Wacker Neuson SE — Annual Report 2013

Apr 15, 2014

Annual Report 2013

Facts and figures at a glance

Revenue according to segment reporting

Quarterly revenue trends

The first quarter of 2013 performed below expectations due to the long winter in the northern hemisphere. The situation had already improved by the second quarter, however. Results for the third quarter are typically lower than the second due to seasonal fluctuations. Nevertheless, it was a positive period for Wacker Neuson. During the fourth quarter, the Group benefited from the mainly mild winter conditions, which enabled construction activity to continue longer into the winter season in Europe. Revenue for Q4 was thus 6.4 percent higher than in the previous year. ⁰ 200 300 250 350 Q1 Q2 Q3 Q4 257.1 274.0 276.3 254.5 329.0 284.2 297.1 279.1 -6.2% +15.8% +8.6% +6.4% 0 50 200 300 250 100 350 150 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 257.1 274.0 276.3 254.5

284.2 297.1 279.1

-6.2% +15.8% +8.6% +6.4%

More Information p. 42

Record-breaking revenue

Wacker Neuson's revenue for 2013 rose by 6.2 percent relative to the previous year, reaching a new record high of EUR 1,159.5 million. Group revenue has thus increased by over 90 percent in just four years. 2013 was by no means an easy year, however. Sales of construction equipment fell at times, particularly in Europe, and this development had an impact on many manufacturers. The fact that Wacker Neuson's business continued to develop positively, however, confirms that the Group's go-to-market strategy is on the right path. With an EBITDA margin of 13.2 percent, the Group has met its profit forecast for 2013 and increased profitability relative to the previous year. 15 25 20 10 200 400 600 800 in € million as a % 1,000 1,200 1,091.7 1,159.5 991.6 757.9 597.0 +94%

¹ 2009 profit margins adjusted to discount goodwill impairment, restructuring costs. 20091 2010 2011 2012 2013

in € million

2013 vs. 2009 Revenue EBITDA margin EBIT margin Net earnings margin

Return on capital employed (ROCE)

Return on capital employed (ROCE) shows how much return a company realizes on the total capital it employs. It is calculated by comparing EBIT with the capital invested during a fiscal year. In 2013, Wacker Neuson realized a return of 11.0 percent before tax (ROCE I) and 7.7 percent after tax (ROCE II). The ROCE II figure was higher than the weighted average cost of capital (WACC), which came to 7.1 percent. Overall, the Group thus produced economic value added (EVA) in the amount of EUR 5.1 million in 2013. 25 30 35 20 400 600 800 646.9 531.3 538.9 793.6

as a %

Healthy assets and finances

Equity before minority interests

Net financial debt

Balance sheet ratios 2009 to 2013 Wacker Neuson is in a healthy financial position with a high equity ratio of around 71 percent and gearing of around 19 percent. In 2013, Wacker Neuson reduced net financial debt by EUR 37 million to EUR 177 million. The Group has only drawn on just under 45 percent of its credit lines and thus has sufficient financial headroom. 350 550 750 55 75

901.1

Net financial debt in € million Equity before minority interests in € million Gearing as a % Equity ratio before minority interests as a %

Average capital employed ROCE II

Figures at a glance 2013

Wacker Neuson Group at December 31

in € million	2013	2012	Changes
Key figures
Revenue	1,159.5	1,091.7	6.2%
EBITDA	153.4	141.7	8.3%
Depreciation and amortization	58.6	56.8	3.2%
EBIT	94.7	84.9	11.6%
EBT	88.0	77.8	13.0%
Profit for the period	61.2	54.1	13.0%
Number of employees	4,157	4,096	1.5%
R&D ratio (incl. capitalized expenses) as a %	3.1	3.1	0 PP
Share
Earnings per share in €	0.87	0.77	13.0%
Dividends per share in €	0.401	0.30	33.3%
Key profit figures
EBITDA margin as a %	13.2	13.0	+0.2 PP
EBIT margin as a %	8.2	7.8	+0.4 PP
Key figures from the balance sheet
Non-current assets	792.0	790.2	0.2%
Current assets	530.4	554.6	-4.4%
Equity before minority interests	935.5	914.7	2.3%
Gearing as a %	18.9	23.4	-4.5 PP
Equity ratio before minority interests as a %	70.7	68.0	2.7 PP
ROE as a %	6.6	6.1	0.6 PP
Average working capital to revenue as a %	39.2	37.9	1.3 PP
Capital employed (average)	859.4	793.6	8.3%
ROCE II as a %	7.7	7.6	0.1 PP
Cash flow
Cash flow from operating activities	132.6	13.6	874.7%
Cash flow from investing activities	-75.9	-99.9	-24.0%
Investments (property, plant and equipment and intangible assets)	86.8	104.0	-16.6%
Cash flow from financing activities	-60.1	88.8	–
Free cash flow	56.7	-86.3	–

1 Dividend proposal for the AGM on May 27, 2014.

All consolidated figures prepared according to IFRS. A seven-year overview of key indicators is provided at the end of this report.

The Wacker Neuson Group

The Wacker Neuson Group is a leading manufacturer of light and compact equipment with over 40 affiliates, 140 sales and service stations and more than 12,000 sales and service partners across the globe. The Group can trace its roots back to 1848. With its broad portfolio and efficient, global spare parts service, Wacker Neuson is the partner of choice among professional users across a wide range of industries, including the construction, gardening, landscaping and agriculture sectors, as well as among municipal bodies and companies in industries such as recycling and energy. In 2013, Wacker Neuson achieved revenue of EUR 1.16 billion and employed over 4,100 people worldwide.

Content

To Our Shareholders

• Interview with the CEO
• Management 7

2

• Global Presence 8
• Product Overview 10
• The Share/Investor Relations 13
• Report by the Supervisory Board 19
• Corporate Governance Declaration and Report 24
• Combined Management Report 33
• Consolidated Financial Statements 97

Further Information

• Glossaries 150
• Publishing Details/Financial Calendar 7-Year Comparison 156

Along with this year's Annual Report, you are receiving a copy of the Wacker Neuson sustainability brochure. Anchored in the tradition of a family-run business and actively lived across generations, sustainability has always enjoyed a high priority at the Wacker Neuson Group. In 2013, we launched a far-reaching initiative looking at our current and future responsibilities towards society and the environment as part of our commitment to sustainable development. This brochure outlines the insights we gained along with the goals we defined on that basis.

Interview with the CEO "ON A STEADY GROWTH PATH"

Mr. Peksaglam, against a challenging market backdrop, Wacker Neuson performed very well in 2013 compared with major competitors. And yet you are not fully satisfied. Why is that?

We just about managed to achieve the targets we had set for ourselves at the start of the year. With revenue of EUR 1.16 billion and an EBITDA margin of 13.2 percent, we did what we set out to do, but of course we had expected better results. It is of little comfort to us that only a few companies in our peer group and the construction sector as a whole managed to improve on their prior-year results. Admittedly, market conditions were tough in 2013. To use a sporting analogy: we did indeed jump the height we had set ourselves, but we would have preferred to clear the bar by a much greater distance.

Why do you think you did not exceed expectations?

First of all we had to contend with a longer than usual winter on the Northern Hemisphere. I remember that snow was on the ground when we were setting up for bauma 2013 in Munich, and that was April. The winter slow-down was particularly pronounced in Q1 2013 compared with the previous year, with revenue down 6 percent and profit before interest and tax down by as much as 58 percent. It was difficult to make up for that

"One thing that paid off was our strategy to broaden the reach of our compact equipment segment beyond the traditional confines of Europe."

setback over the rest of the year. Another obstacle was the weak demand in some of our core markets. Key customers in Australia and New Zealand were reluctant to invest because demand from the mining industries had dropped off. In South America, the crisis in Brazil saw our sales there shrink. We also suffered losses in parts of Eastern Europe.

Of course this wasn't helped by exchange rate fluctuations in some of our important markets – if these were discounted, our revenues would actually be 8 percent higher to previous year. Apart from that, a stronger Euro makes it harder to export to countries that are not in the eurozone.

› Cem Peksaglam CEO and Chairman of the Executive Board

Let's move on to the good news. What were the success stories of the year?

Well, there was a lot of good news! Our strategy to broaden the reach of our compact equipment segment beyond the traditional confines of Europe pays off. With this new international focus, we achieved a 12-percent rise in revenue in this segment. We were also very pleased to grow our business in Europe by 6 percent, which clearly outperforms the industry average in Europe. Finally, signs of strong growth in key target markets filled us with confidence for our future development. Revenue were up 72 percent in the UK for instance, 28 percent in Russia and 24 percent in Turkey.

The trends you refer to – both positive and negative – are all of a short-term nature. Are there any longer-term structural changes that could have a lasting impact on Wacker Neuson's business?

We are seeing fundamental shifts in the market – on both the provider and buyer sides. More and more companies are forming alliances and merging in a bid to strengthen their position in the global market and increase market share. The latest examples come from Palfinger of Austria and China's Sany, which underpinned their joint venture with reciprocal shareholdings, and also Manitou from France and the Japanese company

Yanmar, which are coming together to strengthen their distribution activities in the Americas. It is a similar story with our customers. Four major Southern European rental companies have formed an alliance to meet the difficult economic challenges in their home markets. Then there is the regional partnership between the two European rental companies Cramo and Ramirent with the aim of jointly reaching into some Eastern European markets. And of course we cannot ignore the new competitors encroaching on our core markets, in particular the Chinese companies. Sany, for example, is looking to get into the mini excavators segment in Europe. We too are constantly looking at ways to optimize our market reach and position, whether organically or through alliances and acquisitions, either on a regional or global scale.

So you are seeing consolidation of both manufacturers and customers, plus new competitors. In other words, competition is getting hotter. How confident do you feel in this climate?

Very confident. We regard competition as something to be welcomed. It forces companies to provide better products and services, so in the end everyone benefits. Wacker Neuson is on a strong footing right across the world. For one thing, the breadth of our light and compact equipment portfolio is unique. Our customers increasingly welcome our one-stop service. As we have integrated sales, service and logistics globally, our customers enjoy a single point of contact. Another thing we can be proud of is the outstanding quality of our products and services, which have set standards in many areas. These strengths, combined

"We will remain on the attack – both on the technology and sales fronts."

with our extensive expertise in development and production, will continue to give us a powerful springboard. From a global perspective, it is true of course that we are better positioned in some markets than others. But we see this as an opportunity to step up growth.

I take it that Wacker Neuson's robust financial shape is fueling your confidence?

Yes, it provides certainty and ensures continuity. A solid financial footing is imperative for companies seeking to maintain their technology leadership through innovation, further expand their existing markets and tap into new markets. We are rock solid. Our equity ratio of over 70 percent is very high, not only for our sector but for others, too. In 2013, this metric actually increased by 3 percentage points. At the same time, our gearing fell from 23 percent to 19 percent, again a figure we are very comfortable with. Despite numerous operational challenges, such as the start-up of our new compact equipment plant in Hörsching near Linz (Austria) and more demanding market requirements in a difficult climate, we were still able to improve several indicators. One of these was working capital, which we managed to reduce in 2013 despite our revenue growth.

Your investment outlay fell from EUR 104 million to just under EUR 87 million. Should this be interpreted as a defensive measure?

It would be hard to describe it as defensive given that investments are one and a half times greater than write-downs. This clearly places us on an expansion curve, which is where we need to be if we want to capitalize on opportunities in our markets. It must be pointed out that we had two investment-heavy years prior to 2013, with major projects like our new headquarters and R&D complex in Munich as well as the Hörsching plant, so it is not surprising that we have consciously cut back to a lower level. Two thirds of our total investment has gone into expanding our sales activities, sales promotion programs and our rental fleet for Central Europe, all of which will aid our future growth. It is also the case, of course, that this deliberate trimming of investment activity has resulted in us recording a positive free cash flow for the first time since 2009, amounting to EUR 57 million. We are targeting positive free cash flow again in 2014 – with investment of around EUR 85 million.

R&D expenditure has also fallen slightly. Is Wacker Neuson putting less effort into innovation?

Not at all! When evaluating R&D figures, you have to look beyond current investments recognized in the income statement to include R&D expenses capitalized according to IFRS in other fiscal years. Overall, our R&D ratio for 2013 was 3.1 percent of revenue – exactly the same as the previous year. In absolute terms, this represents an increase of 4 percent compared with the previous year. R&D has always been and will continue to be a top priority at Wacker Neuson. Of our 4,100 employees currently over 8 percent work in R&D.

So Wacker Neuson is on a sound technological as well as financial footing. How do you see the future panning out at this stage?

Well, after practically doubling our revenue in the past four years, we definitely want to continue on this growth path in 2014 and beyond. A wider international footprint will play a key role here. Our long-term goal is to increase our revenue share in markets outside Europe from the current level of 29 percent to around 50 percent. Huge potential lies in the emerging markets, which to date account for one eighth of our revenue. We see very promising opportunities in fast-growing markets like China, South America and Russia, but also in the ASEAN1 and SAARC2 countries. Indeed, we recently established a new affiliate in Singapore. But we also want to continue growing in our core markets of Europe and North America. Our strong financial position and market leadership in technology and sales will stand us in good stead here. We also see scope for cost-cutting through streamlining of our global operations. For example, we want to improve the coordination

of our sales activities and supplier management across the world. The same goes for quality management. Through our corporate GIPI strategy, we will continue to focus on our priorities of Growth, Internationalization, Professionalization and Integration.

And what are your targets for 2014?

We want to see fastest growth rates beyond Europe – this is where we see the greatest potential. But at the same time we will certainly not be neglecting our core markets in Europe an North America. We are targeting a revenue figure somewhere between EUR 1,250 and 1,300 million and an EBITDA margin of between 13 and 14 percent this year. At any rate, we intend to reinforce our comfortable financial and asset position. This will be our foundation for international expansion and our springboard to capitalize on M&A opportunities. One thing is certain: we will remain on the attack – both on the technology and sales fronts.

Just a final few words on a new feature in your Annual Report. You have included a separate corporate social responsibility brochure for the first time this year. What is the thinking behind this?

"Quite rightly, a company's environmental performance and social engagement are increasingly influencing the valuation of listed companies."

By publishing the "Thinking ahead. Sustainability at the Wacker Neuson Group." brochure, we are responding to growing interest among our shareholders and the general public in the subject of corporate responsibility. Quite rightly, a company's environmental performance and

social engagement are increasingly influencing the valuation of listed companies. This gave us the motivation to report on our committed efforts in this area in a separate brochure. We consciously adopted a lighter style and focused on interesting projects in order to reach a wide audience. The "Sustainability" section will of course still be included in our Annual Report. Both our Annual Report and sustainability brochure are well worth reading!

Thank you for the interview, Mr. Peksaglam.

The CEO was interviewed by Joachim Weber – Economics journalist

Joachim Weber started his career with an apprenticeship in industrial business management (mechanical engineering). He followed up on this with a degree in business management (minor in business IT) at the University of Hamburg. From 1974 to 2007, he worked as a business and industry reporter for the German-language daily newspapers "Die Welt" and "Handelsblatt". Today, Joachim Weber works as a freelance journalist, focusing mainly on the interface between economics and technology, an area of journalism that continues to offer interesting opportunities in Germany.

Management

(from left to right)

› Martin Lehner CTO (Deputy Ceo)

Responsible for procurement, production, technology and quality.

› Günther C. Binder CFO

Responsible for finance, audit and IT.

› Cem Peksaglam CEO

Responsible for strategy, sales, logistics, service, marketing, investor relations, corporate communication, sustainability, compliance, HR, legal matters and real estate.

Wacker Neuson around the world

Global distribution via affiliates plus Wacker Neuson stations and partners for sales and services.

Our product philosophy: Process know-how

Wacker Neuson is the ideal one-stop provider of light and compact equipment guaranteed to optimize our customers' construction processes. The Group is a market leader in many product areas.

Light equipment

Selection

Pumps Generators Lighting sytems Hydronic surface heaters

Compact equipment

Selection

Excavators Parts repair1

Compact excavators Zero-tail excavators Mobile excavators

Dumpers Parts exchange

Skid steer loaders Rental service1

Services

Track dumpers Four-wheel dumpers Four-wheel dumpers with cabs

loaders

All-wheel-drive tele wheel loaders

Articulated wheel loaders

Hoftracs® models and All-wheel-drive

wheel loaders for the agricultural industry

Compact telescopic handlers Telescopic handlers Telescopic handlers for

the agricultural industry

Telescopic handlers for the agricultural industry

GIPI corporate strategy

Growth Internationalization Professionalization Integration

Growth IN FOUR YEARS, WE HAVE ALMOST DOUBLED OUR REVENUE

Our share in 2013

For the markets, 2013 was one of the best years in recent history. Germany's main share index, the DAX, made gains following the easing of the euro crisis and an upturn in the all-important export markets for German companies, especially in North America. During 2013, the Wacker Neuson share rose by a good 9 percent, with a further increase of around 7 percent recorded from January to mid-March 2014.

Share and index information

Shares in Wacker Neuson SE have been traded in the regulated Prime Standard segment of the Frankfurt Stock Exchange since 2007 and they are listed in the SDAX index. Wacker Neuson has been included in the "DAXplus Family" index since 2010. This index comprises around 120 German and international companies from the Frankfurt Stock Exchange's Prime Standard segment. For a company to be included in the DAXplus Family Index, the founders must hold at least 25 percent of the voting rights, or sit on the Executive or Supervisory Board and hold at least five percent of the voting rights. The weighting in this index is based on market capitalization of the free float.

Stock market trends in 2013

Following an outstanding year in 2012, when the DAX index rose by as much as 29 percent, the continued easing of monetary policy partly resulted in further significant gains in 2013. Investors continued to be attracted by assets like shares, not least because of low central bank interest rates and the monthly purchase of government bonds and securities by the US Federal Reserve. Another important factor was the easing of the sovereign debt crises in the eurozone, which gave markets a further boost. Germany's DAX leading index saw another 25-percent increase in 2013, reaching a record high of 9,500 points by the end of the year. The SDAX rose by 27 percent during the same period. Stock exchanges throughout Europe recorded similar performance, and the US exchange proved particularly successful. In Tokyo, the markets reached levels not seen for over 40 years. In most cases, however, company profits could not match the performance of the markets during 2013.

Market conditions for construction equipment manufacturers

2013 was not an easy year for the global construction industry. Conditions in established markets proved challenging because of continued cuts in government spending and falling demand for construction equipment in some quarters. Following the strong growth of previous years, demand also fell back in many of the emerging markets. Nearly all companies in the construction equipment sector reported figures below their 2012 levels. Despite a slow start to the year caused by harsh weather conditions, the Wacker Neuson Group was able to recover quickly and was recording good growth in some areas from the second quarter of 2013, allowing us to deliver on our ambitious forecast for the year.

The Wacker Neuson share

At the start of fiscal 2013, the Wacker Neuson share was listed at EUR 10.51, rising to EUR 12.48 by the end of March. It lost momentum after that, however, and fell to a year low of EUR 9.24 on June 25, 2013. In the second half of the year, the share rallied to peak at EUR 12.75 on November 28, 2013. It closed the year on EUR 11.49 – an increase of 9 percent on the year's opening price.

Key indicators for the Wacker Neuson share

in €	2013	2012
High	12.75	13.45
Low	9.24	9.06
Average	11.01	11.23
Year-end	11.49	10.35
Average daily trading volume
in shares	25,899	27,354
Earnings per share1	0.87	0.77
Book value per share1	13.39	13.09
Dividend payment proposed1	0.402	0.30
Payout ratio as a %	45.92	38.9
Market capitalization
at year-end in € million	805.6	725.9

70,140,000 shares.

² Dividend payment to be proposed at the AGM on May 27, 2014.

as a %

Peer group: Manitou, Haulotte, Palfinger, Caterpillar, Terex, Ramirent, Cramo, Atlas Copco, Bauer, Deutz.

Share facts at a glance
ISIN/WKN	DE000WACK012/WACK01
Trading symbol	WAC
Sector	Industrial
Reuters /Bloomberg	WACGn.DE/WAC GR
Stock category	Individual no-par value nominal shares
Share capital	EUR 70,140,000
Number of authorized shares	70,140,000
Stock exchange segment	Regulated market (Prime Standard), Frankfurt Stock Exchange
Indices	SDAX, DAXplus Family, CDAX, GEX, Classic All Shares
IPO	May 15, 2007
Designated sponsor	Deutsche Bank

averages for Wacker Neuson share Jan. 1, 2013–Feb. 28, 2014

The Executive Board and the Supervisory Board at the AGM on May 28, 2013 in Munich.

By March 12, 2014, it had climbed around 7 percent to reach EUR 12.31, which corresponds to a market capitalization of EUR 863.1 million. p. 14 figs. 1+2

Performance of construction and construction supplier shares

The above chart p. 14 fig. 1 shows how the Wacker Neuson share performed in relation to our peer group as a whole since January 2013. The index includes French companies Manitou, a telescopic handler manufacturer, and Haulotte, a lifting equipment specialist, Austrian crane and hydraulic lifting systems manufacturer Palfinger, the American construction equipment manufacturers Caterpillar and Terex, north European rental companies Ramirent and Cramo, the Swedish industrial company Atlas Copco and German companies Bauer – specialist in underground construction – and Deutz for engines. Our share price development up to the middle of the year was broadly similar to that of our peer group, but it underperformed slightly in the second half of the year.

General meeting and dividends

The Annual General Meeting of Wacker Neuson SE took place in Munich on May 28, 2013. Around 220 shareholders with 57,576,099 voting rights were represented. Based on a share capital of 70,140,000 shares, this corresponds to 82.1 percent of shareholders.

The AGM approved the proposal to pay out a dividend of EUR 0.30 per share for 2012 (2011: EUR 0.50). This represented a total payout of EUR 21.0 million. The

distribution ratio thus panned out at around 39 percent based on Group profit for the year of EUR 54.1 million. This was in line with the long-term dividend policy pursued by the Supervisory Board and the Executive Board, which defines a minimum distribution of 30 percent of Group profit.

At this year's AGM on May 27, 2014, the Executive Board and the Supervisory Board will propose a dividend of EUR 0.40 for 2013. This would correspond to a payout ratio of around 46 percent based on Group profit for 2013 of EUR 61.2 million.

Ownership structure

As of the closing date, December 31, 2013, 63.1 percent of the share capital is held by a consortium made up of the Wacker and Neunteufel families (for information regarding the consortium and pool agreement, see p. 81). The Executive Board of Wacker Neuson SE holds a further 0.5 percent of the shares. The remaining shares are held by private and institutional investors. To the best of our knowledge, the majority of our shares (free float) – over 60 percent – are held by German investors.

Strong relationships – proactive communication

Maintaining good relationships and regular contact with private shareholders, analysts, investors and other stakeholders is important to us; this is the only way to ensure that market players can realistically assess and evaluate our share and its development. In 2013, we actively briefed capital market players at the AGM and at investor conferences and roadshows in Germany

and abroad. The objective here is to keep analysts and investors up to speed on trends in our markets and lines of business, as well as on our current challenges and go-tomarket strategies.

A wealth of up-to-date information is available on our website www.corporate.wackerneuson.com under Investor Relations. This includes annual and quarterly reports, press releases and ad-hoc announcements, plus presentations. The latest share evaluations from analysts are also posted on our website.

Annual report wins award

In 2013, we were very pleased to be awarded eighth place among SDAX-listed companies in the Best Annual Reports 2012 competition organized by 'manager magazin' in Germany. manager magazin analyzes the annual reports of around 160 companies listed on the DAX, MDAX, SDAX and TecDAX indices. With the wide range of criteria evaluated, most notably regarding transparency, this competition is regarded as the most comprehensive of its kind in Germany.

Sustainability management at the Wacker Neuson Group

Our business strategy is to achieve sustainable profitable growth, thus increasing the company's value over the long term. For us, sustainable profitable growth is not just about the internal management of target and performance indicators – it is also about measuring and managing the "soft" factors that are likely to shape our future success. As a global corporation, we take our responsibilities towards our stakeholders seriously, especially towards our business partners as well to towards our customers, suppliers and, of course, our employees. But we step up to our responsibilities towards the environment and society as a whole.

In order to better meet our corporate social responsibilities (CSR) in future, we have started to establish a professional sustainability management organization. We will be introducing targeted environment and energy management systems at our sites that will enable us to collect and evaluate data and to define appropriate measures (for example to improve energy efficiency). We are publishing our first sustainability brochure under the title "Thinking ahead. Sustainability at the Wacker Neuson Group." together with this Annual Report. It contains several examples of the ways we are responding to ever-increasing sustainability concerns. For our customers in particular,

Geographic distribution of private and institutional investors (free float)

as a regional % of total

As of December 31, 2013.

Differences attributable to rounding.

Share capital/number of shares: 70.14 million

¹ See information on consortium and pool agreement (p. 81).

² According to the definition in "Guide to the equity indices of Deutsche Börse", 31.61% of shares are in free float.

³ Includes shares held by the Wacker and Neunteufel families outside of the consortium.

issues such as energy efficiency and cost-effectiveness are increasingly important factors when it comes to purchase decisions. Critical examination of our processes and transparent reporting help us to identify areas for improvement and the action we need to take. The attention we pay to sustainability issues is a matter of growing interest to all of our stakeholders. In 2014, we plan to carry out an extensive survey, which will include analysts and investors, to help identify the factors we should be prioritizing.

Next year, we will publish our first Group-wide sustainability report, which will bring us into line with other key capital market competitors in the construction equipment sector. You can learn more about our activities in this area in the enclosed brochure, and in the section on sustainability on page 66 of the Annual Report.

Current analyst recommendations for the Wacker Neuson share

Name of bank	Target price in €	Buy	Hold	Sell	Date
Deutsche Bank	15.00				Mar. 3, 14
HSBC Trinkhaus & Burkhardt	15.00				Mar. 5, 14
Exane BNP Paribas	14.00				Mar. 3, 14
Bankhaus Lampe	13.00				Mar. 4, 14
Goldman Sachs	13.00				Oct. 14, 13
BHF Bank	11.90				Aug. 9, 12
Commerzbank	11.80				Mar. 3, 14
Kepler Cheuvreux	11.00				Mar. 4, 14
M.M. Warburg	11.00				Nov. 13, 13
Berenberg Bank	9.60				Jan. 9, 14
Mean target price	12.53

As of March 12, 2014.

Historic overview of analyst recommendations on Wacker Neuson share

Analysts watching our share with interest

Ten analysts regularly evaluate the Wacker Neuson share price. In 2013, Bankhaus Lampe started following our share, and immediately issued a "buy" recommendation. 40 percent of the analysts are currently recommending "buy". In mid-March 2014, the mean target price was EUR 12.53 per share and the recommendations ranged from EUR 9.60 to EUR 15.00.

When we released our preliminary figures for fiscal 2013 on March 3, 2014, the capital market responded positively to our performance over the year. For example, Deutsche Bank changed its recommendation from "hold" to "buy". The analysts' positive evaluations of the Wacker Neuson share are based on the following success factors and opportunities in particular:

• ^J Innovation and market leader in light equipment and compact equipment up to 15 tons
• ^J Sales synergies for compact equipment through existing international sales network
• ^J Strategic alliances with Caterpillar and Claas
• ^J Diversification of product portfolio into various sectors, for example agriculture
• ^J Large share of revenue in Europe, where strong growth is forecast for 2014

These opportunities must, however, be weighed up against risks which have the potential to affect the entire industry. These include general economic risks, currency risks and raw materials risks.

Internationalization MEGATRENDS ARE INCREASING GLOBAL DEMAND FOR OUR PRODUCTS

Looking ahead to 2050

United Nations, World Population Prospects: The 2010 Revision. United Nations, World Urbanization Prospects: The 2009 Revision. Read more on p. 91

Report by the Supervisory Board

Hans Neunteufel Chaiman of the Supervisory Board

Dear Ladies and Gentlemen,

For 2013 we can report yet another increase in our revenue, in spite of difficult market conditions. In April, the bauma trade fair in Munich provided us with an opportunity to showcase our latest innovations, and ongoing dialog with our employees convinced us of their strong commitment to our company. We would like to take this opportunity to thank all of our people for their dedication and active willingness to assume responsibility, which 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 verified that the Group was governed soundly by the Executive Board. Furthermore, the Supervisory Board regularly advised the Executive Board on the management of the Group 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, profit and finances, fundamental issues regarding company planning, company strategy and other key measures by means of written and verbal reports from the Executive Board. The reports to the Supervisory

Board were discussed in depth during Supervisory Board meetings amongst Supervisory Board members and with the Executive Board.

Members of the Executive Board regularly took part in Supervisory Board meetings. When necessary, the Supervisory Board and its committees also convened without the Executive Board. Once again, all Supervisory Board members attended more than half of the Supervisory Board Meetings in fiscal 2013.

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 necessary, 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 ratification. The Supervisory Board voted on resolutions of this kind during scheduled meetings and in writing.

In addition, the Executive Board presented the Supervisory Board with monthly reports on key financial and economic figures. The Chairman of the Supervisory Board maintained regular contact with the Executive Board, ensuring a continuous flow of information on the current business and financial situation of the Group and its members and on major business events. In many instances, this information was actively presented to the Chairman of the Supervisory Board by the Executive Board, or the CEO in particular.

Main topics of Supervisory Board and committee meetings in fiscal 2013

Eight plenary meetings of the Supervisory Board were held in fiscal 2013 (with one of these sessions held as a telephone conference). The Presiding Committee met five times and the Audit Committee met on four occasions (with one of these held as a telephone conference). On one occasion the Supervisory Board voted by means of a written resolution.

To our Shareholders

The Supervisory Board was regularly involved in the dayto-day business of the Wacker Neuson Group and planning activities at executive level. Discussions focused in particular on the global economic downturn and its impact on the business performance and organizational structures of the company and of the Group. Particular emphasis was placed on the analysis and discussion of Wacker Neuson's financial situation as well as the development of sales, costs and earnings. During the relevant meetings, any questions from the Supervisory Board that arose in connection with the regular written and verbal reports were answered in full by the Executive Board. In addition to these regular reports, the Supervisory Board concentrated its advice and auditing activities on the following matters in particular during its meetings:

During its meeting conducted by telephone conference on January 22, 2013, the Supervisory Board discussed the composition of the Executive Board and the assignment of executive mandates.

During its meeting on February 13, 2013, the Supervisory Board focused on the preliminary figures for the previous fiscal year, the updated declaration of compliance with the German Corporate Governance Code and information on the condensed version of Group strategy. Other items on the agenda included the Group's financing strategy and an assessment of the Supervisory Board efficiency audit. The Supervisory Board members also discussed possible strategic alliances, compliance, various technical development projects in the Wacker Neuson plants and an update on plans to move to Hörsching.

Following appropriate preparations by the Audit Committee, the Supervisory Board focused on examining the Annual Financial Statements, the Consolidated Financial Statements, the Combined Management Report of Wacker Neuson SE and the Wacker Neuson Group, as well as related party disclosures for fiscal 2012 at the Supervisory Board meeting to approve the financial statements on March 15, 2013. In its session immediately before the Supervisory Board meeting, the Audit Committee discussed these documents in detail with the

Executive Board, raising numerous questions with the auditing company representative present at the meeting, and discussing these issues at length. This was done in addition to the Supervisory Board's regular examinations as part of its own preparation for the meeting to approve the financial statements. The Annual and Consolidated Financial Statements along with the Combined Management Report and the appropriation of net profit suggested by the Executive Board were approved. This meeting also discussed strategic collaboration projects.

At the meeting on May 8, 2013, the agenda covered the interim report for Q1 as well as various strategic alliances, discussion on sales financing, a status report on strategy implementation and approval of the merger of a nonoperating Group member with another Group member.

The August 1, 2013 meeting discussed the half-year report for 2013 as well as aspects of staffing, IT and further strategic alliances. The Executive Board also provided an outlook for development in the Asia region as well as an update on strategy execution. In addition, the Supervisory Board agreed to exercise certain balance sheet exemptions for various affiliates and thus invoked the company's obligation to carry the associated loss.

The Supervisory Board dedicated its October 22, 2013 meeting to a discussion on corporate strategy.

The meeting on November 8, 2013 covered in particular the pending publication of the quarterly report and the latest real estate projects. Other topics covered at the meeting included sales financing and approval of the establishment of an affiliate in Singapore.

During its meeting on December 10, 2013, the Supervisory Board examined the Executive Board's business plan for fiscal 2014. 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 unpredictable global economic climate. The Group's compliance management system was also discussed at the meeting.

In a written circular resolution of November 25, 2013, the Supervisory Board approved a Group real estate project.

The Supervisory Board examined each of the Executive Board's monthly reports. During numerous meetings, it also addressed in detail various possible acquisition and collaboration projects, aimed at expanding the product portfolio of the Group, for example, and further developing the Group's general sales strategy.

Work performed by the Supervisory Board committees in fiscal 2013

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 efficiently. The corporate governance report names the members and chairmen of both committees. The chairmen of the committees reported on the work performed by the committees during the Supervisory Board's plenary meetings.

During the meeting on March 15, 2013, the Supervisory Board Audit Committee prepared the Supervisory Board's resolution on the adoption of the Annual Financial Statements and the Consolidated Financial Statements for the year ending December 31, 2012. The Committee also discussed the independence and appointment of an auditor and submitted a recommendation in that regard to the Supervisory Board plenary meeting. The Supervisory Board, in turn, followed this recommendation and proposed the same auditor at the AGM. At the May 8, 2013, August 1, 2013 and November 8, 2013 meetings, the Audit Committee primarily dealt with publication of the pending interim financial reports.

The Presiding Committee focused on matters relating to the Executive Board and human resources during its five meetings on January 7, January 17 (held as a telephone conference), March 15, December 7 and December 11, 2013.

Changes in the composition of the executive bodies

In January 2013, the Supervisory Board came to a mutual agreement with Mr. Werner Schwind that he would step down from the Executive Board on March 31, 2013 due to a difference in opinion regarding the future direction of the Group's international sales strategy. Mr. Schwind's executive mandates included sales, marketing, service, rental, training and logistics. The Supervisory Board would like to thank Mr. Schwind for his many years of service to the company and wish him all the best for the future. CEO Mr. Cem Peksaglam has assumed responsibility for Mr. Schwind's executive mandates.

Meanwhile, Dr. Bruse has indicated that he will resign from his position as a member of the Supervisory Board for personal reasons with effect from the close of the 2014 AGM. The Supervisory Board would like to thank Dr. Bruse for his dedication to the company and his valued contribution over the years.

Risk assessment and compliance

The Supervisory Board is satisfied that the Group's internal control system and risk management system meet the requirements of Section 91 (2) of the German Stock Corporation Law (AktG), that insurable risks are sufficiently insured and that operational, financial and contractual risks are subject to suitable controls through approval procedures and organizational processes. A detailed risk reporting system is in place throughout the Group and it is continuously maintained and further developed. The internal control system and the risk management system were also examined by the duly appointed auditing company, which confirmed that the Executive Board had met the requirements outlined under Section 91 (2) 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. In addition, the Audit Committee addressed compliance issues.

Corporate governance

Both the Supervisory Board and the Executive Board are aware that sound 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. The Executive and Supervisory Boards issued an updated declaration of compliance with the German Corporate Governance Code pursuant to Section 161 AktG during the period under review on January 21, 2013 and again after the close of the period on February 20, 2014. The entire declaration is permanently available on the company's website and is also included in the new declaration on corporate governance online and in the annual report pursuant to Section 289a of the German Commercial Code (HGB).

Supervisory Board members Mr. Neunteufel and Mr. Helletzgruber are at the same time indirect shareholders and members of executive bodies in the real estate company Euroreal, which has been renting the production facility in Linz to the Wacker Neuson Group member based at this location since 1997. The resulting business transactions are reported in the Executive Board's annual related party disclosures and assessed by the Supervisory Board and the auditor. In light of the now completed relocation of the Wacker Neuson production activities to the new factory in Hörsching, Euroreal and the Wacker Neuson Group had to reach agreements regarding the termination of the contract and the handover of real estate. To prevent possible conflicts of interest, Mr. Neunteufel and Mr. Helletzgruber have taken the precautionary measure of not participating in Supervisory Board discussions and votes relating to this issue.

Annual and Consolidated Financial Statements for 2013

At the AGM on May 28, 2013, the auditing company Ernst & Young GmbH, Stuttgart, was appointed auditor for the company and Group for fiscal 2013. The Chairman of the Audit Committee commissioned the company in

writing with the task of auditing the accounting procedures. Before the Supervisory Board made its proposal to the AGM, the auditing company confirmed its independence in writing to the Chairman of the Audit Committee.

The Annual Financial Statements for the year ending December 31, 2013 were prepared by the Executive Board in accordance with the German Commercial Code (HGB). The Consolidated Financial Statements for the year ending December 31, 2013 were prepared by the Executive Board in line with the International Financial Reporting Standards (IFRS) as adopted in the EU and in supplementary compliance with Section 315a HGB. The auditing company Ernst & Young GmbH, Stuttgart, audited both sets of statements along with the books and approved them without qualification.

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 Combined Management Report and the related party disclosures in conjunction with the audit reports. The documents were discussed in detail at the Audit Committee meeting on March 12, 2014 and at the Supervisory Board plenary meeting of the same date, with the Executive Board and in the presence of the auditors, who reported the main findings 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 Combined Management Report and, in particular, the forecast regarding the company's further development.

The final examination by the Supervisory Board revealed no grounds for objections. The Supervisory Board therefore endorsed the Annual Financial Statements, the Consolidated Financial Statements and the Combined Management Report prepared by the Executive Board for the year ending December 31, 2013 on March 12, 2014.

The 2013 Annual Financial Statements have thus been duly approved. The Supervisory Board also examined the Executive Board's suggested appropriation of profit for fiscal 2013. It did not raise any objections and thus gives it its unqualified 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 fiscal 2013. This report contains in particular a declaration by the Executive Board about the legal transactions undertaken by Wacker Neuson SE. 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 – appropriate compensation was received in respect of all transactions outlined in the related party disclosures report. Auditing company Ernst & Young GmbH, Stuttgart, examined the related party disclosures report and issued the following auditor's opinion:

"Based on our professional examination and evaluation, we confirm that

• 1. the factual statements contained in the report are correct, and
• 1. 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 Supervisory Board endorses the auditor's assessment of the related party disclosures report. Based on the final 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 management and all employees of the Wacker Neuson Group showed great personal dedication over the past fiscal year, making a valuable contribution to the company's continued positive development. The Supervisory Board would like to thank all employees and the Executive Board for their commitment and performance – both on a day-today basis and under exceptional circumstances.

Munich, March 26, 2014

Supervisory Board

Hans Neunteufel Chairman of the Supervisory Board

Corporate Governance Declaration and Report

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 securing our company's long-term success and increasing its value. The company's mission statement is embedded within the Group and all of its business practices.

Declaration on Corporate Governance

In the following statement the Executive Board reports on the company's corporate governance policies and practices – also for the Supervisory Board. It therefore complies with Section 289a (1) of the German Commercial Code (HGB) and Section 3.10 of the German Corporate Governance Code.

1. Declaration of compliance pursuant to Section 161 AktG (German Stock Corporation Act)

The Executive Board and the Supervisory Board of Wacker Neuson SE consider the German Corporate Governance Code as an important body of regulations. Both executive bodies feel compelled to comply with its principles of responsible, professional and transparent company management. They have therefore thoroughly examined the recommendations of the German Corporate Governance Code and issued the following declaration of compliance on February 20, 2014.

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

The German Corporate Governance Code contains recommendations and proposals for managing and monitoring German listed companies in relation to

shareholders and the Annual General Meeting (AGM), the Executive Board and the Supervisory Board, transparency, accounting and auditing. The German Stock Corporation Act requires the Executive Board and the Supervisory Board of listed companies to disclose each year the recommendations of the German Corporate Governance Code which the company has not followed or is not following, and to explain the reasons for noncompliance ("comply or explain").

The Executive Board and the Supervisory Board identify with the duty as outlined in the German Corporate Governance Code to uphold the principles of a social market economy and maintain the substance of the company as a going concern and its ability to generate value in a sustainable fashion (company interest) and to further promote responsible and transparent management and governance of the company.

In accordance with Section 161 AktG, the Executive Board and the Supervisory Board of Wacker Neuson SE hereby declare that since the submission of the most recent declaration of compliance of February 13, 2013 the company has complied with the recommendations issued by the German Corporate Governance Code Commission published by the German Federal Ministry of Justice (BMJ) in the official section of the Federal Gazette as amended on May 15, 2012 and/or as amended on May 13, 2013 (as of the effective dates) and continues to comply with the recommendations of the Code as amended on May 13, 2013, with the exceptions listed and explained in more detail below:

1. Section 3.8 (3) of the German Corporate Governance Code: The company's directors' and officers' (D&O) liability insurance policy for its Supervisory Board has been concluded without a deductible. The company is of the opinion that a deductible would not improve the sense of motivation and responsibility with which the Supervisory Board members perform their duties. D&O insurance safeguards the company against substantial internal risks and – only as a secondary function –

protects the assets of members of its executive bodies. Hence it is the company's intention to refrain from implementing a deductible on Supervisory Board members until further notice.

1. Section 4.2.2 (2) of the German Corporate Governance Code (as amended on May 13, 2013): When setting the overall remuneration payable to individual members of the Executive Board, the Supervisory Board respects legal requirements and further ensures, in particular, that such remuneration is commensurate with each member's responsibilities and performance, as well with as the situation of the company, and that it does not exceed customary remuneration levels unless there are compelling grounds to do so.

Section 4.2.2 (2) sent. 3 of the German Corporate Governance Code (as amended on May 13, 2013) also recommends that the Supervisory Board set the remuneration of the Executive Board in relation to the remuneration of senior executives and staff in general, also over time. The Supervisory Board is responsible for defining how senior executives are to be distinguished from staff in general. In the opinion of the Executive Board and Supervisory Board, this recommendation is not very practicable at present, particularly as compliance with this guideline would involve considerable effort. Furthermore, in the view of the Executive Board and the Supervisory Board, this information is not necessary at present to provide a concrete corridor for reasonable Executive Board remuneration levels. However, the Supervisory Board is closely monitoring developments in this area and will re-examine the possibility of complying with this recommendation at a later point in time.

• 1. Section 4.2.3 (6) of the German Corporate Governance Code: 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.
• 1. Section 4.2.4, 4.2.5, 5.4.6 (3) and 7.1.3 of the German Corporate Governance Code: 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 remuneration report and the corporate governance report do not include an individualized report on the remuneration of the Executive Board. Nor does it contain specific information about share-based incentive systems

for the Executive Board (which the company does not have in any case). For this reason, this information is not presented in the model tables recommended in Section 4.2.5 (3) of the German Corporate Governance Code (as amended on May 13, 2013).

Similarly, the remuneration of individual Supervisory Board members is not published. Remuneration is clearly regulated in the company's Articles of Incorporation. The Executive Board and Supervisory Board are of the view that these Articles coupled with other mandatory legal disclosures provide investors and the public with sufficient information in this area.

• 1. Section 5.3.3 of the German Corporate Governance Code: 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 the shareholders' Supervisory Board candidates.
• 1. Section 5.4.1 of the German Corporate Governance Code: When submitting its election proposals to the Annual General Meeting regarding the election of the shareholder representatives, the Supervisory Board takes into account the statutory requirements and recommendations of the German Corporate Governance Code in relation to the personal requirements to be met by Supervisory Board members.

Here the focus is placed – irrespective of nationality and gender – on the specialist and personal competence of potential candidates, paying special attention to the company-specific situation. Within the scope of evaluating competence, the Supervisory Board also factors in the company's international involvement, potential conflicts of interest, the number of independent members of the Supervisory Board, the age limit stipulated for members of the Supervisory Board and the principle of diversity. In the Supervisory Board's view, it is not necessary to specify concrete aims at this point in time, which means that Supervisory Board's goals and progress in achieving those goals are not published in the corporate governance report either. If statutory requirements are introduced in this context, the Supervisory Board will naturally comply with these within the applicable time frames.

The maximum age limit for Supervisory Board members is 75. One of the Supervisory Board members, who is a shareholder representative, exceeded this age limit of 75 years during his term of office.

1. Section 5.4.2 and 5.3.2 of the German Corporate Governance Code: The following situation is noted, which is also described in the Group Management Report: A pool agreement is in place between some of the shareholders of the Wacker and Neunteufel families. The parties to this pool agreement collectively hold about 63 percent of the shares of Wacker Neuson SE and can thus jointly (but not individually, i.e. individual members of the pool agreement acting in isolation) control the company. In accordance with the provisions of the pool agreement, each party to the pool agreement must exercise its right to vote and submit proposals at the Annual General Meeting such that two Supervisory Board members nominated as shareholders' representatives by the Wacker family and two by the Neunteufel family are always elected.

The shareholders' Supervisory Board members thus elected are, however, not bound in any way to the directions of individual, several or all of the parties to the pool agreement and any and all decisions they make within the Supervisory Board are made exclusively in the company's interests. Even though these shareholders' Supervisory Board members always enjoy the special trust of the parties to the pool agreement appointing them, they are not, in the Supervisory Board's view, in any personal or business relationship with a controlling shareholder, which could lead to a fundamental conflict of interest. In the view of the Supervisory Board, the shareholder representatives in the Supervisory Board, including the chairman of the Audit Board, are therefore to be considered independent. The Supervisory Board is thus composed of a sufficient (in its opinion) number of independent members. Given the ongoing legal uncertainty surrounding interpretation of the term "independence", the company nonetheless declares non-conformance as a precautionary measure.

• 1. Section 5.4.3. sent. 3 of the German Corporate Governance Code: So that the Supervisory Board can continue to vote impartially for its chairperson, the proposed candidates will not be announced in advance.
• 1. Section 5.4.6 (2), sent. 2 of the German Corporate Governance Code: Along with a fixed remuneration, the Supervisory Board members shall be paid a variable

remuneration which depends exclusively on the success of the relevant fiscal year. The Executive Board and the Supervisory Board are of the view that the current remuneration regulation is still appropriate and reflects the Supervisory Board's tasks and functions and therefore are refraining from proposing a change at the Annual General Meeting.

10.Section 6.6 sent. 1 of the German Corporate Governance Code (as amended on May 15, 2012) and/or Section 6.3 sent. 1 of the German Corporate Governance Code (as amended on May 13, 2013): 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 and Supervisory Boards are of the view that protecting personal and family privacy takes priority here.

Munich, February 20, 2014

Wacker Neuson SE Executive Board and Supervisory Board

The above declaration of compliance has been made permanently available to shareholders on the Wacker Neuson SE website (www.wackerneuson.com) under Investor Relations, Corporate Governance. It is updated as required, at least once a year. Previous declarations of compliance are stored for reference purposes on our website for a period of at least five years. Further details on corporate governance at Wacker Neuson SE are presented in the following corporate governance report.

2. Corporate governance report

The corporate governance report outlines the role of the Executive Board and the Supervisory Board as well as the composition and role of the committees.

Wacker Neuson SE is a European company (Societas Europaea) incorporated under German law. Upon foundation of the company, shareholders chose the dual management system common under the German stock corporation law, comprising two executive bodies, the Executive and the

Supervisory Board, each vested with different spheres of competence. The two bodies work closely together on a basis of mutual trust and are committed to increasing the company's long-term value.

Executive Board

The Executive Board represents the company towards third parties and manages its business in accordance with legal regulations, the Articles of Incorporation and the rules of procedure for the Executive Board. The Executive Board currently comprises three members. It is responsible for managing the company and represents it both legally and otherwise. The Executive Board functions on the basis of joint accountability. In other words, all members of the Board are jointly responsible for all areas of company management.

The Executive Board plans the company's strategic direction in collaboration with the Supervisory Board and ensures it is appropriately executed. It is also responsible for establishing the company and group's business plans for the coming year and beyond as well as preparing legally required reports such as Annual Financial Statements, Consolidated Financial Statements and interim reports. In addition, the Executive Board also ensures that a suitable risk management and control system is in place and that regular, prompt and extensive reports are made to the Supervisory Board regarding all issues relating to strategy, company planning, business developments, the risk situation, risk management and compliance activities that are relevant to the company and the Group.

Cooperation and areas of responsibilities within the Board are governed by the rules of procedure of the Executive Board. These focus not only on the lines of responsibility vested in individual Executive Board members, but also the issues entrusted to the Executive Board as a whole, resolutions (quorum requirements in particular) and the rights and obligations of the chairperson of the Executive Board (CEO). Executive Board meetings are held regularly and are convened by the CEO or at the request of an Executive Board member. The Executive Board generally reaches decisions based on a simple majority of votes cast unless other legal provisions apply. If an equal number of votes are cast, the chairperson has the casting vote.

The CEO steers and coordinates the entire Executive Board and represents the company and Group vis-à-vis the public, in particular when dealing with the authorities, trade associations and publishing houses.

Mr. Cem Peksaglam is CEO of Wacker Neuson SE, the parent company of the Group. Mr. Martin Lehner is Deputy CEO. Further details on individual members of the Executive Board, in particular their areas of responsibility within the Executive Board, are disclosed in the Notes to the Consolidated Financial Statements in Section 31 "Executive bodies" (Wacker Neuson Annual Report 2013). p. 145

Measures and transactions of fundamental importance must be approved by the Supervisory Board as set down in the rules of procedure for the Executive Board and/or the Articles of Incorporation. They are also communicated to shareholders and the capital market in a timely manner, thus ensuring that decision-making processes remain transparent – also throughout the year – and capital market players are kept sufficiently up to date.

Supervisory Board

The Supervisory Board advises the Executive Board in key decisions, monitors its activities, appoints members and relieves them of their duties. The Supervisory Board has six members. In accordance with the agreement on employee representation in the Wacker Neuson SE Supervisory Board and the German One-Third Participation Act (Drittelbeteiligungsgesetz), four of these are shareholder representatives and two are employee representatives. Taking the company-specific situation into consideration, the composition of the Supervisory Board reflects the company's international footprint, the need to avoid conflicts of interest, the number of independent Supervisory Board members in line with the German Corporate Governance Code, the age limit applicable to Supervisory Board members and the benefits of diversity. The Supervisory Board also plans to propose female members where appropriate in order to ensure that women are adequately represented at Supervisory Board level.

The terms of office of all Supervisory Board members run until the close of the AGM that tables a resolution to formally approve the actions taken by Wacker Neuson SE in fiscal 2014. Their terms may be no longer than six years. Further details on individual members of the Supervisory Board are disclosed in the Notes to the Consolidated Financial Statements in Section 31, "Executive bodies" (Wacker Neuson Annual Report 2013). p. 145

The principles of cooperation within the Supervisory Board are governed by the rules of procedure for the Supervisory Board. These rules reflect the recommendations of the German Corporate Governance Code and – as an integral part of the monitoring and controlling process – provide for clear and transparent procedures and structures as well as regular efficiency checks on Supervisory Board work. The Supervisory Board reaches decisions based on a simple majority of votes cast unless other legal provisions apply. In the event of a tie, the resolution or nomination proposal shall be deemed rejected; the chairperson shall not have the casting vote. The chairperson of the Supervisory Board convenes and oversees Supervisory Board meetings and generally coordinates the activities of the Supervisory Board and its committees.

The Supervisory Board defines the Executive Board's information and reporting duties in detail. The core areas of collaboration between the Executive and Supervisory Boards as well as specific details on the Supervisory Board's activities and committees are disclosed in the report by the Supervisory Board.

Composition and role of committees

In contrast to the Executive Board, the Supervisory Board forms two committees, the Presiding and the Audit Committee.

The responsibilities of the Presiding Committee include in particular submitting proposals for Executive Board member appointments, terminations and mandate extensions, for Executive Board remuneration and remuneration scales, and for preparing measures to conclude, amend or terminate contracts with Executive Board members. The Presiding Committee members are Mr. Hans Neunteufel, Dr. Matthias Bruse and Dr. Eberhard Kollmar. Mr. Hans Neunteufel is Chairman of the Presiding Committee.

The Audit Committee maintains close contact with the auditors. It appoints the auditors to review the Annual and Consolidated Financial Statements, identifies the focal points of the audit and receives the report. Furthermore,

the Audit Committee negotiates the fee with the auditor, assesses their independence and additional services provided by the auditor and submits a voting proposal with regard to the auditor to the Supervisory Board for the AGM. It prepares the Supervisory Board discussions and resolutions required to approve the Annual and Consolidated Financial Statements and to review the Executive Board's report. It supports and monitors the Executive Board regarding accounting process issues, the internal control system, risk management system, internal auditing system and compliance. The Audit Committee members are Dr. Eberhard Kollmar, Mr. Hans Neunteufel, Mr. Kurt Helletzgruber and Mr. Elvis Schwarzmair. Mr. Kurt Helletzgruber is the Chairman. As an independent financial expert, he fulfills the requirements set out in Sections 100 (5) and 107 (4) of the AktG.

The respective committee chairpersons provide the Supervisory Board with regular and timely information about the committees' activities. The committees also reach decisions with a simple majority of votes cast. In the event of a tie, the resolution or nomination proposal shall be deemed rejected; the respective chairpersons shall not have the casting vote.

Further details on the activities of the Supervisory Board and its committees can be found in the current Supervisory Board report (Wacker Neuson Annual Report 2013).

Shareholders and the AGM

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 shall entitle its holder to one vote. The AGM agenda plus the reports and documents required for the AGM are published in good time – also on the company's website, where they can be easily viewed by shareholders.

Our AGM this year will take place on May 27, 2014 in Munich. 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. Shareholders can also do this during the AGM. Information on how to vote by proxy will also be included in the invitation to the 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 financial 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 and the Combined Management Report of Wacker Neuson SE and its Group are prepared in accordance with the German Commercial Code (HGB).

The Supervisory Board proposes the election of the auditor at the AGM, based on a recommendation from the Audit Committee. Prior to making its proposal, the Supervisory Board obtains a certificate of independence from the auditor in question.

The Chairman of the Audit Committee asked the auditor to immediately report all significant findings or incidents identified during the audit and relating in the broadest sense to Supervisory Board duties if these findings or incidents could not be directly resolved.

Risk management

Responsible handling of risks facing the group and the company is, as always, a crucial part of sound corporate governance. The Executive and the Supervisory Board therefore continually monitor the Wacker Neuson Group's risk management and internal controlling systems along with the accompanying reporting mechanisms.

Specific details on risk management within the Wacker Neuson Group are disclosed in the risk report of the Consolidated Management Report (Wacker Neuson Annual Report 2013). This also includes a report on the controlling and risk management systems within accounting. p. 74

Transparency

Regular, active dialog with our shareholders and other stakeholders is one of the cornerstones of our corporate governance policy. We provide shareholders, financial analysts, shareholder associations and the media with information about business trends and significant changes within the company promptly, regularly and with the greatest possible transparency. We are fully committed to a policy of active and honest communication.

As stipulated by the German Securities Trading Act (WpHG) and the German Corporate Governance Code, we provide information on our company's business development and financial situation four times a year. This takes the form of one annual report and three quarterly reports. The Supervisory Board and the Audit Committee discuss these reports with the Executive Board prior to their publication. In addition, the Executive Board answers shareholders' questions at the AGM. We also use our website as a way of keeping our stakeholders up to date. All press and ad-hoc releases, financial reports and our financial calendar detailing important events throughout the year are permanently available and up to date on www.wackerneuson.com under Wacker Neuson Group, Investor Relations. Interested parties can join our distribution list to receive regular updates.

Director's dealings and significant voting interests

Wacker Neuson SE publishes reports on directors' dealings pursuant to Section 15a of the German Securities Trading Act (WpHG), thereby ensuring compliance with the WpHG. We use these reports to provide immediate information about securities transactions with regard to Wacker Neuson shares made 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 Wacker Neuson Group, Investor Relations, Corporate Governance. Also under Investor Relations/IR News, we immediately publish shareholder news releases regarding the purchase or sale of significant voting rights in line with Section 21 WpHG and the holding of financial and other instruments in line with Sections 25 and 25a WpHG.

Shares owned by the Executive Board and the Supervisory Board

The total number of Wacker Neuson SE shares held by all members of the Executive Board and Supervisory Board on December 31, 2013 was more than 1 percent of all shares issued by the company. Directly or indirectly, the Executive Board holds around 1.0 percent (711,760 shares) and the Supervisory Board around 29.7 percent (20,827,009 shares) of issued shares.

Remuneration report in the Corporate Governance Report

We report on the remuneration system applicable to the Executive Board in our Combined Management Report under section XII "Remuneration framework". The AGM approved a resolution not to publish remuneration details for individual Executive Board members in the interest of their privacy.

The overall remuneration of the Executive Board and the Supervisory Board is disclosed in the above-mentioned section and in the Notes to the Consolidated Financial Statements in section 32 "Related party disclosures" (Wacker Neuson Annual Report 2013). p. 146

3. Corporate governance best practices

Compliance – principles of sound business and financial governance

Moving beyond the guidelines and recommendations of the German Corporate Governance Code, the Wacker Neuson SE Executive Board is committed to conducting its business worldwide in a lawful manner, along socially and ethically responsible lines. Which is why we have developed a group-wide strategic mission statement that shapes the conduct of each and every individual in the group – from the Executive Board through management to all group employees. This mission frames the way we do business for shareholders, customers, business partners, the general public and our employees alike.

Our approach is anchored in the values you would expect from a mid-sized family-owned company, geared towards profitable sustainability. Shared values and sustainable leadership principles underlie everything we do. Values such as integrity, openness, honesty, and respect for other people and our surroundings inspire us to succeed, serve our shareholders with dedication and embrace sustainable business practices. This mission statement captures our commitment to all our stakeholders and can be seen on our website at www.wackerneuson.com/leitbild.

On May 2, 2013, a Chief Compliance Officer was appointed. This person serves as a contact point and advisor for compliance issues and is responsible for implementing a compliance management system geared towards the specific requirements of the Wacker Neuson Group.

In this context, we defined a mission statement, outlining our commitment to integrity and to systematic compliance with statutory and regulatory requirements. This statement is available to the public at the following link: http://corporate.wackerneuson.com/en-compliance.php.

To ensure our values remain firmly embedded in every aspect of our corporate structure, we regularly inform our employees of the rules and requirements of responsible conduct. In the interests of our company and the entire workforce, we ensure that any infringements are traced back to source and their causes rectified. This also includes the rigorous pursuit of any violations of applicable national regulations.

Moving forward, we are committed to sustaining this valuedriven approach, which we see as a solid ground for our future success and credibility as a company.

Munich, February 20, 2014

Wacker Neuson SE

Executive Board

(CEO)

Cem Peksaglam Günther C. Binder

Martin Lehner (Deputy CEO)

This declaration on corporate governance is permanently available to shareholders on the Wacker Neuson SE corporate website at www.corporate.wackerneuson.com under Investor Relations/Corporate Governance. The declaration of compliance will be revised annually. Wacker Neuson SE will make outdated declarations on compliance available on its website for a period of at least five years.

Professionalization OUR KEY PERFORMANCE INDICATORS HAVE IMPROVED

2013 fi gures compared with 2009 baseline

Contents Combined Management Report

I. The Wacker Neuson Group	34
II. General background	37
Overall economic trends	37
Overview of construction and
agricultural industries	38
General legal framework	39
Competitive position	40
III. Business trends in 2013	41
IV. Profi t, fi nancials and assets	43
Profi t	43
Financial position	47
Assets	52
General overview of economic situation	54
V. Profi t, fi nancials and assets
of Wacker Neuson SE (condensed
version according to HGB)	54
VI. Segment reporting by region	58
Europe	58
Americas	58
Asia-Pacifi c	59
VII. Segment reporting by business segment	60
Light equipment	60
Compact equipment	61
Services	62

VIII. Other factors that impacted on results	62
Research and development	62
Production and logistics	65
Sustainability and quality	66
Procurement	69
Human resources	70
Sales, customers and marketing	73
IX. Risk report	74
X. Information in accordance with
Section 315 (4) HGB and Section 289 (4) HGB
plus an explanatory report from the Executive
Board in accordance with Section 176 (1)
Sentence 1 AktG	81
XI. Declaration on corporate governance
according to Section 289a HGB	86
XII. Remuneration framework	86
XIII. Supplementary report	87
XIV. Opportunities and outlook	88
Overall economic outlook	88
Outlook for construction and
agricultural industries	89
Opportunities and outlook for future
development of the Wacker Neuson Group	91
Group forecast	94
Summary forecast	95

The graphics and tables below are provided for information purposes only. Market statistics and page references have not been audited and are therefore not part of the Combined Management Report. Accounting methods, key indicators and fi nancial terms are defi ned in the glossaries at the end of this annual report.

Combined Management Report of Wacker Neuson SE and its Group for fi scal 2013

Unless otherwise stated, the information contained in this Management Report refers to the Wacker Neuson Group. We have prepared the Consolidated Financial Statements in accordance with the International Financial Reporting Standards (IFRS) as applicable in the EU in addition to the provisions of the German Commercial Code (HGB) set forth in section 315a (1).

The Annual Financial Statements of Wacker Neuson SE (which is structured as a holding company) have been prepared in

accordance with the provisions of HGB and the German Stock Corporation Act (AktG). The Management Report of Wacker Neuson SE is included in this Group Management Report in line with Section 315 (3) of the HGB; further details are disclosed in section "V. Profi ts, fi nancials and assets of Wacker Neuson SE (condensed version according to HGB)". The risks and opportunities facing Wacker Neuson SE cannot be differentiated from those facing the Group. p. 54

I. The Wacker Neuson Group

• A global leader in light and compact equipment
• International sales and service network backed by outstanding logistics know-how
• Focus on sustainable increase in company value

The Wacker Neuson Group is a leading manufacturer of light and compact equipment with 51 Group members (including the holding company, 49 of which are consolidated) and more than 140 sales and service stations across the globe. Manufacturing activities are distributed across three sites in Germany, one in Austria, two sites in the US and one in the Philippines. Wacker Neuson also manufactures components in Serbia.

Our segment reporting is divided into three regions – Europe, the Americas and Asia-Pacifi c.

We also report revenue according to the following three strategic business segments:

• Light equipment up to 3 tons with the following business fi elds:
• Concrete technology
• Compaction

• Worksite technology

• Compact equipment up to 15 tons

• Excavation technology
• Material handling
• Services (including spare parts, maintenance, fi nancing and used equipment)

With its broad and deep portfolio, wide range of services and effi cient, global spare parts service, Wacker Neuson is the partner of choice among professional users across a wide range of industries, including the construction, gardening, landscaping and agriculture sectors, as well as among municipal bodies and companies in industries such as recycling and energy.

Wacker Neuson Group is the company's umbrella brand. It is used for all Group-wide communications. The Group distributes its products and services under the three separate brands, namely Wacker Neuson, Kramer and Weidemann. The broadest portfolio (light and compact equipment) is distributed worldwide under the Wacker Neuson brand. Under the Kramer brand, the Group also distributes all-wheel drive wheel loaders, tele wheel loaders and telescopic handlers via an extensive sales network focusing on industry, construction and municipal services. In 2013, Kramer launched its Green Line of products for the agricultural sector and is currently establishing a dedicated network for the distribution of these products. The Weidemann brand is a by-word for long-standing expertise and experience in the agricultural sector. The company distributes its compact, articulated Hoftracs®, wheel loaders, tele wheel loaders and telescopic handlers via a specialist dealer network.

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.

The Consolidated Financial Statements of Wacker Neuson SE are prepared in accordance with the International Financial Reporting Standards (IFRS). Forty-nine companies, including the holding company, are fully consolidated in these statements.

Wacker Neuson SE operates as a management holding company with a central management structure. It directly or indirectly holds the shares in its affi liates, which are mainly sales offi ces.

The holding company's Executive Board is responsible for managing the Group. As a rule, the executive bodies of the affi liates report directly to the Group's Executive Board.

With the exception of Kramer-Werke GmbH and Weidemann GmbH, which operate under their own brands and names, all signifi cant operating affi liates worldwide now trade under the common name of Wacker Neuson.

Please refer to the section entitled "General information on accounting standards" in the Notes for detailed information on the legal structure. p. 104

Corporate governance and value management

As a centralized function, the controlling department of the holding company Wacker Neuson SE is responsible for the Group's internal controlling instruments. It steers and monitors deviations between 'as is' and 'to be' fi gures, primarily based on the development of revenue and profi t reported by affi liates. It also tracks the progress of operative measures and prepares Group-wide key performance indicators (KPIs) for the Executive Board. The controlling instruments are adapted where necessary in the process to refl ect developments both within and beyond company walls.

Important decisions on projects initiated by the company in response to changing market and customer requirements are made by management committees. The committees include members of the Executive Board, affi liate managers, market developers plus senior employees from research and development, product management, quality management, sales and service, marketing, controlling, treasury and strategic procurement.

Our management strategy is geared toward creating a lasting increase in company value. We have invested heavily over the past few years to achieve and maintain long-term growth. Revenue, profi t before interest, tax, depreciation and amortization (EBITDA) and profi t before interest and tax (EBIT) are our most important key performance benchmarks and targets – each in absolute terms and as a percentage of revenue.

Performance indicators (5-year period)

as a %	2013	2012	2011	2010	2009
Revenue in € million	1,159.5	1,091.7	991.6	757.9	597.0
EBITDA margin	13.2	13.0	16.4	10.3	4.6
EBIT margin	8.2	7.8	12.5 (11.4)1	4.8	-18.9 (-0.5)2
Average working capital/revenue	39.2	37.9	32.2	32.1	43.7
ROCE II	7.7	7.6	12.51	5.2	-1.9 3
Equity ratio (before minority interests)	70.7	68.0	74.2	80.6	81.2
Gearing	18.9	23.4	10.0	1.7	-3.1
Free cash fl ow in € million	56.7	-86.3	-61.9	-38.8	100.6

1 Adjusted for reversal of brand impairment in 2011 (EUR 10.8 m).

2 Adjusted for write-downs on intangible assets (EUR 100.3 m) and restructuring costs (EUR 9.6 m) in 2009.

3 Adjusted for write-downs on intangible assets (EUR 100.3 m) in 2009.

We also govern our dividend payment policy, fi nancing structure and return on capital employed. We use two indicators to do this: Average working capital in relation to revenue, and return on capital employed after tax (ROCE II), which shows how effi ciently Wacker Neuson uses its capital (average capital employed). The results are used to determined the economic value added (EVA). The balance sheet performance indicators for the Group also include equity ratio. The Group's treasury department controls fi nancing by monitoring net fi nancial debt and gearing. Free cash fl ow is also an important indicator of the company's ability to fi nance itself.

The table above shows a year-on-year comparison of how these key indicators have developed. The terms are explained in the fi nancial glossary. p. 152

In additional to these fi nancial performance indicators, the Wacker Neuson Group also regularly monitors key operative leading indicators for operational business trends. Important indicators for the construction business include future investment plans in the construction equipment and construction materials industries, the development of production volumes and market shares, the number of building permits issued as well as the development of real estate prices, especially in the US. Operative leading indicators for the European agricultural industry include the rate of mechanization among landholdings, trends in agricultural technology and the development of milk, food and animal feed prices. We use these indicators to respond early to global economic developments and dynamically adapt our course accordingly.

Performance indicators at a glance

II. General background

Overall economic trends

• Stable growth in the global economy
• European debt crisis on the road to recovery
• Euro continues to gain strength

Weak economic performance in some eurozone countries together with slow growth in North America and a comparatively sluggish rate of development in emerging markets mean that global gross domestic product (GDP) only rose by 3 percent in 2013 according to International Monetary Fund (IMF) estimates. The GDP of industrialized countries rose by just 1.1 percent in 2013. This slow rate of expansion is primarily due to a downturn in growth in the eurozone.

Nevertheless, the seventeen eurozone countries seem to be coping increasingly well with the fi nancial crisis. Although economic output fell once again, the 0.4 percent drop was less severe than expected. Many eurozone countries did not emerge from the recession until the second quarter of 2013. Government budget consolidation, weak consumer spending and an unwillingness to invest on the part of companies had the most dampening impact on growth here.

In contrast, German economic growth was clearly bolstered by industry and construction during 2013 – fueled above all by the rising share of exports. Germany was thus able to report growth of 0.5 percent. However, German companies still see mounting energy and raw materials prices as a threat to economic growth.

In Italy and Spain, the recession eased somewhat in 2013. However, neither country was able to report positive growth for the year.

The US showed very cautious economic growth in 2013. Cutbacks in public spending had a major impact here. Nevertheless, the US economy expanded in 2013 by 1.9 percent relative to the previous year. This was fueled primarily by a rise in consumer spending and an increased willingness to invest among companies.

Real GDP

Change from previous year
as a %	2013	2012
World	3.0	3.1
Eurozone	-0.4	-0.7
Germany	0.5	0.9
USA	1.9	2.8
Latin America	2.6	3.0
China	7.7	7.7
Russia	1.5	3.4
Middle East and North Africa	2.4	4.1
South Africa	1.8	2.5

Source: IMF – International Monetary Fund, January 2014.

Weak economic growth in Europe and North America also contributed to the slightly slower pace of growth in some emerging markets. The slowdown in economic growth among emerging economies proved a particular cause for concern in the second half of 2013. Demand for industrial goods was especially hard hit, revealing sharp drops at times. These developments come on the back of strong growth in the previous three years, which resulted in individual markets becoming oversaturated.

Compared with the development of key currencies, the euro rose 4.5 percent against the US dollar (USD), 11.7 percent against the Canadian dollar (CAD), 2.2 percent against the

Performance of key currencies against the euro (End of year rates)

			Change
1 euro equals	2013	2012	as a %
US dollar (USD)	1.3791	1.3194	4.5
Swiss franc (CHF)	1.2276	1.2072	1.7
British pound (GBP)	0.8337	0.8161	2.2
Japanese yen (JPY)1	144.7200	113.6100	27.4
Australian dollar (AUD)	1.5423	1.2712	21.3
Brazilian real (BRL)	3.2530	2.7011	20.4
Hong Kong dollar (HKD)	10.6933	10.2260	4.6
Indian rupee (INR)	85.1000	72.4700	17.4
Canadian dollar (CAD)	1.4671	1.3137	11.7
Russian ruble (RUB)	45.3246	40.3295	12.4
South African rand (ZAR)	14.5660	11.1727	30.4

Source: Notes to the Consolidated Financial Statements, p. 109.

1 Source for yen: European Central Bank

British pound (GDP), 1.7 percent against the Swiss franc (CHF), and 27.4 percent against the Japanese yen (JPY). The currencies of emerging markets1 fell signifi cantly during the period under review. For example, the euro rose 20.4 percent against the Brazilian real (BRL), 12.4 percent against the Russian ruble (RUB), 17.4 percent against the Indian rupee (INR) and a hefty 30.4 percent against the South African rand (ZAR). The euro's 4.6-percent increase against the Hong Kong dollar (HKD) proved a moderate rise compared with other fi gures.

Overview of construction and agricultural industries

• Mixed growth in established markets
• Construction activity in the US above previous year's level
• European agricultural technology sector cautious

Regional differences in economic growth rates in 2013 called on manufacturers of construction and agricultural equipment to display a high degree of fl exibility. Dealers trimmed stock to reduce capital tied up in inventory. Investment in new machines was sluggish and selective. To benefi t from new machine sales made by dealers, manufacturers of construction and agricultural equipment had to remain fl exible and ensure rapid delivery capabilities.

The construction industry showed particular signs of weakening in Europe, where the construction equipment market is almost half the size it was in 2007. In 2013, construction activity fell in France, Italy, the Netherlands, Poland, Portugal and Spain. Construction activity also fell markedly in the Middle East. After a experiencing a sharp decline in the recent years, Great Britain developed extremely well to become the fi fth largest market in Europe. Residential construction was one of the main growth drivers here. German-speaking countries and Norway continued to grow moderately from a high base level.

With the debt crisis calming in Europe, confi dence levels have risen among construction companies. The German construction industry initially improved as the year progressed, pushing up capacity utilization and employment levels. However, the pace of growth slowed somewhat towards the end of the year. In

The term emerging markets refers to 35 countries according to the Dow Jones defi nition: Argentina, Bahrain, Brazil, Bulgaria, Chile, China, Colombia, Czech Republic, Egypt, Estonia, Hungary, India, Indonesia, Jordan, Kuwait, Latvia, Lithuania, Malaysia, Mauritius, Mexico, Morocco, Oman, Pakistan, Peru, Philippines, Poland, Qatar, Romania, Russia, Slovakia, South Africa, Sri Lanka, Thailand, Turkey, United Arab Emirates.

Construction and economic growth (Europe) 2013

Source: Euroconstruct, November 2013.

the second quarter of the year, buildings and infrastructure in Germany and Eastern Europe were damaged by extreme fl ooding. This led to increased demand for repair and construction work here in the second half of the year. According to the German Engineering Federation (VDMA), demand for compact equipment fell in Germany during the course of 2013. This was primarily due to a comparatively high baseline as unit sales for the majority of these products are higher than the long-term average. In addition, customers were still cautious about making investments despite the healthy order situation. This means that machines are being used for longer periods of time.

Demand in North America in 2013 was higher than in the previous year. The real estate market in the US continued to expand, with demand for residential real estate and house

prices rising at a steady pace. The US construction sector is still far below the high levels of 2006, however, and construction equipment markets are around 30 percent below the pre-crisis levels of 2007.

Central America, South America, Africa, Eastern Europe and Asia (excluding China) account for around 29 percent of today's global market. These emerging markets continued to deliver the main growth impetus in 2013, although the pace of growth did slow in some countries. The construction industry proved particularly strong in India and China. In 2013, construction activity increased by 5 and 9 percent respectively in these countries.

China remains the largest market for construction equipment with a global market share of 29 percent. The market for compact equipment developed particularly well in 2013. Local manufacturers are reporting a shift in demand for light and compact equipment. Customers looking to invest are now placing more importance on a machine's lifecycle and therefore expect signifi cantly higher levels of quality. It is becoming increasingly important for manufacturers to tailor products to the needs of customers in local markets. However, the rapid increase in production volumes in recent years saturated the market and resulted in large numbers of used machines in China. This, in turn, is reducing demand for new equipment.

From mid-2012 on, falling industrial metal prices caused mining companies to cut back on investments. As a result, demand for equipment in Australia was below the previous year's level.

Agricultural sector cautious to invest

Economic assessments in the agricultural sector are closely linked to input and commodity price trends, political developments and the general competitive situation. The fi nancial situation on agricultural holdings is infl uenced by a range of factors, including income (which itself is determined by variables such as harvests) and the prices of energy, fertilizer, feed and leasing agreements. According to the VDMA, revenue generated by agricultural machines rose by 4.0 percent in Europe in 2013 and by 5.6 percent worldwide. In 2013, customers continued to focus on modern technology solutions that make fi eld and yard work more cost effective.

General legal framework

• Protection of users and the environment
• Ongoing integration of new regulations in internal process fl ows
• Compliance with new emissions standards

As a global manufacturer and provider of light and compact equipment, Wacker Neuson has to observe numerous national and international statutory guidelines governing environmental and user protection. These include provisions regulating exhaust gas emissions and ergonomics as well as noise and vibrationinduced impact.

At Wacker Neuson, we therefore continuously review and adapt our product portfolio to ensure compliance with new requirements and various harmonized standards and norms. We integrate new regulations as promptly as possible in our processes.

Emission standards for light and compact equipment

Statutory exhaust emission regulations have a major impact on the sale of compact equipment. As of 2012, the new TIER IV interim and TIER IV fi nal emissions regulations are effective in the US (mandated by the Environmental Protection Agency, EPA). In Europe, stages 3b and 4 of Directive 97/68/EC are in force. These emission stages apply to diesel engines in non-road mobile machinery – in other words, construction equipment, forklifts and agricultural machines. The specifi c compliance dates vary depending on engine power and individual market requirements. The Wacker Neuson Group has already equipped some of its compact equipment models with compliant diesel engines. Further models will be adapted by 2015 to comply with the new regulations. Components such as engines, cooling systems and exhaust gas treatment systems have to be modifi ed.

In 2013, Wacker Neuson made further efforts to comply with new product standards. This includes the above-mentioned EPA emissions regulations and the new RoHS 2 Directive1 .

Beyond that, there were no legislative changes that had a signifi cant impact on the company's business activities.

Competitive position

• Maintaining and expanding market position
• Differentiation from competitors
• Highly effi cient, international service network

The global construction equipment market, which is our competitive landscape, is very heterogeneous. The majority of our competitors offer either light equipment or heavy equipment (machines weighing over 15 tons), or a combination of compact and heavy equipment.

Competitive edge – broad product portfolio backed by a global sales and distribution network

The Wacker Neuson Group delivers an exceptionally broad range of products and premium services to customers the world over.

Wacker Neuson's combination of light and compact equipment is one of the main factors that sets it apart from the competition. The Group's machines are aimed at professional users. The compact equipment segment, which comprises versatile, effi cient machines weighing up to 15 tons, grew signifi cantly through the merger with the Neuson Kramer Group in 2007. The merger has enabled us to offer a much broader portfolio of products via our highly effi cient, international sales and distribution network.

In the light equipment segment, the company faces a variety of competitors, including Ammann, Bomag, Dynapac, Mikasa, Multiquip and Weber. In the compact equipment segment, we also compete with specialist manufacturers and global companies such as Bobcat (Doosan), Kubota, Takeuchi and Yanmar. Some international heavy equipment manufacturers such as Komatsu or Volvo offer compact equipment and are therefore part of our competitive landscape.

The need to increase productivity on agricultural holdings is leading to increasingly industrialized structures across the agricultural sector and greater demand for compact equipment.

The acquisition of the Weidemann Group in fi scal 2005 has enabled the Wacker Neuson Group to expand its presence in the agricultural machinery sector. Weidemann-branded articulated wheel loaders and telescopic handlers enjoy a leading position in the Central European agricultural market. Since 2013, Kramer has also been establishing a dedicated sales network for the distribution of its all-wheel drive machines in the agricultural sector. In this sector, the Group competes with companies such as Schaeffer, Thaler and JCB.

Leading global manufacturer

Wacker Neuson's strong market position is built on outstanding product and service quality, backed by in-depth product development and manufacturing know-how and an effi cient sales network. Many of our products have established excellent market positions across the globe. However, there are few offi cial statistics on market segmentation, thus making it diffi cult for us to provide an overview of market shares, especially in the case of light equipment.

End customers, dealers and professional rental companies select the manufacturer that offers the most appealing overall package consisting of innovative products, a strong brand, simple and effi cient logistics and all-in service with an attractive price/performance ratio. Customers prefer a bundled package that gives them a single point of contact to the manufacturer as this greatly simplifi es processing and administration. As one of the world's leading manufacturers with an exceptionally broad product portfolio of light and compact equipment, Wacker Neuson is ideally placed to offer all of these benefi ts.

Changes in the competitive landscape

In our global competitive landscape, it is becoming increasingly diffi cult to secure existing market shares. Consolidations, mergers, acquisitions and alliances are becoming an increasingly important and common response to intensifi ed competition.

Following the merger of the two largest rental companies in the US, United Rentals and RSC, two years ago, the trend toward mergers and alliances has increased among market players the world over. In Italy, for example, four large rental fi rms (Venpa, E-Mac, Milantractor and Tecnifor) agreed to work together in response to the diffi cult economic conditions. Large rental companies have also joined forces in Spain. The two northern European rental companies Cramo and Ramirent launched a joint venture for Russia and the Ukraine in a bid to pool their resources and leverage market opportunities in these markets.

In North America, Volvo sold its Volvo Rents rental business to an American private equity company at the end of 2013. Volvo Rents included Volvo's rental activities for the US, Canada and Puerto Rico, making it the fi fth largest rental business in North America. Also in December, Volvo bought the company Terex's truck business, which manufactures trucks weighing between 31 and 91 tons. Back in August of the same year, Atlas Maschinen bought Terex's wheel loader division, which covers machines with bucket capacities between 1.5 and 3 cubic meters.

The Austrian company Palfi nger and Chinese operator Sany have expanded their 2012 joint venture by each acquiring a stake in the other company. Manitou and Yanmar have also strengthened their strategic alliance, with Yanmar (mini excavator segment) acquiring a stake in Manitou. Both companies want to expand the strategy that they are currently following in North America and distribute each other's products in South America in the future. Kubota and Giant have intensifi ed their collaboration on compact wheel loaders in Europe.

Chinese companies are also entering our core markets. The company Sany, for example, aims to launch mini excavators (1.6 and 3.5 tons) in Europe. In addition, SDLG has opened its fi rst facility outside of China in Brazil and plans to launch its wheel loaders in the North American market. Chinese construction equipment group XCMG is also increasing its focus on Europe. The company is expanding its portfolio to include premium products, establishing a sales and service network and making targeted acquisitions in a bid to strengthen its market presence.

The mergers and events described above have not had a material impact on Wacker Neuson's position. The Group remains in a good position on the strength of its product groups, ongoing sales synergies resulting from the merger, and key strategic alliances.

Strategic alliances

Group member Kramer-Werke GmbH develops and manufactures powerful, versatile telescopic handlers for the agricultural industry. These are distributed by Claas Global Sales GmbH, a leading German agricultural machinery supplier, under the Claas brand. This cooperation has been in place since 2005.

Wacker Neuson and Caterpillar Inc (Peoria/USA) entered a longterm strategic alliance in 2010. Wacker Neuson develops and manufactures mini excavators with a total weight of up to 3 tons exclusively for Caterpillar. Caterpillar distributes these machines under its own brand via its sales network, with the exception of Japan. Caterpillar intends to cover global demand for its compact machines through the alliance. Both partners aim to strengthen their individual competitive positions in this highly fragmented market more quickly.

Increasing market penetration, synergies and diversifi cation

Wacker Neuson expanded its share in national and international markets in the last fi scal year and was also able to strengthen its position in some declining markets. Wacker Neuson leveraged its core strengths to increase its overall market penetration, capitalizing on its strong innovative drive, excellent product and service quality, reliable spare parts business, streamlined business processes, strong fi nancial position and independence.

The Group's existing sales networks in North and South America, Europe and Asia-Pacifi c also offer further opportunities to increase light and compact equipment sales. The company's growing presence in a variety of other industries including agriculture, gardening, landscaping, recycling and logistics is a further strategic growth driver.

By continually improving its processes and modernizing its production facilities in recent years, Wacker Neuson has gained a high degree of fl exibility that enables the company to react rapidly to fl uctuations in demand and changing customer requirements. This has signifi cantly strengthened the company's competitive standing.

III. Business trends in 2013

• Positive business development; currency fl uctuations impact revenue
• Revenue and EBITDA targets for 2013 achieved
• Increased market presence with products tailored to local requirements

General statement on business performance

Business for the Wacker Neuson Group developed positively once again in 2013. Revenue rose 6.2 percent, from EUR 1,091.7 million in the previous year to a record high of EUR 1,159.5 million. However, this fi gure was impacted by the euro's gain against other currencies relative to 2012. When adjusted to discount currency fl uctuation, revenue actually rose by 8.3 percent.

This increase was primarily fueled by positive business trends in North and South America as well as by strong revenue in Europe, with markets such as Germany, Switzerland, Austria, Norway, the UK, Russia and Turkey playing a signifi cant role here. The Group increased overall sales of light and compact equipment in Europe and North America. This positive development shows that the measures implemented by the Group to increase penetration in core markets are having an effect.

During the period under review, the light equipment and services segments both reported revenue gains. Revenue in the compact equipment segment rose at an above-average rate. This is a result of the Group's strategy to increasingly distribute compact equipment via its global sales and distribution network for light equipment. As expected, the segment increased its share of overall revenue.

The fi rst quarter of 2013 got off to a weak start due to harsh weather conditions. However, the Group reported a signifi cant rise in revenue and profi t relative to the previous year for each of the following quarters.

Quarter-on-quarter comparison: revenue 2009 to 2013 in € million

The company posted an EBITDA margin1 for the year of 13.2 percent. This is a slight yet important increase on the previous year (2012: 13.0 percent) especially considering the company's efforts to expand its position in what were in some cases extremely competitive markets. The following section contains further information on items that impact profi t in 2013. p. 44

Comparison between actual trends and projected performance

In March 2013, Wacker Neuson forecast revenue of around EUR 1.2 billion and an EBITDA margin in excess of 13.0 percent for the fi scal year. The Group achieved these targets despite the negative effects of currency fl uctuations.

	Forecast March 2013	Achieved 2013	Medium-term goal
Revenue	approx. € 1.2 bn	€ 1.160 bn	yoy +> 10%
EBITDA margin	> 13.0%	13.2%	> 13.0%
Investments	approx. € 80 m	€ 86.8 m	-

EBITDA margin = EBITDA/revenue.

Healthy fi nancials and assets

The Group's fi nancials and assets remain strong with a high equity ratio (before minority interests) of around 71 percent and net fi nancial debt of around EUR 177 million (2012: EUR 214 million). This corresponds to a gearing of approximately 19 percent (2012: 23 percent).

Skid steer loaders for the US market

In 2013, Wacker Neuson developed a new platform for skid steer loaders tailored to the US market at its production site in Hörsching, near Linz in Austria. These new products will also open up new sales channels for other compact equipment in North America. Wacker Neuson presented the new skid steer loader models to selected major dealers in the fall of last year in Milwaukee, USA. The company will also be launching these models to further markets in North and South America in the fi rst half of 2014. The machines will initially be produced at the Hörsching site.

Products tailored to local market needs

In 2013, Wacker Neuson continued to establish and expand its sales and service structures in emerging economies such as South America, Africa and above all Asia. Each of these regions has its own industry standards and product quality requirements. The Group's new Value Line products target more price-sensitive customer groups. Last year, we expanded this portfolio signifi cantly and currently distribute mainly in China.

Expanding customer fi nancing options

Customers in all industries are increasingly making use of fi nancing options to maintain liquidity despite large investments. Today, a higher percentage of all new machine sales in the compact equipment and light equipment segments are purchased in conjunction with fi nancing plans. To provide customers with more information on fi nancing options, the Wacker Neuson Group entered a global collaboration with De Lage Landen (DLL) in July 2013. DLL is a specialist provider of fi nancing solutions for equipment manufacturers, dealers and distributors. In Germany, the partners work very closely together within the framework of a virtual joint venture to provide customers with tailored fi nancing solutions from DLL under the Wacker Neuson Finance, Weidemann Finance and Kramer Finance brands.

Changes to company organization and structure

In mid-2013, Wacker Neuson Holding Limited was founded in Samutprakarn in Thailand. The new entity functions solely as a holding company.

At the end of 2013, we founded a new company in Singapore which will serve as a regional headquarters for the ASEAN and SAARC markets.

Please refer to the Notes to the Consolidated Financial Statements for information on changes to the Group's participating interests that have had an impact on the consolidation structure.

Changes to the Executive Board

On January 22, 2013, the Supervisory Board of Wacker Neuson SE came to a mutual agreement with Mr. Werner Schwind that he would step down from the Executive Board on March 31, 2013 due to a difference in opinion regarding the future direction of the Group's international sales strategy. Mr. Schwind's areas of responsibility (sales, marketing, service, rental, training and logistics) have been entrusted to CEO Mr. Cem Peksaglam.

IV. Profi t, fi nancials and assets

The report on profi t, fi nancials and assets covers a total of 49 Group companies (previous year: 50) including the holding company, Wacker Neuson SE.

Profi t

• Record revenue and increase in profi t
• Forecast met despite currency fl uctuations
• Cost structure geared toward further growth

2013 got off to a diffi cult start for Wacker Neuson due to poor weather conditions. After this initial phase, however, the company was able to successfully implement its growth strategies. Group revenue rose by 6.2 percent to a new record high of EUR 1,159.5 million (previous year: EUR 1,091.7 million).

The Group uses hedging instruments to protect itself against unfavorable exchange rates in key currencies. However, these instruments are subject to certain assumptions and opinions from experts in the fi nancial sector. The euro performed very strongly against some key currencies in 2013. This increase in value had a negative impact on revenue in the Group's consolidated fi nancial statements for 2013, which are drawn up in euros.

Adjusted to discount these currency fl uctuations, revenue for 2013 rose 8.3 percent, which – all things being equal – would have resulted in revenue of EUR 1,182.3 million. Overall, Group revenue aligns with the company's forecast for 2013 of approximately EUR 1.2 billion. 1

1 Record-breaking revenue

Development of revenue and profi t margins 2009 to 2013

Wacker Neuson's revenue for 2013 rose by 6.2 percent relative to the previous year, reaching a new record high of EUR 1,159.5 million. Group revenue has thus increased by over 90 percent in just four years. 2013 was by no means an easy year, however. Sales of construction equipment fell at times, particularly in Europe, and this development had an impact on many manufacturers. The fact that Wacker Neuson's business continued to develop positively, however, confi rms that the Group's strategy is on the right path. With an EBITDA margin of 13.2 percent, the Group has met its profi t forecast for 2013 and increased profi tability relative to the previous year.

2009 profi t margins adjusted to discount goodwill impairment, restructuring costs.

Profi t developments

This positive revenue development is also refl ected in Group profi t. Group EBITDA for 2013 increased by 8.3 percent to EUR 153.4 million and the EBITDA margin amounted to 13.2 percent (2012: EUR 141.7 million; 13.0 percent).

Relative to previous years, the following items had an impact on profi t in 2013:

• Focus on greater market penetration in increasingly competitive core markets
• Expansion into new markets (entering markets, developing tailored product portfolios)
• Expenses related to bauma 2013, the world's largest construction equipment trade fair, which is held every three years in Munich

Cost developments

Manufacturing costs rose 6.1 percent to EUR 806.8 million (previous year: EUR 760.2 million) due to a rise in production volumes. This fi gure refl ects strong growth in the compact equipment segment (+12 percent), which typically involves higher manufacturing costs but also reports lower selling expenses.

Gross profi t for 2013 amounted to EUR 352.7 million (previous year: EUR 331.5 million). The gross profi t margin remained unchanged at 30.4 percent (previous year: 30.4 percent).

We continued to keep strict control over costs. Total sales, general and administrative (SG&A) expenses and research and development (R&D) expenses grew at a slower rate than revenue, increasing by 4.0 percent to EUR 259.5 million (previous year: EUR 249.5 million). The cost-to-revenue ratio improved on the previous year at 22.4 percent (previous year: 22.9 percent).

At EUR 166.8 million, selling expenses rose 3.9 percent on the previous year's fi gure of EUR 160.6 million. During the period under review, we implemented international market penetration measures, expanded our sales team and took part in major industry trade shows such as bauma in Munich.

R&D expenses decreased by 4.1 percent to EUR 25.7 million (previous year: EUR 26.8 million). Our expenses here were higher in 2012. This is because we were making targeted efforts to complete a wide range of new products in time for their launch at bauma in April 2013. In 2012, we also required more funds to ensure that our products met stricter legal regulations governing emissions.

A total of EUR 10.0 million in development costs was capitalized by all manufacturing companies in 2013 (previous year: EUR 7.4 million). The research and development ratio, including capitalized expenditure, remained at 3.1 percent (previous year: 3.1 percent), a healthy fi gure for maintaining our leading innovative position in many different areas.

General administrative costs amounted to EUR 67.0 million (previous year: EUR 62.2 million). The administrative cost ratio increased slightly to 5.8 percent (previous year: 5.7 percent).

Other operating income fell to EUR 14.3 million (previous year: EUR 15.1 million).

Other operating expenses amounted to EUR 12.8 million (previous year: EUR 12.2 million).

Profi t before interest, tax, depreciation and amortization (EBITDA) grew at a faster rate than revenue, increasing by 8.3 percent from EUR 141.7 million to EUR 153.4 million. The EBITDA margin amounted to 13.2 percent (previous year: 13.0 percent) and is therefore higher than our forecast for the year.

Write-downs in 2013 totaled EUR 58.6 million (previous year: EUR 56.8 million).

Profi t before interest and tax (EBIT) rose 11.6 percent to EUR 94.7 million. This corresponds to an improved EBIT margin1 of 8.2 percent (previous year: EUR 84.9 million; 7.8 percent). Purchase price allocation (PPA) from the merger with Neuson Kramer had the effect of reducing EBIT by EUR 2.6 million (previous year's PPA: EUR 4.0 million). The effects of PPA resulting from the 2007 merger with the Neuson Kramer Group will continue to have an – albeit a diminishing – impact until the end of 2017.

The fi nancial result amounted to EUR -6.8 million (previous year: EUR -7.1 million). Further information on the fi nancial result is available in the "Financial position" section p. 47 and under item 5 in the Notes to the Consolidated Financial statements. p. 116

Profi t before tax (EBT) grew to EUR 88.0 million (previous year: EUR 77.8 million). Tax expenditure was posted at EUR 26.4 million (previous year: EUR 23.1 million). The tax rate was 30.0 percent (previous year: 29.7 percent).

Group profi t amounted to EUR 61.2 million (previous year: EUR 54.1 million). This corresponds to an increase of 13.1 percent. The return on revenue thus improved to 5.3 percent (previous year: 5.0 percent).

	Q1	Q1 vs. Q4 prev. year	Q2	Q2 vs. Q1	Q3	Q3 vs. Q2	Q4	Q4 vs. Q3	Total year
2012 revenue in € million	274.0	3.8%	284.2	3.7%	254.5	-10.4%	279.1	9.7%	1,091.7
2013 revenue in € million	257.1	-7.9%	329.0	28.0%	276.3	-16.0%	297.1	7.5%	1,159.5
Change compared to previous year as a %	-6.2		15.8		8.6		6.5		6.2
EBITDA margin 2012 as a %	14.2		13.1		13.4		11.2		13.0
EBITDA margin 2013 as a %	9.7		13.6		14.9		14.3		13.2

Quarter-on-quarter comparison of revenue and earnings for 2012 and 2013

70.14 million ordinary shares were in circulation at all times during the period. This resulted in earnings per share of EUR 0.87 (previous year: EUR 0.77).

Quarterly developments

The table above shows quarterly revenue and profi t for 2013 and 2012. The fi rst quarter of 2013 performed below expectations due to the long winter in the northern hemisphere (-6.2 percent relative to the previous year). The situation had already improved by the second quarter, however (+15.8 percent relative to the previous year, +28.0 percent relative to Q1 2013). Results for the third quarter are typically lower than the second due to seasonal fl uctuations. Nevertheless, it was a positive period for Wacker Neuson (+8.6 percent on the previous year). During the fourth quarter, the Group benefi ted from the mainly mild winter conditions, which enabled construction activity to

continue longer into the winter season in Europe. Revenue for Q4 was thus 6.5 percent higher than in the previous year and 7.5 percent higher than Q3 2013. Earnings were also strong in this quarter, with the Group reporting an EBITDA margin of 14.3 percent.

Return on capital employed 2013

At EUR 859.4 million, average capital employed – in other words, the book value of all assets used for operational purposes – increased by 8.3 percent on the previous year as a result of the rise in revenue (previous year: EUR 793.6 million).

Return on capital employed (ROCE I) increased from the prior-year fi gure of 10.8 to 11.0 percent. ROCE II amounted to 7.7 percent (previous year: 7.6 percent). 2

Capital employed and ROCE II 2009 to 2013

Return on capital employed (ROCE) shows how much return a company realizes on the total capital it employs. It is calculated by comparing EBIT with the capital invested during a fi scal year. In 2013, Wacker Neuson realized a return of 11.0 percent before tax (ROCE I) and 7.7 percent after tax (ROCE II). The ROCE II fi gure was higher than the weighted average cost of capital (WACC), which came to 7.1 percent. Overall, the Group thus produced economic value added (EVA) in the amount of EUR 5.1 million in 2013.

The indicators presented here are also described in more detail in the "Corporate Governance and value management" section (see section I. The Wacker Neuson Group p. 35 ). They are calculated as follows on the basis of the fi gures reported in the Consolidated Financial Statements and the Notes:

Calculating ROCE I and II

in € K	2013	2012	2011	2010	2009
EBIT	94,748	84,899	123,750	36,700	-113,134
EBIT1	94,748	85,649	112,951	36,700	-12,796
Tax ratio acc. to income statement1 as a %	30.04	29.44	28.48	24.74	18.68
NOPLAT1,2 = EBIT – (EBIT x tax rate)	66,287	60,435	80,786	27,619	-10,406
Non-current assets	792,047	790,208	742,132	673,903	632,696
Goodwill	-236,259	-236,603	-237,509	-236,550	-236,016
Brands	-64,838	-64,838	-64,838	-54,040	-54,040
Other investments	0	0	-2,000	-5,478	-4,144
Loans	-25	-181	-310	-99	-99
Investment securities	-2,206	-3,449	-3,626	-3,540	-3,094
Present value (fi nance lease obligations)
of non-current assets	0	0	0	-4,381	-9,680
Non-current liabilities
Deferred taxes	-33,124	-33,475	-30,006	-23,957	-25,530
Non-current assets used in business	455,595	451,662	403,843	345,858	300,093
Current assets	530,360	554,597	471,207	356,314	339,042
Cash and cash equivalents	-15,533	-18,867	-16,890	-36,559	-85,024
Currency hedges	-4	0	-466	0	0
Interest rate swap	0	0	-6	-56	0
Trade payables	-44,702	-51,143	-62,362	-36,207	-21,251
Short-term provisions	-12,948	-12,804	-15,151	-12,317	-13,583
Current tax payable	-310	-1,834	-1,967	-470	-413
Other current liabilities	-59,759	-55,438	-57,102	-43,776	-29,102
Net working capital	397,104	414,511	317,263	226,929	189,669
Capital employed	852,699	866,173	721,106	572,787	489,762
Average capital employed	859,436	793,640	646,947	531,275	538,927
ROCE I (return on capital employed before tax) as a % (EBIT/average capital employed)	11.02	10.79	17.46	6.91	-2.37
ROCE II (return on capital employed after tax) as a %	7.71	7.61	12.49	5.20	-1.93

(NOPLAT/average capital employed)

1 2009 EBIT was reported before one-off write-downs on intangible assets in the amount of EUR 100.3 million.

The tax ratio in 2009 does not contain the deferred taxes in the amount of EUR 2.7 million that were payable on these write-downs.

2011 EBIT was reported before one-off write-ups on intangible assets in the amount of EUR 10.8 million.

The tax ratio in 2011 does not contain the deferred taxes in the amount of EUR 2.7 million that are payable on these write-ups.

2012 EBIT is recognized before one-off write-downs on intangible assets in the amount of EUR 0.8 million.

The tax ratio in 2012 does not contain the deferred taxes in the amount of EUR 1.3 million that were payable on these write-downs.

2 NOPLAT = Net Operating Profi t Less Adjusted Taxes. NOPLAT shows the annual profi t a company would achieve if it were fi nanced purely from equity.

Financial position

• Investments secure long-term growth prospects
• Positive free cash fl ow
• Working-capital-to-revenue ratio in target range

Principles and targets of fi nancial management at Wacker Neuson

Financial management at the Wacker Neuson Group aims to strike a healthy balance between fi nancial security, return on equity and earnings. To achieve this, we draw on set balance sheet ratios and key indicators to manage our fi nancing needs. The most important indicators here are net fi nancial debt – resulting from short-term net borrowings and long-term borrowings – and the equity ratio.

Key fi nancial instruments as at December 31, 2013

	Amount in € m	Due	Tax rate as a %
Schuldschein loan agreement (Tranche I)	89.7	2017	3.00
Schuldschein loan agreement (Tranche II)	29.9	2019	3.66
Borrowings from banks	72.9	n/a	variable

Our aim is to fund day-to-day operations with cash fl ow from operating activities. Surplus funds are invested in liquid, safe instruments where they earn the prevailing interest rates and are available to fi nance sustainable growth.

Statement of free cash fl ow changes

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

In 2012, Wacker Neuson SE placed Schuldschein loan agreements with cooperative, savings and private banks. These loan agreements were used to convert short-term borrowings into long-term borrowings, thus optimizing the Group's capital structure.

Ensuring payment fl ow through liquidity management

The main objective of liquidity management is to ensure that the Wacker Neuson Group has suffi cient funds to meet payment obligations as they arise. To this end, the Group maintains cash pools in which most of its companies are incorporated. The participants can draw on the positive cash pool balances provided by Wacker Neuson SE up to individually fi xed, fair market limits. Interest accrues on deposits and withdrawals effected by participants in keeping with the market conditions prevailing in the respective currency and company.

Positive free cash fl ow

As planned, Wacker Neuson fi nanced day-to-day operations with cash fl ow from operating activities. At the close of the year, cash fl ow amounted to EUR 132.6 million (previous year: EUR 13.6 million). This was due on the one hand to the increase in the volume of business and, on the other, to the reduction of inventories.

in € K	2013	2012	2011	2010	2009
Cash fl ow from operating activities	132,584	13,602	43,581	44,918	138,255
Purchase of property, plant and equipment	-71,793	-93,944	-104,494	-75,618	-36,281
Purchase of intangible assets	-14,968	-10,085	-9,511	-9,344	-7,120
Proceeds from the sale of marketable securities	0	0	0	0	1,996
Proceeds from the sale of property, plant and equipment,
intangible assets and non-current assets held for sale	10,887	4,156	8,526	1,205	3,753
Change in consolidation structure	0	0	0	-1,467	-460
Cash fl ow from investment activities	-75,874	-99,873	-105,479	-85,224	-38,112
Change in consolidation structure	0	0	0	+1,467	+460
Free cash fl ow	56,710	-86,271	-61,898	-38,839	100,603

operations as planned in 2013. Following the reduction in working capital, cash fl ow from operating activities amounted to EUR 138.6 million (previous year: EUR 13.6 million). The reduction in investments in 2013 relative to the previous year resulted in a clearly positive free cash fl ow of EUR 56.7 million. The Group was thus able to reduce net fi nancial debt. The dividend payout to shareholders amounted to EUR 21.0 million. At EUR 15.5 million, the liquidity situation remained comfortable as at December 31, 2013.

Cash fl ow from investment activities, which only covers investments that have been paid, amounted to EUR -75.9 million within the framework of planned investments realized (previous year: EUR -99.9 million). We reduced our investments in 2013. This contrasts with previous years, when we channeled a signifi cant amount of funds into a wide range of measures, including projects to expand our production capacities.

Cash fl ow from fi nancing activities came to EUR -60.1 million (previous year: EUR 88.8 million). The Schuldschein loan agreements that we placed in the amount of EUR 120 million increased cash fl ow in 2012. The dividend payment of EUR 35.1 million reduced cash fl ow correspondingly. The company made a dividend payout of EUR 21.0 million in 2013.

At the closing date, 46.9 percent of liabilities were current and 53.1 percent non-current.

Free cash fl ow corresponds to cash fl ow from operating activities plus cash fl ow from investment activities1 . In 2013, Wacker Neuson again generated clearly positive free cash fl ow and reduced net debt. The sharp rise in cash fl ow from operating activities and the reduction in investments relative to previous years meant that free cash fl ow rose to EUR 56.7 million (previous year: EUR -86.3 million).

Comfortable liquidity situation

Wacker Neuson was able to meet liquidity needs in 2013 through its own liquid funds. Credit line commitments provided additional backing. At the closing date, less than 45 percent of these had been drawn. The reduction in net fi nancial debt did not have a noticeable impact on Wacker Neuson's credit line structure. For further details on the terms and interest conditions of credit lines, please refer to item 20 in the Notes to the Consolidated Financial Statements. p. 130

The Group had liquid funds to the value of EUR 15.5 million (previous year: EUR 18.9 million) at year-end. Liquid funds are only held by companies that do not participate in the cash pool system. The slight drop in liquid funds is intentional, refl ecting the company's decision to reduce short-term borrowings and associated interest payments. 3

Refi nancing developments

We continue to regard the banking sector as a volatile option for refi nancing, also in light of rising refi nancing rates. However, Wacker Neuson benefi ts from its outstanding credit rating, which is also acknowledged by the banks. The Deutsche Bundesbank confi rmed that Wacker Neuson SE was eligible for credit in 2013.

Our aim remains to organize our own direct refi nancing options irrespective of external market forces.

If available excluding changes to the consolidation structure and plus amounts accruing from the issue of new shares including the costs of raising capital.

4 Working capital developments

The Wacker Neuson Group aims to keep working capital as low as possible. Due to effi cient working capital management, the working-capital-to-revenue ratio amounted to 39 percent.

Working capital developments

We optimized our inventory management in recent years to improve our delivery capabilities and react rapidly to global market developments. This led to an increase in working capital. At December 31, 2013, average working capital (average capital held in current assets) amounted to EUR 454.9 million. This corresponds to a 10.0 percent increase on the previous year's fi gure of EUR 413.7 million. The working-capital-to-revenue ratio came to 39.2 percent (previous year: 37.9 percent). Working capital amounted to EUR 453.1 million at the closing date (previous year: EUR 456.8 million), a decrease of 0.8 percent on the previous year's closing date. If we compare the working capital reported at the closing date against the fi gure based on annualized Q4 2013 revenue, the working-capital-to-revenue ratio increased to 38.11 percent, which is within the range we expected.

The Group thus succeeded in reducing the working capital fi gure reported at September 30, 2013 (EUR 466.5 million) by EUR 13.4 million (2.9 percent) by the closing date, even though revenue for Q4 2013 was 7.5 percent higher than in the third quarter.

Inventory decreased 7.3 percent in 2013 to EUR 333.8 million (previous year: EUR 360.1 million). Trade payables fell to EUR 44.7 million (previous year: EUR 51.1 million). Trade receivables increased 11.0 percent to EUR 164.0 million (previous year: EUR 147.8 million) due to the rise in revenue. 4 In certain cases, particularly outside of Central European markets, Wacker Neuson provides customers with longer payment terms in line with standard industry practices.

				Calculation of average working capital
--	--	--	--	----------------------------------------	--	--	--

in € K	2013	2012	2011	2010	2009
Inventory	333,812	360,121	274,492	183,980	148,301
+ Trade receivables	163,953	147,838	158,358	121,487	90,837
- Trade payables	44,702	51,143	62,362	36,207	21,251
Working capital	453,063	456,816	370,488	269,260	217,887
Average working capital =
(opening inventory + closing inventory)/2	454,939	413,652	319,874	243,573	260,908
Average working capital to revenue ratio	39.2%	37.9%	32.3%	32.1%	43.7%

Note on calculation: 453.1/(297.2*4) = 38.1 percent.

5 Cash fl ow and investments

In 2013, the Group invested EUR 86.8 million (EUR 71.8 million excluding intangible assets). This is EUR 22.1 million less than in 2012. Although investments exceeded writedowns by a factor of 1.5, we were still able to achieve a positive free cash fl ow in the amount of EUR 56.7 million.

1 2009 depreciation: Adjusted to refl ect write-downs on intangible assets in the amount of EUR 100.3 million.

2011 depreciation: Adjusted to refl ect write-ups on intangible assets in the amount of EUR 10.8 million.

Capital expenditure Depreciation and amortization Operating cash flow

Substantial investments for future growth

Wacker Neuson continued to invest in its future growth in 2013, although spending in this area was at a signifi cantly lower level than in 2012 (the new compact equipment production site in Hörsching pushed up investments in 2012). During the period

under review, we invested around EUR 86.8 million (2012: EUR 104.0 million), EUR 15.0 million of which was channeled into property plant and equipment (capitalization of research and development activities, software, etc.). This fi gure is within our expected range of around EUR 80 million.

	2013	2012	2011	2010	2009
Risk-free return (rf) as a %	2.75	2.50	2.75	3.00	4.25
Market risk premium (MRP) as a %	6.00	6.00	5.5	5.00	5.00
Leverage beta (ßL )	1.037	1.094	1.001	1.050	1.028
Average interest-bearing liabilities, € K	288,061	219,921	108,149	88,053	130,452
Interest expense (D x rD), € K	7,971	7,731	4,525	4,333	4,987
Cost of debt (rD) as a %	2.77	3.52	4.18	4.92	3.82
Group tax rate (s) as a %	30.04	29.72	28.16	24.74	36.52
Share price at closing date (k) €	11.49	10.35	9.55	13.00	8.20
Number of shares (n) in thousands	70,140	70,140	70,140	70,140	70,140
Market capitalization (E), € K	805,558	725,949	669,837	911,820	575,148
Cost of equity (rE) as a %	8.97	9.06	8.26	8.25	9.39
Percentage of fi nancing that is equity [E/(E+D)] as a %	73.66	76.75	86.10	91.19	81.51
Percentage of fi nancing that is debt [D/(E+D)] as a %	26.34	23.25	13.90	8.81	18.49
Weighted average cost of capital (WACC) as a %	7.12	7.53	7.53	7.85	8.10

Basis for calculating (WACC1 )

WACC: (percentage of fi nancing that is equity x cost of equity) + (percentage of fi nancing on average that is debt x cost of debt) x (1 – tax rate).

WACC = (rf +MRPxßL ) x E/(E+D)+rDx(1-s)xD/(E+D).

WACC stands for weighted average cost of capital. It is calculated as the mean value of equity and debt costs, whereby tax benefi ts are to be deducted from the cost of debt. Here, equity is taken at market value at the closing date.

In 2012, the calculation of WACC was adjusted. For the fi rst time, the average interest-bearing liabilities were calculated precisely for each month. The previous year's fi gures have been adjusted in line with this new calculation.

Calculation of the economic value added (EVA)

	2013	2012	2011	2010	2009
ROCE II as a %	7.71	7.62	12.49	5.20	-1.93
WACC as a %	7.12	7.53	7.53	7.85	8.10
ROCE - WACC as a %	0.59	0.09	4.96	-2.65	-10.03
Average capital employed in € m	859.4	793.6	646.9	531.3	538.9
EVA in € m	5.1	0.7	32.1	-14.1	-54.1

Investments 20131

as a % of total investment

Total investments for 2013: EUR 86.8 million (property, plant and equipment and intangible assets).

We invested around EUR 58 million in the expansion of sales activities, programs aimed at increasing sales and our own rental fl eet (for Central Europe). This accounted for around 66 percent of total investment. The equipment and machines that we rent must be below a certain average age. Our business model therefore also includes the sale of used equipment. Wacker Neuson equipment has a high resale value due to its outstanding quality

the company itself. Part of our investment budget is therefore earmarked for replacing older machines in our rental fl eet.

and durability, coupled with the fact that it is maintained by

Renewal/maintenance activities and other investments accounted for around 16 percent (EUR 14.3 million) of total investments.

The investment (property, plant and equipment plus intangible assets) to depreciation factor amounted to 1.5 (previous year: 1.8). 5

Producing value

We also include the key indicator weighted average cost of capital (WACC) for the Group in our fi nancial reports. A company is producing value for its investors if return on capital employed (ROCE) exceeds WACC. For shareholders and lenders, WACC indicates the return they might expect on the funds or capital they have provided. It also gives a company a good indication of the type of return it needs to generate on prospective investments.

The company produced value in 2013. At 7.71 percent (previous year: 7.62 percent), ROCE II (return on capital employed after tax) was higher than WACC, which came to 7.12 percent (previous year: 7.53 percent).

Economic value added (EVA) is calculated by multiplying the difference between ROCE II and WACC by the mean capital invested. This fi gure thus represents the net amount of economic profi t obtained from capital employed and shows how much value a company has gained or lost in a specifi c year. Following on from a slightly positive EVA of EUR 0.7 million in 2012, Wacker Neuson managed to increase economic value added to EUR 5.1 million in the fi scal year under review.

Assets

• Solid balance sheet structure underpins further growth
• High equity ratio compared with industry peers
• Net fi nancial debt reduced

The balance sheet total fell 1.7 percent during the fi scal year to EUR 1,322.4 million (previous year: EUR 1,344.8 million).

Return on assets (ROA) after tax and before minority interests rose to 4.7 percent (previous year: 4.3 percent). Return on assets expresses the ratio between profi t/loss for the period before minority interests and the average balance sheet total. Deferred tax is always deducted when calculating ROA. In 2013, deferred tax liabilities amounted to EUR 30.3 million (previous year: EUR 31.7 million).

Assets rose to EUR 749.6 million (previous year: EUR 746.5 million).

At December 31, 2013, goodwill amounted to EUR 236.3 million (previous year: EUR 236.6 million). At EUR 108.5 million, intangible assets were slightly higher than the previous year's level (previous year: EUR 103.2 million).

Due to an increase in production volumes, the value of fi nished products in 2013 grew from EUR 237.7 million to EUR 240.5 million. Current assets amounted to EUR 530.4 million (previous year: EUR 554.6 million).

Strong return on equity plus high equity ratio

Net profi t for the period pushed equity before minority interests up to EUR 935.5 million (previous year: EUR 914.7 million). At 70.7 percent (previous year: 68.0 percent), the equity ratio before minority interests remained high for the industry. The company's share capital remained unchanged at EUR 70.14 million.

Bolstered by profi t fi gures after minority interests, return on equity (ROE) amounted to 6.6 percent for 2013 (previous year: 6.1 percent).

Non-current liabilities fell slightly by 1.9 percent to EUR 203.2 million (previous year: EUR 207.1 million). Long-term borrowings also fell to EUR 130.6 million (previous year: EUR 134.8 million). At EUR 39.5 million, long-term provisions were higher than the previous year's level (previous year: EUR 38.9 million). Deferred tax liabilities amounted to EUR 33.1 million (previous year: EUR 33.5 million).

Total current liabilities fell to EUR 179.8 million (previous year: EUR 219.5 million). This is mainly due to a decrease in trade payables and short-term borrowings from banks. Trade payables fell to EUR 44.7 million (previous year: EUR 51.1 million). Shortterm borrowings decreased to EUR 62.1 million (previous year: EUR 98.3 million). This fi gure also includes the current portion of long-term borrowings.

Calculating ROE

in € K	2013	2012	2011	2010	2009
Profi t/loss after minority interests	61,167	54,8811	77,7322	23,934	-12,4663
Equity before minority interests	935,481	914,658	901,064	830,618	789,049
Average equity before minority interests	925,070	907,861	865,841	809,834	849,069
ROE as a %	6.61	6.05	8.98	2.96	-1.47
(profi t/loss after minority interests / average equity before

minority interests)

1 2012 fi gures are reported before one-off write-downs on intangible assets in the amount of EUR 0.8 million.

2 2011 fi gures are reported before one-off write-ups on intangible assets in the amount of EUR 10.8 million

including the associated deferred tax liabilities in the amount of EUR 2.7 million.

3 2009 fi gures are reported before one-off write-downs on intangible assets in the amount of EUR 100.3 million including the associated deferred taxes in the amount of EUR 2.7 million.

Net fi nancial debt at December 31, 2013 amounted to EUR 177.2 million (previous year: EUR 214.2 million). Gearing1 decreased from 23.4 percent at the start of the year to 18.9 percent at the closing date. The Group's fi nancing structure thus remains very strong for the industry. Please refer to item 30 in the Notes ("Risk management/capital management") for further information on calculating net fi nancial debt. p. 142

Financial structure

Please refer to the "Financial liabilities" section (item 20) in the Notes to the Consolidated Financial Statements for information on the fi nancing structure, fi nancial covenants and the terms of covenants. p. 130

Off-balance-sheet assets and fi nancial instruments

In addition to the assets shown in the consolidated balance sheet, the Group also makes customary use of assets that cannot be recognized in the balance sheet. These generally refer to leased, let or rented assets (operating leases). Please refer to the "Other fi nancial liabilities" section (item 25), in the Notes to the Consolidated Financial Statements for detailed information. p. 135

The Group utilizes off-balance-sheet fi nancial instruments such as the sale of receivables to a limited extent only. In connection with the sale of receivables, customers are offered fi nancing models, in part interest-subsidized, which can also be reported as factoring in the wider context. However, these schemes are only used to fi nance sales and are not a major source of funding for the Group.

Judgments and estimates

During the past fi scal year, no voting rights were exercised and no balance-sheet disclosures made which, if exercised or disclosed differently, would have had a material effect on the net assets, fi nancials and profi ts of the Group.

Information about the use of estimates, assumptions and judgments made, especially in connection with the valuation of tangible and intangible assets, goodwill, doubtful debts, pension liabilities, provisions, contingencies and information about tax expenses is presented in the Notes to the Consolidated Financial Statements.

Net fi nancial position

in € K	2013	2012	2011	2010	2009
Long-term borrowings	-130,594	-134,807	-15,261	-32,218	-33,583
Short-term borrowings	-61,698	-97,853	-91,654	-5,958	-14,889
Current portion of long-term borrowings	-428	-437	-421	-12,109	-11,698
Cash and cash equivalents	15,533	18,868	16,890	36,559	85,024
Total net fi nancial position	-177,187	-214,229	-90,446	-13,726	24,854

6 Healthy assets and fi nances

Wacker Neuson is in a healthy fi nancial position with a high equity ratio of around 71 percent and gearing of around 19 percent. In 2013, Wacker Neuson reduced net fi nancial debt by EUR 37 million to EUR 177 million. The Group has only drawn on just under 45 percent of its credit lines and thus has suffi cient fi nancial headroom.

General overview of economic situation

The Group again reported record revenue in 2013. Profi tability was also above the previous year. With an equity ratio before minority interests of around 71 percent and gearing of 19 percent, the Group's fi nancials and assets remain strong, also for the industry. At the close of 2013, the Group was again in a healthy fi nancial position. In light of the company's secure liquidity situation and the fact that the company has still not drawn on over 55 percent of its credit lines, Wacker Neuson will be able to meet all of its fi nancial obligations in the current year. In line with its strategy, the Group is committed to further growth – at an international level in particular – and increasing its presence in core markets. 6

V. Profi t, fi nancials and assets of Wacker Neuson SE (condensed version according to HGB)

The Annual Financial Statements of Wacker Neuson SE have been prepared in accordance with the provisions of the German Commercial Code (HGB) and the German Stock Corporation Law (Aktiengesetz). For the 2013 fi scal year, the Management Report of Wacker Neuson SE has been combined with the Group Management Report.

The Annual Financial Statements describe the results of business activities conducted by Wacker Neuson SE during fi scal 2013. Here it should be noted that the company has been operating as a management and holding company since fi scal 2011.

Operational activities in Germany (sales, production and logistics) were dropped down from the parent company Wacker Neuson SE to separate companies in 2011. The three new affi liates are each structured as GmbH & Co. KG companies with headquarters in Munich. They are wholly owned by Wacker Neuson SE.

All operational business segments have now been dropped down from Wacker Neuson SE. As a result, the company now only performs global, Group-wide management and holding activities and no longer generates operating revenue.

The corporate purpose of Wacker Neuson SE is holding and managing shares in companies that are directly or indirectly involved in the development, manufacture and sale of machines, equipment, tools and processes – particularly for the construction and agricultural industries – as well as the provision of all associated services.

Only central Group functions based in Munich remain at Wacker Neuson SE together with Group-wide and/or non-transferrable contractual relationships and other legal relationships, receivables and liabilities. The holding is responsible for all

strategic functions of Group management. The Group Executive Board plus all central Group-wide departments are with the holding company. These include Group controlling, Group accounting, treasury, legal (in-cluding patent management), internal auditing, compliance, real estate, investor relations and corporate communication. In addition to the above-mentioned departments, the holding company also has dedicated employees for IT, marketing and HR to steer these corporate functions at Group level. The company employed 39 people on average in fi scal 2013

In its capacity as a management and functional holding, the company also delivers administrative, fi nancial, commercial and technical services for the holding entities under the terms and conditions customary in the market. Some of these service contracts are reciprocal agreements.

The income statement is prepared in the "cost-of-sales" format.

Income statement for Wacker Neuson SE (condensed version)

in € K	2013	2012
Revenue	0	0
Cost of sales	0	0
Gross profi t	0	0
Sales expenses	0	0
General and administrative
expenses	-26,121	-22,825
Other income	28,137	25,476
Other expenses	-5,648	-3,715
Dividends	23,685	24,080
Income from other securities
and long-term loans	16,208	20,297
EBIT	36,261	43,313
Interest and similar income	6,144	4,541
Write-downs on fi nancial assets	-3,942	0
Interest and similar expenses	-6,029	-5,090
Expenses from losses absorbed	0	0
Profi t before tax (EBT)	32,434	42,764
Taxes on income and earnings	-5,343	-6,099
Other taxes	-182	-88
Net profi t/loss	26,908	36,577
Profi t/loss carried forward	20,488	4,953
Withdrawal from/allocation to other
revenue reserves	0	0
Retained earnings	47,396	41,530

General administrative costs amounted to EUR 26.1 million in fi scal 2013 (previous year: EUR 22.8 million). Other income came to EUR 28.1 million. This includes remuneration for services rendered within the Group. In 2012, other income was posted at EUR 25.5 million.

The dividend payment made by Wacker Neuson SE to its shareholders is dependent on the performance of its holding entities and the profi t that they yield. In 2013, Wacker Neuson SE received EUR 23.7 million in dividends (previous year: EUR 24.1 million).

On April 4, 2012, Wacker Neuson SE concluded a profi t transfer agreement with Weidemann GmbH, based in Diemelsee-Flechtdorf, Germany. The proceeds from the profi t transfer agreement came to EUR 16.2 million in the period under review (previous year: EUR 20.3 million).

Income from shareholdings in companies (dividends plus proceeds from the profi t transfer agreement) thus amounted to EUR 39.9 million (previous year: EUR 44.4 million).

Wacker Neuson SE realized profi t before interest and tax (EBIT) of EUR 36.3 million (previous year: EUR 43.3 million).

Profi t before tax (EBT) came to EUR 32.4 million (previous year: EUR 42.8 million). After tax, this results in profi t for the period of EUR 26.9 million (previous year: EUR 36.6 million).

Assets and fi nancials

Enterprise Resource Planning system.

Group software licenses, primarily for the ERP system1 as well as for the operating systems and offi ce applications deployed across the Group are capitalized at Wacker Neuson SE. The holding company provides Group members with these licenses in return for a fee. As in the previous year, Wacker Neuson SE reported intangible assets of EUR 5.7 million (previous year: EUR 5.7 million) for licenses and similar rights at December 31, 2013.

The property held by Wacker Neuson SE refers to the site of the Group headquarters in Milbertshofen, Munich. Wacker Neuson SE reported property, plant and equipment in the amount of EUR 37.0 million at December 31, 2013 (previous year: EUR 38.7 million).

The fi nancial assets reported by Wacker Neuson SE refer to its holdings in all Group members within and beyond

Balance sheet of Wacker Neuson SE (condensed version)

in € K	Dec. 31, 2013	Dec. 31, 2012
Intangible assets	5,702	5,700
of which: licenses for industrial
property rights and similar	5,100	4,880
of which: payments on account	602	820
Property, plant and equipment	36,997	38,717
of which: land, land titles and
buildings on third-party land	35,042	36,212
of which: machinery and
equipment	1	2
of which: offi ce and other equipment	1,955	2,400
of which: payments on account/
assets under construction	0	103
Financial assets	734,276	738,220
of which: shareholdings in
affi liated companies	733,524	737,467
of which: loans to affi liated
companies	750	750
of which: other loans	2	3
Assets	776,975	782,636
Trade receivables	5	0
Receivables from affi liated
companies	199,829	206,089
Other assets	1,127	1,645
Liquid funds	18,489	25,629
Current assets	219,450	233,363
Deferred items	684	568
Balance sheet total (assets)	997,108	1,016,567
Equity	784,314	778,447
of which: subscribed capital	70,140	70,140
of which: capital reserves	583,999	583,999
of which: revenue reserves	82,778	82,778
of which: retained earnings	47,396	41,530
Special tax-free reserves	53	62
Other provisions	13,059	11,829
Liabilities	199,672	226,229
Borrowings from banks	54,729	89,970
Trade payables	553	547
Payables to affi liated companies	21,327	12,518
Other liabilities	123,063	123,193
Deferred items	10	0
Balance sheet total (liabilities)	997,108	1,016,567

Germany. At December 31, 2013, fi nancial assets amounted to EUR 734.3 million (previous year: EUR 738.2 million). The slight drop resulted from an impairment loss in the amount of € K 3,942 (previous year: € K 0) in line with Section 253 (3) sent. 3 of the HGB.

Total assets attributable to Wacker Neuson SE amounted to EUR 777.0 million at the closing date (previous year: EUR 782.6 million).

Wacker Neuson SE does not hold any inventory.

Trade receivables due from customers and sales partners within Germany and beyond also accrue almost entirely to the operational companies. Receivables from associated companies of Wacker Neuson SE fell to EUR 199.8 million (previous year: EUR 206.1 million). Wacker Neuson SE receivables are mainly related to its shareholdings in Group members, in particular resulting from cash pool borrowings, but also from external loans and from the Schuldschein loan agreement.

Wacker Neuson SE reported liquid funds of EUR 18.5 million at December 31, 2013 (previous year: EUR 25.6 million).

Total current assets amounted to EUR 219.5 million at the closing date (previous year: EUR 233.4 million). The balance sheet total is reported at EUR 997.1 million (previous year: EUR 1,016.6 million).

At December 31, 2013, the company's equity amounted to EUR 784.3 million (previous year: EUR 778.4 million). Wacker Neuson SE's share capital remained stable at EUR 70.14 million. It is divided into 70,140,000 individual no-par-value nominal shares.

Other provisions amounted to EUR 13.1 million (previous year: EUR 11.8 million).

Wacker Neuson SE has signifi cant external fi nancial liabilities as a result of the cash pool and other fi nancing agreements with Group companies. These liabilities are managed by the holding's corporate treasury department, which is the central instance responsible for securing and managing liquidity across the Group. Borrowings from banks fell to EUR 54.7 million (previous year: EUR 90.0 million). External loans taken out by Wacker Neuson SE will be extended to affi liates at prevailing market conditions

Payables to associated companies include fi xed-term, inter company loans and current liabilities from the cash pool. At the closing date, payables to associated companies amounted to EUR 21.3 million (previous year: EUR 12.5 million).

Dividend trends (the fi gures shown relate to the fi scal year in which the dividend was realized)

	20131	2012	2011	2010	2009
Total payout (€ m)	28.06	21.04	35.07	11.9	–
Payout ratio (as a %)	45.9	38.9	40.9	49.8	–
Eligible shares (in m)	70.14	70.14	70.14	70.14	70.14
Dividend per share (in €)	0.40	0.30	0.50	0.17	–

1 Dividend proposal for the AGM on May 27, 2014.

Other liabilities amounted to EUR 123.1 million (previous year: EUR 123.2 million) and include the Schuldschein loan agreements that the company raised in 2012.

In summary, company management feels that Wacker Neuson SE's fi nancial position remains strong.

Dividend proposal

The Executive Board and Supervisory Board of Wacker Neuson SE will propose a dividend of EUR 0.40 per eligible share (previous year: EUR 0.30) at the AGM on May 27, 2014 (based on a total of 70.14 million eligible shares). In total therefore, the company will be paying out EUR 28.1 million (previous year: EUR 21.0 million). The distribution ratio pans out at around 46 percent (previous year: around 39 percent) based on Group profi t for the year in the amount of EUR 61.2 million (previous year: EUR 54.1 million).

The auditing company Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Munich, Germany, has audited the Annual Financial Statements of Wacker Neuson SE in full and approved them without qualifi cation. The audited report will be published in the electronic Federal Gazette. It can also be downloaded from www.wackerneuson.com/fi nanzberichte (only in German).

Forecast of Wacker Neuson SE

Wacker Neuson SE believes that it will continue to receive suffi cient income from its participating interests in future for it to make appropriate dividend payments to its shareholders.

Statement from the Executive Board pursuant to Section 312 AktG

The following declaration concludes the Executive Board report regarding relations with related entities.

"Our company received appropriate compensation in respect of all transactions entered into with associated companies. These transactions did not put the company at a disadvantage. No measures were taken during the year under review that would have required reporting. This assessment is based on the circumstances known to us at the time of transactions subject to reporting."

Executive Board

VI. Segment reporting by region

• Europe company's biggest revenue driver continues to grow
• Americas report strongest growth
• Asia-Pacifi c revenue down slightly

With its broad product and service portfolio, the Wacker Neuson Group not only supplies construction companies, but also dealers, rental organizations and importers across the globe.

Segment reporting provides an overview of business developments according to region (Europe, Americas and Asia-Pacifi c). We also break revenue down according to business segment (light equipment, compact equipment and services).

We are happy to report that Wacker Neuson increased revenue across all core markets and business segments in 2013. The Asia-Pacifi c region, however, performed slightly below the previous year's level due to a market downturn in Australia coupled with exchange rate fl uctuations.

25.6 Americas (25.3) 3.1 Asia-Pacific (3.6)

Europe

Europe – company's core market – report revenue growth

The Europe region accounts for the lion's share of Group revenue at 71.3 percent (previous year: 71.1 percent). Revenue for the period increased by 6.4 percent to EUR 826.2 million (previous year: EUR 776.4 million). Profi t before interest and tax (EBIT) rose signifi cantly to EUR 79.8 million (previous year: EUR 59.4 million).

Germany was again the strongest revenue driver in Europe. Business on the German market in 2013 benefi ted from ongoing construction and infrastructure maintenance projects on the one hand and from the revival in residential construction on the other. New product launches and an enhanced service offering also strengthened our position in the German market.

In the rest of Europe, revenue development varied from region to region. Sales in Southern European countries, for example, continued to fall. In contrast, Central and Northern Europe developed positively. South Africa, Turkey and Russia (Wacker Neuson includes these countries in its Europe segment although – geographically speaking – they are located outside of the region) also developed well.

The fact that Wacker Neuson was able to increase its revenue in Europe in spite of the diffi cult market conditions clearly shows that our product portfolio is targeted at growth segments and that our European sales strategies – including diversifi cation into other industries – have yielded positive results. Revenue growth was fueled by rising demand across various other industries in Europe, including the gardening, landscaping and industrial sectors.

Americas

Revenue at all-time high

In 2013, revenue in the Americas region rose 7.6 percent relative to the previous year to reach EUR 297.2 million (previous year: EUR 276.2 million). This was the Group's highest ever annual revenue fi gure in the region. Exchange rate fl uctuations had a negative impact on revenue in some markets, especially in South America.

The average euro/dollar exchange rate in 2013 was EUR 1 to USD 1.33 (previous year: EUR 1 to USD 1.29). Discounting exchange rate fl uctuations, revenue in the region as a whole grew by 12.1 percent.

At 25.6 percent, the region's share of total revenue was slightly above the previous year's level (previous year: 25.3 percent). Profi t before interest and tax (EBIT) fell from EUR 29.1 million to EUR 21.4 million.

As in previous years, North America accounted for the lion's share of revenue in this region. In local currency, revenue in the US and Canada again grew at double-digit rates from a high level. Although current uncertainties had an impact on demand in Brazil, the Group continues to view Brazil as a promising market.

As anticipated, rental fi rms in the US invested in new equipment and machines (depending on the age of their existing fl eets). Our own dealers also reported increased product sales. We are gradually expanding our dealer network in North and South America to ensure we have the reach to distribute both our light and compact equipment offerings over as wide an area as possible here.

Our strategy to distribute compact equipment in North and South America had a positive impact on revenue. Demand for our compact offering was particularly high in the US and Canada.

Asia-Pacifi c

Exchange rate fl uctuations impact revenue growth In the Asia-Pacifi c region, revenue dropped 7.7 percent from EUR 39.1 million the previous year to EUR 36.1 million. Here too, the euro's strong performance against local currencies strongly impacted our revenue fi gure, which actually rose by 0.3 percent discounting exchange rate fl uctuations. The region's share of total revenue was 3.1 percent (previous year: 3.6 percent). Segment profi t before interest and tax (EBIT) amounted to j ust a few thousand euro (previous year: EUR 2.1 million).

While revenue in China was up, Australia and New Zealand fi gures were marked by a reticence to invest among key accounts. This was due in particular to a drop in demand from the mining sector, which meant that large dealers and rental chains adopted a cautious approach to investment in machinery.

Growing strategic importance of emerging markets

Emerging economies such as China and India are still at the early stage of infrastructural and industrial development, which primarily requires heavy equipment – for example, to build road and rail networks as well as tunnels, power plants and pipelines. Nevertheless, demand in these geographies is growing for repair and maintenance work on infrastructure, especially in the megacities, and this trend is bolstering our product sales.

China and South-East Asia are key future markets for us – notwithstanding short-term uncertainties surrounding growth and currency fl uctuations. We established our fi rst affi liates in the region some years ago. We have been playing an active role in the Indian market since 2008 through our affi liate Wacker Neuson Equipment Private Ltd. based in Bangalore. Towards the end of 2013, we established a new affi liate in Singapore – Wacker Neuson (Singapore) PTE. LTD – which will act as regional headquarters for the ASEAN1 and SAARC2 countries.

ASEAN: Association of Southeast Asian Nations.

SAARC: South Asian Association for Regional Cooperation.

EBIT by region 2009 to 2013 in € million

2013 vs. 2012 2009 2010 2011 2012 2013

Adjusted to discount write-downs on intangible assets in the amount of EUR 100.3 million.

Adjustment for reversal of brand impairment in the amount of EUR 10.8 million.

In order to expand our product portfolio and secure a stronger competitive position in Asia, we started to introduce light equipment products tailored to local market dynamics in the second half of 2012. The bulk of these products are made in the region, for the region. We have also launched compact equipment in Asia, primarily in China.

In 2013, Wacker Neuson's revenue from emerging markets (for a defi nition of the term, see "II. General background" p. 38 ) rose by around 6 percent on the previous year. This fi gure put growth on a par with that reported for established markets. The region's share of total revenue in 2013 remained unchanged at 12 percent.

VII. Segment reporting by business segment

• Demand for light equipment remains high
• Growth strongest in the compact equipment segment
• Product strategy for emerging markets in place

in € K	2013	2012
Light equipment	407,169	400,404
Compact equipment	519,955	466,455
Services	248,453	239,155
Less cash discounts	-16,055	-14,298
= Total revenue	1,159,522	1,091,716

Revenue by business segments

Light equipment

Demand for high-quality products remains strong The light equipment business segment covers the Wacker Neuson Group's activities within the strategic business fi elds of concrete technology, compaction and worksite technology. Production is synchronized with demand and delivery times are short. Orders are usually delivered within a few days. The Group

therefore does not report an order backlog for this segment.

Our products complement each other perfectly and so customers often deploy several items of equipment simultaneously. We are committed to making high-quality equipment that excels under what are usually harsh conditions. This commitment has enabled us to secure our leading market position, particularly in Europe and the US. Demand remained consistently high throughout the four quarters of the year. We see this as a positive sign of a long-term trend as the light equipment segment is traditionally an early mover in economic cycles. Light equipment revenue before discounts for the period under review rose 1.7 percent to EUR 407.2 million (previous year: EUR 400.4 million). The effects of currency fl uctuations played a signifi cant role here too; when adjusted to discount currency fl uctuations, revenue rose by 5.6 percent. This segment's share of total revenue was 34.6 percent (previous year: 36.2 percent) as there was a bigger increase in compact equipment revenue.

Product innovations and new models played a key role in the light equipment segment's positive performance over the last year. At bauma 2013, two new lighting technology products were unveiled: a light balloon (LBS 80M) and an electrohydraulic telescopic mast (LTN 6LV). Innovations in our demolition portfolio included new gasoline fl oor saws and the world's most powerful breaker (EH 100 with 100 joules of single-stroke impact). New products were also launched in our compaction equipment line. For vibratory plates, there is the new Compatec control system. We also introduced a new trench roller ( RTx-SC2) which allows the working width to be adjusted between 56 cm and 82 cm. All of these innovations were well received by industry professionals as they make the operator's work signifi cantly easier.

Product strategy for emerging markets: our new Value Line

We are currently establishing a range of light equipment products tailored to the Asian market. The new Value Line products are robust and built to Wacker Neuson's high quality standards.

Compact equipment

Strong revenue growth in compact equipment segment

The compact equipment business segment covers compact machinery targeted at construction and agricultural industries, gardening, landscaping and industrial fi rms as well as recycling companies and municipal bodies. The portfolio includes excavators, wheel loaders, skid steer loaders, telescopic handlers, and four-wheel and track dumpers weighing up to 15 tons, as well as attachments. The Group is targeting its compact equipment portfolio at more and more markets outside of Europe.

The trend toward compact, versatile machines in other industries outside of the construction sector is gathering momentum. At the same time, our measures to increase market penetration and distribute our offering via our existing

Revenue by business segment1 as a % (previous year)

Consolidated revenue before discounts; differences attributable to rounding.

Development by business segment 2009 to 2013 in € million

sales network drove revenue in almost all countries where we distribute compact equipment. Demand for compact equipment was particularly strong in Germany, the UK, Switzerland, France, Turkey, South Africa, Australia, North America and Chile. We produce our machines in Austria and Germany.

Compact equipment revenue before discounts increased to EUR 520.0 million, an 11.5-percent rise on the previous year's fi gure of EUR 466.5 million. This segment's share of total revenue thus expanded to 44.2 percent (previous year: 42.2 percent).

Our customers continue to place orders at short notice. As such, our forecasts are restricted to a period of three to four months. It is therefore crucial that these short-term orders are delivered as quickly as possible.

Monthly order intake is a reliable indicator of demand for our compact equipment. It also enables us to accurately forecast capacity utilization at our production sites for the coming months.

At December 31, 2013, accumulated orders for compact equipment for the construction and agricultural sectors were 20 percent higher than the previous year, including internal deliveries.

We continually develop technical innovations in order to expand and improve our compact portfolio. The Group unveiled a range of new models and innovations at bauma 2013 in Munich. These included the 803 mini excavator with dual power equipped with an electric hydraulic motor for emission-free operation. Other highlights were the new compact excavator (EZ17), the compact telescopic handlers (TH412 and TH625) and the smallest wheel loader (WL 20) in the product portfolio. These are described in more detail in the "Research and development" section. p. 62

Fall in revenue in the agricultural sector

Due to a drop in demand, revenue generated by agricultural equipment fell 5.2 percent to EUR 156.8 million in 2013 (previous year: EUR 165.4 million). Challenging market conditions for customers such as biogas plant operators meant that demand for telescopic handlers from our Pfullendorf site also fell. In 2013, agricultural compact equipment accounted for 13.3 percent of total Group revenue (previous year: 15.0 percent).

At the closing date, order intake was more than 20 percent higher than in the previous year. This can be attributed to the success of Agritechnica, which took place in Hanover in November 2013.

The Group continued to successfully deliver special fi nancing options for customers in the compact equipment business.

Services

Segment growth in synch with new equipment sales We believe in customer-centric service, advising and helping each customer according to individual. Wacker Neuson therefore complements new equipment sales with an extensive range of services. The services segment covers the business fi elds of repair and spare parts, the reconditioned equipment business (for example, the European used equipment center in Gotha) and rental in Central Europe. Flanking the rise in new machine sales, the services segment is growing steadily. Wacker Neuson is also strengthening its international spare parts business as part of its strategy to expand into new international markets and ensure a seamless supply of spare parts the world over.

In 2013, Wacker Neuson increased its revenue before discounts in the services segment by 3.9 percent to EUR 248.5 million (previous year: EUR 239.2 million). At 21.1 percent, this segment's share of total revenue remained more or less stable compared with the prior-year fi gure (previous year: 21.6 percent).

Services resonate strongly among customers

Our customer-centric strategy in the traditional repair and spare parts business again yielded results in 2013. In countries with direct sales channels, we implemented measures aimed at reducing lead times for repairs, improved our equipment pickup and delivery service from and to construction sites and intensifi ed training for our service staff.

Our Europe-wide used equipment center in Gotha, Germany, rounds off our service offering, providing a central location for us to recondition used machines and market them professionally in the used equipment market. Our online sales platform (www.used.wackerneuson.com) is extremely popular among our customers.

Our rental offering gives our customers a high degree of fl exibility. Our sales and service stations responded with great fl exibility to customer requirements, making rental equipment available at short notice wherever it was needed.

VIII. Other factors that impacted on results

Research and development

• Cross-factory innovation team formed
• Numerous innovations premiered at bauma 2013
• Kramer makes a return to agriculture

Our research and development (R&D) activities are geared towards the needs of the market and our customers, also taking regional dynamics into account.

Formation of a cross-factory innovation team

The Group's R&D departments are responsible for the development of new products and the ongoing evolution of existing models. We develop products at the following locations: light equipment products are developed in Munich (Germany), Menomonee Falls (USA), Norton Shores (USA) and Manila (Philippines); compact equipment is developed at our sites in Flechtdorf, Pfullendorf, Korbach (Germany) and in Hörsching (near Linz, Austria). Research and development activities are coordinated centrally to ensure that synergies are used effi ciently. With this in mind, the cross-factory " Corporate Technology Standardization & Design" innovation team was set up in 2013. The team is also responsible for product design worldwide.

Research and development 1

	2013	2012	2011	2010	2009
R&D costs (€ m)	25.7	26.8	21.9	22.3	20.5
R&D share (%)	2.2	2.5	2.2	2.9	3.4
Capitalized expenses (€ m)	10.0	7.4	9.1	3.0	3.3
R&D share (incl. capitalized expenses) (%)	3.1	3.1	3.1	3.3	4.0
Share of employees working in R&D (%)	> 8	> 8	> 8	> 8	> 7

1 Previous years adapted to current booking basis.

Research and development activities secure leading position

Many of its product innovations position Wacker Neuson as a global technology leader. In 2013, our development was aimed in particular at extending our pioneering position in product safety, operator safety and environmental protection. Light equipment should be easy to operate and present no risk or hazard to the operator. Ideally it should have a reduced level of hand-arm vibrations – the vibrations which the operator can actually feel. Looking beyond functional design, development work also focuses heavily on ergonomics. Research, development and innovation are playing an increasingly central role, for example, in ensuring compliance with climate protection targets. Our activities here have a particularly high priority as we intend to maintain our high standards in the delivery of environmentally sound, safe products as we move forward. That is why, in addition to developing new products, we will continue to focus our R&D efforts on compliance with, and even exceeding, stricter environmental regulations governing combustion engine emissions. For further information on new exhaust emissions regulations, please refer to the "General legal framework" section. p. 39

Staff profi le

Over eight percent of Wacker Neuson's 4,100-plus employees around the globe work in research and development. The R&D payroll mainly consists of mechanical and electronic engineers, technical engineers, technical drawers and other skilled workers. We provide ongoing training for these employees to ensure that they have the right qualifi cations for their demanding jobs.

New products and innovations in 2013

2013 was again a year of new product developments across Wacker Neuson. We develop various basic models for the global market that can then be adapted to meet country-specifi c requirements thanks to numerous options and model variants.

New peak performance from light equipment

During the course of the year, Wacker Neuson launched a host of new light equipment products that deliver greater productivity and safety to end customers. The EH 100 electric breaker delivers 100 joules of single-stroke impact – a huge amount of power for an electric breaker weighing just 32 kilograms. This powerful piece of equipment features full-hood spring mounting, which enables operators to work with utmost precision, accurately positioning the breaker while keeping a close eye on the drill bit. The breaker is also extremely effi cient and generates hand-arm vibrations of just 5.8 meters per second.

Another Wacker Neuson innovation, the Compatec compaction display system, was developed specifi cally for the DPU 6555 vibratory plate. The display system tells operators when a surface is suffi ciently compacted, thus preventing them from carrying out unnecessary work or over-compacting surfaces. In response to positive market feedback, this option will be gradually implemented on additional plates.

Wacker Neuson also optimized the performance and size of its AR 36 external vibrator for exposed concrete surfaces. The resulting AR 26 external vibrator delivers the same performance as its predecessor but is around two kilograms lighter.

The LBS 80M light balloon is easy to use and diffuses light highly effectively. It also features a robust stand. The LTN 6LV light tower features a telescopic mast that can be electrically extended and retracted, allowing it to be put into action or packed away for transport in no time at all.

Mindful of the specifi c requirements of its customers, Wacker Neuson developed the HSH 650 hydronic heater as a lowerweight version of the HSH 700 as well as an additional version of the HSH 350 model. Like the two larger models, it comes with its own generator.

Launch of innovative compact equipment

Wacker Neuson unveiled an alternative drive concept for compact equipment at bauma 2013 in Munich. The 803 mini excavator with dual power is the smallest in the Group's portfolio. An external, plug & play electrohydraulic drive can be connected to the excavator and used as an alternative power source to the diesel engine. This cost-effective option turns the 803 into a zero-emissions powerhouse on any construction site, also delivering enough cooling power for it to be operated in temperatures of up to 45°C. The 803 is the fi rst excavator in this weight class with this capability.

Wacker Neuson's EZ17 excavator is the company's newest and smallest zero-tail model. It combines maximum maneuverability, digging power and ergonomics with Wacker Neuson's proven design expertise. Wacker Neuson also launched the compact WL 20 wheel loader. This new and smallest addition brings the Group's wheel loader range with a bucket capacity between 0.3 and 1 m3 to nine models.

Wacker Neuson has opened up new market segments with the launch of its TH412 and TH625 telescopic handlers: the TH412 mini telescopic handler offers an impressive combination of compact footprint and powerful performance. The TH625 is a compact telescopic handler and a powerhouse in the popular 2x2 meter class (< 2 m wide and < 2 m high).

Skid steer loaders are used in the US construction industry primarily for transporting material. At a dealer event in the US in October, Wacker Neuson presented the new powerful skid steer loaders for the North American market. The fi rst models were well received by US dealers. The Group unveiled the new products at CONEXPO in Las Vegas in March 2014.

Kramer expands product portfolio to include agriculture

To complement the established Weidemann brand and its articulated wheel loaders (Hoftracs®) and telescopic loaders for the agricultural industry, Kramer launched all-wheel drive wheel loaders and compact telescopic handlers for this growing market in 2013. This move sees Kramer return to its roots: in 1925, the company started life as a manufacturer of motorized mowers in the southern German town of Gutmadingen. Later, Kramer became a leading tractor manufacturer before establishing a construction equipment division in the 1970s. The company stopped production of agricultural equipment in the mid-1980s, only to make a return to the sector in 2013 with a range of fi ve wheel loader models, two tele wheel loaders and two compact telescopic handler models. Since 2013, the machines have been distributed in the traditional Kramer green for the agricultural sector via a dedicated sales network and are available with a range of agricultural attachments.

Awards underscore innovation leadership

The Wacker Neuson ET20 compact excavator and the Kramer Allrad 650 wheel loader were singled out for both the iF Product Design Award 2013 in the special vehicles category and a Universal Design Award 2013. The DT12 track dumper received a Universal Design Award 2013.

Half of product portfolio less than fi ve years old

Wacker Neuson regards R&D as a crucial growth driver and core element of the Group's overall success. During the period under review, around 50 percent of revenue was generated by products that were launched within the last fi ve years.

Over the last fi scal year, we fi led a total of 24 new patents and utility models around the world (previous year: 34). 22 patents and utility models were granted (previous year: 37). In total, Wacker Neuson owns over 430 patents and utility models worldwide. At EUR 25.7 million, our research and development costs for 2013 were slightly lower than the prior-year fi gure of EUR 26.8 million. During the period under review, we also capitalized costs in the total amount of EUR 10.0 million (previous year: EUR 7.4 million). The relative R&D ratio (R&D share of total revenue including capitalized expenditure) came to 3.1 percent (previous year: 3.1 percent).

We only procure third-party services for R&D projects in exceptional cases. However, we do work closely with national and international universities and renowned research institutes. This gives us access to the latest scientifi c insights in our areas of research.

Production and logistics

• Innovative work models for greater fl exibility
• Ongoing process streamlining
• Capacity adjusted in line with growth

The Group currently has eight production facilities across the globe. We manufacture light equipment at Reichertshofen (Germany), Menomonee Falls and Norton Shores (both US) and Manila (Philippines). Cross-deliveries between the regional logistics centers provide a certain degree of natural currency hedging.

We manufacture compact equipment at our factories in Pfullendorf and Korbach (both in Germany) and at the new facility in Hörsching (Austria), which started production in 2012.

Our plant in Kragujevac (Serbia) supplies our compact equipment production sites with premanufactured steel components. This optimizes production processes and enables us to channel our own in-depth expertise in steelwork into innovations at an early stage of development processes.

New concepts for reducing delivery times

In 2013, we optimized production processes at all of our production facilities. Similar to the automotive industry, we rely on premanufactured parts that involve their own complex supply chains before they get to us. This especially applies to the manufacture of compact equipment. We made concerted efforts here to increase inventory required for manufacturing our products in order to cut production times. To further improve our ability to deliver in future, we jointly developed forward-looking solutions with our key business partners and suppliers.

The delivery timeframe for almost all of our product groups in our light equipment offering – which is less dependent on supplier markets thanks to a high degree of vertical integration – remained between 24 and 48 hours in 2013.

Flexible production

The upswing in demand improved capacity utilization at our production facilities in 2013. During the course of the year, we aligned manpower capacity with the rising order intake. We also utilized existing fl exitime options. Our forward-looking increase in capacity puts us in a prime position to capitalize on further growth opportunities in coming years.

Outstanding production recognized

In 2013, Austrian publication "Industriemagazin", in cooperation with Fraunhofer Austria Research GmbH, evaluated the production effi ciency of industrial companies in Austria for the fourth time. In a complex, multi-step process, the best companies were assessed and rated based on their value-add chain, production principles, inventory management, logistics operations, and customer and supplier relationship management practices. The best companies were honored with the "Fabrik 2013" award.

As an Austrian site with outstanding production standards, Wacker Neuson Linz GmbH in Hörsching was awarded second place in its category. The jury was especially impressed with the effi cient manufacturing strategy and the commitment to continuous improvement through lean management.

Continuous improvements to production and logistics processes

We have also implemented a variety of measures to streamline production processes and make them more customer-centric. In addition to investing in a powerful machine pool, we reorganized production structures (lean management), material fl ows and intralogistics across the Group.

Smooth logistics

Compact equipment is delivered straight from the respective production sites. For light equipment, spare parts and attachment deliveries, however, the Wacker Neuson Group uses a number of logistics centers located in Karlsfeld (Germany), Germantown (Milwaukee, US) and Hong Kong (China). In 2013, our logistics strategy focused on further improving parts and product availability.

Sustainability and quality

• Professional sustainability management at the Wacker Neuson Group
• Wacker Neuson value wheel
• Quality management system implemented, plans for energy and environmental management systems
• ECO seal / further eco-friendly product innovations unveiled at bauma

Professional sustainability management at the Wacker Neuson Group

As a global player, Wacker Neuson takes its responsibility to society and the environment very seriously. With over 4,100 employees, more than 5,200 dealers and 8 production sites on three continents, the Group's business activities have an impact around the world. Given this global reach, we are determined to actively step up to and shape our responsibilities.

In the second half of 2013, the Wacker Neuson Group began implementing a professional and Group-wide sustainability management system. This is not a question of starting from scratch, but rather bundling and developing the many ongoing sustainability strategies in place throughout the Group. On

an organizational level, this new role comes under investor relations/communications with the creation of a separate corporate social responsibility function.

One of the fi rst steps taken on the path to an in-house sustainability management system was to set up a far-reaching Group-internal dialog process. This process included the entire Group Executive Board, the managing directors of

Internal stakeholders of the Wacker Neuson Group

Wacker Neuson value wheel

Wacker Neuson's corporate history stretches back over 160 years. We can trace our roots to the mid-19th century, where our story began with a blacksmith's shop. The customer is at the heart of the Wacker Neuson value wheel. Innovation and quality are an integral part of our corporate identity. Our customers experience these values directly through our products and services. Looking within company walls, performance and character are defi ning values for both our employees and our organization as a whole. These values help make up the DNA of our employees and management teams. They steer our success and shape the way we do business both within and beyond the company.

the production sites in Germany and Austria, the heads of production, the quality management and occupational safety offi cers and the facility managers/technicians. The members of the Executive Board responsible for procurement, compliance, HR and investor relations/communications also took part in this dialog.

As a transparent and stakeholder-focused company, we intend to start publishing a Group-wide sustainability report from 2015. An important step in this direction is the sustainability brochure accompanying this Annual Report. The brochure contains examples of the sustainability measures we have put in place in the areas of management/strategy, HR, environment/product stewardship and corporate social responsibility.

Wacker Neuson value wheel

The Wacker Neuson value wheel comprises our four core values of quality, innovation, performance and character. These values put the customer at the heart of everything we do. They serve as a guideline for our everyday working lives and continually remind us of our goal to be the partner of choice for our customers the world over. Everything we do and every decision we make builds on our values. To reward the achievements of individual employees and teams who particularly embody our corporate values, we introduced the annual Wacker Neuson Award in 2013.

Quality management system implemented; plans for energy and environmental management systems

The Wacker Neuson Group has successfully introduced quality management systems certifi ed to ISO 9001 at its plants. Long service life and high reliability, ease of operation and repair, low operating costs and compliance with the highest safety standards are key benchmarks of our product quality. To ensure we always meet our own high standards, our commitment to quality is hardwired throughout the entire organization and we are continuously on the lookout for areas offering scope for improvement. In 2013, we further optimized our Group-wide quality management system. This covers our Group headquarters in Munich, the production plants in Reichertshofen, Pfullendorf, Korbach (all Germany), Hörsching (Austria), Norton Shores and Menomonee Falls (both US), as well as our logistics center in Karlsfeld (Germany) and all sales regions in Germany.

Building on the experience gained from our existing quality management system and quality certifi cation, in the future we intend to steer more effectively key areas such as environmental protection and energy across the Group by means of

Basic framework of continuous improvement processes (CIP) and management systems

professional management systems. This is not entirely new to us, either. As a manufacturer of light and compact equipment, we are subject to a wide range of national and international regulations aimed at protecting users and the environment. We therefore comply with water and soil regulations just as meticulously as we comply with emissions regulations.

We regularly arrange audits to identify areas within our Group offering scope for energy effi ciency gains. This includes improving energy management features on our light and compact equipment – which means users release less carbon dioxide (CO2 ). We are also committed to managing energy more effi ciently in our own buildings and fl eet in order to permanently reduce CO2 emissions. In the coming years, we will be raising our game here by improving compact equipment environmental performance as we implement new exhaust emissions regulations.

The new plants we constructed in the past six years in Korbach, Pfullendorf (both Germany), Manila (Philippines), Norton Shores (US) and Hörsching (Austria) have all been designed with optimized building management systems. Pfullendorf takes the lead here, with highlights including solar panels to heat running water, wastewater treatment, rainwater recycling, heat recovery and structural HVAC. Furthermore, an intelligent light management system automatically adapts indoor hall lighting. The new plant in Hörsching was also built in line with the latest

architectural developments and features high-quality energysaving insulation technology, biological water treatment, solar energy to heat running water and heat recovery.

Our employees across the globe are trained to handle waste carefully and are highly sensitive to the importance of recycling. Regulations on this key area are embedded in Group guidelines and the quality management handbook and are therefore part of our regular training sessions.

Recycling and reuse have priority over disposal at all times. We use Europe-wide standardized waste codes to categorize waste. Paint, grinding and oil sludge are collected separately from production processes to be fi ltered and reused, where possible, or appropriately disposed of. We document the disposal of waste. The information on waste treatment can then be processed and evaluated effi ciently. In this way, we are raising sustainability levels across the entire company.

In the next few years, we plan to gradually introduce an energy management system certifi ed to ISO 50001 at our production sites in Germany and Austria in combination with an environment management system certifi ed to ISO 14001. An external auditor will be appointed for these tasks. This step fl anks the lean management processes we have been introducing since 2013, and will enable us not only to save energy in our production processes, but also measure and control all of our production activities in greater detail. In the medium to long term, our customers, the environment and the Wacker Neuson Group itself will benefi t from the effects of more effi cient energy use, closer monitoring of the (raw) material fl ows through our facilities and an optimized recycling strategy.

ECO seal / further eco-friendly product innovations unveiled at bauma

As a company, we are responsible for protecting our environment and conserving resources. Meanwhile, more and more customers are paying attention to the cost-effectiveness and eco-friendliness of the products they use – not least to improve their own environmental footprint. By introducing the ECO seal, the Wacker Neuson Group wants to highlight products and solutions that create added value for customers and that prove that environmental protection and cost effi ciency can go hand in hand.

Wacker Neuson has added the ECO seal to some of its existing products as well as a number of low-emission, value-for-money innovations unveiled at bauma. Alternative engine concepts were a highlight of the bauma stand.

Energy effi ciency, environmental protection and forward thinking are the key pillars of Wacker Neuson's development work. Indeed, some of our tried-and-true products prove that Wacker Neuson has always been inspired by these aims.

For instance, the WM 80 engine, developed in house, falls well within all current and upcoming emission limits. Our two-cycle rammers and gasoline breakers are equipped with the WM 80 engine, which stands out for its low fuel consumption, excellent starting performance, durable, high-quality components and ease of deployment. The two-cycle rammer from Wacker Neuson has the lowest emissions of any gasoline rammer on the market. Hydrocarbon emissions are rated at a comparatively low 25 g/kWh per machine, with CO2 output rated at approx. 70 g/kWh. This gives customers the peace of mind of investing in cutting-edge equipment that also protects the operator from the danger of emissions.

Other highlights with the ECO factor launched in 2013 were the EH 75 and EH 100 electric breakers. The EH 100 in particular boasts some impressive features. The machine's fuel effi ciency means that it is capable of emitting up to 1.2 tons less CO2 over its lifetime, equating to a saving of up to EUR 5,500 in fuel costs. Operators will fi nd this versatile breaker easy to use because of its light weight and lack of air hoses. Another Wacker Neuson ECO innovation is the world's most powerful vibratory plate – the DPU 130. Delivering the same power as a 7t roller, not only does it outperform the roller in terms of fuel consumption, it is also much easier to transport, weighing in at only 1.2 tons. The Vertical Digging System (VDS) featured in Wacker Neuson's compact excavators has also proven worthy of the ECO seal. The VDS can compensate for slopes and gradients of up to 27 percent, resulting in a potential productivity gain of 25 percent in time and materials.

Procurement

• New procurement organization leads to greater synergies
• Improved supplier management and qualifi cation
• Absorbing price fl uctuations

Global networking across procurement and the supply chain

Wacker Neuson is active in all parts of the world. In line with our corporate strategy, products are increasingly being developed and manufactured in the regions in which they are primarily marketed to best meet the requirements of our customers.

Globalization is still the predominant trend in procurement. This is closely linked to the huge improvement in quality of premanufactured parts sourced from countries beyond Central Europe and North America. Choosing the right procurement markets is thus becoming an increasingly important success factor in securing Wacker Neuson's competitive position. As such, global procurement is positioned as the integration hub for all value creation activities.

Under the cost of sales, the cost of materials and third-party services constitute the largest cost factors for the Group. To manufacture its products, Wacker Neuson requires various components and raw materials – particularly steel, aluminum and copper. We also require structural steel components and precast parts as well as engines and hydraulic and chassis components.

Reorganization of global procurement structure

For some time now, we have been operating a lead buyer concept at our compact equipment production locations in Hörsching (Austria), Pfullendorf and Korbach (both Germany). Consolidating the procurement of identical or similar parts in this way has enabled us to negotiate more attractive purchasing terms in recent years by submitting joint tenders and coordinating supplier selection.

To leverage further synergies in procurement and involve all our sites around the world, a new central function for procurement & quality was created in 2013. Procurement and quality organization tasks and processes will henceforth be managed in a uniform manner. The main tasks assigned to this new central role include selective supplier management, the consolidation of purchasing volumes and a greater focus on internationalization.

We are increasingly looking to international markets for the procurement of steel components and other parts. One region where we will step up our activities in this regard is Asia, where we have already established procurement offi ces.

The local procurement departments of our plants will be structured into commodity groups and will be responsible for cross-location and international procurement.

Indirect purchasing will be coordinated centrally as far as possible.

We expect these Group-wide procurement changes to deliver signifi cant cost savings in the coming years. The fi rst projects that have so far been partly implemented are already showing potential.

Sustainable supplier management

We have optimized production processes in recent years by maintaining close ties with our key suppliers and incorporating them into our production planning processes at an early stage. We also managed to avoid supply bottlenecks over the year under review. While developing our global supply chains, however, we identifi ed potential areas for improvement. We plan to close these gaps through qualifi cation and by selectively expanding our supplier audits. A special supplier qualifi cation unit has been set up with this in mind. In the future, dedicated employees will accompany and develop our suppliers along the entire pathway from initial nomination through to series production. Our focus here will very much be on prevention, ensuring that supplier mistakes do not occur in the fi rst place. For future projects, therefore, we will only consider suppliers who meet our quality, time and cost requirements. In addition, we will focus increasingly on the sustainability performance of our supply chain.

Reacting to price fl uctuations in procurement markets

Certain raw materials like steel went down in price in 2013. Other components like the new generation of diesel engines for regulated markets have on the other hand become markedly more expensive. Our long-term contracts enabled us to absorb almost all price increases or pass them on to the market in the form of a two to three percent price increase.

Human resources

• Selective new hires to meet rising demand
• Emphasis on training for young people
• Global HR strategy in place

Wacker Neuson Group employees play a key role in the company's successful growth and performance. Identifying and promoting our employees' skills and expertise is therefore a cornerstone of our HR strategy. Fairness, respect and trust are the core principles that defi ne how we cooperate and interact with each other across the Group.

Positive business development fuels increase in manpower capacity

We increased headcount in 2013 as a result of the company's strong performance. Selective new hires were reported in all regions. The number employed in manufacturing across the Group fell slightly.

At December 31, 2013, the Group employed a total of 4,157 employees (previous year: 4,096). These fi gures are calculated by converting the number of people working for the Group into full-time equivalents. They do not include temporary staff.

Within the Wacker Neuson Group, 3,215 (77.3 percent) of all employees were based in Europe at the balance sheet date (previous year: 3,187). 696 were employed in the Americas region (previous year: 665), with 246 in the Asia-Pacifi c region (previous year: 244). Personnel costs amounted to EUR 250.7 million (previous year: EUR 238.9 million).

Employees by sector

as a %

Production	38.0
Sales and service	42.4
Administration	11.3
Other	8.3

Age structure1

number of employees as a %

1 Based on 79 percent of all employees.

HR marketing and talent development intensifi ed

Qualifi ed professional training gives young people a good and motivating start to their working lives. In 2013, we provided training for 173 young people in industrial, technical or business posts at our production sites and German sales and service stations (previous year: 159). We also provided opportunities within the framework of practical training programs fl anked by studies at technical or vocational colleges. Our training philosophy centers on providing experience in a wide range of disciplines, assigning individual areas of responsibility and ensuring intensive, one-to-one trainee support via contact partners in all areas. The student training quota for Wacker Neuson Group production sites over the last fi scal year was 5.1 percent (previous year: 4.7 percent). In 2013, 37 trainees completed their training (previous year: 30), with 32 of these offered positions in the Group (previous year: 28). This corresponds to a take-up rate of 86.5 percent (previous year: 93.3 percent).

We were able to attract qualifi ed graduates to our company by attending renowned career fairs. In order to bring this talent to the Group, we will continue to attend these recruitment fairs but will also focus more on recruiting networks and social media.

Number of employees (Group)1 as of December 31

2013	2012	2011	2010	2009	2008	2007
4,157	4,0962	3,514	3,142	3,059	3,665	3,659

1 Number of full-time jobs (FTE).

2 Newly consolidated employees as of December 31, 2012: 245

We also gave young people interesting insights into Wacker Neuson by increasing the number of internships and student trainee positions across the entire Group. Furthermore, we again assigned challenging thesis topics in 2013 to support qualifi ed graduates.

Training and voluntary benefi ts

The Wacker Neuson Group has always placed great importance on ongoing employee development and continues to do so. In 2013, our internal training and development measures focused on IT systems, sales and soft skills (mainly leadership skills but also project management and sales techniques). Various training sessions and courses were held at the Wacker Neuson Academy in Reichertshofen during the last fi scal year. Numerous employees from our own company and from our customer's businesses availed of our program. In 2014, we will also be placing greater focus on training managers and young talent.

Total staff development expenditure at our production sites (around 79 percent of all employees) came to around EUR 1.2 million in 2013 (previous year: EUR 770,000).

We again offered our employees in Germany numerous voluntary benefi ts in 2013, including our employer-funded company pension plan, healthcare schemes and a bonus plan for employees who work at the company for a certain number of years.

Recognition for apprentice training

Wacker Neuson places great importance on training for young people. In 2013, the Chamber of Commerce of Upper Austria (WKO) presented our Austrian affi liate, Wacker Neuson Linz GmbH, with the INEO Award for exemplary apprentice training along with a special award for encouraging girls to take up technical apprenticeships. This fi rst-time award presented by

WKO recognized apprenticeship providers for their measures and efforts to support trainees. As well as innovation, sustainability and commitment, the jury evaluated training plans, contact with vocational schools, teachers and parents and the quality of fi nal examinations.

"Karrieretag Familienunternehmen" careers day The "Karrieretag Familienunternehmen" initiative for familyrun businesses was set up in 2006 by the Entrepreneurs Club, a number of leading German family-run businesses and the Foundation for Family Business. Its aim is to promote careers in family-run businesses and to enable young specialists and managers to meet the owners and decision-makers of leading family-run businesses in Germany. In 2013, Wacker Neuson hosted the 12th careers day. Out of 2,500 applicants, 600 were chosen to attend and they made the most of the opportunity to impress the 30 exhibitors from around the country.

Human resources fi gures1

	Dec. 31, 2013	Dec. 31, 2012
Part-time employees as a %	3.1	2.9
Number of trainees	173	159
Quota of trainees as a %	5.1	4.7
Expenses for personnel development in € K	approx. 1,200	approx. 770
Average age in years	39.2	39.4
Number of men (proportion as a %)	2,837 (83.4)	2,816 (83.9)
Number of women (proportion as a %)	565 (16.6)	540 (16.1)
Number of years with the company	9.9	9.7
Fluctuation as a %	9.9	10.0
Sickness rate as a %	3.5	3.0

Based on 79 percent of all employees (2012: 79 percent).

Wacker Neuson was able to showcase itself as an open and innovative company, forge contacts with other businesses and conduct several interesting interviews with potential applicants. The event was a great success and positive feedback was received from companies, visitors and applicants alike.

Corporate HR as a strong strategic partner

Wacker Neuson's corporate HR department has been reorganized for better management of strategic topics like top talent management and global staff development. Under this realignment, HR management will be more international in scope and more in tune with the needs of internal customers based on globally harmonized processes. Building on SAP ERP Human Capital Management (HCM), a global HR information system using will be developed and expanded in parallel. Complementing standardized indicators, this system will form the basis for qualifi ed HR planning.

HR marketing will focus increasingly on identifying target groups of interest to Wacker Neuson in order to position the Group more prominently as an attractive employer across various media, in particular on the Internet and online job sites. For instance, we will be stepping up our presence at recruitment fairs and on social networks like Facebook and XING. This is where we will reach the young talent and managers of tomorrow, so we want to directly show them what we have to offer.

By introducing a standardized annual employee dialog process, which took place in early 2014 at our Pfullendorf site, we are creating new guidelines for communication and leadership at Wacker Neuson. This will lay the foundation for a regular, structured exchange of views and promote systematic HR development within the Group.

In addition to the offerings of the Wacker Neuson Academy, we complemented our ongoing training measures in 2013 by providing a comprehensive program of open courses in collaboration with our training partner Integrata.

Creating and strengthening our management culture and the long-term development of our management staff has been and will continue to be a key priority. We laid a solid foundation for this in 2013 by drafting the new Wacker Neuson management guidelines in consultation with our international management team and through the PerspActive management course.

Long-term measures planned for 2014

In 2014, we are planning to introduce a modular management training program for our global managers at various locations.

Our PerspActive training course and Wacker Neuson International Circle management program, which will be starting in the second half of 2014, will focus on developing the professional and personal skills of our top talent, thus making a lasting contribution to our management culture. Standardizing levels of remuneration for our global management will remain a key element of our HR strategy. This will, with due consideration of the component to incentivize profi table growth, be adapted to prevailing conditions.

In order to create further pay-related incentives for our employees, we will be revising the existing variable remuneration models in both sales and manufacturing. Our aim is to reward individual performance so that we can increasingly use the variable component of remuneration as an incentive in addition to our existing employer benefi ts.

Sales, customers and marketing

• Successful marketing of compact equipment via existing sales network
• Strong resonance at industry trade fairs
• Sales structures adapted to country-specifi c market structures

One of the biggest synergies from the merger of Wacker and Neuson in 2007 has been the ability to market the entire product portfolio through existing distribution channels. In 2013, this resulted in a signifi cant rise in demand for compact equipment.

Strong resonance at industry trade fairs

In 2013, Munich again hosted bauma – the leading trade fair for the construction industry and the most important fair in the world for the Wacker Neuson Group. We used the event to unveil new products and solutions to an international audience across 6,000 m2 of exhibition space. The product demos on the Wacker Neuson stand also received widespread attention. With around 530,000 visitors from over 200 countries, bauma 2013 set a new attendance record.

2013 also saw the fi rst staging of bauma Africa in Johannesburg, South Africa. The fair was Africa's largest event of its kind for the construction sector, and interest in our products was very high.

Wacker Neuson used the BICES fair in Beijing to present a product line conceived specifi cally for the Chinese market. The presentation of the 50Z3 excavator marked a further step in the introduction of compact equipment to the Chinese market.

Wacker Neuson was also present at two fairs in the growth market of India – bc India and Excon. As well as these international trade fairs, the Group also attended various regional and local exhibitions such as World of Concrete in Las Vegas (US), Baumag (Switzerland), Ecomondo (Italy) and CTT (Russia), to name but a few examples. Live demos of our light and compact equipment was the highlight of our engagement at Plantworx in the UK, Demopark in Eisenach and Tiefbau Live in Baden-Baden (both Germany).

Expansion of global sales network

Our corporate culture enables us to create a decentralized organization that reacts with greater speed and less bureaucracy to customer needs. We align our sales structures with local market dynamics and use different channels to distribute our products, including a direct channel to end customers. In most markets, the Group works with independent dealers, and in some cases local sales affi liates support and advise major customers and dealers in these countries. Finally, in some countries like the US and China, Wacker Neuson distributes its products via sales partners who offer multiple brand models of single products.

Diverse customer base

Diversifi cation is becoming an increasingly important part of sales with a view to spreading economic risks and achieving further growth. Our customer base in 2013 again included construction companies (public and private enterprises), gardening and landscaping fi rms, municipal bodies, companies from the industrial and agricultural sectors and rental fi rms. We generated around 13 percent of worldwide revenue during the past fi scal year with our ten largest accounts (previous year: 13 percent). This does not include sales made within the framework of our strategic partnerships. We are not dependent on individual customers to any signifi cant degree.

Individualized solutions and customer-centric strategy

During the period under review, our sales and service teams focused on customer acquisition, promotional measures and attractive fi nancing models via external service providers. We also offered our customers individualized sales and service solutions tailored to their needs and held various specialist seminars around the world. These were targeted at the company's own sales and service teams as well as at dealers, customers and employees looking for information on how to put our products and services to the best possible use and maximize process effi ciencies for customers. We also held a number of training courses around the world as part of our sales support concept for compact equipment.

IX. Risk report

As Wacker Neuson SE is largely affi liated with the companies of the Wacker Neuson Group through its direct and indirect shareholdings in Wacker Neuson Group members, the risk situation facing Wacker Neuson SE is mainly determined by the risk situation facing the Wacker Neuson Group. The statements on the overall risk situation for the Group made by the Executive Board therefore also summarize the risk situation facing Wacker Neuson SE.

Presentation of the internal control and risk management system including information in accordance with Section 315 (2) No. 5 and Section 289 (5) of the German Commercial Code (HGB) plus an explanatory report from the Executive Board Risk reporting requires that the company outline its risk

management goals and methods in the Management Report. Furthermore, the key steps involved in the internal control system and the risk management system in relation to the (consolidated) accounting process must be described in detail pursuant to Section 315 (2) No. 5 and Section 289 (5) HGB. Since the internal control system is an integral part of the overall risk management system, the Executive Board has decided to present both together. These disclosures are also explained in more detail – including in relation to the accounting process – as a precautionary measure pursuant to Section 175 (2) of the German Stock Corporation Act (AktG) in the version outlining modernization of German accounting rules (Bilanzrechtsmodernisierungsgesetz).

Risk management system

The Group-wide risk management system serves as an earlywarning safety net that identifi es, assesses and appropriately communicates risks and enables the Group to implement

corresponding counteractive measures in good time. This calls for the reliable identifi cation, evaluation and monitoring of all risks that may prevent this goal from being achieved. In fi scal 2013, 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 and comprehensive Group reports on all affi liates (which are regularly analyzed, discussed, evaluated and submitted to all decision-makers). The risk management system also covers process defi nitions for all business segments and Group auditing.

The risk management handbook outlines the Group's risk policy in terms of defi ning, assessing and quantifying potential risks, and the nature and procedures of the risk management system. It also assigns roles and responsibilities for identifying, analyzing, monitoring and communicating risks. This allows us to derive suitable measures to actively counteract known risks. Every risk management system has certain limitations, however. The Group makes every effort to rule out incorrectly applied control mechanisms or similar irregularities. Nevertheless, the control processes deployed in our company and described in detail in this report do not provide an absolute guarantee or warranty that all risks are always correctly identifi ed and recorded in full and in good time.

Risk categorization

Risk class	Risk exposure1
To be monitored	€ 50,000 to 125,000
Major	€ 125,000 and above

1 Risk exposure = (probability in percent) x impact.

Our risk reporting system lists and describes each individual risk identifi ed in our business segments. We examine the situation every quarter and add newly identifi ed risks if necessary. To this end, the corporate controlling department of Wacker Neuson SE consults the departments at Group headquarters and at the affi liates. Following completeness and plausibility checks, the data gathered is aggregated and made available to management, for example the Executive Board.

The Group's comprehensive risk management system 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. We then assess the risks using both quantitative and qualitative methods that are uniform throughout the Group, allowing comparison across the various business segments. Please refer to item 30 in the Notes to the Consolidated Financial Statements for further information on the risk management system. p. 142

The risks are evaluated according to probability of occurrence and potential damages.

Risk probability

Category	Risk probability as a %
Low	0 to 5
Medium	5 to 20
High	20 to 50
Very high	50 to 99

Key features of our internal control and risk management systems in relation to accounting plus related disclosures

According to the law outlining modernization of German accounting rules, the internal control system covers the basic principles, processes and measures required to ensure effective, effi cient, due and proper performance of accounting processes in compliance with the relevant legal guidelines. This also includes the internal auditing system, to the extent that it relates to accounting. As part of the risk management system, the internal control system – similar to the auditing system – draws on appropriate control and monitoring processes for accounting. This refers in particular to items on the balance sheet recognizing the company's risk hedging positions (hedging relationships).

The Wacker Neuson Group's internal control and risk management systems in relation to accounting can be described as follows:

• The entities responsible for accounting are clearly defi ned at company and Group level. Responsibility has been vested in the corporate accounting, corporate controlling, auditing and treasury departments. Ultimate responsibility lies with the Executive Board. Within accounting, we clearly differentiate between booking and auditing fi nancial data.
• Employees involved in accounting are qualifi ed to the highest standards.
• We have suitable systems and processes in place for planning, reporting, controlling and risk management, and implement these across the Group. Reports due on a quarterly or monthly basis, fi nancial accounting reports included, enable the Group to respond quickly to unexpected negative developments.
• Procedural guidelines, such as the Group-wide accounting manual and the corporate treasury manual as well as other regulations such as the rating guide and list of processes subject to second sign-off, are documented in writing and accessible at all times to all Group employees. These guidelines guarantee uniform handling of specifi c scenarios throughout the entire Group. We update them as required and align them with new circumstances and requirements.
• Proven standard software supports accounting functions, and all systems deployed are secured against unauthorized access from third parties.

• Line managers double-check sample bookings and run plausibility checks. Similarly, built-in electronic checks are also actively and regularly verifi ed. Effective controls (including second sign-off and analytical checks) are in place for all accounting-related processes (payment runs, for example).

• Accounting processes are also regularly checked by internal auditing.

• Various internal bodies, such as the auditing department or the Audit Committee of the Supervisory Board, regularly review and rate the effectiveness of the internal control and risk management systems in relation to accounting processes.

The aim of our internal control and risk management systems in relation to accounting is to ensure that all company dealings and circumstances are disclosed, calculated and categorized correctly on the balance sheet, and correctly represented in the accounting system. This enables the Group to avoid errors or at least identify them in good time.

Effi cient control processes are built on a framework comprising suitably qualifi ed employees, appropriate tools and software, a clearly defi ned management, control and monitoring structure plus internal regulations and guidelines. Clearly defi ned areas of responsibility plus a range of controls and checks as described in detail above (in particular second sign-off and regular plausibility checks) ensure that our accounting processes are executed correctly and with due care and attention.

This framework ensures that business transactions are captured, processed and documented in the accounting systems of the company and Group in compliance with commercial law and other statutory regulations, international accounting standards, the Articles of Incorporation and internal company guidelines, and that these fi gures are rapidly and correctly recognized in the accounts. Our risk management strategy enables us to identify risks at an early stage, respond appropriately and communicate them in a timely manner. At the same time, it ensures that assets and liabilities are correctly evaluated and disclosed in the Annual and Consolidated Financial Statements. This provides our stakeholders with reliable, meaningful and timely information.

Risks

As of December 31, 2013, the company identifi ed the following signifi cant risks to the Wacker Neuson Group that could have a negative impact on business development:

Greatest individual risks

Risk class	Risk probability	Change relative to previous year
Currency devaluation	Very high	Increased
Drop in demand for equipment	High	Unchanged
Increased competition	High	Increased

Environment and industry risks (risks related to the overall economic situation, the industry, locations and countries as well as other sales risks)

At 40 percent, environment and industry risks account for the largest share of overall risks (previous year: 48 percent).

The Wacker Neuson Group is dependent on the general economic climate and international construction industry trends. The affi liates Weidemann GmbH and Kramer-Werke GmbH and Wacker Neuson Linz GmbH are dependent on developments in agriculture and other industries.

Although forecasts for the construction industry in 2014 and 2015 are positive, there is still an underlying risk that some markets could be affected by a renewed economic downturn. Following strong growth in previous years, there is a growing measurable risk of demand dropping in the construction equipment sector, in particular in light of the slowdown in growth in emerging markets. The debt situation in a number of European countries may lead to the delay or cancelation of government-fi nanced construction and infrastructure projects. A slowdown in the construction industry would depress light and compact equipment sales, and this drop in demand could squeeze Wacker Neuson Group profi tability. We are countering these risks by diversifying sales across industries and regions. The Group's commitment to increasing its presence in established markets, expanding into targeted new markets and launching new products should offset any fl uctuations in demand at country level. The Group regularly monitors key leading indicators in order to implement appropriate countermeasures

in good time. From an organizational perspective, we are also implementing fl exible work and production models that enable us to absorb capacity fl uctuations.

The German, US, Canadian and Swiss markets account for a sizeable chunk of Group revenue and earnings. Unfavorable market dynamics in these countries could have a disproportionately high impact on Group earnings. We are countering this risk with proactive, fl exible go-to-market strategies executed through a variety of clearly differentiated sales channels in these countries.

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

The international nature of our business means the Group is exposed to a variety of national political and economic risks.

We face tough international competition. In 2013, the competitive market situation was more intense than during the previous year. However, we are maintaining our price strategy, which is accepted by our customers. We are countering the potential risk of losing market share as a result of this pricing policy by offering our customers attractive fi nancing solutions and further strengthening our spare parts and service offerings (total cost of ownership approach). The Group has also identifi ed a risk resulting from variations in customer structure from one country to another. Within an individual country, the loss of a major customer (due to insolvency or market consolidation, for instance) could have a serious impact on demand for products and services from the affi liate concerned. We are countering this risk by proactively maintaining strong customer relationships and by diversifying our customer base.

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 a positive or negative impact on our unit sales and revenue, neither of which can be accurately predicted at this stage. The Wacker Neuson Group is countering this risk through transparent yet fl exible terms and conditions geared towards bolstering the overall market position of its customers.

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

Financial risks account for 37 percent of overall risk to the Group. This is an increase on the previous year's fi gure of 22 percent.

The Group used the successfully concluded hedging transactions in its key currencies. However, these instruments also rely on predictions that may ultimately differ from actual developments. Our planning processes and hedging transactions are based on forecasts made by currency experts. Deviations do occur, however, and so we regularly adapt our plans and instruments to refl ect these changes.

The increase in fi nancial risk to the Group primarily stems from the risk of currencies in some emerging markets falling sharply against the company's production currencies (EUR/ USD). This devaluation would signifi cantly diminish the value of expected revenue and profi t from these countries when they are translated into the Group's consolidated fi nancial statements, which are drawn up in euro. The Group is countering this risk by continually monitoring the currencies in question. In some cases, we are countering the prospect of unfavorable currency developments by agreeing production currency prices with our customers on conclusion of a business deal. To a limited extent, the Group also hedges exchange rate risks for currencies in which it conducts a large volume of business and therefore regards as important to the Group.

Please refer to items 23 and 30 in the Notes to the Consolidated Financial Statements for further information on fi nancial risks. p. 133/142

Performance-related risks (risks associated with procurement, production and R&D)

At around 16 percent, performance-related risks account for the third largest share of overall risks (previous year: 19 percent).

The Group requires raw materials to manufacture its products – particularly steel, aluminum, copper and crude oil. To produce machine components, we use structural steel components, engines, precast parts as well as hydraulic and chassis components. The Wacker Neuson Group relies on timely delivery of defect-free, premanufactured parts. As demand increases, there is a continued risk of supply or quality problems developing, which – in turn – could lead to delays in production and sales losses. The company is countering this risk by preemptively qualifying a range of key indicators for its important suppliers, rating the quality, timescale and cost of services they provide. These key suppliers are supported on site by qualifi ed Wacker Neuson personnel at every step of the business relationship, from initial nomination through prototyping to series production. The Group focuses on ensuring short lead times so that it can react to fl uctuations in demand. Series-manufactured products are produced in advance, subject to tight management of capital investment commitments.

Loss of a supplier (due to insolvency, for instance) could also impact our ability to deliver and therefore threaten individual sales targets. We are minimizing these risks through proactive go-to-market strategies, supplier communication and special standard agreements that secure our partners' delivery capabilities to a certain extent.

Increases in the prices of raw materials, in particular for steel but also for other components, caused by a rise in demand, speculation on the raw materials markets and exchange rate fl uctuations could push up manufacturing costs for the Wacker Neuson Group. The Group is countering this risk through longerterm contracts and more fl exible global procurement strategies. We are maintaining regular contact with our business partners and suppliers to jointly develop forward-looking solutions.

In addition, we rely on delivered components and raw materials being free of defects and meeting the relevant specifi cations and quality standards. Defects in premanufactured parts could impact quality and slow production, which may ultimately delay product deliveries, possibly damaging our corporate and brand image. The Wacker Neuson Group is countering this risk associated with key components with a systematic supplier selection process, pre-emptive supplier qualifi cation during series production preparations, regular audits and approval of installed production systems within the framework of an ongoing supplier support process fl ow. Our quality management system also incorporates our suppliers.

The Wacker Neuson Group depends on developing new products and bringing these to market in good time. It is essential that we comply with national and international laws and directives and factor these into product development. If this does not continue to happen, our competitive position and growth opportunities may be impaired. The Group's R&D department therefore continuously works to develop new products and enhance our existing portfolio, always aligning its activities with market demands and observing applicable regulations, laws and directives.

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

If the Group were no longer able to protect its intellectual property suffi ciently, this would impair its competitive ability. We are reducing this risk through focused patent and intellectual property management. Our market-leading products are being copied – in particular by Chinese manufacturers – and this could reduce sales. We are minimizing this risk by systematically enforcing our intellectual property rights, while also expanding our international sales and service network.

Warranties and product liability claims could 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 on the one hand and, on the other, by drafting

contracts carefully and ensuring they are properly enforced. The Group 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 have a signifi cant impact on the Wacker Neuson Group's fi nancial situation. The Group has concluded insurance policies worldwide to protect against liability risks and potential damages attributable to the company.

Strategic business risks (risks arising from business decisions, investments, entering new markets, launching new products, and acquiring and integrating new companies)

Although the impact of the following risks cannot be quantifi ed, they are an important element in risk reporting.

We continue to expand our business segments as well as our sales and service network in line with our Group growth strategy. This involves investments, which may not necessarily be recouped. Unforeseeable risks can also arise within individual projects and delay execution. We are countering these risks by adapting our execution strategy to current market dynamics, carefully examining all planned investments and possible imminent risks, pursuing a lean project management policy and maintaining a high equity ratio.

The Group is also exposed to risks in connection with its ongoing international expansion activities. If our medium- to long-term expansion plans do not pan out as anticipated, or if we are unable to harmonize national sales channels due, for example, to lower-than-anticipated demand for our products in certain countries, there is still a risk that we might have to change or downscale our long-term growth strategies. Our strategy department regularly evaluates the success of our measures and we apply high quality standards for market analysis and development to counter this risk.

We also consider and carefully assess alliances and acquisitions as a means of gaining market share and expanding our product portfolio. However, failure to evaluate risks accurately when acquiring another company or entering into a partnership may have a negative impact on Group business development and growth prospects.

We have secured our strategic alliances with Claas (Harsewinkel, Germany) and Caterpillar (Peoria, USA) with longterm contracts. The company is countering the risk of these OEM alliances1 being terminated through close collaboration, regular contact, the ongoing improvement of processes and consistently high product quality.

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

The success of Wacker Neuson is due in large part to the skill and motivation of its employees. The loss of highly qualifi ed people in key positions could impact negatively on our growth plan. Wacker Neuson is countering this risk by offering employees incentives to commit themselves to the company, for example attractive remuneration and long-term development opportunities. In light of current market developments, the Wacker Neuson Group is looking from time to time to recruit qualifi ed employees in the fi eld of mechanical engineering. The labor market may not meet our need for qualifi ed staff in this area. The Group is countering this risk with dedicated recruitment efforts, both in Germany and abroad. It also offers attractive remuneration schemes and interesting work opportunities promising a high degree of personal responsibility.

The Group uses IT in numerous areas. Failure of these systems could negatively impact on our production and goods fl ow and lead to loss of revenue. The Group is countering this risk through IT backup strategies. We are pursuing a strict project management policy to counter risks that can occur during the roll-out of global IT systems and to prevent additional costs.

Increasingly strict regulations governing noise, environmental and user protection could entail additional costs for the Wacker Neuson Group. The Group is countering this risk through active involvement in associations that may have an infl uence on new developments as well as through intensive research and development.

Summary of risk situation facing the Group (assessment of risk situation by management)

Viewed as a percentage of overall risks, our main risks lie in the environment and industry, fi nancial and performance-related categories. Together, these three categories represent around 93 percent of total risk (previous year: 89 percent).

Distribution of risk

as a %

Risk category	Percentage share of total risk
Environment and industry risks	40
Financial risks1	37
Performance-related risks	16
Other risks	6
Legal risks	< 1

1 The fi nancial risks (risk associated with fi nancial instruments, exchange rate and interest fl uctuations, and fi nancing) are explained in the Notes to the Consolidated Financial Statements (items 23 and 30).

In mid-2013, we changed our basis for evaluating risks. As result, we can no longer compare the Group's total risk exposure (overall risk) with the overall risk of the previous year, although we can compare individual risks to those we faced in 2012. However, our assessment of the risk situation facing the Group remains the same as last year. We have listed the main risks in this risk report.

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 the Group in the foreseeable future.

OEM: Original Equipment Manufacturer

The risk profi le of the Wacker Neuson Group is not currently analyzed or evaluated by an external body such as a rating agency.

Opportunity management system

Opportunities relate to internal and external developments that could have a positive impact on the Group. The responsibility for identifying and managing opportunities in a timely manner is vested in committees rather than specifi c individuals. These committees make decisions on innovation projects initiated by the Group in response to changing market and customer requirements. The committees include high-ranking decisionmakers from across the Group, including members of the Executive Board, affi liate managers, the strategy department, market developers plus senior employees from research and development, product management, quality management, sales and service, marketing, controlling, treasury and strategic procurement. Our decision-making process focuses on opportunities while at the same time taking the associated risks into account. We will be developing this committee system into a Group-wide, standardized opportunity management system in future. Selected potential opportunities for the Wacker Neuson Group are described in detail in the section "Opportunities and outlook for future development of the Wacker Neuson Group". p. 91

X. Information in accordance with Section 315 (4) HGB and Section 289 (4) HGB plus an explanatory report from the Executive Board in accordance with Section 176 (1) Sentence 1 AktG

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 executive bodies that may be relevant for takeovers in the Group Management Report. The same information must also be disclosed in the Management Report of Wacker Neuson SE, pursuant to Section 289 (4) HGB. Furthermore, according to Section 176 (1) Sentence 1 of the German Stock Corporation Act (AktG), the Executive Board must submit a report containing this information to the AGM. The following contains a summary

of the information pursuant to Section 315 (4) and Section 289 (4) HGB as well as the corresponding explanatory comments pursuant to Section 176 (1) Sentence 1 AktG.

Composition of subscribed capital

At Tuesday, December 31, 2013, 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 Neuson SE. 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 et seq. and 186 AktG. The provisions of AktG apply to Wacker Neuson SE in accordance with Article 9 (1) c) ii) and Article 10 of Council Regulation (EC) No 2157/2001 of October 8, 2001 on the Statute for a European company (SE) (SE Regulation), unless otherwise specifi ed in the SE Regulation.

Restrictions affecting voting rights or the transfer of shares

Information on the pool agreement

There is a pool agreement between some of the shareholders and companies attributable to the Wacker family on the one hand, and shareholders and companies of the Neunteufel family 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. Two members of the Supervisory Board are appointed by the Neunteufel family shareholders in the pool, and two by the Wacker family shareholders in the pool.

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 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

Some 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. 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 shareholders who are party to the pool agreement. In the case of a sale by a family shareholder 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 above-mentioned 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. Since May 14, 2012, each exiting family shareholder can demand to receive their compensation in the form of the shares to which they are fi nancially entitled.

Pool agreement between Lehner and Neunteufel shareholders

Martin Lehner and one of the Neunteufel shareholders have a pool agreement. Under the terms of this agreement, the Neunteufel shareholder exercises the voting rights in the company for all of Martin Lehner's shares acquired as part of the merger between the company and Neuson Kramer Baumaschinen AG (now Wacker Neuson Beteiligungs GmbH). The Neunteufel shareholder is not bound by any instructions and will always exercise these voting rights in the same way as for the shares that they themselves hold. The pool agreement also applies to shares held by Mr. Adolf Lehner and Ms. Herta Lehner. In 2013, Adolf and Herta Lehner announced that they had sold the shares in question to another Neunteufel shareholder and to members of the Wacker family. The terms of the pool agreement therefore apply directly to these shares.

The Neunteufel shareholder has a preferential purchase right to these shares in the event of a transfer to parties other than the Neunteufel shareholder.

The Executive Board is not otherwise 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

Under the German Securities Trading Act (WpHG), every shareholder of a listed company is obliged to inform the German Financial Services Supervisory Authority and the company in question, in this case Wacker Neuson SE, of the percentage of their voting rights as soon as these holdings reach, exceed or fall below certain thresholds. These thresholds are 3, 5, 10, 15, 20, 25, 30, 50 or 75 percent.

The Executive Board has been informed of the following direct or indirect participating interests in the share capital that exceed 10 percent of voting rights:

	Direct/indirect participating
Name/company	interests that exceed 10 percent of voting rights
Wacker Familiengesellschaft mbH & Co. KG, Munich, Germany	Indirect
Wacker-Werke GmbH & Co. KG, Reichertshofen, Germany	Direct and indirect
Interwac Holding AG, Volketswil, Switzerland	Indirect
VGC Invest GmbH, Herrsching, Germany	Indirect
Christian Wacker, Germany	Indirect
Dr. Ulrich Wacker, Germany	Indirect
Andreas Wacker, Germany	Indirect
Barbara von Schoeler, Germany	Indirect
Petra Martin, Germany	Indirect
Dr. Andrea Steinle, Germany	Indirect
Ralph Wacker, Germany	Indirect
Susanne Wacker-Waldmann, Germany	Indirect
Benedikt von Schoeler, Germany	Indirect
Jennifer von Schoeler, Germany	Indirect
Leonard von Schoeler, Germany	Indirect
Vicky Schlagböhmer, Germany	Indirect
Christiane Wacker, Germany	Indirect
Georg Wacker, Germany	Indirect
Baufortschritt-Ingenieurgesellschaft mbH, Munich, Germany	Indirect
PIN Privatstiftung, Linz, Austria	Indirect
NEUSON Industries GmbH, Leonding, Austria	Indirect
Johann Neunteufel, Austria	Indirect
NEUSON Ecotec GmbH, Haid bei Ansfelden, Austria	Direct and indirect
Martin Lehner, Austria	Indirect

The voting rights held by the above-mentioned shareholders correspond to around 63.1 percent of share capital. The shareholders are bound to exercise these voting rights under the terms of a pool agreement (see "Restrictions affecting voting rights or the transfer of shares" p. 81 ). The above information is based on notifi cations pursuant to Section 21 of the WpHG that Wacker Neuson SE has received and published since 2007, which was the year the company went public. The disclosures are explained in detail in the Notes to the Annual Financial Statements of Wacker Neuson SE under section "IV. Notifi cations and disclosures of changes to voting interests pursuant to Section 21 (1) or (1a) WpHG". The Executive Board is not aware of any other direct or indirect participations in the company's share capital that exceed 10 percent of voting rights.

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 vested in them through their 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 AktG. The Executive Board of Wacker Neuson SE must have at least two board members according to Article 6 (1) of the Articles of Incorporation of Wacker Neuson SE. The Supervisory Board otherwise determines the number of Executive Board members (Article 6 (2) Sentence 1 of the Articles of Incorporation). The Supervisory Board is responsible for appointing and dismissing Executive Board members; a simple majority of votes cast suffi ces for these decisions. Executive Board members shall be appointed for a maximum term of six years (Section 9 (1) and Section 39 (2) and Article 46 of the SE Regulation, Sections 84 and 85 AktG and Section 6 (2) Sentence 1 of the Articles of Incorporation). The Supervisory Board can appoint a Chairman of the Executive Board, a Deputy Chairman of the Executive Board and a Spokesperson for the Executive Board (Section 6 (2) Sentence 2 of the Articles of Incorporation). Currently, a CEO and Deputy CEO have been appointed.

Sections 179 et seq. AktG must be observed in the event of changes to the Articles of Incorporation. The AGM passes a resolution to approve changes to the Articles of Incorporation (Sections 119 (1) No. 5 and 179 (1) AktG). Under the charter of a European company (Societas Europaea or SE) such as Wacker Neuson SE, all decisions affecting the Articles of Incorporation must be approved with a majority of at least two thirds of the votes cast, unless the legislation of the state where the SE is based mandates or allows a larger majority to apply (Section 59 (1) of the regulation on the charter of an SE). Each member state is free, however, to rule that a simple majority of votes cast suffi ces, provided at least half of the subscribed capital is represented (Section 59 (2) of the regulation on the charter of an SE). German legislation has instituted this option in Section 51 (1) of the law governing implementation of the SE in Germany (SE-Ausführungsgesetz). This does not apply to changes relating to the object/ purpose of the company or relocation of the company's headquarters. Similarly, it does not apply to instances where the law mandates that the votes cast must represent a higher percentage of the subscribed capital (Section 51 (2) of the SE-Ausführungsgesetz). Accordingly, Section 21 (1) of the Articles of Incorporation states that unless otherwise stipulated by law, changes to the Articles of Incorporation require a twothirds majority of the votes cast or – if at least half of the share capital is represented – a simple majority of votes cast.

The Supervisory Board is entitled to approve changes to the Articles of Incorporation that are merely a matter of wording (Section 179 (1) Sentence 2 AktG, Section 15 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 a resolution passed at the AGM on May 22, 2012, the Executive Board is authorized, subject to the prior approval of the Supervisory Board, to acquire 7,014,000 treasury shares via the stock exchange by May 21, 2017. This acquisition may also be performed by one of the Group members on 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 must not at any time total more than 10 percent of the existing share capital. Shares must 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) must 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 to be passed 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 with Section 8 (3) AktG (Section 237 (3) No. 3 AktG). The Executive Board is authorized to change the number of shares in the Articles of Incorporation accordingly.

The Executive Board is authorized, subject to 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 in the execution 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 to members of the executive bodies and employees of associated companies. If shares are to be sold to members of the Executive Board within the framework of an executive profi t-share model, the Supervisory Board will determine the details when deciding on the overall remuneration for Executive Board members. In addition, the Executive Board is authorized, subject to the approval 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 must 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 the Frankfurt Stock Exchange on the last fi ve trading 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 subject to the exclusion of subscription rights in accordance with Section 186 (3) Sentence 4 AktG, and together with treasury shares already sold, must not exceed 10 percent of the company's share capital which exists on the date the resolution passed at the AGM came into effect. The authorization to redeem/sell shares can be availed of in full or in several partial amounts. The shareholders' subscription rights to treasury shares in the company are excluded to the extent that these shares are redeemed or sold according to the above authorizations.

2012 Authorized Capital I

According to Section 3 (3) of the Articles of Incorporation, the Executive Board is authorized to increase the company's share capital by May 21, 2017, subject to 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 17,535,000 (2012 Authorized Capital I).

However, the Executive Board is authorized, with the approval of the Supervisory Board, to exclude shareholder subscription rights:

• in the case of fractional amounts resulting from the subscription ratio;
• in the case of capital increases resulting from the granting of shares in exchange for contributions in kind for the purpose of acquiring companies, parts of companies or participating interests in companies or other assets (even if alongside the shares, part of the purchase price is paid out in cash) or as part of amalgamations or mergers;

in the case of capital increases resulting from the granting of shares in exchange for cash contributions, provided that the issue price of the new shares is not signifi cantly below the stock market price of the company's shares listed at the time when the issue price is fi nally determined in accordance with Section 203 (1) and (2) in conjunction with Section 186 (3) Sentence 4 AktG and that the total number of shares issued subject to the exclusion of subscription rights does not exceed 10 percent of the share capital neither on the date on which this authorization takes effect nor on the date this authorization is exercised. This limit of 10 percent shall also include shares which are sold, issued or due to be issued subject to the exclusion of subscription rights during the term of this authorization up until the point in time when it is exercised by virtue of other authorizations in direct or corresponding application of Section 186 (3) Sentence 4 AktG.

In all other respects, the Executive Board shall decide in consultation with the Supervisory Board on the nature of share rights, including the issue amount, and other conditions relating to issuance of shares.

The authorized capital provisions described above refl ect the practices typical of listed businesses similar to Wacker Neuson. 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

A long-term cooperation agreement with the company Caterpillar covering the production of mini excavators includes a provision that allows Caterpillar to terminate the agreement under certain conditions should a competitor to Caterpillar acquire a direct or indirect share in the company in excess of 25 percent or a share in excess of 15 percent combined with a seat on the company's Supervisory Board. The list of competitors is specifi ed in detail in the agreement.

The Schuldschein loan agreements with terms between fi ve and seven years placed by Wacker Neuson SE in February 2012 give the respective creditors termination options if third parties acquire at least 50 percent of voting rights in the company.

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

There is no such agreement.

Concluding remark

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.

XI. Declaration on corporate governance according to Section 289a HGB

On February 20, 2014, the Executive Board of Wacker Neuson SE issued a Corporate Governance Declaration pursuant to Section 289a of the German Commercial Code (HGB). This is available on the Wacker Neuson SE website at http://corporate.wackerneuson.com/ir/en-cg-governance.php.

XII. 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 Financial Statements, broken down into performance-related and non-performance related components as well as long-term incentives. The Act stipulates 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 again availed of this option for fi scal years 2011 to 2015 inclusive by way of a resolution passed at the AGM on May 26, 2011.

The Executive Board's remuneration is defi ned by the entire Supervisory Board and reviewed at regular intervals. Defi ning the structure and amount of the remuneration is based on the company's size and economic 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
• 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.
• From fi scal 2011 onwards, the variable salary has been based on average consolidated earnings after taxes for the previous three fi scal years (with transitional provisions), as reported in the approved Consolidated Financial Statements for the respective fi scal year, as well as on the return on capital employed as reported in the Consolidated Financial Statements. The Group's performance may also be taken into consideration, as refl ected in both the success with which revenue goals are achieved and the size of the EBIT margin. An upper threshold for the variable remuneration has been agreed for all Executive Board members.
• The proportion of the variable remuneration within the overall remuneration package differs in each individual case and ranges from 56 to 70 percent for 100-percent achievement of targets.
• If the Executive Board members' employment contract is terminated prematurely, but not for good cause, the members of the Executive Board each receive compensation in the amount of their average discounted

annual remuneration for the remainder of the contractual period including their variable remuneration, up to a maximum of two annual remunerations. If the contract is terminated after the age of 55 and prior to the member reaching the age of 60, 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. In the event of death, widows and dependent children receive corresponding payments for a limited period. This does not affect widow's and orphan's pensions under the pension commitment.
• The non-cash remuneration and other remuneration includes a subsidy for health 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 as part of the pension commitment upon reaching the age of 60 unless the employment relationship with the company was terminated for good cause attributable to the Executive Board member in question. In addition, an invalidity pension is paid in the event of disability or professional incapacity, and a widow's and orphan's pension is paid in the event of death. Other remuneration may have to be offset against these amounts payable.

Total remuneration for the Executive Board

Total remuneration for the Executive Board in the period under review amounted to EUR 4.9 million (previous year: EUR 5.4 million). Total remuneration for the Supervisory Board for the same period amounted to EUR 0.5 million (previous year: EUR 0.5 million). At the AGM on May 26, 2011, a resolution was again passed to refrain from itemizing this information in accordance with Section 285 (1) No. 9 a Sentences 5 to 8 in conjunction with Section 314 (2) Sentence 2 HGB in conjunction with Section 315a (1) HGB.

Information on the Supervisory Board

The remuneration structure for the members of the Supervisory Board is set down in Section 14 of the Articles of Incorporation. It was last amended at the AGM in May 2012. In line with this provision, the fi xed remuneration for each individual member of the Supervisory Board amounts to EUR 30,000. The Chairman of the Supervisory Board receives twice this amount, and his/ her Deputy receives 1.5 times the fi xed remuneration. Members of committees receive an additional remuneration, with the Chairman of each committee receiving twice the regular committee remuneration. The members of the Supervisory Board also receive a fi xed allowance for each Supervisory Board meeting in which they participate. 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.

The variable remuneration for the individual members of the Supervisory Board is based on the consolidated earnings after taxes. It is capped at 0.75 times their respective fi xed remuneration. It is calculated in line with the company's approved Consolidated Financial Statements taking Section 113 (3) of the AktG into account.

XIII. Supplementary report

As of the end of the 2014 AGM, Dr. Matthias Bruse will be stepping down from the Supervisory Board for personal reasons.

Wacker Neuson does not expect this to directly infl uence the company's profi ts, fi nancials and assets.

There have been no other events since the reporting date that could have a signifi cant impact on the Group's earnings, fi nancials and assets.

XIV. Opportunities and outlook

Overall economic outlook

• Global economy to remain on growth path
• Mixed outlook for emerging markets
• Solid performance in established markets

Global economy to remain on growth path

According to experts from the International Monetary Fund (IMF), the global economy will grow by 3.7 percent in 2014. In contrast to recent years, this will largely be driven by the developed economies.

Growth prospects for the emerging markets are less favorable than they were one year ago. There are three main reasons for this. The fi rst is the economic slowdown in China, which is set to continue over the coming years. Secondly, fi nancial market conditions in emerging economies are generally more constrained, due to capital drain and restrictive monetary policy by the central banks. And fi nally, weaker productivity growth, a reduced level of competitiveness and a slow increase in the demand for imports in the industrialized markets despite their general economic recovery.

In view of the continuing high infl ation rates in emerging economies – the result of strong wage increases and governments failing to keep a tight rein on economic policy in recent years – the latest developments have revealed some clear imbalances between individual emerging countries. The currencies of nations with current account defi cits, such as Indonesia, Turkey, South Africa and Brazil, have taken the worst hits. Most of these countries have a large current account defi cit, which makes them dependent on foreign capital. Emerging countries have already experienced widespread cash drain. In response, central banks in Turkey, Argentina and South Africa, for example, have hiked their prime rates to stem the problematic outfl ow of capital. Two countries which continue to avoid these destabilizing risks are Russia – thanks to its current account surplus, low short-term cash infl ows, stable foreign currency reserves and only mildly infl ated credit growth – and China, which has often been regarded with concern.

Overall there is a mixed outlook for the emerging markets, with greater uncertainty surrounding their economic development. We expect growth in these countries to slow down compared to the strong performance of previous years.

Global GDP growth 2014e to 2015e

Source: IMF, WEO January 2014.

Solid performance in established markets

The US economy could potentially kick start global growth in 2014, with a growth rate of 2.8 percent expected for the year. Following a strong second half of 2013, growth is set to continue in 2014, driven in particular by domestic demand.

In Europe, the high debt levels of southern European countries remain a risk factor, hindering growth. The IMF predicts 1.0 percent growth for the eurozone following the setback of 2013 (-0.4 percent). For the UK, the experts are predicting growth as high as 2.4 percent for this year.

As for Germany, the IMF predicts growth of 1.6 percent for 2014, following on from the slight expansion recorded in 2013. This would again make Germany one of the main growth drivers in Europe.

Outlook for construction and agricultural industries

• Increasing demand for effi cient products with customer demands varying at local level
• Emerging markets investing heavily in infrastructure
• Outlook improving for European construction and agricultural industries

Even though the strong growth previously seen in the emerging markets is set to slow down, these countries will continue to invest in their infrastructure in the coming years, especially in the megacities.

China's infrastructure is very well developed compared with some of its neighbors in Asia. Huge sums of money are invested in the expansion of its transport networks every year. Despite this, China is fi nding it hard to deliver infrastructure to keep pace with its enormous economic growth. Plans are being made for several new railway lines to handle passenger and freight transport. By 2020, the country will have invested around USD 700 billion in the expansion of its rail network. China's roads will also benefi t from continued investment. At present, many roads are in a poor state of repair. Nonetheless, it is now possible to reach practically every part of the country by car.

Economic growth will remain high in Indonesia, Vietnam, Cambodia, Malaysia and parts of Africa. These countries, with their considerable reserves of raw materials, will be building or expanding roads, railways and airports to cater for the needs of local growth industries. Increasing levels of wealth will lead to further, largely overground, construction activity, especially production facilities, warehouses, administrative buildings and housing. In these countries, the local construction industry often has a low level of mechanization, with insuffi cient or technologically outdated equipment.

00 10 01 11 12e 13e 14e 15e 16e 02 03 04 05 06 07 08 09 in units Average 2012–2016e: 998,927 400,000 600,000 800,000 700,000 500,000 900,000 1,000,000 1,100,000

Global sales of construction equipment 2000 to 2016e

Revenues 2000–2011 Revenues 2012–2016 (forecast)

South American countries will also be investing billions in their infrastructure in the coming years.

The European companies that are already well positioned in these markets will continue to profi t from strong growth conditions. This intense activity will push average annual global construction equipment unit sales up to one million by 2016.

Rising demand for machinery will be accompanied by a clear shift in the revenue-generating share of individual countries. China in particular – already the world's largest construction equipment market – will account for an above-average share of construction equipment sales in the medium to long term, with other emerging markets also accounting for a fast-growing share of global revenue. By 2020, these markets should make up a 62-percent share of the global construction machinery market. Even allowing for rising demand in North America and Western Europe, these regions will see their share of the overall market sink from 42 percent to 38 percent by 2020.

Nevertheless, the established markets are still expected to grow at a solid rate. In Western Europe, the construction equipment market is expected to grow by 1.6 percent per year. For North America, the corresponding fi gure is 1.8 percent. In the US, the market penetration of rental companies has increased in recent years, and this segment already accounts for around 50 percent of the overall construction equipment market. Because the US construction industry is only experiencing slow growth,

Global construction equipment market through 2020 Index (value), 2012 to 2020

Source: Off-Highway Research, October 2012. Source: Oliver Wyman, 2013.

the experts are now speaking in terms of a new reality – a level well below pre-crisis levels (2006). Rental companies and construction equipment dealers are therefore increasingly turning to other industries such as energy, where there is a growing demand for machinery.

US rental market: revenue and penetration

Source: Executing for Growth and Returns, 2014 Outlook Investor Presentation, Fourth Quarter – Full Year 2013.

In Europe, construction investment over the coming years will be focused on road, rail and transport networks and on telecommunications. Other priorities include general renovation and modernization projects and measures to protect the environment and limit climate change. Residential investments are due to rise. In the southern European countries, cuts in government spending could continue to dampen willingness to invest in construction equipment.

According to the VDMA, German construction materials and equipment manufacturers reported a steady intake of orders in January 2014 – coming mainly from Germany and the Scandinavian countries. The German construction industry expects revenue to rise by 3.5 percent in 2014 to just under EUR 100 billion. The number employed in the sector is also predicted to rise.

Cumulated construction and economic growth (Europe) 2014e to 2016e (3 years)

Source: Euroconstruct, November 2013.

Bright prospects for European agricultural sector

The outlook of European agricultural equipment manufacturers had brightened considerably at the start of 2014 according to the VDMA. Over two thirds expect steady or increased sales in the fi rst half of 2014. In general, all countries can look forward to rising demand, although this will be less pronounced in Italy, France and Poland. Even in Spain, a country that was hit hard by the crisis, positive trends are emerging, although developments are still at a very low level.

However, universal trends – such as the world's growing population and the resulting increase in demand for foodstuffs – continue to have a positive effect on demand for agricultural equipment. The basic need for modern machines, particularly to work agricultural holdings effi ciently, will continue to increase. Rising agricultural prices should bolster landholders' income – a factor which, in turn, should further fuel demand for Weidemann- and Kramer-branded equipment.

Source: Euroconstruct, November 2013.

Wider opportunities to drive product sales

Global opportunities for construction

• Infrastructural needs in emerging markets
• Consequences of climate change and greater emphasis on environmental protection
• Expansion of telecommunication networks (including expansion of broadband network)
• Expansion and modernization of road and rail networks worldwide
• Reconstruction (renovation, modernization)
• Greater demand for residential developments partly driven by rising urbanization
• Recovery of commercial and residential construction sectors

Global opportunities for agriculture and other sectors

• Increasing global demand for food and fodder due to population growth
• Structural shift towards fewer, larger holdings (especially in Europe) with greater demand for mechanization
• Increasing industrialization/automation of agricultural operations, even in emerging economies
• Trend towards multifunctional compact equipment for transporting material in industrial sector
• Rising demand for effi cient products in the energy sector (for example, for oil and gas production)

Opportunities and outlook for future development of the Wacker Neuson Group

• Strategies for further profi table growth
• Internationalization, diversifi cation, synergies
• Strong performance expected in 2014 and 2015

Strategic development at Wacker Neuson

Global trends in the construction and agricultural industries will lead to greater global demand for compact and light equipment. The biggest drivers of this growth will be as follows:

• By 2050, the world's population will have grown from 6 billion to around 9 billion, with the greatest increases in Asia and Africa.
• In Asia in particular, higher purchasing power and demand from new groups of consumers will lead to increased investment in construction and housing.
• By the year 2025, around two thirds of the world's population will be living in cities. The greatest challenges in terms of construction, housing and infrastructure will be faced by the megacities with over 10 million inhabitants in the developing and emerging countries.

Data extrapolated by the International Energy Agency (IEA) indicates an increase in demand for primary energy of around 50 percent, accompanied by a corresponding increase in CO2 emissions.

These trends present huge opportunities for Wacker Neuson to build on its cross-industry, leading expertise and expand its business in both industrialized and emerging markets.

Wacker Neuson's strategy is geared towards lasting, profi table growth. As part of its 2012 strategic business planning process, management set out its targets for the next fi ve years. This involved elaborating basic strategies and concrete measures for defi ned focus areas.

Further internationalization

In the long-term, we want to extend our global reach and establish a strong position in all construction and agriculture markets where we have a presence. We see major growth opportunities for Wacker Neuson in emerging markets. Currently, these economies only account for around 12 percent of revenue. Our long-term aim is to increase our share in markets outside of Europe to around 50 percent (2013: 29 percent). We see strong prospects in emerging markets such as China, South America

and Russia in particular. The variety of our product portfolio will allow us to gain an even greater foothold in these markets. We will supply products and services, in both the light and compact equipment segments, that are tailored to the market and customer needs, increasing our chances of success. To support these efforts, we will also expand our sales and service network. This increased level of internationalization will broaden our activity base and make the Group more resilient to isolated regional fl uctuations.

Further growth in established markets

Our strong fi nancial position and our market reach are a good foundation for further growth in our core markets of Europe and North America. Our strategy is based on strengthening our innovation and quality leadership. We will therefore continue to invest in research and development with the aim of further expanding our portfolio and reinforcing our position as a technology leader. We plan to expand our service portfolio in particular in the spare parts and repairs business in line with evolving customer requirements. Our strategy focuses on greater penetration of the European and American markets over the coming years. By focusing more on user processes and market requirements, we aim to align sales in both of our core markets even more closely with customer needs and priorities. In America, we will also focus on expanding our dealer network for light and compact equipment.

Sales synergies and greater diversifi cation

Active cross-selling across different segments allows us to continue to leverage global sales synergies. Our sales affi liates will offer specifi c industries an even more tailored product portfolio in order to serve other markets outside the cyclical construction industry. Customers in gardening and landscaping, agriculture and other branches of industry already contribute signifi cantly to our revenue. Targeted diversifi cation and crosssegment synergies will help to stabilize the Wacker Neuson Group in a volatile climate.

Future partnerships and acquisitions

On the compact equipment front, we have formed strategic alliances with market leaders like Caterpillar and Claas to drive further growth potential in this segment. With a view to enhancing our product portfolio and expanding our international footprint, we are planning further partnerships and acquisitions in the medium to long term.

Planned changes to company structure, strategy and targets

The Wacker Neuson Group is pursuing a long-term growth strategy which will be implemented systematically. Short- to medium-term objectives and measures will be adapted as needed to changing dynamics in order to ensure focused execution. The annual Global Leader Summit attended by representatives of all global Group companies is a strategic platform for sharing information and international experience and for working on future projects. No major changes need to be made to the 2012 GIPI (Growth, Internationalization, Professionalization, Integration) strategy and targets defi ned in line with this strategy.

A fundamental realignment took place in 2011, when Wacker Neuson SE was restructured as a holding company. It now acts as an umbrella for operating companies that are separate legal entities. New companies can easily be integrated into the holding structure. As part of our expansion strategy, we intend to establish more new affi liates in the next few years. At the end of 2013, for example, we set up a new regional headquarters for ASEAN and SAARC in Singapore.

In 2013, we created a number of new central functions and roles, including procurement & quality, compliance, strategic planning, corporate technology standardization & design, corporate projects and corporate social responsibility & the environment.

New processes and technologies

In 2014, we plan to realign our global procurement activities through central management of purchasing and supplier management. Quality management will also be organized on a Group-wide basis.

On the compliance front, we will be implementing preventative measures and initiatives aimed at raising awareness of compliance guidelines worldwide as part of our plans to expand our global compliance management engagement. These activities will be aimed at our employees and business partners and will also include dedicated training sessions.

Regional action items for Wacker Neuson

Americas

• Market penetration of light equipment via new sales channels and products
• Expansion of compact equipment
• Sales synergies (cross-selling)
• Above-average growth in South America

Europe

• Defend and expand market leadership
• Increase market share beyond Central Europe
• Expand agricultural offering for farmyards, stalls and pastures with the Weidemann and Kramer brands
• Expand service offering

Asia-Pacifi c

• Strengthen premium segment position and develop mid-market segment for light equipment
• Launch of compact equipment
• Expansion in ASEAN and SAARC countries
• Establish compact equipment in Australia/New Zealand

Combined Management Report

The central strategic planning function will oversee the planning process and the implementation of important future projects.

Lean management is becoming an increasingly important topic. Initial activities are already underway at a number of sites and will be standardized across the Group. We aim to further standardize our technology and reporting processes. When it comes to innovative technologies, we will keep our focus fi rmly on meeting market requirements, whether we are developing new, alternative drive technologies or optimizing user protection, comfort and effi ciency levels.

New products and services

It is becoming increasingly important for manufacturers to tailor products to the needs of customers in local markets. We therefore focus our international marketing activities on our customers' regional requirements. We have taken the fi rst steps to directing our marketing at specifi c target groups, for example in the underground, gardening and landscaping and track construction sectors, both on our website and in our brochures and sales activities. We will align these activities with our target groups even more closely in 2014.

Over the coming years, the Wacker Neuson Group will be looking to enter more emerging markets in which we do not currently have a foothold. We developed our range of Value products to meet the needs of regional customers and improve our market penetration. We have launched our Value products

in countries such as China, Thailand and South Africa and are currently considering expanding our offering to other selected emerging markets.

Our development activities are geared towards creating more effi cient, environmentally sound machines with low or zero emissions levels. Our ECO range of products, which we launched in 2013, together with our ECO seal (ECO = ECOlogy and ECOnomy) further refl ects our commitment here.

In the services segment, we will be focusing on leveraging and expanding our used equipment business (trade-in, maintenance and resale) and broadening our service network – either through collaboration with external service partners or our own in-house offers.

As we expand into new markets, we also have to offer our customers fi nancing solutions. Wacker Neuson is intensifying its collaboration with partners with this in mind and will be offering a wider portfolio of fi nancing options in 2014.

The Wacker Neuson Academy near Munich offers specialized training courses as well as global sales and service training concepts for our own sales and service employees and employees from our sales partners' organizations. Due to the positive feedback we have received, we will be increasing the number of courses over the coming years.

Overview

	2014e	2015e
Revenue	€ 1.25 to 1.3 bn	Further growth
EBITDA margin	13.0 to 14.0%	Same as 2014
EBIT margin	8.0 to 9.0%	Same as 2014
Investments	approx. € 85 m	Adapted to market developments

We believe that the decision to launch Kramer-branded products for the agricultural sector will increase sales of our all-wheel drive wheel loaders and telescopic handlers. As for Weidemann, we will continue to expand the brand outside of central Europe.

Group forecast

Revenue growth expected again in 2014

The fact that the Group has almost doubled its revenue in only four years clearly confi rms that the company is on the right strategic course. We expect further growth in 2014 and in the following years.

The current fi scal year again got off to a satisfactory start on the business front. In Europe, we benefi ted from a relatively mild winter. We have a healthy order book for compact equipment, and light equipment is also performing well.

Assuming market trends remain positive, the Executive Board predicts overall revenue for fi scal 2014 to amount to between EUR 1.25 and 1.30 billion (2013: EUR 1.16 billion) with an EBITDA margin of between 13.0 and 14.0 percent (2013: 13.2 percent). The EBIT margin is expected to lie somewhere between 8.0 and 9.0 percent (2013: 8.2 percent).

The expansion of our global sales network and the costs associated with these efforts could impact our profi t in the medium term. However, we view this as an investment in our future growth.

Segment trends

Although we expect positive development in our core Europe region, we expect the greatest growth fi gures to come from beyond Europe.

We predict further growth through 2014 and the following years for all three business segments – light equipment, compact equipment and services. Compact equipment is expected to continue realizing dynamic growth fi gures, attributable in particular to increased international sales and our existing strategic alliances. We expect the share of this business segment in total revenue to further increase in the medium term. As the services segment continues to grow, we expect its share of revenue to remain at more or less the same level.

Planned fi nancing options, future investments and cost trends

We intend to remain on our proven path, continuing to invest in profi table projects and building the business systematically across all regions and business segments. For the current fi scal year, we have earmarked around EUR 85 million in total (2013: EUR 87 million) for investments.

As in 2013, we are again expecting a positive free cash fl ow for 2014, with cash fl ow from operating activities exceeding cash fl ow from investment activities.

We aim to maintain our sound balance sheet structure with a comparatively high equity ratio. Our equity ratio currently stands at around 71 percent, net fi nancial debt is relatively low – we do not intend to increase gearing by a signifi cant margin – and our fi nancial position is correspondingly healthy. Strong fi nancials and assets will help to drive our company's growth over the next two years.

Outlook through 2015

As things stand and assuming market trends remain positive, we predict continued sales growth for fi scal 2015 and hope to maintain profi tability at around the 2014 level.

Summary forecast

We are optimistic about fi scal 2014 and 2015 and expect further growth.

The global trend towards infrastructure expansion and improvement offers opportunities for our business model. Global investments in road, rail and telecommunication networks as well as the modernization of buildings is set to rise, fueling demand for compact and light equipment. We will be able to meet this demand by expanding our international presence.

The overall economic outlook for 2014 and the following years is positive, in particular in our core markets. We expect sales of compact and light equipment to increase further as demand rises.

We want our shareholders to continue to share in the success of the Group. We therefore aim to maintain our sound dividend policy and plan to make yearly dividend payments to our shareholders provided our projections are accurate.

Munich, March 12, 2014

Wacker Neuson SE, Munich

The Executive Board

Cem Peksaglam Günther C. Binder (CEO)

Martin Lehner (Deputy CEO)

Integration WE USE SALES SYNERGIES TO EXPAND ON OUR MARKET POSITION

Revenue increase in light and compact equipment segments, 2009 through 2013

Contents Consolidated Financial Statements

Consolidated Income Statement	98
Consolidated Statement of
Comprehensive Income	99
Consolidated Balance Sheet	100
Consolidated Statement of Change in Equity	101
Consolidated Cash Flow Statement	102
Consolidated Segmentation	103

Notes to the Consolidated

Financial Statements	104
General information on the company	104
General information on accounting standards	104
Changes in accounting under IFRS	105
Accounting and valuation methods	110

Explanatory Comments on the

	Income Statement	115
1	Revenue	115
2	Other income	115
3	Personnel expenses	115
4	Other operating expenses	116
5	Financial result	116
6	Taxes on income	116
7	Earnings per share	117

Explanatory Comments on the

	Balance Sheet	118
8	Property, plant and equipment	118
9	Investment properties	119
	10 Intangible assets	120
	11 Other non-current assets	123
	12 Inventories	123
	13 Trade receivables	123

14 Other current assets	124
15 Cash and cash equivalents	124
16 Non-current assets held for sale	124
17 Total equity	124
18 Provisions for pensions and
similar obligations	125
19 Other provisions	128
20 Financial liabilities	130
21 Trade payables	132
22 Other current liabilities	132
23 Derivative fi nancial instruments	133
Other Information	135
24 Contingent liabilities	135
25 Other fi nancial liabilities	135
26 Additional information on
fi nancial instruments	138
27 Events since the balance sheet date	141
28 Segmentation	141
29 Cash fl ow statement	142
30 Risk management	142
31 Executive bodies	145
32 Related party disclosures	146
33 Auditor's fee	147
34 Declaration regarding the German
Corporate Governance Code	147
35 Availing of exemption provisions
according to Section 264 (3)
and/or Section 264b HGB	147
Responsibility Statement by the Management	148
Unqualifi ed Auditors' Opinion	149

Consolidated Income Statement

For the period from January 1 through December 31

		Jan. 1 –	Jan. 1 –
in € K	Notes	Dec. 31, 2013	Dec. 31, 2012
Revenue	(1)	1,159,522	1,091,716
Cost of sales		-806,806	-760,178
Gross profi t		352,716	331,538
Sales and service expenses		-166,757	-160,555
Research and development expenses		-25,690	-26,750
General administrative expenses		-67,043	-62,235
Other income	(2)	14,283	15,072
Other expenses	(4)	-12,761	-12,171
Profi t before interest and tax (EBIT)		94,748	84,899
Financial income	(5a)	1,898	1,627
Financial expenses	(5b)	-8,695	-8,688
Profi t before tax (EBT)		87,951	77,838
Taxes on income	(6)	-26,419	-23,135
Profi t for the year		61,532	54,703
Of which are attributable to:
Shareholders in the parent company		61,167	54,131
Minority interests		365	572
		61,532	54,703
Earnings per share in euros (diluted and undiluted)	(7)	0.87	0.77

Consolidated Statement of Comprehensive Income

For the period from January 1 through December 31

		Jan. 1 –	Jan. 1 –
in € K	Notes	Dec. 31, 2013	Dec. 31, 2012
Profi t for the year		61,532	54,703
Other income
Income to be recognized in the income statement for subsequent periods:
Exchange differences		-18,608	-1,600
Profi t from securing cash fl ows	(23)	0	16
Effect of taxes on income		0	0
Income to be recognized in the income statement for subsequent periods		-18,608	-1,584
Income not to be recognized in the income statement for subsequent periods:
Actuarial gains/losses from pension obligations		-1,006	-4,858
Effect of taxes on income		312	1,302
Income not to be recognized in the income statement for subsequent periods		-694	-3,556
Other comprehensive income after tax		-19,302	-5,140
Total comprehensive income after tax		42,230	49,563
Of which are attributable to:
Shareholders in the parent company		41,865	48,991
Minority interests		365	572
		42,230	49,563

Consolidated Balance Sheet

Balance at 31 December

in € K	Notes	Dec. 31, 2013	Dec. 31, 2012
Assets
Property, plant and equipment	(8)	386,384	386,075
Property held as fi nancial investment	(9)	18,476	20,666
Goodwill	(10a)	236,259	236,603
Intangible assets	(10)	108,505	103,178
Deferred tax assets	(6)	30,285	31,706
Other non-current fi nancial assets	(11)	10,457	9,923
Other non-current non-fi nancial assets	(11)	1,681	2,056
Total non-current assets		792,047	790,207
Inventories	(12)	333,812	360,121
Trade receivables	(13)	163,953	147,838
Tax offsets	(6)	4,673	4,915
Other current fi nancial assets	(14)	2,091	3,118
Other current non-fi nancial assets	(14)	10,298	13,694
Cash and cash equivalents	(15)	15,533	18,867
Non-current assets held for sale	(16)	0	6,045
Total current assets		530,360	554,598
Total assets		1,322,407	1,344,805

Equity and liabilities

Subscribed capital	(17)	70,140	70,140
Other reserves	(17)	576,596	595,898
Net profi t/loss	(17)	288,745	248,620
Equity attributable to shareholders in the parent company		935,481	914,658
Minority interests		3,865	3,500
Total equity		939,346	918,158
Long-term fi nancial borrowings	(20)	130,594	134,807
Deferred tax liabilities	(6)	33,124	33,475
Long-term provisions	(18) (19)	39,498	38,856
Total non-current liabilities		203,216	207,138
Trade payables	(21)	44,702	51,143
Short-term borrowings from banks	(20)	61,698	97,853
Current portion of long-term borrowings	(20)	428	437
Short-term provisions	(19)	12,948	12,804
Tax liabilities	(6)	310	1,834
Other short-term fi nancial liabilities	(22)	22,241	21,670
Other short-term non-fi nancial liabilities	(22)	37,518	33,768
Total current liabilities		179,845	219,509
Total liabilities		1,322,407	1,344,805

Consolidated Statement of Change in Equity

Balance at 31 December

in € K	Sub scribed capital	Capital reserves	Exchange differences	Other neutral changes	Net profi t/ loss	Equity attri butable to shareholders in the parent company	Minority interests	Total equity
Notes	(17)	(17)	(17)	(17)	(17)
Balance at January 1, 2012	70,140	618,661	-13,680	-3,942	229,886	901,065	2,928	903,993
Profi t for the year	0	0	0	0	54,131	54,131	572	54,703
Other income	0	0	-1,600	-3,541	0	-5,141	0	-5,141
Total comprehensive income	0	0	-1,600	-3,541	54,131	48,990	572	49,562
Change in consolidation
structure	0	0	0	0	-327	-327	0	-327
Dividends	0	0	0	0	-35,070	-35,070	0	-35,070
Balance at December 31, 2012	70,140	618,661	-15,280	-7,483	248,620	914,658	3,500	918,158
Profi t for the year	0	0	0	0	61,167	61,167	365	61,532
Other income	0	0	-18,608	-694	0	-19,302	0	-19,302
Total comprehensive income	0	0	-18,608	-694	61,167	41,865	365	42,230
Dividends	0	0	0	0	-21,042	-21,042	0	-21,042
Balance at December 31, 2013	70,140	618,661	-33,888	-8,177	288,745	935,481	3,865	939,346

Consolidated Cash Flow Statement

For the period from January 1 through December 31

		Jan. 1 –	Jan. 1 –
in € K	Notes	Dec. 31, 2013	Dec. 31, 2012
EBT		87,951	77,838
Adjustments to reconcile profi t before tax to net cash fl ows:
Depreciation and amortization		58,604	56,763
Foreign exchange result		-11,379	-806
Gains/losses from sale of intangible assets and property, plant and equipment		709	-909
Book value from the disposal of rental equipment		12,255	6,863
Losses from derivatives (cash fl ow hedging)		0	11
Actuarial losses from pension obligations		-694	-3,551
Financial result	(5)	6,797	7,061
Changes in misc. assets		2,649	380
Changes in provisions		786	100
Changes in misc. liabilities		2,767	-1,222
Changes in net current assets:
Changes in inventories	(12)	26,309	-84,281
Changes in trade receivables	(13)	-16,115	10,520
Changes in trade payables	(21)	-6,441	-11,219
		3,753	-84,980
Interest paid		-8,500	-5,414
Income tax paid		-25,192	-39,964
Interest received		2,078	1,432
Cash fl ow from operating activities		132,584	13,602
Purchase of property, plant and equipment	(8)	-71,793	-93,944
Purchase of intangible assets	(10)	-14,968	-10,085
Proceeds from the sale of property, plant and equipment,
intangible assets and non-current assets held for sale		10,887	4,156
Cash fl ow from investing activities		-75,874	-99,873
Dividends	(17)	-21,042	-35,070
Cash receipts from short-term/long-term borrowings		1,509	125,761
Repayments from short-term/long-term borrowings		-40,411	-1,811
Payment of fi nance lease liabilities		-123	-124
Cash fl ow from fi nancing activities		-60,067	88,756
Decrease in cash and cash equivalents		-3,357	2,485
Change in cash and cash equivalents due to consolidation		0	80
Effect of exchange rates on cash and cash equivalents		23	-588
Change in cash and cash equivalents		-3,334	1,977
Cash and cash equivalents at beginning of period	(29)	18,867	16,890
Cash and cash equivalents at end of period	(29)	15,533	18,867

Consolidated Segmentation

For the period from January 1 through December 31

Segmentation (geographical segments)

in € K	Europe	Americas	Asia-Pacifi c	Consolidation	Group
2013
Segment revenue
Total external sales	1,339,811	721,414	51,715
Less intrasegment sales	-449,887	-378,454	-3,017
	889,924	342,960	48,698
Intersegment sales	-63,699	-45,757	-12,604
Total	826,225	297,203	36,094	0	1,159,522
EBIT	79,802	21,425	4	-6,483	94,748
EBITDA	131,177	27,818	840	-6,483	153,352
Net fi nancial debt	113,609	59,517	4,061	0	177,187
Working capital	300,711	145,019	22,163	-14,830	453,063
Non-current assets	680,527	60,568	10,210	0	751,305
Average number of employees	3,211	680	244	0	4,135
in € K	Europe	Americas	Asia-Pacifi c	Consolidation	Group
2012
Segment revenue
Total external sales	1,277,946	384,877	55,651
Less intrasegment sales	-422,899	-65,997	-2,902
	855,047	318,880	52,749
Intersegment sales	-78,642	-42,685	-13,633
Total	776,405	276,195	39,116	0	1,091,716
EBIT	59,350	29,106	2,101	-5,658	84,899
EBITDA	109,353	35,124	2,843	-5,658	141,662
Net fi nancial debt	204,762	4,486	4,981	0	214,229
Working capital	320,306	128,736	25,511	-17,737	456,816
Non-current assets	673,002	64,018	11,558	0	748,578
Average number of employees	3,070	650	238	0	3,958

Revenue with non-Group companies generated by affi liates headquartered in Germany came to EUR K 437,948 (previous year: EUR K 441,112).

Segmentation (business segments)

in € K	2013	2012
Segment revenue from external customers
Light equipment	407,169	400,404
Compact equipment	519,955	466,455
Services	248,453	239,155
	1,175,577	1,106,014
Less cash discounts	-16,055	-14,298
Total	1,159,522	1,091,716

Notes to the Consolidated Financial Statements

General information on the company

Wacker Neuson SE (referred to as the company in the following) is a listed European stock corporation (Societas Europaea or SE) headquartered in Munich (Germany). It is entered in the Register of Companies at the Munich Local Court under HRB 177839.

Wacker Neuson shares have been listed since May 2007 on the regulated Prime Standard segment of the German stock exchange in Frankfurt. The company has been listed in the SDAX since September 2007.

General information on accounting standards

The following Consolidated Financial Statements for fiscal 2013 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 IFRS Interpretation Committee (IFRS IC) as adopted by the EU, and in supplementary compliance with the provisions set forth in Section 315a (1) of the German Commercial Code (HGB). All valid and binding standards for fiscal 2013 have been applied.

The Consolidated Financial Statements comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the Notes to the Consolidated Financial Statements, the consolidated cash flow statement, as well as the consolidated statement of changes in equity. In addition, a Group Management Report, which was combined with the Management Report of Wacker Neuson SE, was prepared in accordance with Section 315a HGB. The Consolidated Financial Statements are prepared using the acquisition cost method. The income statement is prepared in the "cost-ofsales" format. The Consolidated Financial Statements have been prepared in euros (EUR). All figures are presented in thousand euros (EUR K), rounded to the nearest thousand, unless otherwise stated.

Wacker Neuson SE's fiscal year corresponds to the calendar year. The Consolidated Financial Statements for fiscal 2013 (which include prior-year figures) were approved for publication by the Executive Board on March 26, 2014.

Changes in accounting under IFRS

Standards and interpretations applied for the first time in the fiscal year

The following standards, amendments to standards and interpretations are mandatory from January 1, 2013:

Name	Description	Mandatory as of1	Date of endorsement
IAS 1	Amendment: Recognition of items under other com prehensive income	July 1, 2012	June 5, 2012
IAS 12	Amendment: Recovery of underlying assets	Jan. 1, 2013	Dec. 11, 2012
IFRS 1	Amendment: Severe hyperinflation and removal of fixed dates for first-time adopters	Jan. 1, 2013	Dec. 11, 2012
IFRS 7	Amendment: Information on offsetting financial assets and liabilities	Jan. 1, 2013	Dec. 11, 2012
IFRS 13	Fair value measurement	Jan. 1, 2013	Dec. 11, 2012
IFRIC 20	Stripping costs in the pro duction phase of a surface mine	Jan. 1, 2013	Dec. 11, 2012
	Improvements to IFRS (2009–2011)	Jan. 1, 2013	Mar. 27, 2013
IFRS 1	First-time adoption of International Financial Re porting Standard (amended version)	Jan. 1, 2013	Mar. 4, 2013

1 For fiscal years that start on or after this date.

The standards to be applied for the first time in this fiscal year did not have any significant impact on the accounting and valuation methods used by the Group, with the exception of the following:

• ^J As a result of changes to IAS 1 (presentation of items of other comprehensive income), the company presented information on the nature of items not recognized in profit/ loss for the period, indicating in the consolidated statement of comprehensive income those items that may be reclassified and those that may not be reclassified.
• ^J The new IFRS 13 standard defines uniform guidelines governing the determination of fair value. As a result of the application of the standard, the Group reevaluated the accounting methods that it uses to measure fair value, in particular the input parameters that the Group draws on when determining the fair value of a liability, for example the risk of non-performance. The application of IFRS 13 did not have an impact on the measurement of fair value for the Group. However, it does call for additional disclosures. These can be found in the notes to the individual assets and liabilities whose fair value has been measured.

The Group already applied IAS 19 (Employee Benefits) (amended in 2011, IAS 19R) voluntarily in fiscal 2012 (previous year).

IAS 36, (Recoverable Amount Disclosures for Non-Financial Assets) is mandatory for fiscal years that start after January 1, 2014. However, the Group applied it voluntarily in fiscal 2013. This resulted in changes to the disclosures regarding assets and cash generating units.

Standards and interpretations that have been published but not yet applied

The following financial reporting standards have been published but have not yet come into force, which is why there is no obligation to apply them yet. Should these financial reporting standards be endorsed by the European Union, earlier voluntary adoption would be feasible. At present, the Group aims to apply these standards from the date on which they take effect.

Name	Description	Mandatory as of1	Date of endorsement
IFRS 10	Consolidated financial statements	Jan. 1, 2014	Dec. 11, 2012
IFRS 11	Shared agreements	Jan. 1, 2014	Dec. 11, 2012
IFRS 12	Disclosure of interests in other entities	Jan. 1, 2014	Dec. 11, 2012
IAS 27	Consolidated and sepa rated financial statements (amended version)	Jan. 1, 2014	Dec. 11, 2012
IAS 28	Investments in associates (amended version)	Jan. 1, 2014	Dec. 11, 2012
IAS 32	Offsetting assets and liabilities	Jan. 1, 2014	Dec. 11, 2012
	Investment entities (amendments to IFRS 10, IFRS 12 and IAS 27)	Jan. 1, 2014	Nov. 20, 2013
	Transition guidance (amendments to IFRS 10, IFRS 11 and IFRS 12)	Jan. 1, 2014	Apr. 4, 2013
IAS 39	Novation of derivatives and continuation of hedge accounting	Jan. 1, 2014	Dec. 19, 2013
IFRIC 21	Public charges	Jan. 1, 2014	Planned for Q2/2014
IAS 19	Defined benefit plans: employee contributions	July 1, 2014	Planned for Q4/2014
	Improvements to IFRS (2010–2012)	July 1, 2014	Planned for Q4/2014
	Improvements to IFRS (2011–2013)	July 1, 2014	Planned for Q4/2014
IFRS 9	Financial instruments (recognition, classification and measurement) and hedging relationships	provisionally decided Jan. 1, 2018	delayed
IFRS 14	Regulatory deferrals/ accruals	Jan. 1, 2016	Planned for Q1/2015

For fiscal years that start on or after this date.

First-time application of the above-mentioned standards and interpretations is unlikely to substantially change the current accounting and valuation methods of the Group, with the exception of the following amendments:

• ^J IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associated companies, structured entities and off-balance-sheet units. The disclosures required under IFRS 12 will result in significantly more information in the Consolidated Financial Statement, in particular regarding affiliates.
• ^J IFRS 9 represents the first phase of the IASB project to replace IAS 39. It deals with the classification and evaluation of financial assets and liabilities in accordance with IAS 39. In November 2013, the IASB launched the next phase in the development of the new IFRS 9 (Financial Instruments) standard by publishing guidelines governing hedge accounting. The standard is designed to enhance and amend the previous version of IFRS 9. It differs from the previous legal situation above all with regard to new guidelines governing the designation of instruments and risks, effectiveness requirements, amendments to and the dissolution of hedging instruments and, in some cases, the disclosure of hedging instruments on the balance sheet. It changes a number of existing standards, including IFRS 7, which governs mandatory disclosures relating to financial instruments. The application of the first part of phase I will affect the classification and evaluation of the Group's financial assets. The Group does not expect the second part of this project phase to have a material impact on its assets, financials or earnings. The third phase, which was completed in November 2013, relates to hedge accounting. To obtain a comprehensive overview of the potential effects, the Group will quantify the impact in conjunction with the other phases, as soon as these are published.

Closing date

The closing date for all affiliates included in the Consolidated Financial Statements is December 31 of the respective year. The current accounting period is January 1, 2013 through December 31, 2013.

Consolidation structure

see fig. on p. 107

In addition to the parent company, Wacker Neuson SE, the Consolidated Financial Statements as at December 31, 2013 include the following affiliates in which the company has the following direct or indirect shareholdings:

	City	Country	Wacker Neuson SE shareholding as a %		Equity in	Segment
					€ K
Company Name			direct	indirect
Wacker Neuson Produktion GmbH & Co. KG	Munich	Germany	100		53,672	Europe
Wacker Neuson PGM Verwaltungs GmbH	Munich	Germany		100	28	Europe
Wacker Neuson Vertrieb Deutschland GmbH & Co. KG	Munich	Germany	100		88,824	Europe
Wacker Neuson SGM Verwaltungs GmbH	Munich	Germany		100	28	Europe
Wacker Neuson Vertrieb Europa GmbH & Co. KG	Munich	Germany	100		37,574	Europe
Wacker Neuson SEM Verwaltungs GmbH	Munich	Germany		100	28	Europe
Weidemann GmbH	Diemelsee-Flechtdorf	Germany	100		38,106	Europe
Wacker Neuson Pty Ltd.	Springvale (near Melbourne)	Australia	100		13,441	Asia-Pacific
Wacker Neuson Máquinas Ltda.	Jundiaí (near Sao Paulo)	Brazil	100		3,167	Americas
Wacker Neuson Ltda.	Huechuraba (near Santiago)	Chile	100		7,948	Americas
Wacker Neuson Limited	Hong Kong	Hong Kong	100		4,042	Asia-Pacific
Wacker Neuson Machinery Trading (Shenzhen) Ltd. Co.	Shenzhen	China		100	0	Asia-Pacific
Wacker Neuson ApS	Karlslunde	Denmark	100		2,032	Europe
Wacker Neuson S.A.S.	Brie-Comte-Robert (near Paris)	France	100		7,541	Europe
Wacker Neuson Ltd.	Waltham Cross (near London)	UK	100		5,505	Europe
Wacker Neuson Equipment Private Ltd.	Bangalore	India	100		821	Asia-Pacific
Wacker Neuson srl con socio unico	San Giorgio di Piano (near Bologna)	Italy	100		344	Europe
Wacker Neuson Ltd.	Mississauga (near Toronto)	Canada	100		7,178	Americas
Wacker Neuson S.A. de C.V.	Mexico City	Mexico	100		4,522	Americas
Wacker Neuson B.V.	Amersfoort	Netherlands	100		3,982	Europe
Wacker Neuson AS	Hagan (near Oslo)	Norway	100		5,058	Europe
Wacker Neuson Beteiligungs GmbH	Hörsching (near Linz)	Austria	100		142,936	Europe
Wacker Neuson Linz GmbH	Hörsching (near Linz)	Austria		100	90,208	Europe
Wacker Neuson Rhymney Ltd.	Tredegar	UK		100	4,179	Europe
Wacker Neuson Kragujevac d.o.o.	Kragujevac	Serbia		100	413	Europe
Wacker Neuson Lapovo d.o.o.	Lapovo	Serbia		100	1,445	Europe
Kramer-Werke GmbH	Pfullendorf	Germany		95	96,339	Europe
PADEM Grundstücks-Vermietungs-	Dusseldorf	Germany		90	8	Europe
gesellschaft mbH & Co. Objekt Gutmadingen KG
Wacker Neuson Grundbesitz GmbH & Co. KG	Pfullendorf	Germany		95	7,120	Europe
Wacker Neuson Grundbesitz Verwaltungs GmbH	Pfullendorf	Germany		95	23	Europe
Wacker Neuson Immobilien GmbH	Überlingen	Germany		95	3,160	Europe
Wacker Neuson GmbH	Vienna	Austria	100		15,048	Europe
Wacker Neuson Manila, Inc.	Dasmariñas (near Manila)	Philippines	100		8,039	Asia-Pacific
Wacker Neuson Sp. z.o.o.	Jawczyce (near Warsaw)	Poland	100		8,248	Europe
Wacker Neuson GmbH	Moscow	Russia	100		3,222	Europe
Wacker Neuson AB	Södra Sandby (near Malmö)	Sweden	100		814	Europe
Drillfix AG	Volketswil (near Zurich)	Switzerland	100		243	Europe
Wacker Neuson AG	Volketswil (near Zurich)	Switzerland	100		27,477	Europe
Wacker Neuson, S.A.	Torrejón de Ardoz (near Madrid)	Spain	100		4,713	Europe
Wacker Neuson (Pty) Ltd.	Florida (near Johannesburg)	South Africa	100		7,285	Europe
Wacker Neuson Limited	Samutprakarn (near Bangkok)	Thailand		100	1,417	Asia-Pacific
Wacker Neuson s.r.o.	Prague	Czech	100		6,445	Europe
		Republic
Wacker Neuson Makina Limited irketi	Küçükbakkalköy (near Istanbul)	Turkey	100		7,929	Europe
Wacker Neuson Kft.	Törökbálint (near Budapest)	Hungary	100		973	Europe
Wacker Neuson Corporation	Menomonee Falls	USA	100		113,807	Americas
	(near Milwaukee)
Wacker Neuson Logistics Americas LLC	Menomonee Falls	USA		100	61,742	Americas
	(near Milwaukee)
Wacker Neuson Production Americas LLC	Menomonee Falls	USA		100	53,484	Americas
	(near Milwaukee)
Wacker Neuson Sales Americas LLC	Menomonee Falls (near Milwaukee)	USA		100	21,318	Americas

In fiscal 2013, the consolidation structure changed as described below; however this change did not have a significant impact on the Group's assets, financials and earnings:

^J On July 11, 2013, an internal merger agreement was signed, whereby STG Stahl und Maschinenbautechnik Gutmadingen GmbH became part of Kramer-Werke GmbH, Pfullendorf.

The following companies were founded in fiscal 2013 but have not been included in the consolidation structure due to their limited significance:

• ^J Wacker Neuson Holding Limited was founded in Samutprakarn, Thailand on July 9, 2013. This company was created as the new holding company for Wacker Neuson Limited, Samutprakarn, Thailand. The new entity functions solely as a holding company.
• ^J Wacker Neuson (Singapore) PTE. LTD, was founded in Singapore on December 24, 2013. It is wholly owned by Wacker Neuson SE. In fiscal 2013, the company was not yet fully operational as a business.

		Share (direct)	Share (indirect)
Company name	Country	as a %	as a %	Segment
Wacker Neuson (Singapore) PTE. LTD	Singapore	100		Asia-Pacific
Wacker Neuson Holding Limited	Thailand	100		Asia-Pacific

No other significant acquisitions or disposals were made in fiscal 2013.

The Group does not hold any investments in associate companies or joint ventures that are recognized pro-rata or at equity on the balance sheet.

Consolidation principles

The Consolidated Financial Statements are based on the annual financial statements of the domestic and foreign companies included in the Group, which were prepared in accordance with IFRS to the year ending December 31, 2013. The annual financial statements of these companies were prepared according to the uniform accounting and valuation methods applied by the Group.

Equity was consolidated according to the acquisition method. For the first consolidation of subsidiaries, all identifiable assets, liabilities and contingent liabilities of the acquired companies are recognized at fair values.

During initial consolidation, positive balances remain after reevaluation of all hidden assets and liabilities. These are capitalized as goodwill resulting from equity consolidation and are subject to an annual impairment test. To carry out the impairment test, this goodwill is allocated to the cashgenerating units of the Group likely to benefit from the merger.

Receivables and payables as well as purchases and sales between consolidated Group affiliates have been eliminated. Group inventories and fixed assets have been adjusted for intra-Group profits and losses.

Consolidation transactions affecting income and consolidation transactions that do not affect income are subject to deferred tax.

Exchange differences

Transactions carried out in foreign currencies are recognized at the exchange rate applicable at the time of the transaction. Nominal assets and liabilities in foreign currencies are converted at the exchange rate effective at the balance sheet date. The resulting exchange differences are recognized in the income statement.

The annual financial statements of consolidated Group members that are prepared in foreign currencies 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) and Hungary (euro). Thus, assets and liabilities are translated at the spot rates of exchange effective at the balance sheet date,

whereas income and expenses are translated at the average annual rates of exchange, provided that the exchange rates did not fluctuate strongly during the period under review.

Exchange differences arising from the application of different exchange rates for balance sheets and income statements are recorded directly as a separate item of equity and thus have no impact on the financial result. Exchange differences resulting from the translation of foreign affiliates into the Group's currency are recognized in other income and are also recorded as a separate item of equity with no impact on the financial result.

The exchange rates of the main currencies relevant to the Group are as follows:

1 euro equals		2013	2012	2013	2012
		Annual average rates			Rates at balance sheet date1
Australia	AUD	1.3936	1.2447	1.5423	1.2712
Brazil	BRL	2.8945	2.5334	3.2530	2.7011
Chile	CLP	663.1867	628.7386	723.4884	631.6330
Denmark	DKK	7.4577	7.4452	7.4593	7.4610
UK	GBP	0.8501	0.8119	0.8337	0.8161
Hong Kong	HKD	10.3231	10.0296	10.6933	10.2260
India	INR	78.4498	68.9458	85.1000	72.4700
Canada	CAD	1.3771	1.2906	1.4671	1.3137
Mexico	MXN	17.1245	16.9543	18.0350	17.1900
Norway	NOK	7.8664	7.4615	8.3630	7.3483
Philippines	USD	1.3308	1.2932	1.3791	1.3194
Poland	PLN	4.2134	4.1677	4.1543	4.0740
Russia	RUB	42.6203	40.1080	45.3246	40.3295
Sweden	SEK	8.6692	8.6839	8.8591	8.5820
Switzerland	CHF	1.2291	1.2044	1.2276	1.2072
Serbia	RSD	113.1190	112.0500	114.8550	113.5688
South Africa	ZAR	13.0128	10.5800	14.5660	11.1727
Thailand	THB	41.0803	40.0571	45.1780	40.3470
Czech Republic	CZK	26.0270	25.1395	27.4270	25.1510
Turkey	TRY	2.5675	2.3148	2.9605	2.3551
USA	USD	1.3308	1.2932	1.3791	1.3194

1 Rates at the balance sheet date: rates on the last working day of the year.

Accounting and valuation methods

Recognition of profits and revenue

In the case of contracts for the sales of goods, profits are realized when the goods are delivered (passing of risk), whereas profits arising from the provision of services are realized on completion of the work. In the case of short- and long-term service contracts, such as hire-purchase, profits are realized on a pro-rata, straight-line basis over the duration of the service agreement. Operating expenses are recognized in profit or loss 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.

Determining fair value

most advantageous market.

The Group identifies certain financial instruments and nonfinancial assets and recognizes them at fair value in line with applicable guidelines at every closing date. Fair value is the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value measurement assumes that the business transaction

• ^J takes place on the principle market for the asset or liability
• ^J or, in the absence of a principle market, on the most advantageous market for the asset or liability.

The Group must have access to the principle market or the

The fair value of an asset or liability is measured on the basis of assumptions that market participants would use to agree on a price that is in their best economic interests.

A fair value measurement of a non-financial asset takes into account the market participant's ability to generate economic benefit from the asset's highest and best use or from the sale of the asset to another market participant capable of utilizing the asset's highest and best use.

The Group uses appropriate evaluation techniques that provide sufficient data for measuring fair value. These processes must give the highest priority to observable inputs and the lowest priority to non-observable inputs. All assets and liabilities to be

measured at fair value or recognized in the financial statements are categorized into the following fair value hierarchies based on the lowest level input that is significant overall to the measurements.

• ^J Level 1: Prices quoted in active markets (not adjusted)
• ^J Level 2: Evaluation processes incorporating key lowest-level inputs that are observable for the asset or liability either directly or indirectly on the market
• ^J Level 3: Evaluation processes incorporating key lowest-level inputs that are not observable on the market for the asset or liability

The categorizations are checked at the end of each reporting period.

Property, plant and equipment

Property, plant and equipment is recognized in accordance with IAS 16. Property, plant and equipment is valued at acquisition costs or manufacturing costs less accumulated scheduled depreciation and accumulated impairment. Property, plant and equipment is derecognized on disposal or when it is withdrawn from use.

Financing costs are capitalized provided there is a qualified underlying asset.

Investment properties

Land and buildings held for the purpose of generating rental revenue are disclosed at net book value. Straight-line depreciation occurs using the pro rata temporis method.

Goodwill/acquisitions

Acquisitions are reported according to the acquisition method. Consequently, income of an acquired company is included in the Consolidated Financial Statements as of 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.

Reported goodwill is subject to an impairment test at the end of each fiscal year to verify its value. Goodwill is not subject to scheduled straight-line amortization.

Intangible assets

Intangible assets with a limited useful life are capitalized at acquisition cost or manufacturing cost less accumulated depreciation and accumulated impairment and amortized on a straight-line basis depending on their projected useful life.

Intangible assets with an unlimited useful life are not subject to scheduled amortization but are tested for impairment at least once a year.

Financing costs are capitalized provided there is a qualified underlying asset.

Leases

When the Group is the lessor

Leasing transactions regarding tangible assets in which the Group as the lessor transfers all material risks and rewards from the use of the leased object to the lessee are treated as finance leases according to IAS 17. In such cases, the lessee recognizes the leased object as an asset in the balance sheet and it is therefore not entered in the Group balance sheet. Leasing transactions regarding tangible assets and investment properties in which the Group as the lessor does not transfer all material risks and rewards are treated as operating leases according to IAS 17.

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 finance 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 finance 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 classified as operating leases. In such cases, the leasing installments or the rental payments are distributed on a straight-line basis over the duration of the leasing contract and shown directly as an expense in the income statement.

Inventories

Inventories of work in process and finished products, as well as raw materials and supplies, are valued at their acquisition or manufacturing cost, in accordance with IAS 2. To the extent that acquisition and manufacturing costs of inventories are

above fair value, they are written down to net realizable value at the balance sheet date. The net realizable value corresponds to the estimated realizable sales price under normal business conditions less estimated manufacturing and sales costs. If 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 on purchase prices are deducted. Manufacturing costs include all expenses which are allocable either directly or indirectly to the manufacturing process.

Acquisition and manufacturing costs for inventories were, for the main part, determined on the basis of the FIFO (first in, first out) method; in other words, on the assumption that those assets that were acquired first will be consumed first. The moving average cost procedure is also used to simplify valuation. Production orders are not included.

Financial instruments and hedging transactions

Non-derivative financial instruments

Non-derivative financial instruments as disclosed on the assets side of the balance sheet comprise investments, marketable securities and receivables. Marketable securities and investments are measured at fair value and recognized under "Available-for-sale financial instruments". Receivables are recognized at amortized cost. Assets are recognized in the balance sheet for the first time when a Group company becomes party to a contract. Financial assets are recognized as of the day of performance. Assets are derecognized upon transfer of ownership or expiration of contractual rights to cash flows.

The carrying amounts of assets valued at amortized cost are verified if there is any indication 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. Non-current receivables are discounted at standard interest rates.

Credit balances with financial institutions are recognized at their nominal values. Financial liabilities are categorized according to type and intended purpose in line with IAS 39.9. All financial liabilities for the Group were classed as other financial liabilities as defined by IAS 39.9. They were initially recognized at

acquisition cost, which corresponds to the fair value through profit or loss of the consideration received. Transaction costs are included here. In subsequent years, all liabilities are measured at amortized cost using the effective interest method.

Derivative financial instruments

The Wacker Neuson Group utilized standard financial instruments such as interest rate swaps/caps and foreign exchange forward contracts exclusively for hedging purposes and to minimize risks. These kinds of financial instruments are organized centrally and always have a corresponding underlying transaction.

Derivative financial 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 financial instruments are recognized at fair value when the contract is entered into and also when the contract is subsequently reevaluated at the respective closing date. The fair values are calculated based on market information available on the closing date and with the help of recognized actuarial principles.

Recognition of gains and losses from derivative financial instruments is subject to the requirements for hedge accounting as set forth in IAS 39. Derivative financial instruments are allocated to the assets or liabilities held for trading and designated at fair value through profit or loss when first recognized and also in subsequent fiscal years. Profits and losses realized through fair value fluctuations are immediately recognized.

Research and development

Research expenses are recognized in the consolidated income statement in the period in which they are incurred.

Development costs are capitalized, providing the criteria as set forth in IAS 38.57 onwards are fulfilled.

Trade receivables and other assets

Both trade receivables and other assets are principally valued at amortized cost. They are, as a rule, valued at nominal value prior to allowances for uncollectable accounts. Provided they are financial instruments, they are classified in the category "loans and receivables". 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 comprise cash on hand, checks and demand deposits. They belong to the category "loans and receivables" and have maturities of three months or less. Cash and cash equivalents are recognized at current value, which, for liquid funds, is equivalent to the nominal value in euro.

Non-current assets held for sale

Non-current assets or groups of assets and liabilities are treated in the balance sheet as being held for sale as defined by IFRS 5 if their carrying value is principally realized through a sale transaction rather than through continued use. Assets classified according to IFRS 5 are valued at the lower of carrying amount or fair value less costs to sell. Property, plant and equipment held for sale is not subject to scheduled depreciation.

Government subsidies

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

Pensions and similar obligations

Provisions for pensions and similar obligations from defined benefit plans are recognized following the projected unit credit method, taking into consideration future adjustments to remuneration and pension payments in compliance with the regulations as set forth in IAS 19R. Reevaluations, primarily including actuarial gains and losses, are directly recognized in the balance sheet and allocated to equity via other income in the period in which they occur. Reevaluations may not be moved to the income statement in subsequent periods.

Unvested past service costs are recognized in profit or loss at the earlier of the following points in time:

• ^J The time at which the adjustment or curtailment of the plan takes effect
• ^J The time at which the Group recognizes any costs related to the restructuring

Net interest is determined by applying the discount rate to the balance of the defined benefit plan. The Group recognizes the following amendments to defined benefit plans in the income statement depending on the functional scope:

• ^J Service costs, including current service costs, unvested past service costs
• ^J Profits and losses from plan curtailments and extraordinary plan payments
• ^J Net tax expense or income

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 specific to the corresponding country.

Service costs for vested rights to future pension payments result from the changes in the present value of the obligation. The interest portion of the increase in pension provisions is disclosed under financial results. Payments under defined contribution benefit plans are recognized directly as an expense.

Other provisions

Other provisions are recognized in accordance with IAS 37 when the Group has a present legal or constructive obligation as a result of a past event, which will probably result in an outflow of resources with economic benefits, and when a reliable estimate of the amount can be made. Other provisions are made for all recognizable obligations. Valuation is based on estimations of the expected settlement amount on due consideration of all business circumstances. Provisions that are due after more than one year and for which the payment amounts and due dates can be reliably estimated are measured at discounted present value.

Other provisions are set up for all recognizable risks as well as for all contingent liabilities in the amount of the probable occurrence.

Financial liabilities

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

Deferred tax liabilities

Deferred and current tax is calculated in line with IAS 12.

Deferred tax assets and liabilities are recognized for temporary differences between carrying amounts and corresponding tax bases, for consolidation transactions recognized in the income statement and for tax loss carry-forwards.

Deferred tax assets on tax loss carry-forwards are only recognized if the associated reductions in tax are likely to arise in the next five years (maximum) and if they will be applicable in subsequent periods. Deferred tax was recognized for loss carry-forwards in the year under review.

Deferred tax is calculated at the tax rate of the company in question valid or approved at the balance sheet date, which is likely to be valid when the reversal effects will probably enter into effect.

Changes to deferred tax in the balance sheet result in deferred tax expense or income. If any movements that necessitate a change in deferred tax are charged directly to equity, the resulting change to deferred tax is also recognized directly in equity.

Material discretionary decisions, estimates and assumptions

In preparing the Consolidated Financial Statements, it has been necessary to make estimates and assumptions which may influence the carrying amounts of assets and liabilities, income and expenses as well as contingent liabilities. The following significant estimates and assumptions, together with the uncertainties associated with the accounting and valuation methods applied are crucial in understanding the underlying risks of the financial report and the impact these estimates, assumptions and uncertainties could have on the Consolidated Financial Statements:

The value of goodwill, assets with an unlimited useful life, development costs (at least one impairment test per year)

The company carries out an impairment test on goodwill, intangible assets of unlimited useful life and capitalized development costs once a year or more often if there is indication that an asset has been impaired. This involves making estimates regarding the forecast and discounting of future cash flows. In fiscal 2013, no grounds were identified that would indicate impairment. In December 2012 (previous year), a write-down in the amount of EUR K 750 was made on goodwill attributed to Wacker Neuson GmbH (Austria)/ BAUMA operations following the annual impairment test. For more information on calculating impairment, the assumptions indicating impairment and the sensitivity of these assumptions, please refer to item 10 "Intangible Assets" in these Notes.

Indications for tangible and intangible asset impairment (specific to events or circumstances)

At each closing date, the Group determines 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 fiscal 2012 (previous year), a one-off impairment loss in the amount of EUR K 516 was reported on an investment property in Tredegar, UK. This non-cash, one-off write-down resulted from the purchase price allocation (PPA) originally set in connection with the 2007 merger. It is allocated to the European segment. In fiscal 2013, no further grounds were identified that would indicate significant tangible or intangible asset impairment.

Useful lives of tangible assets and other intangible assets

At the end of each fiscal year, the Group assesses the estimated useful lives of tangible assets and other intangible assets. Company management assumes that the assessments of the relevant expected useful lives are appropriate. Estimations did not need to be adjusted in 2013. For information on useful lives, please refer to items 8 "Property, Plant and Equipment" to 10 "Intangible Assets" in these Notes.

Taxes on income and earnings

At each closing date, the Group determines whether the probability of future tax benefits is sufficient to justify deferred tax assets. The recognized deferred tax assets may be reduced if the estimates regarding scheduled tax income and the tax benefits realizable through available tax strategies are lowered, or should changes to current tax legislation restrict the timeframe or feasibility of future tax benefits. Refer to item 6 "Taxes on income" in these Notes for more detailed information.

Employee benefits

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 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 commitment.

For more detailed information on this and issues relating to sensitivity, please refer to item 18 "Provisions for pensions and similar obligations" in these Notes.

Legal risks

Legal risks result from legal action against Wacker Neuson SE or individual Group members. The outcome of these disputes could have a substantial impact on Group assets, financials and earnings. Company management regularly analyses the current information available about these cases and builds provisions to cover probable obligations. Assessments are performed by internal and external lawyers. When reaching a decision on the need to recognize provisions, company management takes sufficient account of the probability of an unfavorable outcome and takes due care to estimate the amount of the obligation sufficiently reliably.

Explanatory comments on the income statement

Personnel expenses are composed as follows:

With respect to the presentation and composition of revenue by geographic regions and by business segments, please refer to the section on segment reporting.

Other income 2

in € K	2013	2012
Proceeds from sale of property,
plant and equipment	413	2,468
Currency gains	7,428	6,659
Rental income on investment
properties	1,905	1,900
Carry-forwards	361	743
Recovery of receivables written off	85	187
Insurance reimbursements	410	136
Gains on foreign-exchange forward
contracts	4	0
Other income	3,677	2,979
Total	14,283	15,072

Other items include income from the offsetting of non-cash benefits, income from the sale of scrap, reimbursements of electricity tax and official orders for payment as well as income from derecognizing liabilities.

The expenses for pensions include the expense for pension benefits without the interest portion of the additions to provisions for pensions, which is recognized under financial results.

in € K 2013 2012 Wages and salaries 191,291 178,629 Social security contributions 41,036 39,673 Other personnel costs 13,691 16,569 Expenses for pensions 4,665 4,042 Total 250,683 238,913

Other personnel costs include redundancy payments to the following extent:

in € K	2013	2012
Redundancy payments	3,203	3,154

The average number of employees broken down according to fields of activity is as follows for the period under review:

	2013	2012
Production	1,576	1,546
Sales and service	1,756	1,680
Research and development	341	316
Administration	462	416
Total	4,135	3,958

Other operating expenses 4

in € K	2013	2012
Exchange losses	11,329	8,182
Value adjustments on Wacker Neuson GmbH (Austria) / operational company BAUMA goodwill/brands	0	750
Losses on the disposal of property, plant and equipment	1,112	1,650
Other expenses	320	1,589
Total	12,761	12,171

For information on the write-down of goodwill attributed to Wacker Neuson GmbH (Austria)/BAUMA operations in the previous year, please refer to item 10 "Intangible assets" in these Notes.

Financial result 5

a) Financial income

in € K	2013	2012
Interest and similar income	1,851	1,571
Income on disposals of financial
assets	47	56
Total	1,898	1,627

b) Financial expense

in € K	2013	2012
Interest and similar expense	-8,623	-8,541
Expenses on disposals of financial
assets	-22	-111
Unrealized gains and losses	-50	-36
Total	-8,695	-8,688

Interest expenses include expenses for interest resulting from finance lease contracts in the amount of EUR K 12 (previous year: EUR K 31).

Taxes on income 6

Expense for taxes on income is composed as follows:

in € K	2013	2012
Current tax expense	24,802	28,063
Deferred tax expense	1,617	-4,928
Total	26,419	23,135

Reconciliation of calculated tax to actual tax expense:

in € K	2013	2012
EBT	87,951	77,838
Tax at the applicable rate: 29.11%
(previous year: 28.74%)	25,603	22,371
Variance in Group tax rates	-999	1,085
Taxes from or for prior periods	-904	0
Tax effects of non-deductible
expenses and tax-exempt income	2,563	-358
Other	156	37
Total	26,419	23,135

In some cases, the items "tax effects of non-deductible expenses and tax-exempt income" and "Other" may contain expenses and income from a period other than the period under review.

Taxes on income are calculated by applying the Group's uniform tax rate of 29.11 percent (previous year: 28.74 percent) to the profit before tax.

Our tax assessment for the current year is based on a corporate income tax rate of 15.83 percent and a solidarity surcharge of 5.5 percent. Trade tax is set at a uniform 3.5 percent.

Actual netted income tax receivables at the closing date amounted to EUR K 4,363 (previous year: EUR K 3,080).

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

in € K	2013	2012
Deferred tax assets
Valuation differences: assets	13,893	12,412
Valuation differences: inventories	12,397	17,273
Loss carry-forwards	2,315	0
Valuation differences: provisions for pensions	927	946
Valuation differences: liabilities	546	618
Valuation differences: receivables	443	457
Other	-236	0
Total	30,285	31,706
Deferred tax liabilities
Recognition and valuation
differences: intangible assets	-27,400	-25,542
Valuation differences: tangible assets	-13,795	-15,115
Netted deferred tax assets and liabilities
Valuation differences:
provisions for pensions	4,689	4,406
Loss carry-forwards	877	776
Valuation differences: inventories	611	315
Other	1,894	1,687
Total	-33,124	-33,473

Deferred tax recognized in the consolidated balance sheet arises from deferred tax recognized in the balance sheets of individual Group 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.

Unused tax loss carry-forwards for which no deferred tax receivable was recognized in the balance sheet amount to EUR K 13,669 (previous year: EUR K 13,404).

With respect to deferred tax assets, EUR K 1,553 (previous year: EUR K 1,234) 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 subsequent years. The deferred tax expense as a result of a drop in deferred tax receivables amounts to EUR K 865.

Deferred taxes from pension obligations in the amount of EUR K 3,247 were recognized directly in equity (previous year: EUR K 2,935). The remaining deferred tax was recognized in the income statement.

Earnings per share 7

in € K	2013	2012
Earnings of the current year attribu table to shareholders in € K	61,167	54,131
Weighted average number of shares outstanding during current period	70,140	70,140
Undiluted earnings per share in €	0.87	0.77
Diluted earnings per share in €	0.87	0.77

According to IAS 33, earnings per share are calculated by dividing the total profit/loss for the year attributable to Wacker Neuson SE shareholders by the weighted average number of shares issued. This amount is entirely allocated to continuing operations.

There was no share dilution effect in the reporting period shown.

Explanatory comments on the balance sheet

8 Property, plant and equipment

				Payments
			Office and	on account/
	Land and	Machinery and	other equip	Assets under
in € K	buildings	equipment	ment	construction	Total
Acquisition costs
Balance at January 1, 2013	299,686	241,683	83,406	2,306	627,081
Exchange rate differences	-4,980	-3,478	-1,471	-37	-9,966
Additions	2,377	56,453	9,081	1,457	69,368
Disposals	-561	-45,780	-6,421	-76	-52,838
Transfers	604	591	67	-1,262	0
Balance at December 31, 2013	297,126	249,469	84,662	2,388	633,645
Accumulated depreciation
Balance at January 1, 2013	63,393	127,599	50,014	0	241,006
Exchange rate differences	-962	-1,995	-868	0	-3,825
Additions	7,864	31,875	9,897	0	49,636
Disposals	-449	-33,378	-5,729	0	-39,556
Transfers	0	1	-1	0	0
Balance at December 31, 2013	69,846	124,102	53,313	0	247,261
Book value at December 31, 2012	236,293	114,084	33,392	2,306	386,075
Book value at December 31, 2013	227,280	125,367	31,349	2,388	386,384
Useful life in years	1–50	1–20	1–27

			Payments
		Office and	on account/
Land and	Machinery and	other equip	Assets under
buildings	equipment	ment	construction	Total
251,643	219,480	73,591	45,371	590,085
54	146	41	-28	213
138	1,815	550	1,085	3,588
8,735	51,351	15,135	18,724	93,945
-11,906	-40,187	-7,640	-118	-59,851
51,022	9,078	1,729	-62,728	-899
299,686	241,683	83,406	2,306	627,081
61,893	131,634	47,628	0	241,155
-177	-245	-2	0	-424
7,759	29,160	9,400	0	46,319
-5,431	-33,088	-6,875	0	-45,394
-651	138	-137	0	-650
63,393	127,599	50,014	0	241,006
189,750	87,846	25,963	45,371	348,930
236,293	114,084	33,392	2,306	386,075
1–50	1–20	1–27

Amounts recognized for land and buildings as well as for office and other equipment include the book values of finance lease contracts. For further information on this, please refer to item 25 "Other financial liabilities" in these Notes. Machinery and equipment includes rental equipment.

Total write-downs on property, plant and equipment, investment property and intangible assets reported in the Group income statement amounted to EUR K 57,898 (previous year: EUR K 55,845). EUR K 38,360 of this is attributable to manufacturing costs, EUR K 6,463 to selling expenses, EUR K 3,901 to research and development costs and EUR K 9,174 to general administrative costs.

Investment properties 9

The table below shows the development of investment properties held during the years 2012 and 2013:

in € K	2013	2012
Acquisition costs
Balance at January 1	31,649	30,502
Exchange rate differences	179	169
Additions	72	0
Disposals	-2,364	0
Transfers	0	978
Balance at December 31	29,536	31,649
Accumulated depreciation
Balance at January 1	10,983	9,225
Exchange rate differences	141	75
Additions	712	1,032
Disposals	-776	0
Transfers	0	651
Balance at December 31	11,060	10,983
Book value on January 1	20,666	21,277
Book value on December 31	18,476	20,666

The profit derived from investment properties is shown in the table below:

in € K	2013	2012
Rental income	1,905	1,900
Depreciation and amortization	-712	-1,032
Other expenses	-197	-288
Total	996	580

The depreciation and amortization item includes a one-off write-down on real estate in the UK, in the amount of EUR K 235 (previous year: EUR K 516). Depreciation and amortization is allocated to the European segment.

Investment properties include the land and buildings listed below, which have all been rented to third parties or are intended to be rented to third parties. The reported depreciation methods and useful lives only affect the buildings listed.

The evaluation methods applied are listed in the table below. The key, non-observable input parameters used to evaluate investment properties are as follows (measuring fair value; hierarchy level 3):

The fair values of properties were determined by surveyors using the German income approach and discounted cash flow methods. These evaluations are based on standard land values, standard market rents, estimated running costs and estimated residual useful lives. The fair values of properties in the UK and South Africa were determined by comparing against local market pricing, which involved asking local real estate agents about the square meter pricing of properties comparable in terms of location, the transport infrastructure and substance.

Property	Book value in € K	Fair value in € K	Calculation method	Depreciation method	Useful life
Germany	15,769	23,400
Dortmund	124	170	Discounted cash flow	linear	33 years
Gutmadingen	1,412	5,250	Survey/German income approach	linear	33 years
Überlingen	14,233	17,980	Survey/German income approach	linear	33–50 years
UK	2,399	2,399	Estate agent pricing	–	–
Spain	277	294	Survey/German income approach	linear	50 years
South Africa	31	247	Estate agent pricing	–	–

Intangible assets 10

a) Goodwill

Goodwill developed as follows:

in € K	2013	2012
As at January 1	236,603	237,509
Impairment	0	-750
Foreign currency fluctuations	-344	-156
As at December 31	236,259	236,603

In the previous year, goodwill attributed to Wacker Neuson GmbH (Austria)/BAUMA operations was written down in the full amount of EUR K 750.

b) Other intangible assets

see fig. on p. 121

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

	Book value	Book value
	on Dec. 31,	on Dec. 31,
in € K	2013	2012	Useful life
Brands	64,838	64,838	indefinite
Customer base	1,631	1,847	5 years
Technologies	66	2,627	max. 1 year
Total	66,535	69,312

Furthermore, other intangible assets include 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 indefinite useful life.

EUR K 42,838 was recognized for the brand name in connection with the merger with the Neuson Kramer Group. This is also considered to have an indefinite useful life due to the company's strong market position. Wacker Neuson SE does not own the "Neuson" logo. This is owned by the PIN Private Trust (PIN Privatstiftung), which is part of the group founded by the Chairman of the Supervisory Board, Hans Neunteufel. Subject to certain guidelines, however, the company has an exclusive, irrevocable and unlimited license to use this brand in conjunction with the name "Wacker".

Intangible assets created internally refer to capitalized development costs.

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

Capitalized borrowing costs only had a minor impact in 2013.

c) Impairment of goodwill and intangible assets with an unlimited useful life

The goodwill and indefinite-lived "Weidemann" and "Neuson" brands obtained through mergers are allocated for impairment testing to the following cash-generating units within the Americas or Europe segments:

• ^J Weidemann GmbH (Germany)
• ^J Wacker Neuson Production Americas LLC (USA)
• ^J Wacker Neuson Beteiligungs GmbH (subgroup/Austria)

The pro-rata book values break down as follows:

in € K	Dec. 31, 2013	Dec. 31, 2012
Wacker Neuson
Production Americas LLC
Book value of goodwill	7,579	7,923
Weidemann GmbH
Book value of goodwill	24,232	24,232
Book value of the
indefinite-lived brand	22,000	22,000
Wacker Neuson
Beteiligungs GmbH
Book value of goodwill	204,448	204,448
Book value of the
indefinite-lived brand	42,838	42,838
Book value of goodwill	236,259	236,603
Book value of the
indefinite-lived brand	64,838	64,838

b) Other intangible assets

	Licenses and	Other intangible	Internally produced	Payments on
in € K	similar rights	assets	intangible assets	account	Total
Acquisition costs
Balance at January 1, 2013	24,277	101,985	24,696	3,065	154,023
Exchange rate differences	-306	-224	-431	-35	-996
Additions	3,021	315	9,653	1,978	14,967
Disposals	-823	-28,300	-2,253	-115	-31,491
Transfers	897	0	328	-1,225	0
Balance at December 31, 2013	27,066	73,776	31,993	3,668	136,503
Accumulated depreciation
Balance at January 1, 2013	12,024	32,673	6,148	0	50,845
Exchange rate differences	-115	-157	-81	0	-353
Additions	2,342	3,024	2,899	0	8,265
Disposals	-512	-28,299	-1,950	0	-30,761
Transfers	2	0	0	0	2
Balance at December 31, 2013	13,741	7,241	7,016	0	27,998
Book value at December 31, 2012	12,253	69,312	18,548	3,065	103,178
Book value at December 31, 2013	13,325	66,535	24,977	3,668	108,505
Useful life in years	3–8	1–7	6	–

			Internally
	Licenses and	Other intangible	produced	Payments on
in € K	similar rights	assets	intangible assets	account	Total
Acquisition costs
Balance at January 1, 2012	25,156	101,991	17,653	2,922	147,722
Exchange rate differences	-175	-101	-76	-44	-396
Change in consolidation structure	70	0	0	0	70
Additions	1,504	75	6,542	1,964	10,085
Disposals	-2,393	0	-302	-683	-3,378
Transfers	115	20	879	-1,094	-80
Balance at December 31, 2012	24,277	101,985	24,696	3,065	154,023
Accumulated depreciation
Balance at January 1, 2012	12,448	28,658	3,823		44,929
Exchange rate differences	-111	-64	-26	0	-201
Additions	2,124	3,986	2,384	0	8,494
Disposals	-2,343	0	-33	0	-2,376
Transfers	-94	93	0	0	-1
Balance at December 31, 2012	12,024	32,673	6,148	0	50,845
Book value at December 31, 2011	12,708	73,333	13,830	2,922	102,793
Book value at December 31, 2012	12,253	69,312	18,548	3,065	103,178
Useful life in years	3–8	1–7	6	–

With the exception of the year when they were first recognized in the balance sheet, the carrying amounts of goodwill and indefinite-lived brands are verified during the annual impairment test or subjected to an additional impairment test if there are indications of asset impairment. For this purpose, the book value is compared with the "fair value less cost to sell". The "fair value less cost to sell" is determined using the discounted cash flow method. Future cash flows are discounted to the respective balance sheet date. Value is impaired if "fair value less cost to sell" is lower than the book value. No indications of value impairments have been identified in the current fiscal year. In the previous year, impairment was recognized on goodwill attributable to Wacker Neuson GmbH (Austria)/BAUMA operations, which did not develop in line with expectations at the time of purchase. The book value of this cash-generating unit exceeded the "fair value less cost to sell". This resulted in a write-down on indefinite-lived intangible assets in the amount of EUR K 750. This was entirely attributable to goodwill. The value impairment was allocated to the European segment and recognized under "Other operating expenses".

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

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

Free cash flow – free cash flow is calculated based on a detailed planning phase from 2014 to 2023. Growth rates are determined for the first three budget years (up to 2016) 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 flow is paid out each fiscal year. Distributable cash flow refers to free cash flow after interest payments, tax effects from borrowings and changes in borrowings. Care is taken to ensure that the cash flow distribution does not reduce the share capital. For the period from 2017 to 2023, management anticipates results and growth rates that more strongly align with past values. Various scenarios with annual revenue growth of between 5 and 10 percent from 2017 to 2023 were created for the three cash-generating units Weidemann GmbH, Wacker Neuson Production Americas LLC and Wacker Neuson Beteiligungs GmbH (subgroup/Austria). A negative scenario with revenue growth of just two percent as of 2017 was also calculated for the three cash-generating units. In addition to revenue growth, upper EBIT limits were also defined as restricting criteria for the cash-generating units. None of the scenarios resulted in impairment.

Discount rates: These reflect the management's assessment of the risks associated with cash-generating units. This calculation includes a risk-free and risk-weighted rate. A weighted average cost of capital (WACC) after tax at a uniform rate of 9.24 percent (previous year: 10.01 percent) was applied.

Price increases of raw materials: Actual past price fluctuations are used as indicators for estimating future price developments.

Growth rate estimates: Management and affiliates estimate growth rates based on local market dynamics. As in the previous year, a growth rate of 1 percent was projected for perpetual annuity.

Sensitivity of assumptions: These calculations did not reveal a need to recognize impairment for any of the cash-generating units even if no growth rate had been applied in perpetual annuity or if WACC had been set 1 percent higher.

Other non-current assets 11 13

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

in € K	Dec. 31, 2013	Dec. 31, 2012
Non-current trade receivables	6,838	4,614
Investment securities	2,206	3,449
Loans	25	181
Misc. other non-current financial
assets	1,388	1,679
Other non-current financial
assets	10,457	9,923
Other non-current non-financial
assets	1,681	2,056
Total	12,138	11,979

Inventories 12

in € K	Dec. 31, 2013	Dec. 31, 2012
Raw materials and supplies	79,683	107,503
Works in progress	13,604	14,914
Finished goods	240,525	237,704
Total	333,812	360,121

An expense of EUR K 756,281 (previous year: EUR K 720,960) was recorded under acquisition and manufacturing costs for inventories.

Of the reported inventories, EUR K 40,253 (previous year: EUR K 62,322) is recognized at net realizable value. Write-downs on inventories recognized as an expense amount to EUR K 2,772 in the reporting period (previous year: EUR K 3,054). Write-ups on inventories recognized as income amount to EUR K 3,792 in the reporting period (previous year: EUR K 2,360).

Similar to 2012, no inventories were pledged as collateral for liabilities during the period under review.

Trade receivables

Trade receivables have the following components:

in € K	Dec. 31, 2013	Dec. 31, 2012
Trade receivables at nominal value	171,297	154,861
Less allowance for doubtful
accounts	-7,344	-7,023
Total	163,953	147,838

As of December 31, 2013, trade receivables (at nominal value) were broken down as follows:

in € K	2013	2012
Trade receivables	171,297	154,861
Nominal value of trade receivables written down or not due	162,537	144,651
Overdue at nominal value but not written down < 30 days	4,967	4,404
Overdue at nominal value but not written down 30–90 days	2,670	4,535
Overdue at nominal value but not written down > 90 days	1,123	1,271

Allowance for doubtful accounts developed as follows:

in € K	2013	2012
Balance at January 1	7,023	7,667
Exchange rate differences	-264	86
Additions	2,390	1,035
Additions from changes to the consolidation structure	0	22
Amount used for write-offs	-779	-538
Reversals	-1,026	-1,249
Balance at December 31	7,344	7,023

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

The fair value is a reasonable approximation of the book value since all receivables are due within less than one year. At December 31, 2013, transfers of financial assets that have not been derecognized amounted to EUR K 5,412. This specifically refers to trade receivables that have been sold, but for which the Group continues to bear the risk of customer default and has therefore not derecognized. Payables were recognized in the same amount.

Other current assets 14

in € K	Dec. 31, 2013	Dec. 31, 2012
Receivables from customers	320	616
Interest receivables	82	253
Derivatives	4	0
Receivables from public authorities	0	688
Misc. other current financial assets	1,685	1,561
Other current financial assets	2,091	3,118
Advance payments	4,978	6,710
Sales tax	4,207	6,272
Advances to employees	173	171
Misc. other current non-financial
assets	940	541
Other current non-financial
assets	10,298	13,694
Total	12,389	16,812

The fair value is a reasonable approximation of the book value since all items have a maturity of less than one year.

Cash and cash equivalents 15

in € K	Dec. 31, 2013	Dec. 31, 2012
Petty cash	12,396	15,365
Bank balances	3,003	3,341
Cash deposits	134	161
Total	15,533	18,867

Cash on hand and bank balances in foreign currencies are converted at the spot rates.

Interest accrues at variable rates on the daily cash balances held with banks. Depending on the company's liquidity requirements, short-term, term accounts running from one day to three months are set up. The term money yielded interest at the agreed prevailing rates.

Positive bank balances in the amount of EUR K 32,528 (including cash pool current account balances) (previous year: EUR K 42,537) were netted against cash pool current account liabilities amounting to EUR K 20,132 (previous year: EUR K 27,172), as a net balance (offset option) was agreed with the cash pool bank. Current account balances at December 31, 2013, after netting, amounted to EUR K 12,396 (previous year: EUR K 15,365).

Non-current assets held for sale 16

in € K	Dec. 31, 2013	Dec. 31, 2012
Non-current assets held for sale	0	6,045

The fixtures on third-party property or in third-party buildings in Leonding, Austria, which were disclosed under "Non-current assets held for sale" at December 31, 2012, were sold to a related party at book value during the first half of 2013.

Total equity 17

As in the previous year, subscribed capital amounted to EUR K 70,140 and is divided into 70,140,000 individual no-parvalue registered shares, each representing a proportionate amount of the share capital of EUR 1.00. The share capital was fully paid in at the closing date of the Consolidated Financial Statements.

Other reserves are as follows:

in € K	Dec. 31, 2013	Dec. 31, 2012
Capital reserves	618,661	618,661
Exchange rate differences	-33,888	-15,280
Other changes without effect	-8,177	-7,483
Total	576,596	595,898

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

The reserve for exchange differences includes gains and losses from translating the annual financial statements of consolidated affiliates that are prepared in foreign currencies according to the concept of the functional currency. This figure is recorded under equity and does not have an impact on the financial result.

Other neutral changes include reserves for the recognition of gains and losses from reevaluations of pensions and similar obligations, primarily actuarial gains and losses.

The company did not hold any treasury shares at December 31, 2013, nor at any point during the 2013 fiscal year or the previous year.

Retained earnings developed as follows:

in € K	Dec. 31, 2013	Dec. 31, 2012
Balance at January 1	248,620	229,886
Dividends for respective fiscal year	-21,042	-35,070
Change in consolidation structure	0	-327
Consolidated earnings	61,167	54,131
Balance at December 31	288,745	248,620

In 2013, the Group paid out EUR K 21,042 in dividends (EUR 0.30 per share). In 2012, it paid out EUR K 35,070 in dividends (EUR 0.50 per share). The proposed dividend payout for fiscal 2013 is EUR 0.40 per share. Proposed dividend payouts for no-par-value shares that require AGM approval were not recognized as a liability at December 31. Refer to the statement of changes in equity for further details on equity.

^J Authorized Capital 2012 I

On May 22, 2012 at the AGM, the Executive Board was authorized to increase the company's share capital by May 21, 2017, subject to the approval of the Supervisory Board, by issuing up to 17,535,000 new, registered shares against cash contributions and/or contributions in kind, in full or in partial amounts, on one or several occasions, however at the most by a maximum of EUR 17,535,000.00 (in words: seventeen million five hundred and thirty-five thousand euros) (Authorized Capital 2012 I).

^J Rights, preferential rights and restrictions on shares

There are pool agreements between some shareholders and companies of the Wacker family on the one hand, and companies and shareholders of the Neunteufel family on the other, which essentially regulate the exercise of voting and petition rights at the AGM and restrict the transfer of shares. A pool agreement also exists between a shareholder of the Neunteufel family and Mr. Martin Lehner that permits the Neunteufel shareholder to exercise the voting rights attributable to the Mr. Lehner's shares. For detailed information, please refer to the Management Report "Restrictions affecting voting rights or the transfer of shares".

Provisions for pensions and similar obligations 18

in € K	Dec. 31, 2013	Dec. 31, 2012
Provisions for pension obligations	35,264	34,155
Provisions for other obligations to
employees	351	1,669
Total	35,615	35,824

Within the Group, there are different types of retirement benefit schemes worldwide for old age and surviving dependents' pensions. Most of the schemes provide for the payment of fixed lump-sum amounts. The others are defined retirement plans with a pension paid from retirement until death. The amounts to be paid are based on the respective employee's ranking (both with respect to salary as well as hierarchy) as well as her/his years of service to the company.

At the parent company, pension commitments due to enter into effect as of retirement age also exist vis-à-vis Executive Board members as well as former executives and Executive Board members.

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 earnings for employees who fulfill the time-of-service requirements, which differ from country to country.

The defined benefit plans are partly financed by liability insurance. There are also pension commitments that are not financed by liability insurance or funds, where the Group pledges to make future payments when the pension payouts are due. This primarily refers to pension commitments governed by the legal framework of individual countries (adjustments to pensions, for example).

Foreign affiliates also have defined contribution plans. In such cases, the individual company makes contributions to the respective pension insurance schemes 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 profit before interest and tax (EBIT) in the respective year.

The actuarial valuation is based on the following assumptions:

	in	2013	2012
Actuarial assumptions1
Discount rate	%	3.51	3.48
Salary trends	%	0.39	0.41
Pension trends	%	1.97	1.94
Expected return on plan
assets	%	3.51	3.48
Healthcare cost trends	%	4.50	4.5
Retirement age	Years	64	63

Weighted average of the individual benefit schemes.

Pension obligations are distributed as follows:

in € K	2013	2012
Fair value of pension obligations,
funded	19,777	17,662
Fair value of plan assets	-8,014	-6,746
Shortfall in pension obligations,
funded	11,763	10,916
Fair value of pension obligations,
not funded	23,852	24,778
Shortfall in all pension obligations	35,615	35,694
Plans with surplus/minimum funding
requirement	0	130
Pension obligations	35,615	35,824
in € K	2013	2012
Provisions for pension plans,

Total	43,629	42,440
fully or partly funded	19,777	17,662
Provisions for pension plans,
not funded	23,852	24,778

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

in € K	2013	2012
Changes in the present value of pension obligations
Balance at January 1	42,440	36,584
Current service costs	766	981
Interest expense	1,444	1,557
New valuations:
Actuarial gains/losses
- from changes to demographic assumptions	-206	539
- from changes to financial assumptions	19	4,452
Experience adjustments	947	-88
Changes in exchange rate	-173	-20
Paid benefits	-1,762	-1,549
Past service cost	154	-16
Balance at December 31	43,629	42,440
in € K	2013	2012
Changes in fair value of plan assets
Balance at January 1	6,747	5,898
Interest income	266	261
Changes in exchange rate	-72	8
New valuations:
Experience adjustments	-179	106
Employer's contributions	1,412	595
Payouts	-160	-121
Balance at December 31	8,014	6,747

in € K	2013	2012
Financing status	35,615	35,693
Other	0	94
Plan surplus	0	37
Accruals for pensions
at December 31	35,615	35,824

Plan assets include pension liability insurance where future payments are pledged in favor of the entitled recipient. Pension liability insurance schemes are not listed on an active market. The fair value of plan assets amounts to EUR K 8,014 (previous year: EUR K 6,747).

The average term of a defined benefit obligation was 14.4 years at the close of the reporting period (previous year: 13.4 years). The investment strategy for plan assets is designed to achieve a sufficient return on investment in connection with contributions to enable the company to manage the financing risk from pension obligations appropriately. The actual contributions may differ from the investment strategy as a result of changing economic conditions.

Pension expenses are as follows:

in € K	2013	2012
Current service costs	766	981
Interest expense for pension
obligations	1,444	1,557
Net interest	-266	-261
Past service cost	154	-16
Pension expense from defined
benefit plans	2,098	2,261
Pension expense from defined
contribution plans	616	635
Total contributions to statutory
pension insurance schemes	14,587	12,984
Total pension expense	17,301	15,880

Interest expense ensuing from pension obligations is recognized in the financial 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 plan 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 plan assets is the current value as per January 1. Transfers during the year are accounted for on a pro-rata basis.

The contributions expected to be made to German plan assets in 2014 amount to EUR K 1,513 (previous year: EUR K 1,299).

The following overview shows the projected pension pay-outs for the next five years:

in € K
Due in 2014	1,757
Due in 2015	1,876
Due in 2016	1,998
Due in 2017	2,144
Due in 2018	2,275

The following overview shows the sensitivity of key actuarial assumptions:

			Increase	Decrease
			in valuati	in valuati
			on para	on para
in € K	in %	Sensitivity	meters	meters
Discount rate	3.51	+/- 1.00%	-5,812	6,776
Salary trends	0.39	+/- 0.50%	129	-42
Pension trends	1.97	+/- 0.50%	2,541	-2,257

The sensitivity analysis shows how the value of pension obligations would develop if the individual actuarial assumptions changed. The sensitivity is only determined following the projected unit credit method. This involves determining and displaying the impact of a change to individual actuarial assumptions, while all other assumptions remain unchanged.

The following risks arise for the Group from pension commitments:

• ^J A reduction in the discount rate results in a rise in pension obligations.
• ^J An increase in life expectancy results in a rise in pension obligations.

The following actual return on plan assets was recognized for fiscal years 2013 and 2012:

in € K	2013	2012
Actual return on plan assets	81	368

The following table shows the effects of a one percentage point increase or reduction in healthcare costs:

in € K	Additions	Reversals
2013
Effect on the present value of pension obligations	198	-162
2012
Effect on the present value of pension obligations	176	-145

The present value of obligations as well as pension pay-outs and reevaluations are distributed as follows across pension obligations and healthcare contributions:

in € K	2013	2012
Provisions for pensions recorded
in the balance sheet
Pension obligations	34,235	34,457
Healthcare	1,380	1,367
Total	35,615	35,824
Pension expenses listed under
EBIT
Pension obligations	766	867
Healthcare	0	114
Total	766	981
New valuations
Pension obligations	953	4,659
Healthcare	-8	138
Total	945	4,797

The following information applies to the period 2009 through 2013:

	Dec. 31,	Dec. 31,	Dec. 31,	Dec. 31,	Dec. 31,
in € K	2013	2012	2011	2010	2009
Present value of performance-oriented obligations	43,629	42,440	36,584	36,826	30,158
Fair value of the plan assets	8,014	6,747	5,898	5,301	4,847
Shortfall in pension obligations	35,615	35,693	30,686	31,525	25,311
Experience adjustments
of plan liabilities	947	-88	575	276	194
of plan assets	-179	106	494	-188	-62

Other provisions 19

The provisions are as follows:

	Balance					Balance
in € K	Jan. 1, 2013	Currency	Utilization	Additions	Reversals	Dec. 31, 2013
Provisions
Warranties	8,971	-185	3,301	3,457	630	8,312
Obligations towards employees	4,766	-96	1,793	3,630	169	6,338
Professional fees	454	-3	423	464	28	464
Litigation costs	471	-9	112	139	138	351
Other provisions	1,175	-26	733	1,262	312	1,366
Total	15,837	-319	6,362	8,952	1,277	16,831

in € K	Balance Jan. 1, 2012	Currency	Utilization	Additions	Reversals	Balance Dec. 31, 2012
Provisions
Warranties	11,825	-56	6,475	4,426	749	8,971
Obligations towards employees	5,885	-4	3,068	2,049	96	4,766
Professional fees	313	-1	226	472	104	454
Litigation costs	591	-8	260	260	112	471
Other provisions	696	-18	499	1,123	127	1,175
Total	19,310	-87	10,528	8,330	1,188	15,837

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

in € K	Short-term (< 1 year)	Long-term (> 1 year)	Balance Dec. 31, 2013
Provisions
Warranties	7,637	675	8,312
Obligations towards employees	3,648	2,690	6,338
Professional fees	464	0	464
Litigation costs	136	215	351
Other provisions	1,063	303	1,366
Total	12,948	3,883	16,831

in € K	Short-term (< 1 year)	Long-term (> 1 year)	Balance Dec. 31, 2012
Provisions
Warranties	8,422	549	8,971
Obligations towards employees	3,146	1,620	4,766
Professional fees	454	0	454
Litigation costs	57	414	471
Other provisions	725	450	1,175
Total	12,804	3,033	15,837

The increase in discounts for non-current provisions from December 31, 2012 through December 31, 2013 amounted to EUR K 50 (previous year: EUR K 41) for obligations towards employees based on the applicable assessment basis.

Group obligations from employee work accounts are offset against securities classified as assets, which are created in order to secure these claims. Obligations from work accounts amount to EUR K 2,448 (previous year: EUR K 135). The cost

of acquiring the securities amounts to EUR K 2,286 (previous year: EUR K 129) and the fair value at December 31, 2013 was EUR K 2,448 (previous year: EUR K 135), of which EUR K 2,448 is offset (previous year: EUR K 135).

The Group has not created any environmental provisions.

Other provisions include restructuring costs and default risks in conjunction with financing options for dealers.

Financial liabilities 20

Financial liabilities comprise the amounts recognized under the balance sheet items long-term financial borrowings EUR K 130,594 (previous year: EUR K 134,807); short-term borrowings from banks EUR K 61,698 (previous year: EUR K 97,853); and current portion of long-term financial borrowings EUR K 428 (EUR K 437).

The following table shows the remaining contractual periods of the financial liabilities at December 31, 2013 together with the estimated interest payments. These are undiscounted gross amounts which include the estimated interest payments.

in € K	Dec. 31, 2013	Up to 1 year	1 to 5 years	Over 5 years
Borrowings from banks	73,944	62,465	9,446	2,033
Schuldschein loan agreements	136,986	3,797	102,203	30,986
Liabilities from finance leases	200	101	99	0
Total	211,130	66,363	111,748	33,019

in € K	Dec. 31, 2012	Up to 1 year	1 to 5 years	Over 5 years
Borrowings from banks	114,884	98,743	13,693	2,448
Schuldschein loan agreements	140,671	3,797	104,812	32,062
Liabilities from finance leases	331	129	202	0
Total	255,886	102,669	118,707	34,510

Borrowings from banks

Borrowings from banks include the following items:

	Dec. 31, 2013		Interest rate
Borrowings from banks	in € K	Interest rate as a percentage	type	Due dates
Long-term loan	3,883	6.00	fixed	> 1 year in annuities by 2017
Subtotal on fixed interest rate loans	3,883
Loan to purchase a tract of land	6,666	6 mo. Euribor + 1.85	variable	January 1, 2016
Money market loans in EUR	1,676	0.1–3.9	variable	< 1 year
Money market loans in EUR	44,788	Euribor + (0.80–0.99)	variable	< 1 year
Money market loans in USD	195	1.42	variable	< 1 year
Money market loans in PLN	9,629	3.30	variable	< 1 year
Loans in Brazilian reals	1,912	13.60	variable	EUR K 1,912 < 1 year
Loans in Brazilian reals	668	13.60	variable	EUR K 668 > 1 year
Loans in Chilean pesos	3,500	8.52	variable	< 1 year
Subtotal on variable interest rate loans	69,034
Total	72,917

	Dec. 31, 2012		Interest rate
Borrowings from banks	in € K	Interest rate as a percentage	type	Due dates
Long-term loan	4,191	6.00	fixed	> 1 year in annuities by 2017
Subtotal on fixed interest rate loans	4,191
Loan to purchase a tract of land	10,000	6 mo. Euribor + 1.85	variable	January 1, 2016
Money market loans in EUR	74,789	Euribor + (0.80–0.95)	variable	< 1 year
Money market loans in USD	15,158	1.42	variable	< 1 year
Loans in Brazilian reals	3,903	8.30	variable	EUR K 3,903 < 1 year
Loans in Brazilian reals	1,230	8.30	variable	EUR K 1,230 > 1 year
Loans in Chilean pesos	3,877	7.56–8.40	variable	< 1 year
				Can be terminated each year
Export incentive credit line	126	2.00	variable	on March 31
Subtotal on variable interest rate loans	109,083
Total	113,274

Refer to item 30 "Risk management" in these Notes for information on the sensitivity of interest risks associated with variable-interest borrowings.

The following table lists the credit lines that have been confirmed in writing but were not utilized by Wacker Neuson SE:

in € K	2013
First credit line EUR (Euribor + 0.85%)	25,440
Second credit line EUR/USD (3 mo. Euribor + 0.80%/
USD Libor + 1%)	25,153
Third credit line USD	17,048
Fourth credit line USD	14,502
Fifth credit line EUR	30,371
Sixth credit line EUR	308
Seventh credit line EUR	15,000
Eighth credit line EUR	44,940
Ninth credit line EUR	25,000
Tenth credit line EUR	19,978
Eleventh credit line EUR (2%)	16,586
Twelfth credit line BRL	1,769
Thirteenth credit line TRY	117
Fourteenth credit line BRL	1,177
Fifteenth credit line EUR	300
Sixteenth credit line RSD	61
Seventeenth credit line CLP	828
Eighteenth credit line EUR	10,000
Total	248,578

in € K	2012
First credit line EUR (Euribor + 0.85%)	26,314
Second credit line EUR/USD (3 mo. Euribor + 0.80%/
USD Libor + 1%)	33,897
Third credit line USD	18,190
Fourth credit line EUR	44,968
Fifth credit line EUR	10,000
Sixth credit line EUR	20,000
Seventh credit line EUR (2%)	4,804
Eighth credit line BRL	2,416
Ninth credit line ZAR	45
Tenth credit line TRY	100
Eleventh credit line EUR	18
Twelfth credit line EUR	300
Thirteenth credit line RSD	455
Total	161,507

The book values of borrowings from banks with variable and fixed interest rates were reported in the following currencies (equivalent in EUR):

in € K	2013	2012
Euro	57,012	89,106
USD (USA)	195	15,158
BRL (Brazil)	2,581	5,133
CLP (Chile)	3,500	3,877
PLN (Poland)	9,629	0
Total	72,917	113,274

The fair value for the Schuldschein loan agreement amounted to EUR K 124,305 at December 31, 2013 (previous year: EUR K 127,351); the fair value was measured in line with hierarchy level 3. All other fair values of financial liabilities are reasonable approximations of the book values.

Schuldschein loan agreement

In the previous year, two tranches of a Schuldschein loan agreement were issued:

Liquid funds payable from the Schuldschein loan agreement refer to annual interest through 2017 on the first tranche amounting to EUR 2.7 million and a repayment in the amount of EUR 90 million to be made on February 27, 2017. For the second tranche, annual interest payments in the amount of EUR 1.1 million are to be made through 2019 and a repayment in the amount of EUR 30 million is due on February 27, 2019.

Financial covenants

Financial covenants exist for the following financial instruments of Wacker Neuson SE:

^J Schuldschein loan agreement

The Schuldschein loan agreement is subject to financial covenants customary in the market, for example, cross default, negative pledge and change of control clauses. A minimum equity ratio of 30 percent has been agreed as a binding financial covenant. The covenants were observed in the fiscal year under review.

Trade payables 21

As of December 31, 2013, trade payables (at book value) were broken down as follows:

in € K	2013	2012
Trade payables	44,702	51,143
Book value due < 30 days	35,627	41,613
Book value due 30–90 days	8,804	9,227
Book value due > 90 days	271	303

Interest does not accrue on trade payables.

Other current liabilities 22

in € K	Dec. 31, 2013	Dec. 31, 2012
Other accruals/deferrals	19,603	18,982
Liabilities to customers	1,159	696
Misc. other current financial
liabilities	1,449	1,992
Derivatives	30	0
Other current financial liabilities	22,241	21,670
Personnel accruals/deferrals	16,315	16,142
Tax accruals/deferrals and tax
liabilities	10,916	9,400
Sales tax liabilities	7,803	5,709
Advance payments received	1,923	1,774
Other	561	743
Other current non-financial
liabilities	37,518	33,768
Total	59,759	55,438

The other accruals in 2013 mainly consist of costs for preparing the Annual Financial Statements and outstanding invoices.

The fair values of the short-term borrowings are reasonable approximations of the book values.

Derivative financial instruments 23

Derivative financial instruments not treated according to hedge accounting criteria

The derivatives concluded to hedge future foreign-exchange transactions (underlying transaction) and to hedge interest rates do not satisfy formal hedge accounting criteria and are therefore classified as "held for trading" and recognized at fair value through profit or loss. The nominal amounts and market values of derivative financial instruments (interest rate caps and foreign exchange forward contracts) are recognized as follows as per December 31, 2013 and December 31, 2012:

in € K		Dec. 31, 2013		Dec. 31, 2012
	Nominal value	Market value	Nominal value	Market value
Assets
Currency hedges	435	4	0	0
Interest hedges	24,502	0	21,369	0
Total	24,937	4	21,369	0
Liabilities
Currency hedges	21,120	30	0	0
Total	21,120	30	0	0

Changes in the values of the underlying transactions that offset each other are not included when calculating the fair value of the derivative financial instruments. Thus, they do not represent the value that the companies would jointly realize from the hedged item and hedge instrument under current market conditions. The book values of derivatives correspond to the fair values and there is no significant exposure to credit risks since all derivative contracts were entered into with banks that have a top credit rating.

Refer to item 26 "Additional information on financial instruments" in these Notes for information regarding net profits and losses from these financial instruments.

in € K	Up to 1 year	1 to 5 years	Over 5 years
		Nominal value
Assets
Currency hedges	435	0	0
Interest hedges	14,502	10,000	0
Total	14,937	10,000	0
Liabilities
Currency hedges	21,120	0	0
Total	21,120	0	0

Other information

Contingent liabilities 24

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 sufficient reliability.

The Group has undersigned the following guarantees:

in € K	Dec. 31, 2013	Dec. 31, 2012
Guarantees	1,521	3,636

Furthermore, the Group is liable to the amount of EUR 4.1 million (previous year: EUR 4.1 million) in connection with a contract with the city of Munich to develop a property.

Other financial liabilities

25

a) Obligations for equipment rental and service

The terms of the obligations for rental equipment and service contracts are as follows:

Total	34,764	38,027
Obligations due in more than 5 years	5,705	7,553
Obligations due in 1 to 5 years	16,544	18,349
Obligations due within 1 year	12,515	12,125
in € K	Dec. 31, 2013	Dec. 31, 2012

b) Lease obligations

Finance lease obligations When the Group is the lessee

Finance lease contracts mainly concern the purchase of office and other equipment and the purchase of real estate.

The following table lists the net book values of the relevant assets at the closing date:

in € K	Dec. 31, 2013	Dec. 31, 2012
Office and other equipment	22	112
Buildings	640	639
Total	662	751

Lease contracts for office 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 real-estate finance lease contract concerns the leasing of a self-occupied administration building by the Hungarian affiliate, Wacker Neuson Kft., which runs until 2015.

Future minimum lease payments and their present values are presented in the following table:

in € K 2013	Up to 1 year	1 to 5 years	Over 5 years	Total
Future minimum lease payments (nominal)	107	105	0	212
Less discount	-6	-6	0	-12
Present value	101	99	0	200

Discount rate 5.95%

in € K 2012	Up to 1 year	1 to 5 years	Over 5 years	Total
Future minimum lease payments (nominal)	136	214	0	350
Less discount	-7	-12	0	-19
Present value	129	202	0	331

Discount rate 2–8%

Operating leases

When the Group is the lessee

To the extent that a 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 office equipment.

Outstanding commitments for future minimum lease payments under operating leases that cannot be terminated can be seen in the following table:

in € K 2013	Up to 1 year	1 to 5 years	Over 5 years	Total
Future minimum lease payments (nominal)	3,124	4,568	43	7,735
in € K 2012	Up to 1 year	1 to 5 years	Over 5 years	Total
Future minimum lease payments (nominal)	3,160	3,315	46	6,521

In 2013, a total of EUR K 4,099 (previous year: EUR K 4,421) for operating lease agreements was expensed.

When the Group is the lessor

The Group has concluded lease agreements with its customers for the commercial rental of its equipment. These agreements can be terminated at any time and as such it is not possible to specify minimum lease payments. During the period under review, conditional lease payments amounting to EUR K 1,756 (previous year: EUR K 910) were recorded as income.

c) Obligations resulting from investment decisions/ takeback obligations

Financial obligations ensuing from construction and investment projects amounting to EUR K 2,907 (previous year: EUR K 3,718) and from takeback obligations amounting to EUR K 1,131 (previous year: EUR K 785) exist. In addition, unconditional purchase commitments amounting to EUR K 140,418 also exist (previous year: EUR K 99,114).

Additional information on financial instruments 26

The book and fair values of financial assets and liabilities are presented in the following table. It also shows how the individual items are categorized.

in € K	2013 Fair value	2013 Book value	Initial disclosure	Held for trading	Held for sale	Hedges	Loans and receiv ables	Held to maturity	Leases and others (book value)
						IAS 39 classification (book value)
			income statement	Measured at fair value recognized in the		Measured at fair value with changes recognized in equity	At residual book value
Assets
Other non-current financial
assets	10,457	10,457	0	0	1,554	0	8,903	0	0
Trade receivables	163,953	163,953	0	0	0	0	163,953	0	0
Other current financial
assets	2,091	2,091	0	4	0	0	2,087	0	0
Cash and cash equivalents	15,533	15,533	0	0	0	0	15,399	0	134

in € K	2013 Fair value	2013 Book value	Initial disclosure	Held for trading	At residual book value	Hedges	Leases and others (book value
					IAS 39 classification (book value)
			Measured at fair value recognized in the income statement		At amortized cost	Measured at fair value with changes recognized in equity
Liabilities
Long-term borrowings	135,295	130,594	0	0	130,495	0	99
Trade payables	44,702	44,702	0	0	44,702	0	0
Short-term borrowings from banks	61,689	61,698	0	0	61,698	0	0
Current portion of
long-term borrowings	428	428	0	0	327	0	101

Other short-term financial borrowings 22,241 22,241 0 30 22,211 0 0

in € K	2012 Fair value	2012 Book value	Initial disclosure	Held for trading	Held for sale	Hedges	Loans and receiv ables	Held to maturity	Leases and others (book value)
					IAS 39 classification (book value)
				Measured at fair value recognized in the income statement	recognized in equity	Measured at fair value with changes		At residual book value
Assets
Other non-current financial
assets	9,923	9,923	0	0	1,599	0	8,324	0	0
Trade receivables	147,838	147,838	0	0	0	0	147,838	0	0
Other current financial assets	3,118	3,118	0	0	0	0	3,118	0	0
Cash and cash equivalents	18,867	18,867	0	0	0	0	18,707	0	160

in € K	2012 Fair value	2012 Book value	Initial disclosure	Held for trading	At residual book value	Hedges	Leases and others (book value
					IAS 39 classification (book value)
Liabilities				Measured at fair value recognized in the income statement	At amortized cost	Measured at fair value with changes recognized in equity
Long-term borrowings	142,666	134,807	0	0	134,605	0	202
Trade payables	51,143	51,143	0	0	51,143	0	0
Short-term borrowings from banks	97,853	97,853	0	0	97,853	0	0
Current portion of long-term borrowings	437	437	0	0	308	0	129
Other short-term financial borrowings	21,670	21,670	0	0	21,670	0	0

The following table shows the net profits and losses from financial instruments based on valuation categories. It does not include the effects on income of finance 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 profits and losses from financial instruments.

in € K	2013	2012
Loans and receivables	-2,174	-888
Financial liabilities measured at
amortized cost	-4,120	37

Net gain/loss in 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 criteria are included in the category of "assets held for trading".

Total interest income (EUR K 110; previous year: EUR K 349) and total interest expense (EUR K 5,774; previous year: EUR K 5,537) was recognized for financial assets and liabilities (calculated using the effective interest method) that were not valued at fair value through profit or loss.

Financial instruments in the form of foreign-currency trade receivables and payables are valued at the relevant spot rates applicable on the balance sheet dates. This resulted in proceeds to amounting to EUR K 71 (previous year: expense of EUR K 345), which are reported in the cost of sales. Refer to items 2 and 4 "Other income" and "Other operating expenses" in these Notes for information on exchange rate fluctuations and adjustments to monetary holdings.

The table below shows the financial instruments subsequently valued at fair value. Refer to the section on accounting and valuation methods for information on how fair value is categorized (into hierarchical levels) in accordance with IFRS 13.

in € K	Level 1	Level 2	Level 3	Dec. 31, 2013
Financial assets categorized "measured at fair value recognized in the income statement"
Non-hedged derivatives	0	4	0	4
Financial assets categorized "measured at fair value not recognized in the income statement"
Securities	1,554	0	0	1,554
Financial liabilities categorized "measured at fair value recognized in the income statement"
Non-hedged derivatives	0	30	0	30

in € K	Level 1	Level 2	Level 3	Dec. 31, 2012
Financial assets categorized "measured at fair value recognized in the income statement"
Non-hedged derivatives	0	0	0	0
Financial assets categorized "measured at fair value not recognized in the income statement"
Securities	1,599	0	0	1,599
Financial liabilities categorized "measured at fair value recognized in the income statement"
Non-hedged derivatives	0	0	0	0

The methods and assumptions used to determine the fair values were as follows:

Long-term fixed and variable rate receivables/borrowings are evaluated by the Group based on parameters including interest rates, country-specific risk factors, the creditworthiness of individual customers and the risk profile of the financed project. Based on this evaluation, allowances for doubtful accounts are made to account for the expected losses from these receivables. As of December 31, 2013, the book values of these receivables, less allowances for doubtful accounts, corresponded approximately to their calculated fair values.

The fair value of financial assets available for sale is derived from quoted prices on active markets.

The Group concludes derivative financial instruments with various counterparties, principally financial institutions with a high credit rating. Derivatives valued by applying an evaluation process with input parameters observable on the market primarily include forward exchange contracts. The most frequently used evaluation methods include forward price models using present value calculations. The models incorporate various inputs including the credit standing of the business partner, spot exchange rates and forward exchange rates.

The fair values of the Group's interest-bearing loans are determined using the discounted cash flow method. The discount rate used reflects the borrowing rate of the issuer at the close of the period under review. The Group's own risk of non-performance was classified as low at December 31, 2013.

Events since the balance sheet date 27

On February 14, 2014, the Swedish affiliate Wacker Neuson AB acquired the company Skanska Mark och Exploatering Bygg Invest AB. This is not an operational company; however, it owns real estate on which the Swedish affiliate intends to build its future headquarters. It will be merged shortly with the Swedish affiliate. A contract for work and services to construct the new headquarters was signed at the same time.

There have been no other events since the reporting date that could have a significant impact on the Group's earnings, financials and assets.

Division and determination of operating segments

The internal organizational structure and management structure as well as the internal reports to the Executive Board and Supervisory Board, which are based on geographic segments, form the basis for determining the operating segments of the company. For information regarding geographical segmentation of affiliates, please refer to the section on consolidation structure (see the general information on accounting standards/ consolidation structure). According to this structure, the affiliates are geographically grouped into regional markets (Europe, Americas and Asia-Pacific). Reporting is also carried out internally according to business segments. This exclusively deals with revenue. Company management will therefore continue to focus on geographical segments. In the period under review, no segmentation changes were made.

Products and services of operating segments

The products and services offered by the geographic operating segments can be divided into light equipment, compact equipment and services.

The light equipment business segment covers the manufacture and sale of light equipment weighing up to 3 tons in the business fields of concrete technology, compaction and worksite technology.

The compact equipment business segment covers the manufacture and sale of compact machinery weighing up to 15 tons.

The services business segment houses the company's activities in the business fields spare parts, maintenance, financing and used equipment.

Segment valuation methods

Segment valuation methods are based on the valuation methods used in internal reporting. Internal reporting is carried out exclusively in line with the valid IFRS standards as applicable.

Transactions between the individual Group segments are based on prices that also apply to third-party transactions.

Reporting format

Segment reporting is covered in a separate Note.

Internal reporting reveals segment revenue and segment earnings, expressed as EBIT. EBITDA is also disclosed as a profit indicator.

The figures for working capital and net financial debt are also derived from internal reporting and included in external segment reporting for operating segments as segment assets and segment liabilities. Working capital comprises inventory plus trade receivables minus trade payables. Net financial debt refers to long-term financial borrowings, short-term borrowings from banks and the current portion of long-term financial borrowings less cash and cash equivalents.

The operating segments are reported after elimination of transactions that have taken place within segments. The consolidation column thus contains only the eliminated transactions that took place between operating segments.

Revenue from external customers, categorized according to products and services, are recognized at company level. No individual customer accounted for more than 10 percent of Group revenue.

Cash flow statement 29

The cash flow statement is prepared in accordance with IAS 7. The cash flow statement reports cash flows resulting from operating activities, from investing activities as well as from financing activities. Insofar as changes in liquid funds are

due to foreign exchange rate fluctuations, these are reported separately. The determination of cash flow 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. Short-term borrowings from banks in the Group cash pool were offset against cash and cash equivalents.

in € K	Dec. 31, 2013	Dec. 31, 2012
Cash deposits	134	161
Petty cash	32,528	42,537
Bank balances	3,003	3,341
Liabilities from group cash pool	-20,132	-27,172
Total	15,533	18,867

Non-cash operating expenses and income as well as gains or losses on the sale of property, plant and equipment have been eliminated from the cash flow from operating activities.

The item "Book value from the disposal of rental equipment" recognized in the cash flow from operating activities includes the book values of rental equipment formerly recognized under fixed assets and reclassified on sale of the equipment as current assets.

Cash flow from investment activities comprises the cash outlay for intangible assets and property, plant and equipment.

Cash flow from financing activities contains payments received from and made to shareholders. It also contains payments resulting from borrowing and repayment of debt.

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 actively controls and modifies its capital structure in line with changing market dynamics. The goal of the capital management policy is to secure the Group's business and investment activities in the long term. To maintain a

suitable capital structure, the Group can propose changes to dividend payments to shareholders or issue new shares. As of December 31, 2013 and December 31, 2012, no changes were made to objectives, guidelines or procedures within the framework of the capital structure control policy. The Group monitors its capital using net financial debt resulting from current net financial liabilities and non-current financial liabilities as an indicator.

The minimum capital requirements for equity stipulated under German stock legislation have been fulfilled. Equity is subject to an external minimum capital requirement of 30 percent under the terms of a Schuldschein loan agreement. For further information, please refer to item 20 "Financial liabilities" in these Notes.

in € K	Dec. 31, 2013	Dec. 31, 2012
Current financial liabilities	62,126	98,290
Short-term financial liabilities	61,698	97,853
Current portion of long-term financial liabilities	428	437
Non-current financial liabilities (without provisions)	130,594	134,807
Total equity before minority interests	935,481	914,658
Total capitalization	1,128,201	1,147,755

in € K	Dec. 31, 2013	Dec. 31, 2012
Current net financial liabilities	46,593	79,423
Short-term liabilities	62,126	98,290
less liquid funds	-15,533	-18,867
Net financial debt	177,187	214,230
Current net financial liabilities	46,593	79,423
plus non-current financial liabilities	130,594	134,807

Financial risk factors

Due to the global scope of its operations, the Group is exposed to various financial risks, including 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 financial markets and aims to minimize any potential negative impact on the Group's financial position. It is the general policy of the company to reduce these risks through systematic financial management. The Group employs selective derivative financial instruments to hedge against certain risks.

The Group finance department is responsible for risk management in accordance with the rules and guidelines approved by the Executive Board. It identifies, evaluates and hedges against financial risks in close cooperation with the operating units of the Group. The Executive Board sets guidelines for risk management as well as fixed policies for specific areas of risk. These include dealing with foreign currency risks, interest rate risks and credit risks.

The guidelines also specify how derivative and other financial instruments and liquidity surpluses are to be used.

Currency risks

Currency risks arise from expected future transactions, assets and liabilities reported in the balance sheet, as well as from net investments in a currency that diverges from the functional currency (EUR). Exchange risks are naturally hedged by offsetting receivables against payables in a given currency.

Two major manufacturing affiliates prepare their balance sheets in US dollars. From the Group's perspective, the US dollar is therefore a foreign currency that represents a significant potential currency risk for financial instruments. If the USD/EUR exchange rate increased or decreased by 5 percent, changes in the financial assets and liabilities reported in the balance sheet in US dollars would have the following impact on profit before tax and equity:

	2013	2012
USD currency trends as a %	+5.00/-5.00	+5.00/-5.00
Impact on profit before tax (EBT)
in € K	-4,538/5,016	1,236/-1,366
Impact on equity in € K	-4,538/5,016	1,236/-1,366

Group profit was hardly affected by exchange rate fluctuations arising from the international flow of goods due to natural currency hedging, in particular with regard to the euro/US dollar. In 2013, the average EUR/USD exchange rate was EUR 1 to USD 1.33 (previous year: EUR 1 to USD 1.29). The Group uses derivative financial instruments to hedge other currencies.

The Group is also subject to currency risks from individual transactions resulting from purchases and sales executed by a Group member in a currency other than the functional currency.

Credit risks

The Group is not exposed to any material credit risks (default risks). Contracts for derivative financial instruments and financial transactions are concluded only with financial institutions with a high credit rating in order to keep the risk of default by the contracting party as low as possible. The book value of financial assets recognized in the Consolidated Financial Statements less impairment represents the maximum default risk. For further information on the book value of financial assets, please refer to item 26 "Additional information on financial instruments" in these Notes.

Continued weakness on construction and financial markets in some countries may present certain Group customers with financial difficulties, possibly culminating in insolvency. This would lead to a rise in accounts receivable and a subsequent increased risk of default. The Group is counteracting the risk of changes in individual customers' payment patterns through our active accounts receivable management policy, partner "healthchecks" and tools such as credit hedging.

Interest rate risks

Interest rate risks are caused by market fluctuations in interest rates. On the one hand, they impact the amount of interest payments for which the Group is liable. On the other hand, they influence the market value of financial instruments.

The Group hedges some of its cash flow against interest rate risks arising from borrowings 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 fixed interest rates.

Of the total financial liabilities listed in item 20 "Financial liabilities" in these Notes (EUR K 192,720; previous year: EUR K 233,097), EUR K 123,686 (previous year: EUR K 124,014) are attributable to fixed interest rate liabilities, which are not subject to changes in interest rate, and EUR K 69,034 (previous year: EUR K 109,083) to variable interest rate liabilities.

The following table shows how the Group's earnings before tax would respond to changes in interest rates that could be reasonably expected to occur based on the impact this would have on variable interest rate loans (EUR K 69,034; previous year: EUR K 109,083) and bank balances (EUR K 154; previous year: EUR K 0) resulting from a Group-wide cash pool system.

The effects on Group earnings before tax also reflect the impact on equity.

in € K	Book value at Dec. 31, 2013	Interest 2013	Impact on profit before tax (increase of 0.20%)	Impact on profit before tax (decrease of 0.20%)
Financial assets with variable interest rates
Bank balances cash pool	154	0.13%	0	0
Financial liabilities with variable interest rates
Other borrowings from banks	69,034	2.45%	-138	138
Total			-138	138

in € K	Book value at Dec. 31, 2012	Interest 2012	Impact on profit before tax (increase of 0.20%)	Impact on profit before tax (decrease of 0.20%)
Financial assets with variable interest rates
Bank balances cash pool	0	0	0	0
Financial liabilities with variable interest rates
Other borrowings from banks	109,083	2.88%	-218	218
Total			-218	218

Liquidity risks

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 it is not currently using. Liquidity is managed by the Group's treasury department via a Group-wide cash pool system. Refer to item 20 "Financial liabilities" in these Notes for further information on existing credit lines and financial covenants.

Executive bodies 31

Executive Board

In the year under review, the Executive Board comprised four members up to and including March 31, 2013, and three members at the reporting date:

• ^J Cem Peksaglam, CEO, responsible for Group strategy, investor relations/communications, legal matters, real estate, HR and compliance.
• ^J Martin Lehner, Deputy CEO, responsible for technology, plants, research and development, procurement and quality management.
• ^J Günther Binder, responsible for finance, controlling, Group auditing and IT.
• ^J Werner Schwind, responsible for sales, rental, logistics, service, marketing and training.

Mr. Werner Schwind stepped down from his position as member of the Executive Board on March 31, 2013. Mr. Cem Peksaglam assumed responsibility for his executive mandates.

The members of the company's Executive Board do not have any additional Supervisory Board positions or seats on comparable supervisory committees outside of the Wacker Neuson Group in Germany or abroad.

Supervisory Board

The following members are appointed to the Supervisory Board of Wacker Neuson SE as of the closing date:

• ^J Hans Neunteufel, engineer, Chairman of the PIN Private Trust (PIN Privatstiftung), in Linz, Austria, Chairman of the Supervisory Board
• ^J Dr. Matthias Bruse, attorney-at-law and partner at the P+P Pöllath+Partners law firm, Munich, Germany, Deputy Chairman of the Supervisory Board

• ^J Dr. Eberhard Kollmar, attorney-at-law at the Kollmar, Deby & Sinz Rechtsanwaltsgesellschaft mbH law firm, Munich, Germany, Deputy Chairman of the Supervisory Board

• ^J Kurt Helletzgruber, businessman, member of the board of the PIN Private Trust (PIN Privatstiftung), Linz, Austria

• ^J Elvis Schwarzmair, Chairman of the Reichertshofen Works Council and Chairman of the Central Works Council, the Group Works Council, and the SE Works Council, Rohrbach, Germany
• ^J Hans Haßlach, Chairman of the Kramer-Werke GmbH Works Council, Deputy Chairman of the Group Works council, Deputy Chairman of the SE Works Council, Uhldingen-Mühlhofen, Germany

In accordance with the Articles of Incorporation, the terms of office of the Supervisory Board members listed above will run until the close of the AGM that tables a resolution to formally approve the actions taken by Wacker Neuson SE in fiscal 2014. The terms may be no longer than six years however.

The following members of the Supervisory Board have additional supervisory board positions or seats on comparable supervisory committees for German or foreign commercial companies outside of the Wacker Neuson Group:

^J Hans Neunteufel

Chairman of the Supervisory Board of Allgemeine Sparkasse Oberösterreich Bankaktiengesellschaft, Linz, Austria

• ^J Dr. Matthias Bruse
• 1) Member of the Supervisory Board of Klöpfer & Königer GmbH & Co. KG, Garching, Germany
• 2) Member of the Supervisory Board of SURTECO SE, Buttenwiesen, Germany
• ^J Kurt Helletzgruber Chairman of the Supervisory Board of HTI High Tech Industries AG, St. Marien bei Neuhofen, Austria

For information on the remuneration of the Executive and Supervisory Boards, as well as remuneration of former Board members, please refer to item 32 "Related party disclosures" in these Notes.

Related party disclosures 32

In the case of the Group, IAS 24 defines a related party necessitating disclosures as shareholders, entities over which shareholders have control or significant influence (sister companies), non-consolidated companies, members of the Executive Board, members of the Supervisory Board and the pension fund.

Key trade relations with related parties were as follows during the period under review:

in € K	Current receivables Dec. 31, 2013	Current payables Dec. 31, 2013	Expenses for business transactions 2013	Income for business transactions 2013
Relations with shareholders	152	124	558	998
Relations with sister companies	27	16	779	6,365
Relations with non-consolidated companies	6	0	0	0
Pension fund	6	0	0	0
Total	191	140	1,337	7,363

in € K	Current receivables Dec. 31, 2012	Current payables Dec. 31, 2012	Expenses for business transactions 2012	Income for business transactions 2012
Relations with shareholders	414	236	725	1,291
Relations with sister companies	50	18	1,621	1,648
Relations with non-consolidated companies	0	0	0	0
Pension fund	41	199	0	3
Total	505	453	2,346	2,942

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 998 (previous year: EUR K 1,291). These were counterbalanced with goods and services received by the shareholder to the value of EUR K 558 (previous year: EUR K 725). 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 significant influence resulted from deliveries and rental arrangements between affiliates and entities over which shareholders have control or significant influence.

Relations with non-consolidated companies resulted from goods and services traded between the parent company and companies that are not included in the consolidation structure although the parent company has a shareholding in these entities (see general information on accounting standards/ consolidation structure). The pension fund is matched solely with a provision for voluntary support and pension benefits for employees both in the year under review and the prior fiscal year.

Total remuneration for the Executive Board in the period under review amounted to EUR K 4,924 (previous year: EUR K 5,435) of which EUR K 1,385 (previous year: EUR K 1,586) was

paid out in connection with termination of employment. Total remuneration for the Supervisory Board for the same period amounted to EUR K 512 (previous year: EUR K 464). At the AGM on May 26, 2011, a resolution was passed to refrain from itemizing this information in accordance with Section 285 (1) No. 9a sentences 5 to 8 in conjunction with Section 314 (2) sentence 2 HGB in conjunction with Section 315a (1) HGB. At the closing date, short-term payables to the Executive Board in the amount of EUR K 1,600 were outstanding (previous year: EUR K 1,700).

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 2,320 (previous year: EUR K 4,404). The decrease in value (repayment) amounted to EUR K 2,084 (previous year: EUR K 100). The value of pension obligations is based on pension obligations before netting with plan assets and before any possible actuarial gains or losses that have not yet been recognized. For more detailed information, please refer to item 18 "Provisions for pensions and similar obligations" in these Notes.

Due to respective agreements, pension agreements have also been closed with former members of the Executive Board. The value of these pension obligations at the end of the accounting period totaled EUR K 23,850 (previous year: EUR K 19,754). In the period under review, EUR K 2,052 (previous year: EUR K 2,321) was paid to former Executive Board members.

Auditor's fee 33

The auditor's fee is disclosed as an expense in fiscal 2013 and is broken down as follows:

in € K	2013	2012
Auditing services	752	746
Other approval and
assessment services	202	114
Tax consultation services	423	292
Other services	64	80

Declaration regarding the German Corporate Governance Code 34

The Executive and Supervisory Boards have issued a declaration stating which recommendations of the Government Commission on the German Corporate Governance Code have been and are being adopted. The declaration can be downloaded at any time from the Group website at www.wackerneuson.com.

Availing of exemption provisions according to Section 264 (3) and/or Section 264b HGB

The following fully consolidated domestic affiliates avail of the exemptions set down in Section 264 (3) HGB and/or Section 264b HGB for fiscal 2013:

Company name	City
Kramer-Werke GmbH	Pfullendorf
Wacker Neuson Grundbesitz GmbH & Co. KG	Pfullendorf
Wacker Neuson Grundbesitz Verwaltungs GmbH	Pfullendorf
Wacker Neuson Produktion GmbH & Co. KG	Munich
Wacker Neuson PGM Verwaltungs GmbH	Munich
Wacker Neuson Vertrieb Deutschland GmbH & Co. KG	Munich
Wacker Neuson SGM Verwaltungs GmbH	Munich
Wacker Neuson Vertrieb Europa GmbH & Co. KG	Munich
Wacker Neuson SEM Verwaltungs GmbH	Munich
Weidemann GmbH	Diemelsee-Flechtdorf
Wacker Neuson Immobilien GmbH	Überlingen

Munich, March 12, 2014

Wacker Neuson SE

Executive Board

(CEO)

35

Cem Peksaglam Günther C. Binder

Martin Lehner (Deputy CEO)

Responsibility Statement by Management

"To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a true and fair view of the assets, financials and earnings of the Wacker Neuson Group, and the Combined Management Report includes a fair review of the development and performance of the business and the position of the Wacker Neuson Group and Wacker Neuson SE, together with a description of the principal opportunities and risks associated with the expected development of the Wacker Neuson Group and Wacker Neuson SE."

Munich, March 12, 2014

Wacker Neuson SE, Munich

Executive Board

(CEO)

Cem Peksaglam Günther C. Binder

Martin Lehner (Deputy CEO)

Unqualified Auditors' Opinion

The following auditor's opinion is based on the Consolidated Financial Statements and Combined Management Report of the Wacker Neuson Group:

"We have audited the Consolidated Financial Statements prepared by Wacker Neuson SE, Munich, Germany, comprising the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated cash flow statement, consolidated segment report and the Notes to the Consolidated Financial Statements, together with the Group Management Report, which is combined with the Management Report of the Company, for the reporting period from January 1 through December 31, 2013. The preparation of the Consolidated Financial Statements and the Group Management Report in accordance with IFRS as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315a paragraph 1 HGB are the responsibility of the parent company's management. Our responsibility is to express an opinion on the Consolidated Financial Statements and on the Group Management Report based on our audit.

We have conducted our audit of the Consolidated Financial Statements in accordance with Section 317 HGB and generally accepted German standards for the audit of financial statements promulgated by the "Institut der Wirtschaftsprüfer" (Institute of Public Auditors in Germany). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the Consolidated Financial Statements in accordance with the applicable financial 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 accountingrelated internal control system and the evidence supporting the disclosures in the Consolidated Financial Statements and the Group Management Report are examined primarily on a sample test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of the entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by management, as well as evaluating the overall presentation of the Consolidated Financial Statements and the Group Management Report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion and based on the findings of our audit, the Consolidated Financial Statements comply with those IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315a paragraph 1 HGB and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The Group Management Report is consistent with the Consolidated Financial 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 12, 2014

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

Keller Nöhmeier (Public Auditor) (Public Auditor)

Wirtschaftsprüfer Wirtschaftsprüferin

Technical Glossary

Compact equipment	One of the Group's strategic business segments. Compact equipment covers machinery weighing up to 15 tons, particularly wheel loaders and telescopic wheel loaders, skid-steer loaders, four-wheel and track dumpers, telescopic handlers as well as mobile and compact excavators.
Compaction	One of the Group's business fields in the light equipment segment. Equipment in this field is used for compacting soil and asphalt during the construction of trenches, roads, paths, foundations and industrial buildings. It includes products such as rammers, vibratory plates and rollers.
Compatec	The Compatec display unit shows the degree of compaction achieved with vibratory plates, helping operators determine when a surface has been sufficiently compacted.
Concrete technology	One of the Group's business fields in the light equipment segment. The equipment is used to compact concrete when laying concrete walls, ceilings and floors and includes internal and external vibrators as well as trowels for applying a smooth finish to concrete surfaces.
dual power	This dual drive system for compact excavators enables conventional diesel-powered excavators to be operated in zero-emissions mode simply by connecting an external electro-hydraulic unit to the excavator's undercarriage.
Dumpers	Track- or wheel-based machines in the compact equipment segment primarily used for transporting backfill material.
ECO	Seal awarded by Wacker Neuson to products that are particularly environmentally friendly (ECOlogy) and cost efficient (ECOnomy).
Floor saws	Hand-guided saws equipped with a diamond blade. Like cut-off saws, they are mainly used for demolition work.
Heavy equipment	Large construction machinery which Wacker Neuson defines as having a total weight of over 15 tons. Typically transported to construction sites for specific projects and operated by specially trained employees.
Hoftrac®	Compact wheel loaders made primarily for stable/barn and yard work in the agricultural sector. Their compact footprint makes them highly maneuverable and ideal for indoor work. Hoftrac® loaders are significantly narrower and more compact than conventional wheel loaders and have a smaller turning radius.

Hydronic heating equipment	Mobile heating equipment to thaw frozen ground, heat buildings and cure concrete at sub-zero conditions, making construction work less dependent on weather conditions (for example in regions with long winters such as Canada, Alaska, Russia and Scandinavia).
Internal vibrators	Used for concrete compaction, mainly on construction sites. These vibrators comprise eccentric weights driven by an electrical motor, which are encased in a water-tight steel tube so that they can be submerged in fresh concrete.
Light equipment	One of the Group's strategic business segments. It covers predominantly hand-held, remote control or ride-on equipment weighing up to 3 tons in the strategic business fields of concrete technology, compaction and worksite technology.
Rammers	First developed in the 1930s by Wacker Neuson, this pioneering product is used in soil and asphalt compaction, particularly in small spaces and narrow trenches.
Rebar technology	Part of the concrete technology business field. Rebar tiers are used to knot together the steel bars that reinforce concrete. These devices can tie up to 1,000 knots an hour.
Skid steer loaders	Small loaders with four wheel drive steering or rubber tracks. They offer excellent maneuverability thanks to their skid steering system. They can also be equipped with a wide range of attachments, making them a flexible option for a wide range of jobs.
Telescopic handlers	Like wheel loaders, these compact machines are ideal for the construction and agricultural sectors. Telescopic handlers, however, feature a detached cabin and support very high lifting heights despite their compact dimensions. The telescopic arm on the tail provides these machines with a strong lever effect.
Trowels	Trowels are used to smooth concrete surfaces, in particular freshly poured concrete, for example, in industrial buildings.
Vibratory plate	Soil and asphalt compaction devices, mainly used to precompact foundation soil and compact paving stones. They travel forwards and backwards, and can also be equipped with remote control technology.
Wheel loaders	Articulated and all-wheel drive wheel loaders are extreme versatile machines. Thanks to a broad range of attachments and technologies, they are the perfect choice for a host of jobs, including transporting and stacking material. Telescopic wheel loaders feature a telescopic arm, which gives them a greater range and lifting height. Operators are seated in a central position with a clear view of their surroundings. The telescopic boom is positioned directly in front of the cabin.
Worksite technology	One of the Group's business fields in the light equipment segment. Products in this business field include generators and lighting equipment for construction site activities as well as equipment used to break or cut asphalt such as cut-off saws, floor saws and breakers.
Zero-tail excavators	The housing of zero-tail excavators does not protrude over the tracks when the superstructure rotates (360°). Zero-tail excavators can be used directly next to walls as they will not cause any damage when rotating.

Financial Glossary

Capital employed	Invested capital: Capital employed represents the interest-bearing capital tied up in and required by the Group to function. It is equal to the Group's operating assets less the amount of non-interest bearing available capital. Capital employed = non-interest-bearing assets less non-interest-bearing liabilities, less goodwill and less brand value.
Cash flow	Refers to a company's ability to finance itself, calculated by the excess of cash revenues over cash outlays in a given period of time (not including non-cash expenses/income).
Cash flow from financing activities	Cash balance resulting from changes to financial liabilities, the issue of shares, cash inflow from disposal of treasury shares/cash outflow from the acquisition of treasury shares and dividend payments.
Cash flow from investment activities	Cash balance resulting from the acquisition of financial, tangible or intangible assets and the disposal of financial, tangible or intangible assets.
Cash flow from operating activities	Cash flow generated from operating activities.
Corporate governance	Sound and responsible management and control of a company with the aim of creating long-term value.
Corporate social responsibility (CSR)	CSR refers to a company's voluntary contribution to sustainable development above and beyond the minimum legal requirements (compliance). Acting as a good corporate citizen, the company explains how it is taking a responsible approach to business (markets), to the environment, to its employees and to communication with key stakeholders.
Deferred taxes	Differences between the tax base and the carrying amounts in the IFRS accounts in order to disclose tax expense and tax entitlement (actual and deferred) according to IFRS.
Derivatives	Financial instruments, such as futures and options that derive their value from the value of other financial instruments or an underlying asset.
Discounted cash flow (DCF) method	Valuation method used to estimate the market value by discounting a company's future cash flows to their present value.
Earnings per share (EPS)	EPS is defined as net Group profit for the year divided by the number of shares.
EBIT (margin)	The earnings before interest and taxes (EBIT) margin is the ratio of EBIT to revenue.

EBT	Earnings before taxes (EBT).
Economic Value Added (EVA)	Indicates whether company value has increased. EVA = ROCE II less WACC, multiplied by average capital employed. The company is producing value if ROCE II exceeds WACC.
Equity ratio	Ratio of equity before minority interests to total capital; indicates the financial stability of a company.
Free cash flow	Free cash flow refers to the amount of cash readily available to a company.
Gearing	Net financial debt as a percentage of equity before minority interests.
Goodwill	When a company purchases another company for a price that is higher than the fair value (book value) of all assets and liabilities, the difference is recorded as goodwill.
Gross profit margin	A measure of operational efficiency, expressing the relationship between gross profit and sales revenue or the percentage by which sales exceed cost of sales.
Hedge	Provides protection against risks arising from unfavorable exchange rate fluctuations and changes to raw materials and other prices.
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.
Impairment test	Intangible assets are subject to an annual impairment test. This involves comparing the carrying amount with the fair value less costs to sell. Fair value is calculated using the discounted cash flow method. Future cash flows are discounted to the respective reporting date. The asset is deemed impaired if the fair value less costs to sell is lower than the carrying value.
Key performance indicators (KPI)	KPIs are used to define company targets and measure the extent to which a company is achieving its goals.
NOPLAT	Net operating profit less adjusted taxes (NOPLAT) refers to earnings before interest and taxes (EBIT) minus adjusted taxes. NOPLAT shows the annual profit a company would achieve if it were financed purely from equity. NOPLAT = EBIT less (EBIT x Group tax ratio)
Peer group	Companies active in the same or similar branch or industry.

Purchase Price Allocation (PPA)	A process whereby the purchase price paid for a company is allocated at fair value to the assets, liabilities and contingent liabilities acquired. The difference in value is disclosed as goodwill (see entry above).
ROA (Return on assets after tax and before minority interests)	The ratio between profit for the period before minority interests and the average balance sheet total.
ROE (return on equity)	This indicator measures the return a company is getting on its equity. It shows the relation between profit for the period (after tax and after minority interests) and equity employed before minority interests.
	ROE = Profit for the period (after tax and after minority interests) in relation to average equity before minority interests as a %
ROCE I (return on capital employed)	ROCE I indicates the efficiency and profit generating ability of capital expenditure within a company. ROCE I = EBIT ratio to average capital employed as a %
ROCE II (return on capital employed)	ROCE II shows how much return a company realizes on the capital it invests after tax. ROCE II = NOPLAT in relation to average capital employed as a %
ROS (Return on sales)	The ratio between profit for the period after minority interests and revenue.
Schuldschein loan agreements	Schuldschein loan agreements ("Schuldscheindarlehen") are bilateral loan agreements unique to the German market. They represent a source of capital market financing similar to bond or syndicated loan financing for issuers with long-term funding needs. Schuldschein loan agreements are typically senior unsecured instruments that pay a fixed or a variable coupon. Unlike bonds, Schuldschein loans are not securities but bilateral, unregistered, (usually) unrated and unlisted loan agreements sold directly to institutional investors. Schuldschein loans are not exchange traded.
Swap	An agreement between two parties to exchange cash flows at a future point in time. The agreement also defines how the payments are calculated and when they are to be made.
Tax shield	The reduction in income taxes that results from availing of tax deductions applicable to interest on borrowings. It increases a company's equity value.

Weighted average cost of capital (WACC)	Indicates the minimum return on capital employed. It is calculated as the weighted average cost of equity and debt, whereby tax benefits are deducted from the cost of debt. Here, equity is taken at market value at the closing date and not at the balance sheet value. The cost of equity is based on the risk-free return plus a company-specific market risk premium. This corresponds to the difference between the risk-free return and the overall market return depending on the leverage beta.
	The long-term conditions under which the Wacker Neuson Group can borrow funds are used to de fine debt costs. For shareholders and lenders, WACC indicates the return they might expect on the funds or capital they have provided. It also gives a company a good indication of the type of return it needs to generate on prospective investments. A company is producing value for its investors if return on capital employed (ROCE) exceeds WACC. WACC: (percentage of financing that is equity x cost of equity) + (percentage of financing on average that is debt x cost of debt) x (1- tax rate)
	Equity costs = basic interest rate (risk-free return) + market risk premium x leverage ß
Working capital	The difference between a company's current (i.e. within a year) liquid assets and current liabilities. It is thus the part of current assets that is not reserved to meet short-term borrowings and can there fore be used in procurement, production and sales processes. Working capital = Total inventory plus trade receivables minus trade payables.
Working capital to revenue	Return on capital employed to generate revenue. (Average) working capital to revenue = (average) working capital divided by revenue. The average is calculated by adding the opening and closing balances, and dividing this figure by two.
Write-downs	Scheduled or one-off write-downs indicating the impairment of an asset. The impairment test in fiscal 2009 resulted in the write-down of goodwill attributable to the Neuson Kramer subgroup in the amount of EUR K 89,540 and a write-down in the amount of EUR K 10,798 attributable to the Neuson brand – a constituent part of the Wacker Neuson name (total impairment losses of EUR 100.3 million). This one-off, non-cash write-down was reflected in the income statement. The portion of the write-down attributable to brand impairment was reversed in fiscal 2011 ( write-ups).
Write-ups	This involves making an upward adjustment to the carrying value of an asset. If the impairment test reveals that the reasons for writing down an asset in a previous accounting period no longer prevail, IAS 36 provides for the reversal of impairment up to the maximum amount of the historic cost under other intangible assets (brands, technologies, customer pool). This reversal is recognized in the income statement. IAS 36 specifically prohibits the reversal of impairment losses for goodwill.

Publishing Details/Financial Calendar

Contact

Wacker Neuson SE

Katrin Neuffer Investor Relations Preussenstrasse 41 80809 Munich, Germany

Tel. +49 - (0)89 - 354 02 - 173 Fax +49 - (0)89 - 354 02 - 298

ir@wackerneuson.com www.wackerneuson.com

Publishing Details

Issued by: Wacker Neuson SE, Department: Corporate Communication/ Investor Relations

Concept, design and realization: Kirchhoff Consult AG

Content: Wacker Neuson SE

Financial Calendar 2014

March 31, 2014	Publication of 2013 financial results, press conference, Munich
May 13, 2014	Publication of first-quarter report 2014
May 27, 2014	AGM, Munich
August 5, 2014	Publication of half-year report 2014
November 11, 2014	Publication of nine-month report 2014

All rights reserved. Valid March 2014. 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. Published on March 31, 2014.

Disclaimer

This 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 any way guaranteeing that those expectations will turn out to be accurate. Future performance and the results actually achieved by Wacker Neuson SE and its affiliated 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.

7-Year Comparison

in € million	2013	2012	2011	2010	2009	2008	2007
Revenue	1,159.5	1,091.7	991.6	757.9	597.0	870.3	742.11
Revenue Europe	826.2	776.4	723.9	558.6	465.7	676.2	520.7
Revenue Americas	297.2	276.2	231.0	168.1	103.1	166.9	196.1
Revenue Asia-Pacific	36.1	39.1	36.7	31.2	28.2	27.2	25.3
EBITDA	153.4	141.7	162.6	77.8	27.2 (36.7)2	100.9	117.0
Depreciation and amortization	-58.6	-56.8	-38.8	-41.1	-140.3	-43.0	-38.1
Of which one-off write-ups/write-downs	–	-0.8	10.8	–	-100.3	–	–
EBIT	94.7	84.9	123.8	36.7	-113.1 (-3.2)3	58.0	78.9
EBT	88.0	77.8	120.3	32.7	-115.5 (-5.6)3	55.7	78.2
Profit for the period	61.2	54.1	85.8	23.9	-110.1 (-2.9)3,4	37.4	54.1
Number of employees	4,157	4,096	3,514	3,142	3,059	3,665	3,659
R&D ratio (incl. capitalized expenses) as a %	3.1	3.1	3.1	3.3	4.0	3.0	2.9
Share
Earnings per share in €	0.87	0.77	1.22	0.34	-1.57	0.53	1.1
Dividends per share in €	0.405	0.30	0.50	0.17	0	0.19	0.50
Book value at Dec. 31 in €	13.4	13.1	12.9	11.9	11.3	13.0	13.0
Closing price at Dec. 31 in €	11.5	10.4	9.6	13.0	8.2	6.2	14.6
Market capitalization at Dec. 31	805.6	725.9	669.8	911.8	575.1	434.2	1,025.4
Key profit figures
Gross profit margin as a %6	30.4	30.4	32.6	31.6	30.8	33.7	38.1
EBITDA margin as a %	13.2	13.0	16.4	10.3	4.6 (6.2)2	11.6	15.8
EBIT margin as a %	8.2	7.8	12.5	4.8	-18.9 (-0.5)3	6.7	10.6
Net return on sales (ROS) as a %	5.3	5.0	8.7	3.2	-18.4 (-2.1)4,7	4.4	7.3
Key figures from the balance sheet
Balance sheet total	1,322.4	1,344.8	1,214.3	1,030.2	971.7	1,178.6	1,214.5
Return on assets (ROA) as a %	4.7	4.3	7.0	2.5	-1.14,7	3.2	7.5
Equity before minority interests	935.5	914.7	901.1	830.6	789.0	909.1	910.4
Equity ratio before minority interests as a %	70.7	68.0	74.3	80.6	81.2	77.1	75.0
Return on equity (ROE) as a %	6.6	6.1	9.08	3.0	-1.5	4.2	12.3
Net financial debt	177.2	214.2	90.4	13.7	-24.9	59.0	-43.1
Net financial debt/EBITDA	1.2	1.5	0.6	0.2	-0.9	0.6	-0.4
Gearing as a %	18.9	23.4	10.0	1.7	-3.2	6.5	-4.7
Working capital	453.1	456.8	370.5	269.3	217.9	303.9	271.5
Average working capital as a % of revenue	39.2	37.9	32.3	32.1	43.7	33.1	29.0
Capital employed	852.7	866.2	721.1	572.8	489.8	588.1	486.7
ROCE I as a %	11.0	10.8	17.58	6.9	-2.47	10.8	23.19
ROCE II as a %	7.7	7.6	12.58	5.2	-1.97	7.4	15.89
Weighted average cost of capital (WACC)	7.1	7.5	7.5	7.9	8.1	7.6	–
Economic value added (EVA)	5.1	0.7	32.1	-14.1	-54.1	-1.3	24.3
Cash flow
Cash flow from operating activities	132.6	13.6	43.6	44.9	138.3	38.110	55.0
Cash flow from investing activities	-75.9	-99.9	-105.5	-85.2	-38.1	-16.410	-141.8
Investments	86.8	104.0	114.0	85.0	43.4	101.8	84.0
Cash flow from financing activities	-60.1	88.8	42.6	-10.3	-53.0	-21.9	96.4
Free cash flow	56.7	-86.3	-61.9	-38.8	100.6	23.4	62.1

Pro-forma Group revenue amounted to EUR 979.5 million (Neuson Kramer Baumaschinen AG consolidated for the first time on October 1, 2007).

² Adjusted to reflect restructuring costs (EUR 9.6 million).

³ Adjusted to reflect restructuring costs in the amount of EUR 9.6 million and write-downs on intangible assets in the amount of EUR 100.3 million.

⁴ Including deferred taxes in the amount of EUR -2.7 million (in conjunction with write-downs on brand value – intangible assets).

⁵ Dividend proposal for the AGM on May 27, 2014.

Since 2010, expenses for service technicians are reported in the income statement under cost of sales (instead of sales and service expenses).

⁷ Adjusted for write-down on intangible assets in the amount of EUR 100.3 million.

2011 figure adjusted for reversal of impairment in the amount of EUR 10.8 million.

⁹ On a pro-forma basis.

¹⁰ The item "Interest received" has been transferred from cash flow from investment activities to cash flow from operating activities.

Wacker Neuson SE Preussenstrasse 41, 80809 Munich, Germany Phone +49 - (0)89 - 354 02 - 0 Fax +49 - (0)89 - 354 02 - 390 www.wackerneuson.com