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Wacker Neuson Group Our way to success Q3/2020

Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

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Page 1: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Wacker Neuson Group – Our way to success

Q3/2020

Page 2: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Wacker Neuson in a nutshell

2

Customer centricity

Innovative products &

services

Diversified sales

channels

Strong growth

potential

Solid financial

base

Resilience to cyclicality

Innovation leader for

sustainable solutions

Page 3: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

3

Who we are 02

Our way to success in different

markets03

Innovation is part of our DNA 04

1 Cost reduction & efficiency enhancement program.

Putting the customer first 01

Financials Q3/20 05

Page 4: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Putting the customer first

Page 5: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Maximum productivity & machine uptime

Comfortable & intuitive machine handling

Operator health & safety

Service, Partnership, Reliability

Attractive total cost of ownership

Empowering our customers benefits our growth

5

Page 6: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

We drive innovation to improve our customers’ processes

6

Dual View Dumper Zero emissionVertical Digging System Remote-control steering

Connected products Self-driving equipmentHand-arm vibrations Modular design

Wireless handling with no

emissions

Cockpit rotatable by 180°

Shorter process

times due to exact vertical digging

Autonomous control and

digital performance

record

Flexibility with one battery fitting 7

products

Give your machines a

voice!

Operating equipmentwithout any

time restrictions

Maximizing operator comfort

Page 7: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

We see our customers as our partners

7

Strong customer involvement in R&D

Sophisticated value engineering

Voice

of Customer

Technical

benchmarking

Early involvement

of all functions

Front Loading

With our accelerated

customer-oriented

product development

process, we provide our

customers with the right

features and the best

quality at the best price.

Teamwork at every step of the value chain

Research & Development

Page 8: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Who we are

Page 9: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

We are a one-stop provider with an unrivaled offering

9

Light Equipment (LE) Compact Equipment (CE)

Different product groups

same customers

25%of Group sales1

55%of Group sales1

AcademyUsed Machines2Repair2 &

Maintenance2Rental Service2 Genuine PartsConcrete

solutions

Financial Solutions E-Store2 Telematics

Services

20%of Group sales1

1 FY 2019. 2 In selected countries.

Page 10: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Competitors include

Ammann

Bomag

Husqvarna

Weber MT

Customers trust in our longstanding expertise in LE

10

Demolition

Light Equipment (LE)

25%of Group sales1

CompactionConcrete technology

Power & Lighting Pumps

Heaters

€ 2,000Average price of an LE product1

In 1930, Wacker invented

the electric rammer. The

term "wacker packer" is still

used on construction sites.

1 FY 2019.

Page 11: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Customers opt for the advantages of compact equipment

11

Telehandlers Wheel loaders

Compact Equipment (CE)

55%of Group sales2

Dumpers Backhoe loaders Skid steers / Compact track loaders

Excavators

€ 36,000Average price of a CE product2

Urbanization,

limited space and

mechanization are

driving demand for

compact equipment

in construction and

agriculture.

Competitors include

Kubota

Takeuchi

Yanmar

Manitou

JCB

Bobcat (Doosan)

1 own estimates, based on underlying data from CECE and Off-Highway Research 2 FY 2019.

EUR 18 Bnexpected value of global compact

construction equipment market

accessible to Wacker Neuson in 20251

Page 12: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Service is key to our customers’ success

Academy

Used Machines2Repair2 &

Maintenance2

Financial Solutions

Rental Service2

E-Store2

Genuine Parts

Telematics

Concrete Solutions

Comprehensive services Collaborative relationship

We are there for our customers, listening,

sharing our expertise and working closely

with them to find the best solutions.

Service, Partnership,Reliability

Customer proximity

20%of Group sales1

>550service technicians

in close proximity

to our customers

121 FY 2019. 2 In selected countries.

Page 13: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

We serve our markets with three strong brands

13

Construction, gardening/landscaping, maintenance/repairs, etc. Agriculture, horse breeders, tree nurseries, etc.

Page 14: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

We strive for long-term stable growth

Revenue development (2010-2019)

758

992 1,0921,160

1,2841,375 1,361

1,5341,710

1,901

CAGR +10.8%[€ m]

14

Page 15: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

We attach importance to a solid balance sheet structure

151 As at December 31, 2019.

56%Equity ratio1

1.7Net financial debt/

EBITDA1

Excellent basis

for further profitable growth

Page 16: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Our diversified business dampens cyclical fluctuations

16

Focus on maintenance & repair

of infrastructure →large infrastructure

projects have no major impact on our

business

Rental equipment as buffering alternative to purchasing new

machines→ maximum flexibility for customers

Only small investment volumes

required

Broad customer base, diversified target industries

Different cycles in agriculture & construction

Resilience to cyclical

fluctuations

1 Source: Off-Highway Research, August 2019. 2 FY 2019

16%of Group sales

from agriculture2

>10different target

industries

0

400

800

1,200

1,600

2,000

0

200,000

400,000

600,000

800,000

1,000,000

Global equipment sales (units) Revenue WN Group (€ million)

-33%

1

+39%

[units] [€ m]

Page 17: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Clear-cut strategy

17

Strategy 2022

In light of current developments regarding Covid-19, we

expect the pandemic to continue to have a major impact

into fiscal 2021. Consequently, we expect to achieve our

Strategy 2022 targets one to two years later than

planned.

How we measure success

Page 18: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

18

Our way to success in different markets

Page 19: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Our diversified sales organization responds to regional needs

Direct sales &

rent to sell1 DealersKey accounts

& rental firmseCommerce1

Country-specific sales with long-standing customer relationships

1 In selected countries.19

Page 20: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

+15%

Internationalization – plenty of room to grow

20

357.5

401.3

459.5

2017 2018 2019

1,129.8 1,248.9

1,379.0

2017 2018 2019

46.6

59.862.6

2017 2018 2019

+10%

+5%

73%of Group sales1

3%of Group sales124%

of Group sales1

AMERICAS

EUROPE

APAC

[€ m]

[€ m]

[€ m]

1 FY 2019.

Page 21: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Europe – We are striving to increase market shares

21

Light Equipment

Compact Equipment

Services

2019

Further strengthening of

our market position

Gaining significant market shares in UK &

France (i.a.)

Expansion in agriculture with Weidemann and

Kramer

Game changer

We have redefined

safety and accelerated our

customers’ processes with

our Dual View dumpers

1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd.

Major market shares in DACH –

plenty of room for growth

in other regions

Charles Messenger, Galtec Ltd. “It’s a

lovely bit of kit, […] I’m very

impressed so far. It’s going to be

ideal for the winter, no more

sitting out in the open exposed

to the wind and rain, which will

be really nice. Not only that, but

they are safe and will save time

without a doubt.”2

Germany, 29%

France, 19%

United Kingdom, 15%

Italy, 11%

Netherlands, 4%

Belgium, 3%

Sweden, 3%

Norway, 3%

Spain, 3%

Switzerland, 2%Denmark, 2%

Others, 6%

Western Europe:

Relative size of equipment markets1

Page 22: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Europe – We are growing our business in the ag sector

22

All-wheel steering

Articulated steering

Our customers are mainly dairy and

cattle farmers who work in confined

spaces such as stables.

They require small, highly

maneuverable machines with a

minimal turning radius and

outstanding stability.

Development of revenues in the ag sector1

Revenue in € million

1 FY 2019.

+21%growth in CE for the

agricultural sector1

16%of Group sales

from agriculture1

0

100

200

300

2015 2016 2017 2018 2019

+12.6% CAGR

Page 23: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Financing programs set up to enable future growth

Extension of dealer

network for LE & CE

Skid steers as door opener for compact equipment

Large potential for

further market share gains

Americas – A market with huge growth potential

23

Light Equipment

Compact Equipment

Services

1 Source: Off-Highway Research, September 2020.

60 yearsin the US light equipment market with

high market shares

2019

0

50,000

100,000

150,000

200,000

250,000

2019 2020 2021 2022 2023 2024

Forecast sales of construction equipment North America (units)1

Page 24: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

APAC – We benefit from structural market changes in China

24

Light Equipment

Compact Equipment

Services

1 Source: Off-Highway Research, Feb. 2020.

0%

20%

40%

60%

80%

100%

Crawler Excavators Wheeled LoadersMini Excavators Mobile CranesCompactors & Pavers Graders & Dozers

Changing market structure in China – compact equipment on the rise1

Mini excavator market China 2019 (units)1

2019

85,000

2019

Serving export markets from

plant in Pinghu, China

Even small market shares would leverage

our sales significantly

Introducing new excavator models

to counteract price pressure

28%of mini excavator

sales worldwide

Page 25: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Innovation is part of our DNA

Page 26: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

We drive innovation to improve our customers’ processes

26

Dual View Dumper Zero emissionVertical Digging System Remote-control steering

Connected products Self-driving equipmentHand-arm vibrations Modular design

Wireless handling with no

emissions

Cockpit rotatable by 180°

Shorter process

times due to exact vertical digging

Autonomous control and

digital performance

record

Flexibility with one battery fitting 7

products

Give your machines a

voice!

Operating equipmentwithout any

time restrictions

Maximizing operator comfort

Page 27: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

We drive electrification in our industry

EZ17e

DW15e

DT10e

AP1840e AP2560e

AS60e

AP1850e

ACBe

Full portfolio of zero emission products

ChangeWe are well prepared for the

shift to zero emission

construction sites

“If we learn early enough that

ambitious climate demands will

be imposed, we can drive

innovation forward by

demanding zero-emission

solutions from machinery

manufacturers, equipment

suppliers and contractors.”1

1 Ole Henrik Ystehede, director of EBA (Contractors Association - Building and Construction) for Oslo/Akershus/Østfold.

Through a smart and

innovative procurement

strategy, the City of Oslo

reduces climate gas

emissions at

construction sites.

27

Page 28: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Digitalization creates new opportunities for our business

Connected products –

always a step ahead

Pinpointing location –

connected jobsites

Give your machines a voice

Increasing runtime –

predictive maintenance

Transparency –

Real-time data analysis

Increasing efficiency –

smart products

Optimizing utilization

28

Page 29: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Innovation is our answer to a changing world

- Maintenance of

infrastructure

- Limited space

- Clean air

regulations

- Noise pollution

- Growing

middle class

- Food

- Mechanization

- Infrastructure

- Housing

- Energy efficiency

- Waste

management

- Process

optimization

- Telematics

- Smart products

- Building Infor-

mation Modeling

(BIM)

29

Page 30: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

30

Financial results Q3/20

Page 31: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

416469

435

517468 480

411386 391

10.1%8.9%

7.1%

10.7%

8.8%

5.4%7.0%

5.6% 5.8%

0%

5%

10%

15%

20%

0

100

200

300

400

500

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

Revenue and earnings Q3/20

31

-16.5%

Q3/20: Drop in revenue related to coronavirus crisis

Income statement (excerpt)

Q3/20: Comments

Revenue -16.5% yoy (adj. for FX effects: -15.0%)

▪ Single-digit revenue decline in Europe; significant double-digit drop in the

Americas; Asia reports slight growth

▪ Services segment clearly above prior year; H1 growth continues

Gross profit -17.6% yoy (gross profit margin -0.3 PP)

▪ Capacity utilization at production plants due to low sales volumes and

significant inventory reduction below prior year’s levels

▪ Favorable product mix driven by strong services segment, fueled in

particular by higher sales of rental equipment (rent-to-sell)

EBIT -44.7% yoy (EBIT margin: -3.0PP)

▪ Operating costs significantly below prior year; conversely bad debt

allowances amounted to € 7.5 m (attributable to the Americas in particular);

short-time work models cut back significantly relative to Q2/20

▪ Restructuring expenses linked to the cost reduction and efficiency

enhancement program: € 1.7 m; EBIT before restructuring costs: € 24.5 m

(margin: 6.3%)

Earnings per share -56.8% yoy

▪ Financial result slightly below prior year; negative FX effects (€ -1.1 m yoy);

in contrast less negative interest income (€ +0.7 m yoy)

▪ Tax rate at 35.5% (Q3/19: 28.6%); mainly due to losses reported by

affiliates for which no deferred taxes could be capitalized; existing deferred

tax assets were partly written down

€ million Q3/20 Q3/19 9M/20 9M/19

Revenue 390.8 468.2 1,187.5 1,420.8

Gross profit 98.0 118.9 302.9 367.7

as a % of revenue 25.1% 25.4% 25.5% 25.9%

Operating costs1 -77.0 -80.6 -227.4 -249.6

as a % of revenue -19.7% -17.2% -19.1% -17.6%

EBIT 22.8 41.2 73.2 127.4

as a % of revenue 5.8% 8.8% 6.2% 9.0%

Financial result -5.6 -5.2 -19.4 -11.6

Taxes on income -6.1 -10.3 -20.0 -35.7

Profit for the period 11.1 25.7 33.8 80.1

Earnings per share (€) 0.16 0.37 0.48 1.14

1 Excl. other income/expenses.

Revenue

[€ m]

EBIT

margin

Page 32: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

416469

435

517468 480

411386 391

10.1%8.9%

7.1%

10.7%

8.8%

5.4%7.0%

5.6% 5.8%

0%

5%

10%

15%

20%

0

100

200

300

400

500

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

Revenue and earnings 9M/20

32

-16.5%

9M/20: Sales decline related to coronavirus crisis

Income statement (excerpt)

9M/20: Comments

Revenue -16.4% yoy (adj. for FX effects: -16.0%)

▪ Sales decline related to Covid-19, most severe impact in Americas,

central Europe had a balancing effect, Ag business for the Group -3% yoy

▪ Services segment shows positive development (+7% yoy)

Gross profit -17.6% yoy (gross profit margin -0.4 PP)

▪ Lower volumes burden gross profit; measures to soften impact of Covid-19:

cut in production programs, additional company holidays, various models of

short-time work

▪ Favorable product mix thanks to strong services segment

EBIT -42.5% yoy (EBIT margin: -2.8PP)

▪ Operating costs significantly below prior year

▪ Impairment on accounts receivable amounted to € 12.5 m (attributable to

the US in particular)

▪ Restructuring expenses linked to the cost reduction and efficiency

enhancement program sum up to € 3.8 m

▪ EBIT before impairment on US goodwill (€ -9.3 m) and restructuring costs

from CEP (€ -3.8 m) at € 86.3 m (margin of 7.3%)

Earnings per share -57.9% yoy

▪ Financial result significantly below prior year; negative FX effects (€ -8.5 m

yoy); less negative interest income (€ +0.7 m yoy)

▪ Tax rate at 37.2% (Q3/19: 30.8%); Aforementioned negative FX effects and

impairment loss are not tax deductible; write-offs or non-capitalization

of deferred tax assets

€ million Q3/20 Q3/19 9M/20 9M/19

Revenue 390.8 468.2 1,187.5 1,420.8

Gross profit 98.0 118.9 302.9 367.7

as a % of revenue 25.1% 25.4% 25.5% 25.9%

Operating costs1 -77.0 -80.6 -227.4 -249.6

as a % of revenue -19.7% -17.2% -19.1% -17.6%

EBIT 22.8 41.2 73.2 127.4

as a % of revenue 5.8% 8.8% 6.2% 9.0%

Financial result -5.6 -5.2 -19.4 -11.6

Taxes on income -6.1 -10.3 -20.0 -35.7

Profit for the period 11.1 25.7 33.8 80.1

Earnings per share (€) 0.16 0.37 0.48 1.14

1 Excl. other income/expenses.

Revenue

[€ m]

EBIT

margin

Page 33: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Q3/20: Services segment remains on growth path

390.8

14.9

65.9

310.0

Total Q3/20

Asia-Pacific

Americas

Europe

Business development by region and business segment

33

Q3/20: Significant decline in sales in Americas

Revenue Europe -8.2% yoy (adj. for FX effects: -7.7%)

▪ Stable development in DACH region (Wacker Neuson brand), fueled in

particular by gains in the services segment

▪ Growth in UK despite weak demand from major rental chains,

continued market share gains with dumpers

▪ Double-digit decline in revenue in Scandinavia, Southern Europe and

France

▪ Business with compact equipment for agriculture below prior year

(revenue -12.2% yoy)

Revenue Americas -43.1% yoy (adj. for FX effects: -38.8%)

▪ Willingness to invest remains very low among dealers,

key accounts and rental chains due to market uncertainty

▪ Order intake again above prior year; US plant started to gradually ramp

up at the end of Q3/20

Revenue Asia-Pacific +1.4% yoy (adj. for FX effects: +4.3%)

▪ Significant double-digit growth in China, demand for excavators and

light equipment develops positively

▪ Single-digit growth in Australia/New Zealand despite challenging

market conditions

▪ Revenue in Southeast Asia almost halved due to severe impact of the

coronavirus pandemic

79%

17%

4%

100%

-8%

-43%

+1%

-17%

27.1

-12.3

-0.9

22.8

Q3/20: Comments

394.0

106.6

199.6

87.8

Total Q3/20

Services

Compact equipment

Light equipment 22%

51%

27%

100%

-31%

-20%

+9%

-17%

Share yoy EBIT1Revenue [€ m]

Share yoyRevenue [€ m]2

1 EBIT for regions before consolidation.2 Revenue by business segment before cash discounts.

Page 34: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Further decrease in net working capital

34

▪ Further reduction of inventory levels; marked cut-back in production

programs in response to the Covid-19 pandemic; further reduction in

inventory planned by end of Q4; medium-term target: 25% of sales

▪ Receivables continue to decrease; high levels in previous year partly

due to strong revenue growth especially during the first half of the year

▪ Trade payables at a low level, impacted by capacity reductions

→ Reduction of net working capital continues (see next slide)

Comments

500553

633 645 663603 623

544476

151 144

179155

173147

188171

148

0

100

200

300

400

0

100

200

300

400

500

600

700

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

304 303

371413 400

359 345320

273

6759

78 73 7868

77 7664

0

50

100

150

200

0

100

200

300

400

500

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

167

213 208 199

164150

189

122 113

50 56 5948 43 37

57

38 35

0

50

100

150

200

0

50

100

150

200

250

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

Inventory

Trade payables

Trade receivables

Trade payables

[€ m]

Inventory

[€ m]

DIO1

[days]

Trade receivables

[€ m]

DPO3

[days]

DSO2

[days]

1 Days inventory outstanding = (inventory/(cost of sales*4))*365 days; 2 Days sales outstanding =

(receivables/(revenue*4))*365 days; 3 Days payables outstanding = (payables/(cost of sales*4))*365 days.

Page 35: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

-3 -9

-142

-42 -16

84

4

89 87

-160

-120

-80

-40

0

40

80

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

Free cash flow in Q3 at € 87 million

35

▪ Reduction of net working capital continues (€ -106.7 m vs. Q2/20); at

40.7%, net working capital as a percentage of revenue1 significantly

below the previous year (48.0%) despite reduced business volume

▪ By contrast, miscellaneous liabilities (related to deferred VAT liabilities

and social security contributions from Q2/20) developed less favorably

▪ Cash flow from investment activities amounted to € -20.7 m for Q3/20

and € -52.6 m for 9M/20 (Q3/19: € -18.0 m; 9M/19: € -59.5 m)

▪ Free cash flow amounted to € 86.5 m for Q3/20 and € 179.4 m for

9M/20 (Q3/19: € -15.5 m; 9M/19: € -200.0 m)

10 10

-115

-28

3

120

22

102107

-150

-100

-50

0

50

100

150

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

Comments

638 644

797858

899812 779 743

636

38%34%

46%41%

48%42%

47% 48%41%

0%

20%

40%

60%

80%

100%

0

200

400

600

800

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

Net working capital

Free cash flow

Cash flow from operating activities

Free cash flow

[€ m]

Cash flow from operating activities

[€ m]

Net working capital

[€ m]

Net working capital

[as a % of revenue]1

1 Net working capital/annualized revenue for the quarter.

Page 36: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

1,200 1,221 1,242 1,188 1,217 1,225 1,240 1,242 1,245

65% 64%58%

52% 54% 56% 54% 55% 58%

0%

20%

40%

60%

80%

100%

0

200

400

600

800

1,000

1,200

1,400

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

193 205

358

484513

439 446

363

276

16% 17%

29%

41% 42%36% 36%

29%

22%

0%

20%

40%

60%

80%

0

100

200

300

400

500

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

Reduction in gearing, liquidity secured

36

▪ Accelerated reduction in net financial debt; gearing close to target of

below 20%

▪ Ratio of net financial debt to EBITDA still above planned level due to

low profitability

▪ Reduction in total debt; equity ratio increases to 58 percent

▪ Long-term financing: placement of a promissory note

(Schuldscheindarlehen) in the amount of € 50 m in August 2020; short-

term credit lines replaced

▪ Cash3 at end of Q3/20: € 161.8 m (previous year: € 23.5 m)

0.80.7

1.61.5

1.91.7

2.0

1.61.4

0.0

0.5

1.0

1.5

2.0

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20

Comments

Net financial debt

[€ m]

Equity

[€ m]

Net financial debt and gearing1

Equity and equity ratio

Net financial debt/EBITDA2

1 Net financial debt/equity. 2 Net financial debt/annualized EBITDA for the quarter. 3 Incl. cash equivalents.

Gearing1

Equity ratio

Net financial debt/

EBITDA2 [x]

Page 37: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

25

50

75

100

125

Wacker Neuson SDAX DAX Peer group

1.30

0.940.81

1.25

2.06

1.26

0.50 0.50 0.500.60

1.10

0.00

38%53% 62%

48% 53%

0%

-200%

-150%

-100%

-50%

0%

50%

-0.20

0.30

0.80

1.30

1.80

2.30

2.80

2014 2015 2016 2017 2018 2019

EPS in € Dividend per share in € Payout ratio

Share development

37

The share in 20201

Key figures per share

Covid-19: Suspension of dividend payment

1 As at Nov. 23, 2020 2 Peer group: Ashtead, Atlas Copco, Bauer, Caterpillar, Deutz, DoosanBobcat, Haulotte,

Husqvarna, John Deere, Komatsu, Manitou, Palfinger, Terex, United Rentals, Volvo.

Family 58%

Free float 42%

(Total shares: 70,140,000)

Coverage1 Shareholder structure

in € 9M/20 9M/19

Earnings per share 0.48 1.14

Book value per share 17.75 17.35

Share price at end of period 17.44 16.00

Market capitalization (€ m) 1,223.2 1,122.2

0.50

0.60

Special dividend in €

% -6%

2

Bank TP (€) Recom. Date

Hauck & Aufhäuser 23.50 Buy Nov. 20, 2020

Metzler 22.50 Buy Oct. 14, 2020

Warburg 20.00 Buy Nov. 20, 2020

Jefferies 19.50 Buy Nov. 18, 2020

Berenberg 19.00 Buy Nov. 19, 2020

Bankhaus Lampe 18.00 Buy Nov. 19, 2020

Commerzbank 15.00 Hold Nov. 05, 2020

Kepler Cheuvreux 11.00 Reduce Nov. 19, 2020

Page 38: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

2020 – Outlook

38

Guidance for fiscal 2020

▪ Mood in the construction sector continues to recover according to

CECE; revenue in Europe declining at a slower rate than in previous

months

▪ Mood in the agricultural sector back to positive for the first time since

mid-2019 according to the CEMA barometer; the ratings for lawn, garden

and municipal as well as livestock equipment remain negative however

▪ High degree of uncertainty due to renewed global rise in infection rates

and tighter government restrictions

▪ Due to existing uncertainties it is still not feasible to quantify

revenue and earnings guidance published on August 5

− Revenue and EBIT margin expected considerably lower than the

prior-year figures

− Continued reduction of net working capital until end of year, albeit

at a slower pace than in the previous months (previously: net

working capital significantly lower than the prior-year figure)

− Investments of around € 80 m planned

▪ Corona pandemic is expected to continue to have a major impact

into fiscal 2021

▪ Group expects to achieve Strategy 2022 goals one to two years

later than planned

− Revenue > EUR 2 bn

− EBIT margin > 11%

− NWC ratio ≤ 30%

6,5 – 8,5%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Future ExpectationsCurrent Business SituationBusiness Index

Source: CECE, October 2020.

Source: CEMA, October 2020.

Business index for construction

Business index for agriculture

Page 39: Wacker Neuson Group Our way to success€¦ · our Dual View dumpers 1 Source: Off-Highway Research, Sept. 2020 2 Charles Messenger, Galtec Ltd. Major market shares in DACH – plenty

Financial calendar and contact

39

November 5, 2020 Publication of nine-month report 2020, investors & analysts call

November 9, 2020 eRoadshow Jefferies, France & Switzerland

November 12, 2020 eRoadshow Metzler, Germany

November 25, 2020 eRoadshow Hauck & Aufhäuser, London

January 13, 2021 eConference Oddo BHF Forum

March 25, 2021 Publication of the annual report 2020, analysts‘ & investors‘ conference call

Numerous other roadshows and conferences

Disclaimer

This report contains forward-looking statements which are based on current estimates and assumptions made by corporate management at 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 any way

guaranteeing that those expectations will turn out to be accurate. Future performance and the results actually achieved by Wacker Neuson SE and its affiliated companies depend on a number of risks

and uncertainties and may therefore differ materially from forward-looking statements. Many of these factors are outside the Company's control and cannot be accurately estimated in advance, such as

the future economic environment and the actions of competitors and market players. The Company neither plans nor undertakes to update any forward-looking statements.

All rights reserved. Valid November 2020. 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.

Contact

Wacker Neuson SE

Contact IR: +49 - (0)89 - 354 02 - 427

[email protected]

www.wackerneusongroup.com