Overall assessment for 2018

From an operational and strategic perspective, DEUTZ can consider 2018 a success. We made significant progress with the E-DEUTZ strategy, proving our expertise in the electrification of customer equipment by demonstrating fully operational systems during the ELECTRIP Event Week in September 2018. An interdisciplinary team comprising engineers from Torqeedo and DEUTZ managed to develop two prototypes in less than six months. We thus showed that DEUTZ has mastered the technology and is in a position to supply marketable electrification solutions to its customers. DEUTZ is restructuring its market presence in China. Under a three-pillar strategy based around planned alliances with major Chinese companies, namely SANY, HORIZON and BEINEI, we will be looking to drive growth in the world’s biggest individual market for engines and achieve long-term success.

Orders on hand exhibited a very strong trend in all regions and all off-highway application segments in 2018. Against this backdrop, new orders increased by a substantial 25.4 per cent to €1,952.6 million. Revenue and profitability also improved in 2018, despite the detrimental effect on production of a strike at a supplier. We were largely able to contain the negative impact of this by adapting our production plans at an early stage. On 27 July 2018, DEUTZ AG either reiterated or raised its forecast for 2018. We projected a sharp rise in revenue to more than €1.6 billion and an EBIT margin before exceptional items of at least 4.5 per cent. Previously, DEUTZ had raised the prospect only of a sharp rise in revenue and a moderate improvement in the EBIT margin. The raised forecasts were either fully achieved or exceeded. Revenue in 2018 went up by 20.3 per cent to €1,778.8 million. Operating profit (EBIT before exceptional items) advanced to €82.0 million in the reporting year, an increase of more than 100 per cent that comfortably outstripped revenue growth. This was because of the higher volume of business and the resulting economies of scale as well as positive effects from the efficiency programme. The EBIT margin (before exceptional items) improved to 4.6 per cent (2017: 2.7 per cent).