- Revenue: Declined by 12% to EUR1.2 billion for the first half of 2024.
- EBIT: EUR83.8 million, resulting in an EBIT margin of 7.0%.
- Net Working Capital Ratio: Remained at 37% in H1 2024.
- Free Cash Flow: EUR30 million in Q2, leading to a positive free cash flow of EUR5 million at the end of H1 2024.
- Net Debt: Increased by EUR64 million in Q2 2024.
- Equity Ratio: Slightly decreased to 55%.
- Regional Revenue Performance:
- Europe: Fell by roughly 10% to EUR926 million.
- Americas: Fell by roughly 17% to EUR251 million.
- Asia Pacific: Fell by roughly 31% to EUR29 million.
Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EBIT margin increased by 1.5 percentage points in Q2 compared to Q1.
- Successful inventory reduction with a decrease of EUR54 million in one quarter.
- Free cash flow generation of EUR30 million in Q2, leading to a positive free cash flow of EUR5 million at the end of H1.
- Service business area saw a year-on-year increase of more than 3%, with growth in rental, spare parts, repair, and maintenance.
- Introduction of new machines like the 12-tonne dumper, contributing to a 2.2 percentage point increase in gross profit margin since Q4 2023.
Negative Points
- Revenue for the first half year declined by 12% to around EUR1.2 billion.
- Net working capital ratio remained elevated at 37%, driven by lower trade payables.
- Revenues in all regions remained below prior year, with significant drops in the Americas (17%) and Asia Pacific (31%).
- Low order intake and full dealer warehouses persist, reflecting a weak market environment.
- Net debt position increased by EUR64 million in Q2, partly due to dividend payout.
Q & A Highlights
Q: Could you comment on the order intake for Q2 and whether it has seen a lower order intake than Q1?
A: The second quarter shows stabilization at a level lower than sales, with a below one book-to-bill ratio. This varies regionally, being closer to one in Europe and lower in North America. Areas with direct market access show better ratios compared to dealer replenishment business areas. - Karl Tragl, CEOQ: Regarding cost savings, you mentioned a reduction of 485 employees. Were these cuts only temporary workforce, or did they include permanent staff as well?
A: The workforce reduction includes both temporary and permanent staff, affecting both production and SG&A areas. The EUR40 million in cost savings for 2024 is expected to be sustainable into 2025, with a portion of these savings coming from cost of sales reductions. - Christoph Burkhard, CFOQ: Is the growth in the service business driven solely by the rental business, or are other areas contributing as well?
A: Growth is seen across all areas of the service business, including rental, spare parts, repair, and maintenance. This growth is spread throughout the service segment. - Karl Tragl, CEOQ: Are there any significant consolidation effects from recent acquisitions in the P&L and top line?
A: The recent acquisitions have not yet had a significant impact on consolidated revenue. The strategic value is high, but the financial impact is currently low double-digit millions. - Christoph Burkhard, CFOQ: Can you provide insights into the inventory levels in the market and how you expect them to develop into 2025?
A: Dealer inventory levels are higher and will take longer to normalize compared to direct markets. Assuming current dynamics continue, we expect dealer inventories to normalize by the end of 2025. - Christoph Burkhard, CFOQ: What measures are being taken to counterbalance current underutilization costs and prepare for 2025?
A: Measures include reducing workforce through temporary contracts and short-time work, cutting SG&A personnel, and implementing cost-saving initiatives in IT, energy, marketing, and travel. Sales initiatives and low-interest financing programs are also in place to support revenue generation. - Christoph Burkhard, CFOQ: How has the implementation of the strategy 2030 progressed, and what milestones have been achieved in 2024?
A: Key milestones include the successful migration to S/4 Hana, opening a new spare parts warehouse in Mülheim-Kärlich, and several M&A activities to strengthen core business and market presence. - Karl Tragl, CEOQ: What is the updated outlook for Wacker Neuson Group for the full year 2024?
A: The full-year guidance for 2024 has been adjusted to expect revenue in the range of EUR2.3 billion to EUR2.4 billion and an EBIT margin of 6% to 7%, reflecting the prolonged period of weaker market demand. - Karl Tragl, CEOFor the complete transcript of the earnings call, please refer to the full earnings call transcript.