DEUTZ reports rise in revenue and earnings

Off-highway diesel engine maker DEUTZ says it can look back on a successful 2021, with revenue and earnings both significantly up on the previous year.
Ancillary Equipment / May 9, 2022
By Liam McLoughlin
 DEUTZ says its strong 2021 results were driven by customers being very willing to invest
DEUTZ says its strong 2021 results were driven by customers being very willing to invest

The German company achieved its guidance, which it had most recently raised in September 2021.

At €2,012.6m in 2021, DEUTZ’s new orders were up by 52.2% compared with 2020, which had been heavily affected by coronavirus.

It says this growth can be explained by customers being very willing to invest, reflected in double-digit percentage increases across all application segments and regions. DEUTZ adds that the exceptionally strong rise was also attributable to one-off effects of spending brought forward in June and September, which amounted to more than €100m.

This situation came about mainly because of customer orders being brought forward in response both to price adjustments and to longer lead times.

As at December 31, 2021, orders on hand stood at €676.7m (December 31, 2020: €269.0m), which indicates continued growth. The proportion of orders on hand attributable to the service business stood at €35.7m (December 31, 2020: €24.4m).

With a total of 201,283 engines sold, the DEUTZ Group registered an increase in unit sales of 33.4% in the reporting period. The number of DEUTZ engines sold rose by 32.9% to 160,882.

Reflecting the growth in unit sales, DEUTZ generated consolidated revenue of €1,617.3m in 2021. All application segments contributed to this year-on-year growth of 24.8%. Service revenue rose by 15.7% to €403.1m in the reporting period.

CEO Dr. Sebastian C. Schulte said DEUTZ increased its revenue by almost 25% to €1.62bn and improved EBIT (earnings before interest and taxes) margin before exceptional items by around 8 percentage points to 2.3%.

"The book-to-bill ratio stood at 1.24 at the end of the year," Schulte added. "At the same time, we made substantial progress with transforming our business to focus more on alternative, green drive systems.

"Our hydrogen engine is just one example of how DEUTZ is positioning itself in the field of off-highway drive technologies for a sustainable future."

Commenting on the current year, he adds: “The supply situation remains difficult, and we anticipate that the supply chain will continue to contribute to the pressure on margins. Moreover, nobody can predict the economic impact of the war between Russia and Ukraine. We are therefore preparing for a challenging year.”

To report more transparently on its transformation, DEUTZ says it introduced a new Green segment on January 1, 2022 that will cover all activities connected with the development and production of new non-diesel drives. The new reporting structure will be used for the first time in connection with the results for the first quarter of 2022.

DEUTZ says its guidance for 2022 is under review due to significant uncertainty: "The geopolitical impact of the war between Russia and Ukraine on the global economy and on the flow of goods around the world is highly uncertain.

"Fortunately, none of DEUTZ’s direct suppliers are located in these regions. Also our direct business activities in the regions affected by the war account for a relatively small portion of our revenue. But the indirect impact for the DEUTZ business is currently impossible to assess. We therefore have put the guidance as published in our annual report 2021 under review. All new engine business with Russia and Belarus has been discontinued until further notice."

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