DGAP-News

DEUTZ AG: DEUTZ generates further growth in first quarter of 2022

DGAP-News: DEUTZ AG / Key word(s): Quarter Results/Miscellaneous DEUTZ AG: DEUTZ generates further growth in first quarter of 2022 05.05.2022 / 07:30 The issuer is solely responsible for the content of this announcement. Rise in orders on hand to around €750 million Significant improvement in adjusted EBIT New revenue target defined for the profitable service business: €500 million by 2025 Restructuring of the Group’s funding Cologne, May 5, 2022 – DEUTZ, one of the world’s leading manufacturers of innovative drive systems for off-highway applications, can look back on a highly promising start to 2022 despite the outbreak of war in Ukraine.

“With revenue rising by around 30 percent, our adjusted EBIT margin increased by 3.3 percentage points compared with the prior-year quarter to reach 3.5 percent. Now we need to sustain and accelerate this uptrend. We will resolutely implement further measures aimed at boosting our profitability,” says CEO Dr. Sebastian C. Schulte. Turning to the year ahead, he adds: “Our orders on hand climbed to around three-quarters of a billion euros at the end of March. That provides a stable starting position for the coming months. However, the supply situation remains challenging. At the same time, the geopolitical impact of the war in Ukraine creates a lot of uncertainty, including for DEUTZ. Our forecast is therefore still subject to change.”

DEUTZ also made progress from a strategic perspective in the first few months of this year. It has initiated a multi-phase strategy process aimed at increasing its profitability and unlocking potential for growth. The first targets have been defined: revision of the pricing structure for the new engine business, optimization of the engine portfolio, and accelerated expansion of the profitable service business. The aim is to increase service revenue to €500 million by 2025 as a result of organic growth and through acquisitions. Two acquisitions have already taken place: At the start of May, DEUTZ acquired its former service partners AUSMA Motorenrevisie B.V., which is headquartered in Roden, Netherlands, and South Coast Diesels, based in Naas, Ireland. The two companies sell and service diesel engines in their home markets, where they operate as multi-brand dealers. As well as improved market penetration, the acquisitions will enable DEUTZ to expand its service business in these countries to include competitors’ engines.