitments for future minimum lease payments under operating leases that cannot be terminated can be seen in the following table:

in € K	Up to 1 year	1 to 5 years	Over 5 years	Total
Future minimum lease payments (nominal)	5,149	8,750	6,660	20,559

In 2008, a total of EUR K 7,535 (previous year: EUR K 5,423) for operating lease agreements was expensed.

c) Obligations resulting from investment decisions/ takeback obligations

In addition, it should be noted that fi nancial obligations ensuing from construction and investment projects amounting to EUR K 17,072 (previous year: 4,244) and from takeback obligations amounting to EUR K 1,670 also exist.

26 Additional information on fi nancial instruments

The book and fair values of fi nancial assets and liabilities are presented in the following table. It also shows how the individual items are categorized.

									Leases	Non
									and	fi nancial
	2008	2008					Loans		others	assets
	Fair	Book	Initial dis	Held for	Held for		and re	Held to	(book	(book
in € K	value	value	closure	trading	sale	Hedges	ceivables	maturity	value)	value)

			Measured at fair value through profi t or loss		Measured at fair value with changes recognized in equity		At residual book value
Assets
Other investments	3,420	3,420	0	0	3,420	0	0	0	0	0
Other non-current assets	32,999	32,999	0	0	0	0	16,919	0	13,592	2,488
Trade receivables	119,188	119,188	0	0	0	0	118,121	0	1,067	0
Marketable securities	1,894	1,894	0	1,894	0	0	0	0	0	0
Other current assets	14,489	14,489	0	577	0	1,573	4,688	0	0	7,651
Cash and cash equivalents	65,600	65,600	0	0	0	0	65,421	0	179	0

in € K	2008 Fair value	2008 Book value	Initial dis closure	Held for trading	At resid ual book value IAS 39 classifi cation (book value)	Hedges	Leases and others (book value)	Non fi nancial assets (book value)
			Measured at fair value through profi t or loss			Measured at fair value with changes recog nized in equity
Liabilities
Long-term borrowings	38,845	38,845	0	0	38,270	0	575	0
Trade payables	32,290	32,290	0	0	32,290	0	0	0
Short-term borrowings from banks	81,742	81,742	0	0	81,742	0	0	0
Current portion of long-tem borrowings	5,876	5,876	0	0	5,734	0	142	0
Other short-term liabilities	35,184	35,184	0	121	4,761	62	0	30,240

in € K	2007 Fair value	2007 Book value	Initial dis closure	Held for trading	Held for sale	Hedges	Loans and re ceivables	Held to maturity	Leases and others (book value)	Non fi nancial assets (book value)
					IAS 39 classifi cation (book value)
			Measured at fair value through profi t or loss		Measured at fair value with changes recognized in equity		book value	At residual
Assets
Other investments	1,649	1,649	0	0	1,649	0	0	0	0	0
Other non-current assets	34,523	34,523	0	0	0	832	17,219	0	15,628	844
Trade receivables	161,211	161,211	0	0	0	0	159,477	0	1,734	0
Marketable securities	88,656	88,656	77,272	11,330	54	0	0	0	0	0
Other current assets	12,169	12,169	0	0	0	0	3,310	0	0	8,859
Cash and cash equivalents	76,816	76,816	0	0	0	0	76,609	0	207	0
in € K			2007 Fair value	2007 Book value	Initial disclo sure	Held for trading	At resid ual book value	Hedges	Leases and others (book value)	Non fi nancial assets (book value)
							IAS 39 classifi cation (book value)
					Measured at fair value through profi t or loss			Measured at fair value with changes recog nized in equity
Liabilities
Long-term borrowings			44,219	44,219	0	0	43,561	0	658	0

Long-term borrowings	44,219	44,219	0	0	43,561	0	658	0
Trade payables	63,084	63,084	0	0	63,084	0	0	0
Short-term borrowings from banks	72,103	72,103	0	0	72,103	0	0	0
Current portion of long-tem borrowings	6,073	6,073	0	0	5,910	0	163	0
Other short-term liabilities	42,698	42,698	0	0	1,758	8	0	40,932

Investments in equity instruments amounting to EUR K 3,420 (previous year: EUR K 1,649) that do not have a quoted market price in an active market are included in other investments. These equity instruments were valued at acquisition cost as the current value cannot be reliably determined.

The following table shows the net profi ts and losses from fi nancial instruments based on valuation categories. It does not include the effects on income of fi nance leases or of derivatives that qualify for hedge accounting as these are not allocated to any valuation categories set down in IAS 39. Similarly, interest and dividends have not been recognized on the net profi ts and losses from fi nancial instruments.

in € K	2008	2007
Loans and receivables	- 2,956	- 286
Financial instruments measured at fair value through profi t or loss – fi rst-time approach	868	2,406
Financial instruments held for trading	- 1,938	- 543
Financial liabilities measured at amortized cost	0	1,935

Net gain/loss from the category "loans and receivables" results from allowances for doubtful accounts on trade receivables.

The gains and losses from adjustments to the fair value of derivatives that do not meet hedge accounting requirements are included in the category of assets held for trading. Gains and losses from marketable securities categorized as assets held for trading are also disclosed here.

In fi scal 2007, the category "fi nancial liabilities measured at amortized cost" primarily concerned an amount from an agreement reached with a former shareholder of the affi liate Weidemann GmbH in order to settle a legal dispute over the remaining purchase price.

Financial instruments in the form of foreign currency receivables and payables are valued at the relevant spot rates applicable on the balance sheet dates. For 2008, this resulted in proceeds to

the value of EUR K 1,179 (previous year: EUR K 160), which is disclosed under cost of sales. Refer to the sections on other income and other expenses for information on exchange rate fl uctuations and adjustments to monetary holdings.

27 Events since reporting date

On February 11, 2009, the Supervisory Board of Wacker Neuson SE appointed the former members of the Executive Board to the Executive Board of Wacker Neuson SE as part of the move to change Wacker Construction Equipment AG to an SE (Societas Europaea). Wacker Neuson SE was entered in the German Register of Companies under Section B of the Munich Magistrates Court (HRB 177839) on February 18, 2009.

The affi liate Wacker Neuson Rhymney Ltd. in the UK is due to close during the course of 2009. As a result, production of four-wheel dumpers will be transferred from the Tredegar plant to Wacker Neuson Linz GmbH, based at Leonding in Austria. The two factory premises of Wacker Neuson Rhymney Ltd. are located in Rhymney and Tredegar and are to be sold or rented over the coming months.

The Austrian affi liate Wacker Neuson Linz GmbH has concluded an option agreement for the purchase of a site. The agreed purchase price is EUR K 9,166. Purchase of the site was closed on March 12, 2009.

The Japanese affi liate Nippon Wacker Co. is to be sold or closed in fi scal 2009.

No other noteworthy events occurred after the balance sheet date.

28 Segmentation

Primary segmentation (geographical segments)

For information regarding geographical segmentation please refer to the section on consolidation structure (see the general information on accounting standards).

The internal organization structure and management structure as well as the internal reports to the Executive Board and the Supervisory Board form the basis for determining the primary segment format of the company. In this respect the companies are divided geographically into regional markets (Europe, Americas and Asia).

The transactions between the individual segments are valuated according to the transfer prices used within the Group which are derived from market prices.

Secondary segmentation (business segments)

The secondary segment is separated into the business segments light equipment, compact equipment and services.

The light equipment business segment covers the manufacture and sale of light equipment weighing up to approximately three metric tons in the following four business fi elds: concrete technology, soil and asphalt compaction, demolition and utility.

The compact equipment business segment covers the manufacture and sale of compact equipment weighing up to approximately fourteen metric tons.

The business segment services houses the company's activities in the business fi elds after-market (repair and maintenance) and rental.

Intercompany transactions between the individual Group companies are based on prices that also apply to third-party transactions.

Assets cannot be meaningfully allocated to individual business segments, thus segment assets and capital expenditures are not reported.

29 Cash fl ow statement

The cash fl ow statement was prepared in accordance with IAS 7. The cash fl ow statement reports cash fl ows resulting from operating activities, from investing activities as well as from fi nancing activities. Insofar as changes in liquid funds are due to foreign exchange rate fl uctuations, these are reported separately. The determination of cash fl ow from operating activities was derived using the indirect method.

Current liquid funds comprise cash and cash equivalents that are as reported on the balance sheet. Current borrowings from banks in the Group cash pool were offset against cash and cash equivalents.

in € K	2008	2007
Cash on hand	179	207
Bank balances	61,855	74,008
Cash deposits	3,566	2,601
Liabilities from group cash pool	- 28,261	- 38,024
Total	37,339	38,792

Non-cash operating expenses and income as well as the gain or loss on the sale of property, plant and equipment have been eliminated in the cash fl ow from operating activities.

Cash fl ow from investing activities comprises the cash outlay for intangible assets and property, plant and equipment as well as interest received.

The item outlining changes to the consolidation structure refers exclusively in fi scal 2008 to capital contributions to an affi liate not consolidated for reasons of substantiality (see section 32 with overview of equity investments in non-consolidated companies).

Cash fl ow from fi nancing activities is made up of payments received from and paid to shareholders as well as borrowing and the repayment of debt.

30 Risk management

Capital management

The main aim of the Group's capital management policy is to maintain a high equity ratio to support business activities.

The Group controls and modifi es its capital structure in line with changing economic dynamics. The goal of the capital management policy is to secure the company's business and investment activities in the long term. To maintain or adapt capital structure, the Group can change dividend payments to shareholders or issue new shares. As of December 31, 2008 and December 31, 2007, no changes were made to objectives, guidelines or procedures. The Group monitors its capital using the net fi nancial debt resulting from current net fi nancial liabilities and non-current fi nancial liabilities.

in € K	Dec. 31, 2008	Dec. 31, 2007
Liquid assets	65,600	76,816
Short-term fi nancial receivables	1,894	88,656
Short-term liabilities (without provisions)	155,558	185,324
thereof short-tem fi nancial liabilities	87,618	78,176
Short-term fi nancial liabilities	81,742	72,103
Current portion of long-term fi nancial liabilities	5,876	6,073
Long-term fi nancial liabilities (without provisions)	38,845	44,219
Equity
Share capital	70,140	70,140
Share premium	618,397	618,450
Other reserves	- 35,881	- 32,264
Retained earnings	219,043	199,987
Earnings	37,389	54,126
Total equity	909,088	910,439
Total capitalization	1,035,551	1,032,834

in € K	Dec. 31, 2008	Dec. 31, 2007
Short-term net fi nancial liabilities	20,124	- 87,296
Short-term liabilities	87,618	78,176
less liquid assets	- 65,600	- 76,816
less short-term fi nancial receivables	- 1,894	- 88,656
Net fi nancial debt	58,969	- 43,077
Short-term net fi nancial liabilities	20,124	- 87,296
plus long-term fi nancial liabilities	38,845	44,219

Liquid assets cover cash and cash equivalents. Current marketable securities are disclosed under current fi nancial receivables. Financial liabilities includes not only borrowings from banks and bonds but also liabilities from fi nance leases and other non-current liabilities. Equity refers to the entire equity amount attributable to shareholders in the parent company. With the exception of minimum capital requirements stipulated under German stock legislation, equity is not subject to any external minimum capital requirements. The company complies with the minimum capital requirements stipulated under German stock legislation.

Financial risk factors

Due to the global scope of its operations, the Group is exposed to various risks, i.e. foreign currency risks, credit risks, liquidity risks and interest rate risks. The comprehensive risk management policy of the Group is focused on the unpredictability of developments in fi nancial markets and aims at minimizing any potential negative impact on the Group's fi nancial position. It is a general policy of the company to reduce these risks by systematic fi nancial management. The Group employs derivative fi nancial instruments in a targeted way to hedge against certain risks.

Risk management is carried out by the Group fi nance department in accordance with the rules and guidelines approved by the Executive Board. The Group fi nance department identifi es, evaluates and hedges against fi nancial risks in close co-operation with the operating units of the Group. The Executive Board sets guidelines for risk management as well as policies outlining for example how to deal with foreign currency risks, interest rate risks and credit risks, how to use derivative and other fi nancial instruments and how to use liquidity surpluses.

Currency risks

Currency risks arise from expected future transactions, assets and liabilities reported in the balance sheet, as well as net investments in a currency that diverges from the functional currency (euro). Exchange risks are naturally hedged by offsetting receivables against payables in a given currency.

Two of the Group's major manufacturing affi liates prepare their balance sheets in US dollar. From the Group's perspective, the US dollar is therefore a foreign currency that represents a signifi cant potential currency risk for fi nancial instruments. If the USD/EUR exchange rate increased or decreased by 5 percent, changes in the fi nancial assets and liabilities reported in the balance sheet in US dollars would have the following impact on profi t before tax and equity:

	2008	2007
USD currency trends in %	+ 5.00/- 5.00	+ 5.00/- 5.00
Impact on profi t before tax
(EBIT) in € K	195/- 215	- 428/473
Impact on equity in € K	195/- 215	- 428/473

The parent company undersigned a foreign-current loan to the value of EUR K 10,000 (corresponding to GBP K 9,600). If the GBP/EUR exchange rate increased or decreased by 5 percent, this would have the following impact on profi t before tax and equity:

	2008	2007
GBP currency trends in %	+ 5.00/- 5.00	+ 5.00/- 5.00
Impact on profi t before tax
(EBIT) in € K	476/- 526	0/0
Impact on equity in € K	476/- 526	0/0

The Group is also subject to currency risks from individual transactions resulting from purchases and sales executed by a member company in a currency other than the functional currency.

Credit risks

The Group is not exposed to any material credit risks (address default risks). Contracts for derivative fi nancial instruments and fi nancial transactions are concluded only with fi nancial institutions with a high quality credit rating in order to keep the risk of default by the contracting party as low as possible. The book value of fi nancial assets recognized in the Consolidated Financial Statements less impairment represents the maximum default risk. For further information on the book value of the fi nancial assets, please refer to the section "additional information on fi nancial instruments" in these notes.

Interest rate risks

Interest rate risks are caused by market fl uctuations in interest rates. On the one hand, they impact the amount of interest payments for which the company is liable. On the other hand, they infl uence the market value of fi nancial instruments.

The Group hedges its cash fl ow against interest rate risks arising from borrowing with variable interest rates primarily by means of interest rate swaps (payer swaps), which, taking the prevailing economic climate into consideration, convert the variable interest rate positions into positions with fi xed interest rates.

The following tables show how sensitive the Group's profi t before tax is to even conservative changes in interest rates based on the impact this would have on variable interest rate loans and bank balances as well as marketable securities. The effects on Group profi t before tax also refl ect the impact on equity.

in € K	Balance at Dec. 31, 2008	Interest 2008	Impact on profi t before tax (increase of 20%)	Impact on profi t before tax (decrease of 20%)
Financial assets with variable interest rates
Bank balances cash pool	29,221	1.50%	58	- 58
Marketable securities	1,894	5.39%	4	- 4
Financial liabilities with variable interest rates
Borrowings from banks	28,261	1.50%	- 57	57
Other variable borrowings from banks	53,481	5.22%	- 107	107
Total			- 102	102

in € K	Balance at Dec. 31, 2007	Interest 2007	Impact on profi t before tax (increase of 20%)	Impact on profi t before tax (decrease of 20%)
Financial assets with variable interest rates
Bank balances cash pool	55,063	3.50%	110	- 110
Marketable securities	88,656	4.47%	177	- 177
Financial liabilities with variable interest rates
Borrowings from banks	38,024	3.50%	- 76	76
Other variable borrowings from banks	30,326	4.40%	- 61	61
Total			150	- 150

Two bonds to the value of EUR K 19,138 (previous year: EUR K 18,826) with fi xed interest rates also exist in addition to the variable fi nancial assets and liabilities listed above. These bonds are disclosed in detail under the fi nancial liabilities section (20) in these notes. As the interest rates for these bonds are fi xed, there is no risk from interest rate fl uctuations.

A loan was also taken out to fi nance the acquisition of Weidemann GmbH to the value of EUR K 18,600 (previous year: EUR K 24,000). This is disclosed in detail under the fi nancial liabilities section in these notes. The interest payments from the loan are hedged with an interest rate swap at an interest rate of 2.98 percent. Refer to the derivative fi nancial instruments section (23) in these notes for further information.

Liquidity risk

Liquidity risks involve the availability of funds needed to meet payment obligations on time. The company is assured a supply of liquid funds at all times by the lines of credit not currently used by the company. Liquidity is managed by the Group's treasury department via a Group-wide cash pool system. Refer to the fi nancial liabilities section (20) in these notes for further information on existing credit lines.

31 Acquisitions and disposals

No acquisitions or disposals were made in fi scal 2008.

32 Overview of equity investments in non-consolidated companies

Wacker Neuson Beteiligungs GmbH directly or indirectly has shareholdings in the following companies that were not included in the consolidation structure:

Company Name	Country	Particpating interest direct	Particpating interest indirect	Equity in € K	Profi t for period in € K
Wacker Neuson Kragujevac d.o.o.	Serbia	100%		- 1,156	- 1,309
Wacker Neuson Lapovo d.o.o.	Serbia	100%		1,317	4
NK Administration Ltd.	UK	100%		under closure	under closure
Kramer-Allrad of North America Inc.	USA	100%	95%	under closure	under closure
Kramer-Allrad France S.A.R.L	France	100%	95%	under closure	under closure
Wacker Neuson Immobilien GmbH	Germany	100%	95%	1,558	0
Wacker Neuson Wohnungsbau
GmbH	Germany	100%	95%	45	0

The negative equity of Wacker Neuson Kragujevac d.o.o. was recognized through an appropriate reduction in receivables vis-à-vis the company in the consolidated earnings.

33 Executive bodies

Executive Board

The company's Executive Board comprises the following fi ve members

• Dr.-Ing. Georg Sick, CEO, responsible for corporate communication, Group auditing, quality management, legal matters and human resources
• Martin Lehner, Deputy CEO, responsible for the compact equipment business segment
• Günther Binder, responsible for fi nance, controlling and IT
• Richard Mayer, responsible for the light equipment business segment
• Werner Schwind, responsible for sales, marketing, service and rental

Total remuneration for the Executive Board in the period under review amounted to EUR K 3,619 (previous year: EUR K 3,505). At the AGM on May 15, 2006, a resolution was passed to refrain from itemizing this information in accordance with Section 285 (1), no. 9a clauses 5 to 9 in conjunction with Section 314 (2), clause 2 HGB, in conjunction with Section 315a, (1) HGB.

The following members of the company's Executive Board have additional supervisory board positions or seats for comparable supervisory committees in Germany and abroad:

Richard Mayer

Member of the Advisory Board of the EQUA association in Herrsching, Germany

Günther Binder Member of the Supervisory Board of Volksbank Linz-Mühlviertel, Austria

With the exception of the members stated above, no other members of the Executive Board have administrative, executive or supervisory functions or mandates for comparable supervisory committees in Germany or abroad outside of the Wacker Neuson Group.

Supervisory Board

The following members are appointed to the Supervisory Board of Wacker Construction Equipment AG as on the closing date:

• Hans Neunteufel, Chairman of the PIN Private Trust (PIN Privatstiftung), in Linz, Austria, Chairman of the Supervisory Board
• Dr. Ulrich Wacker, Chairman of the EQUA Association (EQUA-Stiftung), Herrsching, Germany, Deputy Chairman of the Supervisory Board
• Kurt Helletzgruber, Chairman of the ASTOR Private Foundation (ASTOR Privatstiftung), in Linz, Austria
• Dr. Eberhard Kollmar, attorney-at-law, Rothe, Senninger & Kollmar, Munich, Germany
• Elvis Schwarzmair, Chairman of the Reichertshofen Works Council and Chairman of the Central Works Council, Chairman of the Group Works Council
• Herbert Santl, Chairman of the Munich Works Council

In accordance with the resolutions regarding the company's transition to a European company (SE) that were approved at the AGM on June 3, 2008, all Supervisory Board members' positions shall be terminated when the transition to Wacker Neuson SE becomes effective. The transition became effective on February 18, 2009.

The members of the fi rst Wacker Neuson SE Supervisory Board are appointed by the AGM. On June 3, 2008, the AGM already appointed the company's former shareholder representatives as shareholder representatives in the fi rst Supervisory Board of the SE, in other words, Mr. Hans Neunteufel, Dr. Ulrich Wacker, Dr. Eberhard Kollmar and Mr. Kurt Helletzgruber. The employee representatives for the Wacker Neuson SE Supervisory Board shall be appointed in due consideration of the employee participation guidelines. Based on the agreement outlining employee participation, which has been entered into in accordance with the law on the involvement of employees (SE-Beteiligungsgesetz), Mr. Herbert Santl and Mr. Elvis Schwarzmair were already appointed to the Supervisory Board as employee representatives on January 14, 2009. The Supervisory Board of Wacker Neuson SE is thus the same as that of Wacker Construction Equipment AG.

The total remuneration for the Supervisory Board for fi scal year 2008 amounted to EUR K 307 (previous year: EUR K 409).

The following members of the company's Supervisory Board have additional supervisory board positions or seats for comparable supervisory committees in Germany and abroad:

Hans Neunteufel

Member of the Supervisory Board of Allgemeine Sparkasse Oberösterreich Bankaktiengesellschaft, Austria, (as of April 22, 2008: Chairman of the Supervisory Board) Member of the Supervisory Board of the Oberösterreichische Technologie- und Marketinggesellschaft m.b.H. ( technological organization in the state of Upper Austria),

• Dr. Ulrich Wacker Member of the Advisory Board of Wacker Beteiligungs
• GmbH & Co. KG i. L., Germany Dr. Eberhard Kollmar Member of the Advisory Board of Wacker Beteiligungs GmbH & Co. KG i. L., Germany
• Kurt Helletzgruber Deputy Chairman of the Supervisory Board of HTI AG ( formerly ProRegio Mittelstandsfi nanzierungs AG), Austria

Remuneration for former board members

Total remuneration for former members of the Executive Board in the period under review amounted to EUR K 231 (previous year: EUR K 280).

34 Related party disclosures

In the case of the Group, IAS 24 defi nes a related party necessitating disclosures as shareholders, entities over which shareholders have control or signifi cant infl uence (sister companies), non-consolidated companies, members of the Executive Board, members of the Supervisory Board and the pension fund.

The controlling interest is held by Wacker Familiengesellschaft mbH & Co. KG, Munich.

Key trade relations with related parties were as follows during the period under review:

in € K	Short-term receivables Dec. 31, 2008	Short-term payables Dec. 31, 2008	Expenses forbusi ness transactions 2008	Income for busi ness transactions 2008
Relations with shareholders	135	0	687	915
Relations with sister companies	92	447	8,034	452
Relations with non-consolidated companies	2,005	193	1,174	1,051
Pension fund	0	213	0	0
Total	2,232	853	9,895	2,418

in € K	Short-term receivables Dec. 31, 2007	Short-term payables Dec. 31, 2007	Expenses for busi ness transactions 2007	Income for busi ness transactions 2007
Relations with shareholders	124	0	886	974
Relations with sister companies	1,448	137	905	76
Relations with non-consolidated companies	824	31	326	118
Pension fund	60	219	0	0
Total	2,456	387	2,117	1,168

Relations with shareholders resulted mainly from goods and services traded with a shareholder. The goods and services delivered to the shareholder were valued at EUR K 907 (previous year: EUR K 973). These were counterbalanced with goods and services received by the shareholder to the value of EUR K 687 (previous year: EUR K 886). The goods and services were traded under the terms customary in the market, as agreed with third parties.

Relations with sister companies and entities over which shareholders have control or signifi cant infl uence resulted from deliveries, IT service deliveries, and rental arrangements between affi liates and entities over which shareholders have control or signifi cant infl uence.

Relations with non-consolidated companies resulted from goods and services traded between affi liates and Neuson Kramer subgroup companies that were not consolidated but where a shareholding exists (see general information on accounting standards /consolidation structure). Receivables in fi scal 2008 were adjusted by EUR K 1,174.

Relations with the pension fund during the period under review refers exclusively to a provision for voluntary support and pension benefi ts for employees of the parent company.

Total remuneration for the Executive Board in the period under review amounted to EUR K 3,619 (previous year: EUR K 3,505). Total remuneration for the Supervisory Board for the same period amounted to EUR K 307 (previous year: EUR K 409). At the closing date, short-term payables to the Executive Board in the amount of EUR K 624 were outstanding (previous year: EUR K 1,224).

Retirement commitments were agreed upon for members of the Executive Board. The value of pension obligations at the end of the accounting period totaled EUR K 8,837 (previous year: EUR K 8,311). The allocation amounted to EUR K 702 (previous year: 1,644).

Pension agreements were also concluded for two former Executive Board members as a result of agreements to that effect. The value of these pension obligations at the end of the accounting period totaled EUR K 5,527 (previous year: EUR K 5,712). In fi scal 2008, EUR K 469 (previous year: EUR K 345) was paid to former Executive Board members.

35 Auditor's fee

The auditor's fee is disclosed as an expense in fi scal 2008 and is broken down as follows:

in € K	2008	2007
Auditing services	363	286
Other approval and assessment
services	361	600
Tax consultation services	205	55

36 Declaration regarding the German Corporate Governance Codex

The Executive and Supervisory Boards have issued a declaration stating which recommendations of the "Commission of the German Corporate Governance Code" have been and will be adopted. The declaration is permanently available to shareholders.

37 Release for publication

The Consolidated Financial Statements for Wacker Neuson SE (formerly: Wacker Construction Equipment AG) for the year ending December 31, 2008 have been released for publication on March 23, 2009 by resolution of the Executive Board.

Responsibility Statement ("Bilanzeid") (Statement in accordance with section 37y no. 1 of the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act) in conjunction with sections 297(2) sentence 4 and 315(1) sentence 6 of the Handelsgesetzbuch (HGB – German Commercial Code))

"To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the group, and the group management report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group."

Munich, March 23, 2009

Wacker Neuson SE, Munich, Germany (Wacker Construction Equipment AG until February 18, 2009)

The Executive Board

Dr.-Ing. Georg Sick (CEO and President)

Martin Lehner (Deputy CEO)

Richard Mayer

Günther C. Binder

Werner Schwind

Unqualifi ed Auditors' Opinion

We have audited the consolidated fi nancial statements prepared by Wacker Construction Equipment AG, comprising the balance sheet, the income statement, the statement of changes in equity, the cash fl ow statement and the notes to the consolida ted fi nancial statements, together with the group management report for the reporting period from January 1 through December 31, 2008.

The preparation of the consolidated interim fi nancial statements and the group management report in accordance with those IFRS as adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a paragraph 1 HGB are the responsibility of the parent company´s management. Our responsibility is to express an opinion on the consolidated fi nancial statements and on the group management report based on our audit.

We have conducted our audit of the condensed consolidated fi nancial statements in accordance with § 317 HGB and German generally accepted standards for the audit of fi nancial statements promulgated by the "Institut der Wirtschaftsprüfer" (Institute of Public Auditors in Germany). Those standards require that we plan and perform the audit so that misstatements materially affecting the presentation of the net assets, fi nancial position an results of operations in the consolidated fi nancial statements in accordance with the applicable fi nancial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated fi nancial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual fi nancial statements of those entities included in consolidation, the determination of the entities to be included in consolidation, the accounting and consolidation principles used and signifi cant estimates made by management, as well as the evaluation of the overall presentation of the consolidated fi nancial statements and the group management report. We believe that our audit provides a reason able basis for our opinion.

Our audit has not led to any reservations.

In our opinion and based on the fi ndings of our audit, the consolidated fi nancial statements comply with those IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to § 315a paragraph 1 HGB and give a true and fair view of the net assets, fi nancial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated fi nancial statements and as a whole provides a suitable view of the Group´s position and suitably presents the opportunities and risks of future development.

Munich, March 23, 2009

Rölfs WP Partner AG Wirtschaftsprüfungsgesellschaft

Reinke Jagosch Wirtschaftsprüfer Wirtschaftsprüfer (Public Auditor) (Public Auditor)

Technical Glossary

Compact Equipment	Group's strategic business segment covering equipment of up to fourteen tons, particularly wheel loaders, compact loaders, telescopic loaders, mini-excavators and dumpers.
Compact wheel loader	Small wheel loader either with four-wheel drive steering or rubber tracks which offers excellent maneuverability in small areas and easy handling even across the roughest terrain. Multi-purpose attachments are available.
Concrete technology	Business fi eld in the light equipment segment. The equipment is mainly used for compacting concrete walls, ceilings and fl oors.
Demolition	Business fi eld in the light equipment segment. The equipment is used to break or cut asphalt and concrete.
Dumpers	Compact construction vehicle primarily used for transporting bulk solids such as gravel and sand.
Floor saws	Hand-guided saws equipped with a diamond blade like the cut-off saw mainly used for cutting concrete and asphalt fl oors.
Focus factory	Element of manufacturing concept, where production is organized by business fi eld. Each factory, staffed by a specialized team, is responsible for producing a single product group.
Heavy equipment	Large construction machinery defi ned by the company as having a total weight of over fi fteen tons, typically transported to construction sites for specifi c projects and operated by specially trained employees.
Hydronic heating equipment	Mobile heating equipment to thaw frozen ground or heat buildings, making construction work less dependent on weather conditions.
Internal vibrator	Used for concrete compaction, mainly on construction sites. The device consists of eccentric weights driven by an electrical motor, arranged in a waterproof steel tube for submersion in fresh concrete.

Light Equipment	Group's strategic business segment. Covers predominantly handheld and handguided devices as well as remote-controlled or ride-on equipment of up to around three tons.
Rebar cutter	Metal rods for reinforced concrete can be cut to measure with rebar cutters.
Soil and asphalt compaction	Business fi eld in the light equipment segment. The equipment is mainly used for compacting soil and asphalt in the construction process of trenches, roads, paths, foundations and industrial buildings.
Telescopic loaders	Telescopic loaders like wheel loaders may be used in construction as well as in agriculture. Even though our loaders have a compact and low level design they can reach enormous lifting heights. Telescopic loaders provide the necessary fl exibilty to complete a wide range of tasks.
Trowel	Used in concrete technology for surface smoothing, especially of freshly laid concrete fl ooring, e.g. in industrial buildings.
Utility	Group's business fi eld in the light equipment segment. The equipment such as generators, light towers, submersible pumps and mobile hydronic heating systems is used to support construction site activities.
Vibratory plate	Soil and asphalt compaction device, mainly used to compact pipeline trenches and paving stones. The machines are also used to support rollers in the compaction process of area and asphalt compaction.
Vibratory rammer (also rammer)	First developed in the 1930s by the company, this pioneering product is used in soil and asphalt compaction, particularly in small spaces and narrow trenches.
Wheel loader	Several types of wheel loaders are available featuring different technology and attachments. The variety of applications include landscape, utility, pallet fork operation and lifting.

Financial Glossary

Cash fl ow	As part of the impairment test according to IAS (see below), a cash-generating unit is the smallest identifi able group of assets that generates cash infl ows for the Group.
Cash fl ow from fi nancing activities	Cash balance resulting from changes to fi nancial liabilities, cash infl ow from disposals/cash outfl ow from the acquisition of treasury shares and dividend payments.
Cash fl ow from investment activities	Cash balance resulting from the acquisition or disposal of fi nancial and tangible assets.
Cash fl ow from operating activities	Cash fl ow generated from operating activities.
Corporate governance	Sound and responsible management and control of a company with the aim of creating long-term value.
Deferred taxes	Refer to future tax liabilities or assets, resulting from temporary differences between book (accounting) value of assets and liabilities and their tax value.
Derivatives	Derivatives are fi nancial instruments, such as futures and options, that derive their value from the value of other fi nancial instruments or an underlying asset.
Discounted cash fl ow (DCF) method	Valuation method used to estimate the market value by discounting a company's future cash fl ows to their present value.
Earnings per share	EPS is defi ned as net profi t for the year divided by the number of shares.
EBIT (margin)	Earnings Before Interest and Taxes. Margin: ratio of EBIT to sales.
EBITDA (margin)	Earnings Before Interest, Taxes, Depreciation and Amortization. Margin: ratio of EBITDA to sales.
EBT	Earnings Before Taxes.
Equity capital quota	Ratio of equity capital to total capital; indicates the fi nancial stability of a company.

Fair value	Value of assets and liabilities at standard market value.
Free cash fl ow	Free cash fl ow refers to the amount of cash readily available to a company.
Goodwill	The difference between the purchase price of an acquired company and the value of the individual assets acquired less liabilities at the time of acquisition.
Gross profi t	Gross profi t expressed as a percentage of total revenue, remaining after deducting manufacturing costs. It gives an indication of a company's cost-effi ciency.
Hedge	Provides protection against risk arising from unfavorable exchange rate and price changes.
IFRS (IAS)	International Financial Reporting Standards. Internationally recognized and applied accounting standards devised by the International Accounting Standards Board (IASB) in an effort to harmonize accounting standards and principles worldwide.
IPO	Initial Public Offering.
Interest rate swap	An interest rate swap is an agreement between two parties to exchange interest rate cash fl ows at a future point in time. The agreement also defi nes how the payments are calculated and when they are made.
PPA	(Purchase Price Allocation). This refers to the process whereby the price paid for a company is allocated at fair value to the assets, liabilities and contingent liabilities acquired.
Project Unit Credit Method	The objective of this IAS 19 standard is to prescribe the accounting and disclosure of employee bene fi ts. Obligations from defi ned benefi t plans are disclosed according to this method, taking expected future benefi t and pension adjustments into consideration.
Working capital	The difference between short-term assets and short-term liabilities; the working capital ratio is a key indicator of the liquidity of a company.

Income Statements

Overview of Wacker and Neuson Kramer subgroups (before consolidation)

Wacker subgroup

in € K	Jan.1– Dec. 31, 2008	Jan.1– Dec. 31, 2007
Revenue	609,009	658,195
Cost of sales	- 373,652	- 386,341
Gross profi t	235,357	271,854
Sales and service expenses	- 140,247	- 135,427
Research and development expenses	- 15,511	- 18,395
General administrative expenses	- 40,606	- 44,860
Other income	6,144	7,627
Other expenses	- 7,236	- 2,581
Profi t before interest and tax (EBIT)	37,902	78,218
Financial result	1,277	146
Profi t before tax (EBT)	39,179	78,364
Taxes on income	- 12,801	- 24,026
Profi t before disc. operations, minority interests	26,378	54,338
Result from discontinued operations	0	0
Minority interests	0	0
Profi t for the period	26,378	54,338
Depreciation and amortization	32,386	27,861
EBITDA	70,288	106,079

Neuson Kramer subgroup1

in € K	Jan.1– Dec. 31, 2008	Feb.1– Dec. 31, 20071
Revenue	338,199	329,924
Cost of sales	- 263,395	- 238,723
Gross profi t	74,804	91,201
Sales and service expenses	- 16,239	- 18,115
Research and development expenses	- 6,385	- 5,163
General administrative expenses	- 12,570	- 15,887
Other income	4,879	3,992
Other expenses	- 4,215	- 1,517
Profi t before interest and tax (EBIT)	40,274	54,511
Financial result	- 3,273	- 2,012
Profi t before tax (EBT)	37,001	52,499
Taxes on income	- 10,531	- 16,882
Profi t before disc. operations, minority interests	26,470	35,617
Result from discontinued operations	0	- 3
Minority interests	- 834	- 787
Profi t for the period	25,636	34,827
Depreciation and amortization	6,766	4,080
EBITDA	47,040	58,591

11 months only for Neuson Baumaschinen GmbH

Wacker Neuson Group

Overview of PPA1

	Jan. 1–	Purchase price	Jan. 1–	Jan. 1–	Jan. 1–
in € K	Dec. 31, 2008	allocation	Dec. 31, 2008	Dec. 31, 20072	Dec. 31, 2007
					pro-forma
	without PPA		with PPA	with PPA	with PPA
Revenue	870,331		870,331	742,062	979,534
Cost of sales	- 574,268	- 2,617	- 576,885	- 459,530	- 633,080
Gross profi t	296,063	- 2,617	293,446	282,532	346,454
Sales and service expenses	- 156,486		- 156,486	- 140,090	- 153,542
Research and development expenses	- 21,896	- 3,161	- 25,056	- 20,810	- 26,719
General administrative expenses	- 53,152	- 335	- 53,487	- 48,289	- 60,505
Other income	11,023		11,023	8,421	11,042
Other expenses	- 11,451		- 11,451	- 2,859	- 4,098
Profi t before interest and tax (EBIT)	64,102	- 6,113	57,989	78,905	112,632
Financial result	- 1,996	- 312	- 2,308	- 660	- 2,178
Profi t before tax (EBT)	62,106	- 6,425	55,681	78,245	110,454
Taxes on income	- 19,401	1,825	- 17,576	- 24,142	- 34,928
Profi t before disc. operations, minority
interests	42,705	- 4,600	38,105	54,103	75,526
Result from discontinued operations	0		0	0	- 3
Minority interests	- 833	117	- 716	23	- 484
Profi t for the period	41,872	- 4,483	37,389	54,126	75,039
Depreciation and amortization	38,136	4,818	42,954	38,081	44,783
EBITDA	102,238	- 1,295	100,943	116,986	157,415

1 PPA = Purchase price allocation. Purchase price allocation describes the process where purchase costs resulting from acquisitions are allocated to individually

acquired assets, liabilities and contingent liabilities, which are measured at fair value.

2 Incl. Q4 Neuson Kramer subgroup

6-Year-Comparison1

in Mio. ¤	2008	2007	2006	2005	2004	2003
Sales	870.3	742.1	619.3	503.2	411.2	361.9
EBITDA (margin as a %)	100.9 (11.6)	117.0 (15.8)	100.2 (16.2)	70.3 (14.0)	60.5 (14.7)	48.2 (13.3)
EBIT (margin as a %)	58.0 (6.7)	78.9 (10.6)	76.7 (12.4)	50.7 (10.1)	41.9 (10.2)	29.0 (8.0)
Profi t for the period	37.4	54.1	48.5	31.3	25.7	21.4
Equity	911.8	912.7	282.4	289.9	246.3	284.6
Balance sheet total	1,178.6	1,214.5	475.0	443.1	315.1	345.0
Equity ration as a %	77.4	75.2	59.5	65.4	78.2	82.5
Capital expenditure	101.8	84.0	31.9	37.6	20.6	17.3
Number of employees	3,665	3,659	2,837	2,630	2,224	2,168

All fi gures prepared according to IFRS

Publishing Details/Financial Calendar

Contact

Wacker Neuson SE

Imre Szerdahelyi Head of Corporate Communication Preussenstrasse 41 80809 Munich Germany

Phone +49 -(0)89 - 354 02 - 251 Fax +49 -(0)89 - 354 02 - 203

ir@wackerneuson.com www.wackerneuson.com

Publishing Details

Issued by: Wacker Neuson SE, Corporate Communication department

Concept & design: Kirchhoff Consult AG, Munich, Germany

Content:

Wacker Neuson SE Joachim Weber, Frankfurt, Germany

Print: p d peschke druck, Munich, Germany

Financial Calendar 2009

March 30, 2009	Publication of fi nancial results 2008, press conference
May 14, 2009	Publication of fi rst-quarter report 2009, analyst conference
May 28, 2009	AGM, Munich, Germany
August 13, 2009	Publication of half-year report 2009
November 11, 2009	Publication of nine-month 2009

All rights reserved. Valid March 2009. Wacker Neuson SE accepts no liability for the accuracy and completeness of information provided in this brochure. Reprint only with the written approval of Wacker Neuson SE in Munich, Germany. The German version shall govern in all instances. In the event of discrepancies between the German and the English version, the German version shall prevail.

Disclaimer

This Annual Report contains forward-looking statements which are based on the current estimates and assumptions by the corporate management of Wacker Neuson SE. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate and similar formulations. Such statements are not to be understood as in anyway guaranteeing that those expec tations will turn out to be accurate. Future performance and the results actually achieved by Wacker Neuson SE and its affi liated companies depend on a number of risks and uncertainties and may therefore differ materially from the forward-looking statements. Many of these factors are outside the Company´s control and cannot be accurately estimated in advance, such as the future economic environment and the actions of competitors and others involved in the marketplace. The Company neither plans nor undertakes to update any forward-looking statements.

Wacker Neuson SEPreussenstrasse 4180809 MunichGermany Tel. +49 - (0)89 - 354 02 - 0 Fax +49 - (0)89 - 354 02 - 390 www.wackerneuson.com