RCS - Deutz AG - DEUTZ holds its own in a difficult environment
20/03/2025 09:00
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RNS Number : 4653B Deutz AG 20 March 2025
DEUTZ AG / Key word(s): Annual Results
DEUTZ holds its own in a difficult environment
20.03.2025 /
The issuer is solely responsible for the content of this announcement.
· Adjusted guidance fully achieved, adjusted EBIT comfortably in
positive territory despite weak economy, slight increase in new orders
· Portfolio development and efficiency measures are increasingly
paying off
Cologne, March 20, 2025 - DEUTZ felt the effects of the persistent, cyclical
weakness in demand in 2024, but nevertheless ended the year successfully
following a stable fourth quarter. This is shown by the results published
today, according to which DEUTZ has met the guidance, as adjusted in October
2024. With revenue down by 12.1% to €1,813.7 million, the Company achieved
adjusted earnings (EBIT before exceptional items) of €76.7 million. This
corresponds to an adjusted EBIT margin of 4.2%, which is a level of margin
that DEUTZ had previously achieved only when production was running at
significantly higher capacity utilization. At €1,827.1 million, new orders
were 4.4% higher than in the previous year, mainly due to the successful
development of the portfolio. In 2024, DEUTZ acquired the US genset
manufacturer Blue Star Power Systems and took over the off-highway business
for selected Daimler Truck engines from Rolls-Royce Power System. In addition,
the sale of the loss-making subsidiary Torqeedo, which was completed in spring
2024, relieved a considerable amount of pressure on the Group's results.
"The economic environment took a considerable toll on us over the past
financial year, as demonstrated by a look at practically all of our sales
markets. The good news is that we are making money even in these difficult
times," explains DEUTZ CEO Dr. Sebastian C. Schulte. "Our strategy of putting
DEUTZ on a progressively broader and more resilient footing is already paying
off. We will therefore position ourselves even more strongly as a solution
provider along the value chains we are familiar with. At the same time, we see
considerable potential for further profitable expansion of our business with
traditional internal combustion engines and our service business."
The core of the Dual+ strategy, which was further developed in 2024, is a
greater diversification of the portfolio. By entering the market for
decentralized energy supply, adopting a demand-driven position in the field of
alternative drive systems and expanding its global service business, DEUTZ has
already reached some important milestones. As the Company continues to
implementof the strategy, it aims to increase revenue to around €4 billion
by 2030.
DEUTZ also began implementing an efficiency program over the past financial
year with the aim of strengthening its profitability. The program is intended
to achieve a reduction of 300 jobs with minimum social impact and to reduce
operating costs, thus going beyond the measures taken at short notice in 2024.
The aim is to reduce costs on a sustainable basis by the end of 2026.
"The cost-cutting measures that we introduced at short notice led to savings
of just over €15 million last year. Our task now is to expand the measures
already taken and to consolidate them. And this is precisely the objective of
our Future Fit program, under which we intend to achieve a lasting reduction
in our cost base of €50 million per year," explains DEUTZ CFO Oliver Neu,
who is overseeing the program in cooperation with an interdisciplinary team.
Dividend proposal for the 2024 financial year
To enable shareholders to benefit from the earnings growth, the Board of
Management and the Supervisory Board will propose to the Annual General
Meeting on May 8, 2025 that a dividend of €0.17 per share (2023: €0.17) be
paid from accumulated income for the 2024 financial year, meaning that DEUTZ
would have maintained a constant dividend for at least four years. This would
equate to a dividend ratio( 1 ) of just over 40%.
Detailed figures for 2024( 2 )
At €1,827.1 million, the DEUTZ Group's new orders in the 2024 financial year
were 4.4% higher than in the previous year (2023: €1,749.9 million). This
increase is mainly because the cyclical decline in demand in the preceding
quarters was more than offset by positive consolidation effects.
Orders on hand totaled €463.9 million at the end of 2024 and were thus
slightly up on the previous year's figure by €13.5 million (2023: €450.4
million), partly due to the acquisition of Blue Star Power Systems and the
acquisition of Rolls-Royce Power Systems' off-highway business relating to
selected Daimler Truck engines.
With new orders in decline since the end of 2023 due to the economic downturn,
DEUTZ recorded a significant year-on-year decline in unit sales of 23.9% to
142,084 engines sold in the Classic segment (2023: 186,718).
As a result of the decline in unit sales, revenue fell by 12.1% to €1,813.7
million in the same period (2023: €2,063.2 million). The significantly
smaller decline in revenue compared with unit sales is mainly due to the
fact that the acquisition of Blue Star Power Systems and the aforementioned
takeover of Rolls-Royce Power Systems' business activities led to a higher
price per unit sold, and the expansion of the service business is not
reflected in unit sales.
The revenue contribution of genset manufacturer Blue Star Power Systems, which
has been consolidated since August 2024, amounted to just over €60 million
in 2024 and has thus more than met expectations so far. DEUTZ had forecast
revenue of more than US$ 100 million per year when the acquisition was
announced.( 3 ) The revenue contribution of the former Rolls-Royce Power
Systems activities, which have also been consolidated since August and
comprise various Daimler Truck industrial engines, amounted to around €80
million.
Adjusted EBIT (EBIT before exceptional items) amounted to €76.7 million in
the reporting period (2023: €143.6 million). This decrease is mainly due to
the decline in revenues as a result of the weak economic environment and a
lower production volume in the Classic segments resulting in diseconomies of
scale in production. In contrast, acquisitions particular had a particularly
positive effect on earnings. In addition, measures to reduce costs and
increase efficiency, as well as lower research and development costs, further
mitigated the volume-related impact on earnings. The adjusted EBIT
margin was 4.2% (2023: 7.0%).
Net income fell to €42.0 million in the 2024 financial year (2023: €106.9
million), reducing earnings per share to €0.32 (2023: €0.86). Earnings
for the entire Group( 4 ) amounted to €51.8 million in 2024 (2023: €81.9
million). The corresponding earnings per share were thus €0.39 (2023:
€0.66). Earnings per share before exceptional items amounted to €0.55
(2023: €0.82).
Cash flow from operating activities amounted to €110.4 million in the 2024
financial year (2023: €151.5 million). The year-on-year decline is due in
particular to lower earnings as a result of the decline in revenue. At
€247.0 million, net cash used for investing activities was significantly
higher than in the previous year (2023: €96.0 million). As a result of the
continued implementation of strategically important growth projects, payments
for acquisitions increased by €151.0 million year on year and had a negative
impact on cash flow of €183.1 million. Excluding M&A activities, net
cash used for investing activities amounted to €63.9 million (2023: €64.9
million). Due to the increase in net cash used for investing activities,
free cash flow decreased year-on-year to minus €153.1 million (2023: plus
€41.8 million). Free cash flow before M&A was €30.0 million (2023:
€72.9 million) as a result of the decline in cash flow from operating
activities.
Due to the increase in cash flow from investing activities, free cash
flow decreased year-on-year to €153.1 million (2023: €41.8
million). Free cash flow before M&A was €30.0 million (2023: €72.9
million) as a result of the decline in cash flow from operating activities.
The equity ratio was 50.4% as at December 31, 2024 (December 31, 2023:
46.7%).( 5 ) In addition to the net income for the period, this increase was
also due to the capital increase of around €71 million in the period under
review.
Guidance for 2025
Assuming a tangible market recovery in the second half of 2025, but before
assessing the announced increase in US import tariffs, DEUTZ expects revenue
of between €2.1 billion and €2.3 billion for the 2025 financial year,
accompanied by an EBIT margin before exceptional items (adjusted EBIT margin)
of between 5.0% and 6.0%.( 6 ) Free cash flow before M&A expenditure is
expected to be in the mid-double-digit millions of euros.
DEUTZ Group: Overview (continuing activities)( 7 )
€ million
2024 2023 Change Q4 2024 Q4 2023 Change
New orders 1.827,1 1.749,9 4,4 % 480,9 351,0 37,0%
Unit sales (units) 142.907 187.116 -23,6 % 35.557 49.557 -28,3 %
Revenue 1.813,7 2.063,2 -12,1 % 507,8 556,0 -8,7 %
Adjusted EBIT 76,7 143,6 -46,6 % 19,4 37,0 -47,6 %
(before exceptional items)
EBIT margin 4,2 % 7,0 % -2,8 PP 3,8 % 6,7 % -2,9 PP
(before exceptional items)
Exceptional items -34,8 -20,1 -73,1 % -17,5 -19,4 9,8%
EBIT 41,9 123,5 -66,1 % 1,9 17,6 -89,2%
Free cash flow (before M&A) 30,0 72,9 -58,8 % 58,6 63,5 -7,7 %
Net financial position (as at Dec. 31)( 8 ) -225,6 -163,4 -38,1 %
Capital expenditure 100,2 114,5 -12,5 % -124,7 9,2 -
(after deducting grants)( 9 )
R&D ratio( 10 ) 5,1 % 4,7 % +0,4 PP
R&D expenditure 93,4 97,9 -4,6 % 23,3 31,1 -25,1 %
(after deducting grants)
Employees (as at Dec. 31)( 11 ) 5.228 5.084 2,8 %
DEUTZ Group: Overview (entire Group)
€ million
2024 2023 Change Q4 2024 Q4 2023 Change
Revenue 1.821,3 2.104,8 -13,5 % 507,8 564,8 -10,1 %
Adjusted EBIT 76,7 120,4 -36,3 % 19,4 27,7 -30,0 %
(before exceptional items)
EBIT margin 4,2 % 5,7 % -1,5 PP 3,8 % 4,9 % -1,1 PP
(before exceptional items)
Exceptional items -25,5 -20,1 -26,9 % -17,9 -19,4 7,7%
EBIT 51,2 100,3 -49,0 % 1,5 8,3 -81,9%
Net income 51,8 81,9 -36,8 % 18,0 16,0 12,5 %
Earnings per share 0,55 0,82 -32,9 %
(before exceptional items, €)
Earnings per share (€) 0,39 0,66 -40,9 %
Equity (as at Dec. 31) 847,9 743,2 14,1 %
Equity ratio 50,4 % 46,7 % +3,7 PP
Free cash flow (before M&A) 20,8 57,8 64,0 % 58,2 61,0 -4,6 %
R&D ratio( 12 ) 5,1 % 4,9 % +0,2 PP 5,1 % 4,9 % +0,2 PP
Employees (as at Dec. 31)( 13 ) 5.228 5.284 -1,1 %
DEUTZ Classic: Overview (continuing activities)( 14 )
€ million
2024 2023 Change Q4 2024 Q4 2023 Change
New orders 1.819,6 1.743,2 4,4 % 479,5 350,6 36,8 %
Unit sales (units) 142.084 186.718 -23,9 % 35.255 49.187 -28,3 %
Revenue 1.806,0 2.058,2 -12,3 % 505,3 554,2 -8,8 %
Adjusted EBIT 113,1 180,1 -37,2 % 30,7 48,1 -36,2 %
(before exceptional items)
EBIT margin 6,3 % 8,8 % -2,5 PP 6,1 % 8,7 % -2,6 PP
(before exceptional items)
DEUTZ Green: Overview (continuing activities)( 15 )
€ million
2024 2023 Change Q4 2024 Q4 2023 Change
New orders 7,5 6,7 11,9 % 1,4 0,4 250,0 %
Unit sales (units) 823 398 106,8 % 302 370 -18,4 %
Revenue 7,7 5,0 54,0 % 2,5 1,8 38,9 %
Adjusted EBIT -35,3 -37,1 4,9 % -9,8 -11,5 14,8 %
(before exceptional items)
EBIT margin -458,4 % -800,0 % +283,6 PP -392,0 % -638,9 % +246,9 PP
(before exceptional items)
The annual report 2024 is available at www.deutz.com/en/investor-relation
(https://www.deutz.com/en/investor-relations/?li_ed=CwEAAAGVn19Z7T0ckyLgpRCbA1W-irYe01beWgd9YxJ7Bq9GQkOBaJ93GBgi5819FCQtdqgwbjzAAfcYPCBrghwZzWSJrldtOg1B5A&li_fat_id=277d5aa3-1098-4143-95d9-a661f13d68dd&cHash=933707baec9c901b6f27cd6c7663d549)
s
(https://www.deutz.com/en/investor-relations/?li_ed=CwEAAAGVn19Z7T0ckyLgpRCbA1W-irYe01beWgd9YxJ7Bq9GQkOBaJ93GBgi5819FCQtdqgwbjzAAfcYPCBrghwZzWSJrldtOg1B5A&li_fat_id=277d5aa3-1098-4143-95d9-a661f13d68dd&cHash=933707baec9c901b6f27cd6c7663d549)
.
To commemorate the 125th anniversary of its initial stock market listing,
DEUTZ AG and its Board of Management will be guests at Deutsche Börse's
morning bell-ringing ceremony on March 20, 2025. From 11.30 a.m., pictures of
the ceremony and quotes from our Board members will be available under the
following link: https://www.deutz.com/en/news/media-center/
(https://www.deutz.com/en/news/media-center/125-years-stock-market)
125-years-stock-market
(https://www.deutz.com/en/news/media-center/125-years-stock-market)
Upcoming financial dates:
April 30, 2025: Quarterly statement for the first quarter of 2025
May 8, 2025: Annual General Meeting (virtual)
August 7, 2025: Interim report for the first half of 2025
For further information on this press release, please contact:
DEUTZ AG | Mark C. Schneider | Head of Investor Relations, Communications
& Marketing
Tel. +49 (0) 221 822-3600 | Mark.Schneider@deutz.com
DEUTZ AG | Svenja A. Deißler | Senior Manager Investor Relations & ESG
Tel. +49 (0) 221 822-2491 | Svenja.Deissler@deutz.com
( 1 ) Calculation based on the result for the entire Group, including
discontinued and continuing operations.
( 2 ) Unless otherwise noted, all figures shown below are for continuing
operations only.
( 3 ) See ad hoc disclosure of June 27, 2024.
( 4 ) Incl. discontinued operations.
( 5 ) Disclosures related to the entire Group, i.e. including discontinued
operations.
( 6 ) In addition to the stated revenue corridor, the range reflects that
cost-saving measures will more than compensate for inflationary effects such
as the collective bargaining agreement of end of 2024 and that raw material
and energy prices will remain stable in 2025; any costs in connection with the
cost program are classified as exceptional items.
( 7 ) In accordance with IFRS 5, continuing operations exclude the Torqeedo
Group.
( 8 ) Cash and cash equivalents less current and non-current interest-bearing
financial debt.
( 9 ) Capital expenditure on property, plant and equipment (including
right-of-use assets in connection with lease) and intangible assets, excluding
capitalization of R&D.
( 10 ) Research and development expenditure (after subsidies) in relation to
sales revenue.
( 11 ) Number of employees in FTE (Full Time Equivalent).
( 12 ) Research and development expenditure (after subsidies) in relation to
sales revenue.
( 13 ) Number of employees in FTE (Full Time Equivalent).
( 14 ) In accordance with IFRS 5, continuing operations exclude the Torqeedo
Group.
( 15 ) In accordance with IFRS 5, continuing operations exclude the Torqeedo
Group.
20.03.2025 CET/CEST Dissemination of a Corporate News, transmitted by EQS News
- a service of EQS Group.
The issuer is solely responsible for the content of this announcement.
The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com
DEUTZ Classic: Overview (continuing activities)( 14 )
€ million
2024 2023 Change Q4 2024 Q4 2023 Change
New orders 1.819,6 1.743,2 4,4 % 479,5 350,6 36,8 %
Unit sales (units) 142.084 186.718 -23,9 % 35.255 49.187 -28,3 %
Revenue 1.806,0 2.058,2 -12,3 % 505,3 554,2 -8,8 %
Adjusted EBIT 113,1 180,1 -37,2 % 30,7 48,1 -36,2 %
(before exceptional items)
EBIT margin 6,3 % 8,8 % -2,5 PP 6,1 % 8,7 % -2,6 PP
(before exceptional items)
DEUTZ Green: Overview (continuing activities)( 15 )
€ million
2024 2023 Change Q4 2024 Q4 2023 Change
New orders 7,5 6,7 11,9 % 1,4 0,4 250,0 %
Unit sales (units) 823 398 106,8 % 302 370 -18,4 %
Revenue 7,7 5,0 54,0 % 2,5 1,8 38,9 %
Adjusted EBIT -35,3 -37,1 4,9 % -9,8 -11,5 14,8 %
(before exceptional items)
EBIT margin -458,4 % -800,0 % +283,6 PP -392,0 % -638,9 % +246,9 PP
(before exceptional items)
The annual report 2024 is available at www.deutz.com/en/investor-relation
(https://www.deutz.com/en/investor-relations/?li_ed=CwEAAAGVn19Z7T0ckyLgpRCbA1W-irYe01beWgd9YxJ7Bq9GQkOBaJ93GBgi5819FCQtdqgwbjzAAfcYPCBrghwZzWSJrldtOg1B5A&li_fat_id=277d5aa3-1098-4143-95d9-a661f13d68dd&cHash=933707baec9c901b6f27cd6c7663d549)
s
(https://www.deutz.com/en/investor-relations/?li_ed=CwEAAAGVn19Z7T0ckyLgpRCbA1W-irYe01beWgd9YxJ7Bq9GQkOBaJ93GBgi5819FCQtdqgwbjzAAfcYPCBrghwZzWSJrldtOg1B5A&li_fat_id=277d5aa3-1098-4143-95d9-a661f13d68dd&cHash=933707baec9c901b6f27cd6c7663d549)
.
To commemorate the 125th anniversary of its initial stock market listing,
DEUTZ AG and its Board of Management will be guests at Deutsche Börse's
morning bell-ringing ceremony on March 20, 2025. From 11.30 a.m., pictures of
the ceremony and quotes from our Board members will be available under the
following link: https://www.deutz.com/en/news/media-center/
(https://www.deutz.com/en/news/media-center/125-years-stock-market)
125-years-stock-market
(https://www.deutz.com/en/news/media-center/125-years-stock-market)
Upcoming financial dates:
April 30, 2025: Quarterly statement for the first quarter of 2025
May 8, 2025: Annual General Meeting (virtual)
August 7, 2025: Interim report for the first half of 2025
For further information on this press release, please contact:
DEUTZ AG | Mark C. Schneider | Head of Investor Relations, Communications
& Marketing
Tel. +49 (0) 221 822-3600 | Mark.Schneider@deutz.com
DEUTZ AG | Svenja A. Deißler | Senior Manager Investor Relations & ESG
Tel. +49 (0) 221 822-2491 | Svenja.Deissler@deutz.com
( 1 ) Calculation based on the result for the entire Group, including
discontinued and continuing operations.
( 2 ) Unless otherwise noted, all figures shown below are for continuing
operations only.
( 3 ) See ad hoc disclosure of June 27, 2024.
( 4 ) Incl. discontinued operations.
( 5 ) Disclosures related to the entire Group, i.e. including discontinued
operations.
( 6 ) In addition to the stated revenue corridor, the range reflects that
cost-saving measures will more than compensate for inflationary effects such
as the collective bargaining agreement of end of 2024 and that raw material
and energy prices will remain stable in 2025; any costs in connection with the
cost program are classified as exceptional items.
( 7 ) In accordance with IFRS 5, continuing operations exclude the Torqeedo
Group.
( 8 ) Cash and cash equivalents less current and non-current interest-bearing
financial debt.
( 9 ) Capital expenditure on property, plant and equipment (including
right-of-use assets in connection with lease) and intangible assets, excluding
capitalization of R&D.
( 10 ) Research and development expenditure (after subsidies) in relation to
sales revenue.
( 11 ) Number of employees in FTE (Full Time Equivalent).
( 12 ) Research and development expenditure (after subsidies) in relation to
sales revenue.
( 13 ) Number of employees in FTE (Full Time Equivalent).
( 14 ) In accordance with IFRS 5, continuing operations exclude the Torqeedo
Group.
( 15 ) In accordance with IFRS 5, continuing operations exclude the Torqeedo
Group.
20.03.2025 CET/CEST Dissemination of a Corporate News, transmitted by EQS News
- a service of EQS Group.
The issuer is solely responsible for the content of this announcement.
The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com
Language: English
Company: DEUTZ AG
Ottostraße 1
51149 Köln (Porz-Eil)
Germany
Phone: +49 (0)221 822 2491
Fax: +49 (0)221 822 3525
E-mail: svenja.deissler@deutz.com
Internet: www.deutz.com
ISIN: DE0006305006
WKN: 630500
Indices: SDAX
Listed: Regulated Market in Dusseldorf, Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Hamburg, Hanover, Munich, Stuttgart, Tradegate
Exchange
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