2015 Annual General
Meeting Wacker Neuson SE
Munich, May 27, 2015
Executive Board
Report
Cem Peksaglam (CEO)
Martin Lehner (CTO)
Günther Binder (CFO)
1
Executive Board and Supervisory Board
2
Executive Board
Supervisory Board:
Hans Neunteufel (Chairman)
Prof. Dr. Matthias Schüppen Ralph Wacker
Kurt Helletzgruber
Elvis Schwarzmair (employee representative)
Hans Haßlach (employee representative)
Cem PeksaglamCEO
Strategy/M&A,sales, logistics,service, marketing,investor relations, corporate communication, HR, sustainability, compliance, legal and real estate
Günther C. Binder CFO
Finances,auditing and IT
Martin Lehner CTO
Purchasing,production,technology andquality
Contents
3
Fiscal 2014
Annual General Meeting
Markets – Vision –
Strategy
Financial indicators and
share news
Q1 2015Technology and
innovation
The ups and downs of fiscal 2014
Dynamics in emerging markets mixed, significant
slowdowns / currency fluctuations in some markets
Emerging markets’ share of revenue unchanged
Still no all-clear for European economy: France, Russia,
Turkey, Italy
Increased competition and price pressure in individual
markets/regions (overcapacities in some cases)
New, disparate emissions standards in EU/US pose a
major challenge (tying up resources, costs)
European agricultural technology industry contracting
(after a decade of strong investments)
Weak demand from mining industry and energy sector
Strong market position in challenging market conditions
Ongoing recovery in the US
Overall growth in European construction sector
(UK leading the way)
European export industry – and Wacker Neuson – benefits
from weaker euro
Innovations setting benchmarks (e.g. battery-powered
rammer, electric wheel loader, dual power excavator,
vibratory plates with low hand/arm vibrations)
Collaboration with Wirtgen/Hamm in roller production
Expansion/internationalization
Progress in many emerging markets
Skid steer loader production in US (relocation from
Austria)
New sales affiliates established
Cost reduction and process optimization measures take
effect
New records / improvements in key performance indicators
4
2014: Record levels
Revenue
EUR 1.28 bn (+11% on previous year)(+12% discounting currency effects)
EBITDA
EUR 196 m (15.3% of revenue; +2.1 PP on previous
year)
EBIT
EUR 136 m (10.6% of revenue; +2.4 PP on previous
year)
Employees
4,372 (+5% on previous year)
R&D expenses1
EUR 41.3 m (+16% on previous year)
Net earnings per share
EUR 1.30 (+50% on previous year)
Equity (at Dec. 31, 2014)
EUR 1.01 bn (equity ratio: 70%)
Return on equity (ROE)
9.4% (+2.8 PP on previous year)
Economic added value
EUR 32.4 m (EUR 5.1 million in previous year)
Market capitalization (at Dec. 31, 2014)
EUR 1.2 bn (EUR 1.6 bn at present)
51Incl. capitalized expensesPP = percentage points
758
9921,092
1,1601,284
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
0
200
400
600
800
1.000
1.200
1.400
2010 2011 2012 2013 2014
Focus on profitable growth
Comparison of years 2010 – 20141
(Revenue in EUR million; EBIT as a %)
1 Figures as per IFRS
+10%
+31%
+6%+11%
4.8%
11.4%2
7.8%
8.2%
10.6%
62 adjusted
+70%
7Source: Yellow Table, khl Group
In USD
million
Revenue for construction equipment manufacturers (TOP 50)
$0
$1.000
$2.000
$3.000
$4.000
$5.000
$6.000
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Wacker Neuson
23rd place
(prev. year 26)
3rd place
among
German companies
8th place
among
Europeancompanies
28T17T
Yellow Table: Global revenue ranking for construction industry in 2014
407,2 422,3
2013 2014
520,0 606,0
2013 2014
248,5 273,0
2013 2014
36,1 38,9
2013 2014
297,2 323,7
2013 2014
826,2 921,7
2013 2014
+8% (+11%)
Europe2
(in € million)
Americas2
(in € million)
Asia-Pacific2
(in € million)
Light equipment3 Compact equipment3
(in € million)
Services3
+12% (+12%) +9% (+11%)
(in € million)+4% (+6%) +17% (+17%) +10% (+10%)
2014: Positive development in all regions and segments1
(in € million)
1 Figure in brackets is adjusted for currency fluctuations2 Nominal figure after cash discounts
83 Nominal figure before cash discounts
(as a %)
Europe 72 (71)
Americas 25 (26)
Asia-Pacific 3 (3)
Regions
Differences attributable to rounding
2014: Slight structural shifts in revenue
Light equipment 32 (35)
Compact equipment 47 (44)
Services 21 (21)
Business segment
(as a %)
Further potential for diversification and internationalization
9
Sector
(as a %)
Construction and other
industries 64 (66)
Agriculture 15 (13)
Services 21 (21)
Reactions to our results from trade press
10
Headcount trends, employee programs
Targeted increase in headcount in all regions
4.157 4.372
2013 2014
(Positions)+5% (+215 positions)
Employees 2013 – 2014
11
Employee programs (excerpt)
Plus many more activities/programs at local and
regional level
PerspACTIVE – Young manager program
INTRAMove – Global employee exchange
Wacker Neuson academies: Increased course
offering
Annual Global Leader Summit over multiple
days
First global employee survey in 2014 (YOUR
OPINION COUNTS)
Train and Grow trainee program (as of 2015)
Training
Training is a key success factor today and will become increasingly important in
the future.
119159 173 181
2011 2012 2013 2014
(Number)
Trainees1 2011 – 2014
+62 (+52%)
12
1 Germany, Austria
New apprentices at Reichertshofen 2014
Contents
13
Fiscal 2014
Annual General Meeting
Markets – Vision –
Strategy
Financial indicators and
share news
Q1 2015Technology and
innovation
Income statement for 2014 (excerpt)
(in € million) 2014 2013 Difference
Revenue 1,284.3 1,159.5 10.8%
Gross profit 381.3 352.7 8.1%
Operating costs1 -262.9 -259.5 1.3%
Operating costs1 as a % 20.5 22.4 -1.9 PP
EBITDA 196.3 153.4 28.0%
EBITDA margin as a % 15.3 13.2 2.1 PP
EBIT2 136.2 94.7 43.8%
EBIT margin2 as a % 10.6 8.2 2.4 PP
Net profit 91.5 61.2 49.6%
Earnings per share in € 1.30 0.87 49.6%
Employees 4,372 4,157 5.2%
Increase in revenue and profit in 2014
1 Discounting other income/expenses
Revenue and increased profit forecasts achieved (Revenue: € 1.25-1.30 bn, EBITDA margin: 14.5-15.5%, EBIT margin: 10.0-11.0%)
14
2014: Strict control over costs
0%
5%
10%
15%
20%
25%
30%
0
50
100
150
200
250
300
2010 2011 2012 2013 2014
Cost of sales, R&Dand administration
As a % of revenue
27,3%
(in € million)
22.9%
207222
250
+27%
(revenue +70%)
259
22.4%
+1.5%
22.4%
15
1
1 Before other income/expenses
Cost of sales, R&D and administration1 2010–2014
Increase in productivity, improvement in cost-to-revenue ratio
20.5%
263
Award for our IT infrastructure
16
SAP Innovation Award 2015
Using latest technology for business intelligence
Simplifying and speeding up processes in all areas of the company
Leveraging synergies via integration on a global SAP system
Cloud for Customer / Customer Relationship Management
HANA (SAP database)
BI on HANA C4C ERP on HANA
-19%
Cash flow from
operating activitiesFree cash flow
(in € million)
Positive free cash flow despite increase in working capital
17
-61%
Working capital
Trade receivables
Inventories
Trade payables
(in € million)
453.1
+17%
+6%
+27%
+46%2013
Revenue: +11%
2014
532.2
2013 2014
21.5
55.2
2013 2014
106.8
131.1
(in € million)
Cash flow from
investment activities
2013 2014
-75.9
-12%
(in € million)
Depreciation/amortization
2013: € 58.6 million
2014: € 60.1 million
-85.3
177 179,5
936
18.9% 17.7%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
45,0%
50,0%
0
100
200
300
400
500
600
700
800
900
1.000
2013 2014
Net financial debt
Equity before minorityinterests (ratio)Gearing in %
Equity and financial debt
18
Equity, net financial debt and gearing
Gearing1 reduced despite double-digit growth in revenue
(71%)
+1.4%
(70%)
(in € million)+8.1%
1,012
1 Gearing = net financial debt / equity before minority interests
Eligibility for central
bank credit
confirmed by:
Increase in economic value added (EVA)
(in EUR million) (as a %)
WACC = Weighted average cost of capital; ROCE II = Return on capital employed (after tax)
Economic value added (EVA) = (ROCE II-WACC) * Ø capital employed = EUR 32.4 m (2014)
531,3646,9
793,6859,4 897,1
757,9
991,61.091,7
1.159,51.284,3
5,2%
12,5%
7,6% 7,7%
10,8%7,9%
7,5% 7,5% 7,1% 7,1%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
0
200
400
600
800
1000
1200
1400
2010 2011 2012 2013 2014
Durch. eingesetztes Kapital Umsatz
Kapitalrendite nach Steuern (ROCE II) Gewichtete Kapitalkosten (WACC)
Increased returns on capital employed (EVA)
(70%)
(65%)
(73%)(74%)
(70%)
19
in € 2011 2012 2013 2014 May 20, 2015
Earnings per share 1.22 0.77 0.87 1.30 -
Year-end 9.55 10.35 11.49 16.96 22.76
Market capitalization (in € million) 669.8 725.9 805.6 1,189.6 ~ 1,600
Change in share price at May 20, 2015 +138% +120% +100% +34%
Share price +100% since January 1, 2014
Share trends: January 1, 2014 – May 20, 2015
20
1 Manitou, Haulotte, Palfinger, Caterpillar,
Terex, Ramirent, Cramo, Atlas Copco,
Bauer, Deutz.
+100%
Contents
21
Fiscal 2014
Annual General Meeting
Markets – Vision –
Strategy
Financial indicators and
share news
Q1 2015Technology and
innovation
Reference (apr02)
Technology
22
PROCUREMENT AND QUALITY
International procurement across all sites
Standardized processes and workflows
Group-wide supplier strategy:
Reduction in suppliers
Supplier audits
→ Innovative drive, quality, price and supply performance
Internationalization
Increased sales volumes reduced unit costs
Reference (apr02)
2009 2010 2011 2012 2013 2014
Unit
Annual production of new machines at compact equipment plants
Number of units produced has almost quadrupled since 2009.
23
+384%
Technology
24
PRODUCTION
Continuous improvement in quality and costs
Standardization of processes and workflows
Uniform KPIs used to steer and benchmark production plants
Roll-out of lean management practices
Expansion of international production network: “In the region, for the region”
Industry 4.0
Roll-out of lean management practices
25
“Lean” means:
Inspiring a culture of continuous improvement among
employees
Minimizing waste
Reducing/preventing complexity
Eliminating the unnecessary
Preventing downtime
Ensuring efficiency and quality
Roll-out with focus on all sites across the globe
Relocating skid steer loader production to the US
Development and production: “In the region, for the region”
26
> 70,000 units per year
US is the largest sales market
for skid steer loaders
1. Big data
Integration of data, systems, processes
Digital data model
2. Assistance systems 3. Product development
27
Industry 4.0 / advanced manufacturing
Technology
28
PRODUCT DEVELOPMENT
Group-wide technology strategy: Focus technologies controlle centrally, expert
committees, intensive knowledge transfer, standardization of processes, workflows and
tools, shared parts and platform strategy
Innovations: Differentiation from the competition and growth drivers
Customer-centric product development
Compliance with legal regulations: Emissions legislation, HAV regulations, etc.
Growing ECO portfolio combines cost efficiency and environmental friendliness
Light equipment innovations (examples)
DPU 6555: Reversible vibratory
plate with reduced HAV 29
HSH 380: HeaterIE and IEC internal
vibrators
Compact equipment innovations (examples)
30
EW100
excavator
DW60, DW90, DW100
dumpers
ET90 excavator
Criteria: What makes a product “ECO”?
31
Increased productivity plus demonstrable lower total cost of ownership than competitor products:
Procurement costs
Maintenance costs
Repair costs
Energy costs
Transport costs
Cost of labor and materials
Demonstrably lower values than competitor products in the following areas:
Noise
Dust
Emissions
New zero-emissions ECO products
Good for users and the environment zero emissions, significant reduction in noise levels
Efficient, low-maintenance, future proof (compliance with stricter regulations)
Broad portfolio of new products is a USP
3232
Awards from third parties (selected)
33
Gold: Bi-GaLaBau Green Award
(Germany)
Gold Green Innovation
(UK)Gold (France) Gold (Poland)
Innovationspreis
EquitanaGold: Innovationspreis
AGRA (Bulgaria)
Gold: demopark-
Innovations-Medaille
Innovationspreis
Eima 2014
Today at the AGM:
Growing for the future
34
At Wacker Neuson, we develop innovative products
that help cut CO2 emissions. However, our
commitment to sustainability goes even further. With
your support, the Wacker Neuson Groups wants to
plant up to 250 trees.
Lend a helping hand.
Place soil in the
container and the
Wacker Neuson Group
will donate trees that will help improve CO2
balance. For more
information, go to:
Thank you
for your
support.
Contents
35
Fiscal 2014
Annual General Meeting
Markets – Vision –
Strategy
Financial indicators and
share news
Q1 2015Technology and
innovation
36
Market trends driving product sales
Global construction activity set to rise
Construction industry Infrastructural needs in emerging markets
Consequences of climate change and
greater emphasis on environmental
protection
Expansion of telecommunication networks
(including broadband)
Expansion and maintenance of road and rail
networks worldwide
Reconstruction (modernization)
Increased need for apartments, driven, for
example, by urbanization
Growing rental sector in established markets
Market trends driving product sales
37
Increasing global demand for innovative technical equipment
Agricultural technology and other industries
Increasing global demand for food and
fodder due to population growth
Structural shift towards fewer, larger
holdings (especially in Europe) with greater
demand for mechanization
Increasing mechanization of agricultural
sector, also in developing countries
Trend towards multifunctional compact
equipment
Rising wages, increased prosperity and
productivity
Our “GIPI” vision
38
Growth – Internationalization – Professionalization – Integration
Our company is the result of mergers between various family-run enterprises each with a unique corporate culture.We have set down our own values in writing and live by them. We actively integrate all of our companies into the Group and will continue to do so in the future.
Integration
We want to establish our company as a global player with a strong position in our target markets. To achieve this, we employ qualified people whose diverse cultural backgrounds are an invaluable asset to our company.
InternationalizationGrowthWe aim for profitable growth and healthy return on capital employed. We do not believe in revenue growth at any cost.
ProfessionalizationWe strive for excellence in everything we do.
Growth – maintain profitable growth
39
Revenue trends
Goal: To increase revenue to more than EUR 2 bn in medium term and boost profitability
Construction industry, gardening and landscaping
firms, municipal bodies, railroad/track
construction, rescue services, energy sector, etc.
Agriculture, horse breeders, tree nurseries, etc.
Growth – brand strategy
40
Growth – strategic alliance with HAMM
41
RD24RD18
Internationalization – expansion of global sales network
New affiliates established in Latin America and Asia in 2014
42
NEW
NEW
NEW
NEW
Energy efficiency and resource conservation
(Example: Hörsching, Austria)
Professionalization – sustainability management
43
Goal: To achieve demonstrable energy savings, protect the environment
Photovoltaic system for heating water
Intelligent light control
Heat recovery in spray facility
Effluent-free spray facility
Biological waste water treatment
Heat recovery in ventilation systems
and compressors
Flue gas recirculated in boiler
Integration – leveraging synergies
44
Examples
Securing long-term competitive advantages
Cross selling via international sales network
Group-wide standardized workflows
Shared parts, modular systems, platform
strategies
Development projects across multiple sites
Bundling purchasing volumes (direct, indirect)
Uniform, global IT platform
Measures promoting intercultural employee
exchanges
0
5
10
15
20
25
30
0,0
200,0
400,0
600,0
800,0
1.000,0
1.200,0
1.400,0
1.600,0
2014 2015e
(Revenue in € bn)
1.28
Revenue and margins 2014 – 2015e
+9-13%
10.6%
Forecast for 2015: Business expected to develop positively
Solid performance in core markets (Europe, North
America), mixed picture for emerging markets
Revenue growth in all segments
Greater internationalization (especially in emerging
markets)
New technologies, innovations
Increased penetration in core markets (e.g. through
cross selling)
Focus on diversification (target groups)
Process optimization, leveraging synergies
M&A opportunities
Risks: Regional market uncertainties, weak demand and
currency developments
Wacker Neuson 2015e
1.40–1.45
9.5-10.5%
45
EBIT
margin
Contents
46
Fiscal 2014
Annual General Meeting
Markets – Vision –
Strategy
Financial indicators and
share news
Q1 2015Technology and
innovation
22
32
7.6%
9.8%
789101112131415
05
101520253035
Q1/14 Q1/15
292
324
Q1/14 Q1/15
Q1/15: Development of revenue and profit
47
(in € million) (in € million, as a % of revenue)+11% (+6%1)
+43%
Revenue Q1/15 vs. Q1/14 EBIT (and margin) Q1/15 vs. Q1/14
1 Adjusted to discount currency fluctuations
Promising start to 2015
Q1/15: Revenue according to region and business segment1
48
216,1 231,4
Q1/2014 Q1/2015
Europe2
+7% (+6%)(in Mio. €)
67,983,9
Q1/2014 Q1/2015
Americas2
+24% (+5%)(in Mio. €)
7,6 9,1
Q1/2014 Q1/2015
Asia-Pacific2
+20% (+6%)(in Mio. €)
141,1166,1
Q1/2014 Q1/2015
Compact equipment3
+18% (+16%)(in Mio. €)
94,4 100,0
Q1/2014 Q1/2015
Light equipment3
+6% (-5%)(in Mio. €)
59,7 62,5
Q1/2014 Q1/2015
Services3
+5% (+0%)(in Mio. €)
1 In brackets: adjusted for currency effects2 Nominal, after cash discounts3 Nominal, before cash discounts
(in € million) (in € million) (in € million)
(in € million) (in € million) (in € million)
Reactions from trade press (examples)
49
Contents
50
Fiscal 2014
Annual General Meeting
Markets – Vision –
Strategy
Financial indicators and
share news
Q1 2015Technology and
innovation
2015 Annual General Meeting: Agenda
Item 1: Presentation of the Annual Financial Statements
Item 2: Resolution on the appropriation of net profit for the year
Item 3: Official approval of Executive Board actions
Item 4: Official approval of Supervisory Board actions
Item 5: Appointment of the auditors
Item 6: Appointments to the Supervisory Board51
2014 2013 2012 2011 2010
Payout (in € million) 35.07 28.06 21.04 35.07 11.9
Payout ratio (as a %) 38.3 45.9 38.9 40.9 50.0
Dividend payment
proposed (in €)0.50 0.40 0.30 0.50 0.17
Earnings per share (in €) 1.30 0.87 0.77 1.22 0.34
2015 Annual General
Meeting Wacker Neuson SE
Munich, May 27, 2015
Executive Board
Report
Cem Peksaglam (CEO)
Martin Lehner (CTO)
Günther Binder (CFO)
52