Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor...

38
1 Cem Peksaglam (CEO) Günther C. Binder (CFO) March 15, 2016 Wacker Neuson SE Analyst and Investor Conference Results FY 2015 and Q4 2015

Transcript of Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor...

Page 1: Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor Conference –Results FY 2015 and Q4 2015. Agenda Outlook Overview Financials 2015 2. The

1

Cem Peksaglam (CEO) – Günther C. Binder (CFO)

March 15, 2016

Wacker Neuson SE

Analyst and Investor Conference – Results FY 2015 and Q4 2015

Page 2: Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor Conference –Results FY 2015 and Q4 2015. Agenda Outlook Overview Financials 2015 2. The

Agenda

Outlook

Overview

Financials 2015

2

Page 3: Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor Conference –Results FY 2015 and Q4 2015. Agenda Outlook Overview Financials 2015 2. The

The ups and downs of fiscal 2015

3

Record revenue of € 1.375 billion

Solid growth in Europe (+6%), double-digit growth in Asia-Pacific

(+22%, from a low level)

Compact equipment segment again main growth driver (+15%),

esp. in Americas (+60%)

Progress on expansion of international reach

Successful launch of compact equipment in China

New sales affiliates established in Asia (Shanghai) und Latin

America (Peru, Columbia)

Extension of dealer network for Weidemann and Kramer

Alliance with HAMM AG proved successful (rollers)

Progress on many projects (e.g. eStore, procurement synergies,

logistics, aftermarket, R&D, used equipment)

Innovations setting benchmarks (e.g. dual power excavator,

electric wheel loader, battery-powered rammer etc.)

Solid financial position (equity ratio: 69%; gearing: <20%)

Positive economic value added (€ 1.1 m),

positive free cash flow (€ 17.8 m)

Crisis in many markets/regions hit revenue and especially

profitability in H2/2015

Energy sector (oil & gas) → squeeze on oil prices made it

impossible to cost-effectively extract crude oil in North

America

Extraction of row materials (mining) → low prices negatively

impacted important countries (Australia, Chile, Brazil, South

Africa)

Downturn in the agricultural equipment sector → drop in

prices for milk and other agricultural products dampened

willingness to invest amongst agricultural landholders

Weak markets in France, Russia

Strong US dollar squeezed exports

Negative currency developments in emerging markets

Especially strong margin business of light equipment was

affected by crisis-hit markets

New emission legislation had a major impact on costs, missing

harmonization on standards for North America and Europe

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Q4/15 and 2015 at a glance

Q4/15: Revenue increase, profit decrease

Revenue:+3% Q4/yoy to € 358 m (adjusted for currency effects: -1%); Q4/qoq +15%

EBITDA: -17% Q4/yoy to € 41 m; EBIT margin: 11.2% (Q4/14: 13,9%)

EBIT: -31% Q4/yoy to € 22 m; EBITDA margin: 6.3% (Q4/14: 9.4%)

2015: Revenue increase, profit decrease

Revenue: +7% yoy to € 1,375 m (adjusted for currency effects: +3%)

EBITDA: -20% yoy to € 171 m; EBITDA margin: 12.5% (2014: 15.3%)

EBIT: -24% yoy to € 104 m; EBIT margin: 7.5% (2014: 10.6%)

2015: Revenues business segments / regions

Light equipment: -1% yoy (adjusted for currency effects: -9%)

Compact equipment: +15% yoy (adjusted for currency effects: +13%)

Services: +4% (adjusted for currency effects: +0%)

Agriculture: -2% yoy

Europe: +6% yoy (adjusted for currency effects: +5%)

Americas: +8% yoy (adjusted for currency effects: -5%)

Asia-Pacific: +22% yoy (adjusted for currency effects: +12%)

4

Fiscal 2015 was another year of revenue growth for Wacker Neuson – despite difficult market conditions.

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Global construction machinery markets 2015 vs. 2014

5Sales of earth moving equipment, Source: ISC-Statistics, VDMA, February 2016

Crisis-hit markets dampened willingness to invest and reduced machinery sales

North America

Latin America

Europe Russia

Africa

Middle East

India

China

Rest of Asia

Oceania

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Development of raw material and oil prices

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Source: IMF - The International Monetary Fund, February 2016

Price indices development

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Raw materials in total Agriculture Metals Crude oil

(as a %)

2005 = 100%

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Low oil prices make exploration economically impossible in some regions

7January 9, 2016

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Low oil & gas prices hit Wacker Neuson business

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23%

77%

FY 2014

Oil & Gas Others

Oil & Gas: Wacker Neuson North America exposure

Oil & Gas industry remains difficult

(% of revenue)

14%

86%

FY 2015

Oil & Gas Others

Exposure

decreased

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FAO – Food Price Index1

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Continued decrease of food prices

Source: FAO, January 2016, FAO = Food and Agriculture Organization of the United Nations. The FAO Food Price Index is a measure of the monthly change in international prices of a basket

of food commodities. It consists of the average of five commodity group price indices.

100

120

140

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220

240

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Jan 16

Food Meat Dairy Cereals1 100 = average prices 2002-2004

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Global market for agricultural machines

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Market for ag machinery declined significantly – 2015 below 2011 level

Source: VDMA Landtechnik (estimated, September 2015)

Rest of world

Latin-/Central America

North America (NAFTA)

Rest of Asia

Japan

India

China

Turkey

Rest of Europe

European Union

Market volume of ag machines in EUR bn.

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5 years comparison: Revenue development per quarter

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Quarter-on-quarter comparison (revenues)

The downturn left its mark in second half of the year 2015.

CAGR: 11.2% CAGR: 9.4% CAGR: 5.7% CAGR: 7.9%

(in € m)

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5 years comparison: FY revenue and EBIT margin

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Revenue and EBIT margin 2011 - 2015

1 Without Impairment: 12.5%

€ 543 m EBIT generated in 5 years: → Ø € 109 m p.a.

(in %)

11.4%1

7.8% 8.2%10.6%

7.5%

(in € m)

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2015: Revenues per region / business segment1

921,7 979,3

2014 2015

13

Europe2

+6% (+5%)

422,3 417,1

2014 2015

Light equipment3

-1% (-9%)

323,7348,5

2014 2015

Americas2

+8% (-5%)

606,0697,5

2014 2015

Compact equipment3

+15% (+13%)

38,9

47,5

2014 2015

Asia/Pacific2

+22% (+12%)

273,0 283,9

2014 2015

Services3

+4% (+0%)

1 In brackets: adjusted to discount currency effects; 2 Nominal, after cash discounts; 3 Nominal, before cash discounts

(in € m)

(in € m)

(in € m)

(in € m)

(in € m)

(in € m)

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2015 and Q4/15: Comparison of peer group construction divisions (global)

Company

Peer 1 Construction division1

Wacker Neuson Group

Peer 2 Construction division

Peer 3 Construction division

Peer 4 Access Equipment div.2

Peer 5 Construction division

Peer 6 Construction division1

Peer 7 Construction division1

Peer 8 Construction division

Peer 9 Construction division1

Peer 10 Construction division

Peer 11 Construction division

Peer 12 Construction division

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-24%

-25%

-18%

-12%

-7%

-4%

-4%

-11%

-17%

8%

-4%

3%

7%

-24%

-20%

-14%

-13%

-9%

-5%

-5%

-3%

-3%

3%

4%

7%

9%

Change in revenue 2015 vs. 2014 Change in revenue Q4/15 vs. Q4/14

1 fiscal year differs from calendar year, figures show 9M/2015 and Q3/20152 fiscal year differs from calendar year, figures show fiscal year ended in fall 2015

Revenue (Change vs. 2014 and Q4/14)

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2015 and Q4/15: Comparison of peer group agriculture divisions (global)

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Revenue (Change vs. 2014 and Q4/14)

Company

Peer 13 Agriculture division1

Wacker Neuson Agr. Div.

Peer 14 Agriculture division1

Peer 15 Agriculture division

Peer 16 Agriculture division -12%

-21%

-25%

-9%

-28%

-23%

-20%

-2%

0%

1 fiscal year differs from calendar year, figures show fiscal year ended in fall 2015

Change in revenue 2015 vs. 2014 Change in revenue Q4/15 vs. Q4/14

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„Zero Emission” – Wacker Neuson, a leader of alternative drive technologies

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Alliance with HAMM AG proved successful

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New tandem rollers (1.8 – 4.5 t) and compactors (weighing up to 12 t)

The cooperation has extended the portfolio of soil and asphalt compaction rollers.

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Launch of Wacker Neuson

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Internet is gaining of importance

Digitalized offering of whole Wacker Neuson portfolio.

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New assembly site in Brazil

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Itatiba, São Paulo, Brazil

Products: mobile generators

Target market: Latin America

Start of production: April 2016

„In the region – for the region“

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New CSO Mr. Jan Willem Jongert

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Mr. Jan Willem Jongert (51) will be joining the Executive Board on April 1, 2016.,

taking responsible for the global sales, service, logistics and marketing activities

Jan Willem Jongert

Before joining Wacker Neuson he was CEO of Schwarzmüller

Prior to this, Mr. Jongert spent many years in a number of positions at Jungheinrich:

responsible for sales in Asia-Pacific

heading up an overseas subsidiary in China

responsibility for sales in northern and eastern Europe

Mechanical engineer, bachelor’s degree in international marketing managementJan Willem Jongert

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Areas of responsibility for Executive Board from April 1, 2016

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Cem Peksaglam

CEO

Strategy/M&A, HR,

legal matters, compliance,

real estate, investor relations,

corporate communication,

sustainability

Martin Lehner

CTO

Procurement, production,

technology, quality

Günther C. Binder

CFO

Finance, audit, IT

Jan Willem Jongert

CSO

Sales, logistics, service,

marketing

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Agenda

Outlook

Overview

Financials 2015

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2015: Development of revenue and profitability

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2015in % of

revenue2014

in % of

revenueChange in %1

Revenue 1,375.3 100.0 1,284.3 100.0 +7.1 (+2.7)

Gross profit 384.5 28.0 381.3 29.7 +0.8

SG&A and R&D cost2 -291.3 21.2 -262.9 20.5 +10.8

Operating expenses2 93.2 6.8 118.4 9.2 -21.3

EBIT 103.6 7.5 136.2 10.6 -23.9

Net profit 66.2 4.8 91.5 7.1 -27.7

Net profit per share in € 0.94 1.30 -27.7

EBITDA 171.3 12.5 196.3 15.3 -12.7

Number of employees 4,632 4,372 +5.9

Income statement (extract) and number of employees for 2015 and Q4 2015

1 in brackets: adjusted to discount currency effects2 without other income/expenses

Q4/2015in % of

revenueQ4/2014

in % of

revenueChange in %1

357.9 100.0 348.1 100.0 +2.8 (-0.8)

90.6 25.3 98.8 28.4 -8.3

-73.0 20.4 -70.1 20.1 +4.1

17.6 4.9 28.7 8.2 -38.7

22.4 6.3 32.7 9.4 -31.5

12.4 3.5 22.5 6.5 -44.9

0.18 0.32 -44.9

41.0 11.5 48.3 13.9 -15.1

4,632 4,372 +5.9

(in € m)

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2015: Comparison of EBIT vs. previous year

24

EBIT-change 2015 vs. 2014

1

1 Other income & expense

Earnings negatively impacted by situation in crisis-hit emerging markets/industries, regional/product mix and FX effects.

(in € m)

0

20

40

60

80

100

120

140

160

EBIT 2014 Revenue volume effect Revenue margin effect S,G&A Other EBIT 2015

136.2

27.0 -23.8

-28.4

-7.4103.6

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2015: Development of profit per region

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EBIT-change by region 2015 vs. 2014

2015 vs. 2014 Europe Americas Asia-Pacific Total

Revenue +6% +8% +22% +7%

EBIT -9% -82% -87% -24%

EBIT margin (2014)1 11.5% (13.5%) 1.2% (7.4%) 0.0% (2.4%) 7.5% (10.6%)

1 EBIT Margin of regions on total external sales

(in € m)

0

20

40

60

80

100

120

140

EBIT 2014 Europe Americas Asia-Pacific Consolidation EBIT 2015

136.2 -11.6

-19.7

-0.8 -0.5 103.6

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90

214177 180 199

901 915 9361.012

1.064

10,0%

23,4%

18,9%17,7%

18,7%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

0

200

400

600

800

1.000

2011 2012 2013 2014 2015

Net financial debt Equity before minority interests Gearing as a %

2015: Gearing and equity

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High equity ratio of 69%, gearing <20%

(€ million)

Equity, net debt and gearing 2011 – 2015

(as a % of equity)

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2015: Working capital development

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2011 2012 2013 2014 2015

Inventories Trade receivables Trade payables

Working Capital ratio1

35.1% 40.9% 38.1% 38.2% 40.1%

(in € m)

+4%

WC: +8% 574.5

532.2

+23%

+12%

453.1456.8

370.5

Working capital 2011 – 2015

1 calculation: working capital reported at the closing date / annual revenue calculated on the basis of Q4

180.0

173.3

164.0147.8

158.4

474.6

424.0

333.8360.1274.5

-80.1-65.2-44.7-51.1-62.4

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+23%

(in € million)

-17%

+13%

2014 2015

67.7

2014 2015

17.8

21.5

2014 2015

131.0

106.8

(in € million)

-85.3

+33%

-113.2

Depreciation/amortizationCash flow

from operating activities

Cash flow

from investment activitiesFree cash flow

2015: Comfortable liquidity situation despite high investments

28

(in € million) (in € million)

2014 2015

60.1

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(€ million)

2011 2012 2013 2014 2015

Average capital employed (in % of revenue) Revenue Return on capital employed (ROCE II) Weighted average cost of capital (WACC)

(65.2%)

(72.7%)(74.1%) (69.9%)

1 (ROCE II – WACC) * average capital employed = economic value added (EVA)2 Return on equity = Profit/loss after minority interests / average equity before minority interests3 Return on assets = Profit/loss before minority interests / average balance sheet total

991.61,091.7

1,375.3

1,159.5

1,284.3

646.9

793.6859.4 897.1

7.5% 7.5% 7.1% 7.1%

12.5%

7.6% 7.7%

10.8%

ROCE II > WACC, positive EVA1: EUR 1.1 million

2015: Positive economic value added (EVA)1

29

(71.0%)976.6

7.1%

7.3%

ROE (%)2 9.0 6.1 6.6 9.4 6.4

ROA (%)3 7.0 4.3 4.6 6.7 4.4

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Share price development

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in € 2011 2012 2013 2014 2015

Earnings per share 1.22 0.77 0.87 1.30 0.94

Dividend payment 0.501 0.30 0.40 0.50 0.50

End of period 9.55 10.35 11.49 16.96 14.23

High 13.49 13.45 12.75 18.00 24.60

Low 8.35 9.06 9.24 11.49 11.12

Market capitalization (in € m) 669.8 725.9 805.6 1,189.2 998.1

ISIN / WK DE000WACK012 / WACK01

Reuters /

Bloomberg

WACGn.DE / WAC GR

Indices SDAX, DAXplus family, CDAX,

GEX, Classic All Shares

Share Prime All Share

Total shares 70.140.000

Shareholder

structure

63% Family; 37% Free float

(thereof management: 0.5)

Share price performance since January 2015 with peak on April 27

Key figures share

%

1 Dividend payment to be proposed at the AGM on May 31, 2016

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Proposed dividend for AGM on May 31, 2016

20151 20141 2013 2012 2011 2010 2009 2008 2007

Total payout (€ million)

35.07 35.07 28.06 21.04 35.07 11.92 0 13.33 35.07

Payout ratio2 (as a %) 53.0 38.3 45.9 38.9 40.9 49.8 - 32.0 40.0

Eligible shares(in m)

70.14 70.14 70.14 70.14 70.14 70.14 70.14 70.14 70.14

Dividend per share (in €) 0.50 0.50 0.40 0.30 0.50 0.17 0 0.19 0.50

Earnings per share (in €) 0.94 1.30 0.87 0.77 1.22 0.34 -1.57 0.53 1.1

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1 Dividend payment to be proposed at the AGM on May 31, 20162 Based on net consolidated profit for the period before purchase price allocation in 2007 and 2008. Due to the diminishing effects of purchase price allocation,

the payout ratio has been based on net consolidated profit for the period after purchase price allocation since 2010.

Dividend payouts 2007 – 2015

Dividend of EUR 0.50 per share reflects confidence in the earnings potential

and in the success of corporate strategy.

Page 32: Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor Conference –Results FY 2015 and Q4 2015. Agenda Outlook Overview Financials 2015 2. The

Agenda

Outlook

Overview

Financials 2015

32

Page 33: Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor Conference –Results FY 2015 and Q4 2015. Agenda Outlook Overview Financials 2015 2. The

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

2015 2016e

(Revenue in € billion)

Revenue and margins 2015–2016e

1.38

+2% to +5%

EBIT Margin

7.5%

1.40–1.45

Cautious forecast for 2016

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Europe

North America

Latin America

South Africa and Sub Sahara

Asia

Australia

Agriculture

Construction

Mining

Oil & Gas

Other channels

1

Wacker Neuson Group revenue trend 2016e

Some developments offset each other, low visibility

1 Strong increase, but from a low base

Revenue growth +2% to +5%, EBIT Margin 7.0% to 8.0%

Investments of ~ 100 m €, positive free cash flow

EBIT Margin

7-8%

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Our “GIPI” vision

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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.

Page 35: Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor Conference –Results FY 2015 and Q4 2015. Agenda Outlook Overview Financials 2015 2. The

Targeted expansion of profitable business fields, restructuring of low margin business fields

Further market penetration with core products and diversification of end markets

Continued internationalization

Continued cost control

Critical assessment and, where appropriate, postponement of investments

Critical assessment of all new hires

Optimization of inventories (enhanced structure; less inventories)

Focus on supplier management and qualification

Process optimization through lean management activities, standardization of components and processes;

development of new platforms

Investments into new technologies and innovations (R&D rd. 3.2% of revenue p.a.)

Reinforcing measures to improve bottom line, e.g.

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Goal: To increase revenue to more than EUR 2 bn. in medium term and boost profitability

Medium-term goal: > 2 bn. Euro revenue

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Financial calendar and IR contact

Financial Calendar

IR contact

Investor Relations Department

Preussenstrasse 41, 80809 Munich, Germany

Phone: +49-89-35402-713, Fax: +49-89-35402-298

[email protected]

March 15, 2016 Publication of financial results 2015; Press Conference, Munich; Analysts' Conference Call

April 12, 2016 Capital Market Day on bauma, Munich

May 12, 2016 Publication of first-quarter report 2016; Analysts' Conference Call

May 31, 2016 AGM, Munich

August 4, 2016 Publication of half-year report 2016; Analysts' Conference Call

November 10, 2016 Publication of nine-month report 2016; Analysts' Conference, Frankfurt

Numerous international trade fairs, roadshows and conferences

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DisclaimerCautionary note regarding forward-looking statements

The information contained in this document has not been independently verified and no representation or

warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy,

completeness or correctness of this information or opinions contained herein.

Certain statements contained in this document may be statements of future expectations and other forward

looking statements that are based on management‘s current view and assumptions and involve known and

unknown risks and uncertainties that could cause actual results, performance or events to differ materially

from those expressed or implied in such statements.

None of Wacker Neuson SE or any of its affiliates, advisors or representatives shall have any liability

whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its

content or otherwise arising in connection with this document.

This document does not constitute an offer or invitation to purchase or subscribe for any securities and neither

it nor any part of it shall form the basis of or be relied upon in connection with any contract or commitment

whatsoever.

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