basic principles and business performance of DEUTZ AG

DEUTZ AG is the parent company of the DEUTZ Group. At home and abroad, DEUTZ AG has a direct or indirect stake in 31 companies (2017: 34 companies). DEUTZ AG is also by far the largest production company of the DEUTZ Group and provides the head-office functions for the Group. For details of DEUTZ AG’s equity investments, please see the list of shareholdings of the annual report.

Because the business performance of DEUTZ AG and the economic environment in which it operates are essentially the same as for the DEUTZ Group, we make reference here to the ‘Business performance in the DEUTZ Group’ section of this combined management report.

Because of the significance of DEUTZ AG within the Group, and its heavy interdependencies with other Group companies, the Group is managed at the level of DEUTZ AG. In addition to the key performance indicators used for management at Group level, the net income of DEUTZ AG, as the relevant variable in the payment of dividends, is also an element of the management system of the Company. The internal management system for the DEUTZ Group is described in this combined management report. The DEUTZ Group’s net income in accordance with IFRS is reconciled to DEUTZ AG’s net income in accordance with the HGB:

DEUTZ AG: Reconciliation

€ million  
DEUTZ Group net income (IFRS) 69.9
Consolidation of equity investments –50.2
DEUTZ AG income (IFRS) 19.7
Material differences due to different financial reporting standards  
Recognition of development expenditure 28.0
Measurement of provisions for pensions and other post-retirement benefits –10.5
Recognition of deferred taxes –6.4
Other differences relating to the financial reporting standards 1.0
DEUTZ AG net income (HGB) 31.8