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Three Years on, Wacker Neuson Confirms Merger Success

Fri November 12, 2010 - National Edition
Construction Equipment Guide

The three-year anniversary of the Wacker Neuson merger provided proof of concept, with the group’s strategy of becoming a one-stop provider of light and compact equipment emerging a clear success. Taking stock of the last three years, the group reported positive progress, having reached key milestones defined during the merger and firmly placing itself on the road to further growth, according to the company.

Merger Arises From Shared Vision of Growth

Three years ago, on Oct. 31, 2007, the company announced that the merger between the former Wacker Construction Equipment AG, Munich, Germany, and the former Neuson Kramer Baumaschinen AG, Linz, Austria was complete. In February 2009 it changed its legal form to a European company and has been trading under the name Wacker Neuson SE ever since.

The two companies behind the merger shared the same strong roots. Both were traditional, family-owned businesses managed with a high degree of flexibility and a strong sense of cost awareness. And both companies were committed to high standards of technology and quality, resulting in respective portfolios of market-leading products. The merger was inspired by the joint vision of securing further growth through sales synergies. And Wacker Neuson has used its existing global sales and distribution network for light equipment to launch compact equipment in new markets, resulting in a broad light and compact equipment portfolio, flanked by an extensive service offering, according to the company.

Promoting Team Spirit and Cost Synergies

The group focuses on actively merging the two corporate cultures and creating a unified corporate identity. Group-wide deployment of SAP software is a key step in this move as it will further integrate business processes.

Since 2007, the group has made significant progress and achieved many key milestones:

• High levels of customer acceptance

Customers highly rate the group’s ability to provide light and compact equipment along with rentals and service from a single source. In Switzerland, for example, this approach saw Wacker Neuson increase revenue in 2009 by ten percent although the industry as a whole experienced growth of just one percent. The benefits of these synergies also were evident at this year’s Bauma trade fair in Munich, where Wacker Neuson showcased its new product portfolio for the first time. Order intake was 25 percent up on Bauma 2007, when both companies had separate stands.

• Launch of compact equipment in further markets

Since the merger, the company has used the former Wacker Group’s sales and distribution network to introduce compact equipment from its production facilities in Linz (Austria) and Pfullendorf (Germany) to markets in North and South America, South Africa, the Middle East and several countries in the EU. The most strategic target market here is the United States, where the group’s compact equipment portfolio was previously largely unknown.

The positive mid-term outlook for Wacker Neuson in the United States is a strong sign that the group will be able to build on its strong position in the light equipment sector and also become one of the leading providers of compact equipment here, according to the company.

The group is planning further launches in countries, e.g. Russia, once the economy picks up. The 20-year strategic partnership that Wacker Neuson concluded with Caterpillar in June will generate additional revenue in the compact equipment segment. The agreement will see Wacker Neuson designing and producing mini excavators weighing up to three tons for the company. These machines will then be distributed under the Caterpillar brand via Caterpillar’s global sales network.

• Expansion of product portfolio for the agricultural sector

The agricultural market worldwide also offers attractive long-term growth prospects for the group. Increasing reliance on technology and machinery in agricultural holdings is fueling demand for particularly versatile compact equipment. To maximize this opportunity, Wacker Neuson is gradually expanding the Weidemann range (compact equipment for the agricultural industry) to include proven machines from our construction industry portfolio (platform concept).

• Expansion and modernization of production capacity

To create capacity for further growth, Wacker Neuson built four production plants over the space of three years. The new facilities were constructed at the Korbach (Weidemann) and Pfullendorf (Kramer Allrad) facilities in Germany as well as at Norton Shores in the US and Manila in the Philippines (both light equipment). A further new facility is planned for Linz, Austria. All of the group’s production lines then have extensive capacity and are equipped with cutting-edge technology plus the latest developments in sustainable production.

• Stronger joint position as economy recovers

As was the case among all industry peers, Wacker Neuson experienced a dramatic drop in revenue, especially in 2009. However, the company has already returned to a growth path in 2010 and is leveraging the strengths of the merger to outpace the market.

Further International Expansion Planned for the Future

The Wacker Neuson Group is a growth-oriented company that is determined to outgrow the market by sticking to its strategic goals. The company intends to gain new market share, open up new markets and reap the benefits of its intelligent platform concepts across the construction and agricultural sectors.

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