Overview of 2018

Significantly better key financials

2018 was a very successful year for DEUTZ AG. New orders went up by just over a quarter on the figure achieved in 2017 to reach €1,952.6 million. We sold 214,776 engines and increased our revenue by 20.3 per cent to €1,778.8 million. Operating profit (EBIT before exceptional items) more than doubled due to the increase in business volume, going up by €42.3 million to reach €82.0 million. As a result, the EBIT margin before exceptional items rose significantly from 2.7 per cent to 4.6 per cent. This underlines the success of the steps that we have taken to improve profitability.

E-DEUTZ strategy bearing fruit

Our primary objective of becoming the world’s leading manufacturer of innovative drive systems is unchanged. The electrification of our product range is playing a crucial role here. The E-DEUTZ strategy combines DEUTZ’s low-emission engines with electric drives, and its launch represents an important step forward for the Company. Last year, engineers from DEUTZ and Torqeedo managed to develop two E-DEUTZ prototypes in less than six months. We presented these fully functioning telescopic handlers at our ELECTRIP event in September 2018 in Cologne, and in doing so provided further evidence of our Company’s leadership in technology for off-highway applications.

Modular product system meets all requirements

DEUTZ is able to deliver the optimum drive system for customers’ individual requirements by drawing on its modular product system. And thanks to our long-standing expertise, we are in a position to exploit a range of technologies and combine them to meet these requirements. As well as our conventional diesel engines and the new E-DEUTZ drives, this will also encompass the use of alternative fuels. From 2019, for example, we will be launching two LPG engines. In addition, the Munich start-up Keyou recently unveiled a DEUTZ prototype engine that has been converted to utilise hydrogen.

New three-pillar growth strategy for China

Following the sale of our 50 per cent stake in the DEUTZ Dalian joint venture in November 2018, we are now taking an entirely new approach in China. To this end, we have developed a three-pillar growth strategy that will allow us to establish local production operations and achieve long-term success in this fast-growing market. The first pillar of the strategy entails founding a production-focused joint venture with SANY, the biggest construction equipment manufacturer in China, in which DEUTZ AG is set to hold a 51 per cent stake. A contract manufacturing alliance with China’s oldest diesel engine manufacturer, BEINEI, constitutes the second pillar. Under the third pillar, we will be teaming up with HORIZON, China’s largest construction equipment rental company, in order to expand our service network. This will also open the door to progressing the digitalisation of our service business at local level.