Wacker Neuson SE — Interim / Quarterly Report 2024

May 23, 2024

Wacker Neuson Group Quarterly report Q1 2024

1

7 May 2024, unaudited

Overview Q1 2024¹

Q1 2024
Revenue	EBIT margin	NWC ratio3	FCF
€ 593.1 m	6.2%	38.7%	€ -25.1 m
(-11.1% YoY)	(py: 13.2%)2	(py: 30.0%)	(py: € -17.1 m)

Revenue down 11.1% compared to Q1 2023, driven by economic slowdown, especially weaker demand in the USA and Canada

EBIT margin increased compared to Q4 2023, continuous improvement over the course of 2024 expected

Increase in the NWC ratio compared to Q4 2023 (33.9%)³ , driven through slightly increased trade receivables as well as decreased revenue

Supply chain significantly more relaxed than in the previous year

¹ Please note the rounding differences in the presentation. ² Previous year's value includes a one-off effect amounting to € 15.5 million (property sale). ³Net Working Capital in % of the annualized revenue.

Revenue and profitability – Q1 2024

Growth and profitability decrease due to economic slowdown

Profit and loss statement (excerpt)

€ m	Q1/24	Q1/23	Δ
Revenue	593.1	667.2	-11.1%
Gross profit	138.8	167.3	-17.0%
as a % of revenue	23.4%	25.1%	-1.7PP
Operating costs1	-101.9	-79.5	28.2%
as a % of revenue	-17.2%	-11.9%	-5.3PP
EBIT	36.9	87.8	-58.0%
as a % of revenue	6.2%	13.2%	-7.0PP
Financial result	-4.9	-2.6	88.5%
Taxes on income	-8.7	-22.8	-61.8%
Profit for the period	23.3	62.4	-62.7%
EPS (in €)	0.34	0.92	-63.0%

Comments on Q1 2024

Revenue -11.1% YoY (adj. for FX effects : -10.9%)

• Economic slowdown in construction industry still highly noticeable in Q1 2024
• Persistent weakening demand in agriculture

Gross profit -17.0 YoY (gross profit margin -1.7 PP)

• Higher gross profit margin than in Q4 2023 (21.8%) after cost reduction measures in production come into effect
• Lower production output could be compensated through cost decreases only to a certain extent (time lag)

EBIT -58.0% YoY (EBIT margin: -7.0 PP)

• EBIT margin influenced by a higher operating costs to revenue ratio
• Operating costs in Q1 2023 include a positive one-off effect amounting to € 15.5 million (property sale), excluding this one-off effect the percentage increase in the operating costs amounts to +7.3% compared to Q1 2023

Earnings per share -63.0% YoY

• Financial result impacted by higher interest rates and increased gearing
• Tax rate for Q1 2024 at 27.2% comparable to previous year (27.0%)

1 Including other operating income / other operating expenses.

Development of regions and business areas

All regions are influenced by economic slowdown Comments on Q1 2024

Business area compact equipment with biggest share of revenue

Revenue Europe (EMEA) -8.9% YoY (adj. for FX effects -8.9%)

• Light one-digit revenue decrease due to persistent economic slowdown
• Noticeably weaker growth trends in all submarkets, however positive demand developments in some markets (ex. Austria)
• Agricultural business growth rate slows down (+3.3% YoY)

Revenue Americas -15.6% YoY (adj. for FX effects -14.9%)

• Double-digit revenue decrease due to overstocking of the dealers
• EUR/USD exchange rate increases compared to Q1 2023 (average quarter exchange rates)

Revenue APAC -35.0% YoY (adj. for FX effects -31.6%)

• Revenue significantly decreases, Australian market also under pressure
• Currency weakness against the euro continues

Supply chain more relaxed, but increase in trade receivables

Inventories

Trade payables

Trade receivables

Comments

• Slight increase in inventories since the 2023 year-end (+0.7%): increase in work in progress goods (+13.4% compared to year-end 2023) as well as in finished goods (+1.7% compared to year-end 2023)
• Trade receivables increase by 11.5% compared to December 31, 2023 due to seasonality
• Trade payables at a comparable level to that at the year-end 2023
• DIO, DSO and DPO (annualized values) influenced by lower revenue in Q1 2024 compared to previous quarter

NWC ratio remains characterized by high inventories

Net working capital

Free cash flow

Free cash flow² [€ m]

¹ Net working capital as a % of annualized revenue for the quarter. ² Before outflows or inflows from time deposits 3 Investments in property, plant and equipment and intangible assets.

Operating cash flow

Comments

1

• Increase in the annualized net working capital ratio compared to Q4 2023 due to a slight increase in trade receivables as well as inventories and lower revenue (above the strategic benchmark of ≤ 30%)
• YoY increase in operating cash flow amounting to € +9 million, driven by lower net working capital payouts
• Investments³ amounted to € 24.2 million (€ 14.9 million in property, plant and equipment and € 9.3 million in intangible assets)
• Free cash flow decrease to € -25.1 million, remains impacted by NWC

Still robust financial structure with substantial equity ratio

Net financial debt¹ and gearing²

Equity and equity ratio

¹ Net financial debt = Non-current financial liabilities + Current liabilities to banks + Current portion of non-current liabilities - Cash and cash equivalents. ² Net financial debt/equity. ³ Net financial debt/annualized EBITDA for the quarter. ⁴ Correction of the previous year's value amounting to c. € -2 million.

Net financial debt/EBITDA³

Comments

• Increased net financial debt¹ (+9.8%) compared to year-end 2023 reflects further use of the credit lines in Q1 2024 (net effect from repayments and cash inflows amounting to € +36 million) and slightly declining cash and cash equivalents
• Slight increase in equity compared to year-end 2023 (+1.7%), but also increase in gearing² amounting to 2 PP due to increased net financial debt
• Equity ratio nearly unchanged compared to year-end 2023
• Dividend proposal to the Annual General Meeting on May 15, 2024: € 1.15 per share (PY: € 1.00 per share)

Industry barometers indicate a weak start of 2024

Construction:

Source: CECE (Committee for European Construction Equipment), April 2024.

Agriculture: CEMA business climate index decreases further

Source: CEMA (European Agricultural Machinery Industry Association), April 2024.

1 Investments in property, plant and equipment and intangible assets. Investments in the Group's own rental portfolio, 8 equity investments and financial assets are not included.

Outlook

• Sideways movement of the business climate index, negative market expectations, sales on the European market still going down significantly
• Business climate index decreases further and reaches -57 points and is, therefore, in recession, expected turnover to decline in the coming six months expected
• Business cycle risks for H2 2024:
  • − Significantly higher dealer stocks
  • − Increased interest rate environment stirs up recession trends
  • − Challenging economic and geopolitical environment
• Revenue and earnings forecast for 2024 reaffirmed:
  • − Revenue between 2,400 and 2,600 million euros
  • − EBIT margin between 8.0% and 9.0%
  • − Investments of around € 120 million¹
  • − Net working capital as a percentage of turnover around 30%

Consolidated Financial Statements

(unaudited)

Consolidated income statement

	Q1/24	Q1/23
Revenue	593.1	667.2
Cost of sales	-454.3	-499.9
Gross profit	138.8	167.3
Sales and service expenses	-64.0	-60.4
Research and development expenses	-16.4	-14.8
General administrative expenses	-23.9	-22.7
Other income	2.7	18.7
Other expenses	-0.3	-0.3
Earnings before interest and tax (EBIT)	36.9	87.8
Financial income	10.4	11.1
Financial expenses	-15.3	-13.7
Earnings before tax (EBT)	32.0	85.2
Taxes on income	-8.7	-22.8
Profit for the period	23.3	62.4
Earnings per share in € (diluted and undiluted)	0.34	0.92

Consolidated balance sheet

IN € MILLION				IN € MILLION
	March 31, 2024	Dec. 31, 2023	March 31, 2023		March 31, 2024	Dec. 31, 2023	March 31, 2023
Assets				Equity and liabilities
				Subscribed capital	70.1	70.1	70.1
				Other reserves	604.7	603.2	608.6
Property, plant and equipment	580.6	581.8	463.5	Net profit/loss*	902.8	879.4	823.9
Property held as financial investment	27.5	27.8	25.8	Treasury shares	-53.0	-53.0	-53.0
Goodwill	232.5	232.5	232.5	Equity	1,524.6	1,499.7	1,449.6
Other intangible assets	221.4	219.1	213.5	Non-current financial borrowings	91.4	97.3	169.4
Investments accounted for using the equity
method*	5.0	0.0	0.7	Non-current lease liabilities	83.7	88.4	50.2
Other Investments	3.9	4.0	4.5	Deferred tax liabilities	62.8	63.2	61.3
Deferred tax assets	55.4	54.9	32.3	Provisions for pensions and similar obligations	38.4	40.0	36.5
Non-current financial assets	22.3	24.3	26.7	Non-current provisions	15.1	14.0	8.7
Rental equipment	265.7	260.9	214.7	Non-current contract liabilities*	17.3	16.1	13.1
Total non-current assets	1,414.3	1,405.3	1,214.2	Total non-current liabilities	308.7	319.0	339.2
				Trade payables	249.2	251.5	317.9
				Current liabilities to financial institutions	336.5	296.1	123.4
Inventories	780.2	774.4	742.4	Current portion of non-current borrowings	0.2	0.2	0.3
Trade receivables	386.5	346.6	377.4	Current lease liabilities	28.0	29.7	21.5
Tax offsets	10.8	9.8	24.0	Current provisions	26.2	26.2	21.1
Other current financial assets	41.7	44.2	38.6	Current contract liabilities*	11.2	10.0	7.3
Other current non-financial assets	33.4	36.8	31.3	Income tax liabilities	28.5	33.9	19.8
Cash and cash equivalents	26.2	27.8	35.1	Other current financial liabilities	93.3	106.9	85.8
Non-current assets held for sale	0.0	0.0	0.0	Other current non-financial liabilities	86.7	71.7	77.1
Total current assets	1,278.8	1,239.6	1,248.8	Total current liabilities	859.8	826.2	674.2
Total assets	2,693.1	2,644.9	2,463.0	Total liabilities	2,693.1	2,644.9	2,463.0

* As a result of changes in reporting due to a new Consolidated Balance Sheet item for Investments accounted for using the equity method as well as an error correction in connection with the revenue recognition of extended warranty obligations, the Consolidated Balance Sheet has been adjusted compared to the previous year. Refer to "Changes in accounting under IFRS" of the Annual Report 2023 for more information.

Consolidated cash flow statement (1)

	Q1/24	Q1/23
EBT	32.0	85.2
Depreciation, amortization and impairment of non-current assets	23.3	19.3
Unrealized foreign exchange gains/losses	2.2	0.4
Financial result	4.9	2.6
Gains from the sale of intangible assets and property, plant and equipment	0.0	-15.7
Changes in rental equipment, net	-7.8	-8.6
Changes in misc. assets	8.3	-14.6
Changes in provisions	0.7	-0.6
Changes in misc. liabilities	-0.7	22.9
Gross cash flow	62.9	90.9
Changes in inventories	-3.0	-68.4
Changes in trade receivables	-40.0	-77.8
Changes in trade payables	-2.8	57.5
Changes in net working capital	-45.8	-88.7
Cash flow from operating activities before income tax paid	17.1	2.2
Income tax paid	-15.9	-10.0
Cash flow from operating activities	1.2	-7.8

Consolidated cash flow statement (2)

	Q1/24	Q1/23
Cash flow from operating activities	1.2	-7.8
Purchase of property, plant and equipment	-14.9	-25.0
Purchase of intangible assets	-9.3	-8.6
Cash outflows for investments accounted for using the equity method and other investments	-2.5	-0.5
Proceeds from the sale of property, plant and equipment, intangible assets and assets held for sale	0.4	24.8
Cash flow from investment activities	-26.3	-9.3
Free cash flow	-25.1	-17.1
Cash receipts from current borrowings	161.2	53.3
Repayments from current borrowings	-125.0	-48.9
Repayments from non-current borrowings	-0.2	0.0
Repayments from lease liabilities	-6.5	-5.4
Interest paid	-5.3	-2.6
Interest received	0.7	1.0
Cash flow from financial activities	24.9	-2.6
Change in cash and cash equivalents before effect of exchange rates and changes in consolidation group	-0.2	-19.7
Effect of exchange rates on cash and cash equivalents	-1.4	1.1
Change in cash and cash equivalents	-1.6	-18.6
Cash and cash equivalents at the beginning of the period	27.8	53.7
Cash and cash equivalents at the end of period	26.2	35.1

Group segment reporting

Geographical segments

IN € MILLION

	Europe		Americas		Asia-Pacific		Consolidation		Group
	Q1/24	Q1/23	Q1/24	Q1/23	Q1/24	Q1/23	Q1/24	Q1/23	Q1/24	Q1/23
Total revenue	727.3	854.0	136.0	168.0	18.9	29.9	0.0	0.0	882.2	1,051.9
Revenue from external customers	459.3	504.0	120.4	142.6	13.4	20.6	0.0	0.0	593.1	667.2
EBIT1	31.0	85.9	9.1	18.3	-0.3	1.4	-2.9	-17.8	36.9	87.8

¹ EBIT of regions before consolidation

Business areas

	Q1/24	Q1/23
Segment revenue from external customers
Light equipment	110.4	135.6
Compact equipment	370.9	416.1
Services	115.2	119.7
	596.5	671.4
Less cash discounts	-3.4	-4.2
Total	593.1	667.2

Financial calendar and contact

15 May 2024	Annual General Meeting, Munich
16–17 May 2024	HAIB Stockpicker Summit 2024, Kitzbühel
06 June 2024	Warburg Highlights Conference, Hamburg
13 August 2024	Publication of Half-Year Report H1/2024 , Earnings Call
25 September 2024	Berenberg Goldman Sachs German Corporate Conference, Munich
14 November 2024	Publication of Nine-month Statement 9M/2024, Earnings call
25–26 November 2024	German Equity Forum, Frankfurt

Disclaimer

This presentation 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, uncertainties and other factors. Many of these factors, including, but not limited to, those described in disclosures, in particular in the risk report of the Company, are outside the Company's control and cannot be accurately estimated in advance, such as the future economic environment, the actions of competitors and others involved in the market-place or the legal and regulatory framework. If these risks or uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. Above and beyond legal requirements, the Company neither plans nor undertakes to update any forward-looking statements.

All rights reserved. As of May 2024. Wacker Neuson SE accepts no liability for the accuracy and completeness of information provided in this presentation. Reprint only with the written approval of Wacker Neuson SE in Munich, Germany.

Contact

Wacker Neuson SE Investor Relations

+49 - (0)89 - 354 02 – 1823 ir@wackerneuson.com

www.wackerneusongroup.com