Impact of economic conditions on business performance

Market environment slightly weaker

The overall economic climate in 2018 was not quite as upbeat as in 2017. Although the prices of oil and commodities rose again last year, they weakened slightly in the second half of the year in line with the global economic trend. Nevertheless, investment activity in DEUTZ’s main application segments and regions remained brisk. Our Company registered a much higher volume of new orders as a result.

DEUTZ’s revenue rose at a much faster rate than the global economy as a whole last year. GDP growth in the USA was higher than in 2017. Demand for construction equipment, material handling equipment and agricultural machinery increased only moderately in North America, however. Despite this, our revenue in the Americas region advanced by a substantial 26.0 per cent.

In 2018, China’s economy did not expand quite as strongly as in the prior year. The markets for construction equipment and material handling managed to make significant gains nonetheless. The amount of revenue generated by DEUTZ in the Asia-Pacific region rose by 10.9 per cent in line with this trend. There was a significant decline in the agricultural machinery sector, however.

Economic activity in the eurozone expanded moderately last year; this was reflected in the markets for construction equipment and material handling, which are DEUTZ’s main customer segments. By contrast, the market for agricultural machinery contracted. Despite this, revenue in our largest market, EMEA (Europe, Middle East and Africa), climbed by a substantial 20.1 per cent in 2018.

DEUTZ thus outperformed the market in virtually all regions and application segments during the reporting year. It should be noted here that DEUTZ benefited from the effects – in relation to around 20,000 engines – of spending being brought forward in 2018 due to the introduction of the EU Stage V emissions standard.