Company Presentation - Wacker Neuson Group

Company Presentation

Overview

                        Company profile

           Our future                     Our business model

                               2

Facts and figures

                                                                                                Group headquarters
                                                                                                          Munich, Germany

                                                                                Production and development locations
                                                         Germany, Austria, USA, the Philippines*, Brazil, Serbia, China
                                                                                                                                           Turnover
                                                           Affiliates worldwide                                              > 50
                                                                                                                                       (€ bn)

                                                     Sales and service stations                                             > 140                +13%
                                                                                                                                                    1.53
                                                               Product groups                                               > 300         1.36

                                                    Property rights and patents                                             ~ 280

                                                                   Employees                                                > 5.500

                                                        Stock exchange listing                                        since May 2007      2016      2017

Headquarters Munich, Germany   * Integration of production Manila (Philippines) into Pinghu (China)

                                                                                                      3

Areas of responsibility for Executive Board and Supervisory Board
                                                     Executive Board

                      Martin Lehner                  Wilfried Trepels                               Alexander Greschner
                          CEO                              CFO                                             CSO
                 Production, technology, quality,
                 procurement, strategy/M&A, HR,                                                         Sales, service, marketing
                                                        Finance, audit, IT,
                    legal matters, compliance,
                                                     supply chain, real estate
                   investor relations, corporate
                  communication, sustainability

                                                    Supervisory Board
   Hans Neunteufel (Chairman)                                          Kurt Helletzgruber
   Prof. Dr. Matthias Schüppen                                         Elvis Schwarzmair (employee representative)
   Ralph Wacker                                                        Christian Kekelj (employee representative)
                                                                 4

Development of revenue and profit
                          Revenue and margin development 2013 to 2017
                (in m€)                                                 (in %)

                                                5

2017: Revenue growth by regions and divisons1

                Europe2                                Americas2                                               Asia-Pacific2
(m€)                                   (m€)                                             (m€)
                +11% (+11%) 1129.8                     +22% (+24%)                                                  -5% (-4%)
       1020.7                                                        357.5
                                                                                                        48.9                             46.6
                                              291.9

       12M/16                 12M/17          12M/16                 12M/17                           12M/16                          12M/17

         Light equipment3                     Compact equipment3                                                 Services3
(m€)                                   (m€)                                             (m€)
                +12% (+13%)                            +15% (+16%)                                                 +8% (+8%)
                                                                                                                                        320.4
                              422.7                                  817.6                             297.2
       377.9                                  709.3

       12M/16                 12M/17          12M/16                 12M/17                           12M/16                          12M/17
                                                                              1   In brackets: adjusted for currency effects; 2 Nominal, after cash discounts;
                                                                                     3 Nominal, before cash discounts; differences from rounding may occur
                                                           6

Global footprint
Sales by region 2017 (as %)

  Europe 74%
  Americas 23%
  Asia-Pacific 3%

                    More than 50 affiliates and 5,200 dealers in over 12,400 sites worldwide

                                                        7

History – innovation from tradition (since 1848)
                                       Focus on simplification of processes of our customers

               1930:                             1937:                               1971:                                   1991:
               first electric rammer             first internal vibrators            first Hoftrac®                          first articulated trench roller

               1925:                                                          1960:
                                                                                                                                                               …
1848:          Foundation                                                     Foundation
               Kramer                                                         machine factory
Foundation
of the                                                                        Weidemann KG
blacksmith's
shop
Wacker

                               1933:                      1956:                                       1984:                         1987:
                               Kramer tractors            electric breakers                           first mini excavator          Allrad-technology Kramer
                                                                               8

History – innovation from tradition (since 1848)
                                  Focus on simplification of processes of our customers

 2001:
 Merger of the companies
 Neuson Baumaschinen GmbH
 and Kramer-Werke GmbH                   2004:                                      2008:
                                                                                                                                2015:
                                         first joystick steering system             first cabin dumpers
                                                                                                                                first battery powered rammer

                                          2005:                           2007:
                                                                                                                                                               …
                                          Weidemann GmbH                  Merger of Neuson Kramer
                                          joins the group                 Baumaschinen AG und
                                                                          Wacker Construction
                                                                          Equipment AG

2001:
first six-ton excavator with pivot arm                                                              2010:
                                                                                                    first compact telehandler
                                                                                     9

Company values
                                                      Culture of a traditional, family-run business

                                                                                                                                                          Shareholder structure

           Expertise                             Passion                         Entrepreneurship                                Agility                      Family Wacker 33%

                                                                           As a family-run company, we
                                                                                                                                                              Family Neunteufel 30%
No matter what we do, we are          We      are    passionate   about                                             We understand that needs vary
always looking for ways to do it      delivering excellent results, feel   focus on the challenges that lie         from one customer to another and          Free float 37%
better – and to the highest quality   compelled to achieve our goals       ahead, taking an open-minded,            so we make it our personal
standards. We understand the          and      often   reach    beyond     bold approach to new business            business to always respond to
benefits that our equipment and       ourselves to go the extra mile.      opportunities. With a clear focus        each new challenge with agility
services offer our customers and      Challenges inspire us to be more     on      targets     and    execution     and efficiency. We never lose
we know the strengths and             creative.       We      recognize    efficiency, we aim for sustainable,      sight of the big picture. Organized       Number of shares:
weaknesses of our competitors.        outstanding performance and          profitable growth. As employees,         in self-starting teams, we ensure         70,140,000
These insights enable us to find      celebrate our successes.             we pride ourselves on our sense          that information is shared quickly
new ways of solving problems                                               of initiative, responsibility and        and transparently across the
and      launching      innovative                                         reliability, as well as our ability to   company. We value and respect
products for our customers.                                                think outside the box.                   each other.

                                                                                               10

Overview

                        Company profile

           Our future                     Our business model

                              11

Our brands and target groups

Construction industry, gardening and landscaping firms, municipal
 services, recycling, railroad/track construction, rescue services,        Agriculture, horse farming, tree nurseries etc.
                         energy sector, etc.
                                                                      12

Product range to meet the full spectrum of customer needs
             Light Equipment                                          Compact Equipment                         Services
Concrete technology           Compaction             Excavators

                                                                                                       Used machines1           Academy

                                                     Dumpers         Backhoe-loaders   Skid Steers

                                                                                                        Repair1 &              Financing
                                                                                                       Maintenance1

Demolition            Power & Lighting     Pumps

                                                     Telehandlers                      Wheel loaders
                                                                                                       Rental service1         Telematics

                                           Heating

                                                                                                          e-Store1         Concrete Solutions

        Over 250 product groups                                     More than 40 product groups               1in   selected countries

                                                                         13

Beside construction, more industries are gaining of importance
                                           Target group oriented sales:                       Business segments
Markets                              Light equipment        Compact machines
                                                                               Revenue split (2017, as %)
Agriculture
Renovation/rehabilitation
Development
Infrastructure (road and highway
construction, bridge construction)
Gardening and landscaping
Handling logistics/port logistics
Residential construction
Demolition
Maintenance/repairs
Industry & Recycling
Underground construction                                                                     Light equipment 27%
Oil & gas/energy industry                                                                    Compact equipment 52%
Events                                                                                       Services 21%
Municipalities
                                                                   14

Strategic alliances and partnerships leverage our sales

                                               Core Markets: Europe & North America
                OEM (global1)                                      OEM (global)                                Distribution (EMENA & CIS2)

  Wacker Neuson produces for Caterpillar1                 HAMM produces for Wacker Neuson                 Kramer3 distributes via JD‘s dealer network

                                                          Latin America and Asia
       OEM (Latin America)                  Distribution (Korea)                Distribution (Japan)                           Distribution (ASEAN)

 Randon produces for Wacker Neuson Wacker Neuson via Everdigm‘s network        Weidemann via ISEKI‘s network              Wacker Neuson via MHE‘s network

                                                                                                                                                      1
                                                                                                                                                      Not in Japan.
                                                                                                   2   Commonwealth of Independent States. Kramer “green line” only.
                                                                                                                                           3

                                                                          15

Focus on customer processes
Floor/cut-off saws              Breakers          Compact excavators             Wheel loaders           Rammers               Vibratory plates

     Cutting                    Breaking               Excavation                    Filling            Compaction            Asphalt compaction

                                                                       Utility

                 Light towers                                       Generators                                        Pumps

               Innovative and high quality product solutions drives working process economical and ecological – one-stop provider.
                                                                          16

Development and production sites
            Reichertshofen (GER)         Pfullendorf (GER)            Korbach (GER)             Hörsching (AT)

        Production / Academy / R&D        Production / R&D            Production / R&D          Production / R&D

             Concrete                  All-wheel steered           Articulated steered      Tracked and
              technology                 wheel loaders                wheel loaders             wheeled excavators
              Internal/external
                                        Telehandlers                Hoftracs®                Track and wheel
              vibrators, frequency
                                                                                                dumpers
              converters                                             Telehandlers
             Soil and asphalt
              compaction
              Vibratory plates,
              rollers, rammers
             Demolition
              Breakers

                                                             17

Development and production sites
           Milwaukee (USA)               Itatiba, São Paulo
                                                                       Kragujevac (Serbia)       Pinghu (China)
                                               (Brasil)
            Production / R&D                 Production                    Production               Production

       Concrete technology             Mobile generators             Premanufactured         Mini-excavators
        Trowels                                                         steel components
                                                                                                Construction
       Soil and asphalt                                                                         equipment for Asia
        compaction                                                                               in the course of
        Rammers, rollers, trench                                                                 2018
        rollers
       Utility
        Generators, pumps, heater,
        light towers, lighting
       Material handling
        Skid steer loaders,
        compact track loaders
                                                              18

Selected innovations (I)
         Excavator 803 with dual power                                Continuous overdrive gearbox

                     Emission-free and standard diesel                       • Hydrostatic large-angle drive with
                      engine; one model for two job sites.                      continuous speed control from 0 – 40 km/h.
                     Same performance with diesel or HPU                     • Maximum shear force and tractive force in
                      operation.                                                all driving and working situations.
                     HPU specially designed for excavator
                      application.
                     No limitation of working movements.

              vls / smart handling                                       Battery-driven rammers

                                                                             • Maintenance-free electric motor that is
                                                                               started at the push of a button
                                                                             • 100% emission-free work expands the
                                                                               application range (e.g. compaction in trench
                                                                               applications or in urban areas)
               Protection against overload by means of the                  • Same compaction performance as
                automatic and load-dependent down-telescoping.                 comparable gasoline-powered rammers
               Also safe for inexperienced operators                        • Low operating and energy costs
                 increased operating safety
                 clear increase in efficiency in daily use.
                                                                 19

Selected innovations (II)
         Vertical Digging System (VDS)                                           Weidemann-branded eHoftrac® 1160

                                                                                           High performance, low energy.
               Shorter digging times through exact
                vertical digging.                                                          Battery-operated electric wheel loader.
               Usual upright seating position                                             No emission of harmful substances such as
                 More productivity and greater                                             CO2, soot particles or other exhaust gases.
                efficiency                                                                 Up to 5 hours under full workload.
                 Fatigue-free working.

         Compatec compaction control                                      Excavators with extremely economical consumption

               Measurement of the relative compaction                                     30% higher productivity and 20% less fuel
                progress during compaction. Protecting the                                  consumption
                machine: avoidance of over-compaction and                                  Unique kinematics: up to 20% more
                overloading.                                                                breakout force, greater vertical cut-in depth
               Display adapts to the ambient light Ideal for                              Total angle of rotation 200 degrees
                inexperienced users, low acquisition costs.
                                                                                           Better view of the working area
               Measurement sensor on the upper mass: lower
                                                                                           Diverse options
                risk of damage, longer service life.
               Available for trench rollers and vibratory plates.
                                                                     20

Selected innovations (III)
   Kramer 5055e all-wheel drive electric wheel loader:                          Vibratory plates with low hand-arm vibrations

                      Zero emissions and extremely low noise                              Equipment operation without any time restrictions
                       levels                                                               (according to EU directive 2002/44/EG).
                      First fully electric wheel loader in the 0.55                       Comfortable working without health burden.
                       m³ bucket capacity class                                            Elimination of obligatory documentation
                      Performance, maneuverability and user                                requirement.
                       friendliness all match the conventional                             No preventative measures necessary.
                       model
                                                                                           Efficient compaction performance.
                      Cost effective

                  RT-SC3 trench roller                                      WM80 two-cycle engine for rammers and gas breakers

                       Simple detachment of attachment drums
                                                                                            Emissions fall significantly below current emission
                        to reduce the operating width from 82 cm
                                                                                             thresholds and those announced for the future.
                        to 56 cm.
                                                                                            High single stroke impact energy with low
                       Third infra-red receiving eye
                                                                                             emissions.
                       Increased maneuverability and flexibility.
                                                                                            Typical two-cycle engine: even on uneven terrain
                       The engine control module with diagnostic                            fully functional.
                        LEDs monitors machine functions.
                       Compaction control Compatec available.

                                                                       21

Wacker Neuson Group leading alternative drive technologies

              EZ17e

                                    22

Sustainability Management @ Wacker Neuson Group
      Ecology                                                                                         Society
         Energy- and resource-efficient processes in production,                     Intensive dialogue with customers / stakeholders and
          sales, logistics and administration                                          involving them in the product development process
         Tapping unused energy efficiency potentials and                             Building a reputation as an attractive employer
          reducing costs through energy and environmental
          management systems (ISO 50001, ISO 14001) and
                                                                                      Responsible interaction between colleagues
          energy use control                                                          Regular involvement in social projects (corporate
                                                                                       citizenship)
         Environmentally friendly products and solutions for
          customers (ECO products)

      Safety                                                                                          Economy
         Ensuring the highest occupational safety                                    Sustainable value chain
          standards
                                                                                      Reducing operating costs for customers through
         Operator safety and protection for customers and                             energy-efficient products (zero-emissions products)
          users
                                                                                      Legal compliance and anti-corruption
         Maintaining quality across all processes
                                                                                      Integration of management systems (quality, energy,
                                                                                       environment)

                                      Building a stronger position to meet growing challenges
                         Current sustainability report: www.wackerneusongroup.com/en/sustainability/downloads/
                                                                    23

Overview

                        Company profile

           Our future                     Our business model

                              24

Megatrends are increasing global demand for our products

                                    25

Trends driving Group business

                                                                Opportunities
Construction industry                                                    Agriculture and other sectors

 Modernization of infrastructure in mature and emerging                  Increasing global demand for food and fodder due to
  markets                                                                  population growth

 Products and services adapted to local customer requirements            Shift towards larger holdings (especially in Europe) with
                                                                           greater demand for mechanization (multifunctional equipment)
 Expansion of broadband networks (super-fast Internet)
                                                                          Increasing industrialization/automation of agricultural
 Reconstruction (renovation, modernization)                               operations, including in emerging economies
 Increase in residential and non-residential construction in             More efficient transportation of material in the industrial sector
  cities (urbanization)
                                                                          Greater emphasis on environmental protection (stricter
 Greater emphasis on environmental protection (stricter                   emissions legislation)
  emissions legislation)
                                                                          Digitalization of products and services
 Digitalization of products and services

                                                                    26

Strategy 2022

                                  Costumer Centricity: Focus – Acceleration – Excellence
Mission – What do we stand for                                                               Strategy – What drives us forward
Everything we do, think and learn is inspired by the success of our customers in
the construction and agricultural sectors. We stay close to our customers around
the world so we are always getting quicker and better at understanding their
regional needs, challenges and worksite processes. As a specialist for light and
compact equipment, we proactively offer innovative solutions, products and
services that strengthen our customers’ business success in the long term.

Vision – Where we are headed
We are the most innovative trendsetter in the industry, growing twice as fast as
the market. We are the partner of choice for our customers. Our core strengths lie
in closer customer ties, customer-centric product development, digitalization and
product/service networking. We maintain a corporate culture that values and
respects individual effort and we channel our efforts into gaining a leading position
in all areas.                                                                                Goals - How we measure success

                                                                                        27

Forecast for 2018 and goals for 2022
                                 Revenue and EBIT margins 2017–2018e–2022

      (Revenue in € m)   2.500

                                                                            >2,000
                         2.000                 +8% to +11%
                                                         1,650–1,700
                                  1,534
                         1.500

                         1.000

                                 EBIT margin                 EBIT margin    EBIT margin
                                    8.6%                     9.0 – 10.0 %      >11%
                          500

                            0

                                   2017                        2018e          2022

                                           Investments (2018e) of ~ € 60 m

                                                                  28

Great reasons for choosing Wacker Neuson Group

               Strong financial position Independence
      Long-term growth strategies Family culture
         Technology leader     Highest product and service quality

      Flexible production Sophisticated logistics
      Balanced revenue structure Cross-industry focus
   Global footprint Targeted internationalization Customer proximity
        Experienced, highly motivated employees
            Sustainable business practices Cooperations
         Unparalleled extensive portfolio
             Balanced risk profile Strong profit margins

                                        29

Financial calendar and IR contact
                                              Financial Calendar

       March 20, 2018     Publication of annual report 2017

       May 8, 2018        Publication of Q1 report 2018

       May 30, 2018       AGM, Munich

       August 7, 2018     Publication half-year report 2018

       November 8, 2018   Publication of Q3 report 2018

                                                   IR contact
                                           Investor Relations Department
                                     Preussenstrasse 41, 80809 Munich, Germany
                                   Phone: +49-89-35402-173, Fax: +49-89-35402-298
                                               ir@wackerneuson.com

                                                          30

Disclaimer
Cautionary 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.

                                                              31

Appendix

           32

Concrete technology

                      33

Concrete technology

                      34

Trowels

          35

Compaction

             36

Cutting & Breaking

                     37

Heaters

          38

Pumps

        39

Power and light

                  40

Compact machines

                   41

Attachments

              42