Annual Report 2010

Transcription

Annual Report 2010

Wacker Neuson SE Annual Report 2010
Figures at a glance 2010
Wacker Neuson Group at December 31
in € million
2010
2009
Revenue
757.9
597.0
EBITDA
Depreciation and amortization
2008
Key figures
870.3
77.8
27.2 (36.7)
1
100.9
41.1
140.3 (40.0)5
43.0
EBIT
36.7
- 113.1 (- 3.2)2
58.0
EBT
32.7
- 115.5 (- 5.6)2
55.7
Profit for the period
23.9
- 110.1 (- 2.9)2, 6
37.4
Number of employees
3,142
3,059
3,665
Earnings per share in €
0.34
- 1.57
0.53
Dividends per share in €
0.173
0
0.19
Share
Key profit figures
Gross profit as a %
33.1
EBITDA margin as a %
10.3
4.6 (6.2)1
11.6
4.8
- 18.9 (- 0.5)2
6.7
EBIT margin as a %
30.8
33.7
Key figures from the balance sheet
Non-current assets
673.9
632.7
750.0
Current assets
356.3
339.0
428.6
Equity before minority interests
830.6
789.0
909.1
13.7
- 24.9
59.0
197.3
180.2
266.8
80.6
81.2
77.1
269.3
217.9
303.9
Net financial debt
Total liabilities
Equity ratio before minority interests as a %
Working capital
ROCE I as a %
6.9
- 2.45
10.8
ROCE II as a %
5.2
-1.95
7.4
Capital employed (average)
ROE as a %
531.3
3.0
538.9
-1.45, 6
537.4
4.2
Cash flow
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
5100000724| 04-2011| Layout KC | Print Kriechbaumer
A firm grip!
Annual Report 2010
Cash flow from operating activities
44.9
138.3
38.14
Cash flow from investing activities
- 85.2
- 38.1
- 16.44
Investments (property, plant and equipment and intangible assets)
85.0
43.4
101.8
Cash flow from financing activities
- 10.3
- 53.0
- 21.9
Free cash flow
- 38.8
100.6
23.4
Figure in parentheses adjusted to discount restructuring costs in the amount of EUR 9.6 million (p. 54 and 60).
Figure in parentheses adjusted to discount restructuring costs in the amount of EUR 9.6 million and discount write-downs on intangible assets in the amount
of EUR 100.3 million (p. 54 and 60).
3
Dividend payment to be proposed at the AGM on May 26, 2011.
4
The position “Interest received” has been shifted from cash flow from investing activities to cash flow from operating.
5
Adjusted to discount write-downs on intangible assets (p. 54 and 60).
6
Incl. deferred taxes in the amount of EUR -2.7 million (resulting from write-downs on brand value, intangible assets).
All consolidated figures prepared according to IFRS. A complete list of figures from the past seven years is provided at the end of this report.
1
2
in € million
2010
2009
Revenue
757.9
597.0
EBITDA
2008
Key figures
870.3
77.8
27.2 (36.7)
1
100.9
41.1
140.3 (40.0)5
43.0
EBIT
36.7
- 113.1 (- 3.2)2
58.0
EBT
32.7
- 115.5 (- 5.6)2
55.7
23.9
- 110.1 (- 2.9)2, 6
37.4
Number of employees
3,142
3,059
3,665
0.34
- 1.57
0.53
0.173
0
0.19
Share
Key profit figures
Gross profit as a %
33.1
10.3
4.6 (6.2)1
11.6
4.8
- 18.9 (- 0.5)2
6.7
EBIT margin as a %
30.8
33.7
Non-current assets
673.9
632.7
750.0
Current assets
356.3
339.0
428.6
830.6
789.0
909.1
13.7
- 24.9
59.0
197.3
180.2
266.8
80.6
81.2
77.1
269.3
217.9
303.9
Net financial debt
Total liabilities
Working capital
ROCE I as a %
6.9
- 2.45
10.8
ROCE II as a %
5.2
-1.95
7.4
ROE as a %
531.3
3.0
538.9
-1.45, 6
537.4
4.2
Cash flow
Wacker Neuson SE
Preussenstrasse 41
80809 Munich
Germany
Phone + 49 - (0)89 - 354 02 - 0
Fax
+ 49 - (0)89 - 354 02 - 390
A firm grip!
Annual Report 2010
44.9
138.3
38.14
- 85.2
- 38.1
- 16.44
85.0
43.4
101.8
- 10.3
- 53.0
- 21.9
Free cash flow
- 38.8
100.6
23.4
3
4
5
6
1
2
One Group – Three Brands
Facts and figures at a glance
Wacker Neuson SE is a global manufacturer of light and compact equipment. The company also offers an exceptionally broad portfolio of services. Products under the Wacker Neuson and Kramer Allrad brands are tailored to the
needs of professional users in construction, gardening and landscaping as well as to the needs of municipal bodies
and companies in the industrial sector. The company’s Weidemann-brand machines are designed to optimize agricultural processes.
Rise in Group revenue and gross profit
€ million
in €inmillion
in %
in %
979.5
1,000
1,000
Our business segments
25 25
870.3
757.9
742.1
800
800
619.3
597.0
600 503.2
600
Light Equipment
Compact Equipment
Services
with the business fields:
with the product groups:
Concrete technology
Track and mobile excavators
Service
Soil and asphalt compaction
Wheel loaders
Rental (Central and Eastern
Demolition
Telehandlers
Europe)1
Utility
Skid-steer loaders
1
Dumpers
More Information
400
400
10 10
200
200
5 5
0 0
0 0
Revenue EBITDA
EBITDA
margin
Revenue
margin
EBIT
margin
EBIT
margin
in %
40
600
+ 39
+%
39
%%
+ 34
+ 39 %
+2%
400 + 34
+%
34 %
+ 34 %
+400
39 %
23 %
- 11- %
500
+ 2+%2 %
+2%
400
- 11 %
- 23 %
- 23 %500
+ 39+%
34 %
+ 39 %
+ 34 %
400
+ 34
%
300
200
200
200
200
100100
100
100
100
100
100
0 0
0
Light Equipment
0
0
0
0
300300
300
300
200
200200
200
100
0
2008
+5%
+5%
300
+2%
+2%
+ 39 %
+5%
538.9
531.3
486.7
+ 34 %
400
300
Compact Equipment
2007
2007 2008
2008 2009
2009vs. 2010
20102007
2010
2010
vs.
2008
vs.
2008
2008 2009
2007
2010
2010
vs.2010
vs.
2008
2009
2009
2007 2010
20092008
vs. 2008
201020092010
2010vs.
2010
vs.2009
2008 20102007
2010
vs. 2008
vs. 2009
20082010 2009
vs. 2009 2010
2009
2010
2010
2008
2010
vs.
2009
2007
2008
2009
2010
2010
vs.
2008
2010 vs. 2009
More Information
2010 vs. 2008
2005
2007
2008
pro-forma1
2009
2010
ROCE I
2006
2007
2008
pro-forma1
Average capital employed
2009
2010
-5
in € million
ROCE I
in %
950
Healthy asset and financial position
910.4
95
909.1
850
830.6
789
750
Revenue according to segment reporting
in %
Sales by business segment1
as a % (previous year)
910.4
95
909.1
850
830.6
789
750
75
650
38.8 Light Equipment (35.5)
36.0 Compact Equipment (34.1)
25.2 Services (30.4)
73.7 Europe (78.0)
22.2 Americas (17.3)
4.1 Asia (4.7)
550
55
2005
350
289.9
250
35
282.4
15
150
9.4
2005
Consolidated sales before discounts
59
45.1
- 50
1
As planned, we turned the net cash position from 2009
550
into
a slight net financial debt of EUR 13.7 million 55
as
450
financial markets grew more confident. Wacker Neuson
35 is
350a high equity ratio in excess of 80 percent and
has
289.9 282.4
almost
debt-free with a low gearing of only 1.7 percent.
250
The
15 lines
150Group has drawn on less than half of its credit
59
and50thus has 45.1
plenty of financial
backing.
13.7
9.4
p. 60
For
more informationen
-5
- 50
450
50
75
650
in € million
950
Sales by region
-5
0
2005
p. 68
p. 65
2006
Key figures from the balance sheet 2005 – 2010
More Information
5
0
5
Dienstleistungen
2010 vs. 2009
35
Average capital employed increased as a result of30
400merger in 2007. Negative EBIT in 2009 led to 25
the
a
negative
return on capital employed. In 2010, the20im300
269.4
provement
in the
Group’s earnings situation pushed
236.5
15
200
ROCE
up to almost 7 percent.
10
p. 55
For more informationen
10
100
531.3
0
15
200
538.9
486.7
20
269.4
236.5
0
Light
Equipment
Compact
Equipment
Dienstleistungen
Light
Equipment
CompactServices
Equipment
Dienstleistungen
Light Services
Equipment
Light
Equipment
Compact
Equipment
Light Equipment
Services
Compact
Equipment
Light Equipment
Compact Equipment
Compact
Equipment Compact
Dienstleistungen
Light
Equipment
Equipment
Dienstleistungen
40
600
100
25
+5%
+5%
35
30
- 23 %
- 11 %
+2%
+2%
+ 5+%5 %
300
+5%
300
2007
- 11 500
%
in %
in € million
500
in € million
537.4
400400
+ 39 %
400
Net
earnings
margin
Net
earnings
margin
Capital employed and ROCE 2005 – 2010
- 23- %
23 %
500
- 23 %
and
(p.(p.
54 54
and
60).60).
3
Compound
annual
growth
rate
(CAGR)
over
a period
of three
years.
Compound
annual
growth
rate
(CAGR)
over
a period
of three
years.
537.4
p. 2/3
- 11- %
11
- 23%%
- 11 %
1
Pro-forma
figures
if Neuson
Kramer
subgroup
had
been
consolidated
Pro-forma
figures
as as
if Neuson
Kramer
subgroup
had
been
consolidated
in in
in fiscal
2007
(consolidation
of October
1, 2007).
fullfull
in fiscal
2007
(consolidation
as as
of October
1, 2007).
2
2
2009
profit
margins
discounting
goodwill
impairment
and
restructuring
costs
2009
profit
margins
discounting
goodwill
impairment
and
restructuring
costs
3
Increased return on capital employed (ROCE)
In countries where we are not in direct
competition with our key accounts.
500
400
15 15
2 2
2009
2008 2009
2010
2005 2006
2006 2007
2007 2007
2007 2008
2005
2010
1 1
pro-forma
pro-forma
in € million
- 11500
%500
500
20 20
1
Development of business segments
500
In the years from 2005 to 2008, Wacker Neuson increased revenue by 20 percent on average3. The sharp drop
in revenue in 2009 resulted in the company reporting an
operating loss for the first time in its history. By mid-2010,
the company had returned to the profit zone and posted
a double-digit EBITDA margin for the entire year. Wacker
Neuson is aiming for an EBITDA margin in excess of
15.0 percent in the medium to long-term.
p. 52
Development of revenue and margins 2005 – 2010
2006
- 43.1
2007
2008
2009
-5
2010
Net financial debt
in € million
in € million
Gearing
Equity ratio before minority interests
in %
in %
- 43.1
2007
- 24.9
2008
2009
2010
This Annual Report contains forward-looking statements which are based on the current estimates and
assumptions by the corporate management of Wacker Neuson SE. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate
and similar formulations. Such statements are not to be understood as in anyway guaranteeing that those
expectations will turn out to be accurate. Future performance and the results actually achieved by Wacker
Net financial debt
Neuson SE and its affiliated companies depend on a number of risks and uncertainties and may therefore
in € million
in € million
differ materially from the forward-looking statements. Many of these factors are outside the Company´s
Gearing
in %
in %
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
13.7
- 24.9
2006
Disclaimer
to update any forward-looking statements.
€ million
in €inmillion
in %
in %
979.5
1,000
1,000
25 25
870.3
757.9
742.1
800
800
619.3
597.0
600 503.2
600
Light Equipment
Compact Equipment
Services
Concrete technology
Service
Wheel loaders
Demolition
Telehandlers
Europe)1
Utility
Skid-steer loaders
1
Dumpers
More Information
400
400
10 10
200
200
5 5
0 0
0 0
Revenue EBITDA
EBITDA
margin
Revenue
margin
EBIT
margin
EBIT
margin
in %
40
600
+ 39
+%
39
%%
+ 34
+ 39 %
+2%
400 + 34
+%
34 %
+ 34 %
+400
39 %
23 %
- 11- %
500
+ 2+%2 %
+2%
400
- 11 %
- 23 %
- 23 %500
+ 39+%
34 %
+ 39 %
+ 34 %
400
+ 34
%
300
200
200
200
200
100100
100
100
100
100
100
0 0
0
Light Equipment
0
0
0
0
300300
300
300
200
200200
200
100
0
2008
+5%
+5%
300
+2%
+2%
+ 39 %
+5%
538.9
531.3
486.7
+ 34 %
400
300
Compact Equipment
2007
2007 2008
2008 2009
2009vs. 2010
20102007
2010
2010
vs.
2008
vs.
2008
2008 2009
2007
2010
2010
vs.2010
vs.
2008
2009
2009
2007 2010
20092008
vs. 2008
201020092010
2010vs.
2010
vs.2009
2008 20102007
2010
vs. 2008
vs. 2009
20082010 2009
vs. 2009 2010
2009
2010
2010
2008
2010
vs.
2009
2007
2008
2009
2010
2010
vs.
2008
2010 vs. 2009
More Information
2010 vs. 2008
2005
2007
2008
pro-forma1
2009
2010
ROCE I
2006
2007
2008
pro-forma1
2009
2010
-5
in € million
ROCE I
in %
950
910.4
95
909.1
850
830.6
789
750
in %
910.4
95
909.1
850
830.6
789
750
75
650
73.7 Europe (78.0)
4.1 Asia (4.7)
550
55
2005
350
289.9
250
35
282.4
15
150
9.4
2005
59
45.1
- 50
1
550
into
as
450
35 is
has
289.9 282.4
almost
250
The
15 lines
59
and50thus has 45.1
plenty of financial
backing.
13.7
9.4
p. 60
For
more informationen
-5
- 50
450
50
75
650
in € million
950
Sales by region
-5
0
2005
p. 68
p. 65
2006
More Information
5
0
5
Dienstleistungen
2010 vs. 2009
35
the
a
negative
269.4
provement
in the
236.5
15
200
ROCE
10
p. 55
10
100
531.3
0
15
200
538.9
486.7
20
269.4
236.5
0
Light
Equipment
Compact
Equipment
Dienstleistungen
Light
Equipment
CompactServices
Equipment
Dienstleistungen
Light Services
Equipment
Light
Equipment
Compact
Equipment
Light Equipment
Services
Compact
Equipment
Light Equipment
Compact Equipment
Compact
Equipment Compact
Dienstleistungen
Light
Equipment
Equipment
Dienstleistungen
40
600
100
25
+5%
+5%
35
30
- 23 %
- 11 %
+2%
+2%
+ 5+%5 %
300
+5%
300
2007
- 11 500
%
in %
in € million
500
in € million
537.4
400400
+ 39 %
400
Net
earnings
margin
Net
earnings
margin
- 23- %
23 %
500
- 23 %
and
(p.(p.
54 54
and
60).60).
3
Compound
annual
growth
rate
(CAGR)
over
a period
of three
years.
Compound
annual
growth
rate
(CAGR)
over
a period
of three
years.
537.4
p. 2/3
- 11- %
11
- 23%%
- 11 %
1
Pro-forma
figures
if Neuson
Kramer
subgroup
had
been
consolidated
Pro-forma
figures
as as
if Neuson
Kramer
subgroup
had
been
consolidated
in in
in fiscal
2007
(consolidation
of October
1, 2007).
fullfull
in fiscal
2007
(consolidation
as as
of October
1, 2007).
2
2
2009
profit
margins
discounting
goodwill
impairment
and
restructuring
costs
2009
profit
margins
discounting
goodwill
impairment
and
restructuring
costs
3
500
400
15 15
2 2
2009
2008 2009
2010
2005 2006
2006 2007
2007 2007
2007 2008
2005
2010
1 1
pro-forma
pro-forma
in € million
- 11500
%500
500
20 20
1
500
p. 52
2006
- 43.1
2007
2008
2009
-5
2010
Net financial debt
in € million
in € million
Gearing
in %
in %
- 43.1
2007
- 24.9
2008
2009
2010
Net financial debt
in € million
in € million
Gearing
in %
in %
13.7
- 24.9
2006
Disclaimer
Publishing Details / Financial Calendar
To our Shareholders
156 Wacker Neuson SE | Annual Report 2010
Content
To our Shareholders
Contact
Publishing Details
Wacker Neuson SE
Issued by:
Wacker Neuson SE,
Katrin Neuffer
Corporate Communication Department
Product Overview
|
2
Interview with the Executive Board
|
4
A firm grip!
|
9
Report by the Supervisory Board
| 23
Declaration on Corporate Governance
| 29
The Share /Investor Relations
| 36
Group Structure
| 42
Combined Management Report
| 43
Consolidated Financial Statements
| 99
Investor Relations
Preussenstrasse 41
Concept, design and realization:
80809 Munich
Kirchhoff Consult AG, Germany
Germany
Content:
Phone +49 - (0)89 - 354 02 - 173
Fax
Wacker Neuson SE
+49 - (0)89 - 354 02 - 298
Print:
[email protected]
Fritz Kriechbaumer, Munich, Germany
Financial Calendar 2011
March 24, 2011
Publication of financial results 2010, press conference
May 13, 2011
Publication of first-quarter report 2011, Analyst conference
May 26, 2011
AGM, Munich, Germany
August 11, 2011
Publication of half-year report 2011
November 11, 2011
Publication of nine-month report 2011
All rights reserved. Valid March 2011. 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 24, 2011.
Further Information
Glossaries
| 150
7-Year Comparison
| 155
Publishing Details/Financial Calendar
| 156
Wacker Neuson SE | Annual Report 2010
7-Year Comparison
Our product philosophy is based on
understanding our customers’ processes
Wacker Neuson is the ideal one-stop provider of light and compact equipment
guaranteed to optimize our customers’ construction processes. The Group has a
market leader position in many product areas.
7-Year Comparison1
in € million
2010
2009
2008
2007
2006
2005
2004
757.9
597.0
870.3
742.16
619.3
503.2
411.2
Revenue Europe
558.6
465.7
676.2
520.7
391.1
301.1
239.3
Revenue Americas
168.1
103.1
166.9
196.1
205
182.7
154.1
31.2
28.2
27.2
25.3
23.2
19.4
17.8
251.0
184.1
293.4
282.5
255.7
212.6
182.4
Revenue
Revenue Asia
Gross profit
Light equipment
(Over 250 product groups)
EBITDA
77.8
27.2 (36.7)2
100.9
117.0
100.2
70.3
60.5
41.1
140.3 (40.0)3
43.0
38.1
23.6
19.6
18.6
EBIT
36.7
- 113.1 (- 3.2)3
58.0
78.9
76.7
50.7
41.9
EBT
32.7
- 115.5 (- 5.6)3
55.7
78.2
76.2
50.4
42.3
23.9
- 110.1 (- 2.9)3,7
37.4
54.1
48.5
31.3
25.7
Number of employees
Concrete technology
155
3,142
3,059
3,665
3,659
2,837
2,630
2,224
2.9
3.4
2.9
2.8
2.5
2.7
2.6
0.34
- 1.57
0.53
1.1
1.19
0.77
0.65
0.174
0
0.19
0.50
0.38
0.27
0.57
R&D percentage of revenue
Share
Key profit figures
Internal vibrators
Convertors
Trowels
Rebar tiers
Gross profit margin as a %
33.1
33.7
38.1
41.3
42.3
44.4
10.3
4.6 (6.2)2
11.6
15.8
16.2
14.0
14.7
EBIT margin as a %
4.8
- 18.9 (- 0.5)3
6.7
10.6
12.4
10.1
10.2
Net return on sales (ROS) as a %
3.2
- 18.4 (- 2.1)7,8
4.4
7.3
7.8
6.2
6.2
Non-current assets
673.9
632.7
750.0
697.0
229.2
202.5
119.5
Current assets
356.3
339.0
428.6
517.5
245.8
240.6
195.7
184.0
148.3
217.0
175.1
100.2
99.0
73.3
36.6
85.0
65.6
76.8
36.4
47.6
47.7
830.6
789.0
909.1
910.4
282.4
289.9
246.3
13.7
- 24.9
59.0
- 43.1
45.1
9.4
- 43.1
1.7
- 3.2
6.5
- 4.7
16
3.3
- 17.5
197.3
180.2
266.8
301.8
192.6
153.2
68.8
1,030.2
971.7
1,178.6
1,214.5
475.0
443.1
315.1
of which inventory
of which liquid funds
Net financial debt
Rammers
Vibratory plates
Rollers
Universal compaction
equipment
Gearing as a %
Total liabilities
Balance sheet total
Return on assets (ROA) as a %
Demolition
Working capital
Breakers
Utility
Generators
Lighting systems
The technical glossary on p. 150 contains more detailed information on exact areas of deployment.
Hydronic surface heaters
8.5
7.8
75.0
59.5
70.1
75.6
269.3
217.9
124.1
303.9
271.5
158.6
154.6
10.8
23.9
28.5
21.4
19.5
ROCE II as a %
5.2
- 1.98
7.4
16.5
18.1
13.3
11.7
7.9
8.6
–
–
–
–
–
531.3
538.9
537.4
486.7
269.4
236.5
214.8
4.2
12.3
17
11.7
9.7
3.0
- 1.47,8
Cash flow
44.9
138.3
38.15
55
49.1
44.9
43.6
- 85.2
- 38.1
- 16.45
- 141.8
- 41.6
- 89.8
- 14.8
Investments (property, plant and
equipment and intangible assets)
85.0
43.4
101.8
84.0
31.9
37.6
20.6
- 10.3
- 53.0
- 21.9
96.4
- 23.0
40.6
- 57.2
Free cash flow
- 38.8
100.6
23.4
62.1
22.6
10.3
28.8
All figures prepared according to IFRS.
2
Adjusted to discount restructuring costs (EUR 9.6 million)
3
Adjusted to discount 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
Dividend proposal for the AGM on May 26, 2011.
5
The item “Interest received” has been transferred from cash flow from investment activities to cash flow from operating activities.
6
The Austrian merger partner (formerly Neuson Kramer Baumaschinen AG) was consolidated for the first time on October 1, 2007. The revenue figures for 2007,
therefore, only includes Q4 revenue for this entity. Pro-forma Group revenue amounted to EUR 979.5 million.
7
Including deferred taxes in the amount of EUR -2.7 million (in conjunction with write-downs on brand value and intangible assets).
8
Adjusted to discount write-downs on intangible assets in the amount of EUR 100.3 million.
1
Pumps
10.9
77.1
- 1.17,8
- 2.48
Return on equity (ROE) as a %
Floor saws
7.5
81.2
2.5
6.9
Rotary drills (10 kg class)
3.2
80.6
ROCE I as a %
Weighted average cost of capital
(WACC)
Cut-off saws
30.8
Further Information
2
Compact equipment
3
Services
Excavators
Mini excavators
Parts repair
Mobile excavators
Compact excavators
Dumpers
Track dumpers
Parts exchange
Four-wheel dumpers
Four-wheel dumpers with cabs
Skid-steer loaders
Skid-steer loaders
Rental service
Skid-steer loaders
Track skid-steer loaders
Wheel loaders
All-wheel drive
wheel loaders
Maintenance
All-wheel drive tele
wheel loaders
Articulated wheel
loaders
Wheel loaders for
the agricultural sector
Telescopic handlers
Compact telescopic handlers
Financing
Telescopic handlers
Telescopic handlers for
the agricultural sector
To our Shareholders
Product Overview
4
“Healthy finances, innovative drive
and strong global sales will secure
our future growth.”
From left to right
Richard Mayer,
Martin Lehner,
Werner Schwind,
Günther C. Binder,
Spokesperson for the
Deputy Chairman
Member of the Executive
Member of Executive Board
Executive Board.
(since October 2007).
Board.
(since October 2007).
Member of management /
Executive Board since 1998.
Responsible for the compact
equipment business segment.
Member of management /
Executive Board since 1993.
Responsible for finance, IT,
investor relations and auditing.
Responsible for the light
equipment business segment,
Previously member of
management / Executive
Responsible for sales, rental,
logistics, service and
Previously member of
management / Executive
HR, legal matters and quality
management.
Board at Neuson Kramer.
marketing.
Board at Neuson Kramer.
5
To our Shareholders
Wacker Neuson has emerged from the crisis in
a stronger position. In the following interview,
the Executive Board outlines the measures
the company has already implemented and
the challenges it intends to master as it moves
forward.
Mr. Mayer, was fiscal 2010 a good year for
Wacker Neuson?
Richard Mayer: Good is relative in this case. On the
What does this mean for shareholders?
Günther C. Binder: Our shareholders have probably
already noticed the difference. Allowing for the usual
fluctuations, share prices nonetheless rose steadily
during the course of 2010, gaining around 50 percent in
“We want our shareholders to share our success
and will be paying a dividend of EUR 0.17 per share
this year.”
one hand, we put in a very strong performance and
Günther C. Binder
regained a lot of the ground lost in 2009 when our revenue fell by almost a third to just under EUR 600 million
value overall. Plus we are already in a position to again
due to the financial crisis. On the other hand, however,
offer our shareholders a dividend of EUR 0.17 per share
we are still a long way from the EUR 1 billion pro-forma
for 2010, which is at least a small token of our gratitude
revenue that we reported in 2007. But we are growing
for their loyalty.
fast, as our earnings clearly show. In 2010 for example,
our EBITDA almost trebled.
Mr. Binder, what are the key factors behind this
success?
Mr. Schwind, what are the main drivers of this
new, dynamic growth? Are there any special hot
spots?
Werner Schwind: Most sales regions and all of our
Günther C. Binder: Well, we busied ourselves during
business segments contributed to our growth. The
the downturn – getting our house in order and stream-
light equipment segment led the field with a revenue
lining our cost structures. At EBIT level, break-even
for 2011 is EUR 690 million, although we have already
increased core staff numbers in the US and Austria
to capitalize on upcoming opportunities. Fixed costs
now only account for just over one third of current
total costs and our operating leverage ratio is currently
“We are no newcomer to the South American market.
We have a long and successful track record with light
equipment in this region and are now following suit
with our compact equipment.”
between 3.5 and 4. Which means that a 10 percent
Werner Schwind
increase in revenue translates to a 35 to 40 percent rise
in profit.
increase of 39 percent. But the compact equipment
segment was not far behind with a plus of almost
34 percent. As anticipated, our plan to distribute
compact equipment via our existing international light
equipment sales network yielded substantial synergies,
which were of great benefit to the company.
6
ties for compact equipment – for instance in South
Looking first of all to the near future, Mr. Mayer,
what are your expectations for fiscal 2011?
America, where we have been successfully distrib-
Richard Mayer: It’s looking good. The global construc-
uting light equipment for over 30 years through our
tion industry is picking up, fueled in part by numerous
affiliates. We also saw great results in Canada as well
government recovery packages but also by market-
as in South and North Africa. We are also delighted
driven increases in demand from key sectors such
with the almost five percent growth in our services
as residential construction. And although the upturn
segment, which comprises our rental, spare parts and
in public construction is set to level off somewhat as
repair business.
recovery packages come to an end, we still anticipate
This strategy has opened up new market opportuni-
further strong double-digit growth for Wacker Neuson.
Mr. Lehner, what does the future hold for the
compact equipment business?
Martin Lehner: The future is certainly bright. In 2010
alone, we experienced steady quarter-on-quarter
growth in this segment. After a marginal rise in the
“In 2011, we expect revenue to rise by over
15 percent. So we plan to match 2008
revenue but exceed 2008 earnings.”
first quarter, revenue for Q2 was up 32 percent on Q2
Richard Mayer
2009, going on to grow a further 53 and 55 percent in
the third and fourth quarters respectively. Of course,
We are aiming to exceed the EUR 870 million mark in
this upward curve cannot continue forever. But it does
revenue, a rise of 15 percent that should result in an
underline a clear overall dynamic trend. Our compact
EBITDA of at least EUR 105 million and an EBITDA
equipment is making headway across the globe and
margin in excess of 12 percent. In other words, we aim
there is still plenty of room to increase market shares.
to generate roughly the same revenue as in 2008 but
exceed that year’s EBITDA margin of 11.6 percent. Of
What about the US market?
course, this assumes that the economy does not suffer
Werner Schwind: Our progress here is somewhat
any further setbacks. In fact, we also expect double-
slower at present than in other compact equipment
digit growth in 2012.
markets due to local market structures. In the US, we
of large rental companies and dealers. So unlike other
Which markets or product segments are looking
particularly promising?
countries such as Germany, we do not have a direct
Richard Mayer: We expect healthy growth across all
sales network here. However, we are currently estab-
product segments. Building on our substantial shares
lishing our own network of exclusive Wacker Neuson
worldwide in the light equipment market, we expect fur-
dealers for our compact equipment offering in the
ther growth as professional rental companies in the US
US. Our strategic alliance with the heavy equipment
and Europe start restocking fleets. Investment from this
manufacturer Caterpillar Inc. will also contribute to
sector is set to increase throughout 2011 and intensify
medium-term revenue gains in the US. We are currently
in 2012. During the downturn we continued to focus on
developing several mini excavator models as part of this
product development. The new products we developed
agreement and expect this alliance to start bolstering
will open up new revenue streams, as will new regional
revenue during the second half of this year. Caterpillar
markets. Our expectations for the compact equip-
already unveiled the first models for the European mar-
ment segment are even higher. But I’ll hand over to
ket in March at the SAMOTER trade fair in Italy.
Mr. Lehner for that one.
have always sold our light equipment to a small number
Martin Lehner: Indeed, our predictions are based on
capacity to significantly increase output, including de-
three pillars of growth. The first of these is the massive
liveries to Caterpillar. All of our production facilities will
order backlog at the start of 2011, which was 350 per-
then be in company ownership. Following this invest-
cent up on the previous year. This was due in part to
ment, will have sufficient overall production capacity to
delays from some suppliers who still had difficulty
generate revenue well in excess of EUR 1 billion. Our
meeting orders once business picked up. This situation,
expansion strategy also entails investments in our own
however, has now eased. These longer delivery times
rental pool and new sales and service stations. The
also prompted our customers to place orders earlier, all
opening of our new European research and develop-
of which gives us a clear overview of the current fiscal
ment center in Munich mid-2011 will mark another key
year. Our strategy of utilizing the global light equip-
milestone for Wacker Neuson.
ment sales network to launch our compact offering in
collaboration with Caterpillar is the third pillar, although
You just mentioned the one billion euro revenue
mark. When does Wacker Neuson expect to
reach this milestone?
we will not realize the revenue benefits until 2012. The
Günther C. Binder: As things currently stand, by 2013
agricultural industry is also a promising opportunity for
at the latest. As we move towards this target, however,
compact equipment. We have established footholds in
our revenue structure is set to change. We expect the
new markets such as Russia and Italy.
compact segment to increase its share in revenue from
new markets is our second core growth driver. And it
is proving to be an increasingly successful model. Our
today’s 36 percent, including agricultural machines,
Such rapid expansion calls for a degree of
financial flexibility that many companies simply
do not have after an economic crisis. How is
Wacker Neuson positioned?
Günther C. Binder: Our growth strategies may appear
drawing level with today’s 40 percent light equipment.
“We intend to again hit the EUR 1 billion revenue
mark in 2013.”
ambitious, but the crisis did not shake our healthy finan-
Günther C. Binder
cial foundation. In fact, the opposite is the case. Our low
net financial debt and high equity ratio in excess of 80
The timeframe here will depend on how quickly our
percent ensure good bank ratings. This means we have
compact offering captures international markets be-
enough undrawn credit lines with reasonable terms to
yond Europe. The services segment, which comprises
finance future growth. Also bear in mind that we did not
the rental, maintenance and spare parts business,
compromise on R&D expenses or necessary invest-
should then level off at around 20 percent. In 2010, this
ments even during the crisis. So we are more than ready
sector accounted for 25 percent of total revenue as,
for the upswing.
unlike the construction equipment business, it was not
7
To our Shareholders
affected by the downturn.
On the subject of investments – what are the
company’s capital expenditure plans for 2011?
What about longer-term prospects?
Günther C. Binder: We will be investing around EUR
Richard Mayer: We are also very optimistic about
100 million this year. Much of this will be channeled into
our long-term prospects. Many of our light equipment
our new production facility for compact equipment in
products already lead the market, in some cases with
the Austrian district of Hörsching, near Linz. This site
over 30 percent market share. Nevertheless, we still see
will become our new center of competence for excava-
major opportunities to expand our lead over competi-
tors, dumpers and skid-steer loaders. It will give us the
tors here. There are plenty of factors in our favor.
8
Our reputation as innovation leader; our fast, efficient
to access remote regions, lay roads and build other
service network; our broad product portfolio; and the
transport routes. Light and compact equipment is
reliability and quality of our products mean we are ide-
required at a later stage and Wacker Neuson is ideally
ally positioned to provide one-stop solutions to the wid-
placed to capitalize on these opportunities as they
est range of customer challenges. In addition, we have
arise. Although China and India are still future markets,
only just begun to tap a whole range of opportunities in
we have already established our first affiliates there. As
promising growth markets. Emerging economies, which
in all other economies, demand for high-quality equipment will rise here in the medium term once the cost of
labor increases. This will mark the start of our strong
“Our reputation as innovation leader will help us
expand market share for light equipment across the
globe.”
Richard Mayer
growth phase in these regions. Eastern Europe is also
a promising growth market. We are carefully analyzing
all of these dynamics to ensure that we closely align our
go-to-market strategies with global economic trends.
for the compact equipment segment is even brighter.
Tapping these new markets single-handedly can
be quite challenging. What role do alliances and
acquisitions play here?
Looking at international markets beyond Europe, we
Werner Schwind: Werner Schwind: Both strategies
have only scratched the surface thus far. It’s full steam
have played a central role at Wacker Neuson through-
ahead for our global marketing strategy.
out the company’s history. Our acquisition of agricul-
currently account for 15 percent of Group revenue,
are a particularly interesting prospect. And the future
tural machine manufacturer Weidemann is a case in
Martin Lehner: Compact equipment is growing in
point. It enabled us to enter the agricultural market,
importance as construction players increasingly recog-
which now accounts for one eighth of Group revenue.
nize the clear benefits of equipment in this class. These
The merger of Wacker and Neuson, which evolved
from a successful alliance spanning several years, is
a further example. As are our strategic alliances with
“China and India are still establishing an extensive
basic infrastructure. Once this phase is complete,
our integrated, compact machines will come into
play.”
Martin Lehner
Caterpillar and CLAAS, both of which are creating new
sales opportunities for our products. In addition to
these milestones, we have also made numerous smaller
acquisitions. One such move, for example, enabled us
to incorporate heating and lighting equipment into our
portfolio and create real value for our customers. Col-
include increased flexibility, comparatively low invest-
laborations and alliances will continue to be part of our
ment and operating costs, outstanding maneuverability
strategic gameplay and we are always on the lookout
and the possibility of working in restricted spaces. In
for winning opportunities. After all, Wacker Neuson is
emerging economies such as China and India, where
nowhere near the end of its growth path.
industry and logistics are developing rapidly, initial
construction work calls for heavy equipment – required
Thank you for taking time for this interview.
A firm grip!
The right growth strategy, product
excellence and innovative drive are
crucial to staying ahead in tomorrow’s
markets and meeting our customers’
ever-changing needs. At Wacker
Neuson, we intend to focus more than
ever on consolidating and expanding
these success factors in 2011.
Above all, we will be raising the bar for
flexibility, customer service and teamwork. Demand for the kind of machines
Growth strategy
page 10
our Group manufactures is rising worldwide – primarily fuelled by infrastructure
expansion and repair projects, increasing demand for industrial and residential
buildings and ongoing industrialization of
agricultural holdings. For Wacker Neuson,
this means bundling our know-how with
decades of experience in state-of-the-art
technologies and product quality to bring
our products to the markets that need
them. In short, we have a firm grip on
today’s and tomorrow’s opportunities!
Product excellence
page 12
Innovative drive
page 14
page 18
Teamwork
page 20
Kompakte Baumaschinen aus Europa verändern
Bauprozesse in den USA.
_D_009_022.indd 10-11
28.03.11 17:57
Flexibility
page 16
9
To our Shareholders
A firm grip!
Customer service
10
Wacker Neuson SE | Annual
Geschäftsbericht
Report 2010
2010
Compact equipment from Europe streamlines
construction processes in the US.
An our
To
unsere
Shareholders
Aktionäre
firm grip!
grip! 11
A Afirm
Growth strategy
Pastures new
Building on our success in our core markets, we are now looking to broaden our
horizons and reach new heights. We will
use synergies to grow faster at an international level, particularly in our compact
equipment segment where many of our
products are still relative newcomers to
many regions. Countries in North and
South America as well as South Africa,
Scandinavia and Russia are of particular interest to us. We are working hard to
establish and expand our sales networks in
these areas, increasingly utilizing our existing light equipment infrastructure.
Our aim is to give our customers a onestop-shop for both light and compact
equipment. Certainly the US market offers
promising growth opportunities. Market
potential for compact equipment is set
to double in the medium term given the
sizeable investment backlog – particularly
for compact and cost-effective equipment.
Here also, we will be aiming to provide a
one-stop service. In South America, we
intend to benefit from dynamic growth in
individual regions by expanding the portfolio distributed through our network of
affiliates, which we have built up there over
the last 30 years.
12
Geschäftsbericht
Report 2010
2010
Product excellence
Precision engineering
– down to the last nut
and bolt
Our company name is more than a brand.
It is a promise to customers. A guarantee of product and quality excellence.
Wacker Neuson is a by-word for a long
service life, outstanding reliability, low
operating costs and ease of use. Above
all, our customers can be sure of highly
competitive machines packed full of innovative technologies and designed to
the most exacting safety and environmental standards. Our attention to detail
is evident down to the last nut and bolt.
Our commitment to quality, excellence and
continuous improvement is hardwired into
our entire product value chain and defines
each and every business relationship. Our
sales, procurement, production and service
departments work hand in hand, ensuring
that the Group remains in future what it is
today – a quality leader.
To our Shareholders
A firm grip! 13
Stop-check during the production of ties for the DF16 rebar tier – quality
control is an integral part of all production processes.
14
Geschäftsbericht
Report 2010
2010
Innovative drive
New ideas for a bright
future
When we develop products, we always
have our customers and their needs in
mind. After all, the machines don’t do the
job on their own. Operators have to work in
the same tough environment – day in, day
out. Which is why our research and development activities are geared toward meeting everyday challenges on construction
sites and raising performance, efficiency
and safety across our portfolio. We stay in
close contact with users to keep a grip on
emerging trends. In our modern training
center, we not only teach our sales teams
and dealers how to handle new equipment,
but also our customers, so when they get
back on site they know our equipment
inside-out.
We are always on the lookout for innovative
ideas and already own around 600 patents
and utility models. The ability to quickly
turn these ideas into market successes is
what keeps us ahead. In 2010, the bauma
trade fair was the perfect showcase for
our innovative drive, enabling us to demonstrate a broad range of new products
– and show how the future starts with new
ideas and creative solutions.
To our Shareholders
A firm grip! 15
Before launching the DPU 130, the world’s most powerful vibratory plate,
Wacker Neuson provided training for all sales teams.
16
Geschäftsbericht
Report 2010
2010
Its compact footprint, sensational lifting height and tight turning radius
make the Weidemann T4512 telescopic handler a versatile farm hand.
An our
To
unsere
Shareholders
Aktionäre
A Afirm
firm grip!
grip! 17
Flexibility
Greater efficiency for
greater gains
The agricultural sector is changing across
the globe. Farms and holdings are getting
larger. Pressure on prices is increasing.
Now more than ever, agricultural holders
must raise efficiency levels to succeed
at domestic and international level. Our
modern, versatile Weidemann-branded
machines are the perfect answer to rising
efficiency needs. These agile all-rounders
make light work of the toughest farm, barn
and stable jobs – raising efficiency levels
and cutting costs.
Yet flexibility also means change. And for
Wacker Neuson, change means growth.
2010, for example, saw us branch out to
new agricultural markets in Italy and Russia. In addition, our growth strategy has
also seen us adapt compact construction
equipment for the agricultural sector in
order to streamline processes on agricultural holdings. We intend to increase our
sales worldwide, backed by our wealth of
experience and broad portfolio of compact
equipment for the agricultural industry. In
2011, we will be strengthening both these
strategies.
18
Geschäftsbericht
Report 2010
2010
Assembling a spring element for the BS 30 gasoline rammer at the
spare parts production facility in Reichertshofen, Germany.
An our
To
unsere
Shareholders
Aktionäre
A Afirm
firm grip!
grip! 19
Customer service
Always on the move
Across the globe, around 180 locations
and 30 affiliates take Wacker Neuson’s
international expertise and product excellence right to our customers’ doorsteps.
Worldwide, our people are on hand to
respond quickly to customer needs and
deliver flexible solutions. This commitment
is reflected in the trust our customers place
in us and our equipment the world over.
Our international network delivers outstanding services – above all maintenance,
repair and rental in countries with direct
sales stations. Our global service capabilities range from individual consultations
to 24-hour delivery guarantees for spare
parts, which are manufactured on demand
and at short notice. Where necessary, we
also produce in very small numbers – anything to keep our machines on the move.
Maintaining continuous dialog with our
customers is not just a sign of trust and
reliability. It is also the basis of our
company’s continued success. And every
day, we go the extra mile to keep it that
way.
20
Geschäftsbericht
Report 2010
2010
Marcus Auerbach
Head of Compact Equipment
and Marketing for the Americas
Region
Michaela Detzner
Area Sales Manager for
Weidemann Products
Ferdinand Kopp
Industrial Engineer in Rebar Tier
Production
Teamwork
Reaching new heights together
Our employees are the biggest secret to our
success. Their dedication and drive fuel our
growth, make our products better every day
and create value for our customers. Over 3,100
dedicated and highly skilled people worldwide
are constantly looking at ways of turning new
opportunities into concrete ideas. Our people
never stand still – they are hands-on and always
ready for action. Wacker Neuson’s employees
the world over live and breathe our core values,
making them a clear and integral part of their
working lives. Our philosophy is defined above
all by a sense of responsibility, reliability and
integrity. These attributes form the solid base
upon which our company is built and explains
why everything we do stands out.
Michael Schmitt
Trainer for Soil and Concrete Compaction
at the Wacker Neuson Academy
Stefan Stichlmayr
Industrial Engineer in Spare
Parts Production
An our
To
unsere
Shareholders
Aktionäre
A Afirm
firm grip!
grip! 21
22
Exceeding expectations
We achieved a lot in the past year. In some areas, we came considerably closer to reaching our targets; in others, we met and even
exceeded our goals. Our performance was particularly strong on
the financial front, where we clearly exceeded our original forecasts
for 2010. Revenue was up an impressive 27 percent on the previous
year, while EBITDA almost trebled. Our share also made significant
value, rising 53 percent. So our efforts literally did pay off.
However, our ability to recover from the crisis so quickly and so
successfully is not just down to economic dynamics. Our employees also put in an outstanding performance, driving the company
forward with intelligent innovations that enhanced our market presence. Whatever challenges the future may hold for Wacker Neuson,
on the future success of our company, we have
a firm grip!
Hans Neunteufel
Chairman of the
Supervisory Board
In the run-up to and during its meetings, the Supervisory Board was brought up to date on business
developments, changes in the net assets, financial
position and earnings, fundamental issues regarding business planning, business 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.
Dear Ladies and Gentlemen,
After reporting an operating loss for the first time
in company history in 2009, 2010 saw us seize
market opportunities to drive a significant increase
in revenueand earnings. We would like to thank our
employees in particular for this achievement. Their
dedication and active willingness to assume responsibility was a great support to company management over the year.
Cooperation between Supervisory and
Executive Boards
In the period under review, the Supervisory Board
performed the tasks assigned to it by law and the
Articles of Incorporation and 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 Group.
As already reported in 2009, at the start of the
period under review there were some differences of
opinion within the Supervisory Board and within the
Executive Board as well as between the Supervisory
Board and Executive Board. These led to various
legal proceedings. These differences have now been
resolved by mutual agreement.
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 2010.
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
23
To our Shareholders
24
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.
In addition, the Executive Board submitted 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 or Spokesperson in
particular.
Main topics of Supervisory Board and
committee meetings in fiscal 2010
Twelve plenary meetings of the Supervisory Board
were held in fiscal 2010. One of these sessions was
held by telephone. The Presiding Committee met
three times and the Audit Committee met on four
occasions. In three cases, the Supervisory Board
adopted circular resolutions.
The Supervisory Board was regularly involved in the
day-to-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 on February 26, 2010, the Supervisory Board focused on the preliminary figures for
the previous fiscal year as well as possible changes
in the Group structure (holding structure) and the
strategic alliance with Caterpillar, which the company has now entered into. The general remuneration structure for the Executive Board was also
discussed as were the results of the efficiency audit
of the Supervisory Board. Furthermore, the Supervisory Board approved the closure of the production
plant in Gotha, which has now been converted to a
used equipment center.
Following appropriate preparations by the Audit
Committee, the Supervisory Board focused on the
Annual Financial Statements, the Consolidated
Financial Statements, the Combined Management
Report of Wacker Neuson SE and the Group, as well
as related party disclosures for fiscal 2009 in the
Supervisory Board meeting to approve the financial statements on March 22, 2010. 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 regularly examinations as part
of its own preparation for the meeting to approve
the financial statements. The Supervisory Board
also addressed strategic issues regarding the
compact equipment business and the alliance with
Caterpillar. In a follow-up session to the Supervisory
Board meeting to approve the financial statements
on March 25, 2010, supplemented by a circular
resolution, 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. The
Supervisory Board also ratified the AGM agenda,
the Supervisory Board report and the updated
declaration of compliance with the German Corporate Governance Code at this meeting.
At the meeting on May 7, 2010, the agenda covered
the interim report for Q1, restructuring measures at
an affiliate and the strategic alliance with Caterpillar.
The Supervisory Board also approved the acquisition of a company in Austria.
The current shareholder representatives were reelected during the AGM. This meeting on May 28,
2010 was followed by the constituent meeting of
Wacker Neuson SE’s Supervisory Board, during
which the Chairman and Deputy Chairman of the
Supervisory Board were appointed along with the
committees and chairpersons. The alliance with
Caterpillar was also discussed at this meeting. The
spotlight was again on the strategic alliance with
Caterpillar at the June 21, 2010 meeting.
The meeting of June 28, 2010, focused primarily on
Executive Board matters. On the basis of this meeting, the Supervisory Board extended the contracts
of the members of the Executive Board by means of
a circular resolution on July 30, 2010.
At its meeting on August 9, 2010, the Supervisory
Board focused primarily on the pending publication of the half-year report. The possible sale of real
estate not required for operating purposes, a holding structure, the alliance with Caterpillar and issues
regarding Group strategy were also discussed. In
addition, the liquidation of the affiliate in Japan was
approved.
The September 16, 2010, meeting centered on HR
matters resulting from Dr.-Ing. Georg Sick’s decision
to step down from his position.
The meeting of September 22, 2010 was conducted
by phone and again discussed HR issues primarily
in conjunction with the search for a successor for
the position of Chief Executive Officer.
The meeting on November 8, 2010, covered in
particular the pending publication of the quarterly
report, the revision of the rules of procedure for the
Supervisory Board, the alliance with Caterpillar plus
related plans to build a new production facility in
Hörsching (near Linz), a holding structure, possible
sale of real estate not required for operational purposes as well as the operational situation at various
international sales affiliates. The Supervisory Board
also exercised certain balance sheet exemptions for
an affiliate and thus invoked the company’s obligation to carry the associated loss.
During its meeting on December 17, 2010, the
Supervisory Board examined the Executive Board’s
business plan for fiscal 2011. 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
improving economic climate. The planned construction of the new production facility in Hörsching (near
Linz) was also discussed in this meeting together
with certain balance sheet exemptions for another
affiliate, invoking the company’s obligation to carry
the associated loss.
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.
Changes in the composition of the executive
bodies
On September 15, 2010, Dr.-Ing. Georg Sick, CEO
and President of Wacker Neuson SE, stepped down
from his position at his own request in order to
prepare for a new position. The Supervisory Board
complied with the wishes of Dr.-Ing. Georg Sick. The
contracts of the remaining members of the Execu-
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To our Shareholders
26
tive Board were extended during the period under
review until March 2016. Mr. Richard Mayer (Executive Board member responsible for light equipment)
was appointed temporary Spokesperson for the
Executive Board and shall remain in this position
until an external successor for the position of CEO
has been found.
During the AGM on May 28, 2010, all four existing
shareholder representatives were reappointed to the
Supervisory Board for a further term. The two existing employee representatives were also reappointed
to the Supervisory Board for a further term by the
SE Works Council. In the constituent meeting of the
Supervisory Board following the AGM, Mr. Hans
Neunteufel was re-elected Chairman of the Supervisory Board and Dr. Ulrich Wacker Deputy Chairman. The composition of the Presiding Committee
remains unchanged with Mr. Hans Neunteufel as
Chairman. There were also no changes to the composition of the Audit Committee, although Mr. Kurt
Helletzgruber has replaced Dr. Kollmar as Chairman.
On December 31, 2010, Mr. Herbert Santl stepped
down from his position as employee representative
on the Supervisory Board for reasons of health. He
has been replaced by Mr. Hans Haßlach, Chairman
of the Kramer-Werke Works Council and Deputy
Chairman of the Group and SE Works Council.
Mr. Haßlach was appointed to the Supervisory
Board on January 1, 2011 by the Wacker Neuson SE
Works Council. The Supervisory Board would like
to thank Mr. Santl for his many years of service and
dedication to the Group and the Supervisory Board
and warmly welcomes Mr. Haßlach as the new
employee representative on the Board.
Work performed by the Supervisory Board
committees in fiscal 2010
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.
During the March 22, 2010 meeting, the 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, 2009. The Committee
also contemplated a suitable auditor and submitted
a recommendation in that regard at the Supervisory
Board plenary meeting. The Supervisory Board, in
turn, followed this recommendation and proposed
the same auditor at the AGM. At the May 7, 2010,
August 9, 2010, and November 8, 2011 meetings,
the Audit Committee primarily dealt with publication of the pending interim financial reports. The
Presiding Committee dealt with general matters
regarding the Executive Board and human resources during its three meetings. The chairmen of the
committees reported on the work performed by the
committees during the Supervisory Board’s plenary
meetings.
Risk assessment and compliance
The Supervisory Board is satisfied that the Group’s
risk management policy meets the requirements set
down in the German law on control and transparency in business (KonTraG), insurable risks are sufficiently insured and 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 risk management system
was also examined by the duly appointed auditing
company, which confirmed that the Executive Board
had met the requirements outlined under Section
91 (2) of the German Stock Corporation Law (AktG)
and established a suitable early warning system
capable of monitoring and identifying developments
that could pose a threat to the company’s continued
existence as a going concern. During Supervisory
Board meetings and personal conversations, the
Executive Board informed the Supervisory Board
of the current risk situation. The Supervisory and
Executive Boards discussed all areas deemed to be
risks during these sessions. 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 March 25, 2010 and again
after the close of the period on March 21, 2011. 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).
Annual and Consolidated Financial Statements
for 2010
At the AGM on May 28, 2010, the auditing company
Rölfs WP Partner AG, based in Munich, Germany,
was appointed auditor for the company and Group
for fiscal 2010. 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, 2010 were prepared by the Executive
Board in accordance with the German Commercial
Code (HGB). The Consolidated Financial Statements for the year ending December 31, 2010 were
prepared by the Executive Board in line with IFRS as
adopted in the EU and in supplementary compliance
with Section 315a HGB. The auditing company Rölfs
WP Partner AG has 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 (Group) 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 21, 2011
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
(Group) 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
Super visory Board therefore endorsed the Annual
Financial Statements, the Consolidated Financial
Statements and the Combined (Group) Management
Report prepared by the Executive Board for the year
ending December 31, 2010, on March 21, 2011. The
Annual Financial Statements have thus been duly
approved.
The Supervisory Board also examined the Executive
Board’s suggested appropriation of profit for fiscal
2010. It did not raise any objections and thus gives
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 2010. 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
27
To our Shareholders
28
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 Rölfs WP Partner AG
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
2. the performance provided by the company in
respect of the transactions listed in the report
was not unreasonably high.”
The Audit Committee and the entire Supervisory
Board received the Executive Board’s report on
related party disclosures in a timely manner. The contents of the report and the assessment thereof by the
auditors were read and understood by these bodies,
and both documents and their results were examined and discussed with the Executive Board and
the auditors. The 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 in
light of the turbulent global economic situation. Their
commitment, dedication and performance – both on
a day-to-day basis and under exceptional circumstances – were crucial factors behind the company’s
continued positive development during the period
under review. The Supervisory Board would like to
thank all employees and the Executive Board for their
efforts here.
Munich, March 21, 2011
Supervisory Board
Hans Neunteufel
Chairman of the Supervisory Board
Declaration on
Corporate Governance
Corporate Governance takes high priority at
Wacker Neuson. Our Executive and Super
visory 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
longterm success and increasing its value.
The mission statement is embedded in the
group and its business practices.
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 of the German Stock
Corporation Act (AktG)
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 aimed at 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
March 21, 2011.
Declaration of compliance with the German
Corporate Governance Code in accordance
with Section 161 of the German Stock
Corporation Act (AktG)
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 declare each year which recommendations of the German Corporate Governance Code
have not been followed or are not being followed,
and why this is the case.
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 declare that the company complied with
and continues to comply 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
electronic Federal Gazette as amended on June 18,
2009 and/or as amended on May 26, 2010 (as of the
effective dates respectively), with the exceptions
listed and explained in more detail below:
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To our Shareholders
30
1. Section 3.8, para. 2: 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 introducing a deductible on Supervisory Board members until further
notice.
2. Section 4.1.5: The company does not follow this
recommendation to the extent that it requires
companies to aim or provide for adequate representation or involvement of women. The Wacker
Neuson Executive Board has always and will
continue to base its staff appointment decisions
solely on the basis of the capabilities and qualifications of the available candidates and does not
accord any importance to gender. It should be
noted in this context that key top Group management positions are already occupied by women.
The Executive Board actively welcomes all
efforts to combat gender-based discrimination,
and indeed any other type of discrimination, and
to promote diversity.
3. Section 4.2.3 para. 2 and 3: In some of the
Executive Board members’ contracts, recommendations under the Code that extend beyond
the German Law on the Appropriateness of
Executive Board Remuneration (VorstAG) regarding the variable components of Executive Board
remuneration were not considered in the past.
The provisions of existing contracts of employment thus enjoyed a valid right of protection and
continuity. In connection with the 2010 extensions to existing contracts, all contracts were
adapted to consider the recommendations under
the Code. The Supervisory Board will continue
to generally follow this recommendation under
the Code when concluding new contracts and
extending existing contracts in the future.
4. Section 4.2.3, para. 6: The AGM is not informed
separately about the main terms of and changes
to the remuneration system for Executive Board
members as this information is already disclosed
in the Group Management Report, which is available to all shareholders.
5. Section 4.2.4, 4.2.5, 5.4.6, para. 3 and 7.1.3:
The AGM decided not to publish the income of
each individual Executive Board member in the
Notes to the Annual and Consolidated Financial
Statements. In line with this, the corporate governance report does not include an individualized
remuneration report. Nor does it contain specific
information about share-based incentive systems
for the Executive Board (which the company
does not have in any case).
Once again, the Executive and Supervisory
Boards devoted themselves to the question of
striking a balance between shareholders’ need
for information and Executive Board members’
need for privacy. Once more, they have come
to the conclusion that the shareholders’ right to
transparent information is duly served with the
disclosure of total Executive Board remuneration and that publishing information on individual remuneration payments would impinge
unnecessarily on the privacy of the members
of the Executive Board. A resolution in line with
Sections 286 (5) and 314 (2) sent. 2 HGB shall
thus again be presented at the upcoming AGM,
proposing that individual Executive Board remuneration payments shall not be published in the
Annual and Consolidated Financial Statements
for the next four fiscal years.
Similarly, the income of individual Supervisory
Board members shall not be 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.
6. Section 5.1.2 para. 1 sent. 2 and section 5.4.1
para. 2 and 3: The company does not follow this
recommendation to the extent that it requires
companies to aim or provide for adequate
representation or involvement of women on the
Executive Board and on Supervisory Board.
Hence the corporate governance report does not
include representation targets from the Supervisory Board. The Supervisory Board bases its
staff appointment recommendations and decisions solely on the basis of the capabilities and
qualifications of the available candidates and
does not accord any importance to gender. The
Supervisory Board actively welcomes all efforts
to combat gender-based discrimination, and
indeed any other type of discrimination, and to
promote diversity.
7. Section 5.1.2, para. 2, sent. 3: The Supervisory
Board originally set no age limit for members of
the Executive Board as the Supervisory Board
was of the opinion that individual performance
was the deciding factor when assessing management ability, not age. In 2010 however, an age
limit was introduced in line with this recommendation under this code.
8. Section 5.3.3: The Supervisory Board has not
formed a nomination committee. The size of the
Supervisory Board (four shareholder representatives) does not warrant a dedicated committee
for proposing Supervisory Board candidates.
9. Section 5.4.1, para. 2: The rules of procedure
of the Supervisory Board stipulate that members
of the Supervisory Board should not generally
be older than 75. To ensure the greatest possible
transparency in advance, the company draws
attention to the fact that one of the Supervisory
Board members, who is a shareholder representative, will turn 75 during his term of office.
10. Section 5.4.3., sent. 3: So that the Supervisory
Board can continue to vote impartially for its
chairperson, the proposed candidates will not be
announced in advance.
11. Section 5.4.4: Should the AGM elect a (previous)
member of the Executive Board to the Supervisory Board, taking the regulations of the German
Stock Corporation Act into consideration, the
Supervisory Board intends to comply with the
recommendation that this new member should
not chair the Supervisory Board.
12. Section 6.6: Share ownership by individual
members of the executive bodies exceeding one
percent of shares issued by the company has
not been and will not be stated in the corporate
governance report. The Executive Board is of the
view that protecting personal and family privacy
takes priority here.
Wacker Neuson SE
Executive and Supervisory Boards
The above declaration has been made permanently
available to shareholders on the Wacker Neuson SE
company website (www.wackerneuson.com) under
The Company, Investor Relations, Corporate Governance. It is updated as required, at least once a
year. Previous declarations of conformity 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 Act, comprising two executive bodies, the Executive Board and the Super-
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To our Shareholders
32
visory 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 four 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 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 and risk management activities that are relevant to the company and
the Group.
Cooperation and areas of responsibility within the
Board are governed by the rules of procedure for
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 Spokesperson of the Executive Board.
Executive Board meetings are held regularly and
are convened by the Spokesperson of the Executive Board 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.
The Spokesperson of the Executive Board 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. Richard
Mayer is the Spokesperson of the Executive Board.
Mr. Martin Lehner is the Deputy CEO. Further details
on individual members of the Executive Board, in
particular their areas of responsibility, are disclosed in the Notes to the Consolidated Financial
Statements in section 31 “Executive bodies” (2010
p. 145
Wacker Neuson Annual Report).
Measures and transactions of fundamental importance must be approved by the Supervisory Board
as set down in the rules of procedure for the Supervisory 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. 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” (2010
p. 145
Wacker Neuson Annual Report).
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 control 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. 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 concluding, amending and
terminating contracts with Executive Board members, as well as for preparing Supervisory Board
meetings and handling ongoing business. The Presiding Committee members are Mr. Hans Neunteufel,
Dr. Ulrich Wacker 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, assesses the auditor’s independence
and submits a voting proposal with regard to the auditor to the Supervisory Board for the AGM. It sup-
ports and monitors the Executive Board regarding
accounting issues especially in relation to quarterly
reports, risk management, the internal control system, internal auditing system and compliance. The
Audit Committee members are Dr. Eberhard Kollmar,
Mr. Hans Neunteufel, Mag. Kurt Helletzgruber, Mr.
Herbert Santl (until December 31, 2010) and Mr.
Elvis Schwarzmair (from January 1, 2011). Mr. Kurt
Helletzgruber is the Chairman.
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. The respective chairperson has the casting
vote in the event of a tie.
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 represents 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.
Our AGM this year will take place in Munich on
May 26, 2011. 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).
33
To our Shareholders
34
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 Board and the
Supervisory Board therefore continually monitor the
Wacker Neuson Group’s risk management and internal control 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 Combined Management Report.
This also includes a report on the control and
risk management system within accounting
p. 79
(2010 Wacker Neuson Annual Report).
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 or the
Audit Committee discusses these reports with the
Executive Board prior to their publication. The Executive Board also answers shareholders’ questions at
the AGM. We also use our Internet platform 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 are permanently
available under The Company, Investor Relations at
www.wackerneuson.com. Interested parties can join
our distribution list to receive regular updates.
Director’s dealings and significant voting
interests
In order to ensure compliance with the German
Securities Trading Act (WpHG), Wacker Neuson SE
publishes reports on directors’ dealings pursuant to
Section 15a 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 The Company, Investor
Relations, Corporate Governance. Pursuant to Section 21 WpHG, we also immediately publish reports
regarding the purchase or sale of significant voting
rights, and the holding of corresponding financial
instruments in line with Section 25 WpHG on our
website under Investor Relations, IR News.
Annual Document in line with Section 10 of
the German Securities
Prospectus Act (WpPG)
The Annual Document pursuant to Section 10 (1)
WpPG is available at www.wackerneuson.com under
The Company, Investor Relations, Corporate Governance.
Remuneration report in the Corporate
Governance Report
We report on the remuneration system of the
Executive Board in our Combined Management
Report under section XII “Remuneration framework”.
p. 89 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 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” (2010 Wacker Neuson Annual Report).
p. 145
of responsible conduct. In the interests of our
company and the entire workforce, we ensure we
trace any infringements back to their causes, which
we promptly eliminate. This also includes thorough
investigation of any violations of applicable national
regulations.
Moving forward, we are committed to sustaining
this value-driven approach, which we see as a solid
ground for our future success and credibility as a
company.
3. Corporate governance best practices
Compliance – key business driver
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, the general public and
employees alike.
Our approach is anchored in the values one would
expect from a mid-sized family-owned company,
geared towards a profitable, sustainable business
model. 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/mission-statement.
To ensure our values remain firmly embedded in
every aspect of our corporate structure, we regularly
inform our employees of the rules and requirements
Wacker Neuson SE
The Executive Board
Richard Mayer
Günther C. Binder
Martin Lehner
Werner Schwind
This declaration on corporate governance is per manently available to
share holders on the Wacker Neuson SE website at
www.wackerneuson.com under The Company, Investor Relations,
Corporate Governance. The declaration on 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.
35
To our Shareholders
36
An eventful year sees Wacker
Neuson share price climb
In 2010 – the year of economic recovery –
Wacker Neuson stepped up its efforts to
give all stakeholders a transparent overview
of Group events and developments. Road
shows and capital market days in Germany,
Europe and the US provided a regular feed of
information on the company’s latest per
formance and gave all capital market play
ers an opportunity to exchange views. And
our efforts have certainly paid dividends.
A clear upward trend was visible in the financial
markets. Early 2009, it was already evident that smallto-medium cap shares were clearly outstripping their
large-cap cousins. This was a global phenomenon,
but the difference was especially pronounced in Germany, where the MDAX – the index for medium-sized
companies – rose by 35 percent in 2010. As such, it
clearly outperformed the DAX leading index, which
registered a 16 percent rise. The best performance of
all, however, was seen in the SDAX small cap index,
which rose by 46 percent.
Climbing 53 percent, Wacker Neuson’s share
Wacker Neuson mirrors stock market trends
price clearly outperformed the SDAX.
Overall, stock market trading was extremely lively
and this was reflected in Wacker Neuson SE share
price trends. With significantly more pronounced
spikes than the SDAX, the share price continued on
its upward path until it reached EUR 13.00 at the end
of 2010. This represented an increase of 53 percent,
p. 37 fig.1 This was
outpacing the SDAX average.
Stock market trends in 2010
International stock market trends in 2010 were largely shaped by global recovery from the economic and
financial crisis. The German economy, in particular,
experienced rapid, strong growth. On the negative
side, however, debt crises in Greece and Ireland put
the euro under considerable pressure.
the market’s reward for a quicker than expected
return to profit mid-year and a sizeable increase in
earnings throughout the year.
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
37
To our Shareholders
The Share/Investor Relations
1. Share price trends
Jan. 1, 2010 – Feb. 28, 2011
as a %
180
160
140
120
100
80
60
Jan.
Feb.
Mar.
WACKER NEUSON
2. Share price trends:
Apr.
May
SDAX
DAX
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
Jan.
Feb.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
Jan.
Feb.
Nov.
Dec.
Jan.
Feb.
CDAX
250
Compared with peers
Jan. 1, 2010 – Feb. 28, 2011
as a %
200
150
100
50
Jan.
Feb.
Mar.
Volatilität WACKER NEUSON
Apr.
May
HAULOTTE
Jun.
MANITOU
PALFINGER
DEUTZ
in €
3. Monthly highs, lows
14
and averages for Wacker
Neuson share
12
Jan. 1, 2010 – Feb. 28, 2011
in €
10
8
6
Jan.
Feb.
High/low price
Mar.
Apr.
May
Monthly average
Jun.
Jul.
Aug.
Sep.
Oct.
38
Construction equipment shares performed well
on the whole in the year under review.
p. 37 fig. 2
plots Wacker Neuson’s share against four of its peers –
French companies Haulotte, a lifting equipment manufacturer, and Manitou, one of our competitors in the
compact equipment sector, Palfinger, Austrian crane
manufacturer, and Deutz, engine manufacturer. Deutz
also supplies special-purpose engines to compact
equipment manufacturers. The share price trend for all
companies was roughly similar. In the first few weeks
Wacker Neuson is ranked in this index as one of the
largest listed family-owned companies. Compared
with all other companies listed on the DAX, MDAX,
SDAX and TecDAX, Wacker Neuson is rated as one
of the ten best companies in Germany, with a high
equity ratio of over 80 percent. We regard inclusion
in the DAXplus Family-Index as confirmation of our
success in combining the culture of a family-run enterprise with a value-driven commitment to sustainable, stable management practices.
of fiscal 2011, the sharp rise in oil prices in response
to political upheaval in the Arab world had a negative
2010 AGM
effect on stock markets. In March 2011, the conse-
The Annual General Meeting (AGM) is an important event for Wacker Neuson. In the year under
review, it was held in Munich on May 28, 2010.
Around 230 shareholders with 61,158,924 voting
rights were represented. Based on a share capital of
70,140,000 shares, this corresponds to attendance
of 87.2 percent. In view of the uncertain economic
situation prevailing at the time, the shareholders
approved the proposal by the Executive Board and
the Supervisory Board to carry the net profit for the
year forward in full and thereby waive a dividend
payment for fiscal 2009 (previous year’s resolution
for fiscal 2008: EUR 0.19 per share).
quences of the earthquake in Japan caused further
uncertainty.
Share and index information
Wacker Neuson SE shares are listed on the regulated Prime Standard segment of the Frankfurt
Stock Exchange and the SDAX. Wacker Neuson
has been included in the new DAXplus FamilyIndex since January 4, 2010. This index comprises
around 120 German and international companies
from the Frankfurt Stock Exchange’s Prime Standard segment in which the founding families hold
at least 25 percent of the voting rights or sit on the
Executive or Supervisory Board and hold at least
a five-percent share of the voting rights. Weighting
is based on market capitalization of the free float.
Key indicators for the Wacker Neuson share
in €
2010
2009
High
13.20
9.51
Low
7.63
4.31
Average
10.28
6.96
Year-end
13.00
8.20
38,790
37,837
Average daily trading
volume in shares
Earnings per share1
Book value per share1
0.34
-1.57
11.86
11.28
Dividend payment
proposed1
0.172
0
Distribution ratio as a %
49.82
–
Market capitalization at
year-end in € million
911.8
575.1
70,140,000 shares.
2
1
Dividend proposal
In view of the company’s stronger earnings situation potential and the long-term optimization of cost
structures, the Executive Board and Supervisory
Board of Wacker Neuson SE will propose a dividend of EUR 0.17 per eligible share at the AGM on
May 26, 2011. This dividend represents a total payout of EUR 11.9 million. The distribution ratio pans
out at around 50 percent based on Group profit for
the year in the amount of EUR 23.9 million. This is
in line with the long-term dividend policy defined by
the Supervisory Board and Executive Board and is
higher than the 30 percent minimum (of net earnings) communicated at the time of the IPO. This
early return to a dividend payout after a gap of just
one year demonstrates the Executive Board’s and
the Supervisory Boards’ gratitude to shareholders
for their loyalty during a difficult period.
Ownership structure
At December 31, 2010, around 70 percent of company shares were in either direct or indirect family
ownership. The Executive Board holds a further
1.5 percent direct stake. The remaining shares are
39
To our Shareholders
Executive Board and Supervisory Board at the official AGM on May 28, 2010 in Munich.
in free float. As far as the company is aware, around
87 percent of the free float is held mainly by European investors.
Proactive communication
Investor relations (IR) is a key priority at Wacker
Neuson. The aim of IR communications is to give
financial market players an up-to-date and accurate
account of company performance so that stakeholders can realistically assess and evaluate our share.
briefings on the current status of the company
at a number of events, including the AGM, investor conferences and roadshows in Germany and
abroad. The objective here was, and remains, to
keep analysts and investors up to speed on trends
in our markets and business areas as well as on our
responses to market challenges and our strategic
reaction to changes.
Capital market players continued to show a keen
interest in our company in 2010. The Executive Board
and the IR department did everything possible to
satisfy high expectations surrounding the information flow in the year of the upturn. We held regular
A wealth of up-to-date information is available on
our website www.wackerneuson.com under The
Company, Investor Relations. This includes annual
and quarterly reports, press releases and ad-hoc
announcements, plus presentations. manager magazin provided further welcome confirmation of the
quality of our financial communication by awarding
Shareholder structure
Shareholders within free float
as a % of total
as a regional % of total
38.5
29.0
1.5
31.0
Wacker family1
Neuson Ecotec GmbH
Executive Board
Free float
Share capital/number of shares: 70.14 million as of: March 1, 2011
1
Including Wacker-Werke GmbH & Co. KG, Wacker Familiengesellschaft
mbH & Co. KG and VGC Invest GmbH.
54.4
10.5
21.8
13.3
Germany
Austria
Europe (rest of Europe)
USA + others
40
us eighth place among SDAX-listed companies in its
Best Annual Reports 2010 competition. Meanwhile
in the Vision Awards Annual Report Competition,
organized by the League of American Communications Professionals, our 2009 Annual Report came
first in the “Equipment, Machinery and Instruments”
category and ranked 55th overall out of a 4,000-plus
field of entrants. Finally, our 2009 Annual Report
featured in the 13th edition of “Beispielhafte Geschäftsberichte” [Exemplary Annual Reports]. From
a selection of over 1,000 annual reports, it was included in the top 100 for its success in the compelling visual presentation of financial information.
Wacker Neuson’s “Capital Market Day” at
world’s largest construction equipment trade
fair
In April 2010, over 415,000 visitors from more than
200 countries attended bauma 2010 – the world’s
largest construction equipment trade fair held in
Munich. There was an upbeat mood at the event,
suggesting that the worst of the economic downturn
in Europe is over. As such, bauma 2010 marked a
turnaround for the entire sector.
Meanwhile, in a bid to demonstrate the company’s
strong performance and innovative drive to the
financial market, the Executive Board and Investor
Relations team hosted a “Capital Market Day” event
for a sizeable group of analysts and investors on
April 19, 2010. The demo show and a tour around
the stand gave participants useful insights into the
innovations that underpin the company’s strong
competitive position. Important investment issues
and questions from investors were addressed
during follow-up talks. And, to round it all off, our
bravest guests even had the chance to try out some
of our machinery for themselves.
Analysts focusing on small and mid caps
Our stock has attracted the attention of yet more
analysts, with 12 financial institutions now regularly
studying the movements of Wacker Neuson’s share
price. The latest addition was Unicredit Bank in
February 2011. At the beginning of March 2011, the
mean target price was EUR 12.87 per share. The
highest recommendation was EUR 15.00 and the
lowest EUR 10.80. Only three analysts made a “sell”
recommendation.
Wacker Neuson took the opportunity to unveil its
broad portfolio of light and compact equipment,
ranging from handheld rebar tiers to 14-ton excavators, providing end-to-end support for the widest
range of construction process flows. The demo
shows proved to be particularly popular. The spec-
tator stands around the 1,000 m² demo site were full
of visitors who had come to see the excavator, wheel
loader and dumper drivers put the machines through
their paces.
On solid ground
for future growth
Wacker Neuson SE
Preussenstrasse 41
80809 Munich
Germany
Tel. + 49 - (0)89 - 354 02 - 0
Fax + 49 - (0)89 - 354 02 - 390
0988198|04-2010|Layout KC|Print Kriechbaumer
Annual Report 2009
Awards for Wacker Neuson’s 2009 Annual Report
“Capital Market Day” at bauma 2010 in Munich (April 2010)
Current analyst recommendations on Wacker Neuson share
Name of bank
Target price in €
Buy
Hold
Sell
Date
Deutsche Bank
14.00
Feb. 14, 2011
UniCredit Bank AG
15.00
Feb. 1, 2011
Reuschel & Co. Privatbankiers
12.50
DZ Bank
13.50
BHF Bank
13.60
UBS Investment Bank
13.00
Mar. 9, 2011
Commerzbank
11.50
Nov. 26, 2010
M.M.Warburg
12.50
Feb. 14, 2011
Berenberg Bank
14.70
Cheuvreux
12.00
Goldman Sachs
11.30
Bank of America Merrill Lynch
10.80
Aug. 13, 2010
1
Mar. 3, 2011
Oct. 29, 2010
2
Feb. 15, 2011
Feb. 14, 2011
3
Dec. 10, 2010
Feb. 25, 2011
3
Recommendation: Accumulate
2
Recommendation: Overweight
3
Recommendation: Underperform
as of March 15, 2011
1
The analysts’ positive evaluations are based on the
following opportunities in particular:
JJ Gains in market share in the US market with
compact equipment
JJ Stimulation of demand through rental chains
JJ Strategic alliance with Caterpillar for mini
excavators
JJ Expansion of agricultural machinery portfolio
The possible risks are identified as general economic
risks, currency risks, raw materials risks and price
pressure, all of which could affect the entire sector.
Historic overview of analyst recommendations on Wacker Neuson share
25
17
17
14
14
14
14
30
44
33
44
56
100
30
18
36
30
30
40
20
20
40
40
40
40
40
44
67
40
30
30
30
30
40
40
67
100
75
25
20
33
78
100
71
71
56
67
56
33
11
33
22
22
11
45
40
42
22
07/07 09/07 11/07 01/08 03/08 05/08 07/08 09/08 11/08 01/09 03/09 05/09 07/09 09/09 11/09 01/10 03/10 05/10 07/10 09/10 11/10 01/11 03/11
% Buy
% Hold
% Sell
41
To our Shareholders
42
Group Structure
Wacker Neuson SE (Consolidation structure)
Europe (all 100 %)
Americas (all 100 %)
Weidemann GmbH,
Wacker Neuson (Pty) Ltd,
Wacker Neuson Ltd.,
Diemelsee-Flechtdorf,
Florida (near Johannesburg),
Waltham Cross (near London),
Germany
South Africa
Great Britain
Wacker Neuson GmbH,
Wacker Neuson srl con socio unico,
Wacker Neuson S.A.S.,
Vienna,
San Giorgio di Piano
Brie-Comte-Robert (near Paris),
Austria
(near Bologna), Italy
France
Wacker Neuson s.r.o.,
Wacker Neuson AG,
Wacker Neuson S.A.,
Volketswil (near Zurich),
Torrejón de Ardoz (near Madrid),
Prague,
Switzerland
Spain
Czech Republic
Wacker Neuson Máquinas Ltda.,
Jundiaí (near São Paulo), Brazil
Wacker Neuson Ltda.,
Huechuraba (near Santiago), Chile
Wacker Neuson Ltd.,
Mississauga (near Toronto), Canada
Drillfix AG,
Wacker Neuson A/S,
Wacker Neuson Sp. z o.o.,
Volketswil (near Zurich),
Karlslunde,
Jawczyce (near Warsaw),
Switzerland
Denmark
Poland
Wacker Neuson B.V.,
Wacker Neuson AS,
Wacker Neuson Kft,
Amersfoort,
Hagan (near Oslo),
Törökbálint (near Budapest),
Menomonee Falls
Netherlands
Norway
Hungary
(near Milwaukee), USA
Wacker Neuson Makina Ltd. Şti.,
Wacker Neuson AB,
Wacker Neuson GmbH,
Küçükbakkalköy (near Istanbul),
Södra Sandby (near Malmö),
Moskau,
Turkey
Sweden
Russia
Wacker Neuson Oy, i.L.,
Wacker Neuson Beteiligungs GmbH,
Kerava (near Helsinki),
Leonding (near Linz),
Finland1
Austria
Wacker Neuson S.A. de C.V.,
Mexico City, Mexico
Wacker Neuson Corporation,
Asia (all 100 %)
Wacker Neuson Manila, Inc.,
Dasmariñas (near Manila), Philippines
Wacker Neuson Pty Ltd,
100 %
98%
Wacker Neuson Linz GmbH,
Wacker Neuson Finance
Leonding (near Linz),
Immorent GmbH,
Austria
Leonding (near Linz), Austria
100 %
95 %
Wacker Neuson Limited,
Auckland, New Zealand 2
Wacker Neuson Rhymney Ltd.,
Kramer-Werke GmbH,
Tredegar,
Pfullendorf,
Great Britain
Springvale (near Melbourne), Australia
Samutprakarn (near Bangkok),
Thailand
Germany
1
Wacker Neuson Equipment Private Ltd.,
Bangalore, India
100 %
STG Stahl und
Maschinenbautechnik
Gutmadingen GmbH,
Geisingen, Germany 1
1
Operations ceased.
2
Affiliate is set to be closed.
95 %
PADEM GrundstücksVermietungsgesellschaft
mbH & Co.
Objekt Gutmadingen KG,
Düsseldorf, Germany
100 %
100 %
Wacker Neuson
Wacker Neuson
Grundbesitz
Grundbesitz
Hongkong, China
100 %
GmbH & Co. KG,
Verwaltungs GmbH,
Wacker Neuson Machinery Trading
Pfullendorf, Germany
Pfullendorf, Germany
(Shenzhen) Ltd. Co., Shenzhen, China
December 31, 2010
Contents Combined Management Report
43
Contents Combined Management Report
70
44
Research and development
70
II. General background
46
Production and logistics
72
Overall economic trends
46
Sustainability and quality
73
Purchasing
75
Overview of construction and
agricultural industries
47
Human resources
75
General legal framework
48
Sales, customers and marketing
77
Competitive position
49
IX. Risk report
79
III. Business trends in 2010
50
X. Information in accordance with Section
IV. Earnings, financial position and net assets
52
315 (4) and Section 289 (4) HGB as well as the
Earnings
52
Executive Board report in accordance with
Section 176 (1) Sentence 1 AktG
Finances
55
Assets
60
General overview of economic situation
62
84
XI. Declaration on corporate governance
according to section 289a HGB
89
V. Earnings, financial position and net assets
of Wacker Neuson SE (condensed version
according to HGB)
XII. Remuneration framework
89
XIII. Supplementary report
90
63
VI. Segment reporting by region
65
Europe
65
XIV. Opportunities and outlook
91
Americas
67
Overall economic outlook
91
Asia
67
Outlook for construction and
VII. Segment reporting by business segment
68
Opportunities and outlook for the
Light equipment
68
future development of the Wacker Neuson Group
94
Compact equipment
68
Development outlook by region
95
Services
70
Development outlook by business segment
96
Group forecast
96
Summary forecast
98
agricultural industries
The graphics and tables below are not part of the Consolidated Management Report and are provided for information purposes only. The following
print version of the Consolidated Management Report does not exactly correspond to the audited Consolidation Management Report. Further
informations on key figures definition and calculation methods applied in the report are disclosed in the glossaries at the end of this annual report.
92
VIII. Other factors that impacted on results
I. The Wacker Neuson Group
44
of Wacker Neuson SE and its Group
for fiscal year 2010
The Management Report of Wacker Neuson SE has been
broad product portfolio optimizes and supports its customers’
combined with the Group Management Report according
construction processes around the globe. The Group is the
to section 315 (3) of the German Commercial Code (HGB).
partner of choice among professional users in mainstream
The risks and opportunities facing Wacker Neuson SE, in its
construction, gardening, landscaping, agriculture, municipal
capacity as parent company, cannot be differentiated from
works, recycling and various branches of industry, includ-
those facing the Group. Unless otherwise stated, the informa-
ing the construction machine rental sector. The construction
tion contained in this Management Report refers to the Group.
industry is the Group’s largest target market, accounting for
The information relating specifically to the parent company is
around 84 percent of machine sales. The Group offers over
presented in a separate section.
300 product categories together with rental, spare parts and
repair services.
We have prepared the Consolidated Wacker Neuson Financial Statements in accordance with the International Financial
Wacker Neuson has approximately 180 locations in over
Reporting Standards (IFRS) as applicable in the EU in addi-
30 countries, resulting in a dense consulting and
tion to the provisions of HGB set forth in section 315a (1). The
service/support network.
Annual Financial Statements of Wacker Neuson SE have been
complement our broad offering of high-quality products
prepared in accordance with the provisions of HGB and the
with an extensive and reliable range of services.
fig. p. 42
Our main aim is to
German Stock Corporation Act (AktG).
The Wacker Neuson Group is divided into three business
segments:
I. The Wacker Neuson Group
JJ
Light equipment up to 3 tons with the following business
fields:
JJ
A global leader in light and compact equipment
JJ
Concrete technology
JJ
International sales, consulting and support/service
JJ
network backed by outstanding logistics know-how
JJ
Demolition
JJ
Utility
JJ
Management focus on long-term increase in company
value
The Wacker Neuson Group develops, manufactures and dis-
JJ
Compact equipment up to 14 tons
JJ
Services with two business fields:
JJ
After-market (repair and maintenance)
JJ
Rental (Central and Eastern Europe)
tributes high-quality light and compact equipment. Comple-
The majority of products from our light and compact equip-
mented by an extensive service offering, Wacker Neuson’s
ment segments are marketed under the “Wacker Neuson”
The Wacker Neuson Group
brand. In the Europe region, we also distribute all-wheel-drive
Please refer to the section entitled “General information on
wheel loaders and telescopic handlers from the compact
accounting standards” in the Notes for detailed information on
equipment business segment under the “Kramer Allrad” brand,
the legal structure.
Group products for the construction industry are branded
Corporate governance and value-based company
management
“Wacker Neuson”.
The controlling department of the parent company Wacker
Neuson SE is responsible for the Group’s internal controlling
Organizational and legal structure
instruments. It steers and monitors deviations between ‘to
Wacker Neuson SE is a European company with its head-
be’ and ‘as is’ figures, primarily based on the development
quarters in Munich. It is registered in the German Register of
of revenue and profit before interest and tax (EBIT) margins
Companies (Handelsregister) at the Munich Magistrate’s Court
(EBIT to revenue ratio) reported by affiliates. It also tracks the
under HRB 177839. The company’s shares have been listed
progress of operative measures and prepares the consolidated
since May 2007.
monthly reports for the Executive Board. We continually adapt
our controlling instruments to reflect developments both within
The Consolidated Financial Statements of Wacker Neuson SE
and beyond company walls.
are prepared in accordance with the International Financial
Reporting Standards (IFRS). Forty-one companies, including
Project decisions made in response to changing market and
the parent company, are fully consolidated in these state-
customer requirements are taken by various committees rather
ments. Furthermore, we have direct or indirect majority hold-
than specific individuals. These may include members of the
ings in five smaller companies which do not have a significant
Executive Board, representatives from company management
impact on Wacker Neuson’s business either individually or
at our affiliates, plus senior employees from research and de-
collectively and are therefore not included in the consolidation
velopment, product management, quality management, sales
structure.
and service and strategic procurement.
Wacker Neuson SE is the largest operating company in the
Our management strategy is geared toward generating a
Wacker Neuson Group and thus assumes a central role in the
lasting increase in company value. We have invested heav-
Group. As the parent company, it holds the shares in the other
ily over the past few years to achieve and maintain long-term
members of the Wacker Neuson Group directly or indirectly
growth. Revenue, profit before interest, tax, depreciation and
and is represented in Germany through approximately 70
amortization (EBITDA) and the corresponding EBITDA margin
controlled sales and service stations. The parent company’s
(EBITDA as a percentage of revenue) are our key performance
Executive Board is responsible for managing the Group. As
indicators.
a rule, the executive bodies of the affiliates report directly to
Group management.
Other key performance benchmarks and targets are gross
profit margin, EBIT margin (ratio of profit before interest and
Our segment reporting is based on regions (Europe, Americas
tax to revenue), and the working capital to revenue ratio (return
and Asia). We also break revenue down according to business
on working capital to generate revenue).
segments (light equipment, compact equipment and services).
We also analyze and steer our dividend payment policy,
With the exception of our affiliates Kramer-Werke GmbH and
financing structure and return on capital employed. Our key
Weidemann GmbH, which have retained their original names,
indicators here are capital employed (average invested capital)
all significant operating affiliates now trade under the common
and return on capital employed (ROCE I and II, return on
name of “Wacker Neuson”.
capital before and after tax). ROCE indicates the efficiency and
profit-generating ability of our capital expenditure. We also
p. 106
as well as articulated wheel loaders for the agricultural industry
under the “Weidemann” brand. In the rest of the world, all
45
46
Performance indicators
As a %
2010
2009
2008
Pro-forma 2007
Gross profit margin
33.1
30.8
33.7
35.4
EBITDA margin
10.3
4.6 (6.2)
11.6
16.1
6.7
11.5
EBIT margin
4.8
Working capital / revenue
1
- 18.9 (- 0.5)1,2
35.5
36.5
34.9
–
ROCE I
6.9
- 2.42
10.8
23.1
ROCE II
5.2
- 1.92
7.4
15.8
ROE
4.2
8.3
Equity ratio (before minority interests)
Gearing
3.0
- 1.4
80.6
81.2
77.1
–
1.7
- 3.1
6.5
–
2,3
Adjusted to discount restructuring costs in 2009.
Adjusted to discount write-downs on intangible assets and restructuring costs in 2009.
3
1
2
use ROE (return on equity) to measure how well equity is used.
II. General background
The balance sheet performance indicators for the Group also
generally include equity ratio. These indicators are described
in more detail in the sections “Earnings” and “Net assets”. To
Overall economic trends
effectively manage financing, the Group monitors a number
of indicators including gearing (net financial debt in relation to
equity before minority interests) and net financial debt.
Please refer to section Earnings for an explanation of the
JJ
Economic buoyancy fuels upturn
JJ
Export-heavy countries benefit most
JJ
Record growth for Germany
adjusted figures in 2009 on page 54, and to the Opportunities
and outlook chapter for an explanation of the targets defined
for each indicator.
p. 98
The global economy has largely recovered from the financial
and economic crisis. Initially, the economic drivers for 2010
were underestimated. In effect, the global economy recov-
Alongside these financial performance indicators, we also
ered faster overall than originally expected – thanks in part
monitor key early indicators on the operational side. Important
to momentum from fast-growing countries such as India and
indicators for the construction business include future invest-
China. Global trade, for example, was expected to expand by
ment plans in the construction equipment and construction
just 5 percent in 2010. Experts have now reported growth of
materials industries, the number of building permits as well
12 percent.
as the development of real estate prices, especially in the US.
Operative early indicators for the European agricultural industry
The economy in the US was plagued by structural problems
currently focus on subsidy programs for agricultural land-
such as high levels of private debt, high unemployment, a
holders as well as the development of milk, food and animal
severely contracted real estate sector and continued weak
feed prices. We continually revise the controlling instruments
performance on financial markets. Nevertheless, the US econ-
in place at Wacker Neuson SE and align them with global
omy also developed positively in 2010. Government spend-
developments and trends.
ing and corporate investment showed a clear rise. National
economies in Latin America and Canada also experienced
The indicators are described in more detail in the financial glossary
from p. 152.
General background
clear growth. Many emerging economies1 returned relatively
47
Real GDP
2010
2009
World
4.7
- 0.6
The European economy also expanded by 1.8 percent in 2010,
EU 27
1.8
- 4.3
although financing difficulties slowed development in numer-
Germany
3.7
- 4.7
ous EU countries and subsequently the European Union as a
USA
2.8
- 2.6
whole. European rescue packages stabilized some countries,
Latin America
5.9
- 2.1
although current budgetary deficits still pose risks. Many coun-
China and Hong Kong
9.7
8.2
Russia
4.4
- 7.9
growth driver.
tries, Germany included, have started to introduce cost-cutting
measures, some of which are quite severe.
change from previous year as a %
Source: ifo Institute, Eurostat, OECD, German Federal Statistical Office, 2010:
ifo Institute forecast
Overall, however, Germany enjoyed a unique position. With
record economic growth of 3.7 percent, the country capitalized
heavily on the upswing thank to its high share of exports and
high degree of specialization. The euro devalued 5.3 percent
Overview of construction and agricultural
industries
(annual average) against the US dollar during the course of
2010. This, and the devaluation of the euro against other key
JJ
trade partner currencies also helped fuel growth. Exports to
Construction and agricultural markets experience
partial revival
other countries in the European Monetary Union – Germany’s
main sales market – rose at a below-average rate last year, but
JJ
Emerging markets drive growth
this was offset by a stronger than anticipated rise in exports to
JJ
Major differences between individual countries
the US and growth markets in Asia. The low interest rate also
stimulated investments while low unemployment bolstered
The global construction industry benefitted from the economic
consumer spending. Compared with the annual averages
upswing although the pace of revival varied from one region
of other key currencies, the euro fell 3.7 percent against the
to another. In 2010, global construction investment fell by
British pound (GBP), 9.2 percent against the Swiss franc (CHF)
just 0.7 percent, compared with a 7.0 percent slump in 2009.
and as much as 11.7 percent against the Japanese yen (JPY).
Recovery was particularly strong in Asia and South America,
where the construction industry expanded by around 5 per-
The swift pace of economic recovery pushed up prices of raw
cent last year.
materials in general, and of steel in particular. Please refer to the
“Purchasing” section for further information on this.
In contrast, construction in North America and Europe again
experienced a downturn. The US property and mortgage mar-
1
Dow Jones list as of May 2010, Dow Jones classified the following 35 countries
as emerging markets: 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
ket showed no signs of recovery in 2010. Demand for residential
property remained at a low level, although state economic
action plans countered this negative trend somewhat.
Performance key currencies against the euro
(Annual average rates)
Change
1 euro equals
US dollar (USD)
2010
2009
as a %
1.3213
1.3955
- 5.3
British pound (GBP)
0.8575
0.8907
- 3.7
Swiss franc (CHF)
1.3693
1.5089
- 9.2
115.2189
130.4779
- 11.7
Japanese yen (JPY)
Source: Notes to the Consolidated Financial Statements, from p. 110.
quickly to their growth paths. China in particular proved to be a
48
Construction industry trends differed greatly throughout
Agricultural incomes stabilizes
Europe. Finland, Poland, Germany, the UK, Sweden and
In the first half of 2010, the agricultural climate in Western
Switzerland, for example, experienced strong growth. Over-
Europe was still dominated by the effects of the economic and
all, however, European construction investments contracted
financial crisis. At the beginning of the period under review,
3.3 percent (previous year: minus 8.8 percent).
producer prices were still below average. In the fourth quarter,
however, prices for milk and grain were on the rise. This had
The German construction industry is the largest in Europe.
a positive impact on landholders’ incomes, which in turn
According to Euroconstruct, construction investments
raised prospects of investment in agricultural equipment and
here rose 3.4 percent. Underground and public overground
machines.
construction, both of which are closely linked to commercial
construction, showed strong performance. Low interest rates
On the global market for agricultural raw materials, drought
stimulated growth in residential construction. According to
and forest fires in Russia, coupled with arid conditions in
experts at VDMA (German Engineering Federation), revenue
Australia, had the effect of pushing up producer prices. How-
from earth-moving equipment and highway construction
ever, the markets for agricultural raw materials also mirrored
equipment was up 25 and 38 percent respectively. The posi-
financial speculations and the resulting price distortions on the
tive mood in the construction sector was bolstered by the
global market. Discussions are currently being held regarding
healthy overall economic climate and by the German Govern-
more stringent regulation of raw materials markets.
ment’s economic action plan – although this initially got off
to a slow start and in some cases merely resulted in existing
Even though the European livestock sector – a key target mar-
projects being put on hold in favor of new projects that quali-
ket for Wacker Neuson – developed positively overall in 2010,
fied for financing aid.
low landholder income and, at times, stringent bank lending policies slowed growth, especially in Eastern European
markets.
Construction and economic growth 2010
Finland
4.4
Poland
4.0
Germany
General legal framework
3.4
United Kingdom
3.1
Sweden
2.4
Switzerland
JJ
Protection for users and the environment
JJ
Compliance with new emissions standards in compact
equipment segment
2.4
Belgium
- 0.6
Austria
JJ
- 3.0
Norway
Ongoing integration of new requirements in internal
process flows
- 3.1
EC-19
- 3.3
Hungary
As a global manufacturer and provider of light and compact
- 3.8
France
equipment, Wacker Neuson has to observe numerous national
and international statutory guidelines governing environmen-
- 4.2
Italy
tal and user protection. These include provisions regulating
- 4.8
Slovakia
exhaust gas emissions and ergonomics as well as noise and
- 6.3
Denmark
vibration-induced impact. Europe, in particular, has a large
- 7.2
Portugal
number of directives and regulations in this area.
- 7.5
The Netherlands
- 9.4
Czech Republic
At Wacker Neuson, we therefore continuously review and
- 10.0
Spain
adapt our product portfolio to ensure compliance with new
- 16.1
Ireland
- 28.3
requirements and various harmonized standards and norms.
We integrate new regulations as promptly as possible in our
processes.
- 30
- 25
GDP (%)
- 20
- 15
- 10
-5
Construction (%)
Source: Euroconstruct (70th conference), November 2010
0
5
Exhaust emissions standards for light and compact
equipment
Statutory exhaust emissions regulations have a major impact
on the sale of compact equipment. In 2010, attention focused
regulations in the US (EPA) and Europe (COM). As of Janu-
Our competitive edge – the world’s largest light and
compact equipment offering
ary 1, 2011, diesel engines in non-road mobile machinery – in
We will also continue to focus exclusively on light and compact
other words, construction equipment, forklifts and agricultural
equipment in the future – a position that sets us apart from the
machines – must comply with these new emissions levels. The
DIY sector and manufacturers of heavier machines. A broad
specific compliance dates vary depending on the engine power
light and compact equipment portfolio, coupled with a premi-
and individual market requirements. The first wave of compact
um service offering, clearly differentiates us from the competi-
equipment products from the Wacker Neuson Group will be
tion. Our research shows that the majority of our competitors
affected by the new regulations as of 2012. This refers to equip-
restrict their product portfolios to either light equipment or
ment in the power class between 56 and 130 kW – accounting
compact equipment or a combination of compact and heavy
for around 30 percent of our compact offering. Further models
equipment in excess of 15 tons.
on preparations for compliance with the new TIER IV emissions
will be adapted by 2015 to comply with the new regulations.
New components such as engines, cooling and exhaust after-
As a mid-sized company, we back up our high product and
treatment systems – which Wacker Neuson sources from third-
service standards with state-of-the-art production facilities,
party companies – will have to be modified. Our expenses for
in-depth development and manufacturing know-how and an
research and development in 2010 were up as a result of prepa-
efficient sales network. Built on this solid foundation, many of
rations for the new emissions regulations. By and large, Wacker
our products have established an excellent market position
Neuson is less affected by the new rules than manufacturers of
across the globe.
larger machines as the stringency of the regulations varies as a
function of the size and power of the relevant engine.
The global construction equipment market is highly fragmented. There are also few official statistics. Hence it is not
Nevertheless, we still had to adapt a range of light equipment
possible to give a detailed and meaningful overview of market
products to comply with emissions regulations in the US.
shares. Similarly, our competitive landscape is very hetero-
Large vibratory plates and smaller diesel-powered vibra-
geneous. In certain segments, we compete against global
tory plates, for example, had to be certified for compliance
enterprises with a broad spectrum of compact and heavy
with forthcoming EPA4 regulations. We also adapted mobile
equipment such as Atlas Copco and Volvo. We also compete
generators in line with the new TIER IV exhaust emissions
with Takeuchi, Kubota and Yanmar, Japanese manufacturers
standard. Further compliance-related modifications will be
specialized in compact equipment. In the light equipment sec-
carried out between now and 2012. The Group had to develop
tor in particular, we also face a variety of competitors operating
a new version of the DPU 130 for the Swiss market in order
only in specific local markets. Light equipment players in this
avoid additional regulations on soot particle emissions that
category include Bomag, Weber, Ammann, Multiquip, Mikasa
are exclusive to Switzerland and apply to engines in the 18 kW
and Dynapac.
power class and above. Our new gasoline cut-off saws were
designed from the ground up to comply with all relevant regu-
Since the acquisition of the Weidemann Group in fiscal 2005,
lations worldwide.
the Wacker Neuson Group has also been active in the agricultural machinery market. Weidemann GmbH enjoys a leading
Beyond that, there were no legislative changes that had a
position for articulated wheel loaders in the Central European
significant impact on our business activities.
agricultural market. Our Kramer-Werke GmbH affiliate also
develops and manufactures telescopic handlers for the agricultural industry. These are distributed by CLAAS Global Sales
Competitive position
GmbH, a leading German agricultural machinery supplier, under
the CLAAS brand.
JJ
Largest portfolio of light and compact equipment
worldwide
JJ
Leading global manufacturer
JJ
Alliance with Caterpillar
Growing market reach
Over the past fiscal year, the Wacker Neuson Group seized
available opportunities and performed well at both national
and international level. This success was partly fuelled by the
fact that we have a much wider portfolio since the merger. Key
The Wacker Neuson Group is an innovative company with
activities included the launch of our compact equipment port-
good growth prospects and a strong balance sheet. The Group
folio via the existing light equipment sales network in North
aims to expand further at international level by winning new
and South America, South Africa, the Middle East and several
market shares and tapping new markets.
countries in the European Union. Strengths that worked to
49
General background
50
our benefit included our innovative drive, outstanding product
All business segments helped fuel this strong growth. Demand
quality, high rental and service standards, reliable spare parts
was strongest in the US, although the Group also performed
business and streamlined business processes.
well in South America, Central Europe and South Africa.
Alliances grow in importance
New sales in the light equipment segment were particularly
The economic crisis scarcely changed the heterogeneous com-
strong as construction companies upped investments in order
petitive landscape in which the Wacker Neuson Group operates.
to replace existing equipment. Continued high demand for light
The entire industry experienced a drop in revenue and earnings
equipment in the US was a key revenue driver here.
with some manufacturers recording a sharp decline. Manufacturers across the board reacted by cutting costs, closing
As the economy picked up, we also capitalized on sales syner-
production facilities, reducing headcount and looking for new
gies by utilizing our existing light equipment sales network to
financing solutions. However, a market shakeout as a result of
distribute our compact offering. Demand for compact equip-
insolvencies did not occur in 2010. Instead, companies increas-
ment in particular jumped during the second half of the year.
ingly focused on forging alliances, as did Manitou and Terex
The order backlog was up 350 percent on the previous year at
or JCB and Volvo. In January 2011, Finnish rental chain Cramo
the close of 2010. At the same time, customer order patterns
acquired German rental company Theisen. A common aim of
changed. Rising demand led to bottlenecks among suppliers,
such alliances and mergers is to utilize the sales channels of
which in turn extended delivery windows at Wacker Neuson.
the other partner for international expansion. The above-men-
Customers therefore placed orders earlier. Supply bottlenecks
tioned alliances have not changed Wacker Neuson’s position.
have since eased.
Most of the Group’s product groups continue to target fastgrowing markets.
The lean, cost-saving program that we implemented early on in
the crisis and continued over the past two years yielded long-
In June 2010, Wacker Neuson also entered into a 20-year stra-
term positive results during the period under review, enabling
tegic alliance with heavy equipment manufacturer Caterpillar
us to more than double our EBITDA margin to 10.3 percent
and now produces mini excavators weighing up to 3 tons for
(previous year: 4.6 percent) and achieve EBIT turnaround by
the company. Caterpillar will distribute these machines under
the middle of the year. The EBIT margin for the entire fiscal
its own brand via its global sales network, with the exception of
year was 4.8 percent. These results clearly show that adapting
Japan. The alliance will improve the competitive position of both
our cost structure during the crisis was the right move.
companies.
Quarterly comparison: Revenues for 2010 developed positively
in € million
III. Business trends in 2010
- 34%
- 16%
+ 9%
JJ
Strong revenue growth
250
JJ
Own forecast exceeded
200
JJ
Order situation remains strong
150
+ 31%
- 8%
+ 32%
+ 11%
+ 34%
100
General statement on business performance
Overall, business developed positively in 2010 and the Group
was well prepared for the upswing. Revenue and earnings
50
0
Q1
2007
2008
Q2
2009
2010
Q3
2010 vs. 2008
Q4
2010 vs. 2009
quickly reflected the positive effects of comprehensive economic recovery packages, project backlogs and the overall
revenue by 27.0 percent to EUR 757.9 million (previous year:
Comparison between actual trends and projected
performance
EUR 597.0 million).
In March 2010, the Executive Board issued a cautiously opti-
improvement in the economic climate. The Group increased
mistic forecast projecting revenue growth in excess of 5 percent and a return to net profit. At that time, there were still major
uncertainties surrounding the prospect of economic recovery,
especially in relation to the sustainability of the recovery.
Forecast exceeded
purchased a 160,000 m2 plot of land in nearby Hörsching. The
The light equipment segment had already experienced sig-
decision to build a new facility was made by the Executive
nificant growth during the first half of the year. Once this was
Board in December 2010. Through this investment, the Group
mirrored by rising demand for compact equipment, the Group
will be ideally positioned to meet further rises in demand for
raised its forecast for the year in August, predicting a revenue
compact equipment. The previous plant was rented. Once the
rise in excess of 10 percent compared with the prior-year figure
new facility is completed, the Group will own all of its produc-
and an EBITDA margin of at least 9 percent.
tion facilities.
Based on the healthy order situation in the compact equipment
Key resolutions at the 2010 AGM
segment in the fourth quarter, company management again
At the AGM held in Munich on May 28, 2010, the Executive
revised its forecast in October, this time raising its revenue
Board informed around 230 Wacker Neuson SE shareholders
projection to a 20 percent or more increase on the previous
of the developments in fiscal 2009. Based on a share capital
year and estimating an EBITDA margin of at least 10 percent.
of 70,140,000 eligible shares, 87.2 percent of shareholders
However, the Group even managed to exceed these figures. As
were present. In light of the 2009 drop in profit, the Executive
we outperformed expectations overall, we were able to make
Board and Supervisory Board proposed that no dividends be
additional targeted investments, with the result that capital
distributed for fiscal 2009 (2008: EUR 0.19 per share) and that
expenditure was slightly above forecast at year-end.
the retained earnings be carried forward. The AGM agreed this
proposal. Executive and Supervisory Board members’ actions
Healthy finances and assets
were approved for fiscal 2009.
As planned, we financed day-to-day operations with cash
flow from operating activities. Despite the planned increase
All shareholder representatives were reappointed to the
in investments during the period under review, the Group was
Supervisory Board. The employee representatives had been
almost debt-free at December 31, 2010, reporting net financial
reappointed to the Supervisory Board earlier by the SE Works
debt of just EUR 13.7 million and a gearing of only 1.7 percent
Council. There were therefore no changes to the composi-
(net financial debt as a percentage of equity before minority
tion of the Supervisory Board of Wacker Neuson SE in 2010.
interests). As production activity increased, so too did working
In the constituent meeting of the Supervisory Board follow-
capital. To ensure optimum delivery timeframes, we increased
ing the AGM, Mr. Hans Neunteufel was reelected Chairman
inventory. At 80.6 percent (previous year: 81.2 percent), our
and Dr. Ulrich Wacker Deputy Chairman. Mr. Helletzgruber
equity ratio before minority interests remains well above the
succeeded Dr. Kollmar as chairman of the audit committee,
industry average.
a position he had held for many years. On January 1, 2011,
Mr. Hans Haßlach was appointed to the Supervisory Board
Collaboration with Caterpillar
of Wacker Neuson SE as an employee representative. He
Wacker Neuson SE, Munich, and Caterpillar Inc., Peoria/USA,
has thus joined Mr. Elvis Schwarzmair, the company’s other
concluded a strategic alliance on June 24, 2010. The long-term
employee representative on the Supervisory Board. Mr. Hans
collaboration is set to run for 20 years. From 2011 onwards,
Haßlach took over from Mr. Herbert Santl, who stepped down
Wacker Neuson will be developing mini excavators weighing
from the position as he approached retirement age.
up to 3 tons exclusively for Caterpillar, initially at our Austrian
demand for smaller machines worldwide (with the exception
Active capital market communication and share
trends
of Japan) and allow the Wacker Neuson Group to significantly
Wacker Neuson increased its communication efforts to keep
increase production volumes in this product class and cut unit
capital market players continuously informed of Group develop-
costs accordingly. The customers of both partners are set
ments. The Executive Board kept stakeholders up to date on
to benefit from the alliance. Both partners aim to strengthen
current Group developments through a variety of channels
their individual competitive positions in the highly fragmented
including the AGM, investor conferences, national and interna-
market more quickly.
tional roadshows and a Capital Market Day. They also outlined
facility in Linz. The alliance will enable Caterpillar to meet
the Group’s strategy in numerous personal conversations.
Expansion of production capacity in Austria
In 2009, it was already clear that a rise in demand for compact
The share price developed positively over the course of the
equipment would push our plant in Linz – our Austria compe-
year. After starting the year off at EUR 8.49, it initially dropped
tence center for excavators, dumpers and skid steer loaders –
to EUR 7.63 on February 9, 2010. By the middle of the year,
to its capacity limits. Thus, in the same year, Wacker Neuson
it had reached EUR 9.72 and continued to rise, peaking at
51
Business trends in 2010
52
EUR 13.20 on November 5, 2010. At December 31, 2010, the
IV. Earnings, financial position and net assets
share price closed at EUR 13.00. Overall, the share outperformed the positive DAX and SDAX trends.
The report on earnings, financial position and net assets covers
Changes to company organization and structure
a total of 40 Group companies (previous year: 40) excluding the
Differences of opinion within the Supervisory Board were
parent company, Wacker Neuson SE.
resolved by mutual agreement during the first quarter of 2010.
Hans Neunteufel remains Chairman of the Wacker Neuson
The following figures include the effects of purchase price
Supervisory Board.
allocation (PPA) resulting from the merger between the former
Wacker Construction Equipment AG and Neuson Kramer Bau-
The changes to company management as outlined in the fol-
maschinen AG in fall 2007.
lowing occurred during the period under review. On September 15, Dr.-Ing. Georg Sick stepped down from his position as
CEO and President of Wacker Neuson SE at his own request
Earnings
to prepare for a new position. The remaining members of the
Executive Board remain committed to the company in the long
term. With the approval of the Supervisory Board, the Executive
Board appointed Mr. Richard Mayer (Executive Board member responsible for light equipment) temporary speaker of the
JJ
Revenue and profit develop positively
JJ
SG&A and R&D expenses kept low
JJ
Optimized cost structure yields positive results
Executive Board until an external successor to the position of
CEO has been found.
The Wacker Neuson Group benefited worldwide from the
economic upswing as customers showed increasing readiness
The following legal changes were made to the Group during
to invest in light and compact equipment. Combined with the
the period under review. The Group’s sales affiliates in Finland
reorganization measures implemented across the Group in the
and New Zealand were closed. Cooperations with established
previous year, this rise in demand enabled us to outpace the
local sales partners, however, mean that Wacker Neuson
global economic recovery.
products and services retain access to these markets and
the Group can reduce its administrative costs. Please refer to
Group sales rose 27.0 percent to EUR 757.9 million (previ-
the Notes for a description of further changes to the Group’s
ous year: EUR 597.0 million). Adjusted to discount currency
participating interests that affected the consolidation structure.
fluctuations, this corresponds to an increase of 22.5 percent.
The fourth quarter proved particularly dynamic. With revenue
p. 109
of EUR 206.3 million, it outstripped the same quarter in the
To improve and synchronize process flows across the Wacker
previous year by 34 percent, underscoring the lasting nature
Neuson Group, we continued to bundle Group-wide functions
of the recovery. The fourth quarter thus accounted for around
such as finance and accounting, treasury, IT, HR and market-
27.2 percent of overall revenue for 2010, significantly more than
ing. On January 1, 2011, we migrated our entire ERP system
its “usual” share. In previous years, the fourth quarter contrib-
to an SAP platform at the parent company Wacker Neuson SE
uted between 22 and 26 percent of annual revenue.
and at Wacker Neuson Corporation, our wholly owned US
affiliate. On January 1, 2011, Wacker Neuson Corporation
The cost of sales rose 22.8 percent to EUR 506.9 million
was converted from a parent to a holding company and now
(previous year: EUR 412.9 million) due to a rise in production
manages separate legal entities for production, logistics and
volumes. Pressure on product prices did not increase relative to
sales activities. A similar structural change is planned for the
the prior-year period. However, the increase in material costs,
parent company Wacker Neuson SE. For further information,
above all for steel and steel components, had an impact on cost
please refer to section XIII. “Events/transactions of particular
of sales for compact equipment especially in the fourth quarter.
importance since the reporting date”.
This increase could not be passed on to the market during Q4.
p. 90
However, the Group did increase prices in January 2011.
Earnings, financial position and net assets
Gross profit amounted to EUR 251.0 million (previous year:
Selling expenses alone were up 6.5 percent to EUR 143.9
EUR 184.1 million), with the gross profit margin rising to
million (previous year: EUR 135.1 million) due to the increase
33.1 percent (previous year: 30.8 percent).
1
53
in revenue, global expansion of sales channels as well as
As anticipated,
the gross profit margin in the fourth quarter (31.5 percent) was
further go-to-market measures in countries such as Sweden,
down on the third quarter margin (35.7 percent). This was due to
Australia, North America and South America.
Group’s product mix, with compact equipment accounting for a
R&D costs rose 9.1 percent to EUR 22.3 million (previous year:
greater share than light equipment. This was further compound-
EUR 20.5 million). A total of EUR 4.4 million in development
ed by seasonal fluctuations that traditionally make the fourth
costs was capitalized by all manufacturing companies in 2010
quarter a quiet period for our profitable services segment.
(previous year: EUR 4.5 million). As a result of the increase in
revenue, the R&D margin dropped to 2.9 percent (previous
Tight control over SG&A and R&D expenses during
the upswing
year: 3.4 percent).
As business picked up in 2010, we were initially able to make
General administrative costs amounted to EUR 52.2 million
use of excess capacities without having to make significant
(previous year: EUR 47.7 million). The administrative cost ratio
changes to our cost structure which we had streamlined
totaled 6.9 percent (previous year: 8.0 percent).
the previous year in response to the crisis. Although flexible
structures within the Group helped here, this achievement
Other operating income fell to EUR 7.5 million (previous year:
was primarily due to the high levels of qualification among our
EUR 12.2 million). Other operating expenses amounted to
employees. We continued to keep a tight rein on costs. Total
EUR 3.4 million (previous year: EUR 106.2 million). One-off write-
sales, general and administrative (SG&A) and R&D expenses
downs, mainly on goodwill, in the amount of EUR 100.3 million
were up 7.5 percent to EUR 218.4 million (previous year:
were the main factors behind the previous year’s figure.
EUR 203.2 million). Considering the strong rise in revenue, however, we were able to keep these costs in check. Expressed as
Earnings reflect usual seasonal fluctuations
a percentage of revenue, total SG&A and R&D expenses were
Earnings in 2009 were clearly affected by two one-off items.
down to 28.8 percent (previous year: 34.0 percent).
These were a one-off, non-cash write-down on intangible
1 Rise in Group revenue and gross profit
In the years from 2005 to 2008, Wacker Neuson
Revenue and margins from 2005 to 2010
in € million
979.5
1,000
870.3
757.9
742.1
800
619.3
600
597.0
in %
increased revenue by 20 percent on average3. The sharp
25
drop in revenue in 2009 resulted in the company reporting an operating loss for the first time in its history. By
20
mid-2010, the company had returned to the profit zone
and posted a double-digit EBITDA margin for the entire
15
503.2
year. Wacker Neuson is aiming for an EBITDA margin in
400
10
200
5
0
0
excess of 15.0 percent in the medium to long-term.
1
2005
Revenue
2006
2007
2007 2008
pro-forma1
EBITDA margin
20092
EBIT margin
2
2010
2009 profit margins discounting goodwill impairment and restructuring costs
(p. 54 and 60).
3
Net earnings margin
Pro-forma figures as if Neuson Kramer subgroup had been consolidated in
full in fiscal 2007 (consolidation as of October 1, 2007).
Compound annual growth rate (CAGR) over a period of three years.
the above-mentioned impact of cost of sales plus a shift in the
54
Quarter-on-quarter comparison of revenue and earnings for 2009 and 2010
Q1 vs. Q4
2009 revenue in € million
EBITDA margin in %
2010 revenue in € million
EBITDA margin in %
Q1
prev. year
Q2
Q2 vs. Q1
Q3
Q3 vs. Q2
Q4
Q4 vs. Q3
Total year
137.3
- 26.1%
156.5
14.0%
149.0
- 4.8%
154.2
3.4%
597.0
- 9.0
150.3
8.6
- 2.5%
205.3
10.5
36.6%
196.0
4.6
6.8
- 4.5%
206.3
757.9
5.2%
2.4
13.2
12.7
10.7
10.3
9
31
32
34
27
Revenue increase compared
with prior-year period
assets (EUR 100.3 million) which was largely related to the
EUR -3.2 million). Purchase price allocation (PPA) had the
goodwill attributable to the Neuson Kramer subgroup and
effect of reducing EBIT by EUR 3.5 million. The effects of
restructuring costs amounting to EUR 9.6 million. For improved
PPA will continue to have a significant impact until the end
comparability, the previous year’s figures have also been
of 2013, albeit to a lesser and lesser extent. The EBIT margin
adjusted in the following comparison.
revived to 4.8 percent (previous year: -18.9 percent; adjusted
-0.5 percent).
Earnings quickly improved, bolstered by the rise in revenue plus
long-term cost savings from previous years. The Group had
Natural hedging protects the Group against exchange rate
already returned to the profit zone by the middle of the year.
fluctuations. In 2010, the dollar increased slightly on average
against the euro (EUR 1 = USD 1.3213; previous year:
Profit before interest, tax, depreciation and amortization
EUR 1 = USD 1.3955).
(EBITDA) rose from EUR 27.2 million (adjusted: EUR 36.7 million)
to EUR 77.8 million. The EBITDA margin came to 10.3 percent
The financial result amounted to EUR -4.0 million
(previous year: 4.6 percent; adjusted: 6.2 percent). Deprecia-
(previous year: EUR -2.3 million).
tion and amortization amounted to EUR 41.1 million (previous
year: EUR 140.3 million; adjusted: EUR 40.0 million). In the
Profit before tax (EBT) increased to EUR 32.7 million
fourth quarter, the EBITDA margin was 10.7 percent below the
(previous year: -115.5 million; adjusted: EUR -5.6 million).
third-quarter margin (12.7 percent) due to seasonal fluctuations. As mentioned above, the cost of sales for the compact
Tax expenditure totaled EUR 8.1 million (previous year: tax
equipment segment also dampened Q4 figures.
revenue of EUR 5.5 million). The tax revenue in 2009 primarily
resulted from the reversal of deferred tax liabilities in combi-
Profit before interest and tax (EBIT) increased to
nation with write-downs on the Neuson brand value plus the
EUR 36.7 million (previous year: EUR -113.1 million; adjusted:
capitalization of tax loss carry-forwards. The tax rate was
Earnings: One-off expenses in 2009
2009
2009 Adjusted
Group income
Group income
in € million
2010
statement
statement1
EBITDA
77.8
27.2
36.71
EBIT
36.7
- 113.1
- 3.22
EBT
32.7
- 115.5
- 5.62
23.9
- 110.1
- 2.93
Adjusted for EUR 9.6 million restructuring costs.
Adjusted for a EUR 100.3 million write-down on intangible assets and EUR 9.6 million in restructuring costs.
3
Also adjusted for EUR 2.7 million in deferred taxes.
1
2
up from 18.7 percent in 2009 (adjusted for write-downs on
The indicators presented here are also described in more de-
intangible assets and deferred taxes payable on that amount)
tail in the “Performance indicators” section (part I, the Wacker
to 24.7 percent in the period under review.
Neuson Group). They are calculated as follows on the basis of
55
the figures reported in the Consolidated Financial Statements
At EUR 23.9 million, net profit for the period was clearly above
and the Notes on page 56.
the prior-year result (net loss for the year: EUR 110.1 million;
3.2 percent (adjusted figure for previous year: -0,5 percent).
Finances
Based on 70.14 million ordinary shares in circulation on aver-
JJ
Positive liquidity situation
JJ
Investments secure long-term growth prospects
JJ
Working capital increases in line with revenue
age during the period, earnings per share came to EUR 0.34
(previous year: EUR -1.57; adjusted: EUR -0.04).
Earning power up
Non-interest-bearing borrowings, for example, trade payables,
Principles and targets of financial management at
Wacker Neuson
are deducted from this figure. Average capital employed was
Financial management at the Wacker Neuson Group is guided
down 1.4 percent on the previous year despite the increased
by the need to strike a healthy balance between financial se-
investment volume.
curity, return on equity and earnings. To achieve this, we draw
Capital employed generally refers to all assets used in business.
on set balance sheet ratios and key indicators to manage our
ROCE I increased to 6.9 percent, up from -2.4 percent the
financing needs. The most important indicators here are the
previous year. ROCE II rose to 5.2 percent (previous year:
net financial debt – resulting from short-term net borrowings
-1.9 percent). The significant improvement in the Group’s
and long-term borrowings – and the equity ratio.
earnings situation had an impact here. In 2010, the Group thus
succeeded in realizing a healthy return on assets employed for
operating activities.
2
Our aim is to fund day-to-day operations with operating cash
flow as far as possible. Surplus funds are invested in liquid,
safe instruments where they earn the prevailing interest rates
and are available to finance sustainable growth.
2 Increased return on capital employed (ROCE)
Capital employed and ROCE 2005 to 2010
537.4
in %
600
537.4
538.9
531.3
486.7
400
300
236.5
269.4
500
538.9
531.3
486.7
30
Average capital employed increased as a result of
35
the merger in 2007. Negative EBIT in 2009 led to a
30
300
negative
25
15
provement
in the Group’s earnings situation pushed
200
20
ROCE up to almost 7 percent.
10
100
5
0
0
2006
2007
2008
pro-forma1
ROCE I
2009
2010
35
40
400
25
return 269.4
on capital employed. In 2010, the20im236.5
10
100
5
15
200
2005
40
600
in € million
500
in %
in € million
-5
0
0
2005
2006
2007
2008
pro-forma1
ROCE I
2009
2010
-5
adjusted: EUR 2.9 million). The return on revenue here was
56
Calculating ROCE I and II
In € K
2010
2009
2008
pro-forma 2007
EBIT1
36,700
- 12,796
57,989
112,632
24.74
18.68
31.57
31.62
27,619
- 10,406
39,684
77,015
673,903
632,696
750,008
697,036
- 236,550
- 236,016
- 326,059
- 325,676
- 54,040
- 54,040
- 64,838
- 64,838
- 5,478
- 4,144
- 3,420
- 1,649
- 99
- 99
- 139
- 83
- 3,540
- 3,094
- 2,870
- 1,656
Tax ratio acc. to income statement as a %1
NOPLAT = EBIT - (EBIT x tax rate)
1
Non-current assets
Goodwill
Brands
Other investments
Loans
Investment securities
Interest rate swap
Present value (finance lease obligations) of non-current assets
- 56
0
0
- 832
- 4,381
- 9,680
- 14,659
- 17,362
Non-current liabilities
- 23,957
- 25,530
- 31,989
- 33,724
Non-current assets used in business
Deferred taxes
345,802
300,093
306,034
251,216
Current assets
356,314
339,042
428,603
517,474
0
0
- 1,894
- 88,656
Marketable securities
Cash and cash equivalents
- 36,559
- 85,024
- 65,600
- 76,816
Trade payables
- 36,207
- 21,251
- 32,290
- 63,084
Short-term provisions
- 12,317
- 13,583
- 11,112
- 9,324
Current tax payable
- 470
- 413
- 466
- 1,366
- 43,776
- 29,102
- 35,184
- 42,698
Net working capital
226,985
189,669
282,057
235,530
Capital employed
572,787
489,762
588,091
486,746
531,275
538,927
537,419
486,746
6.91
- 2.37
10.79
23.14
5.20
- 1.93
7.38
15.82
Other current liabilities
ROCE I (return on capital employed before tax)
(EBIT/average capital employed)
ROCE II (return on capital employed after tax)
(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 rate in 2009 was calculated without deferred
taxes in the amount of EUR 2.7 million payable on these write-downs.
The Wacker Neuson Group uses standard derivative financial
incorporated. The participants can draw on the positive cash
instruments such as foreign exchange forward contracts and
pool balance up to an individually fixed limit. Participants who
interest rate swaps or caps exclusively for hedging purposes
make deposits receive interest equivalent to market conditions
and to minimize risks. Financial instruments without a corre-
for the respective currency.
sponding underlying transaction are not carried out.
Positive cash flow developments
Ensuring payment flow through liquidity management
Cash flow from operating activities came to EUR 44.9 million
The main objective of liquidity management is to ensure
at the close of the fiscal year (previous year: EUR 138.3 mil-
that the Wacker Neuson Group has sufficient funds to meet
lion). As planned, we were again able to use this to fund day-
payment obligations as they arise. To this end, the Group
to-day business.
maintains a cash pool in which almost all its companies are
Cash flow from financing activities came to EUR -10.3 million
Statement of free cash flow changes
in € K
Cash flow from
operating activities
Purchase of
property, plant
and equipment
2010
2009
20081
44,918
138,255
38,109
60,890
- 75,618
- 36,281
- 93,134
- 81,571
- 9,344
- 7,120
- 8,654
- 2,469
0
0
0
- 122,078
20071
(previous year: EUR -53.0 million). EUR 21.9 million was utilized
for the repayment of long-term bank loans.
Investments in 2010 exceeded write-downs, which resulted in
a negative free cash flow of EUR -38.8 million (previous year:
EUR +100.6 million). Free cash flow corresponds to cash flow
from operating activities plus investment activities without
Purchase of
marketable securities
Proceeds from the
sale of marketable
securities
changes to the consolidation structure (and where available,
amounts accruing from the issue of new shares including the
costs of raising capital). We used available liquid funds to
cover the current year’s financing deficit.
0
1,996
85,674
46,987
Proceeds from the
sale of property,
plant and equipment
and intangible assets
1,205
3,753
1,440
895
Change in consolidation structure
- 1,467
- 460
- 1,771
10,572
Cash flow from investment activities
- 85,224
- 38,112
- 16,445
- 147,664
+ 1,467
+ 460
+ 1,771
- 10,572
Cost of procuring
capital
0
0
- 69
- 5,582
Issue of new shares
0
0
0
165,000
- 38,839
100,603
23,366
62,072
Free cash flow
In 2010, we primarily drew on external credit lines in the
amount of EUR 10 million to finance the purchase of the plot of
land in Hörsching.
Comfortable liquidity situation
The item “Interest received” has been transferred from cash flow from
investment activities to cash flow from operating activities.
We were able to meet liquidity needs in 2010 through our own
liquid funds. Credit line commitments to the value of up to
EUR 110.7 million in total provided additional backing. At the
closing date, less than half of these had been drawn. For further details on the terms and interest conditions of the credit
lines, please refer to item 20 in the Notes to the Consolidated
Financial Statements.
The Group had liquid funds to the value of EUR 36.6 million
(previous year: EUR 85.0 million) at year-end. Our high level
of liquidity from the previous year afforded us the freedom to
Cash flow from investment activities, which only covers invest-
operate independently of bank or state funding during chal-
ments that have been paid, amounted to EUR -85.2 million
lenging economic times.
3
(previous year: EUR -38.1 million). The 2009 figure was lower
as we deferred some investments in property, plant and equipment during that year due to the financial crisis.
3 Comfortable liquidity situation despite increased investment
Change in cash and cash equivalents in 2010
in € million
The diagram shows payments from production
and marketing activities and includes payments
140
44.9
- 85.2
from financing, investment and payout policies.
120
As we outperformed expectations overall, we
100
80
were able to make additional targeted invest-
85.0
ments. We were able to meet liquidity needs in
60
2010 through our own liquid funds. The liquidity
- 10.3
40
2.2
36.6
20
0
Cash and cash Cash flow
equivalents
from
Dec. 31, 2009 operating
activities
Cash flow
from
investing
activities
Cash flow
from
financing
activities
Effect of Cash and cash
exchange
equivalents
rates
Dec. 31, 2010
situation remains healthy.
Purchase of
intangible assets
1
57
58
We do not expect any significant deterioration in the refinanc-
The 2010 investment breakdown is outlined in the following.
ing market in the near future. Although banks have increased
Renewal/maintenance investments of around EUR 13.0 million
their margins on loans, this is largely compensated for by the
and construction work on our new state-of-the-art European
fact that interest rates remain low and our bank rating contin-
R&D center for light equipment and on our company headquar-
ues to improve.
ters in Munich to the tune of EUR 14.2 million. The new complex will be completed by mid-2011 and will enable the Group
Efficient working capital management
to consolidate and expand its position as innovation leader by
Another of our priorities in 2009 lay in reducing our working
focusing heavily on research and development over the coming
capital, particularly with a view to increasing liquidity. Strong
years. Its central location in Munich is an added attraction for
revenue growth in 2010 pushed working capital 23.6 percent
our specialists and technicians. In addition, German sales,
up on the prior-year figure to EUR 269.3 million (previous
export and administration operations are also based in Munich.
year: EUR 217.9 million). The working capital to revenue ratio
developed as expected and – at 35.5 percent (previous year:
4
36.5 percent) – slightly exceeded our 33-percent target.
We invested around EUR 9 million in the expansion of our
global sales network in 2010. Projects here included the con-
Inventory was up 24.1 percent at EUR 184.0 million (previ-
struction of a new head office for Poland in the city of Warsaw
ous year: EUR 148.3 million) and trade payables increased
plus the expansion of our sales facilities in the Norwegian city
to EUR 36.2 million (previous year: EUR 21.3 million). Trade
of Oslo. In recent years, we have focused on expanding across
receivables rose 33.7 percent to EUR 121.5 million (previous
Eastern Europe and now have ten sales and service stations in
year: EUR 90.8 million).
Poland.
Substantial investments for stronger growth
Investments in 20101
In 2010, we continued to make major investments to secure
as a %
future growth at Wacker Neuson.
34.3 Renewal/maintenance and
other investments
29.9 Rental (Central and
Eastern Europe)
14.1 Land/production
facilities Austria
10.6 Expansion of sales
11.1 Intangible assets
These included EUR 75.6 million in property plant and equipment during the period under review (previous year: EUR 36.3
million), which is in line with our planned expenditure of around
EUR 70 million. We have thus more than doubled investments
here after deferring a large number of projects in 2009.
1
4 Working capital to revenue ratio falling
Total investments for 2010: EUR 85 million
(property, plant and equipment and intangible assets)
in %
in € million
Working capital 2005 – 2010
303.9
300
40
271.5
in %
in € million
303.9
300
40
271.5
269.3
250
200
150
158.6
30
217.9
tions
in 2010. Although increased revenue led to a
200
35
25
23.6-percent rise in working capital compared with
30
150previous year, the return on capital employed
20
the
25
154.6
20
158.6
to generate revenue nonetheless improved to
15
10
100
50
5
15
100
0
10
0
2005
50
2006
20071
2008
2009
2010
5
Working capital
0
Working capital/Revenue
0
2005
Working capital
2006
20071
2008
2009
2010
Working capital/Revenue
35
Working capital developed in line with our expecta-
154.6
217.9
269.3
250
1
2007 revenue on a pro-forma basis.
Construction work on our new facility in the Austrian district
EUR 9.4 million was channeled into intangible assets – primar-
of Hörsching, near Linz airport, has just got underway. Thus
ily into licenses and the capitalization of research and develop-
far, we have invested around EUR 12 million in this project.
ment activities.
59
Having made a small down-payment in 2009, we capitalized
the property on January 20, 2010 following successful entry
The investment (property, plant and equipment plus intangible
in the land registry and paid EUR 8.5 million, the remainder of
assets) to write-downs ratio increased to 2.1 (previous year,
the purchase price (total purchase price: EUR 9.3 million). The
excluding one-off write-downs: 1.1).
5
and skid steer loaders will replace our rented plant in Linz. This
Cost of capital
ramp-up in capacity will enable us to meeting rising demand
In fiscal 2010, we included the key indicator weighted average
for compact equipment, including increased volumes resulting
cost of capital (WACC) in our financial reports. It indicates the
from our alliance with Caterpillar.
weighted average cost of capital within the Group. A company is producing value for its investors if return on capital
As planned, we invested EUR 25.4 million in our rental pool for
employed (ROCE) exceeds WACC. For shareholders and
Central and Eastern Europe. Our customers view renting as a
lenders, WACC indicates the return they might expect on the
useful supplement to purchasing that gives them a high degree
funds or capital they have provided. It also gives a company
of flexibility without having to tie up capital funds. Even though
a good indication of the type of return it needs to generate on
we, as the manufacturer, service and maintain the machines
prospective investments.
in our rental pool, regular investments still need to be made to
ensure that products remain below a certain average age.
WACC was reported at 7.93 percent in the period under
review (previous year: 8.57 percent) and was thus higher than
We invested around EUR 0.8 million in the conversion of our
ROCE II (return on capital employed after tax), which stood at
former production facility in Gotha (previously Weidemann) to
5.2 percent.
create our first Europe-wide used equipment center. This strategy will enable us to bundle maintenance work and increase
logistics flexibility in the delivery of used equipment.
5 Cash flow and investments
Investments and cash flow from operating
In 2010, the upswing in business enabled the company
activities 2005 – 2010
to make investments that had been partly put on hold
in € million
during the crisis in 2009. We thus invested a substantial
140
120
EUR
85.0 million in future growth projects in the course
in € million
140
of 100
2010. Investments were twice 101.8
as high as write-downs.
120
85.0
The80investment (property, 84
plant and equipment plus
101.8
100
intangible assets) to write-downs ratio increased to 2.1
60
85.0
84
80
(previous year, excluding one-off write-downs:
1.1).
43.4
40
60
40
20
37.6
31.9
19.6
43
38.1
43.4
40
41.1
20
37.6
31.9
19.6
2005
Capiral expenditure
Capiral expenditure
2006
40
41.1
0
23.6
0
2005
43
38.1
23.6
2007
2008
Depreciation
and amortization
20091
2010
Operating cash flow
2006
2007
2008
Depreciation
and amortization
20091
2010
Operating cash flow
state-of-the-art production facility for excavators, dumpers
60
Basis for calculating WACC1
Risk-free return (r f ) as a %
Market risk premium (MRP) as a %
2010
2009
2008
2007
3.00
4.25
4.25
4.75
5.00
5.00
5.00
4.50
1.050
1.028
1.032
1.542
Interest-bearing liabilities due beginning of period (DBOP), EUR K
83,997
150,649
146,057
91,271
Interest-bearing liabilities due end of period (DEOP), EUR K
75,143
83,997
150,649
146,057
Average interest-bearing liabilities, EUR K
79,570
117,323
148,353
118,664
8,151
Leverage beta (ßL)
Interest expense (D x rD), EUR K
4,212
5,480
8,215
Cost of debt (rD) as a %
5.29
4.67
5.54
6.87
Group tax rate (s) as a %
24.74
36.52
31.57
30.85
Share price at closing date (k) EUR
13.00
8.20
6.19
14.62
Number of shares (n) in thousands
70,140
70,140
70,140
70,140
911,820
575,148
434,167
1,025,447
8.25
9.39
9.41
11.69
92.39
87.26
74.24
87.53
Percentage of financing that is debt (D/(E+D)) as a %
7.61
12.74
25.76
12.47
Weighted average cost of capital (WACC) as a %
7.93
8.57
7.96
10.82
Market capitalization (E), EUR K
Cost of equity (rE)
Percentage of financing that is equity (E/(E+D)) as a %
1
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)
WACC = (rf+MRP x ßL)*E/(E+D)+rD x (1-r) x D/(E+D)
WACC is the weighted average cost of capital. It is calculated as the mean value of equity and debt costs, whereby tax benefits are to be deducted from debt costs.
Here, equity is taken at its market value at the closing date.
Assets
mainly goodwill from the Neuson Kramer subgroup, in the
amount of EUR 100.3 million. This impairment did not affect
JJ
Solid balance sheet structure underpins upswing
liquidity. The goodwill in question resulted from the merger
JJ
High equity ratio compared with industry peers
between the former Wacker Construction Equipment AG and
JJ
Low net financial debt despite increased investments
the former Neuson Kramer Baumaschinen AG in 2007. At
December 31, 2010, goodwill amounted to EUR 236.6 million
(previous year: EUR 236.0 million). Intangible assets were
The balance sheet total rose during the last fiscal year to
valued at EUR 90.6 million (previous year: EUR 87.6 million).
EUR 1,030.2 million (previous year: EUR 971.7 million).
The Group focused once again on increasing inventory to
The Group’s return on assets (ROA) after tax and before minor-
improve delivery capabilities as business picked up. Due to an
ity interests amounted to 2.5 percent (previous year: -1.1 per-
increase in production volumes, the value of finished prod-
cent). Return on assets expresses the ratio between profit/
ucts was up from EUR 107.1 million to EUR 123.5 million in
loss for the period before minority interests and the average
2010. Current assets were at EUR 356.3 million (previous year:
balance sheet total. For fiscal 2009, profit/loss for the period
EUR 339.0 million) due to the increase in inventory and rise in
before minority interests was adjusted to discount one-off
trade receivables.
items resulting from write-downs on brand value and goodwill
plus deferred taxes payable on these write-downs.
High equity ratio compared with industry peers
Net profit for the period brought equity before minority inter-
Assets rose to EUR 642.4 million (previous year: EUR 597.8 mil-
ests up to EUR 830.6 million during the period under review
lion). An impairment test carried out on the basis of projected
(December 31, 2009: EUR 789.0 million). At 80.6 percent, the
figures revealed that there was no need for write-downs when
equity ratio before minority interests remained high for the
the net book value of the Group’s goodwill and brands was
industry (December 31, 2009: 81.2 percent). The Group’s share
compared with the fair market value. In the previous year, this
capital remained unchanged at EUR 70.14 million.
comparison led to one-off write-downs on intangible assets,
61
Balance sheet structure
971.7
EQUITY AND LIABILITIES
1,030.2
1,030.2
Inventories/current 15.3 %
17.8 %
3.5 %
7.2 %
8.4 %
Other current assets 19.6 %
16.8 %
80.9 %
Tangible assets 27.5 %
28.9 %
Goodwill 24.3 %
23.0 %
Other non-current assets 13.3 %
13.4 %
2009
2010
971.7
2.2 % Trade payables (current)
7.2 % Other borrowings (current)
9.2 % Borrowings (non-current)
81.5 % Equity (before minority interests)
2010
2009
In considering the equity figures, the balance sheet effects of
Net financial debt at December 31, 2010 amounted to
currency fluctuations between the euro and US dollar should
EUR 13.7 million (previous year: EUR 24.9 million net cash po-
be taken into consideration. The EUR 41.4 million rise in equity
sition). As financial markets grew more confident, we reduced
is primarily attributable to net profit for the period and the fact
our positive balance as planned with the aim of turning it into
that the euro was weaker than the figure reported on the prior-
a slight debt by the end of the year. For information on the cal-
year closing date.
culation of net financial debt, please refer to the section on risk
management / capital management, item 30 in the Notes to the
Bolstered by a profit before minority interests, ROE rose to
Consolidated Financial Statements. At the closing date, gear-
3.0 percent (previous year: -1.4 percent) in 2010.
ing was posted at 1.7 percent (previous year: -3.1 percent).
Total non-current liabilities fell 3.2 percent to EUR 86.4 mil-
Net financial debt
lion (previous year: EUR 89.3 million). Long-term borrowings
contracted 4.1 percent to EUR 32.2 million (previous year:
In EUR K
2010
2009
2008
EUR 33.6 million). At EUR 30.2 million, long-term provisions
Long-term borrowings
- 32,218
- 33,583
- 38,845
remained at the previous year’s level (previous year:
Short-term borrowings
- 5,958
- 14,889
- 81,742
EUR 30.2 million). Deferred tax posted as liabilities amount
Current portion of long-term
to EUR 24.0 million (previous year: EUR 25.5 million).
borrowings
- 12,109
- 11,698
- 5,876
0
0
1,894
36,559
85,024
65,600
- 13,726
24,854
- 58,969
At EUR 110.8 million, total current liabilities were up 21.9 per-
cent (previous year: EUR 90.9 million). This is primarily due
Total
to the increase in trade payables resulting from the rise in
revenue.
Calculating ROE
In EUR K
Profit/loss before minority interests
2010
2009
2008
pro-forma 2007
24,628
- 12,3071
38,105
75,526
830,618
789,049
909,088
910,439
Average equity before minority interests
809,834
849,069
909,764
910,439
3.04
- 1.45
4.19
8.30
ROE as a %
(profit/loss before minority interests / average equity)
before minority interests
1
2009 figures are reported before one-off write-downs on intangible assets in the amount of EUR 100.3 million, incl. deferred taxes in the amount of EUR 2.7 million payable
on these write-downs.
ASSETS
in € million
62
Financing structure
Information about estimates, assumptions and judgments
Please refer to the section on financial liabilities, item 20 in the
made, especially in connection with the valuation of tangible
Notes to the Consolidated Financial Statements for information
and intangible assets and goodwill, doubtful debts, pension
on the financing structure, financial covenants and the terms of
liabilities, provisions and contingent liabilities, is presented in
covenants,
the Notes to the Consolidated Financial Statements along with
p. 130
.
information on tax expense,
p. 110 .
Off-balance-sheet assets and financial instruments
In addition to the assets shown in the consolidated balance
sheet, the Group also makes customary use of assets that
General overview of economic situation
cannot be recognized in the balance sheet. These generally
refer to leased, let or rented assets (operating leases). Please
Group management feels that Group finances and assets are
refer to the section on other financial liabilities, item 25 in the
in a strong position
Notes to the Consolidated Financial Statements for detailed
interests of 80.7 percent and low net financial debt of EUR 13.7
information,
million at year-end, the Group is almost debt-free despite a
p. 135
.
6
. With an equity ratio before minority
significant increase in investments. The Group has not drawn
The Group uses off-balance-sheet financial instruments such
on over half of its credit lines and had liquidity in the amount of
as the sale of receivables to a limited extent only. In connec-
EUR 36.6 million at December 31, 2010. It will thus be able to
tion with the sale of receivables, customers are offered inter-
meet its financial obligations in the current year.
est-subsidized financing models, which can also be reported
as factoring in the wider context. However, these schemes are
The healthy economic climate will help the Group implement
only used to finance sales and are not a major source of fund-
its strategies and reach its goals of further growth – at an inter-
ing for the Group.
national level in particular – and a return to pre-crisis revenue
levels by the year 2013.
Judgments and estimates
During the past fiscal 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, financial position and earnings of the Group.
6 Healthy asset and financial position
in € million
in %
950
850
in %
910.4
909.1
850
750
75
95
75
Wacker
Neuson has a high equity ratio in excess of
450
lion
as financial markets grew more confident.
550
55
80350
percent and is almost debt-free with a low gearing
35
650
289.9
550
55
282.4
of 250
only 1.7 percent.
The Group has drawn on less
than
150 half of its credit lines and thus has plenty of
450
350
289.9
250
35
282.4
45.1
financial
backing.
50
9.4
- 50
2005
15
150
50
830.6
789
750
2009
into a slight net financial debt of EUR 13.7 mil650
830.6
789
95
909.1
As planned, we turned the net cash position from
in € million
950
910.4
9.4
2005
59
45.1
- 50
2006
- 43.1
2007
13.7
-5
- 24.9
2008
2009
2010
Net financial debt
in € million
in € million
Gearing
in %
in %
2006
59
- 43.1
2007
13.7
-5
- 24.9
2008
15
2009
2010
Net financial debt
in € million
in € million
Gearing
in %
in %
Earnings, financial position and net assets of Wacker Neuson SE (condensed version according to HGB)
V. Earnings, financial position and net assets of
Wacker Neuson SE (condensed version
according to HGB)
63
The economic upturn both within Germany and beyond fuelled
a rise in revenue and profit at Wacker Neuson SE. Similar to
many German machinery manufacturers, the company benefited from a revival on the domestic market and a strong pull
from export markets. Revenue was up 18.5 percent in 2010 to
EUR 251.8 million (previous year: EUR 212.5 million).
The Annual Financial Statements of the parent company
the provisions of the German Commercial Code (HGB) and the
Cost of sales rose to EUR 168.7 million (previous year:
German Stock Corporation Law (Aktiengesetz). In 2010, the
EUR 140.7 million). The gross profit margin fell to 33.0 percent
Management Report of Wacker Neuson SE has been combined
due to the shift in the company’s product mix (previous year:
with the Group Management Report.
33.8 percent).
The Annual Financial Statements describe the results of busi-
Sales, general and administrative (SG&A) expenses were up
ness activities conducted by Wacker Neuson SE during fiscal
from EUR 81.1 million in fiscal 2009 to EUR 93.3 million in 2010.
2010. This includes trading activities on the German market
This was primarily due to higher legal and consulting costs
with products from our own manufacturing facilities along with
plus payments for non-compete clauses, profit shares and bo-
imports from affiliates and suppliers, plus the rental, spare parts
nuses incurred in connection with changes to the composition
and service business in Germany and exports from our German
of the Executive Board. After deducting other expenses, other
production facilities.
income was up by EUR 1.6 million.
Income statement for Wacker Neuson SE (condensed version)
Profit before interest and tax (EBIT) came to EUR -4.9 million, a
slight improvement on the 2009 figure of EUR -5.8 million.
In € K
Revenue
2010
2009
251,815
212,510
Cost of sales
- 168,688
- 140,701
Gross profit
83,127
71,809
Income from shareholdings in companies accruing to Wacker
Neuson SE rose EUR 0.8 million to EUR 10.1 million in fiscal
2010 as a result of higher dividend payouts from affiliates.
Sales, general and administrative
- 93,251
- 81,128
At EUR 1.9 million (compared with EUR 3.6 million in 2009), net
Other income
13,829
12,134
profit for the period was positive due to dividend payouts from
Other expenses
- 8,618
- 8,567
affiliates.
EBIT
- 4,913
- 5,752
(SG&A) expenses
Taking retained earnings in the amount of around EUR 3.6 mil-
Income from shareholdings in
companies
10,113
9,265
14
30
515
1,786
- 214
- 550
- 1,130
- 769
4,385
4,010
- 2,180
0
Taxes on income and earnings
- 274
- 379
Net profit/loss
1,931
3,631
Profit/loss carried forward
3,631
30,174
7,500
- 30,174
13,062
3,631
other revenue reserves, Wacker Neuson SE reported retained
Income from other securities and
long-term loans
Interest and similar income
Write-downs on financial assets
Interest and similar expenses
Profit before tax (EBT)
Extraordinary profit
Withdrawal from / allocation to
other revenue reserves
Retained earnings
lion into account and the withdrawal of EUR 7.5 million from
earnings of around EUR 13.1 million.
Assets and finances
Company assets rose to EUR 726.1 million (previous year:
EUR 687.4 million). This was due, on the one hand, to an increase in intangible assets resulting from the SAP project, the
groundwork for which was laid in 2010. At the start of the year
under review, Wacker Neuson SE’s ERP system was successfully migrated to the SAP platform. It was also due to a rise in
outlay on property, plant and equipment required to build the
new R&D center and company headquarters in Munich. Financial assets rose from EUR 563.7 million to EUR 581.2 million,
related primarily to capital increases at affiliate level.
Wacker Neuson SE have been prepared in accordance with
64
Balance sheet of Wacker Neuson SE (condensed version)
In € K
Cash flow statement of Wacker Neuson SE (condensed version)
Dec, 31, 2010
Dec, 31, 2009
6,034
4,696
Property, plant and equipment
138,874
119,049
Financial assets
581,216
563,698
Assets
726,124
687,443
Investments
Inventories
36,733
26,688
Cash flow from investments
Trade receivables
11,669
10,570
Financing
5,871
26,048
Intangible assets
Receivables from associated
companies
Other assets
2,433
7,217
18,514
57,012
Current assets
75,220
127,535
668
1,394
Balance sheet total (assets)
802,012
816,372
Equity
757,779
755,848
80
89
17,147
20,934
Borrowings from banks
7,800
25,099
Trade payables
1,780
6,446
Special tax-free reserves
Other provisions
Other liabilities
Liabilities
Deferred items
Balance sheet total (liabilities)
2009
Cash flow according to DVFA/SG
25,686
23,829
26,086
43,367
- 61,206
- 35,039
- 3,378
16,321
- 38,498
24,649
57,012
32,363
18,514
57,012
Change in cash and cash
equivalents
on January 1
on December 31
Provisions dropped to EUR 17.1 million (previous year:
EUR 20.9 million) and liabilities were down at EUR 26.9 million
(previous year: EUR 39.5 million).
Cash flow according to DVFA/SG (German Society of Financial
Analysts and Investment Consultants) was up EUR 1.9 mil-
Payables to associated
companies
2010
Operations
Liquid funds
Deferred items
In € K
15,066
6,543
lion to EUR 25.7 million in the year under review (previous
2,260
1,403
year: EUR 23.8 million) despite the lower net profit reported
26,906
39,491
for the period. Liquid funds were down EUR 38.5 million to
100
10
802,012
816,372
EUR 18.5 million (previous year: EUR 57.0 million), reflecting the
increase in working capital as well as planned investments.
In summary, company management feels that Wacker Neu-
Current assets dropped from EUR 127.5 million to EUR 75.2 mil-
son SE’s financial position remains strong. The company’s
lion. Inventories were up EUR 10.0 million, fuelled by increased
earnings improved in line with the rise in revenue despite the
production to meet rising demand. However, receivables
negative impact of items detailed above.
from associated companies were down EUR 20.2 million on
the previous year due to the repayment of short-term loans
Dividend proposal
extended to associated companies posted under receivables
The Executive Board and Supervisory Board of Wacker
from associated companies.
Neuson SE will propose a dividend of EUR 0.17 per eligible
share at the AGM on May 26, 2011 (based on a total of
Equity increased to EUR 757.8 million (previous year:
70.14 million eligible shares). In total therefore, the company
EUR 755.8 million) as the company decided not to make a
will be paying out EUR 11.9 million. The distribution ratio pans
dividend payout in 2010 and carried retained earnings for
out at around 50 percent based on net Group profit for the
the period forward. At EUR 584.0 million, capital reserves
year in the amount of EUR 23.9 million. This is higher than the
remained at the previous year’s level. Wacker Neuson SE’s
minimum long-term target pursued by the Executive Board and
share capital also remained stable relative to the previous year
Supervisory Board. As the company refrained from making a
at EUR 70.14 million. It is divided into 70,140,000 individual
dividend payment last year and instead carried the retained
no-par-value nominal shares. The equity ratio amounted to
earnings for the year forward, it regards the payout as justified.
Segment reporting by region
65
Dividend trends (the figures shown relate to the fiscal year in which the dividend was realized)
2009
2008
2007
Total payout (€ m)
11.9
–
13.33
35.07
Payout ratio (as a %)
49.8
–
Eligible shares (in m)
70.14
70.14
70.14
70.14
0.17
0.00
0.19
0.50
20102
Dividend per share (in €)
2
Based on net Group profit for the period before purchase price allocation in 2007 and 2008.
The auditing company Rölfs WP Partner AG, Munich,
We are happy to report that the Group increased revenue
Germany, has audited the Annual Financial Statements of
across all business segments in 2010 – in most cases, with
Wacker Neuson SE in full and approved them without quali-
double-digit percentage growth.
fication. The audited report will be published in the electronic
Federal Gazette. It can also be downloaded from
www.corporate.wackerneuson.com/ir/en-financial_reports.php.
Sales by region
Statement from the Executive Board pursuant to
Section 312 AktG
73.7 Europe (78.0)
4.1 Asia (4.7)
The following declaration hereby 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
Europe
subject to reporting.”
As predicted, Europe was again the biggest revenue generator,
accounting for 73.7 percent of total Group revenue (previous
VI. Segment reporting by region
year: 78.0 percent). This region’s revenue rose 20.0 percent to
EUR 558.6 million (previous year: EUR 465.7 million). Segment
profit before interest and tax (EBIT) increased to EUR 26.6 mil-
JJ
Enhanced product portfolio appeals to European
lion (previous year: EUR -107.3 million; adjusted for write-
customers
downs on goodwill: EUR -7.0 million).
JJ
Strongest growth in Americas region
JJ
Further expansion of sales network in Asia
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). We also break revenue down according to business
segment (light equipment, compact equipment and services).
1
40.01
32.01
66
Sales by region
EBIT by region
in € million
in € million
- 17.4 %
500
400
300
60
+ 20 %
676.2
50
558.6
520.7
+ 0.7 %
+ 14.5 %
196.1
166.9
+ 10.7 %
2008
2009
25.8
Americas
3.1
0
Asia
- 10
2010
1
1.4 0.8
- 0.3
- 71
-8
Europe
2007
Demand for light and compact equipment bucks
predicted trends
14.4
11.6
10
25.3 27.2 28.2 31.2
Europe
26.6
20
168.1
103.1
0
2007
30
+ 63 %
100
45.8
40
465.7
200
50.9
2008
Americas
2009
Asia
2010
Adjusted to discount write-downs on intangible assets in the
amount of EUR 100.3 million.
Demand for our products and services picked up noticeably
across all of Europe, clearly defying Euroconstruct forecasts,
Revenue up in key markets for the Group
which projected a downturn in the construction market for
In the UK, our revenue rose by almost 50 percent. Following a
2010. This is primarily due to the fact that the majority of
two-year slump in sales, investment backlogs were the main
Wacker Neuson’s revenue stems from European countries
growth drivers, although our go-to-market strategy for com-
where the domestic market has largely recovered from the
pact equipment also made an impact here.
global economic crisis, in particular Germany, Austria and
Switzerland.
Our decision to launch compact equipment via the existing
sales network also proved successful in France, where revenue
This positive trend clearly shows that our product portfolio
increased by over 30 percent. This same strategy also fuelled a
is targeted at growth segments and that our European sales
70-percent rise in product revenue in Scandinavia in 2010.
strategies have yielded positive results. The company experienced double-digit growth in particular in France, the UK,
Poland was the only country where the construction industry
Sweden, Norway, Switzerland, Germany, Poland, Hungary,
continued to grow even during the crisis. Consequently, our
Turkey and Russia (which also belongs to the Europe segment).
revenue here also developed positively in 2010. A large number
Denmark, Italy and Spain were the only countries where devel-
of ongoing residential developments, infrastructure improve-
opment remained below the previous year’s level.
ment measures, and redevelopment and commercial construction projects pushed growth further throughout the year. Our
Government investment programs had a stabilizing effect. With
revenue for the region grew by over 30 percent.
the exception of German-speaking countries, growth in 2010
was further boosted by an increase in investments to replace
Russia proved a surprisingly positive market. Our revenue
light equipment on the back of a 2009 drop in capital expen-
here leapt by over 150 percent, albeit from a low level. Our
diture in many countries. Company management believes this
performance in this still new market, however, gives us every
is primarily attributable to rising demand from end customers
confidence for the future.
rather than dealers increasing inventory levels.
Segment reporting by region
Germany again accounted for the lion’s share of European
67
Asia
revenue. In 2010, our domestic business benefited from
ongoing construction projects and infrastructure investment
Asia remains a growth market for Wacker Neuson, although we
programs as well as from increased activity in residential
do not expect demand for our high-quality light and compact
construction plus underground projects in the commercial
equipment to take off there for the next five to ten years. Hence
construction sector. New product launches and our enhanced
we are aligning our go-to-market strategy with the rise in de-
service offering also had a positive impact here.
mand anticipated for that point in time. The company has also
had an affiliate in India since 2008.
Positive trends in Asia
Overall, construction markets showed signs of recovery in the
Significant revenue growth in the Americas
Asia-Pacific region, especially in Australia. Business in Asia
The positive trend in the US that we first reported mid-2009
profited from numerous infrastructure measures aimed at
continued and gained momentum throughout 2010. Product
expanding road and rail networks.
sales to our dealers were up. Major rental companies did not
start investing in individual products until the second half of the
Revenue was up 10.7 percent on the previous year from
year. Depending on the age of their rental fleets, they primarily
EUR 28.2 million to EUR 31.2 million. Segment profit before
invested in new machines to replace existing stock.
interest and tax (EBIT) amounted to EUR -0.3 million (previous year: EUR 0.8 million). This drop was primarily down to
Revenue in the Americas was up 63.0 percent on the previous
increased air transportation costs incurred to ship replace-
year to EUR 168.1 million (previous year: EUR 103.1 million).
ment deliveries from the production plant in Manila as a result
Segment profit before interest and tax (EBIT) increased from
of delivery bottlenecks among suppliers. In light of the strong
EUR -8.1 million to EUR 14.4 million. The region expanded its
growth in other regions, this region’s share of total revenue
share of revenue from 17.3 percent to 22.2 percent. Discounting
dropped to 4.1 percent (previous year: 4.7 percent).
exchange rate fluctuations, revenue in the Americas was up by
49.7 percent.
Revenue plus in Australia
Our results for 2010 in Australia strongly reflect the expansion
As in previous years, our US production and sales company
of our product offering here, with revenue increasing by over
Wacker Neuson Corporation generated the majority of revenue.
50 percent.
In local currency (US dollar), revenue for this affiliate was around
54 percent up on the previous year’s figure. However, increased
Emerging markets now account for around 15 percent of our
exports to Europe and Asia also played a role here. Revenue
revenue. Our revenue in these markets was up by around
growth in South America and Canada were even stronger.
38 percent on the previous year.
We continued to launch our compact equipment offering in
this region in 2010 and were also able to further expand our US
dealer network during the year. Our compact equipment launch
in South America also resonated strongly across the industry
there.
Americas
68
VII. Segment reporting by business segment
Light equipment revenue before discounts rose 38.9 percent
to EUR 296.6 million (previous year: EUR 213.5 million). This
segment’s share of total revenue (before discounts) amounted
JJ
Demand for light equipment remains high
to 38.8 percent (previous year: 35.5 percent). Continued high
JJ
Strong growth in compact equipment segment
demand in the US provided strong momentum here. In 2010,
JJ
Rental business remains at prior-year high level
an increase in pressure on prices for light equipment relative to
the previous year was not evident.
Sales by business segments
in € K
2010
2009
Light Equipment
296,606
213,494
Compact Equipment
274,824
205,321
Services
192,386
183,273
Minus cash discounts
= Total sales
- 5,890
- 5,075
757,926
597,013
Light equipment
1
The light equipment business segment covers the Wacker
Neuson Group’s activities within the four strategic business
Raft of new launches
fields of concrete technology, soil and asphalt compaction,
Product innovations and new models again played a key role in
demolition, and utility. Production is synchronized with demand
the light equipment segment’s positive performance last year.
and delivery times are short. The company therefore does not
We launched a raft of new products including new vibratory
report order intake or the order backlog for this segment.
plates and electric breakers as well as powerful new pumps. In
2010, we added a total of 78 new products or product versions
Light equipment sales was a good indicator of the long-term
to our portfolio (previous year: 44).
nature of economic recovery. Experience from previous
economic cycles shows that this is an early-cycle mover. So
the strong rise in demand for light equipment, which set in
Compact equipment
1.5 years ago, was a clear indicator of overall recovery. This
is because delivery timeframes for light equipment, once
The compact equipment business segment covers the manu-
ordered, are usually very short and per-unit purchase costs
facture and sale of compact machinery under the Wacker
are typically lower than for larger machines. So as the crisis
Neuson, Kramer Allrad and Weidemann brands. In addition to
took hold, investment in this area was the first to drop. The
all-wheel and articulated wheel loaders, the compact equip-
high quality of our products enabled customers to extend the
ment segment includes compact excavators, skid-steer load-
typical service life during the downturn. When business picked
ers, telescopic handlers and dumpers as well as attachments.
up, however, the short delivery times and relatively low capital
outlay meant that customers soon upped their investments to
In 2009, this business segment was still suffering from the
replace their existing machines. Our position as a market lead-
high inventory levels affecting all market players in the Europe
er in many product segments also helped. Demand remained
region at that time (especially in the case of compact excava-
consistently high over the last four quarters.
tors). The situation turned around, however, during the first
Segment reporting by business segment
quarter of 2010. Demand increased dramatically in all countries
The merger between Wacker and Neuson Kramer created a
where we distribute compact equipment. This growth was
wide range of sales synergies that Wacker Neuson is increas-
fuelled by the economic recovery and our continued measures
ingly using to win market share. The Group is also distributing
to expand market share and distribute our compact offering via
its compact equipment portfolio to more and more markets
the existing sales network. This resulted in very high utilization
outside of Europe. Demand for compact equipment is devel-
of production capacities.
oping particularly well in France, Sweden, South America,
69
Canada, South Africa and Australia.
EUR 274.8 million, up 33.9 percent on the previous year’s
There were no noticeable signs of increased pressure on
figure of EUR 205.3 million. In view of the light equipment seg-
prices in the compact equipment segment during fiscal 2010.
ment’s strong revenue performance, compact equipment only
The devaluation of the euro against the US dollar and other key
managed to slightly expand its share of overall revenue (before
trade partner currencies also helped fuel growth for European
discounts) to 36.0 percent (previous year: 34.1 percent).
manufacturers. Japan’s yen (JPY), for example, rose an average 11.7 percent against the euro in 2010, which forced some
Although the compact equipment segment benefited from
of our Japanese competitors to increase the price of products
investments to replace existing equipment, infrastructure
for the European market. Our special financing programs for
construction projects were the main growth drivers, especially
customers continued to be well received.
in Central and Eastern Europe and South America.
We continue to innovate and improve the quality of our exMonthly order intake is a reliable indicator of demand for our
tensive compact portfolio, encompassing around 40 models.
compact equipment. Our customers changed their order pat-
During the period under review, Wacker Neuson launched
terns as a result of supply difficulties, placing orders signifi-
new compact machines, delivering significant added value for
cantly earlier than in 2009. This resulted in a consistently high
customers. These include Wacker Neuson’s largest compact
order backlog for both construction and agricultural compact
excavator model to date, the 14504, with an operating weight
equipment. At December 31, 2010, the order backlog was
of 14.5 tons, as well as a new range of wheel loaders and
around 4.5 times higher than the prior-year figure.
compact telescopic handlers under the Kramer Allrad and
Weidemann brands. The company also launched mini excavator models equipped with new features. In addition, Wacker
Development of order backlog 2010
in units
+ 350 %
yoy
Neuson overhauled its cab concept for compact equipment.
Development by business segment
in € million
- 23 %
- 11 %
500
+2%
400
+ 39 %
+ 34 %
+5%
300
12/09 01/10 02/10 03/10 04/10 05/10 06/10 07/10 08/10 09/10 10/10 11/10 12/10
200
At December 31, 2010, accumulated order intake for the
100
construction and agricultural equipment were around
87 percent up on the previous year’s figure of -34 percent.
0
Light Equipment
2007
2008
2009
Compact Equipment
2010
2010 vs. 2008
Services
2010 vs. 2009
Compact equipment revenue before discounts rose to
70
Demand for agricultural machines up
uncertainty. At EUR 63.0 million, revenue from the rental busi-
Demand for agricultural machines was particularly strong in
ness in 2010 remained level with the previous year’s figure of
the second half of the year. At the close of the year, the order
EUR 63.3 million.
situation for agricultural equipment was almost as healthy as
the construction order book. The Weidemann brand offers
The early onset of winter meant that demand for rental equip-
well designed, innovative machines for agricultural holdings,
ment in the fourth quarter was down slightly by 3 percent on
primarily for farmyard work. In 2010, Weidemann agricultural
the previous year. Rental revenue in the fourth quarter, how-
machines were launched in Italy and Russia. The agricultural
ever, is traditionally higher than in the third quarter as contrac-
sector’s share of group revenue came to 12.4 percent in the
tors usually hire additional equipment to get jobs done before
year under review (previous year: 13.6 percent).
the onset of winter. In 2010, it was 4 percent higher. Hiring
equipment is not only an attractive option in times of economic
decline. It is also a valid alternative in times of growth as it
Services
gives customers additional flexibility. Rented machines also
provide a reliable basis for calculating costs, making rental a
The services business segment encompasses our after-market
useful supplement to purchasing. The number of daily rentals
(repair and maintenance) and rental (Central and Eastern
continued to outweigh numbers of monthly or longer-term
Europe) business fields, each covering both light and compact
rentals. Our sales and service stations responded with great
equipment.
flexibility to customer requirements, quickly making rental
equipment available wherever it was needed.
The services business segment remained stable during the
crisis. From this solid level, revenue before discounts rose a
further 5 percent to EUR 192.4 million in 2010 (previous year:
VIII. Other factors that impacted on results
EUR 183.3 million) and thus accounted for 25.2 percent of total
revenue (previous year: 30.4 percent).
Service offering resounds well with customers
Revenue before discounts in the after-market business field
(which covers the traditional repair and spare parts business) was up 7.9 percent to EUR 129.4 million (previous year:
EUR 119.9 million). A price increase of around 3.0 percent
for spare parts during the second quarter plus the favorable
JJ
Launch of new products and product variants
JJ
Numerous new patent applications
JJ
Construction of new R&D center in Munich
progressing according to plan
response from customers to our extensive service offering had
a positive impact here. Our strategy for the traditional repair
Our research and development (R&D) activities are geared
and spare parts business also yielded results in 2010. In coun-
towards the needs of the market and our customers, also
tries with direct sales channels, we implemented measures to
taking regional dynamics into account. New product develop-
reduce the turnaround times on repairs, improved our equip-
ments are inspired by customer needs. We always implement
ment pickup and drop-off service from and to construction
existing and new legal regulations, particularly measures
sites and intensified training for our service staff. We were able
aimed at protecting users and the environment.
to hold our own against independent workshops and construction machinery dealers.
The Group’s R&D departments are responsible for the development of new products and ongoing evolution of existing
Rental business less prone to cyclical variations but
dependent on the weather
models. We develop products at the following locations: light
We started expanding our rental activities in Central and
Milwaukee (USA), Norton Shores (USA) and Manila (Philip-
Eastern Europe back in the crisis year of 2009. The business
pines); compact equipment under the Weidemann brand is
reached an all-time high back then as many customers saw
developed at the Weidemann GmbH headquarters in Diemel-
rental as a better alternative to purchase at a time of major
see-Flechtdorf (Germany), while compact products under the
equipment products are developed in Munich (Germany),
Other factors that impacted on results
the production plants in Pfullendorf (Germany) and Linz (Aus-
VDS system receives several product innovation
awards
tria). Development and research work is coordinated at Group
In September of last year, the “State Innovation Award 2010”
level in order to synchronize activities at local level.
was presented to the most innovative companies in the
Kramer Allrad and Wacker Neuson brands are developed at
71
digging system (VDS) was awarded second place in the large
ing our pioneering position in product safety, operator safety
enterprise category. Wacker Neuson was also was awarded
and environmental protection. Research, development and
the French EDGE innovation prize for VDS in the category
innovation are playing an increasingly central role, for example,
“Construction and Maintenance of Green Spaces” in the
in ensuring compliance with climate protection targets. Our
mini excavator segment from zero to five tons. The prize was
activities here have a particularly high priority at Wacker
awarded at Saint-Chéron, near Paris. VDS is a hydraulic tilt
Neuson as we intend to maintain our high standards in the
mechanism that keeps the bucket in a vertical position even on
delivery of environmentally sound, safe products as we move
uneven ground, saving customers both time and money, and at
forward. Which is why, in addition to developing new products,
the same time increasing operator ergonomics. This technol-
we will continue to focus our R&D efforts on compliance with
ogy gives us a clear competitive advantage.
more stringent environmental regulations governing combustion engine emissions. For further information on new exhaust
Design has long been a key aspect of Wacker Neuson’s com-
emissions regulations, please refer to the “General legal frame-
pact equipment products. The iF Design Award is the world’s
work” section.
most renowned product design prize. 2011 iF Design Awards
p. 48
went to the Wacker Neuson 14504 compact excavator, the
The R&D payroll mainly consists of mechanical and electronics
new joystick concept for compact excavators, the 2506 tele-
engineers, technical engineers, technical drawers and other
scopic handler from Kramer and Weidemann’s T4512 compact
skilled workers. In 2010, we concentrated on skill building
telescopic handler. The award is an international seal of ap-
among these employees with a series of project management
proval for outstanding design quality and customer value. The
and engineering design seminars, flanked by external courses.
machines were rated on numerous features including compact
dimensions, maneuverability and innovative design combining
2010 was another year of new developments and numerous
maximum payload with easy access to narrow, low-headspace
product launches. We developed various basic models for the
areas. Other highlights included an engine hood design that
global market, creating numerous modular variants of these
gives the operator maximum visibility from the cab.
models to meet country-specific requirements. We launched
78 new products and product variants in the light equipment
New peak performance from light equipment
segment worldwide (previous year: 44), thus further consoli-
Much of our light equipment is subject to particularly high
dating our technology lead in this R&D-intensive area. On the
stresses. R&D activities for these products focus on ensur-
compact equipment side, the Group launched 28 new innova-
ing high-quality, robust design, shorter downtimes and longer
tions (previous year: 25).
maintenance intervals. Our aim here is to keep lifecycle costs
as low as possible while ensuring highest productivity levels
Our new and enhanced products combine greater cost
for our customers. The new BTS 630 and BTS 635 cut-off
efficiencies in deployment with the same high standards of
saws, for example, were developed in line with these principles
quality. In April 2010, we presented our largest range of new
in 2010 and launched in January 2011. The machines are fitted
products to date at bauma, the world’s largest construction
with a new air filter system that makes them extremely produc-
equipment trade fair, in Munich. The world’s largest vibra-
tive. We also improved the compaction performance of our
tory plate, Wacker Neuson’s DPU 130, was nominated for the
successful range of medium-weight vibratory plates by around
bauma design innovation award. The DF 16 rebar tier was
25 percent and launched the EH 25, the world’s first electric
awarded the Euro-Test prize for its outstanding contribution to
breaker delivering 70 joules of single-stroke energy.
user ergonomics.
Austrian state of Upper Austria. Wacker Neuson’s vertical
In 2010, our development was aimed in particular at extend-
72
Innovation is the key to expanding our market shares world-
Production and logistics
wide. Wacker Neuson regards research and development as
crucial growth drivers and core elements of the Group’s overall
success. During the period under review, around 49 percent
of revenue in the light equipment segment was generated by
products that were launched within the last five years (previous
JJ
Rising demand improves capacity utilization
JJ
Flexible work arrangements as business picks up
JJ
Logistics processes streamlined
year: 25 percent). “Newcomers” to the compact equipment
offering accounted for around 60 percent of segment revenue
We manufacture light equipment at Reichertshofen (Germany),
(previous year: 60 percent).
Milwaukee, Norton Shores (both US) and Manila (Philippines).
Our focus factory concept guarantees optimum efficiency by
R&D expenses amounted to EUR 22.3 million (previous year:
ensuring that each product group is manufactured at just one
EUR 20.5 million). The R&D margin (share of total revenue) thus
site. Not only do focus factories ensure the largest possible
fell to 2.9 percent (previous year: 3.4 percent). During the pe-
batch sizes, correspondingly low costs and rapid availability
riod under review, we also capitalized expenses in the amount
of products, they also provide a certain degree of natural
of EUR 4.1 million (previous year: EUR 4.5 million).
currency hedging through cross-deliveries between regional
logistics centers.
Over the last fiscal year, we filed a total of 47 new patents and
utility models (previous year: 31 trademark rights). 45 patents
Compact equipment factories are located in Linz (Austria),
and utility models were granted (previous year: 74 trade-
Pfullendorf and Korbach (both Germany). We have expanded
mark rights). In total, we own 595 patents and utility models
and upgraded production capacity in Pfullendorf (Kramer
worldwide.
Allrad) and Korbach (Weidemann) in recent years, equipping
our facilities here with cutting-edge technologies.
To successfully utilize third-party development know-how,
we rely on the strengths of individual OEM (original equip-
Supply bottlenecks extend delivery windows
ment manufacturer) partnerships or develop forward-looking
Our customers expect short order turnarounds and on-time
solutions in specific areas with our system suppliers. We only
deliveries and are accustomed to this with Wacker Neuson.
procure third-party services in exceptional cases. This entailed
In a growth phase, however, it is to be expected that some
expenses of less than EUR 0.26 million in the light equipment
suppliers will have problems meeting deliveries if they signifi-
segment during the year under review (previous year: EUR 0.25
cantly scaled back their own capacity prior to the upswing.
million). In addition, we cooperate with national and interna-
As a precautionary measure, we started to increase inventory
tional universities and research institutes. This gives us access
levels back in fall 2009. We proceeded with caution though.
to the latest scientific insights.
If demand had stayed low over a longer period, or worsened,
high inventory levels would have tied up an unnecessarily large
We also continued expanding our test department in Munich,
amount of capital.
equipping it with cutting-edge measurement and test stations. This department is set to move into the new R&D center
When business picked up faster than expected in 2010, delays
for light equipment in Munich during the first half of 2011. The
on the part of our suppliers were so severe that they prevented
state-of-the-art R&D center will play a pivotal role in maintain-
us from completing and delivering our compact equipment
ing our dynamic pace of innovation and the high quality of our
orders on time, and our plants were faced with additional pro-
light equipment into the future. In total, the Group plans to
duction and handling costs. Manufacturers across our industry
invest around EUR 43 million in the new R&D center and the
were facing similar issues. Parts such as steering columns and
neighboring Group headquarters. The majority of this con-
hydraulic components for wheel loaders were delivered late
struction work was carried out over the last two years.
across the board.
The delivery timeframe for a number of product groups in
our light equipment offering, which thanks to a high degree
of vertical integration is less dependent on supplier markets,
remained between 24 and 48 hours in 2010. Other product
groups were delayed by up to four weeks. Delivery windows
for compact equipment products were exceptionally long, up
the logistics centers – complemented by the high flexibility of
to five months in spring. Similar to the automotive industry, we
our production facilities. Attention focused on improving parts
rely on premanufactured parts that involve their own complex
and product availability in 2010.
73
supply chains before they get to us. At the close of the year,
average delivery times were down to just four months. We continue to maintain regular contact with our business partners
Sustainability and quality
Improved capacity utilization at all plants
The upswing in demand improved capacity utilization at all
of our production facilities. The Group initially managed its
JJ
Increased awareness surrounding sustainability
JJ
Focus on ergonomics and safety
JJ
Certified quality management system
increased production needs via flexitime accounts and by
reducing short-time work programs. We then terminated short-
As an international player, Wacker Neuson takes its responsi-
time work schemes at all facilities in Germany and Austria in
bility to society and the environment very seriously. Our main
May 2010. In the US, where there are no such comparable legal
focus is on sustainable growth rather than short-term gains.
options, we started to increase headcount again from spring
Environmental protection is a key issue with every new product
2010 on. We also adjusted staff capacity slightly in Europe
we develop and facility we invest in. Our designers and pro-
during the period under review in response to rising order
duction and facility planners face the challenge of creating the
intake but are otherwise focusing on using existing flexitime
optimum balance between product quality, faster, more cost-
options during the upturn. At the start of 2011, utilization of pro-
effective production, energy efficiency, environmental protec-
duction capacity at our facilities had returned overall to 2008
tion and health and safety. Over the past year, we implemented
levels based on the current staff structure. In previous years,
various measures to raise environmental protection levels and
we had ramped up production capacity in preparation for rising
to protect the health of our employees.
demand. We are therefore currently manufacturing below full
capacity and are ideally equipped for the coming years.
Committed to the environment
In recent years, Wacker Neuson has progressively raised aware-
Ongoing improvements to production and logistics
processes
ness in the company surrounding the importance of sustain-
We have also implemented a variety of measures to streamline
important issue in product development. We choose environ-
production processes and make them more customer-centric.
mentally friendly materials wherever possible and factor end-
In addition to investing in a powerful machinery pool, we reor-
of-life recycling into the design of our machines and equipment.
ability in our business dealings. Sustainability is a particularly
ganized production structures, material flows and intralogistics
across the Group.
As a manufacturer of light and compact equipment, we are
subject to a wide range of national and international regula-
With the exception of our plant in Linz, Austria, which is leased,
tions aimed at protecting users and the environment. We
all production facilities are in company ownership. In order to
comply with emissions control, water and soil laws as well as
meet the ongoing rise in demand for compact equipment such
guidelines governing exhaust emissions.
as excavators, skid steer loaders and dumpers, we have started
construction on a new production facility in Hörsching, near
User safety, however, is always a top priority. Product ergo-
Linz, which will be owned by the company. We will be relocating
nomics and the reduction of noise and vibration-induced
production operations to this new site in the first half of 2012.
impact for users are just some of the areas we focus on here.
Our ultimate objective is to deliver products that go above and
Smooth logistics
beyond legal regulations.
The Wacker Neuson Group logistics centers for new light
equipment, spare parts and attachments are located in Karls-
Our products are designed for durability and low maintenance
feld (Germany), Germantown (Milwaukee, US) and Hong Kong
– despite being typically deployed under harsh conditions. We
(China). Spare parts logistics for the Korbach compact equip-
strive to reduce environmental impact by using appropriate
ment plant is integrated in the Karlsfeld logistics center. The
materials and ensuring low exhaust emissions. This reflects our
Group has an efficient logistics planning system in place within
commitment to both customers and the environment.
and suppliers to jointly develop forward-looking solutions.
74
Energy balance – improved climate protection and
greater conservation of resources
Recycling and reuse have priority over disposal at all times.
We regularly arrange audits to identify areas within our compa-
hazardous waste. Paint, grinding and oil sludge are collected
ny offering scope for energy efficiency gains. Improving energy
separately from production processes to be filtered and
management features on our light and compact equipment
reused, where possible, or appropriately disposed of. In May
(which means users are releasing less CO2), managing energy
2010, we rolled out a uniform, electronic management system
more efficiently in our buildings and our fleet and reducing
at our German sites to ensure standardized disposal of all
heat, electricity and fuel consumption all help to permanently
hazardous waste at these facilities. The information on waste
reduce CO2 emissions. The need to reduce CO2 emissions
treatment can then be processed and evaluated efficiently. In
from our products is an integral part of our product philosophy.
this way, we are gradually raising sustainability levels across
In the coming years, we will be raising our game here further
the entire company.
We use Europe-wide standardized waste codes to categorize
by complying with new exhaust emissions regulations for
compact equipment.
Injury and accident prevention
We regularly held safety briefs and occupational safety training
Implementing the latest sustainable production
techniques
courses for employees to minimize the risk of accidents and
In the production of our equipment, we use lighter, higher-
ing procedures, training sessions for safety officers and spe-
grade steel wherever appropriate in order to reduce machine
cial courses for specific machines. Where necessary, we also
weight. This lightweight design can help reduce fuel consump-
carry out regular supplementary audits for specific processes
tion and, by extension, CO2 emissions.
to assess whether the workplace is safe, tidy and clean. During
injury. These included seminars on correct loading and secur-
the period under review, we improved workplace ergonomics
The new plants we constructed in the past three years in
overall.
Korbach, Pfullendorf (both Germany), Manila (Philippines) and
Norton Shores (US) have all been designed with optimized
Responsibility beyond company walls
building management systems. Pfullendorf takes the lead here,
Our company and general approach to business epitomize the
with highlights including solar panels to heat running water,
values typical of mid-sized, family-owned enterprises, focused
waste water treatment, rainwater recycling, heat recovery,
on sustainable and profitable growth. Our corporate culture
structural HVAC, and intelligent lighting that adapts indoor hall
enables us to create a decentralized organization that reacts
lighting to natural fluctuations in daylight.
with greater speed and less bureaucracy to customer needs.
A special coating on our machines protects them against the
We engaged in a variety of voluntary initiatives to the benefit of
elements and rust. Special, high-quality powder coating is in
our employees. Wacker Neuson is a family business in the tru-
use at our Korbach and Reichertshofen production facilities.
est sense of the word. We remained committed to looking after
Eco-friendly, water-based coatings ensure a high-quality finish
our employees in 2010. The Curt Wacker Memorial Founda-
on certain machine parts from Reichertshofen and Pfullendorf.
tion, for example, helps individual employees in hardship. Our
In 2010, we also investigated our other production locations to
Hermann Wacker Innovation Award is presented each year in
see how we could improve our environmental performance at
acknowledgement of excellent creative and, above all, techni-
those plants.
cal employee achievements that deliver lasting benefit to the
company. Please refer to the “Human resources” section for
Since January 2009, we have been sourcing environmentally
further information.
friendly electricity for three of our sites.
Quality management system confirmed by audit
Careful handling of environmentally hazardous waste
Long service life and high reliability, ease of operation and
Our employees across the globe are highly sensitive to the
repair, low operating costs and compliance with the highest
dangers of hazardous waste. Corresponding regulations are
safety standards are key benchmarks of our product qual-
embedded in company guidelines such as the quality manage-
ity. To ensure we always meet our own high standards, our
ment guideline.
commitment to quality is hardwired throughout the entire
organization and we are continuously on the lookout for areas
of improvement. In 2010, we further optimized our Group-wide
quality management system. A significant share of our 2010
segment as prices for diesel engines and hydraulic compo-
investment funds, for example, was used to purchase state-
nents rose. This led us to raise our prices for light and compact
of-the-art, dedicated measurement technology to enable us to
equipment by 3 to 4 percent at the start of 2011.
75
meet the exacting demands we place on our existing portfolio
and new products.
Lead buyer concept optimizes procurement prices
cept at our compact equipment production locations in Linz
ment system are documented and certified to DIN EN ISO
(Austria), Pfullendorf and Korbach (both Germany). Consolidat-
9001. Our quality management system covers our compact
ing the procurement of identical or similar parts in this way has
and light equipment business segments, our Group head-
enabled us to negotiate more attractive purchasing terms.
quarters in Munich, our production plants in Reichertshofen,
Pfullendorf (both Germany), Linz (Austria), Norton Shores and
Our affiliate in Serbia supplies some ready-made steel com-
Milwaukee (both USA), our logistics center in Karlsfeld (Ger-
ponents to our compact production facilities, thus optimizing
many) and all sales regions in Germany. In 2010, an external
workflows in the production plants and reducing dependency
audit reconfirmed that our quality management system is com-
on suppliers.
prehensive and effective. Under the umbrella of this system, for
example, quality indicators are reported on a monthly basis for
Globalization is still the predominant trend in procurement.
the products from all locations based on the German, US and
Choosing the right procurement markets is becoming an
Canadian markets. These are used to improve quality by iden-
increasingly important factor to secure the Group’s competitive
tifying scope for improvement. Quality management officers
position. We have therefore established procurement offices
continuously monitor the implementation of this system.
across the globe, for example in Shanghai. Our aim here is to
focus on promising key suppliers and incorporate them at an
early stage into our development and production processes.
Purchasing
We will continue to align our procurement, production and
JJ
Increase in raw material and premanufactured part
logistics processes more closely in the future in order to
prices
optimize the entire supply chain and minimize dependency on
JJ
Closer ties with suppliers
JJ
Lead buyer concept successfully established
individual suppliers. For further information on the impact of
supplier bottlenecks in the year under review, please refer to
the “Production” section.
Within the cost of sales, the cost of materials and third-party
services constitute the largest cost factors for the Group.
Reacting to price fluctuations in procurement
markets
To manufacture its products, Wacker Neuson requires various
components and raw materials – particularly steel, aluminum
Human resources
JJ
New hires due to rising demand
JJ
HR marketing intensified
JJ
Training for young people actively supported
and copper. We also require structural steel components and
precast parts as well as hydraulic and chassis components. To
Wacker Neuson Group employees play a key role in the com-
meet projected future demands, Wacker Neuson concluded
pany’s successful growth and performance. Identifying and
flexible agreements for raw materials with its main suppliers in
promoting our employees’ skills and expertise is therefore a
recent years.
cornerstone of our HR strategy. Fairness, respect and trust are
the core principles that define how we cooperate and interact
The healthy economic climate raised prices for raw materials,
especially for steel and steel components. However, long-term
contracts for materials subject to variations in annual demand
ensured fair pricing for Wacker Neuson. Currency fluctuations
between the euro and yen were felt in the compact equipment
with each other across the group.
For some time now, we have been operating a lead buyer conThe processes and indicators covered by our quality manage-
76
Employees by sector
Age structure
in %
number of employees in %
Production
33.5
15 – 20
4.2
Sales and Service
47.2
21– 30
19.4
Administration
11.0
31– 40
23.3
8.3
41– 50
28.2
51– 60
20.7
above 60
4.1
Other
Manpower capacity up slightly due to order situation
In 2009, we implemented a range measures to reduce staff
capacity by over 20 percent (flexible work accounts, flexi-
HR marketing and talent development intensified
time, reduction of temporary staff, short-time work schemes
Qualified professional training gives young people a good and
and headcount reductions). In 2010, the upswing in business
motivating start in the working world. In 2010, we provided
enabled us to cancel all of these measures in the first half of
intensive training for 118 young people at our production
the year. At the close of 2009, around 15 percent of our em-
sites in industrial or business posts or within the framework
ployees were still involved in short-time work schemes. By the
of practical training programs flanked by studies at techni-
end of April 2010, we were able to discontinue short-time work
cal or vocational colleges (previous year: 146). Our training
entirely due to the higher utilization of production capacity. In
philosophy centers on providing experience in a wide range
some areas of the company, for example in Austria and the US,
of disciplines, assigning individual areas of responsibility and
we even increased headcount to support our growth strategy.
ensuring intensive, one-to-one trainee support. The student
training quota for the Wacker Neuson Group over the last fiscal
At December 31, 2010, the Group employed a total of 3,142
year was 4.8 percent worldwide (previous year: 6.1 percent). As
people, a 2.7 percent increase on the previous year’s figure of
in the previous year, 45 trainees completed their training, with
3,059. These figures are calculated by converting the number
31 of these offered positions in the company (previous year:
of people working for the company into full-time jobs. They do
28), a takeup rate of 68.9 percent (previous year: 62 percent).
not include temporary staff.
In Manila, we continued to provide training in collaboration with
the Don Bosco institute. Here we trained 7 young people from
Within the Wacker Neuson Group, 2,379 – or 75.7 percent – of all
low-income families along the same lines as the German dual
employees were based in Europe at the balance sheet date (pre-
training system (previous year: 19 young people).
vious year: 2,361). 573 were employed in the Americas region
(previous year: 513) and 190 in the Asia region (previous year:
We were able to hire and systematically support qualified grad-
185). In Germany, headcount came to 1,505 at the close of 2010
uates by attending renowned career fairs. In order to attract
(previous year: 1,533), and the number employed in the US was
talent to our company, we intend to focus more on recruiting
496 at the end of the year (previous year: 442). Personnel costs
networks and establishing links with further technical colleges
totaled EUR 183.1 million (previous year: EUR 170.5 million).
and universities.
Headcount by region
Training and voluntary benefits
The Wacker Neuson Group has always placed great importance
on ongoing employee development and continues to do so. In
75.7 Europe (77.2)
6.0 Asia (6.0)
2010, technology, IT systems, SAP applications and languages
were core subjects of our internal training curriculum. The
Wacker Neuson Academy ran a total of 273 courses during the
year under review (previous year: 129). Around 3,341 employees
from our company and increasingly from our customers completed these courses (previous year: 1,780). Total staff development expenditure from our most important Group companies
(around 72 percent of all employees) came to around
EUR 0.66 million in 2010 (previous year: EUR 0.43 million).
77
Number of employees (Group)1 as of December 31
2010
2009
2008
20072
2006
20053
3,142
3,059
3,665
3,659
2,837
2,630
By number of full-time jobs.
Through the merger with Neuson Kramer.
3
Through Weidemann acquisition.
1
2
Dec. 31,
2010
Dec. 31,
2009
JJ
Successful presence at trade fairs
Part-time employees as a %
3.5
3.31
JJ
Sales structures adapted to country-specific market
Number of trainees
118
146
Quota of trainees as a %
4.7
6.05
appr. 660,000
appr. 430,000
Expenses for personnel
development in €
Average age in years
Number of men (proportion as a %)
41.1
40.76
2,084 (83.4)
2,005 (83.02)
414 (16.6)
410 (16.98)
12.05
12.13
Number of women
(proportion as a %)
Number of years with the company
Fluctuation as a %
Sickness rate as a %
8.5
21.282
2.65
2.81
Figures only based on 72 percent of total workforce
(previous year: 75 percent).
2
Influenced by the market crisis as terminations for operational reasons
are included.
1
structures
JJ
Successful marketing of compact equipment via
existing sales network
Success at world’s largest construction machine trade fair, bauma 2010, and other industry exhibitions
The Wacker Neuson Group presented its portfolio at bauma
2010, the world’s largest construction machine trade fair held
in April 2010 in Munich. Our portfolio of high-quality, innovative
Wacker Neuson and Kramer Allrad products was extremely
well received. We put the spotlight firmly on innovations that
are already in series production and not just prototypes due
for launch in the distant future. This had a positive impact on
sales during the event. The number of contracts concluded
this year was up significantly on figures for the last bauma in
We again offered our employees in Germany numerous volun-
2007, which was a boom year. Our direct sales team won over
tary benefits in 2010, including an employer-funded company
25 percent more deals. This figure does not include the results
pension plan. Depending on the location, we also supported
achieved by our dealers.
employees across the Group with grants and healthcare
initiatives.
Wacker Neuson also showcased its broad product portfolio at
the Galabau trade fair in Nuremberg, Germany, at the end of
General collective wage negotiations did not take place in
September. Galabau is the largest gardening and landscaping
Germany in 2010.
trade fair for German-speaking countries and proved a great
success for the company. Order intake in 2010 was up an
At Wacker Neuson, all employees – management included –
impressive 70 percent on the last Galabau in 2008.
see change as an opportunity. The ability to embrace change
will allow us to continuously evolve and prosper in the future.
The company also exhibited and demonstrated products at
Continuous process optimization and structural evalua-
smaller yet equally successful trade fairs in the UK, France,
tion are an integral part of our organizational development
Germany and the US. Events of this kind are crucial for the
process.
Group as they enable visitors to discover the quality of our
products first-hand. All of our trade fairs were a resounding
success, drawing a steady stream of visitors and sparking very
promising discussions with our customers.
Sales, customers and marketing
Human resources figures1
78
Brand structure
LIGHT EQUIPMENT
COMPACT EQUIPMENT
Brands
Produced for
Markets/
target groups
Construction, gardening and landscaping,
municipal bodies, recycling, industrial sector
Agriculture
Weidemann GmbH exhibited its products at numerous agri-
on Wacker Neuson products to dealer websites in real time,
cultural trade fairs in Europe, including Eurotier 2010, one of
the service improves communication with dealers and their
Europe’s largest agricultural trade fairs. The Weidemann brand
customers, creating an effective sales interface.
showcased its new corporate design and logo, which reflects
the company’s ties to the Wacker Neuson Group.
Our customer base in 2010 again comprised construction
companies (public and private enterprises), gardening and
Expansion of global sales network
landscaping firms, municipal bodies, companies from the
We are aligning our sales structures with local market dynam-
industrial and agricultural sectors, professional rental firms
ics. We have three distribution models: a direct sales chan-
and specialist dealers. We generated around 15 percent of
nel to end customers and rental companies; a global dealer
worldwide revenue during the past fiscal year with our ten
network; and a combination of both. In Europe, we mainly
largest accounts (previous year: 13 percent). The construction
distribute directly to end customers, major accounts and sales
companies and specialist dealers we dealt with were mainly
partners. Weidemann agricultural products are sold mainly
smaller businesses. According to our own estimates, almost
in Europe via special dealer networks. We distribute Kramer
three quarters of these firms have a headcount of less than ten.
Allrad products only in Europe. In the US, the Group distributes
ers. In Asia, we distribute to smaller construction companies,
Individualized solutions and customer-centric
strategy
dealers and rental firms.
During the period under review, our sales and service teams
Wacker Neuson products exclusively to rental firms and deal-
focused on customer acquisition, promotional measures and
During the period under review, we continued to expand
attractive financing models via external service providers (of-
national sales channels in countries such as France, Poland,
fering zero-percent financing, for example). We also offered our
Australia, South Africa, Russia and China. We are making
customers individualized sales and service solutions tailored
particularly good headway with the distribution of our com-
to their needs and held various seminars in our Reichertshofen
pact equipment offering in the US, which is a key market for
training center. These were targeted at the company’s sales
the Group. Here we are extending our existing network of
and service teams as well as at customers looking for infor-
dedicated dealers who exclusively distribute a selected range
mation on how to put our products and services to the best
of light and compact equipment from the Wacker Neuson
possible use and maximize process efficiencies. The company
brand. To provide the best possible support for dealers in the
also held a number of training courses in Spain, France, Italy,
US, we launched a new online service in 2010 through our
Poland, Australia and the US for customers and employees as
affiliate Wacker Neuson Corporation. By feeding information
part of its sales support concept for compact equipment.
Risk report
IX. Risk report
79
company and described in detail in this report do not provide
an absolute guarantee or warranty that all risks are always
correctly identified and recorded in full and in good time.
Risk reporting requires that the company also outline its risk
management system within the Group Management Report.
Furthermore, the key steps involved in the internal control
Risk categorization
Risk class
Risk exposure1
To be monitored
EUR 50,000 to 125,000
Major
EUR 125,000 and more
1
Risk exposure = (probability/100) x impact
system and the risk management system in relation to the
(consolidated) accounting process must be described in detail
Our risk reporting system lists and describes each individual
pursuant to Section 315 (2) No. 5 and Section 289 (5) of HGB.
risk identified in our lines of business. We examine the risks
Since the internal control system is an integral part of the over-
every quarter and add newly identified risks if necessary.
all risk management system, the Executive Board has decided
To this end, the controlling department consults the depart-
to present both together. These disclosures are explained in
ments at Group headquarters and at the affiliates. Following
more detail – also in relation to the accounting process – as
completeness and plausibility checks, the data gathered is
a precautionary measure pursuant to Section 175 (2) AktG as
aggregated.
amended by the German accounting law reform act (Bilanzrechtsmodernisierungsgesetz) although this regulation has
The Group’s comprehensive risk management system also
since been overturned.
includes systematic financial risk management. We have
defined Group guidelines and policies for certain activi-
General
ties such as dealing with foreign currency risks, interest rate
The Group-wide risk management system serves as an early-
risks and credit risks, the use of derivative and other financial
warning safety net that identifies, assesses and appropriately
instruments and the use of liquidity surpluses. We assess the
communicates risks and enables the Group to implement cor-
risks using both quantitative and qualitative methods that are
responding counteractive measures in good time. This calls for
uniform throughout the Group, allowing comparison across the
the reliable identification, evaluation and monitoring of all risks
various business units. The risks are evaluated according to
that may prevent this goal from being achieved. In fiscal 2010,
probability of occurrence and potential damages.
the Wacker Neuson Group continued to implement its risk
management system as a key steering tool for business deci-
Risk probability
sions and processes. This system includes planning for each
Category
of the core business segments, comprehensive Group reports
Low
on all affiliates (which are regularly analyzed, discussed, evaluated and submitted to all decision-makers), process definitions
for all business segments and Group auditing.
Medium
Risk probability as a %
0 to 5
5 to 20
High
20 to 50
Very high
50 to 99
The risk management handbook outlines the Group’s goals,
management system. It also assigns roles and responsibility
Key features of our internal control and risk management systems in relation to accounting plus related
disclosures
for identifying, analyzing, monitoring and communicating risks.
According to the law outlining modernization of German
This allows us to derive suitable measures to actively counter-
accounting rules, the internal control system covers the basic
act known risks. Every risk management system has certain
principles, processes and measures required to ensure effec-
limitations, however. The Group makes every effort to rule
tive, cost-efficient, due and proper performance of accounting
out incorrectly applied control mechanisms or similar vulner-
processes in compliance with the relevant legal guidelines. In
abilities. As such, the internal control systems deployed in our
this context, this also includes the internal auditing system, to
its risk policy in terms of defining, assessing and quantifying potential risks, and the nature and procedures of the risk
Presentation of the internal control and risk management system including information in accordance with
Section 315 (2) No. 5 and Section 289 (5) HGB plus an
explanatory report by the Executive Board
80
the extent that it relates to accounting. As part of the internal
In relation to accounting, the aim of our internal control and risk
control system, the risk management system – similar to the
management system is to ensure that all company dealings
auditing system – draws on appropriate control and monitor-
and circumstances are disclosed, calculated and evaluated
ing processes for accounting. This refers in particular to items
correctly on the balance sheet, and correctly incorporated
on the balance sheet recognizing the company’s risk hedging
in the accounting system. This enables the Group to at least
positions (evaluation units).
identify and – by and large –prevent accounting errors.
The Wacker Neuson Group’s internal control and risk manage-
Efficient accounting procedures are built on a framework
ment system in relation to accounting can be described as
comprising suitably qualified employees, appropriate tools,
follows:
dedicated software, a clearly defined management, control
JJ
JJ
JJ
JJ
The individuals/units responsible for accounting are clearly
and monitoring structure plus internal regulations and guide-
defined at company and Group level. Responsibility has
lines. Clearly defined areas of responsibility plus a range of
been vested in the accounting, controlling, auditing and
controls and checks as described in detail above (in particular
treasury departments. Ultimate responsibility lies with the
second sign-off and plausibility checks) ensure that our ac-
Executive Board. Within accounting, we clearly differentiate
counting processes are executed correctly and with due care
between booking and auditing financial data.
and attention.
Employees involved in accounting are qualified to the highest standards.
This framework ensures that business transactions are cap-
We have suitable systems and processes in place for plan-
tured, processed and documented in the accounting systems
ning, reporting and controlling as well as for risk manage-
of the company and Group in compliance with other statutory
ment and deploy these across the Group. Reports due on
regulations, international accounting standards, the Articles of
a quarterly or monthly basis, including in accounting, en-
Incorporation and internal company guidelines, and that these
able the Group to respond quickly to unexpected negative
figures are rapidly and correctly recognized in the balance
developments.
sheet. Our risk management strategy enables us to identify
Procedural guidelines, such as the Group-wide accounting
risks at an early stage, respond appropriately and communi-
manual, rating guide and list of processes subject to second
cate them in a timely manner. At the same time, it ensures that
sign-off, are documented in writing and accessible at all
assets and liabilities are correctly evaluated and disclosed
times to all Group employees. These guidelines guarantee
in the Annual and Consolidated Financial Statements. This
uniform handling of specific scenarios throughout the entire
provides our stakeholders with reliable, meaningful and timely
Group. We update them as required and align them with
information.
new circumstances and requirements.
JJ
Proven standard software supports accounting functions,
and all systems deployed are secured against unauthorized
Risks
access from third parties.
JJ
Line managers double-check sample bookings. Similarly,
As of December 31, 2010, the company identified the following
electronic checks are regularly activated and plausibility
significant risks to the Wacker Neuson Group that could have a
checks carried out. Effective controls (including second
negative impact on business development:
sign-off and analytical checks) are in place for all account-
auditing.
Environment and industry risks (risks related to the
overall economic situation, the industry, locations and
countries as well as other sales risks)
Various internal bodies, such as the auditing department
At 49 percent, environment and industry risks account for the
or the auditing committee of the Supervisory Board, review
largest share of overall risks (previous year: 32.2 percent).
ing processes (payment runs, for example).
JJ
JJ
Accounting processes are also regularly checked by internal
and rate the effectiveness of the internal control and risk
management system in relation to accounting processes.
The Wacker Neuson Group is dependent on the general economic climate and international construction industry trends.
Risk report
The affiliates Weidemann GmbH and – to a lesser extent –
The Wacker Neuson Group faces tough international compe-
Kramer-Werke GmbH and Wacker Neuson Linz GmbH are
tition. However, we are maintaining the price strategy accepted
dependent on developments in the agricultural industry.
by our customers. We are countering the potential risk of los-
81
ing market share here by offering attractive financing solutions,
The US property and subprime crises were precursors to the
for example, and strengthening our spare parts and service
recession in the real economy in 2009, which had a severe
offerings.
kets – the effects of which are still being felt in 2011. A repeat
If individual distribution partners do not sell the expected vol-
downturn in the US economy could squeeze demand for the
umes of our products, there is a risk that our company might
Group’s products and services. The weak development of key
not be able to achieve revenue and profit targets. Wacker
early indicators for construction activity in the US, for instance,
Neuson is constantly expanding its dealer network. Our strat-
could still trigger significant price adjustments. The US prop-
egy depends on dealers offering the full product portfolio for
erty market must stabilize, however, in order for the American
both the construction and agricultural industries. There is a risk
construction industry to recover in the long-term and not trig-
that certain dealers may elect to only offer part of our portfolio
ger another recession. As a result, there is a fundamental risk
and that dealers in the existing network may switch to com-
that our core markets in the US and Europe could be again hit
petitor products. We are countering this by maintaining close
by a downturn in the construction industry.
contact with our sales partners and addressing their individual
needs with attractive offers.
The large number of state investments in infrastructure projects has helped stabilize the sector. When these investment
The company has also identified a risk inherent in variations in
programs come to an end in our core markets in the US and
customer and supplier structures from one country to another.
Europe, the number of publicly financed construction projects
Within an individual country, the loss of a major customer (due
may fall. Construction investments in some EU countries may
to insolvency or market consolidation, for instance) can have a
also be delayed due to high national debt in these countries.
serious impact on demand for products and services from the
Both scenarios would curb demand for Wacker Neuson Group
affiliate concerned. We are countering this risk by proactively
products and services. We are countering this risk by adopting
maintaining strong customer relationships and flexible collabo-
proactive go-to-market strategies and diversifying target mar-
ration concepts.
kets in various industries. We are also launching new products
– above all compact equipment – and expanding the Wacker
Demand on the international market is becoming increas-
Neuson dealer network.
ingly concentrated due to mergers among our customer base.
Customer takeovers by financial investors are also possible
The German, Austrian and Swiss markets account for a size-
here. This type of development can have a positive or negative
able chunk of our consolidated earnings. Unfavorable market
impact on our unit sales and revenue, neither of which can be
trends in these three countries would have a disproportion-
predicted at this stage The Wacker Neuson Group is counter-
ately strong impact on Group earnings. We are countering
ing this risk through closer customer communication and by
this risk with proactive, flexible go-to-market strategies
continuing to build its brands.
through our direct sales channels in Germany, Austria and
Switzerland.
Performance-related risks (risks associated with
procurement, production and R&D)
The Wacker Neuson Group is also affected by seasonal
At around 29 percent, performance-related risks account
fluctuations. Sales may therefore fluctuate during the year.
for the second largest share of total risk (previous year:
9.9 percent).
The international nature of our business means our company
is exposed to a large variety of political, economic and other
The Group requires components and raw materials to manu-
risks.
facture its products – particularly steel, aluminum and copper.
Our production uses structural steel components, precast
negative impact on the construction and agricultural mar-
82
ity to such an extent that they had difficulty meeting orders
Strategic business risks (risks arising from business
decisions, investments, entering new markets, launching new products and acquiring and integrating
new companies)
during the upswing. Supply bottlenecks can lead to delays in
We are continuing to expand our compact equipment seg-
our shipments and may also result in increased prices. There is
ment as well as our sales and service network in line with our
a continued risk that suppliers may not be able to keep up with
long-term strategy. This involves investments, which may not
demand or could run into financing difficulties, although this
necessarily be recouped. Unforeseeable risks can also arise
risk has now fallen significantly. The company is countering
within individual projects and delay execution. We are counter-
this risk by maintaining close contact with our suppliers and
ing these risks by adapting our execution strategy to current
ensuring they are more involved in planning. We are also draw-
market dynamics, carefully examining all planned investments
ing up special standard agreements and developing new col-
and possible imminent risks, pursuing a lean project manage-
laboration strategies. To secure delivery capabilities, Wacker
ment policy and maintaining a high equity ratio.
parts, as well as hydraulic and chassis components containing
varying amounts of crude steel. Due to the economic recession
in fiscal 2009, many suppliers cut back their production capac-
Neuson is increasing inventory where necessary.
The company is also exposed to risks in connection with its
Increases in the price of raw materials, in particular for steel
ongoing international expansion activities. We are establish-
but also for other components, caused by current demand and
ing our compact equipment offering in Europe, the Americas
exchange rate fluctuations can push up cost of sales for the
and, in the medium term, Asia. We have identified customer
Wacker Neuson Group. The company is countering this risk
demand here. However, if our medium- to long-term expan-
through longer-term contracts and more flexible procurement
sion plans do not pan out as anticipated, or if we are unable to
strategies. We are maintaining regular contact with our busi-
harmonize national sales channels due, for example, to lower
ness partners and suppliers to jointly develop forward-looking
than anticipated demand for our products in certain countries,
solutions. Passing on price increases to a reasonable degree is
there is still a risk that we might have to change or downscale
generally accepted as standard practice by the market.
our long-term growth strategies. We are countering this risk
by regularly evaluating the success of our measures, ensuring
We also rely on supplier parts and raw materials being free of
a high degree of flexibility in line with market dynamics and
defects and meeting the relevant specifications and quality
through intensive training for our sales teams.
standards. Defects in premanufactured products can impact quality and slow production, which may ultimately delay
We also consider and carefully assess alliances and acquisi-
product delivery. The Wacker Neuson Group is countering this
tions as a means of gaining market share and expanding our
risk with a quality management system that also covers our
product portfolio. However, failure to evaluate risks accurately
suppliers.
when acquiring another company or entering into a partnership
may have a negative impact on Group business development
The Wacker Neuson Group depends on developing new prod-
and growth prospects.
ucts and bringing these to market in good time. It is essential
that we comply with national and international laws and
We have secured our OEM partnership with CLAAS Global
directives and factor these into product development. If we do
Sales GmbH and our strategic alliance with Caterpillar Inc.,
not continue to do this, our competitive position and growth
Peoria, USA, with long-term contracts. The company is coun-
opportunities may be impaired. The company’s R&D depart-
tering the risk of these OEM alliances being terminated through
ment therefore continuously works to develop new products
close collaboration, regular contact and the ongoing improve-
and enhance our existing portfolio, always aligning its activities
ment of processes and product quality.
with market demands and observing applicable regulations,
laws and directives.
Risk report
can threaten our ability to deliver products and meet sales tar-
Other risks (risks associated with human resources,
IT and the environment)
gets for specific areas. This also applies to delayed parts and
The company uses IT in numerous areas. Failure of these
component deliveries from suppliers. We are minimizing these
systems could negatively impact on our production and goods
risks through proactive go-to-market strategies and special
flow, for example, and lead to loss of revenue. The company
standard agreements securing delivery capabilities.
is countering this risk through IT backup strategies. We are
In addition, loss of suppliers (due to insolvency, for instance)
83
that can occur during the implementation of global IT systems
difficult and time-consuming.
as well as to prevent additional costs.
The financial risks (risks associated with financial instruments,
Increasingly strict regulations governing noise, environmental
exchange rate and interest fluctuations, and financing) are
and user protection can entail additional costs for the Wacker
explained in the Notes to the Consolidated Financial State-
Neuson Group. We are counteracting this risk by adjusting our
ments (items 23 and 30). Financial risks account for around
price policy.
12 percent of overall risk (previous year: 49.5 percent).
In light of current market developments, the Wacker Neuson
Legal risks (risks related to pending legal proceedings, patent and trademark law and tax law)
Group is looking to recruit qualified mechanical engineers. The
If the company were unable to protect its intellectual property
company is countering this risk with dedicated recruitment
sufficiently, this would impair its competitive ability. We are
efforts.
labor market may not meet our need for qualified staff. The
reducing this risk through intensive patent and intellectual
property management.
Summary of Group risk situation (assessment of risk
situation by management)
Our market-leading products are being copied – in particular
Compared with fiscal 2010, the value of potential damages has
by Chinese manufacturers – and this can distort sales. We are
dropped overall.
minimizing this risk by enforcing our intellectual property rights
more aggressively while expanding our international sales and
Viewed as a percentage of overall risk, our main risks lie in the
service network.
performance, financial, economic and industry categories.
Together, these three categories represent around 90 percent
Warranties and product liability claims can result in claims for
of total risk (previous year: 92 percent).
damages and injunctions. We are minimizing this risk by taking
the greatest of care in the development and manufacture of
We are not currently aware of any other significant risks to the
our products on the one hand and, on the other, by drafting
Group. Furthermore, we have not identified any individual or
contracts carefully and ensuring they are properly enforced.
collective risks to our continued existence as a going concern
The Group also minimizes the risk of disputes with third parties
that might negatively affect the company in the foreseeable
over intellectual property rights through extensive prior investi-
future.
gations and research.
The risk profile of the Wacker Neuson Group is not currently
No legal proceedings are currently underway or pending that
analyzed and evaluated by an external body such as a rating
might pose significant risks to the Wacker Neuson Group’s
agency.
financial situation. The Group has concluded insurance policies worldwide to protect against liability risks and potential
damages attributable to the company.
pursuing a strict project management policy to counter risks
Planned changes to the company’s legal structure could prove
84
Distribution of risk
Group Management Report. The same information must also
as a %
be disclosed in the Management Report, pursuant to Section
289 (4) of the HGB. Furthermore, according to Section 176 (1)
Risk category
Percentage share of total risk
Sentence 1 of the AktG, the Executive Board must submit a
Environment and industry risks
48.7
report containing this information to the AGM. The following
Performance-related risks
29.1
contains a summary of the information pursuant to Section 315
Financial risks1
12.1
(4) and Section 289 (4) of the HGB as well as the corresponding
Strategic business risks
0.1
explanatory comments pursuant to Section 176 (1) Sentence 1
Legal risks
3.5
of the AktG.
Other risks
6.5
1
The financial risks (risks associated with financial instruments, exchange rate
and interest fluctuations, and financing) are explained in the Notes to the
Consolidated Financial Statements (item 23 and 30).
p. 94
Composition of subscribed capital
At December 31, 2010, the company’s share capital amounted
Opportunities
to EUR 70,140,000, divided into 70,140,000 individual no-par-
Opportunities relate to internal and external developments that
value nominal shares, each representing a proportionate amount
can have a positive impact on the Group. The responsibility
of the share capital of EUR 1.00 according to Article 3 (2) of the
for identifying and managing opportunities in a timely manner
Articles of Incorporation of Wacker Neuson SE. There is only
is vested in the same committees that make project decisions
one type of share; all shares are vested with the same rights and
in response to changing market and customer requirements
obligations as outlined in detail in particular under Sections 12,
and not by specific individuals. These committees may include
53a, 188 ff and 186 of the AktG. Unless otherwise specified in
members of the Executive Board, executives at our affiliates,
the charter of an SE, the provisions of the AktG apply to Wacker
plus senior employees from research and development, prod-
Neuson SE in accordance with Section 9 (1) letter c) ii), Sec-
uct management, quality management, sales and service and
tion 10 of Council Regulation (EC) No 2157/2001 of October 8,
strategic procurement. Our decision-making process focuses
2001 on the Statute for a European company (SE) (referred to as
on opportunities while at the same time taking the associated
charter of an SE in the following).
risks into account. In future, we intend to develop this process
into a Group-wide, standardized opportunity management system. Selected potential opportunities for the Wacker Neuson
Group are outlined in the section “Opportunities and outlook
Restrictions affecting voting rights or the transfer
of shares
for future development of the Wacker Neuson Group”.
Information on the pool agreement
There is a pool agreement between some shareholders and
X. Information in accordance with Section
315 (4) and Section 289 (4) HGB as well as
the Executive Board report in accordance
with Section 176 (1) Sentence 1 AktG
(German Stock Corporation Act)
companies of the Wacker family on the one hand, and companies and shareholders of Neuson on the other. Prior to each
AGM of Wacker Neuson SE, the pool members decide how to
exercise voting and petition rights in the meeting. Each pool
member undertakes to exercise their voting and petition rights
in the AGM in line with the pool’s decisions, or to have these
rights exercised in this manner. If the pool does not reach a de-
According to Section 315 (4) of the HGB, listed companies
cision with regard to a resolution on the allocation of retained
must disclose information on the composition of capital,
earnings, adoption of the annual financial statements by the
shareholders’ rights and restrictions, participating interests
AGM, approval of Executive and Supervisory Board members’
and corporate bodies that may be relevant for takeovers in the
actions, appointment of the auditor, upholding minority inter-
Information in accordance with Section 315 (4) and Section 289 (4) HGB
ests and compulsory changes to the Articles of Incorporation
they will vote and exercise their petitioning rights. Votes in the
as a result of changes to legislation or jurisdiction, the pool
AGM are to be cast in line with the pool’s decisions. Two of
members have the right to freely exercise their voting rights.
the Wacker family shareholders have the right to propose one
In all other cases, the pool members must vote to reject the
member of the Supervisory Board each to the shareholders,
proposal. The Neuson shareholders appoint two members to
this member is then to be elected by the remainder.
85
the Supervisory Board, and the Wacker shareholders appoint
two further members to the Supervisory Board.
Only the acquisition and preferential purchase rights in the
pool agreement. In the case of a sale by a family member who
registered partners, pool members’ children, children adopted
is not a pool member, acquisition and preferential purchase
when they were minors by pool members, siblings, foundations
rights apply if shares are sold to third parties who do not fulfill
set up by pool members that are either charitable foundations
the criteria defining those individuals to whom shares can be
or in which the beneficiaries and the controlling members of
freely transferred set forth in the abovementioned pool agree-
the management board satisfy the aforementioned criteria,
ment. If a family shareholder exits the company as a result of
and companies where the direct or indirect shareholders also
a termination, the remaining pool members have a preferential
satisfy the aforementioned criteria. If shares are transferred
purchase right to buy the shares for a period of two years from
to any such persons, they must join the pool agreement. If
the date this shareholder exits the company. In addition, the
shares are transferred to third parties, either for a fee or free of
partners’ meeting can resolve that the exiting family sharehold-
charge, the other pool members have the right to acquire these
er does not receive compensation in cash but in the form of
shares. If the shares are to be sold to third parties off the stock
the shares to which they are financially entitled. After May 14,
exchange, all of the other pool members have a preferential
2012, each exiting family member can demand to receive
purchase right. If a pool member intends to transfer shares
their compensation in the form of the shares to which they are
in such a way that more than 50 percent of voting rights in
financially entitled.
Wacker Neuson SE would be held by third parties who do not
can be freely made, the remaining pool members have the right
Pool agreement between Lehner and Neuson
shareholders
to also sell their shares. If a pool member is excluded from the
The Lehner shareholders have issued a Neuson shareholder
pool for good reason, the other pool members have a right to
with power of attorney with regard to the shares they ac-
acquire the shares or a preferential purchase right. This also
quired prior to the merger and during the merger between the
applies if a pool member ceases to qualify as a pool member.
company and Neuson Kramer Baumaschinen AG (now Wacker
satisfy the criteria defining those individuals to whom transfers
Neuson Beteiligungs GmbH). The Neuson shareholder is inde-
Information on the partnership agreement of Wacker
Familiengesellschaft mbH & Co. KG
pendently responsible for exercising these voting rights. He is
Some of the Wacker family shareholders hold part of their
in the same way as for the shares that he himself holds. These
shares via Wacker Familiengesellschaft mbH & Co. KG, which
shares are thus subject to the provisions of the pool agreement
in turn also holds shares via Wacker-Werke GmbH & Co. KG.
mentioned above.
not subject to any instructions, and will always exercise these
Economic ownership of the shares is attributed to the Wacker
family shareholders.
The Neuson shareholder has a preferential purchase right to
buy these shares in the event of a transfer to entities other than
The pool agreement has precedence over the regulations of the
the Neuson shareholder or to Lehner shareholders.
partnership agreement as long as Wacker Familiengesellschaft
mbH & Co. KG is party to the above pool agreement. A part-
The Executive Board is not otherwise aware of any restrictions
ners’ meeting is held prior to every AGM of Wacker Neuson SE.
affecting voting rights or the transfer of shares.
In this meeting, the Wacker family shareholders define how
pool agreement apply to family members who are party to the
Shares can be transferred without restriction to spouses,
86
Direct or indirect participating interests in equity
that exceed ten percent of voting rights
The Executive Board is aware of the following direct or indirect
participating interests in the share capital of the company that
exceed 10 percent of voting rights at December 31, 2010 –
these are calculated and allocated in accordance with provisions of the German Securities Trading Act (WpHG):
as a % at Dec., 31, 2010
Direct share of
Voting rights allocated
Percentage of voting
voting rights
to the stakeholder 1
rights in total 1
Stakeholder with duty to disclose interest
5.29
57.80
63.09
28.14
35.31
63.45
IWZ AG (Interwac)
0.00
63.09
63.09
VGC Invest GmbH
5.06
63.09
68.15
Christian Wacker
0.74
63.09
63.84
Dr. Ulrich Wacker
0.00
68.15
68.15
Andreas Wacker
0.74
63.09
63.84
Barbara von Schoeler
0.26
63.09
63.35
Wacker Familiengesellschaft mbH & Co. KG
Wacker-Werke GmbH & Co. KG
0.00
63.09
63.09
0.00499
63.09
63.10
Ralph Wacker
0.74
63.09
63.84
Susanne Wacker-Waldmann
0.74
63.09
63.84
Benedikt von Schoeler
0.00
63.09
63.09
Jennifer von Schoeler
0.00
63.09
63.09
Leonard von Schoeler
0.00
63.09
63.09
Vicky Schlagböhmer
0.00
63.09
63.09
Christiane Wacker
0.00
63.09
63.09
Georg Wacker
0.00
63.09
63.09
Baufortschritt – Ingenieurgesellschaft mbH
0.00
63.09
63.09
PIN Privatstiftung
0.00001
63.09
63.09
NEUSON Industries GmbH
0.00001
63.09
63.09
Johann Neunteufel
0.00001
63.09
63.09
Petra Martin
Dr. Andrea Steinle
29.01
34.08
63.09
Martin Lehner
0.46
62.76
63.22
Adolf Lehner
0.33
62.76
63.09
Herta Lehner
0.33
62.76
63.09
NEUSON Ecotec GmbH
1
Votes bound through the pool agreement – see “Information on the pool agreement” under “Restrictions affecting voting rights or the transfer of shares” on p. 84 in
the Notes– are added together. The figures are rounded to two decimal places.
Information in accordance with Section 315 (4) and Section 289 (4) HGB
Bearers of shares with extraordinary rights that
grant the holders controlling powers
87
however, to rule that a simple majority of votes cast suffices,
provided at least half of the subscribed capital is represented
(Section 59 (2) of the regulation on the charter of an SE). Ger-
There are no shares with extraordinary rights that grant the
man legislation has instituted this option in Section 51 (1) of
holders controlling powers.
the law governing implementation of the SE in Germany. This
does not apply to changes relating to the object/purpose of the
company or relocation of the company seat. 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 law governing implementation of
the SE in Germany). Accordingly, Article 21 (1) of the Articles
The company’s employees can exercise the controlling rights
of Incorporation states that unless otherwise stipulated by law,
due to them from shares directly, as is the case for other
changes to the Articles of Incorporation require a two-thirds
shareholders, according to statutory provisions and the Ar-
majority of the votes cast or – if at least half of the share capital
ticles of Incorporation.
is represented – a simple majority of votes cast.
The Supervisory Board is entitled to approve changes to the
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
Articles of Incorporation that are merely a matter of word-
Members of the Executive Board are appointed and dismissed
The Executive Board’s powers, in particular with
regard to the possibility of issuing or buying back
shares
according to Sections 84 and 85 of the AktG. The Executive
Board of Wacker Neuson SE must have at least two board
ing (Section 179 (1) Sentence 2 of the AktG, Article 15 of the
Articles of Incorporation).
members according to Article 6 (1) of the Articles of Incorporation of Wacker Neuson SE. The Supervisory Board otherwise
Treasury shares
determines the number of Executive Board members (Article
By a resolution passed at the AGM on May 28, 2010, the
6 (2) Sentence 1 of the Articles of Incorporation). The Super-
Executive Board is authorized, with the prior approval of the
visory Board is responsible for appointing and dismissing
Supervisory Board, to acquire 7,014,000 treasury shares via
Executive Board members; a simple majority of votes cast
the stock exchange by November 27, 2011. This acquisition
suffices for these decisions. Executive Board members shall
may also be performed by one of the company’s group com-
be appointed for a maximum term of six years (Section 9 (1)
panies or for its or their account by third parties. In so doing,
and Section 39 (2) and Section 46 of the regulation on the
the shares acquired as a result of this authorization together
charter of an SE, Sections 84 and 85 of the AktG, Article 6
with other shares in the company that it has already acquired
(2) Sentence 1 of the Articles of Incorporation). The Supervi-
and still holds may not at any time total more than 10 percent
sory Board can appoint a Chairman of the Executive Board, a
of the existing share capital. Shares may not be purchased for
Deputy Chairman of the Executive Board and a Spokesperson
the purpose of trading company shares on the stock exchange.
for the Executive Board (Article 6 (2) Sentence 2 of the Articles
of Incorporation). A Spokesperson and Deputy Chairman have
The compensation paid by the company per registered share
been appointed.
(without incidental acquisition costs) may not be more than
10 percent higher or lower than the arithmetic average of the
Sections 179 ff of the AktG must be observed in the event of
closing prices for shares in the company in XETRA trading
changes to the Articles of Incorporation. The AGM resolves on
(or a comparable successor system) on the Frankfurt Stock
changes to the Articles of Incorporation (Sections 119 (1) No. 5
Exchange on the last five stock market days prior to the date
and 179 (1) of the AktG). Under the charter of a European com-
on which the undertaking to acquire the shares was entered
pany (Societas Europaea or SE) such as Wacker Neuson SE,
into. The authorization can be exercised in whole or in parts,
all decisions affecting the Articles of Incorporation must be ap-
in the latter case also on multiple occasions.
proved with a majority of at least two thirds of the votes cast,
unless the legislation of the state where the SE is based man-
The Executive Board may also redeem the treasury shares still
dates or allows a larger majority to apply (Section 59 (1) of the
to be acquired without a renewed resolution to be passed by
regulation on the charter of an SE). Each member state is free,
the AGM with the permission of the Supervisory Board. The
Type of control of voting rights if employees hold
participating interests and if they do not directly
exercise their controlling rights.
88
authorization can be exercised in whole or in parts, in the latter
Shareholders’ statutory subscription rights are excluded:
case also on multiple occasions. The redemption is performed
JJ
If employees of the company and its affiliates and executive
such that the share capital is not changed, but that the propor-
bodies of affiliates (to the extent that these are not simulta-
tion the other shares represent in the share capital is increased
neously members of the company’s Executive Board) are
in accordance with Section 8 (3) of the AktG (Section 237
offered shares at an issue price that is 15 percent lower than
(3) No. 3 of the AktG). The Executive Board is authorized to
the issue price;
change the number of shares in the Articles of Incorporation
JJ
For fractional amounts;
accordingly.
JJ
Otherwise, if the issue price of the new shares is not significantly below the company’s market price and the new
The Executive Board is authorized, with the approval of the
shares issued to the exclusion of subscription rights do not
Supervisory Board, to use shares in the company that were
exceed a total of 10 percent of the share capital, neither at
acquired as a result of the above authorization as (partial)
the time the authorization takes effect, nor at the time of
compensation as part of mergers or to acquire companies,
exercising. Shares must be added to the above 10 percent
participating interests in companies or parts of companies.
threshold if they were issued or are to be issued to service
The acquired treasury shares may also be sold to Executive
options or convertible bonds to the extent that the bonds
Board members and members of executive bodies of associ-
are issued in corresponding application of Section 186 (3)
ated companies within the framework of an executive profit-
Sentence 4 of the AktG excluding subscription rights; in
share model, which has yet to be approved by the Supervisory
addition, the sale of treasury shares is to be added if the
Board. The Supervisory Board will determine the extent to
sale was made as a result of a valid authorization to sell
which shares will be sold to members of the Executive Board
treasury shares that applied on the date that Authorized
within the framework of this plan when deciding on the overall
Capital I came into effect in corresponding application of
executive profit-share model. In addition, the Executive Board
Section 186 (3) Sentence 4 of the AktG excluding subscrip-
is authorized, with the approval of the Supervisory Board, to
tion rights.
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
Subject to the approval of the Supervisory Board, the Execu-
the sale. The price at which shares in the company can be sold
tive Board also decides on the content of the respective share
may not be more than 5 percent lower than the arithmetic aver-
rights and the other conditions of the share issue including the
age of the closing prices of shares in the company in XETRA
issuing amount.
trading (or a comparable successor system) at Frankfurt Stock
Exchange on the last five stock market days prior to the date
Authorized Capital II
of the general sale. In this case, the number of the shares to
According to Article 3 (4) of the Articles of Incorporation, the
be sold together with the new shares that were issued after
Executive Board is still authorized to increase the company’s
this authorization was issued excluding subscription rights in
share capital by April 12, 2012, with the approval of the Su-
accordance with Section 186 (3) Sentence 4 of the AktG, and
pervisory Board, by issuing new, registered shares against
together with treasury shares already sold, may not exceed
contributions in kind, in full or in partial amounts, on one or
10 percent of the company’s share capital which exists on the
several occasions, however at the most by a maximum of
date the resolution passed at the AGM came into effect. The
EUR 5,360,000 (Authorized Capital II).
authorization to redeem/sell shares can be availed of in full
or in several partial amounts. The shareholders’ subscription
The shareholders’ statutory subscription rights are excluded
rights to treasury shares in the company are excluded to the
to grant shares against the contribution of companies and
extent that these shares are redeemed or sold according to the
participating interests in companies or parts of companies to
above authorizations.
the company.
Authorized Capital I
Subject to the approval of the Supervisory Board, the Execu-
tive Board also decides on the content of the respective share
Executive Board is authorized to increase the company’s share
rights and the other conditions of the share issue including the
capital by April 12, 2012, with the approval of the Supervisory
issuing amount.
Board, by issuing new, registered shares against cash contributions, in full or in partial amounts, on one or several occa-
The authorized capital provisions described above reflect the
sions, however at the most by a maximum of EUR 1,000,000
practices typical of listed businesses similar to the company.
(Authorized Capital I).
They are not intended to obstruct takeover bids.
Declaration on corporate governance according to Section 289a HGB
Key company agreements that are subject to a
change of control clause following a takeover bid
and the resulting impact
Remuneration framework
89
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 five years. The company has availed
A long-term cooperation agreement with the company Cater-
of this opportunity for fiscal years 2006 to 2010 inclusive by
pillar covering the OEM production of mini excavators includes
way of a resolution passed at the AGM on May 15, 2006.
under certain conditions should a competitor to Caterpillar
The Executive Board’s remuneration is defined by the entire
acquire a direct or indirect share in the company in excess of
Supervisory Board and reviewed at regular intervals. Defining
25 percent or a share in excess of 15 percent combined with a
the structure and amount of the remuneration is based on the
seat on the company’s Supervisory Board. The list of competi-
company’s size and economic position as well as the tasks
tors is specified in detail in the agreement.
and performance of the members of the Executive Board.
The Executive Board’s remuneration comprises:
Compensation agreements between the company
and the members of the Executive Board or its
employees for the event of a takeover offer
JJ
A fixed annual basic salary
JJ
A variable annual salary
JJ
A special bonus (paid for the years up to and including
fiscal 2010)
There is no such agreement.
JJ
Transitional pay, compensation upon an early exit
JJ
Remuneration in the case of accident, illness or death
JJ
Non-cash remuneration and other additional remuneration
Concluding remark
JJ
A pension commitment
During the period under review, the Executive Board had no
The individual remuneration components are as follows:
reason to address issues concerning a takeover, or engage
with disclosure details stipulated under the German Takeover
The annual fixed salary is paid in equal monthly installments.
Directive Implementation Act (Übernahmerichtlinie-Umsetzungsgesetz). The Executive Board therefore does not see the
The variable salary is based on consolidated earnings after
need to add further details to the information provided above.
tax – for the last time in the 2010 fiscal year – as reported in the
approved consolidated financial statements for the respective
fiscal year. From fiscal 2011 onwards, the variable salary will
XI. Declaration on corporate governance
according to Section 289a HGB
be based, on the one hand, on average consolidated earnings after taxes for the previous three fiscal years and, on the
other, on the return on assets as reported in the consolidated
financial statements. An upper threshold for the variable remu-
On March 21, 2011, the Executive Board of Wacker Neuson SE
neration has been agreed in the same amount for all Executive
issued a corporate governance declaration pursuant to Section
Board members.
289a of the German Commercial Code (HGB). This is available
on the Wacker Neuson SE website at www.wackerneuson.com/
Members of the Executive Board shall also receive a special
declaration-on-corporategovernance
bonus for the last time in fiscal 2010. For part of the Executive
Board, this bonus was tied to the financing of shares in the
company within the framework of an executive profit-share
XII. Remuneration framework
model with a view to committing the Executive Board members to the company in the long term. The other members of
the Board received the special bonus during an interim period
Information on the Executive Board
pending introduction of a new executive profit-share model.
According to the Vorstandsvergütungs-Offenlegungsgesetz
This profit-share model for active members of the Executive
(German Executive Board Remuneration Disclosure Act), listed
Board has been terminated without replacement in response
companies must disclose individualized information on the
to the German Law on the Appropriateness of Executive Board
Executive Board’s remuneration in the notes to the annual and
Remuneration (VorstAG); as a result, no special bonuses will
consolidated financial statements, broken down into perfor-
be paid as of fiscal 2011.
mance-related and non-performance related components as
a provision that allows Caterpillar to terminate the agreement
90
If the Executive Board members’ employment contract is termi-
remuneration, with the Chairman of each committee receiving
nated prematurely, but not for good cause, the members of the
twice the regular committee remuneration. In addition, the
Executive Board each receive compensation in the amount of
members of the Supervisory Board receive a meeting fee for
their average discounted annual remuneration for the remain-
each Supervisory Board meeting in which they participate.
der of the contractual period including their variable remuneration and the special bonus. If the contract is terminated after
The variable remuneration for the individual members of the
the age of 55 and prior to the member reaching the age of 60,
Supervisory Board is based on the consolidated earnings after
the members of the Executive Board may claim transitional
taxes. It is capped at 1½ times their respective fixed remu-
payments.
neration. It is calculated in line with the company’s approved
consolidated financial statements taking Section 113 (3) of
If they are temporarily prevented from working through no
the AktG into account. Meeting fees are added to the variable
fault of their own, members of the Executive Board continue to
remuneration. In addition, members of the Supervisory Board
receive their fixed annual salary and bonus for a limited period.
are reimbursed for their out-of-pocket expenses and any VAT
Widows and dependent children receive corresponding pay-
that may be due on their remuneration and out-of-pocket
ments for a limited period.
expenses.
The non-cash remuneration and other remuneration includes
a subsidy for health insurance, premiums for life insurance in
XIII. Supplementary report
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 pen-
Events/transactions of particular importance since
the reporting date
sion for life upon reaching the age of 60 unless the employment relationship with the company was terminated for good
A resolution shall be put forward at the upcoming AGM on
cause that is the fault of the Executive Board member. In ad-
May 26, 2011 to structure Wacker Neuson SE as a holding
dition, an invalidity pension is paid in the event of disability or
company. Operating segments Production Germany, Sales
professional incapacity, and a widow’s and orphans’ pension
Germany and Sales Europe will be separated from Wacker
is paid in the event of death. Other remuneration may have to
Neuson SE in their entirety – all assets, legal relationships
offset again these amounts payable.
and employees included – and established as separate legal
entities. Central Group and corporate functions will remain at
Total remuneration for the Executive Board
Wacker Neuson SE under the umbrella of what is now central
Total remuneration for the Executive Board in the period under
administration. The three operating segments will be divested
review amounted to EUR 6.2 million (previous year: EUR 3.0
into three German companies registered in Munich and struc-
million). The increase here is largely attributable to the depar-
tured as GmbH & Co. KG limited partnerships. A divestiture
ture of an Executive Board member (payments for non-com-
and incorporation contract will be proposed for approval
pete obligations, profit shares and bonuses). Total remunera-
at the AGM. Under the proposed holding structure, Wacker
tion for the Supervisory Board for the same period amounted
Neuson SE shall hold all shares and 100 percent of the capital
to EUR 0.3 million (previous year: EUR 0.3 million). At the AGM
in the three new German affiliates.
on May 15, 2006, a resolution was passed to refrain from itemizing this information in accordance with Section 285 (1), no.
The following management information should be noted when
9a clauses 5 to 9 in conjunction with Section 314 (2), clause 2
considering the planned separation of business. The 2007
HGB in conjunction with Section 315a, (1) HGB.
merger between the former Wacker Construction Equipment
AG and the former Neuson Kramer Baumaschinen AG involved
Information on the Supervisory Board
the Neuson-Kramer subgroup, which was already structured
By a resolution passed by the AGM on May 28, 2010, the remu-
as a holding, joining the Wacker Group. Since the merger,
neration structure for the members of the Supervisory Board
therefore, significant parts of the company are already being
was set down in article 14 of the Articles of Incorporation. In
managed under a holding structure. However, the former
line with this provision, the fixed remuneration for each individ-
Wacker subgroup retained the traditional parent company
ual member of the Supervisory Board amounts to EUR 20,000.
structure with the result that production, logistics and sales
The Chairman of the Supervisory Board receives twice this
operations are all managed under the umbrella of a single legal
amount, and his/her Deputy receives 1½ times the fixed
entity – Wacker Neuson SE. The change in structure follows
remuneration. Members of committees receive an additional
through on the merger by aligning both subgroups. In addi-
Supplementary report
Opportunities and outlook
91
XIV. Opportunities and outlook
tion, the move will align the legal organizational structure with
the international structures that were also already in place at
the former Wacker subgroup. The wholly owned American
subsidiary, Wacker Neuson Corporation, also transitioned from
Overall economic outlook
a parent company to a holding structure on January 1, 2011
JJ
framework of separate legal entities.
Recovery of the global economy continues, but at a
slower pace
The move is also prompted by the desire to align the legal or-
JJ
Some EU countries experience financing problems
ganization more closely with the operating management setup
JJ
Germany remains driving force in Europe
by establishing a central management structure within the
Wacker Neuson SE holding. The objective of the new holding
According to leading economic research institutes, the global
structure is ultimately to also increase transparency over costs,
economic recovery is set to continue in 2011, albeit at a slower
product diversity and areas of responsibility. This will result in
pace as the rebound reaction to the global drop in production
a transparent matrix across regions and product segments,
and world trade should soon have largely leveled off.
unified under a central management body, standardized IT
platform and common sales network.
Economic institutions expect recovery in the US to maintain pace in 2011 but to develop along more moderate lines
These measures shall not result in any changes for sharehold-
from 2012 as economic recovery packages are phased out.
ers in our company as Wacker Neuson SE will remain the sole
Although the US economy picked up in January of the current
owner of the new companies. In financial terms, the new legal
fiscal year, experts feel that recent adjustments to US property
structure does not affect the Group’s net assets and earnings
prices continue to pose a risk to the global economy.
situation.
Economic growth in Asia remains strong as predicted. ExpanOn March 11, 2011, Japan was hit by a powerful earthquake.
sion plans in China include infrastructure projects. In India and
This triggered a tsunami, which devastated the country’s east-
other emerging Asian economies, experts predict continued
ern coast and shut down nuclear power plants. This situation
dynamic expansion. Growth is also forecast for the Middle
could have an impact on individual Wacker Neuson suppliers.
East and Africa.
According to our latest information, our suppliers’ facilities
are not directly affected due to their location. Nevertheless,
rolling blackouts as well as disruptions to Japan’s logistics and
Regional contributions to world GDP growth1
general infrastructure may delay deliveries of premanufactured
6
parts. If the situation continues, it may also ultimately delay
5
deliveries of Wacker Neuson products. The Group is closely
4
following developments among its suppliers here. However,
due to current difficulties in obtaining information from Japan,
3
we are as yet unable to make any exact assessments.
2
1
There have been no other significant events since the reporting
0
date that could have an impact on the future business develop-
-1
ment of the Group.
Forecast
period
-2
2001
Impact on earnings, financial position and net
assets
With the exception of the uncertain supply situation in Japan,
there have been no other events since the reporting date that
could have a significant impact on the Group’s earnings,
financial position and net assets.
2002
2003
2004
2005
2006
2007
2008
2009
World GDP growth
North America
Western and central Europe
Latin Americas and Russia
Asia
Other countries
2010
2011
Based on market weights.
Quelle: IMF; calculations by the EEAG; 2009 and 2010: forecast by the EEAG.
1
and now manages production, logistics and sales within the
92
In the EU, economic researchers expect total GDP to increase
again in 2011. However, due to the slight slowdown in the pace
Outlook for construction and agricultural
industries
of global economic recovery, less momentum is expected from
exports. In addition, the financing difficulties experienced by
JJ
a number of EU countries have not yet been finally resolved.
on the up
Only slight growth is expected in particular for Portugal, Italy,
Ireland, Greece, Spain, Great Britain and Hungary as restric-
JJ
Asian markets will continue to profit from the dynamic growth
High demand for construction investment in emerging
markets
tive fiscal policies could dampen corporate investment. Those
European economies that are well-positioned for exports to
Global construction and agricultural industries
JJ
European construction and agricultural industries
overcome the effects of the economic crisis
in this region.
The German economy is currently experiencing a strong
Demand for construction machinery is set to continue to rise
upturn. Domestic demand is on the rise and demand for
worldwide. Positive impetus is expected in many countries
exports remains very high. Positive sales forecasts mean that
from vital infrastructure projects focusing on road and rail
corporate investment plans for 2011 are largely focused on
improvements, telecommunication services, water supplies,
expansion. The business climate has improved and industrial
general renovation and modernization works, construction of
production has picked up. Order intake has also increased
public education buildings, as well as climate and environmen-
significantly in recent times. Favorable income prospects, job
tal protection measures.
security and low interest rates all bode well for the German
economy.
If the American construction industry is to recover and show
early signs of construction activity, the real estate market must
EU 27 gross domestic product in 2011
Rate of change in GDP (as a %)
stabilize. Experts still see a risk in the high valuation of US residential property as this continues to create significant potential
for price adjustments. The American Rental Association (ARA)
3.3 – 4.0
expects the US (rental) market to start recovering in 2011, and
2.5 – 3.2
it forecasts clear growth rates for 2012.
1.7 – 2.4
0.9 – 1.6
0.1 – 0.8
- 3.2 – 00
Infrastructure projects key driver for emerging
markets
In Asia, and particularly in China, the construction equipment
industry is set to continue to grow. Many emerging markets
returned to the growth path comparatively quickly in 2010.
To remain competitive, however, these countries must invest
heavily in infrastructure over the coming years. The fastest
movers here are the BRIC countries (Brazil, Russia, India and
China), but countries such as Mexico, Argentina, South Africa
and South Korea also plan to invest billions over the coming
years in the construction of roads, airports, rail networks, utility
services (energy, waste and water), and the construction of
Source: ifo institute forecast (December 2010).
public buildings such as schools, universities and hospitals, as
well as in telecommunication networks. These projects will fuel
A further increase in the price of raw materials, particularly
steel and steel products, is expected in the course of 2011.
With regard to the currencies relevant to the Wacker Neuson
Group, in January 2011 M&I Capital Markets forecast a weakening of the euro and a strengthening of the dollar by the end
of 2011.
vdemand for construction equipment.
Spending on infrastructure in emerging markets 2008 – 2017
The German Engineering Federation (VDMA) forecasts a
Bn, USD
10-percent rise in revenue for construction equipment manu-
93
facturers in 2011.
3,500
3,000
Cumulated construction and economic
2,500
growth 2010 – 2013 (Europe)
2,000
1,500
Spain - 14.5
500
Ireland
0
Portugal
- 7.1
- 4.5
0
Czech Republic
Asia
Eastern Europe
Latin America
Middle East
Africa
Experts predict strong growth rates in part for the European
dinavia, Germany, Switzerland, Great Britain, Poland, Hungary
2.5
Belgium
3.3
Switzerland
3.7
United Kingdom
4.6
EC-19
construction industry through 2012. Between 2011 and 2013,
investments are due to rise significantly, particularly in Scan-
2.3
Austria
Source: Morgan Stanley Research, World Bank, Global Insights, e-Morgan
Stanley Research incl. Real Estate
5.7
France
6.5
The Netherlands
7.4
Italy
and Italy. The most dramatic decline in the last two years was
10.5
Germany
experienced in European private non-residential construction,
but also in industrial, public and commercial construction proj-
Finland
ects. Following on from the slight decline again predicted for
Norway
10.9
12.1
12.3
Slovakia
2011, moderate recovery is expected from 2012 onwards.
12.4
Sweden
Financing through PPP projects on the rise
Denmark
Industrial nations typically have to reconcile large national
Hungary
debts with the rising demand for investment funds. Public-
1,000
14.7
24.5
34.1
Poland
private partnerships (PPPs) are an increasingly popular way of
resolving this problem. In some countries, private businesses
and government bodies have been cooperating for years on
- 15
infrastructure projects. The benefits of this type of teamwork
- 10
-5
GDP (%)
0
5
10
15
20
25
30
35
Construction (%)
include lower public expense and more effective use of the
resources invested. The UK started privatizing infrastructural
Source: Euroconstruct (70th Conference), November 2010
facilities in the 1980s, with Australia and Canada following their
example in the 90s. However, Germany still lags behind when it
Residential construction volume 1991– 2013
comes to PPPs. But this type of financing model for infrastruc-
(Euroconstruct countries)
ture projects is growing more and more important as it speeds
the progress of even larger construction projects.
in billion € (2009 prices)
year to year change in %
750
25
700
20
market, are positive. According to the German ifo institute,
650
15
investment particularly in residential construction and also
600
10
in non-residential overground construction is due to rise in
550
5
the coming months, boosted by low interest rates. Even if
500
0
450
-5
400
- 10
The prospects for Germany, Wacker Neuson’s biggest sales
municipal bodies stretch investments over a longer time period
because economic recovery packages are running out, many
projects – such as highway extensions organized through
PPPs – are set to fuel increased demand for construction
equipment.
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
year to year change in %
Residential construction volumne
Source: Euroconstruct November 2010
94
Investments in European residential construction declined
sharply in the last three years. Starting in 2011, investments
Opportunities and outlook for future development
of the Wacker Neuson Group
are due to rise rapidly by 2013, particularly in Scandinavia,
Germany, Switzerland, Great Britain, Poland, Hungary and
Italy. Around 30 percent of products bought by Wacker
Neuson customers are used in residential construction.
JJ
Business model geared towards future market trends
JJ
Wider market reach for compact equipment sector
JJ
Positive business development expected to continue
Development of non-residential construction output 2007 – 2013
In 2011, the Group will take another big step towards achieving
(Euroconstruct countries)
€ million at 2009 prices
its goals through a series of developments that underpin and
10
496,000
strengthen the Group’s business model. This refers chiefly to
5
458,000
four main trends outlined in the following that could open up
0
416,000
new sales markets for Wacker Neuson or prompt investments
-5
376,000
in our target markets.
- 10
336,000
% change in real terms
2007
2008
% change in real terms
2009
2010
2011
2012
2013
JJ
End customers, dealers and professional rental companies select the manufacturer that offers the most attractive
€ million at 2009 prices
overall package consisting of innovative products, a strong
Quelle: Euroconstruct November 2010
brand, simple and efficient logistics and all-in service. A
bundled package gives the customer a single point of con-
The most dramatic decline in the last two years was experi-
tact to the manufacturer – greatly simplifying, for example,
enced in private non-residential construction. Industrial, public
the purchase of spare parts. Wacker Neuson is one of the
and commercial construction projects were hit hardest here.
world’s leading manufacturers with an exceptionally broad
product portfolio of light and compact equipment.
Following on from the slight decline again predicted for 2011,
moderate recovery is expected from 2012 onwards. Around
JJ
The compact class is still largely at an early stage of the
70 percent of products bought by Wacker Neuson customers
market lifecycle. We see the greatest medium-term potential
are used in non-residential construction.
for our compact offering in the European market (particularly in France and Great Britain), in the US and in South
Signs of recovery in the agricultural industry gather
momentum
America. In Europe, we are using our existing sales network,
while in the US we are focusing on establishing a network of
exclusive Wacker Neuson dealers.
Global economic recovery has also benefited the agricultural
industry. In addition, universal trends – such as the world’s
JJ
We will continue to expand our product offering in the light
growing population and resulting increase in demand for food-
equipment segment to capitalize more effectively on oppor-
stuffs – continue to have a positive effect on demand for agri-
tunities in emerging markets such as South America, India
cultural equipment. The basic need for modern machines, par-
and China. To do this, we are focusing on further developing
ticularly to work agricultural holdings efficiently, will continue to
our Group-wide sales and service network and consolidat-
increase. Rising producer prices will have a positive effect on
agricultural income, which should lead to a further increase in
demand for equipment under our Weidemann brand.
ing our strong market position.
JJ
A broader agricultural portfolio will also bolster Group
revenue in the medium term. We are currently focusing on
adapting compact construction equipment for the agricul-
According to the barometer for agricultural activity issued by
tural industry and expanding the global reach of our agricul-
the Association of German Farmers (DBV), investment among
tural portfolio.
agricultural landholders in Germany has risen sharply in recent
times. They are set to spend over EUR 7 billion over the next
We intend to remain on this path, continuing to invest in profit-
six months. The general mood is more upbeat in arable and
able projects and drive growth across all regions and business
dairy farming in particular. There are signs of a sharp rise in
segments.
expenditure on equipment and agricultural buildings.
Taking a long-term view, climate change will create oppor-
95
Development outlook by region
tunities in the construction industry as attention increasingly
focuses on environmental policies. The rise in weather-related
We see great potential for growth in the Americas region and
damage, coupled with the necessary cleanup and repair work,
plan to bolster our sales operations in this area. Investment
will increasingly place the spotlight on preventive measures.
plans among rental companies through 2012 are due to support
This will be flanked by roadway reconstruction projects, more
this growth. Since launching our compact equipment on the
efficient repair procedures and redevelopment of residential
US market, we have been focusing on expanding our network
property with a view to increasing energy efficiency.
of exclusive Wacker Neuson dealers. In the coming years, we
plan to distribute compact equipment throughout or almost
the Canadian and South American markets. In these regions,
our affiliates have been successfully selling light equipment for
over 20 years – and in some cases, over 30 years. Especially in
Global opportunities for
the construction industry
Global opportunities for
the agricultural industry
Infrastructure projects in
Eastern Europe, Asia, the US
Increasing global demand for
foodstuffs and animal feed
remains low in many areas. The economic upturn should drive
Effects of climate change and
greater focus on environmental
protection
Trend towards biofuels and
other renewable raw materials
our strategy for the Americas region to yield strong growth in
Expansion of telecom networks
(including the broadband
network)
Expansion and modernization
of road and rail networks
Changing residential needs –
due to rising urbanization, for
example
Structural shift towards fewer
larger holdings (especially in
Europe) with greater need for
automation
Increasing industrialization of
the agricultural industry, also in
emerging countries
South America, the degree of construction site mechanization
mechanization at these sites over the coming years. We expect
2011 and 2012.
Total US equipment rental revenue
in Million USD
40.000
30.000
20.000
Reconstruction projects
(renovation, modernization)
10.000
Numerous economic action
plans for infrastructure projects
worldwide
0
1997
Recovery in the non-residential
construction sector
1999
2001
2003
2005
Construction and Industrial Equipment
2007
2009
General Tools
2011
2013
Source: American Rental Association and IHS Global Insight, Inc., 2011
Wacker Neuson’s strategy
1 Launch of compact equipment
2 Alliance with Caterpillar (CE)
JJ
JJ
JJ
JJ
JJ
JJ
JJ
Global launch focused on
growth markets outside
Europe
Development of exclusive
dealers
Maximization of potential
synergies from merger
Gain of market share
JJ
JJ
JJ
Strategic alliance for mini
excavators up to 3t
(20 years)
Growing market
Both companies to focus
on their respective areas
of expertise
Higher volumes for more
capacity utilization at
production plant
Platform concept dilutes
development and production costs
Gain of market share in
Europe and USA
Wide compact equipment reach in existing markets
Extending compact equipment reach to new markets
3 Wider portfolio for
agriculture (CE)
JJ
JJ
JJ
JJ
JJ
JJ
JJ
Rising demand for food
and fodder
Biofuels and other renewable resources
Fewer but larger holdings
Greater need for
machinery
Market penetration in
agriculture (e.g. Italy,
Russia)
Introduction of new
machines
International expansion
4 Replacement expenditures
(LE)
JJ
JJ
JJ
JJ
2015
Party and Event
Greater need for innovative light equipment
worldwide
Increased expenditure on
replacement equipment
among rental firms
Strengthening quality
and innovation leadership
position
Strengthening market
position (especially in
South America, India
and China)
CE = Compact equipment
LE = Light equipment
throughout the entire region. Compact sales are also targeting
Opportunities for Wacker Neuson
96
In the Asia region, we plan to continue to drive the positive
We see the greatest potential for growth in our compact equip-
developments evident in recent years. We are focusing on
ment segment. We expect this business to grow steadily as
expanding our sales networks in China and India – countries
it increases market share, also increasing its share of total
where we are already represented through sales and service
Group revenue to over 40 percent in the medium term. We are
stations. In these emerging markets and economies, where in-
confident that order intake will continue to develop positively in
dustry and logistics are developing rapidly, initial construction
this segment.
work calls for heavy equipment – required to access remote
regions, lay roads and build other transport routes. Light and
The services business segment continues to perform well
compact equipment is required at a later stage. We are care-
with the result that we plan to expand our service network
fully analyzing these dynamics to ensure that we closely align
further. Here, plans are guided by current market dynamics
our go-to-market strategies with global economic trends.
and customer needs. Particularly in the spare parts and repairs
business, we will be evolving our service offering in line with
In Europe, we aim to leverage the synergies of a shared distri-
customer requirements. Our new European used equipment
bution channel for light and compact equipment to generate
center will enable us to bundle maintenance work and increase
additional profits. Our strong market presence in Europe, the
logistics flexibility in the delivery of used equipment. In the
depth and breadth of our product portfolio, superior rental,
medium term, growth in the light and compact equipment
spare parts and repair services, and the benefits of a direct
segments will lead to increased revenue in the services seg-
sales strategy have enabled the Group to outperform the mar-
ment. In the long term, we predict that services will account for
ket in capitalizing on the global upturn. For example, we plan to
around 20 percent of total revenue.
establish an efficient dealer network in Russia.
We intend to capitalize on the new opportunities that will be
opening up for agricultural products under our Weidemann
Development outlook by business segment
brand over the coming years. In addition to ongoing expansion
in Italy and Russia, we are broadening our agricultural portfolio
The quality of our products and scope of our services, flanked
by adapting construction equipment to the specific needs of
by our global presence and local proximity to customers in key
the agricultural industry. We are also adapting a wide range of
sales markets, place us in a prime competitive position. We
attachments. These products will be distributed, for example,
intend to consolidate our leading market position in the regions
to agricultural holdings and municipal bodies under the Wei-
that we recently integrated in our business model. We are
demann brand. This strategy will enable Weidemann GmbH
focused on expanding our quality and innovation leadership,
to always provide the right vehicle and the right attachment
establishing our strategic brand platforms across all markets,
for its customers’ agricultural needs. We expect that revenue
and evolving our service portfolio in line with market needs to
in this segment will rise in synch with the overall rise in Group
become a full service provider.
revenue.
Our current product portfolio is already fit for the future. We
plan to launch new products that reach new customer groups.
Group forecast
To secure our future success, we shall therefore continue to
invest in research and development with the aim of further
Capitalizing on medium and long-term opportunities
expanding our service portfolio and strengthening our position
Following on from strong revenue growth in 2010, we are
as one of the market’s technology leaders.
confident about our prospects for 2011. And we have good
reason to be, as the first few weeks of 2011 have shown posi-
We aim to further expand our strong global position as a sup-
tive developments in both the construction and agricultural
plier of light equipment. The variety of our product portfolio
industries. Customer demand for light and compact equipment
(with around 250 product categories) allows us to gain a foot-
remains high and we started the year with a healthy order book
hold in less developed markets. Requirements placed on light
for compact equipment.
equipment can differ significantly from one country to another
and we see the greatest opportunities in emerging markets
In light of the global revival of construction markets and
such as South America, India and China. Rental companies’
growing global demand for infrastructure projects, we expect
plans to replace existing equipment will fuel sales of light
business to continue improving. In addition, we anticipate
equipment. Light equipment’s share of total revenue is likely
increased investment from rental companies in the US and
to fall slightly below the current figure of 40 percent in the me-
Europe in both 2011 and 2012.
dium term as compact equipment sales rise at a faster pace.
It is also a positive sign that our customers’ financing situa-
Future cost trends
tion has not deteriorated overall. The economic recovery has
Taking the upward trend in revenue into account, we will
apparently prompted banks to see more promising prospects
accordingly adjust costs as necessary. The Group plans to
for companies and refrain from scaling back financing schemes.
gradually increase headcount during the year in line with
97
ity (including temporary staff) in the US and Austria. In 2009,
For fiscal 2011, management predicts a rise in revenue in
we were able to reduce our break-even point (at EBIT level)
excess of 15 percent compared with fiscal 2010 – this corre-
to around EUR 600 million. For 2011, the break-even point is
sponds to an increase of over EUR 870 million. It also expects
around EUR 690 million as we are adapting our structures to
profit before interest, tax, depreciation and amortization
the expected growth in revenue.
(EBITDA) to improve, with an EBITDA margin of at least 12 percent. So if the company matches 2008 revenue levels, we are
As material costs increase, we cannot avoid increasing our
aiming for an EBITDA margin that is even higher than the 2008
prices for products and services accordingly. We forecast fur-
figure (11.6 percent). This takes into account the anticipated
ther increases in material costs of around 2 percent overall and
impact of increases in materials procurement, exchange rate
have adapted our sales prices accordingly. Effective January 1,
fluctuations and additional go-to-market measures. From
2011, we increased our prices for light and compact equipment
today’s perspective, repercussions from the major earthquake
and for replacement parts by 3-4 percent. We did not increase
in Japan could affect some of our suppliers in this region. This,
equipment prices in the last two years.
in turn, could lead to production delays at Wacker Neuson
and negatively impact revenue and earnings. We are doing
Future partnerships
everything in our power to minimize the prospect of negative
Additional acquisitions and partnerships remain part of our
effects. Management remains committed to its forecast for
medium- and long-term strategy insofar as these strengthen our
2011, qualified, however, by the assumption that the situation in
product offering and provide added value to our customers or
Japan stabilizes.
enable us to expand our international footprint. We aim to maintain our solid balance sheet structure with a high equity ratio.
The Wacker Neuson Group is financially stable, showing liquidity of EUR 36.6 million and an equity ratio of over 80 percent.
The Group is currently developing numerous mini excavator
As the uncertainty surrounding economic recovery continues
models for our alliance partner, Caterpillar Inc. We expect this
to abate, we are now in a position to reduce liquid funds.
20-year alliance agreement to make an initial contribution to
Again, we aim to finance day-to-day operations in the current
revenue during the second half of 2011 at the earliest. How-
fiscal year with operating cash flow. To meet rising demand
ever, we do not expect to see the full impact on revenue and
while still driving growth, we are planning investments in
economies of scale until 2012.
property, plant and equipment to the value of approximately
EUR 100 million (2010: EUR 76 million) in fiscal 2011. In addition
Outlook to 2013
to renewal/maintenance expenditure, we will be channeling
If the market develops as expected, we are also aiming for
these funds into construction of our new production facility for
a double-digit increase in revenue in 2012. Over the last two
compact equipment at our Hörsching site (near Linz, Austria)
years, we have successfully implemented measures aimed at
and into expansion of our sales and service station network.
improving efficiency and reducing costs – and we intend to
Since investments for 2011 will again exceed write-offs, we
step up these measures in future. This should contribute to
are expecting a negative free cash flow. Increased investment
even higher earnings in 2012, and help us emerge in an even
during 2011 will lead to an increase in the net financial debt,
stronger position from the economic crisis.
currently at a low figure. This will, however, remain below the
value of investments. Annual investments are due to remain
From today’s perspective and assuming market trends remain
at around EUR 50 million in the medium term and the working
positive, the Group predicts that 2013 revenue will return to
capital target is less than 35 percent of revenue.
pre-crisis or similar levels. In 2007, the newly merged Wacker
Neuson reported pro-forma revenue of around EUR 1 billion.
Planned changes to the company structure
We will also be keeping a close eye on cost developments and
A resolution shall be put forward at the upcoming AGM on
conclude that a 15 percent EBITDA margin and 10 percent
May 26, 2011 to structure Wacker Neuson SE as a holding
EBIT margin are also realistic by 2013.
company. Following through on the merger, the change in
structure will align both subgroups. For more information,
see the “Supplementary report” chapter.
increases in demand. In 2011, we plan to increase staff capac-
Double-digit revenue growth expected for 2011
98
Overview
Revenue growth
EBITDA margin
Investments in property,
2011
2012
2013
>15%
Double-digit
Increase to approx. EUR 1 billion
>12%
Additional increase
Approx. 15%
Approx. EUR 100 million
< 35%
< 35%
< 35%
plant and equipment
Working capital to revenue ratio
Summary forecast
Our financial position is already very healthy with an equity
ratio of over 80 percent and liquidity of EUR 36.6 million. Our
Global economic recovery is fuelling demand for Wacker Neu-
strong financial and asset position will help drive growth over
son light and compact equipment. Even in the first few weeks
the coming two years.
of 2011, the compact equipment segment reported that its
order book remains healthy.
We want our shareholders to share in the success of the
Group. We therefore aim to continue our sound dividend policy
It is our aim to return to pre-crisis levels as soon as possible. We
and plan to make dividend payments in the coming years pro-
expect strong performance in fiscal 2011 and fiscal 2012. Invest-
vided our projections are accurate.
ments from professional rental companies is due to increase
worldwide in 2011 and 2012. The rental market is growing in
importance worldwide and the drop in investment experienced
over the last three years has led to a backlog in demand for
equipment – for rental fleets also. The global trend to expand
Wacker Neuson SE, Munich
and improve infrastructure (such as road and rail networks and
telecommunications) and building modernization projects offer
The Executive Board
great opportunities for our business model. This applies particularly in emerging markets. In addition, our compact equipment
portfolio, especially compact excavators and wheel loaders, are
still at the beginning of their market lifecycle worldwide – so we
Richard Mayer
foresee the greatest growth potential in this segment.
(Spokesperson)
Martin Lehner
(Deputy Chairman)
We can win new market shares and improve our reach in
existing markets by expanding our global sales network. This
expansion will probably push our margins slightly below precrisis levels in the medium term. However, we view this as an
investment in our future growth.
Günther C. Binder
Werner Schwind
Contents Consolidated Financial Statements
99
Contents Consolidated Financial Statements
18 Provisions for pensions and
Consolidated Income Statement
100
Consolidated Total Profit/Loss for the Period
101
Consolidated Balance Sheet
102
19 Other provisions
128
Consolidated Statement of Change in Equity
103
20 Financial liabilities
130
Consolidated Cash Flow Statement
104
21 Trade payables
132
Consolidated Segmentation
105
22 Other current liabilities
132
23 Derivative financial instruments
133
similar obligations
125
Notes to the Consolidated Financial Statements 106
General information on the company
106
Other Information
135
General information on accounting standards
106
24 Contingent liabilities
135
Changes in accounting under IFRS
106
25 Other financial liabilities
135
Accounting and valuation methods
110
26 Additional information on
Explanatory Comments on the
138
27 Events since reporting date
141
Income Statement
115
28 Segmentation
141
1
Revenue
115
29 Cash flow statement
142
2
Other income
115
30 Risk management
142
3
Personnel expenses
115
31 Executive bodies
145
4
Other operating expenses
115
32 Related party disclosures
145
5
Financial result
116
33 Auditor’s fee
147
6
Taxes on income
116
34 Declaration regarding the German
7
Earnings per share
117
Corporate Governance Codex
147
35 Availing of exemption provisions
according to Section 264 (3) HGB
Explanatory Comments on the
147
Balance Sheet
118
8
118
Responsibility Statement
148
9
Investment properties
119
Unqualified Auditors’ Opinion
149
10 Intangible assets
119
11 Other investments and other
non-current assets
122
12 Inventories
123
13 Trade receivables
123
14 Other current assets
123
15 Cash and cash equivalents
123
16 Non-current assets held for sale
124
17 Equity
124
financial instruments
For the period from January 1 through December 31
in € K
Notes
Revenue
(1)
Jan. 1 –
Jan. 1 –
Dec. 31, 2010
Dec. 31, 2009
757,926
597,013
Cost of sales
- 506,881
- 412,911
Gross profit
251,045
184,102
- 143,878
- 135,092
- 22,322
- 20,452
Sales and service expenses
Research and development expenses
General administrative expenses
Other income
Other expenses
1
- 52,225
- 47,705
(2)
7,496
12,222
(4)
- 3,416
- 106,209
36,700
- 113,134
Profit before interest and tax (EBIT)
Financial result
(5)
Profit before tax (EBT)
Taxes on income
(6)
Profit for the period before minority interests
Minority interests
Earnings per share (in euros) (diluted and undiluted)
1
In 2009: of which € K 100,338 one-off write-downs on intangible assets.
(7)
- 3,974
- 2,337
32,726
- 115,471
- 8,098
5,526
24,628
- 109,945
- 694
- 159
23,934
- 110,104
0.34
- 1.57
101
in € K
Jan. 1 –
Jan. 1 –
Dec. 31, 2010
Dec. 31, 2009
24,628
- 109,945
17,777
4,419
- 133
264
(23)
- 32
- 1,890
(23)
23
599
Notes
Profit before minority interests
Items not recognized in profit/
loss for the period
Exchange differences
Deconsolidation result
Securing cash flows:
Profit/loss incurred in the current period
Tax effects from items in total profit/loss for the period
Items not recognized in profit/
loss for the period after tax
17,635
3,392
Total profit/loss for the period before minority interests and after tax
42,263
- 106,553
41,569
- 106,712
Shareholders in the parent company
Minority interests
Total profit/loss for the period after tax
694
159
42,263
- 106,553
Notes to the Consolidated Financial Statements
Of which are attributable to:
Balance at 31 December
in € K
Notes
Dec. 31, 2010
Dec. 31, 2009
(8)
292,577
267,408
Assets
(9)
17,191
2,618
Goodwill
Investment property
(10)
236,550
236,016
Intangible assets
(10)
90,605
87,624
Other investments
(11)
5,478
4,144
(6)
17,220
13,344
(11)
14,282
21,542
673,903
632,696
Inventories
(12)
183,980
148,301
Trade receivables
(13)
121,487
90,837
Deferred taxes
Other non-current assets
Total non-current assets
1,133
6,165
(14)
12,457
8,715
(15)
36,559
85,024
Non-current assets held for sale
(16)
698
0
356,314
339,042
1,030,217
971,738
Current tax receivables
Total current assets
Total assets
Equity and liabilities
Subscribed capital
(17)
70,140
70,140
Other reserves
(17)
603,676
585,908
Net profit/loss
(17)
156,802
133,001
830,618
789,049
Minority interests
Total equity
Deferred taxes
Long-term provisions
2,473
832,959
791,522
(20)
32,218
33,583
(6)
23,957
25,530
(18) (19)
Total non-current liabilities
Trade payables
2,341
(21)
30,246
30,167
86,421
89,280
36,207
21,251
Short-term borrowings from banks
(20)
5,958
14,889
Current portion of long-term borrowings
(20)
12,109
11,698
Short-term provisions
(19)
12,317
13,583
470
413
(22)
43,776
29,102
110,837
90,936
1,030,217
971,738
Current tax payable
Total current liabilities
Total liabilities
103
Balance at December 31
Equity
Exchange
Subscri-
before
Other
bed
Capital
diffe-
neutral
Net profit/
minority
Minority
Total
in € K
capital
reserves
rences
changes
loss
interests
interests
equity
Balance at January 1, 2009
70,140
618,397
- 36,914
1,033
256,432
909,088
2,731
911,819
Total profit/loss for the period
0
264
4,419
- 1,291
- 110,104
- 106,712
159
- 106,553
Dividends
0
0
0
0
- 13,327
- 13,327
- 417
- 13,744
70,140
618,661
- 32,495
- 258
133,001
789,049
2,473
791,522
0
0
17,777
-9
23,801
41,569
694
42,263
0
0
0
0
0
0
- 540
- 540
Balance at December 31, 2009
Total profit/loss for the period
structure
Dividends
0
0
0
0
0
0
- 286
- 286
70,140
618,661
- 14,718
- 267
156,802
830,618
2,341
832,959
Change in consolidation
Jan. 1 –
Jan. 1 –
Dec. 31, 2010
Dec. 31, 2009
EBT
32,726
- 115,471
Other major non-cash income
41,144
140,309
9,215
3,614
and property, plant and equipment
1,108
- 877
Book value from the disposal of rental equipment
4,858
7,217
Gains/losses from derivatives (cash flow hedging)
-9
- 1,291
in € K
Notes
Foreign exchange result
Gains/losses from sale of intangible assets
3,974
2,337
Changes in inventories
Financial result
- 35,679
68,729
Changes in trade receivables and other assets
- 29,892
46,423
Changes in provisions
- 1,187
3,350
Changes in trade payables and other liabilities
24,048
- 15,619
Interest paid
- 4,172
- 5,521
Income tax received/paid
- 3,428
1,950
2,212
3,105
Interest received
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from the sale of property, plant and equipment and intangible assets
44,918
138,255
- 75,618
- 36,281
- 9,344
- 7,120
1,205
3,753
Purchase of marketable securities
0
1,996
- 1,467
- 460
- 85,224
- 38,112
- 286
- 13,744
Proceeds/income from short-term borrowings
- 8,623
- 33,676
Proceeds/income from long-term borrowings
- 1,365
- 5,400
- 58
- 223
- 10,332
- 53,043
Increase/decrease in cash and cash equivalents
- 50,638
47,100
2,173
585
Dividends
Payment of finance lease liabilities
Effect of exchange rates on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
(29)
- 48,465
47,685
85,024
37,339
36,559
85,024
105
Primary segmentation (geographical segments)
in € K
Europe
Americas
Asia
Consolidation
Group
2010
Total external sales
Less intrasegment sales
779,171
245,573
43,526
- 180,259
- 38,664
- 2,164
598,912
206,909
41,362
Intersegment sales
- 40,290
- 38,800
- 10,167
Total
558,622
168,109
31,195
0
757,926
EBIT
26,566
14,383
- 302
- 3,947
36,700
EBITDA
62,613
18,891
321
- 3,981
77,844
Net financial debt
- 3,754
20,062
- 2,243
- 339
13,726
176,996
88,930
17,650
- 14,316
269,260
Europe
Americas
Asia
Consolidation
Group
Working capital
in € K
2009
Segment revenue
Total external sales
626,782
151,327
33,711
- 137,412
- 22,911
- 1,046
489,370
128,416
32,665
Intersegment sales
- 23,659
- 25,300
- 4,479
Total
465,711
103,116
28,186
0
597,013
EBIT
- 107,306
- 8,063
789
1,446
- 113,134
27,906
- 3,569
1,428
1,410
27,175
Net financial debt
- 29,736
10,639
- 3,882
- 1,875
- 24,854
Working capital
156,778
61,045
10,450
- 10,386
217,887
2010
2009
Less intrasegment sales
EBITDA
Secondary segmentation (business segments)
in € K
Segment revenue from external customers
Light equipment
296,606
213,494
Compact equipment
274,824
205,321
Services
192,386
183,273
763,816
602,088
- 5,890
- 5,075
757,926
597,013
Less cash discounts
Total
Segment revenue
General information on the company
Changes in accounting under IFRS
Wacker Neuson SE is a listed European company (Societas
Europeea or SE) headquartered in Munich (Germany). It is
Standards and interpretations applied for the first
time in the Consolidated Financial Statements.
entered in the Register of Companies at the Munich Local
The following standards, amendments to standards and inter-
Court under HRB 177839.
pretations are mandatory as of January 1, 2010.
Trading in the company’s shares commenced in May 2007 in
Mandatory
Date of
the Prime Standard segment of the German stock exchange
Name
Description
as of1
endorsement
on the regulated market. The company has been listed in the
IFRS 1
First-time application of
Jan. 1, 2010
June 23, 2010
Jan. 1, 2010
Nov. 25, 2009
Jan. 1, 2010
Mar. 23, 2010
July 1, 2009
June 3, 2009
July 1, 2009
June 3, 2009
July 1, 2009
Sept. 15,
International Financial
SDAX since September 2007.
Reporting Standard (further
exceptions)
General information on accounting standards
IFRS 1
International Financial Reporting Standard (amended
The following Consolidated Financial Statements for fiscal 2010
were prepared in accordance with the International Accounting
Standards (IAS) as approved and published by the Interna-
version)
IFRS 2
cash-settled share-based
Financial Reporting Standards (IFRS) as interpreted by the
payment transactions)
IFRS 3
Business combinations
(amended version)
Financial Reporting Interpretations Committee (IFRIC) as
adopted by the EU, and in supplementary compliance with the
Share-based payment
(recognition of Group
tional Accounting Standards Board (IASB) and the International
Standing Interpretations Committee (SIC) and International
First-time application of
IAS 27
Consolidated and separate
provisions of the German Commercial Code (HGB) set forth
financial statements
in Section 315a (1). All valid and binding standards for fiscal
(recognition of changes
in ownership interests in
2010 have been applied and give a true and fair view of the net
subsidiaries that entail a
assets, financial position and earnings of the Group.
loss of control and changes
that do not entail a loss of
The Consolidated Financial Statements comprise the consolidated income statement, the statement of comprehensive
control)
IAS 39
Financial instruments:
income, the consolidated balance sheet, the Notes to the
Recognition and measure-
Consolidated Financial Statements, the consolidated cash flow
ment (suitable underlying
transactions)
statement, as well as the consolidated statement of changes
in equity. In addition, a Group Management Report, which was
IFRIC 15
IFRIC 16
ros (EUR). All figures are presented in thousand euros (EUR K),
rounded to the nearest thousand, unless otherwise stated.
IFRIC 17
(which include prior-year figures) were approved for publication
by the Executive Board on March 21, 2011.
July 22, 2009
Hedges of a net investment
July 1, 2009
June 4, 2009
Distributions of non-cash
Nov. 1, 2009
Nov. 26, 2009
Nov. 1, 2009
Nov. 27, 2009
Jan. 1, 2010
Mar. 23, 2010
assets to owners
IFRIC 18
Transfers of assets from
customers
Improvements to IFRS
Wacker Neuson SE ’s fiscal year corresponds to the calendar
year. The Consolidated Financial Statements for fiscal 2010
Jan. 1, 2010
in a foreign operation
come statement is prepared in the “cost-of-sales” format. The
Consolidated Financial Statements have been prepared in eu-
Agreements for the
construction of real estate
consolidated with the Management Report of the company,
was prepared in accordance with Section 315a HGB. The in-
2009
(2007 – 2009)
1
For fiscal years that start on or after this date.
The standards and interpretations to be applied for the first
JJ
107
Standard IFRS 9 (Financial Instruments), which deals with
time in this fiscal year do not have any significant impact on the
the classification and measurement of financial assets, was
accounting and valuation methods used by the Group.
published on November 12, 2009. This standard must be
applied for fiscal years beginning on or after January 1,
Standards and interpretations that have been
published but not yet applied
2013. This is the first phase of the project to replace IAS 39.
The following financial reporting standards have been pub-
been adopted in Europe. This is not yet the case.
Entities can only apply this standard in Europe once it has
lished but have not yet come into force, which is why there
is no obligation to apply them yet. Should these financial
Line of business
reporting standards be endorsed by the European Union
With its roots dating back to 1848, Wacker Neuson SE is a
(EU endorsement), earlier voluntary adoption would be
leading global manufacturer of high-quality light construction
feasible.
equipment, weighing up to approximately 3 tons, and compact construction equipment, weighing up to approximately
Mandatory
Date of
14 tons. Wacker Neuson provides a comprehensive one-stop
Name
Description
as of1
endorsement
offering, extending from development and production through
IFRS 1
Limited scope first-time ex-
July 1, 2010
June 30,
sales and rentals to repairs and maintenance for light equip-
2010
ment, plus development and production of compact equip-
emption from comparative
IFRS 7 disclosures
ment. The entire product portfolio comprises over 300 product
July, 1, 2011
tbd Q2/2011
Disclosure requirements
Baumaschinen AG (now Wacker Neuson Beteiligungs GmbH)
(derecognizing financial
and its affiliates in 2007, the new consolidated Wacker Neuson
assets)
IFRS 9
Financial instruments
Jan. 1, 2013
delayed
IAS 24
Related party disclosures
Jan. 1, 2011
July 19,
(amended version)
IAS 32
2009
Feb. 1, 2010
Dec. 23,
2009
Presentation requirements
(classification of rights
Prepayments of a minimum
Jan. 1, 2011
funding requirement
IFRIC 19
Extinguishing financial
brand “Wacker Neuson”. The company will also continue to
market some compact equipment under the “Weidemann” and
“Kramer Allrad” brands in the future. Furthermore, the company CLAAS Global Sales GmbH, which has a direct 5.1 percent
stake in Kramer-Werke GmbH, distributes telescopic loaders
July 19,
industry under the brand “CLAAS”.
2010
July 1, 2010
liabilities with equity instru-
July 23,
Closing date
2010
The closing date for all companies included in the Consoli-
ments
Improvements to IFRS
Group offers its products and services under the new main
developed and manufactured by Kramer to the agricultural
issues)
IFRIC 14
groups. Following the merger with the former Neuson Kramer
dated Financial Statements is December 31 of the respective
Jan. 1, 20112
(2008 – 2010)
tbd
year. The current accounting period is January 1, 2010 through
Q4/2011
December 31, 2010.
For fiscal years that start on or after this date.
2
Varies, in some cases as of July 1, 2010 (IFRS 3 and IAS 27).
1
Consolidation structure
In addition to the parent company, Wacker Neuson SE, the
Consolidated Financial Statements as at December 31, 2010
First-time application of the above-mentioned standards and
include the following entities in which the company has the
interpretations is unlikely to substantially change the current
following direct or indirect shareholdings:
accounting and valuation methods of the company, with the
exception of the following amendments:
IFRS 7
Company Name
City
Country
Drillfix AG
Volketswil (near Zurich)
Switzerland
Direct
Indirect
as a %
as a %
100
Segment
Europe
Wacker Neuson Equipment Private Ltd.
Bangalore
India
100
Asia
Wacker Neuson Beteiligungs GmbH
Leonding (near Linz)
Austria
100
Europe
Austria
100
Europe
Wacker Neuson Linz GmbH
Wacker Neuson Rhymney Ltd.
Kramer-Werke GmbH
Tredegar
Great Britain
100
Europe
Pfullendorf
Germany
95
Europe
Düsseldorf
Germany
95
90
Europe
Geisingen
Germany
100
95
Europe
Pfullendorf
Germany
100
95
Europe
100
95
Europe
PADEM Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt Gutmadingen KG
STG Stahl- und Maschinenbautechnik
Gutmadingen GmbH
Wacker Neuson Grundbesitz
GmbH & Co. KG
Wacker Neuson Grundbesitz
Verwaltungs GmbH
Wacker Neuson Finance Immorent GmbH
Wacker Neuson AB
Pfullendorf
Germany
Austria
98
Europe
Södra Sandby (near Malmö)
Sweden
100
Europe
Wacker Neuson AG
Volketswil (near Zurich)
Switzerland
100
Europe
Wacker Neuson AS
Hagan (near Oslo)
Norway
100
Europe
Wacker Neuson A/S
Karlslunde
Denmark
100
Europe
Wacker Neuson B.V.
Amersfoort
Netherlands
100
Europe
Wacker Neuson Corporation
Menomonee Falls
(near Milwaukee)
USA
100
Americas
Wacker Neuson GmbH
Moscow
Russia
100
Europe
Wacker Neuson GmbH
Vienna
Austria
100
Europe
Wacker Neuson Kft.
Törökbálint (near Budapest)
Hungary
100
Europe
Wacker Neuson Limited
Hong Kong
China
100
Asia
Wacker Neuson Machinery
Shenzhen
China
100
Asia
Trading (Shenzhen) Ltd. Co.
Samutprakarn (near Bangkok)
Thailand
100
Asia
Wacker Neuson Ltda.
Huechuraba (near Santiago)
Chile
100
Americas
Wacker Neuson Ltd.
Mississauga (near Toronto)
Canada
100
Americas
Wacker Neuson Ltd.
Waltham Cross (near London)
Great Britain
100
Europe
Auckland
New Zealand
100
Asia
Wacker Neuson Makina Limited Sirketi
Küçükbakkalköy (near Istanbul)
Turkey
100
Europe
Wacker Neuson Manila, Inc.
Dasmariñas (near Manila)
Philippines
100
Asia
Wacker Neuson Máquinas Ltda.
Jundiaí (near Sao Paolo)
Brazil
100
Americas
Wacker Neuson Oy
Kerava (near Helsinki)
Finland
100
Europe
Wacker Neuson Pty Ltd
Springvale (near Melbourne)
Australia
100
Asia
Wacker Neuson (Pty) Ltd
Florida (near Johannesburg)
South Africa
100
Europe
Wacker Neuson, S.A.
Torrejón de Ardoz (near Madrid)
Spain
100
Europe
Wacker Neuson S.A. de C.V.
Mexico City
Mexico
100
Americas
Wacker Neuson S.A.S.
Brie Comte Robert (near Paris)
France
100
Europe
Wacker Neuson Sp. z.o.o.
Jawczyce (near Warsaw)
Poland
100
Europe
Wacker Neuson srl con socio unico
San Giorgio di Piano
Italy
100
Europe
(near Bologna)
Wacker Neuson s.r.o.
Prague
Czech Republic
100
Europe
Weidemann GmbH
Diemelsee-Flechtdorf
Germany
100
Europe
109
In fiscal 2010 the consolidation structure changed as
described below; however these changes do not have any
significant impact on the Group’s net assets, financial position
and earnings:
JJ
Wacker Neuson Oy in Kerava, Finland, discontinued business and was deconsolidated on December 31, 2010.
JJ
During minor restructuring at Kramer-Werke GmbH, the new
company Wacker Neuson Grundbesitz GmbH & Co. KG
including general partner Wacker Neuson Grundbesitz
Verwaltungs GmbH was established as an affiliate of
Kramer-Werke GmbH.
The following companies have not been included in the
consolidation structure in view of their limited significance.
Net profit for
Indirect as a %
€K
413
- 1,598
1,597
- 20
2,058
0
Country
Wacker Neuson Kragujevac d.o.o.
Serbia
100
Wacker Neuson Lapovo d.o.o.
Serbia
100
Wacker Neuson Immobilien GmbH
Germany
100
95
Wacker Neuson Wohnungsbau GmbH
Germany
100
95
45
0
Austria
100
- 43
- 144
Bauma Baumaschinen Handelsund Vermietungs GmbH
Fiscal 2010 saw the following changes to the structure of
gent liabilities of the acquired companies are recognized at fair
non-consolidated companies:
values.
JJ
JJ
matrics Beratungsgesellschaft m.b.H. in Leonding, Austria,
During initial consolidation, positive balances remain after
was liquidated as planned during the year under review.
reevaluation of all hidden assets and liabilities. After January 1,
In August 2010, Wacker Neuson GmbH, Vienna, Austria
2003, these are capitalized as goodwill resulting from equity
acquired a 100 percent holding in Bauma Baumaschinen
consolidation and are subject to an annual impairment test.
Handels- und Vermietungs GmbH in Schwechat, Austria, for
a purchase price of EUR K 1,191. It only has a minor impact
Intercompany receivables and payables as well as purchases
on the Group’s net assets, financial position and earnings.
and sales between consolidated Group companies have been
eliminated. Group inventories and fixed assets have been
No significant acquisitions or disposals were made in
adjusted for intercompany profits and losses.
fiscal 2010.
Consolidation transactions affecting income are subject to
Consolidation principles
deferred tax, whereby deferred tax assets and deferred tax
The Consolidated Financial Statements are based on the
liabilities are offset provided that the term of payment and the
annual financial statements of the domestic and foreign
creditors are the same.
companies included in the Group, which were prepared in
accordance with IFRS. The annual financial statements of
these companies were prepared according to the uniform
Annual financial statements of the affiliates included in the
accounting and valuation methods applied by the company.
Group that are prepared in foreign currencies have been
translated into euros according to the concept of the func-
Equity was consolidated according to the acquisition method.
tional currency. The functional currency is taken to refer to the
For the first consolidation of subsidiaries acquired after
relevant national currency, with the exception of the Philippines
January 1, 2003, all identifiable assets, liabilities and contin-
(US dollar). Thus, assets and liabilities are translated at the
the period in
Direct as a %
Equity in € K
Company Name
spot rates of exchange effective at the balance sheet date,
With respect to exchange differences without effects on
whereas income and expenses are translated at the average
profits, please refer to the statement of changes in equity.
annual rates of exchange.
The exchange rates of the main currencies relevant to the
Exchange differences arising from the application of different
Group are as follows:
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.
1 Euro equals
2010
2009
Annual average rates
Australia
AUD
1.4383
2010
2009
Rates at balance sheet date
1.7629
1.3121
1.6010
Brazil
BRL
2.3237
2.7626
2.2102
2.4994
Chile
CLP
673.6688
770.8597
621.5312
725.4943
Denmark
DKK
7.4486
7.4460
7.4555
7.4419
UK
GBP
0.8575
0.8907
0.8630
0.8932
Hong Kong
HKD
10.2664
10.8170
10.3382
11.0914
India
INR
60.4041
67.4647
59.6528
66.8570
Japan
JPY
115.2189
130.4779
108.5936
132.5913
Canada
CAD
1.3684
1.5792
1.3277
1.5031
Mexico
MXN
16.6861
18.8839
16.4480
18.6376
Norway
NOK
8.0062
8.7075
7.8231
8.3086
New Zealand
NZD
1.8348
2.2051
1.7292
1.9873
Philippines
USD
1.3213
1.3955
1.3282
1.4303
Poland
PLN
3.9922
4.3516
3.9675
4.1320
Russia
RUB
40.2052
44.2682
40.5280
43.3528
Sweden
SEK
9.4936
10.5939
8.9814
10.2628
Switzerland
CHF
1.3693
1.5089
1.2442
1.4886
South Africa
ZAR
9.6328
11.5160
8.8512
10.5714
Thailand
THB
41.8465
47.9766
40.1316
47.7704
26.4110
Czech Republic
CZK
25.2987
26.4944
25.1760
Turkey
TRY
1.9975
2.1674
2.0625
2.1633
Hungary
HUF
276.3604
281.4997
279.5330
272.6986
USA
USD
1.3213
1.3955
1.3282
1.4303
Accounting and valuation methods
In accordance with IAS 16, tangible assets are recognized at
Recognition of profits and revenue
acquisition costs less scheduled straight-line depreciation.
In the case of contracts for the sales of goods, profits are realized when the goods are delivered (passing of risk), whereas
Financing costs are capitalized provided there is a qualified
profits arising from the provision of services are realized on
underlying asset.
completion of the work. Operating expenses are recognized
when the service has been rendered, or at the date the costs
are incurred. Interest income is accrued based on the outstanding principal of the loan and the applicable interest rates.
When the Group is the lessor
Land and buildings held for the purpose of generating rental
Leasing contracts are classified as finance leases if the lease
revenue are disclosed at net book value. Straight-line depre-
agreement transfers all material risks and rewards associated
ciation occurs using the pro rata temporis method.
with the leased object to the lessee. All other leasing contracts
111
are classified as operating leases.
Goodwill/acquisitions
Acquisitions are reported according to the acquisition method.
Amounts to be paid by lessees resulting from finance leases
Consequently, income of the acquired company is included
are entered as receivables in the amount of the net investment
in the Consolidated Financial Statements as of the date of
value ensuing from the leasing contract. Income from finance
acquisition. For foreign companies that are acquired or found-
leases is distributed across accounting periods in such a way
ed, related acquisition costs are converted to euros at the spot
that regular periodic interest is recognized on the outstanding
rate effective at the date of purchase.
net investment value resulting from the leasing contract.
Reported goodwill is subject to an impairment test at the end
Rental income from operating leases is distributed and
of each fiscal year to verify its value. Goodwill is not subject to
reflected in the income statement on a straight-line basis over
scheduled straight-line amortization.
the duration of the relevant leasing contract. Initial direct costs
attributable to the negotiation and conclusion of a leasing con-
Intangible assets
tract are to be allocated to the book value of the leased asset
Intangible assets with a limited useful life are capitalized at
and distributed on a straight-line basis over the duration of the
acquisition cost and amortized on a straight-line basis depend-
leasing contract.
ing on their projected useful life.
Inventories of work in process and finished products, as well
scheduled amortization but are tested for impairment at least
as raw materials and supplies, are valued at their acquisition
once a year.
and manufacturing costs respectively, in accordance with IAS
2. To the extent that acquisition and manufacturing costs of
Financing costs are capitalized provided there is a qualified
inventories are above fair value, they are written down to net
underlying asset.
realizable value at the balance sheet date. The net realizable
value corresponds to the estimated realizable sales price
under normal business conditions, less estimated manufac-
Leases
turing and sales costs. If the net realizable value of formerly
written-down inventories has increased, corresponding write-
When the Group is the lessee
ups will be made.
Leasing transactions regarding tangible assets in which the
Group as the lessee bears all material risks and rewards from
In determining acquisition costs, incidental acquisition costs
the use of the leased object are treated as finance leases
are added and rebates to purchase prices are deducted.
according to IAS 17. In such cases, the lessee recognizes the
Manufacturing costs include all expenses which are allocable
leased object as an asset in the balance sheet and the pay-
either directly or indirectly to the manufacturing process.
ment obligation of future lease installments is disclosed as a
liability item. Treatment as a finance lease leads to a deprecia-
Acquisition and manufacturing costs for inventories were, for
tion expense on the income statement, dependent upon the
the main part, determined on the basis of the FIFO method; in
useful life of the leased object and the related interest expense.
other words, on the assumption that those assets that were
acquired first will be consumed first. The moving average cost
All other leasing contracts are classified as operating leases. In
procedure is also used to simplify valuation.
such cases, the leasing installments or the rental payments are
shown as an expense in the income statement.
Production orders are not included.
Inventories
Intangible assets with an unlimited useful life are not subject to
Financial instruments and hedging transactions
Derivative financial instruments are recognized at fair value
when the contract into entered into and also when the contract
Non-derivative financial instruments
is subsequently reevaluated at the respective closing date.
Non-derivative financial instruments as disclosed on the assets
The fair values are calculated based on market information
side of the balance sheet comprise investments, marketable
available on the closing date and with the help of recognized
securities and receivables. These items are recognized at
actuarial principles.
amortized cost. Assets are recognized in the balance sheet for
the first time when a Group company becomes party to a con-
Recognition of gains and losses from derivative financial
tract. Financial assets are recognized as of the day of perfor-
instruments is subject to the requirements for hedge account-
mance. Assets are derecognized upon transfer of ownership or
ing as set forth in IAS 39. To this end, upon initiation of such a
expiration of contractual rights to cash flows.
transaction, both the hedging instrument and the underlying
transaction are compared and the goals for risk manage-
The carrying amounts of assets valued at amortized cost are
ment and the underlying strategy are documented. The Group
verified if there is any indication that the book value exceeds
verifies initially and continually whether or not the derivatives
the useful value or the net realizable value (impairment test).
in a hedging relationship will effectively compensate for the
Should the book value exceed the net realizable value, the
changes in cash flow of the underlying transactions. Deriva-
asset is written down.
tive financial instruments that do not satisfy hedge accounting
requirements are allocated to the assets or liabilities held for
Trade receivables and other receivables are recognized at their
trading and designated at fair value through profit or loss when
nominal values less allowance for doubtful accounts based
first recognized and also in subsequent fiscal years. Profits
on the probable default risk. Non-current receivables are dis-
and losses realized through fair value fluctuations are immedi-
counted at standard interest rates.
ately recognized.
Credit balances with financial institutions are recognized at
The interest rate swaps employed by the Group are treated
their nominal values. Liabilities are valued at their nominal
as cash flow hedges in the balance sheet and changes in fair
values or at their higher repayment amounts effective at the
value are recorded directly in equity. An interest rate swap
closing date. Financial liabilities are recognized in the balance
concluded in 2010 does not fulfill the formal requirements of
sheet for the first time when a Group company becomes
hedge accounting and is therefore recognized in the balance
party to a contract. Financial liabilities are derecognized
sheet as being held for trading. In foreign exchange forward
when paid.
contracts that are part of an effective hedge instrument as set
forth in IAS 39, hedge accounting in accordance with IAS 39 is
Derivative financial instruments
applied. Foreign exchange forward contracts without an effec-
The Wacker Neuson Group utilizes standard financial instru-
tive hedge instrument must be reported in the balance sheet
ments such as interest rate swaps/caps and foreign exchange
as assets/liabilities held for trading purposes.
forward contracts exclusively for hedging purposes and
to minimize risks. These kinds of financial instruments are
concluded centrally in the US and Europe and always have a
Research expenses are recognized in the consolidated income
corresponding underlying transaction.
statement in the period in which they are incurred.
Derivative financial instruments are utilized to hedge against
Development costs are capitalized providing the criteria as set
interest rate risks and exchange rate risks. The goal of hedging
forth in IAS 38.57 onwards are fulfilled.
activities is to reduce risks arising from variable interest rate
borrowing and future transactions in foreign currencies. Their
Development costs capitalized from 2008 onwards are written
maturities are termed to match the terms of the correspond-
down over a period of six years. Development costs capitalized
ing underlying transactions, and range from several months to
in previous years are written down over a period of four to five
several years.
years. Amortization is taken using the straight-line method.
Trade receivables and other assets
Provisions for pensions as disclosed in the balance sheet are
Both trade receivables and other assets are principally valued
calculated from the value of the actual pension obligations
at amortized cost. They are, as a rule, valued at nominal value
less the fair value of plan assets as of the balance sheet date.
prior to allowances for uncollectable accounts. Provided they
Actuarial gains and losses are recognized according to the
are financial instruments, they are classified in the category
10-percent corridor rule.
113
“loans and receivables”. Allowances are recognized for the
full amount for those receivables and other current assets for
Service cost for vested rights to future pension payments
which there is a high probability of default. Furthermore, gener-
results from the changes in the present value of the obligation.
al credit, interest and cash discount risks are recognized.
The interest portion of the increase in pension provisions is
disclosed under financial results. Payments under defined con-
tribution benefit plans are recognized directly as an expense.
Cash and cash equivalents comprise cash on hand and
demand deposits. They belong to the category “loans and
Other provisions
receivables” and have maturities of three months or less. Cash
Other provisions are recognized in accordance with IAS 37 if
and cash equivalents are recognized at current value, which,
the Group has a present legal or constructive obligation as a
for liquid funds, is equivalent to the nominal value in euro.
result of a past event, which will probably result in an outflow
of resources with economic benefits, and when a reliable esti-
mate of the amount can be made. Other provisions are made
Non-current assets or groups of assets and liabilities are
for all recognizable obligations. Valuation is based on estima-
treated in the balance sheet as being held for sale as defined
tions of the expected settlement amount on due consideration
by IFRS 5 if their carrying value is principally realized through
of all business circumstances.
classified according to IFRS 5 are valued at the lower of carry-
Other provisions are set up for all recognizable risks as well
ing amount or fair value less costs to sell.
as for all contingent liabilities in the amount of the probable
occurrence.
Government subsidies
Government subsidies are only recognized if there is reasonable
Financial liabilities
assurance that the relevant criteria are fulfilled and the funding
Financial liabilities are recognized at amortized cost by
will be approved. Expense-related subsidies are recognized
applying the effective interest method and are disclosed under
by reducing the book value of the asset. The subsidy is then
financial liabilities recognized at amortized cost.
recognized as income through a reduced write-down value over
the duration of the depreciable asset’s useful life.
Deferred taxes
With respect to temporary differences between valuations for
Pensions and similar obligations
tax purposes and balance sheet purposes, for consolidation
Provisions for pensions and similar obligations from defined
transactions affecting income as well as for tax loss carry-
benefit plans are recognized following the projected unit
forwards, deferred tax assets and liabilities are set up.
credit method, taking into consideration future adjustments in
remuneration payments and in pensions in compliance with the
Deferred tax assets on tax loss carry-forwards are only rec-
regulations as set forth in IAS 19.
ognized if the associated reductions in tax are likely to arise
in the next five years (maximum) and if they will be applicable
Pension obligations in Germany are calculated using the
in subsequent periods. Deferred tax was recognized for loss
demographic tables for 2005 G developed by Prof. Klaus
carry-forwards in the year under review.
Heubeck. Pension obligations abroad are calculated using
accounting principles and parameters specific to the corre-
Deferred tax is calculated at the tax rate valid or approved at
sponding country.
the balance sheet date of the company likely to be affected by
the reversal effects.
a sale transaction rather than through continued use. Assets
Material discretionary decisions, estimates and
assumptions
Taxes on income and earnings
In preparing the Consolidated Financial Statements, it has
ability of future tax benefits is sufficient to justify deferred tax
been necessary to make estimates and assumptions which
assets. The recognized deferred tax assets may be lower if
may influence the carrying amounts of assets and liabilities,
the estimates regarding scheduled taxable income and the tax
income and expenses as well as contingent liabilities as recog-
benefits realizable through available tax strategies are lowered,
nized in the balance sheet. The following significant estimates
or should changes to current tax legislation restrict the time-
and assumptions, together with the uncertainties associated
frame or feasibility of future tax benefits. Refer to item 6 “Taxes
with the accounting and valuation methods applied are crucial
on income” in these Notes for more detailed information.
At each closing date, the Group determines whether the prob-
in understanding the underlying risks of the financial report
and the impact these estimates, assumptions and uncertain-
Employee benefits
ties could have on the Consolidated Financial Statements:
Pensions and similar obligations are calculated in accordance with actuarial valuations. These valuations are based
The value of goodwill, assets with an unlimited useful
life, development costs (at least one impairment test
per year)
on a number of factors including statistical values in order
The company carries out an impairment test on goodwill,
plan assets, expected salary increases and mortality rates.
assets of unlimited useful life and capitalized development
These actuarial assumptions can deviate considerably from
costs once a year or more often if there is indication that an
the actual obligations as a result of changed market and
asset has been impaired. This involves making estimates
economic conditions, resulting in a change in the associated
regarding the forecast and discounting of future cash flows.
future outlay. For more detailed information, please refer to
For more information on the assumptions indicating impair-
item 18 “Provisions for pensions and similar obligations” in
ment and the sensitivity of these assumptions, please refer to
these Notes.
to anticipate future events. These factors include actuarial
assumptions such as the discount rate, expected return on
item 10 “Intangible Assets” in these Notes.
Legal risks
Indications for tangible and intangible asset impairment (specific to events or circumstances)
Legal risks result from legal action against Wacker Neuson SE
At each closing date, the Group determines whether there are
could have a substantial impact on the net assets, financial
any grounds to assume that the book value of a tangible asset
position and earnings of the Group. Company management
or an item under other intangible assets has been impaired.
regularly analyzes the current information available about these
In fiscal 2010, no grounds were identified that would indicate
cases and recognizes provisions to cover probable obligations.
tangible or intangible asset impairment.
Assessments are performed by internal and external lawyers.
or individual Group companies. The outcome of these disputes
When reaching a decision on the need to recognize provi-
Useful lives of tangible assets and other intangible
assets
sions, company management takes sufficient account of the
At the end of each fiscal year, the Group assesses the estimat-
estimate the amount of the obligation sufficiently reliably.
ed useful lives of tangible assets and other intangible assets.
The company management assumes that the assessments of
the relevant expected useful lives are appropriate. Estimations
did not need to be adjusted in 2010.
probability of an unfavorable outcome and takes due care to
Explanatory comments on the
income statement
1
115
Other personnel costs include redundancy payments to the
following extent:
Revenue
in € K
2010
2009
Redundancy payments
2,102
7,889
With respect to the presentation and composition of revenue
by geographic regions and by business segments, please refer
The average number of employees broken down according to
to the section on segment reporting.
fields of activity is as follows for the period under review:
in € K
Other income
in € K
Management
Foreign exchange gains
Income passed on
41
Administration
275
275
Sales
682
719
1,661
Service
573
599
1,548
4,559
Logistics
219
245
897
1,043
Production and technology
1,170
1,148
146
162
3,098
3,189
2010
2009
1,665
Other (cleaning staff, trainees)
Proceeds from sale of property,
plant and equipment
378
1,902
Recovery of receivables written off
344
173
Insurance reimbursements
214
226
Reimbursements for personnel
212
713
Other income
2,238
1,945
Total
7,496
12,222
3
2009
33
Rental income on investment
properties
2010
Total
4
Other operating expenses
in € K
2010
2009
Realisierte Währungsverluste
1,323
3,405
793
104
Losses on foreign-exchange
Personnel expenses
forward contracts
Losses on the disposal of property,
Personnel expenses are composed as follows:
in € K
2010
2009
143,449
130,289
29,481
27,698
Other personnel costs
7,405
10,788
Expenses for pensions
2,758
1,723
183,093
170,498
Wages and salaries
Social security contributions
Total
plant and equipment
759
695
Other expenses
541
1,667
3,416
5,871
0
100,338
3,416
106,209
Value adjustments on goodwill/
brands
Total
Impairment was recognized on goodwill attributed to the
Neuson Kramer Group and/or the Neuson brand value for the
first time during fiscal 2009. This resulted in a write-down of
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.
EUR K 100,338 on intangible assets with unlimited useful lives.
2
5
Financial result
Reconciliation of calculated tax to actual tax expense:
in € K
2010
2009
Interest and similar income
2,094
2,993
58
211
- 1,914
- 61
Income on disposals of financial
assets
Unrealized gains and losses
Interest and similar expenses
- 4,212
- 5,480
Total
- 3,974
- 2,337
in € K
EBT
2010
2009
32,726
- 115,471
Tax at the applicable rate:
29.46% (previous year: 29.46%)
Variance in tax rates
9,641
- 34,018
- 1,381
- 597
724
818
0
26,378
Tax effects of non-deductible
expenses and tax-exempt income
Tax effects of non-deductible
goodwill impairment
Interest expenses include expenses for interest resulting from
Other
- 886
1,893
finance lease contracts in the amount of EUR K 28 (previous
Total
8,098
- 5,526
year: EUR K 54). Interest income from finance lease contracts
in the amount of EUR K 337 (previous year: EUR K 760) is
included in interest and similar income.
Taxes on income are calculated by applying the Group’s
unified tax rate of 29.46 percent to profit before tax (EBT).
Profit/loss arising from changes in the fair value of derivative
There was no change in the Group tax rate compared with the
financial instruments as part of cash flow hedging was rec-
previous year.
ognized under equity during the fiscal year with no effect on
income.
Our tax assessment for the current year is based on a corporate income tax rate of 15 percent and a solidarity surcharge
of 5.5 percent. Trade tax on income is no longer deductible for
6
Taxes on income
the assessment concerning corporate income tax. Trade tax is
set at a uniform 3.5 percent.
Expense for taxes on income is composed as follows:
Actual netted income tax receivables on the closing date
amounted to EUR K 663 (previous year: EUR K 5,752).
in € K
2010
2009
Current tax expense
13,817
70
Deferred tax expense
- 5,719
- 5,596
8,098
- 5,526
Total
Deferred tax assets and liabilities are allocated to the following
The tax losses that were not utilized and for which no deferred
balance sheet items:
tax entitlement was recognized in the balance sheet amount to
117
EUR K 6,648 (previous year: EUR K 4,142).
in € K
2010
2009
Provisions for pensions
1,160
1,002
incurred losses in the current or prior reporting period. The
3,685
3,142
reason for the capitalization lies in the improved earnings situ-
Loss carry-forwards
3,710
2,359
ation in subsequent years.
Inventories
6,853
5,301
443
789
1,026
597
343
154
17,220
13,344
Other
Liabilities
Receivables
Total
With respect to deferred tax assets, EUR K 1,203 (previous
year: EUR K 1,840) are allocable to individual companies which
Deferred tax assets
Deferred taxes from derivative financial instruments in the
amount of EUR K 144 (previous year: EUR K 121) were recognized directly in equity.
7
Earnings per share
Deferred tax liabilities
Inventories
Provisions for pensions
Loss carry-forwards
- 18,906
- 19,389
- 7,523
- 8,101
844
337
1,187
1,029
836
800
Other
- 395
- 206
Total
- 23,957
- 25,530
2010
2009
23,934
- 110,104
70,140
70,140
0.34
- 1.57
0.34
- 1.57
Earnings of the current period
attributable to shareholders
in € K
Weighted average number of shares
outstanding during current period
Undiluted earnings per share in €
Diluted earnings per share
Deferred tax recognized in the consolidated balance sheet
in €
arises from deferred tax as booked by the individual companies. Deferred tax assets and liabilities were netted at the
level of the individual company as appropriate. This netting is
According to IAS 33, earnings per share are calculated by
accounted for in the above table by the positive amounts under
dividing the total profit/loss for the period attributable to
the heading deferred tax liabilities.
Wacker Neuson SE shareholders by the weighted average
number of shares issued.
There was no share dilution effect in the reporting period
shown.
Other intangible assets
Explanatory comments on the balance sheet
8
Payments
Office and
on account/
Land and
Machinery and
other equip-
Assets under
buildings
equipment
ment
construction
Total
203,283
176,542
63,585
19,573
462,983
3,897
5,441
1,543
6
10,887
22,998
28,532
9,495
14,593
75,618
Disposals
- 2,012
- 17,073
- 6,717
0
- 25,802
Transfers
- 6,330
27
419
- 11,487
- 17,371
221,836
193,469
68,325
22,685
506,315
52,972
99,538
43,065
0
195,575
990
3,481
1,118
0
5,589
5,900
22,118
6,243
0
34,261
Disposals
- 716
- 11,913
- 6,332
0
- 18,961
Transfers
- 2,723
- 226
223
0
- 2,726
56,423
112,998
44,317
0
213,738
150,311
77,004
20,520
19,573
267,408
165,413
80,471
24,008
22,685
292,577
3 – 50
2 – 10
1 – 20
in € K
Acquisition costs
Currency translation differences
Additions
Accumulated depreciation
Additions
Useful life in years
Payments
in € K
Office and
on account/
Land and
Machinery and
other equip-
Assets under
buildings
equipment
ment
construction
Total
196,163
188,335
61,008
13,813
459,319
Acquisition costs
794
- 823
418
1
390
Additions
6,079
13,416
5,630
11,156
36,281
Disposals
- 2,507
- 26,434
- 3,701
- 32
- 32,674
Transfers
2,754
2,048
230
- 5,365
- 333
203,283
176,542
63,585
19,573
462,983
49,030
97,128
40,227
0
186,385
128
- 507
275
0
- 104
Additions
5,329
21,871
5,806
0
33,006
Disposals
- 1,336
- 18,918
- 3,279
0
- 23,533
Transfers
- 179
- 36
36
0
- 179
52,972
99,538
43,065
0
195,575
147,133
91,207
20,781
13,813
272,934
150,311
77,004
20,520
19,573
267,408
3 – 66
2 – 10
1 – 20
Amounts recognized for land and buildings as well as office
The reported depreciation methods and useful lives only affect
and other equipment include the book values of finance
the buildings listed.
119
lease contracts. Machinery and equipment includes rental
equipment.
The profit derived from investment property is shown in the
table below:
Under the disposals of land and buildings, EUR K 712 relates
to purchase costs and EUR K 14 to accumulated depreciation
on the reclassification of a property in Tokyo, Japan, recog-
in € K
2010
2009
nized in the balance sheet as “Non-current assets held for
Rental income
1,665
1,661
sale”.
- 255
- 254
Other expenses
Capitalized borrowing costs only had a minor impact in 2010.
9
- 19
- 192
1,391
1,215
2010
2009
236,016
326,059
0
- 89,540
for Weidemann GmbH
- 28
- 332
Foreign currency fluctuations
562
- 171
236,550
236,016
Total
10
Intangible assets
The table below shows the development of investment proper-
a) Goodwill
ties held during the years 2009 and 2010:
2010
2009
7,381
7,041
6
7
Write-down resulting from
Additions
223
0
impairment test
Disposals
0
0
Post-purchase reduction in
Transfers
17,335
333
24,945
7,381
Acquisition costs
in € K
Balance at January 1
As at Januar 1
purchase price
Goodwill as at December 31
4,763
4,333
Additions
255
251
Disposals
0
0
Transfers
2,736
179
7,754
4,763
2,618
2,708
17,191
2,618
Book value on January 1
Book value on December 31
Investment properties include the following land and buildings,
which have all been rented to third parties or are intended to be
rented to third parties:
Property
Überlingen
Book value in
€K
Fair value in
€K
Calculation method
Depreciation method
Useful life
12,158
13,195
Survey/German income
Linear
50 years
approach
England
3,063
3,063
Survey
–
–
Gutmandingen
1,560
2,100
Linear
17 years
219
222
Linear
50 years
approach
Spain
approach
Dortmund
South Africa
151
207
Discounted cash flow
Linear
3 years
40
407
Official market prices
–
–
Goodwill developed as follows:
in € K
b) Other intangible assets
Internally
in € K
Licenses and
Other intangible
produced
Payments on
similar rights
assets
intangible assets
account
Total
20,077
101,422
7,901
4,411
133,811
464
361
98
155
1,078
Acquisition costs
Additions
4,906
0
1,508
2,930
9,344
Disposals
- 1,227
0
- 869
- 207
- 2,303
1,082
0
1,462
- 2,508
36
25,302
101,783
10,100
4,781
141,966
12,434
31,134
2,619
0
46,187
398
135
11
0
544
Additions
916
4,088
1,624
0
6,628
Disposals
- 1,184
0
- 817
0
- 2,001
Transfers
Accumulated amortization
Transfers
3
0
0
0
3
12,567
35,357
3,437
0
51,361
Book value on December 31, 2009
7,643
70,288
5,282
4,411
87,624
12,735
66,426
6,663
4,781
90,605
3–8
0–7
6
–
Licenses and
Other intangible
produced
Payments on
similar rights
assets
intangible assets
account
Total
128,181
Internally
in € K
Acquisition costs
18,935
101,532
5,096
2,618
- 105
- 110
-3
- 34
- 252
Additions
1,761
0
1,406
3,953
7,120
Disposals
- 581
0
- 451
- 206
- 1,238
Transfers
67
0
1,853
- 1,920
0
20,077
101,422
7,901
4,411
133,811
11,801
16,315
1,627
0
29,743
- 95
- 43
-3
0
- 141
Additions
1,204
14,862
1,444
0
17,510
Disposals
- 476
0
- 449
0
- 925
Transfers
0
0
0
0
0
12,434
31,134
2,619
0
46,187
7,134
85,217
3,469
2,618
98,438
7,643
70,288
5,282
4,411
87,624
3–8
0–8
6
–
Accumulated amortization
121
The expected residual useful lives and residual book values of
other intangible assets are as follows:
in € K
Book value on Dec. 31, 2010
Book value on Dec. 31, 2009
54,040
54,040
Indefinite
9,688
13,342
max. 3 years
2,698
2,906
7 years
66,426
70,288
Brands
Technologies
Customer base
Total
Useful life
the brand name “Weidemann” resulting from the acquisition of
c) Impairment of goodwill and intangible assets with
an unlimited useful life
Weidemann GmbH in 2005. Due to the strong market position
The goodwill and indefinite-lived “Weidemann” and “Neuson”
of Weidemann GmbH, the brand name and trademark are con-
brands obtained through mergers were allocated for impair-
sidered to have an indefinite useful life.
ment testing to the following cash-generating units within the
Furthermore, other intangible assets include EUR K 22,000 for
Americas or European segments:
Arising from the merger with the Neuson Kramer Group,
EUR K 32,040 was recognized for the brand name. This is also
JJ
Wacker Neuson Corporation (USA)
considered to have an indefinite useful life due to the compa-
JJ
Weidemann GmbH (Germany)
ny’s strong market position. Wacker Neuson SE does not own
JJ
Wacker Neuson Beteiligungs GmbH (subgroup/Austria)
the “Neuson” logo. This is owned by the PIN Private Trust (PIN
Privatstiftung), which is part of the group founded by Chairman
The pro-rata book values break down as follows:
assumptions, however, the company has an exclusive, irrevocable and unlimited license to use this brand in conjunction
in € K
with the name “Wacker”. The write-downs recognized for 2009
Weidemann GmbH
do include write-downs of the Neuson brand EUR K 10,798.
Book value of goodwill
Dec. 31, 2010
Dec. 31, 2009
24,232
24,260
22,000
22,000
7,870
7,308
–
–
204,448
204,448
Book value of the
Intangible assets created internally refer to capitalized devel-
indefinite-lived brand
opment costs.
Wacker Neuson Corporation
The down-payments effected relate primarily to development
Book value of the
costs for projects not yet completed at the closing date.
Wacker Neuson
Capitalized borrowing costs only had a minor impact in 2010.
Beteiligungs GmbH
Book value of the
32,040
32,040
236,550
236,016
54,040
54,040
Book value of the
of the Supervisory Board, Hans Neunteufel. Subject to certain
The carrying amounts of goodwill and indefinite-lived brands
Discount rates – reflect the management’s assessment of
are verified during the annual impairment test. For this pur-
the risks associated with cash-generating units. This includes
pose, the book value is compared with the “fair value less cost
a risk-free and risk-weighted rate. A weighted average cost
to sell. The “fair value less cost to sell” is determined using the
of capital (WACC) after tax at a uniform rate of 8.38 percent
discounted cash flow method. Future cash flows are discount-
(previous year: 9.35 percent) was applied.
ed to the respective balance sheet date. Value is impaired if
“fair value less cost to sell” is lower than the book value. In
Price increases of raw materials – actual past price
fiscal 2010, no value impairments were recognized (previous
fluctuations are used as indicators for estimating future price
year: EUR K 100,338). Of this 2009 amount, EUR K 89,540 was
developments.
attributable to goodwill impairment and EUR K 10,798 to brand
impairment. The 2009 impairment was allocated to the Europe
Growth rate estimates – management and affiliates estimate
segment.
growth rates based on local market dynamics. A growth rate of
1 percent has been projected for perpetual annuity (previous
The calculation of “fair value less cost to sell” is based on
year: 1 percent).
assumptions, which in turn are dependent on the following
uncertain estimates:
Sensitivity of assumptions – even if no growth rate had been
applied in perpetual annuity or if WACC had been set 1 percent
JJ
Free cash flow
higher there would have been no need to recognize impairment
JJ
Discount rates
for any of the cash-generating units.
JJ
Price increases for raw materials and supplies
JJ
Underlying growth rates for cash-flow predictions outside of
the budget period
11
Other investments and other non-current
assets
Free cash flow – free cash flow is calculated based on a
detailed planning phase from 2011 to 2020. Growth rates
At December 31, 2010, the book value of investments totaled
are determined for the first three budget years (up to 2013)
EUR K 5,478 (previous year: EUR K 4,144). The companies in
based on market conditions. Adjustments were made based
question are not consolidated. For further details, please see
on payout plans. When performing the goodwill impairment
the information on the consolidation structure in the general
test, it is assumed that the entire distributable cash flow is
information on accounting standards.
paid out each fiscal year. Distributable cash flow refers to free
cash flow after interest payments, tax shields and increases
Other non-current assets are composed of the following
and reductions in borrowings. Care is taken to ensure that
components:
the cash flow distribution does not reduce the share capital.
After 2013, management anticipates results and growth rates
that more strongly align with past values. In other words, the
company is not expected to achieve the balanced position as
assumed, for example, in the perpetual annuity assessment by
the year 2014. The detailed planning phase from 2014 to 2020
is therefore derived from past company figures. In the process,
a growth in revenue of 2.5 percent per year from 2014 to 2020
in € K
Dec. 31, 2010
Dec. 31, 2009
Non-current trade receivables
6,728
14,841
Investment securities
3,540
3,094
99
99
Loans
Other non-current assets
Total
3,915
3,508
14,282
21,542
is allocated to the three cash-generating units Weidemann
GmbH (Germany), Wacker Neuson Corporation and Neuson
The non-current trade receivables mainly result from hire-
Kramer Gruppe (Wacker Neuson Beteiligungs GmbH).
purchase agreements and finance leases.
12
Inventories
in € K
123
Allowance for doubtful accounts developed as follows:
Dec. 31, 2010
Dec. 31, 2009
Raw materials and supplies
48,441
33,882
Works in progress
12,079
7,354
Finished goods
123,460
107,065
Additions
Total
183,980
148,301
Amortization/depreciation
in € K
2010
2009
6,672
6,632
Exchange rate differences
172
76
2,046
2,508
- 1,203
- 1,451
Reversals
- 851
- 1,093
6,836
6,672
An expense of EUR K 472,997 (previous year: EUR K 385,119)
was recorded under acquisition and manufacturing costs for
inventories.
Trade receivables are derived from trading with a large number
of companies from different industries and regions. Regular
Of the reported inventories, EUR K 47,397 (previous year:
credit checks verify the financial stability of receivables. Allow-
EUR K 35,785) are recognized at net realizable value. Write-
ances for doubtful accounts are made where necessary.
downs on inventories recognized as an expense amount
to EUR K 2,734 in the reporting period (previous year:
The fair value is a reasonable approximation of the book value
EUR K 2,958). Write-ups on inventories recognized as income
since all receivables are due within less than one year.
amount to EUR K 0 in the reporting period (previous year:
EUR K 0).
14
Other current assets
Similar to 2009, no inventories were pledged as collateral for
in € K
13
Trade receivables
Trade receivables have the following components:
Dec. 31, 2010
Dec. 31, 2009
Advance payments
4,380
4,354
Receivables from employees
2,760
1,193
Sales tax
2,479
994
810
169
companies
172
124
Derivatives
56
0
Other
1,800
1,881
Total
12,457
8,715
Travel advances
Receivables from associated
in € K
Trade receivables at nominal value
Dec. 31, 2010
Dec. 31, 2009
128,323
97,509
Less allowance for doubtful
accounts
Total
- 6,836
- 6,672
121,487
90,837
The fair value is a reasonable approximation of the book value
since all items have a maturity of less than one year.
As of December 31, 2010, trade receivables (at nominal value)
were broken down as follows:
15
in € K
Trade receivables
2010
2009
128,323
97,509
118,497
91,337
Nominal value of trade receivables
written down or not due
Overdue at nominal value but not
written down < 30 days
5,808
2,375
2,352
2,243
1,666
1,554
written down 30 – 90 days
written down > 90 days
in € K
Petty cash
Dec. 31, 2010
Dec. 31, 2009
32,063
51,789
Bank balances
4,317
33,100
Cash deposits
179
135
36,559
85,024
Total
liabilities during the period under review.
Cash on hand and bank balances in foreign currencies are
In addition to subscribed capital, the components of equity are
converted at the spot rates.
as follows:
Interest accrues at variable rates on the daily cash bank balances. Depending on the company’s liquidity requirements,
in € K
Dec. 31, 2010
Dec. 31, 2009
short-term, term accounts running from one day to three
Capital reserves
months were set up. The term money yielded interest at the
Other neutral assets
618,661
618,661
- 267
agreed prevailing rates.
- 258
Exchange rate differences
- 14,718
- 32,495
Total
603,676
585,908
Bank balances in the amount of EUR K 51,032 (including
cash pool current account balances) were netted against liabilities from cash pool current bank balances amounting to
The capital reserves primarily result from share premiums
EUR K 18,969, as a net balance (offset option) was agreed with
in connection with the IPO and the merger with Wacker
the cash pool bank. Current account balances at December 31,
Neuson Beteiligungs GmbH (formerly Neuson Kramer
2010, after netting, amounted to EUR K 32,063 (previous year:
Baumaschinen AG).
EUR K 51,789).
The company did not hold any treasury shares at December 31,
2010 or at any point during the 2010 fiscal year.
16
Retained earnings developed as follows:
in € K
Dec. 31, 2010
Dec. 31, 2009
698
0
in € K
Dividends for respective fiscal year
In December 2010, a property in Tokyo, Japan, previously
Consolidated earnings
reported in property, plant and equipment, was reclassified as
Dec. 31, 2010
Dec. 31, 2009
133,001
256,432
0
-13,327
23,801
-110,104
156,802
133,001
a non-current asset held for sale. Reclassification resulted
from a brokerage contract closed in November 2010.
No dividends were paid in 2010 (previous year: EUR K 13,327;
per share: EUR 0.19).
17
Equity
Refer to the statement of changes in equity for further details
Subscribed capital amounting to EUR K 70,140 is divided into
on equity.
70,140,000 individual no-par-value registered shares, each
Authorized Capital I
representing a proportionate amount of the share capital of
JJ
EUR 1.00. The share capital was fully paid-in at the closing
date of the Consolidated Financial Statements.
Executive Board is authorized to increase the company’s share
capital by April 12, 2012, with the approval of the Supervisory
Board, by issuing new, registered shares against cash contributions, in full or in partial amounts, on one or several occasions, however at the most by a maximum of EUR 1,000,000
(Authorized Capital I).
JJ
Authorized Capital II
125
At the parent company pension commitments due to enter
into effect as of retirement age also exist vis-à-vis Executive
Executive Board is also authorized to increase the com-
Board members as well as former executives and shareholders.
pany’s share capital by April 12, 2012, with the approval of the
Supervisory Board, by issuing new, registered shares against
For the remaining domestic and foreign companies, the
contributions in kind, in full or in partial amounts, on one or
schemes partly provide for a lump-sum payment which is
several occasions, however at the most by a maximum of
based on the salary at retirement age multiplied by a factor
EUR 5,360,000 (Authorized Capital II).
based on years of service with the company, and partly for
pension payments from retirement until death based on the
JJ
Rights, preferential rights or restrictions on shares
There are pool agreements between some shareholders and
employee’s earnings to those who fulfill the time-of-service
requirements, which differ from country to country.
companies of the Wacker family on the one hand, and companies and shareholders of Neuson on the other, which essen-
Foreign affiliates also have defined contribution plans. In such
tially regulate the exercise of voting and petition rights at the
cases, the respective company makes contributions to the
AGM and restrict the transfer of shares. The Lehner sharehold-
respective pension insurance schemes either because of legal
ers have issued a Neuson shareholder with a voting proxy for
requirements or contracted agreements. There is no further
the shares they acquired. Two members of the Executive Board
obligation for the company beyond these payments. The peri-
have received shares in the company as part of their remunera-
odic contributions are recognized as an expense under profit
tion. The company has an unrestricted, preferential purchase
before interest and tax (EBIT) in the respective year.
or acquisition right over some of these shares in the event that
they are transferred. For detailed information, please refer to
The actuarial valuation is based on the following assumptions:
the transfer of shares”, page 85.
in
2010
2009
%
4.00
5.50
%
2.00
2.00
Benefit plans for parent
18
Provisions for pensions and similar obligations
company
Discount rate
Future pension
in € K
Provisions for pension obligations
Dec. 31, 2010
22,557
Dec. 31, 2009
21,663
Provisions for other obligations
to employees
Total
2,301
2,164
24,858
23,827
increases expected
Expected return on
plan assets
Retirement age
%
4.00
4.00
years
60
60
%
4.16
5.34
%
1.55
2.30
%
5.44
5.59
years
63
63
Other benefit plans1
Discount rate
Within the company 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.
Future pension
increases expected
Expected return on
plan assets
Retirement age
1
Weighted average of the individual benefit schemes
the Management Report “Restrictions affecting voting rights or
Pension obligations are distributed as follows:
in € K
Financing status
in € K
Dec. 31, 2010
Dec. 31, 2009
22,456
19,672
Provisions for pension plans,
not funded
2010
2009
31,525
25,311
- 6,726
- 1,582
59
98
24,858
23,827
Actuarial gains/losses not yet
recognized
Plan surplus
Accruals for pensions at
Provisions for pension plans,
fully or partly funded
14,370
10,486
Total
36,826
30,158
December 31
The losses above and beyond the 10-percent corridor are
amortized over the average remaining years until retirement –
The changes in the present value of pension obligations and of
some 15 years in Germany’s case. Amortization of the related
plan assets are as follows:
amounts in 2010 and 2009 is part of total pension expense.
Plan assets primarily comprise pension liability insurance
in € K
2010
2009
where future payments are pledged in favor of the entitled
recipient.
Changes in the present value
of pension obligations
Current service costs
30,158
25,951
889
863
Interest expense
1,541
1,596
Actuarial gains/losses
4,962
3,458
171
- 40
- 1,481
- 1,630
643
0
Curtailments and settlements
- 57
- 40
36,826
30,158
Changes in exchange rates
Paid benefits
Present value of obligations at
December 31
Pension expenses are as follows:
in € K
2010
2009
889
863
Interest expense
1,541
1,596
Expected return on plan assets
- 203
- 172
Current service costs
- 37
Effect of plan curtailments and
settlements
643
- 305
Past service cost
- 14
- 70
2,819
1,912
Pension expense from defined
benefit plans
in € K
2010
2009
Pension expense from defined
Changes in fair value of plan
contribution plans
assets
Total pension expense
Expected return on plan assets
Changes in exchange rate
4,847
4,138
203
172
- 183
- 50
17
0
Employer’s contributions
458
614
Curtailments and settlements
- 41
- 27
5,301
4,847
Plan assets at December 31
659
547
3,478
2,459
Interest expense ensuing from pension obligations is recog-
The following actual return on plan assets was recognized for
nized in the financial result. The remaining pension expense is
fiscal years 2010 and 2009:
127
part of personnel costs shown in the appropriate functional line
of the income statement.
in € K
The valuation date for the current value of plan assets and the
Actual return on plan assets
2010
2009
22
124
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
Only the Wacker Neuson Corporation (USA) benefits plan
of January 1. The base value for the anticipated return on plan
requires the payment of healthcare contributions. The following
assets is the current value as of January 1. Transfers during the
table shows the effects of a one percentage point increase or
year are accounted for on a pro-rata basis.
reduction in assumed healthcare costs:
The contributions expected to be made to German plan assets
in € K
in 2011 amount to EUR K 600.
Additions
Reversals
20
- 16
89
- 74
18
- 15
64
- 53
2010
The following overview shows the projected pension pay-outs
Effect on service cost and
for the next five years:
interest expense
Effect on the present value
Due in 2011
1,575
Due in 2012
1,548
Due in 2013
1,615
Due in 2014
1,586
Due in 2015
1,862
2009
Effect on service cost and
interest expense
Effect on the present value
The following information applies to the period 2006
through 2010:
in € K
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Dec. 31, 2007
Dec. 31, 2006
36,826
30,158
25,951
27,606
14,137
5,301
4,847
4,138
3,496
2,698
31,525
25,311
21,813
24,110
11,439
276
194
129
80
24
- 188
- 62
83
110
- 184
Present value of performance-oriented
obligations
Fair value of the plan assets
Plan surplus /deficit
Experience adjustments
of plan liabilities
of plan assets
in € K
19
Other provisions
Other provisions are as follows:
Balance
in € K
Balance
Jan. 1, 2010
Currency
Utilization
Additions
Reversals
Dec. 31, 2010
5,979
111
1,957
4,794
287
8,640
10,062
60
5,177
2,134
554
6,525
504
Provisions
Warranties
Obligations towards employees
Professional fees
368
3
318
504
53
Litigation costs
934
37
365
234
385
455
2,580
77
1,404
796
468
1,581
19,923
288
9,221
8,462
1,747
17,705
Dec. 31, 2009
Other provisions
Total
Changes in
consolidation
Balance
structure /
Jan. 1, 2009
Currency
Utilization
Additions
Reversals
Warranties
6,914
65
2,343
2,776
1,433
5,979
5,949
74
2,131
6,224
54
10,062
361
3
364
385
17
368
in € K
Balance
Provisions
Professional fees
Litigation costs
Other provisions
Total
389
-4
9
558
0
934
2,601
74
1,613
1,847
329
2,580
16,214
212
6,460
11,790
1,833
19,923
129
The due dates of the above provisions are distributed as
follows:
in € K
Short-term (< 1 year)
Long-term (> 1 year)
Balance Dec. 31, 2010
Warranties
7,507
1,133
8,640
3,000
3,525
6,525
502
2
504
Provisions
Professional fees
41
414
455
1,267
314
1,581
Total
12,317
5,388
17,705
in € K
Short-term (< 1 year)
Long-term (> 1 year)
Balance Dec. 31, 2009
Warranties
4,920
1,059
5,979
5,732
4,330
10,062
368
0
368
Litigation costs
Other provisions
Professional fees
Litigation costs
Other provisions
Total
308
626
934
2,255
325
2,580
13,583
6,340
19,923
The increase in discounts for non-current provisions from
Company obligations from employee work accounts are offset
December 31, 2009 through December 31, 2010 amounted to
against securities classified as assets, which are created in
EUR K 20 (2009: EUR K 24) for obligations towards employees
order to secure these claims. Obligations from work accounts
based on the respectively valid assessment basis.
amount to EUR K 669. The cost of acquiring the securities
amounted to EUR K 659 and the fair value at December 31,
Obligations towards employees includes other provisions for
employees nearing pension age who are working part-time and
for whom claims for reimbursement against the German tax
office amounted to EUR K 335 in 2010 and EUR K 297 in 2009.
2010 was EUR K 669, of which EUR K 669 is offset.
Provisions
20
Financial liabilities
Financial liabilities comprise the amounts recognized under the
balance sheet items long-term borrowings (EUR K 32,218);
short-term borrowings from banks (EUR K 5,958); and current
portion of long-term borrowings (EUR K 12,109):
in € K
Dec. 31, 2010
Up to 1 year
1 to 5 years
Over 5 years
39,998
17,956
18,833
3,209
9,741
0
9,741
0
546
111
435
0
0
0
0
0
Total
50,285
18,067
29,009
3,209
in € K
Bonds
Liabilities from finance leases
Other non-current liabilities
Dec. 31, 2009
Up to 1 year
1 to 5 years
Over 5 years
40,075
16,421
20,098
3,556
Bonds
19,450
10,000
9,450
0
582
103
385
94
63
63
0
0
60,170
26,587
29,933
3,650
Liabilities from finance leases
Other non-current liabilities
Total
Borrowings from banks include the following items:
Dec. 31,
Interest rate
Interest
2010 in € K
as a percentage
rate type
Amortizing loans in USD
10,917
1 mo. USD Libor + 3.75
fixed1
May 31, 2012
Loan to purchase a tract of land
10,000
6 mo. Euribor + 1.85
fixed1
January 1, 2016
Financing of Weidemann GmbH
7,800
12 mo. EUR Libor + 0.65
fixed1
June 30, 2012
Long-term loan
4,756
6.00
fixed
5,910
11.88
variable
242
7.32
variable
Due dates
Either 1, 3, 6 or
Subtotal on fixed interest rate loans
> 1 year
33,473
€ K 5,343 < 1 year or
Loans in Brazilian reals
Loan in Chilean pesos
Export incentive credit line
Other borrowings from banks
Subtotal on variable interest rate loans
Total
1
€ K 567 > 1 year
< 1 year
Can be terminated each year
100
1.45
variable
on March 31
273
< 0.19
variable
< 1 year
6,525
39,998
Loan converted from variable to fixed rate through a hedge. For more information, see section 23 on derivative financial instruments in these notes.
Dec. 31, 2009
Interest rate
Interest
in € K
as a percentage
rate type
131
Due dates
either 1, 3, 6 or
Financing of Weidemann GmbH
13,200
12 mo. EUR Libor + 0.65
fixed1
June 30, 2012
11,606
fixed1
May 31, 2012
5,014
6.00
fixed
Long-term loan
Subtotal on fixed interest rate loans
> 1 year
29,820
€ K 4,789 < 1 year or
Loans in Brazilian reals
5,325
11.88
variable
€ K 536 > 1 year
4,405
variable
May 31, 2012
425
6 mo. Euribor + 1.85
variable
Loan to purchase a tract of land
January 1, 2016
Can be terminated each year
Export incentive credit line
100
Subtotal on variable interest rate loans
10,255
Total
40,075
1
1.55
variable
on March 31
Loan converted from variable to fixed rate through a hedge. For more information, see section 23 on derivative financial instruments in these notes.
Refer to item 30 “Risk management” in these Notes for
The book values of borrowings from banks with variable and
information on the sensitivity of interest risks associated with
fixed interest rates were reported in the following currencies
variable-interest borrowings.
(equivalent in EUR):
firmed in writing but were not utilized by Wacker Neuson SE:
in € K
in € K
2010
2009
20,000
20,000
15,058
13,983
5,000
10,000
2,000
2,000
Fifth credit line (T4M + 0.9 percent)
300
0
Sixth credit line (14.5 percent)
194
185
Seventh credit line (11.0 percent)
56
47
Eighth credit line (7.5 percent)
25
25
42,633
46,240
First credit line
(3 mo. Euribor + 0.5 percent)
Second credit line in USD
(1 mo. Libor + 2.0 percent)
Third credit line (Eonia + 1.25 percent)
Total
2009
22,929
18,739
USD (USA)
10,917
16,011
BRL (Brazil)
5,910
5,325
CLP (Chile)
Total
242
0
39,998
40,075
The fair values of financial liabilities are reasonable approxima-
Fourth credit line (Eonia/Euribor as
fixed rate loan + 1.0 percent)
2010
Euro
tions of the book values.
Bonds
Wacker Neuson Linz GmbH (legal successor to Neuson
Finance GmbH) has issued a bond amounting to a total nominal value of EUR 10 million (book value: EUR K 9,741). This is
listed on the Third Market multilateral trading facility (MTF) of
the Vienna Stock Exchange.
The following table lists the credit lines that have been con-
Dec. 31, 2010
Dec. 31, 2010
Total nominal
Interest rate
value
as a %
in € K
structure or controlling interests – also vis-à-vis a key affiliate
Due date
September 30,
Bundled bond
10,000
3.76
2010
(for example, through the sale of a majority shareholding) and
this change has a negative impact on the ability of the bond
issuer to meet liabilities. The change as described may also be
a gradual process.
JJ
Export incentive credit line (KRR credit line):
In the previous year, Wacker Neuson Linz GmbH (legal
This credit is used exclusively to finance receivables from export
successor to Neuson Finance GmbH) issued two bonds
trade. Amounts accruing to the bank under this loan agreement
amounting to a total nominal value of EUR 20 million (book
are secured by a global debt assignment provision and a bill of
value: EUR K 19,450). These are listed on the Third Market
surety.
multilateral trading facility (MTF) of the Vienna Stock
Exchange.
21
Dec. 31, 2010
Dec. 31, 2010
Total nominal
Interest rate
value
as a %
10,000
3.76
in € K
Trade payables
As of December 31, 2010, trade receivables (at nominal value)
were broken down as follows:
Due dates
September 30,
Bundled bond
Bond with an
Austrian bank
2012
September 8,
10,000
3.41
2010
in € K
2010
2009
Trade payables
36,207
21,251
Book value due < 30 days
34,571
15,521
1,497
3,112
139
2,618
Book value due 30–90 days
Book value due > 90 days
Financial covenants
Financial covenants exist for the following financial instruments
Interest does not accrue on trade payables.
of Wacker Neuson SE:
JJ
Loan contract to finance the purchase of
Weidemann GmbH
The loan contract contains a clause under which the company
is bound to pledge its shares held in Weidemann GmbH to the
bank as security should circumstances arise or become public
that would justify the issuing of a higher risk assessment by the
bank. With respect to the borrower’s share of the business in
Weidemann GmbH, there is an obligation not to execute power
of disposal (sale) and to refrain from making any binding decla-
22
in € K
Dec. 31, 2010
Dec. 31, 2009
Advance payments received
12,525
8,769
Other accruals
10,091
7,291
Deferred taxes
8,073
3,043
Value added tax
4,623
2,963
Advance payments received
1,240
808
rations. Furthermore, Wacker Neuson SE is bound by contract
Other
7,224
6,228
to use the proceeds received from the sale of assets outside
Total
43,776
29,102
of ordinary business operations which exceed the threshold
value of EUR K 10,000 per annum to make a special redemption payment.
The other accruals and other current liabilities in 2010 mainly
consisted of costs for preparing the Annual Financial State-
JJ
Bundled bond
Bond holders may recall their bonds as part of loans in the
ments, outstanding invoices, liabilities to customers, return
obligations, bonuses and derivatives.
event of certain breaches of contract (if the issuer or guarantor defaults on payment or becomes insolvent, for example).
The fair values of the short-term borrowings are reasonable
Furthermore, bond holders may terminate their bonds as part
approximations of the book values.
of loans in the event of a significant change to the ownership
23
133
Derivative financial instruments
Derivative financial instruments treated according
to the hedge accounting criteria
The nominal amounts and market values of derivative financial
instruments that satisfy hedge accounting criteria are recognized as follows at December 31, 2010 and December 31,
2009:
in € K
Dec. 31, 2010
Nominal Value
Market Value
Dec. 31, 2009
Nominal Value
Market Value
Liabilities
Currency hedges
Interest hedges
5,950
50
0
0
18,717
361
24,806
379
Commodity hedges
Total
0
0
0
0
24,667
411
24,806
379
The market values recognized under the results for the period
The maturities of derivative financial instruments are as follows:
not reflected in income and deferred tax accruing on those
amounts developed as follows during the fiscal year and were
in € K
Up to 1 year
1 to 5 years
Over 5 years
Nominal Value
Liabilities
in € K
Market
Deferred
Carried
values
taxes
under equity
Liabilities
hedges
379
- 121
258
32
- 23
9
0
0
0
411
- 144
267
+/- not reflected
in income
+/- reflected
in income
Balance at
Dec. 31, 2010
5,950
0
0
11,724
6,993
0
0
0
0
17,674
6,993
0
Commodity
Balance at
Jan. 1, 2010
Currency hedges
Interest hedges
Total
netted in the statement of comprehensive income:
Derivative financial instruments not treated
according to the hedge accounting criteria
The derivatives concluded to hedge future foreign-exchange
transactions (underlying transaction) 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 and current values developed as follows at
December 31, 2010 and December 31, 2009:
in € K
Dec. 31, 2010
Nominal Value
Market Value
Dec. 31, 2009
Nominal Value
Market Value
Assets
Interest hedges
10,000
56
0
0
Total
10,000
56
0
0
Currency hedges
12,986
1,076
10,490
368
Total
12,986
1,076
10,490
368
Liabilities
The following table provides an overview of maturities of
The offsetting values from the underlying transactions are not
derivative financial instruments that do not satisfy hedge
included when calculating the market value of the derivative
accounting criteria:
financial instruments. Thus, they do not represent the value
that the companies would achieve from both the underlying
transaction and hedging contract. The book values of deriva-
in € K
Up to 1 year
1 to 5 years
Over 5 years
Nominal Value
tives correspond to the market 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.
Assets
Interest hedges
0
10,000
0
Total
0
10,000
0
Refer to item 26 “Additional information on financial instruments” in these Notes for information regarding net profits and
losses from these financial instruments.
Liabilities
Currency hedges
12,986
0
0
Total
12,986
0
0
Other information
135
fluctuated between 11 and 14 percent. At the balance sheet
date, the value of receivables financed by the bank amounted
24
Contingent liabilities
to EUR K 5,585 (previous year: EUR K 4,789).
Contingent liabilities, on the one hand, represent possible
obligations that may be incurred depending on the outcome of
25
Other financial liabilities
a future event or events which are of an uncertain nature and
not wholly within the control of the company. On the other
a) Obligations for equipment rental and service.
hand, contingent liabilities represent present obligations for
The terms of the obligations for rental equipment and service
which payment is not probable or the amount of the obligation
contracts are as follows:
cannot be determined with sufficient reliability.
in € K
The Group has undersigned the following guarantees:
in € K
Guarantees
Dec. 31, 2010
Dec. 31, 2009
1,075
699
Dec. 31, 2010
Dec. 31, 2009
Obligations due within 1 year
11,948
10,947
Obligations due in 1 to 5 years
16,204
18,146
years
8,221
8,479
Total
36,373
37,572
Obligations due in more than 5
b) Lease obligations
Furthermore, the company is liable to the amount of EUR
contract with the city of Munich to develop a property.
Finance lease obligations
When the Group is the lessee (finance lease)
In addition to the above-mentioned contingent liabilities, the
Finance lease contracts mainly concern the purchase of office
Group undersigns various financial guarantees (sureties). It is
and other equipment and the purchase of real estate.
highly unlikely, however, that these will be exercised. Therefore
no value was booked.
The following table lists the net book values of the relevant
assets at the closing date:
The Group is liable for the following financial guarantees:
in € K
in € K
Book value
Nominal value
Dec. 31, 2010
Dec. 31, 2009
0
0
5,585
4,789
Office and other equipment
Dec. 31, 2010
Dec. 31, 2009
64
44
Buildings
747
784
Total
811
828
Lease contracts for office and other equipment contain, for the
The financial guarantees refer to an agreement between the
most part, a purchase option at the end of the basic term of
affiliate Wacker Neuson Máquinas Ltda. (Brazil) and a bank.
the lease which is also to be exercised. The finance lease con-
The agreement was concluded to provide customers with
tract concerns the purchase of a self-occupied administration
financing options. The bank charges the affiliate for these
building by the Hungarian affiliate, Wacker Neuson Kft., which
transactions based on 0.3 percent to 0.8 percent of the
will terminate by 2015.
purchase agreement (previous year: 0.5 percent to 1.0 percent). In the event of default, the affiliate is obliged to settle
the outstanding receivables plus interest. Interest in 2010
amounted to roughly 12 percent, while in the previous year it
4.1 million (previous year: EUR 4.1 million) in connection with a
Future minimum lease payments and their present values are
presented in the following table:
in € K 2010
Up to 1 year
1 to 5 years
Over 5 years
116
458
0
574
Less discount
-5
- 23
0
- 28
Present value
111
435
0
546
Up to 1 year
1 to 5 years
Over 5 years
Total
108
408
100
616
Less discount
-5
- 23
-6
- 34
Present value
103
385
94
582
Future minimum lease payments (nominal)
Discount rate
3 – 6%
in € K 2009
Discount rate
Total
3 – 6%
When the Group is the lessor (finance lease)
ized to the amount of the net investment value ensuing from
To the extent that the company is the lessor and has sold
the lease contract. The sales proceeds are recognized in
machines by way of finance lease, the receivable is capital-
accordance with IAS 17.
The present values at closing date are as follows:
in € K 2010
Outstanding min. lease payments
Up to 1 year
1 to 5 years
Over 5 years
Total
518
2,007
0
2,525
+ Non-guaranteed residual value (nominal)
1,175
930
0
2,105
= Gross investment
1,693
2,937
0
4,630
- Unrealized investment income
= Net investment (present value)
- 48
- 201
0
- 249
1,645
2,736
0
4,381
- 1,138
- 846
0
- 1,984
507
1,890
0
2,397
Up to 1 year
1 to 5 years
Over 5 years
Total
332
7,354
0
7,686
- Present value of non-guaranteed
residual values
= Present value of minimum
lease payments
in € K 2009
Outstanding min. lease payments
+ Non-guaranteed residual value (nominal)
614
2,120
0
2,734
= Gross investment
946
9,474
0
10,420
- Unrealized investment income
- 23
- 717
0
- 740
= Net investment (present value)
923
8,757
0
9,680
- 595
- 1,895
0
- 2,490
328
6,862
0
7,190
- Present value of non-guaranteed
residual values
= Present value of minimum
lease payments
137
Operating leases
Insofar as a Wacker Neuson 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 2010
Up to 1 year
1 to 5 years
Over 5 years
Total
3,387
7,572
6,358
17,317
Up to 1 year
1 to 5 years
Over 5 years
Total
5,185
7,958
5,653
18,796
in € K 2009
In 2010, a total of EUR K 4,929 (previous year: EUR K 6,656) for
c) Obligations resulting from investment decisions/
takeback obligations
Financial obligations ensuing from construction and investment projects amounting to EUR K 14,002 (previous year:
EUR K 24,106) and from takeback obligations amounting
to EUR K 2,622 (previous year: EUR K 1,618) exist. In addition, unconditional purchase commitments amounting to
EUR K 107,559) also exist.
operating lease agreements was expensed.
26
Additional information on financial instruments
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.
2010
Fair
value
in € K
2010
Book
value
Initial
disclosure
Held for
trading
Held for
sale
Loans
and
receivables
Hedges
Held to
maturity
Leases
and others
(book
value)
Nonfinancial
assets
(book value)
IAS 39 classification (book value)
Measured at fair
value through profit
or loss
Measured at fair value
with changes recognized in equity
At residual
book value
Assets
Other investments
Other noncurrent assets
Trade
receivables
5,478
5,478
0
0
5,478
0
0
0
0
0
14,282
14,282
0
0
0
0
9,132
0
2,736
2,414
121,487
121,487
0
0
0
0
119,842
0
1,645
0
Other current
assets
12,457
12,457
0
56
0
0
4,279
0
0
8,122
Cash and cash
equivalents
36,559
36,559
0
0
0
0
36,380
0
179
0
in € K
2010
Fair
value
2010
Book
value
Initial
disclosure
Held for
trading
At
residual
book
value
Hedges
Leases
and others
(book
value)
Nonfinancial
assets
(book value)
Measured
at fair
value with
changes
recognized
in equity
through profit or loss
Liabilities
32,076
32,218
0
0
31,783
0
435
0
Trade payables
36,207
36,207
0
0
36,207
0
0
0
0
5,958
0
0
0
from banks
5,958
5,958
0
borrowings
12,109
12,109
0
0
11,998
0
111
0
43,776
43,776
0
1,076
2,670
411
0
39,619
2009
Fair
value
in € K
2009
Book
value
Initial
disclosure
Held for
trading
Held for
sale
Loans
and
receivables
Hedges
Held to
maturity
Leases and
others (book
value)
Nonfinancial
assets
(book value)
139
Measured at fair
value through profit
or loss
with changes recognized in equity
At residual
book value
Other investments
Other noncurrent assets
4,144
4,144
0
0
4,144
0
0
0
0
0
21,542
21,542
0
0
0
0
10,427
0
8,757
2,358
Trade
receivables
90,837
90,837
0
0
0
0
89,914
0
923
0
Other current
assets
8,715
8,715
0
0
0
0
2,005
0
0
6,710
85,024
85,024
0
0
0
0
84,889
0
135
0
2009
Fair
value
2009
Book
value
Initial
disclosure
Held for
trading
At
residual
book
value
Hedges
Leases
and others
(book value)
Nonfinancial
assets
(book value)
Cash and cash
equivalents
in € K
Measured
at fair
value with
changes
recognized in
equity
through profit or loss
Liabilities
33,583
33,583
0
0
33,104
0
479
0
Trade payables
21,251
21,251
0
0
21,251
0
0
0
from banks
14,889
14,889
0
0
14,889
0
0
0
borrowings
11,698
11,698
0
0
11,595
0
103
0
29,102
29,102
0
368
3,294
379
0
25,061
Assets
Investments in equity instruments amounting to EUR K 5,478
The gains and losses from adjustments to the fair value of
(previous year: EUR K 4,144) that do not have a quoted market
derivatives that do not meet hedge accounting requirements
price in an active market are included in other investments.
are included in the category of “assets held for trading”.
These equity instruments were valued at acquisition cost as
the current value cannot be reliably determined. In the current
Financial instruments in the form of foreign-currency trade
fiscal year, an impairment loss against income of EUR K 1,978
receivables and payables are valued at the relevant spot
is recorded (previous year: EUR K 0).
rates applicable on the balance sheet dates. This resulted in
expenses amounting to EUR K 213 (previous year: earnings of
The following table shows the net profits and losses from
EUR K 1,701), which are reported in manufacturing costs in-
financial instruments based on valuation categories. It does
curred to generate sales revenue. Refer to items 2 and 4 “Other
not include the effects on income of finance leases or of
income” and “Other operating expenses” in these Notes for
derivatives that qualify for hedge accounting as these are
information on exchange rate fluctuations and adjustments to
not allocated to any valuation categories set down in IAS 39.
monetary holdings.
Similarly, interest and dividends have not been recognized on
the net profits and losses from financial instruments.
The table below shows the financial instruments subsequently
valued at fair value. These are split into levels 1 to 3, depending
on the extent to which fair value can be observed:
in € K
Loans and receivables
2010
2009
8
- 1,684
JJ
Financial instruments measured
(unadjusted) in active markets for identical assets or
at fair value through profit or
loss – initial disclosure
0
0
- 652
- 265
0
0
liabilities.
JJ
Financial instruments held
for trading
Level 2 fair value determination based on inputs other than
quoted prices included within level 1 (data) that are observable for the asset or liability, either directly (i.e. as prices) or
Financial liabilities measured
at amortized cost
Level 1 fair value determination resulting from quoted prices
indirectly (i.e. derived from prices).
JJ
Level 3 fair value determination resulting from models that
use inputs for the valuation of the asset or liability that are
Net gain/loss from the category “loans and receivables” results
from allowances for doubtful accounts on trade receivables.
not based on observable market data (unobservable inputs).
in € K 2010
Level 1
Level 2
Level 3
141
Dec. 31, 2010
Financial assets categorized
“at fair value through profit or loss”
Non-hedged derivatives
0
56
0
56
Total
0
56
0
56
Level 1
Level 2
Level 3
Dec. 31, 2010
0
1,076
0
1,076
Total
0
1,076
0
1,076
Level 1
Level 2
Level 3
Dec. 31, 2009
0
0
0
0
Total
0
0
0
0
Level 1
Level 2
Level 3
Dec. 31, 2009
in € K 2010
Financial liabilities categorized
in € K 2009
Financial assets categorized
in € K 2009
Financial liabilities categorized
0
368
0
368
Total
0
368
0
368
27
Events after the balance sheet date
Products and services of operating segments
The products and services offered by the geographic operating
No other noteworthy events occurred after the balance sheet
segments can be divided into light equipment, compact equip-
date.
ment and services.
The light equipment business segment covers the manufacture
28
Segmentation
and sale of light of equipment weighing up to approximately
three metric tons in the following four business fields: concrete
Division and determination of operating segments
technology, soil and asphalt compaction, demolition and utility.
The internal organizational structure and management structure as well as the internal reports to the Executive Board and
The compact equipment business segment covers the manu-
Supervisory Board, which are based on geographic segments,
facture and sale of compact equipment weighing up to approxi-
form the basis for determining the operating segments of the
mately fourteen metric tons.
company. For information regarding geographical segmentation of companies, please refer to the section on consolidation
The business segment services houses the company’s activi-
structure (see the general information on accounting stan-
ties in the business fields after-market (repair and maintenance)
dards/consolidation structure). According to this structure, the
and rental.
companies are bundled geographically into regional markets
(Europe, Americas and Asia). Reporting is also carried out
internally according to business segments. This exclusively
deals with revenue. Corporate governance will therefore continue to focus on geographical segments.
Segment valuation methods
in € K
Segment valuation methods are based on the valuation meth-
Cash on hand
ods used in internal reporting. Internal reporting is carried out
Bank balances
exclusively in line with the applicable valid IFRS standard.
Cash deposits
Transactions between the individual Group segments are
based on prices that also apply to third-party transactions.
Liabilities from group cash pool
Total
Dec. 31, 2010
Dec. 31, 2009
179
135
51,032
72,770
4,317
33,100
- 18,969
- 20,981
36,559
85,024
Reporting format
Non-cash operating expenses and income as well as the gain
Segment reporting is covered in a separate Note.
or loss on the sale of property, plant and equipment have been
eliminated in the cash flow from operating activities.
Internal reporting reveals segment revenue and segment earnings, expressed as EBIT. EBITDA is also disclosed as a profit
The item “Book value from the disposal of rental equipment”
indicator.
recognized in the cash flow from operating activities includes
the book values of rental equipment formerly recognized under
The figures for working capital and net financial debt are also
fixed assets and reclassified on sale of the equipment as cur-
derived from internal reporting and included in external seg-
rent assets.
ment reporting for operating segments as segment assets and
segment liabilities.
Cash flow from investing activities comprises the cash outlay
for intangible assets and property, plant and equipment.
The operating segments are reported after elimination of transactions that have taken place within segments. The consolida-
The item outlining changes to the consolidation structure refers
tion column thus contains only the eliminated transactions that
exclusively in fiscal 2010 to capital contributions to an affiliate
took place between operating segments.
not consolidated for reasons of materiality (see overview of
equity investments in non-consolidated companies).
Revenue from external customers, categorized according to
products and services, are recognized at Group level.
Cash flow from financing activities contains payments received
from and made to shareholders. It also contains payments
resulting from borrowing and repayment of debt.
29
Cash flow statement
The cash flow statement is prepared in accordance with IAS 7.
30
Risk management
The cash flow statement reports cash flows resulting from
operating activities, from investing activities as well as from
Capital management
financing activities. Insofar as changes in liquid funds are due
The main aim of the Group’s capital management policy is to
to foreign exchange rate fluctuations, these are reported sepa-
maintain a high equity ratio to support business activities.
rately. The determination of cash flow from operating activities
was derived using the indirect method.
The Group actively controls and modifies its capital structure
in line with changing market dynamics. The goal of the capital
Current liquid funds comprise cash and cash equivalents that
management policy is to secure the company’s business and
are as reported on the balance sheet. Short-term borrowings
investment activities in the long term. To maintain a suitable
from banks in the Group cash pool were offset against cash
capital structure, the Group can change dividend payments to
and cash equivalents.
shareholders or issue new shares. As of December 31, 2010,
and December 31, 2009, 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 as an indicator; resulting from current net
financial liabilities and non-current financial liabilities.
in € K
Dec. 31, 2010
Dec. 31, 2009
18,067
26,587
5,958
14,889
12,109
11,698
32,218
33,583
Total equity before minority interests
830,619
789,049
Total capitalization
880,904
849,219
Dec. 31, 2010
Dec. 31, 2009
- 18,492
-58,437
18,067
26,587
- 36,559
- 85,024
13,726
- 24,854
- 18,492
- 58,437
32,218
33,583
Current financial liabilities
Short-term financial liabilities
financial liabilities
Non-current financial liabilities
(without provisions)
143
The Group finance department is responsible for carrying out
risk management in accordance with the rules and guidelines
approved by the Executive Board. It identifies, evaluates and
hedges against financial risks in close co-operation 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.
in € K
Current net financial liabilities
Short-term liabilities
less liquid funds
Net financial debt
Current net financial liabilities
plus non-current financial liabilities
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
dollar is therefore a foreign currency that represents a sig-
German stock legislation have been fulfilled. Equity is not
nificant potential currency risk for financial instruments. If the
subject to any further external minimum capital requirements.
USD/EUR exchange rate increased or decreased by 5 percent,
changes in the financial assets and liabilities reported in the
Financial risk factors
balance sheet in US dollars would have the following impact on
Due to the global scope of its operations, the Group is exposed
profit before tax and equity:
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 unpre-
2010
2009
+ 5.00 / - 5.00
+ 5.00 / - 5.00
dictability of developments in financial markets and aims to
USD currency trends as a %
minimize any potential negative impact on the Group’s financial
Impact on profit before tax (EBIT)
position. It is the general policy of the company to reduce these
in € K
65 / - 72
- 87 / 97
risks by systematic financial management. The Group employs
Impact on equity in € K
65 / - 72
- 87 / 97
derivative financial instruments in a targeted way to hedge
against certain risks.
The Group is also subject to currency risks from individual
transactions resulting from purchases and sales executed by
a member company in a currency other than the functional
currency.
sheets in US dollars. From the Group’s perspective, the US
The minimum capital requirements for equity stipulated under
Credit risks
The Group hedges its cash flow against interest rate risks
The Group is not exposed to any material credit risks (default
arising from borrowings with variable interest rates primarily
risks). Contracts for derivative financial instruments and
by means of interest rate swaps (payer swaps), which, taking
financial transactions are concluded only with financial institu-
the prevailing economic climate into consideration, convert the
tions with a high quality credit rating in order to keep the risk
variable interest rate positions into positions with fixed interest
of default by the contracting party as low as possible. The
rates.
book value of financial assets recognized in the Consolidated
Financial Statements less impairment represents the maxi-
Of the total financial liabilities listed in item 20 ”Financial
mum default risk. For further information on the book value of
liabilities” in these Notes (EUR K 50,285; previous year:
financial assets, please refer to item 26 “Additional information
EUR K 60,170), EUR K 43,760 (previous year: EUR K 49,915)
on financial instruments” in these Notes.
is attributable to fixed interest rate liabilities, which are not
subject to changes in interest rate, and EUR K 6,525 (previous
Continued weakness on construction and financial markets
year: EUR K 10,255) to variable interest rate liabilities.
in some countries may present certain Group customers with
financial difficulties, possibly culminating in insolvency. This
The following tables show how sensitive the Group’s earnings
would lead to a rise in accounts receivable and a subsequent
before tax is to changes in interest rates that could be reason-
increased risk of default. We are counteracting the risk of
ably expected to occur based on the impact this would have
changes in individual customers’ payment patterns through
on variable interest rate loans (EUR K 6,525; previous year:
our active accounts receivable management policy, supplier
EUR K 10,255) and bank balances (EUR K 1,551; previous year:
“health-checks” and tools such as credit hedging.
EUR K 2,038) resulting from a Group-wide cash pool system.
Interest rate risks
The effects on Group earnings before tax also reflect the
Interest rate risks are caused by market fluctuations in interest
impact on equity.
rates. On the one hand, they impact the amount of interest
payments for which the company is liable. On the other hand,
they influence the market value of financial instruments.
in € K
Interest 2010
Impact on
profit before tax
(increase of 0.20%)
Impact on
profit before tax
(decrease of 0.20%)
1,551
0.188%
3
- 3
6,525
11.07%
Book value at
Dec. 31, 2010
Financial assets with
variable interest rates
Bank balances cash pool
Financial liabilities with
Total
in € K
- 13
13
- 10
10
Impact on
profit before tax
(decrease of 0.20%)
Book value at
Dec. 31, 2009
Interest 2009
Impact on
profit before tax
(increase of 0.20%)
2,038
0.375%
4
-4
10,255
8.04%
- 21
21
- 17
17
Financial assets with
Bank balances cash pool
Financial liabilities with
Total
Liquidity risks
supervisory committees in Germany or abroad outside of the
Liquidity risks involve the availability of funds needed to meet
Wacker Neuson Group.
145
payment obligations on time. The company is assured a supply
of liquid funds at all times by the lines of credit not currently
Supervisory Board
used by the company. Liquidity is managed by the Group’s
The following members are appointed to the Supervisory
treasury department via a Group-wide cash pool system. Refer
Board of Wacker Neuson SE as of the closing date:
to item 20 “Financial liabilities” in these Notes for further information on existing credit lines and financial covenants.
JJ
Hans Neunteufel, engineer, Chairman of the PIN Private
Trust (PIN Privatstiftung), in Linz, Austria, Chairman of the
Supervisory Board
31
Executive bodies
JJ
Dr. Ulrich Wacker, lawyer, Chairman of the EQUA association (EQUA-Stiftung), Herrsching, Germany, Deputy Chair-
Executive Board
In the year under review the Executive Board comprised five
man of the Supervisory Board
JJ
members up to and including September 15, 2010 and of four
members at the reporting date:
Kurt Helletzgruber, businessman, managing director of
Dipl. Ing. Hitzinger Gesellschaft m.b.H., in Linz, Austria
JJ
Dr. Eberhard Kollmar, attorney-at-law and partner at
Kollmar, Deby & Sinz Rechtsanwaltsgesellschaft mbH,
ber 16, 2010), responsible for the light equipment segment,
JJ
JJ
Elvis Schwarzmair, Chairman of the Reichertshofen Works
Council and Chairman of the Central Works Council, the
sources (departments added since September 16, 2010)
Group Works Council, and the SE Works Council, Rohrbach,
Germany
Martin Lehner, Deputy CEO, responsible for the compact
JJ
Herbert Santl, Chairman of the Munich Works Council,
Munich, Germany (until December 31, 2010)
Günther Binder, responsible for finance, controlling, IT,
investor relations and corporate communication (depart-
JJ
JJ
quality management as well as legal matters and human re-
equipment business segment
JJ
Munich, Germany
Richard Mayer, Spokesperson for the Board (as of Septem-
JJ
Hans Haßlach, Chairman of the Kramer-Werke GmbH Works
ments added since September 16, 2010)
Council, Deputy Chairman of the Group Works council,
Werner Schwind, responsible for sales, rentals, logistics,
Deputy Chairman of the SE Works Council, Uhldingen-
service, marketing, real estate and training
Mühlhofen, Germany (as of January 1, 2011)
Until September 15, 2010: Dr. Georg Sick, Chairman of the
Executive Board, responsible for investor relations, corpo-
The following members of the company’s Supervisory Board
rate communication, quality management, legal matters and
have additional supervisory board positions or seats on
human resources
comparable supervisory committees in Germany and abroad
outside of the Wacker Neuson Group:
Dr. Georg Sick resigned from his position as Chairman of the
Executive Board and as a member of the Executive Board as of
JJ
September 15, 2010.
Hans Neunteufel
Allgemeine Sparkasse Oberösterreich Bankaktiengesellschaft, Chairman of the Supervisory Board
The following members of the company’s Executive Board have
Oberösterreichische Technologie- und Marketinggesell-
additional Supervisory Board positions or seats on comparable
schaft m.b.H. (Technology Organization of Upper Austrian
supervisory committees outside of the Wacker Neuson Group
Region), member of the Supervisory Board
in Germany and abroad:
For information on the remuneration of the Executive and
JJ
JJ
Richard Mayer
Supervisory Boards, as well as remuneration for former Board
Member of the Advisory Board of the EQUA association in
members, please refer to item 32 ”Related party disclosures”
Herrsching, Germany
in these Notes.
Günther Binder
Member of the Supervisory Board of Volksbank
Linz-Mühlviertel, Linz, Austria (until August 2010)
32
Notes on business with related people and
parties
With the exception of the members stated above, no other
members of the Executive Board have administrative, execu-
In the case of the Group, IAS 24 defines a related party
tive or supervisory functions or mandates for comparable
necessitating disclosures as shareholders, entities over which
JJ
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
Expenses for
payables
business
business
Dec. 31, 2010
Dec. 31, 2010
transactions 2010
transactions 2010
Relations with shareholders
0
0
575
740
85
209
3,738
766
4,406
490
3,983
933
0
191
0
0
4,491
890
8,296
2,439
Income for
Relations with sister companies
Relations with non-consolidated companies
Pension fund
Total
in € K
Income for
Current
receivables
Current
Current
Expenses for
receivables
payables
business
business
Dec. 31, 2009
Dec. 31, 2009
transactions 2009
transactions 2009
Relations with shareholders
124
0
392
784
Relations with sister companies
144
142
3,867
397
2,498
108
1,945
767
Relations with non-consolidated companies
Pension fund
Total
0
193
0
0
2,766
443
6,204
1,948
Relations with shareholders resulted mainly from goods and
Relations with non-consolidated companies resulted from
services traded with a shareholder. The goods and services
goods and services traded between affiliates and Neuson
delivered to the shareholder were valued at EUR K 740 (previ-
Kramer subgroup companies that were not consolidated but
ous year: EUR K 784). These were counterbalanced with
where a shareholding exists or from purchasing company
goods and services received by the shareholder to the value
shares from non-consolidated affiliates (see general informa-
of EUR K 575 (previous year: EUR K 392). The goods and ser-
tion on accounting standards/consolidation structure). In
vices were traded under the terms customary in the market, as
the year under review, value impairments on receivables and
agreed with third parties.
shareholdings were realized in the amount of EUR K 1,978
(previous year: EUR K 1,720).
Relations with sister companies and entities over which
shareholders have control or significant influence resulted
Relations with the pension fund during the period under review
from deliveries, IT service deliveries, and rental arrangements
and the previous year refer exclusively to a provision for volun-
between affiliates and entities over which shareholders have
tary support and pension benefits for employees of the parent
control or significant influence.
company.
Total remuneration for the Executive Board in the period under
34
review amounted to EUR K 6,210 (previous year: EUR K 2,964).
147
Declaration regarding the German Corporate
Governance Codex
Total remuneration for the Supervisory Board for the same
period amounted to EUR K 260 (previous year: EUR K 255).
The Executive and Supervisory Boards have issued a declara-
At the AGM on May 15, 2006, a resolution was passed to
tion stating which recommendations of the “Commission of the
refrain from itemizing this information in accordance with Sec-
German Corporate Governance Code” have been and will be
tion 285 (1), no. 9a clauses 5 to 9 in conjunction with Section
adopted. The declaration can be downloaded at any time from
314 (2), sent. 2 HGB in conjunction with Section 315a, (1) HGB.
the Group website at www.wackerneuson.com.
At the closing date, current payables to the Executive Board in
the amount of EUR K 1,935 were outstanding (previous year:
35
EUR K 1,130).
Availing of exemption provisions according to
Section 3 (264) HGB
Retirement commitments were agreed upon for members of
the Executive Board. The value of pension obligations at the
Wacker Neuson SE avails of the exemptions set down in
end of the accounting period totaled EUR K 4,207 (previous
Section 264 (3) HGB for Weidemann GmbH and for Kramer-
year: EUR K 4,848). The allocation amounted to EUR K 1,658
Werke GmbH for fiscal 2010.
(previous year: EUR K 187). The reduction in pension obligations results from the reclassification of an active member of
the Board as a former member of the Board.
Due to respective agreements, pension agreements have also
Wacker Neuson SE
been closed with former members of the Executive Board. The
period totaled EUR K 16,097 (previous year: EUR K 10,829). In
The Executive Board
fiscal 2010, EUR K 517 (previous year: EUR K 504) was paid to
former Executive Board members.
Richard Mayer
(Spokesperson)
Martin Lehner
(Deputy Chairman)
Differences between the year under review and the prior-year
period are mainly due to reclassifications of members of the
Board to former members of the Board.
33
Günther C. Binder
Auditor’s fees
The auditor’s fee is disclosed as an expense in fiscal 2010 and
is broken down as follows:
in € K
2010
2009
340
320
services
154
174
Tax consultation services
396
328
70
22
Auditing services
Other approval and assessment
Other services
Werner Schwind
value of these pension obligations at the end of the accounting
Responsibility statement
“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, liabilities,
financial position and profit or loss of the Wacker Neuson
Group, and that the Consolidated Management Report
includes a fair review of the development and performance of
the business and the position of the Wacker Neuson Group
respectively the parent company Wacker Neuson SE, together
with a description of the principal opportunities and risks associated with the expected development of the Wacker Neuson
Group respectively the parent company Wacker Neuson SE.”
Wacker Neuson SE, Munich
The Executive Board
Richard Mayer
(Spokesperson)
Günther C. Binder
Martin Lehner
(Deputy Chairman)
Werner Schwind
149
We have audited the consolidated financial statements prepared
combined management report are examined primarily on a test
by Wacker Neuson SE, comprising the balance sheet, the in-
basis within the framework of the audit. The audit includes as-
come statement, the statement of comprehensive income, the
sessing the annual financial statements of those entities includ-
statement of changes in equity, the cash flow statement and the
ed in consolidation, the determination of the entities to be in-
notes to the consolidated financial statements, together with the
cluded in consolidation, the accounting and consolidation
group management report, which is combined with the manage-
principles used and significant estimates made by management,
ment report of the Company for the reporting period from Janu-
as well as the evaluation of the overall presentation of the con-
ary 1 through December 31, 2010.
solidated financial statements and the combined management
report. We believe that our audit provides a reasonable basis for
The preparation of the consolidated financial statements and the
our opinion.
combined management report in accordance with those IFRS
as adopted by the EU, and the additional requirements of Ger-
Our audit has not led to any reservations.
man commercial law pursuant to § 315a paragraph 1 HGB are
the responsibility of the parent company´s management. Our re-
In our opinion and based on the findings of our audit, the con-
sponsibility is to express an opinion on the consolidated finan-
solidated financial statements comply with those IFRS as ad-
cial statements and on the combined management report based
opted by the EU and the additional requirements of German
on our audit.
commercial law pursuant to § 315a paragraph 1 HGB and give a
of operations of the Group in accordance with these require-
ments in accordance with § 317 HGB and German generally ac-
ments. The combined management report is consistent with the
cepted standards for the audit of financial statements promul-
consolidated financial statements and as a whole provides a
gated by the “Institut der Wirtschaftsprüfer” (Institute of Public
suitable view of the Group´s position and suitably presents the
Auditors in Germany). Those standards require that we plan and
opportunities and risks of future development.
perform the audit so that misstatements materially affecting the
presentation of the net assets, financial position and results of
operations in the consolidated financial statements in accor-
dance with the applicable financial reporting framework and in
the combined management report are detected with reasonable
Rölfs WP Partner AG
assurance. Knowledge of the business activities and the eco-
Wirtschaftsprüfungsgesellschaft
nomic and legal environment of the Group and expectations as
to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-
Reinke
Jagosch
related internal control system and the evidence supporting the
Wirtschaftsprüfer
Wirtschaftsprüfer
disclosures in the consolidated financial statements and the
(Public Auditor)
(Public Auditor)
true and fair view of the net assets, financial position and results
We have conducted our audit of the consolidated financial state-
Technical Glossary
Breaker
Hammer which runs on a combustion engine or electrical motor and is used to break up or demolish
concrete and asphalt.
Compact equipment
Group’s strategic business segment covering equipment of up to around fourteen tons, particularly
wheel loaders, skid steer loaders, four-wheel and track dumpers, telescopic handlers, track and
mobile excavators and compact excavators.
Compactors
This equipment group includes rammers, vibratory plates and rollers. These are used, for example,
in the construction of roads and paths to compact soil and asphalt.
Concrete technology
Business field in the light equipment segment. The equipment is mainly used for laying concrete
walls, ceilings and floors.
Demolition
Business field in the light equipment segment. The equipment is used to break or cut asphalt and
concrete.
Dumper
Compact construction vehicle primarily used for transporting backfill material.
Floor saws
Hand-guided saws equipped with a diamond blade like the cut-off saw mainly used for cutting
concrete and asphalt floors.
Focus factory
Element of our manufacturing concept, where production is organized by business field. Each
factory, staffed by a specialized team, is responsible for producing a single product group.
Heavy equipment
Large construction machinery defined by the company as having a total weight of over fifteen tons,
typically transported to construction sites for specific projects and operated by specially trained
employees.
Hydronic heating
Mobile heating equipment to thaw frozen ground or heat buildings, making construction work less
equipment
dependent on weather conditions.
Technical Glossary
Internal vibrator
151
Used for concrete compaction, mainly on construction sites. They consist of eccentric weights
driven by an electrical motor, arranged in a waterproof steel tube for submersion in fresh concrete.
Light equipment
Group’s strategic business segment. Covers predominantly hand-held and hand-guided devices as
well as remote-controlled or ride-on equipment of up to around three tons.
Rebar cutter
Metal rods for reinforced concrete can be cut to measure with rebar cutters.
Group’s business field in the light equipment segment. The equipment is mainly used for laying
concrete walls, ceilings and floors.
Skid steer loader
Small wheel loader either with four-wheel drive steering or rubber tracks which offers excellent
maneuverability in small areas and easy handling even across the roughest terrain. Multi-purpose
attachments are available.
Soil and asphalt
Business field in the light equipment segment. The equipment is mainly used for compacting soil and
compaction
asphalt in the construction processes involved in trenches, roads, paths, foundations and industrial
buildings.
Telescopic handlers
Like wheel loaders, these compact machines may be used in construction and agriculture. The main
difference is the detached cabin and enormous lifting heights.
Utility
Group’s business field in the light equipment segment. Equipment such as generators, light towers,
submersible pumps and mobile hydronic heating systems support construction site activities.
Vibratory plate
Soil and asphalt compaction device, mainly used to compact pipeline trenches and paving stones.
Also used to precompact foundation soil.
Vibratory rammer
First developed in the 1930s by the Wacker Neuson, this pioneering product is used in soil and
(also rammer)
asphalt compaction, particularly in small spaces and narrow trenches.
Wet screed
Concrete technology equipment mainly used to manufacture large concrete floors, in industrial
buildings for example, simultaneously leveling and compacting fresh concrete.
Several types of wheel loader are available featuring different technology and attachments. The variety
of applications include landscape, utility, pallet fork operation and lifting.
Further Information
Wheel loader
Financial glossary
Break-even point
The point at which costs or expenses and revenue are equal at EBIT level. If a company fails to generate
enough sales to reach this point, it will make a loss. A break-even analysis is an important tool for corporate planning. It helps assess the impact of changes to the cost structure and determine the amount of
sales (level of revenue generated) required to exceed the break-even point.
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
Cash balance resulting from changes to financial liabilities, the issue of shares, cash inflow from
the disposal of treasury shares /cash outflow from the acquisition of treasury shares and dividend
payments.
financing activities
Cash flow from
investment activities
Cash balance resulting from the acquisition of financial, tangible and intangible assets and the disposal
of financial, tangible and intangible assets.
Cash flow from
Cash flow generated from operating activities.
operating activities
Cash flow according
to DVFA/SG
Cash flow according to the recommendations set down by the German association of finance analysis
and asset management (Deutsche Vereinigung für Finanzanalyse und Asset Management, DVFA) and
the Schmalenbach organization (Schmalenbach-Gesellschaft, SG).
Cash flow according to DVFA/SG is calculated as follows:
Profit/loss for the period
+/- Write-downs/-ups on assets
+/- Changes to pensions and other long-term provisions
+/- Changes to special tax-free reserves
+/- Other non-cash income/expense items of a substantial nature
=
Annual cash flow
+/- Adjustment for one-off income/expense items of a substantial nature
=
Compound annual
Cash flow according to DVFA/SG
growth rate (CAGR)
The average annual rate of growth of a single value over a given period of time. The CAGR of a specific
value is calculated by taking the nth root of the total percentage growth rate of the value, where n is the
number of years in the period being considered.
Corporate governance
Sound and responsible management and control of a company with the aim of creating long-term value.
Deferred taxes
Differences between the tax base and the carrying amounts in the IFRS accounts in order to disclose
tax expense (actual and deferred) according to IFRS.
Derivatives
Derivatives are financial instruments, such as futures and options that derive their value from the value
of other financial instruments or an underlying asset.
Financial glossary
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 is defined as net profit for the year divided by the number of shares.
153
EBIT (margin)
The earnings before interest and taxes (EBIT) margin is the ratio of EBIT to revenue.
EBITDA (margin)
The earnings before interest, taxes, depreciation and amortization (EBITDA) margin is a measure of a
company's operational profitability. It is calculated as the ratio of EBITDA to revenue.
EBT
Earnings before taxes (EBT).
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
Gross profit margin is 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 material 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.
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 corporate tax rate)
Operating leverage
Measures the relation between a company's fixed and variable cost structure. Operating leverage indicates
how a percentage change in revenue as a result of new sales affects profitability.
Purchase price
This refers to 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).
allocation (PPA)
Return on assets
(after tax and before
Return on assets is the ratio between profit for the period before minority interests and the average
balance sheet total.
minority interests)
Return on sales (ROS)
Return on sales is the ratio between profit before minority interests and sales or revenue.
ROCE I (return on
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 %
capital employed)
Further Information
(EPS)
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 %
ROE (return on equity)
This indicator measures the return a company is getting on its equity. It shows the relation between
earnings (after tax) and equity employed before minority interests.
ROE = Earnings after tax in relation to average equity before minority interests as a %
Swap
A swap is 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
Indicates the minimum return on capital employed. It is calculated as the weighted average cost of
equity and debt, whereby tax benefits are to be 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 define
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
cost of capital (WACC)
Working capital
The difference between current assets and current liabilities excluding liquid funds. Also known as net
current assets, this is a key indicator of the liquidity of a company.
Working capital = Total inventory plus trade receivables minus trade payables.
Working capital to
Return on capital employed to generate revenue.
Working capital to revenue = relationship between working capital and revenue.
revenue
7-Year Comparison
Our product philosophy is based on
understanding our customers’ processes
Wacker Neuson is the ideal one-stop provider of light and compact equipment
guaranteed to optimize our customers’ construction processes. The Group has a
market leader position in many product areas.
7-Year Comparison1
in € million
2010
2009
2008
2007
2006
2005
2004
757.9
597.0
870.3
742.16
619.3
503.2
411.2
Revenue Europe
558.6
465.7
676.2
520.7
391.1
301.1
239.3
Revenue Americas
168.1
103.1
166.9
196.1
205
182.7
154.1
31.2
28.2
27.2
25.3
23.2
19.4
17.8
251.0
184.1
293.4
282.5
255.7
212.6
182.4
Revenue
Revenue Asia
Gross profit
Light equipment
EBITDA
77.8
27.2 (36.7)2
100.9
117.0
100.2
70.3
60.5
41.1
140.3 (40.0)3
43.0
38.1
23.6
19.6
18.6
EBIT
36.7
- 113.1 (- 3.2)3
58.0
78.9
76.7
50.7
41.9
EBT
32.7
- 115.5 (- 5.6)3
55.7
78.2
76.2
50.4
42.3
23.9
- 110.1 (- 2.9)3,7
37.4
54.1
48.5
31.3
25.7
Number of employees
Concrete technology
155
3,142
3,059
3,665
3,659
2,837
2,630
2,224
2.9
3.4
2.9
2.8
2.5
2.7
2.6
0.34
- 1.57
0.53
1.1
1.19
0.77
0.65
0.174
0
0.19
0.50
0.38
0.27
0.57
R&D percentage of revenue
Share
Key profit figures
Internal vibrators
Convertors
Trowels
Rebar tiers
Gross profit margin as a %
33.1
33.7
38.1
41.3
42.3
44.4
10.3
4.6 (6.2)2
11.6
15.8
16.2
14.0
14.7
EBIT margin as a %
4.8
- 18.9 (- 0.5)3
6.7
10.6
12.4
10.1
10.2
Net return on sales (ROS) as a %
3.2
- 18.4 (- 2.1)7,8
4.4
7.3
7.8
6.2
6.2
Non-current assets
673.9
632.7
750.0
697.0
229.2
202.5
119.5
Current assets
356.3
339.0
428.6
517.5
245.8
240.6
195.7
184.0
148.3
217.0
175.1
100.2
99.0
73.3
36.6
85.0
65.6
76.8
36.4
47.6
47.7
830.6
789.0
909.1
910.4
282.4
289.9
246.3
13.7
- 24.9
59.0
- 43.1
45.1
9.4
- 43.1
1.7
- 3.2
6.5
- 4.7
16
3.3
- 17.5
197.3
180.2
266.8
301.8
192.6
153.2
68.8
1,030.2
971.7
1,178.6
1,214.5
475.0
443.1
315.1
of which inventory
of which liquid funds
Net financial debt
Rammers
Vibratory plates
Rollers
Universal compaction
equipment
Gearing as a %
Total liabilities
Balance sheet total
Return on assets (ROA) as a %
Demolition
Working capital
Breakers
Utility
Generators
Lighting systems
The technical glossary on p. 150 contains more detailed information on exact areas of deployment.
Hydronic surface heaters
8.5
7.8
75.0
59.5
70.1
75.6
269.3
217.9
124.1
303.9
271.5
158.6
154.6
10.8
23.9
28.5
21.4
19.5
ROCE II as a %
5.2
- 1.98
7.4
16.5
18.1
13.3
11.7
7.9
8.6
–
–
–
–
–
531.3
538.9
537.4
486.7
269.4
236.5
214.8
4.2
12.3
17
11.7
9.7
3.0
- 1.47,8
Cash flow
44.9
138.3
38.15
55
49.1
44.9
43.6
- 85.2
- 38.1
- 16.45
- 141.8
- 41.6
- 89.8
- 14.8
Investments (property, plant and
equipment and intangible assets)
85.0
43.4
101.8
84.0
31.9
37.6
20.6
- 10.3
- 53.0
- 21.9
96.4
- 23.0
40.6
- 57.2
Free cash flow
- 38.8
100.6
23.4
62.1
22.6
10.3
28.8
All figures prepared according to IFRS.
2
Adjusted to discount restructuring costs (EUR 9.6 million)
3
Adjusted to discount 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
5
The item “Interest received” has been transferred from cash flow from investment activities to cash flow from operating activities.
6
The Austrian merger partner (formerly Neuson Kramer Baumaschinen AG) was consolidated for the first time on October 1, 2007. The revenue figures for 2007,
therefore, only includes Q4 revenue for this entity. Pro-forma Group revenue amounted to EUR 979.5 million.
7
Including deferred taxes in the amount of EUR -2.7 million (in conjunction with write-downs on brand value and intangible assets).
8
Adjusted to discount write-downs on intangible assets in the amount of EUR 100.3 million.
1
Pumps
10.9
77.1
- 1.17,8
- 2.48
Return on equity (ROE) as a %
Floor saws
7.5
81.2
2.5
6.9
Rotary drills (10 kg class)
3.2
80.6
ROCE I as a %
Weighted average cost of capital
(WACC)
Cut-off saws
30.8
Further Information
2
Publishing Details / Financial Calendar
To our Shareholders
Content
To our Shareholders
Contact
Publishing Details
Wacker Neuson SE
Issued by:
Wacker Neuson SE,
Katrin Neuffer
Corporate Communication Department
Product Overview
|
2
|
4
A firm grip!
|
9
| 23
| 29
The Share /Investor Relations
| 36
Group Structure
| 42
| 43
| 99
Investor Relations
Preussenstrasse 41
Concept, design and realization:
80809 Munich
Kirchhoff Consult AG, Germany
Germany
Content:
Phone +49 - (0)89 - 354 02 - 173
Fax
Wacker Neuson SE
+49 - (0)89 - 354 02 - 298
Print:
[email protected]
Fritz Kriechbaumer, Munich, Germany
Financial Calendar 2011
March 24, 2011
Publication of financial results 2010, press conference
May 13, 2011
Publication of first-quarter report 2011, Analyst conference
May 26, 2011
AGM, Munich, Germany
August 11, 2011
Publication of half-year report 2011
November 11, 2011
Publication of nine-month report 2011
All rights reserved. Valid March 2011. 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 24, 2011.
Further Information
Glossaries
| 150
7-Year Comparison
| 155
Publishing Details/Financial Calendar
| 156
€ million
in €inmillion
in %
in %
979.5
1,000
1,000
25 25
870.3
757.9
742.1
800
800
619.3
597.0
600 503.2
600
Light Equipment
Compact Equipment
Services
Concrete technology
Service
Wheel loaders
Demolition
Telehandlers
Europe)1
Utility
Skid-steer loaders
1
Dumpers
More Information
400
400
10 10
200
200
5 5
0 0
0 0
Revenue EBITDA
EBITDA
margin
Revenue
margin
EBIT
margin
EBIT
margin
in %
40
600
+ 39
+%
39
%%
+ 34
+ 39 %
+2%
400 + 34
+%
34 %
+ 34 %
+400
39 %
23 %
- 11- %
500
+ 2+%2 %
+2%
400
- 11 %
- 23 %
- 23 %500
+ 39+%
34 %
+ 39 %
+ 34 %
400
+ 34
%
300
200
200
200
200
100100
100
100
100
100
100
0 0
0
Light Equipment
0
0
0
0
300300
300
300
200
200200
200
100
0
2008
+5%
+5%
300
+2%
+2%
+ 39 %
+5%
538.9
531.3
486.7
+ 34 %
400
300
Compact Equipment
2007
2007 2008
2008 2009
2009vs. 2010
20102007
2010
2010
vs.
2008
vs.
2008
2008 2009
2007
2010
2010
vs.2010
vs.
2008
2009
2009
2007 2010
20092008
vs. 2008
201020092010
2010vs.
2010
vs.2009
2008 20102007
2010
vs. 2008
vs. 2009
20082010 2009
vs. 2009 2010
2009
2010
2010
2008
2010
vs.
2009
2007
2008
2009
2010
2010
vs.
2008
2010 vs. 2009
More Information
2010 vs. 2008
2005
2007
2008
pro-forma1
2009
2010
ROCE I
2006
2007
2008
pro-forma1
2009
2010
-5
in € million
ROCE I
in %
950
910.4
95
909.1
850
830.6
789
750
in %
910.4
95
909.1
850
830.6
789
750
75
650
73.7 Europe (78.0)
4.1 Asia (4.7)
550
55
2005
350
289.9
250
35
282.4
15
150
9.4
2005
59
45.1
- 50
1
550
into
as
450
35 is
has
289.9 282.4
almost
250
The
15 lines
59
and50thus has 45.1
plenty of financial
backing.
13.7
9.4
p. 60
For
more informationen
-5
- 50
450
50
75
650
in € million
950
Sales by region
-5
0
2005
p. 68
p. 65
2006
More Information
5
0
5
Dienstleistungen
2010 vs. 2009
35
the
a
negative
269.4
provement
in the
236.5
15
200
ROCE
10
p. 55
10
100
531.3
0
15
200
538.9
486.7
20
269.4
236.5
0
Light
Equipment
Compact
Equipment
Dienstleistungen
Light
Equipment
CompactServices
Equipment
Dienstleistungen
Light Services
Equipment
Light
Equipment
Compact
Equipment
Light Equipment
Services
Compact
Equipment
Light Equipment
Compact Equipment
Compact
Equipment Compact
Dienstleistungen
Light
Equipment
Equipment
Dienstleistungen
40
600
100
25
+5%
+5%
35
30
- 23 %
- 11 %
+2%
+2%
+ 5+%5 %
300
+5%
300
2007
- 11 500
%
in %
in € million
500
in € million
537.4
400400
+ 39 %
400
Net
earnings
margin
Net
earnings
margin
- 23- %
23 %
500
- 23 %
and
(p.(p.
54 54
and
60).60).
3
Compound
annual
growth
rate
(CAGR)
over
a period
of three
years.
Compound
annual
growth
rate
(CAGR)
over
a period
of three
years.
537.4
p. 2/3
- 11- %
11
- 23%%
- 11 %
1
Pro-forma
figures
if Neuson
Kramer
subgroup
had
been
consolidated
Pro-forma
figures
as as
if Neuson
Kramer
subgroup
had
been
consolidated
in in
in fiscal
2007
(consolidation
of October
1, 2007).
fullfull
in fiscal
2007
(consolidation
as as
of October
1, 2007).
2
2
2009
profit
margins
discounting
goodwill
impairment
and
restructuring
costs
2009
profit
margins
discounting
goodwill
impairment
and
restructuring
costs
3
500
400
15 15
2 2
2009
2008 2009
2010
2005 2006
2006 2007
2007 2007
2007 2008
2005
2010
1 1
pro-forma
pro-forma
in € million
- 11500
%500
500
20 20
1
500
p. 52
2006
- 43.1
2007
2008
2009
-5
2010
Net financial debt
in € million
in € million
Gearing
in %
in %
- 43.1
2007
- 24.9
2008
2009
2010
Net financial debt
in € million
in € million
Gearing
in %
in %
13.7
- 24.9
2006
Disclaimer
in € million
2010
2009
Revenue
757.9
597.0
EBITDA
2008
Key figures
870.3
77.8
27.2 (36.7)
1
100.9
41.1
140.3 (40.0)5
43.0
EBIT
36.7
- 113.1 (- 3.2)2
58.0
EBT
32.7
- 115.5 (- 5.6)2
55.7
23.9
- 110.1 (- 2.9)2, 6
37.4
Number of employees
3,142
3,059
3,665
0.34
- 1.57
0.53
0.173
0
0.19
Share
Key profit figures
Gross profit as a %
33.1
10.3
4.6 (6.2)1
11.6
4.8
- 18.9 (- 0.5)2
6.7
EBIT margin as a %
30.8
33.7
Non-current assets
673.9
632.7
750.0
Current assets
356.3
339.0
428.6
830.6
789.0
909.1
13.7
- 24.9
59.0
197.3
180.2
266.8
80.6
81.2
77.1
269.3
217.9
303.9
Net financial debt
Total liabilities
Working capital
ROCE I as a %
6.9
- 2.45
10.8
ROCE II as a %
5.2
-1.95
7.4
ROE as a %
531.3
3.0
538.9
-1.45, 6
537.4
4.2
Cash flow
Wacker Neuson SE
Preussenstrasse 41
80809 Munich
Germany
Phone + 49 - (0)89 - 354 02 - 0
Fax
+ 49 - (0)89 - 354 02 - 390
A firm grip!
Annual Report 2010
44.9
138.3
38.14
- 85.2
- 38.1
- 16.44
85.0
43.4
101.8
- 10.3
- 53.0
- 21.9
Free cash flow
- 38.8
100.6
23.4
3
4
5
6
1
2

Annual Report 2010

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