Capital expenditure

After deducting investment grants, capital expenditure on property, plant and equipment and on intangible assets totalled €80.1 million in 2018, which was €7.9 million more than in the previous year (2017: €72.2 million). This was broken down into €54.8 million (2017: €34.9 million) on property, plant and equipment and €25.3 million (2017: €37.3 million) on intangible assets.

Additions to property, plant and equipment mainly related to a change in supplier, the relocation of the 2011 engine series from Cologne-Porz to Ulm and the new TCD 2.2 engine series. We also invested in new and more efficient testing equipment as well as replacement machinery.

Capital expenditure on intangible assets mainly related to the development of the new TCD 2.2 engine series and the adaptation of our engines to meet the new Stage V emissions standard for Europe.

Before the capitalisation of development expenditure, capital investment amounted to €59.1 million (2017: €54.7 million). This was only slightly below our forecast range of €60 million to €70 million. Capitalised development expenditure, at €21.0 million (2017: €17.5 million), was within the range that we had anticipated (€20 million to €25 million).

The bulk of the total capital expenditure after deducting investment grants – €69.5 million – was invested in the DEUTZ Compact Engines segment (2017: €51.7 million). Capital expenditure in DEUTZ Customised Solutions stood at €8.4 million (2017: €20.1 million). Capital expenditure in the Other segment amounted to €2.2 million (2017: €0.4 million). As in the prior year, this relates to capital expenditure by Torqeedo.