Wacker Neuson SE — Earnings Release 2008

May 15, 2008

News Details

Corporate | 15 May 2008 07:57

Wacker Construction Equipment AG: Growth for Wacker Construction Equipment AG in Q1 2008

Wacker Construction Equipment AG / Quarter Results

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Growth for Wacker Construction Equipment AG in Q1 2008
• Sales and EBITDA up due to merger
• Compact equipment sales for construction and agricultural industries
remain strong
• High investments to launch compact equipment and expand Central and
Eastern European rental business

(Munich, May 15, 2008) Wacker Construction Equipment AG increased sales and
profit in the first quarter of fiscal 2008. Sales were up 42.3 percent,
from EUR 160.4 million to EUR 228.2 million, while profit before interest,
tax, depreciation and amortization (EBITDA) rose 20 percent, from EUR 24.5
million to EUR 29.4 million. The Wacker Group confirms its outlook for
fiscal 2008 and continues to see medium to long-term growth potential.

High Q1 investment activity for further growth
The Wacker Group continued to pursue its growth-oriented strategy during
the first quarter of fiscal 2008. 'Our first-quarter sales and profit
figures reflect the effects of the merger and the Group’s high investment
and sales activity, as planned,' states Dr. Georg Sick, CEO and President.
A key element of this growth strategy is the Group’s intensive investment
in expanding its rental business in Central and Eastern European countries
where the company will not be operating in competition with our customers.
The plan is to invest over EUR 30 million in 2008 alone, replacing
third-party products in the rental pool with proprietary light and compact
construction equipment. The first-quarter investment already came to
approximately EUR 15 million. However, since the resulting income will be
distributed over the next four to six years and the new stock will
primarily come from the Group’s own production facilities, this is
negatively impacting earnings during the current expansion phase as
expected, according to Sick.
Another investment focus for Wacker this quarter was creating demo fleets
to launch its merger partner’s high-quality compact equipment via its
established sales and service network, for instance in the US, Switzerland
and Australia. Supplying Group companies here meant revenue that would have
been generated by selling the same products to third parties was not
realized. Realizing this revenue and including the effects of purchase
price allocation (EUR 0.6 million), EBITDA would have reached EUR 41.3
million.

Increase of production capacity and regional expansion
The first quarter at the Wacker Group was also characterized by measures to
integrate Neuson Kramer Baumaschinen AG and expand production capacities
for Group affiliates Kramer-Werke GmbH (Germany) and Ground Heaters, Inc.
(USA). Regional expansion continued with the opening of an affiliate in
India. Uncertainties due to the US property and mortgage crisis and the
devaluation of the US dollar made for a difficult market environment in
certain countries, which lead to a slowdown in new light equipment sales,
Sick explains. While performance in the Europe and Asia regions was strong,
sales in the Americas dropped 15.0 percent, although this only represents a
3.9 percent decrease discounting exchange rate effects. At the end of
March, the volume of open orders for compact equipment was up 15 percent on
the previous year.

Outlook
'Despite growing uncertainties regarding global economic development and
the slight downturn in new light equipment sales in the US and a few other
countries, we remain confident of our medium to long-term prospects.
Overall, we see major potential for sustainable growth,' explained Sick. He
confirmed the Group’s outlook for fiscal 2008: Wacker will continue to
pursue its growth strategy, with integration and the implementation of
market penetration measures positioned as top priorities this year. The
consolidated Group is aiming for post-merger sales exceeding EUR 1 billion
and EBITDA of at least 17 percent.

Key results: Wacker Group*
in EUR 2007 2007 2006 Change
million without PPA** PPA** with PPA* in %

Sales 228.2 0 228.2 160.4 +42.3
EBITDA 30.0 0.6 29.4 24.5 +20.0
EBIT 21.9 2.8 19.1 18.1 +5.7
EBT 21.4 2.8 18.5 17.4 +6.7
Profit for 14.2 1.9 12.3 10.6 +16.5
the period
* Neuson Kramer subgroup consolidated on October 1, 2007
** PPA = purchase price allocation

About Wacker Neuson:
Completed in 2007, the merger between the parent company Wacker
Construction Equipment AG and Neuson Kramer Baumaschinen AG has created a
major global manufacturer of light and compact equipment. With over 30
affiliates and more than 180 sales and service stations across the globe,
the new company offers an unparalleled product portfolio. All products
manufactured by the new organization will in future be branded Wacker
Neuson. The exceptions to this in Europe are Kramer all-wheel loaders and
the Weidemann brand, which will be retained and further developed for the
agricultural industry. With over 300 product categories and extensive
rental, spare parts and repair services, Wacker Neuson is the partner of
choice among professional users in construction, gardening, landscaping and
agriculture, as well as among municipal bodies and companies in the
industrial and recycling sectors. A resolution to change the form of the
company to a European company (Societas Europaea) and the company name to
Wacker Neuson SE will be proposed at the AGM on June 3, 2008.

Your contact partner:

Wacker Construction Equipment AG
Imre Szerdahelyi
Head of Corporate Communication
Preussenstr. 41
80809 Munich, Germany
Tel. +49 - (0)89 - 354 02 - 251
imre.szerdahelyi@eu.wackergroup.com
www.wackerneuson.com
15.05.2008 Financial News transmitted by DGAP

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Language: English
Issuer: Wacker Construction Equipment AG
Preußenstr. 41
80809 München
Deutschland
Phone: +49 - (0)89 - 354 02 - 0
Fax: +49 - (0)89 - 354 02 - 390
E-mail: info@eu.wackergroup.com
Internet: www.wackergroup.com
ISIN: DE000WACK012
WKN: WACK01
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart

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