DEUTZ AG QUARTERLY STATEMENT Q1 2024 | OVERVIEW OF KEY FIGURES
DEUTZ GROUP: OVERVIEW (continued operations)1
€ million
Q1 2024 | Q1 20232 | Change | ||||
New orders | 419.2 | 515.8 | -18.7% | |||
Unit sales (units) | 38,242 | 46,110 | -17.1% | |||
Revenue | 454.7 | 507.0 | -10.3% | |||
EBITDA | 46.1 | 59.2 | -22.1% | |||
EBITDA (before exceptional items) | 50.0 | 59.2 | -15.5% | |||
EBIT | 23.8 | 36.8 | -35.3% | |||
thereof exceptional items | -3.9 | 0.0 | - | |||
EBIT margin (%) | 5.2 | 7.3 | -2.1 pp | |||
Adjusted EBIT margin (before exceptional items) | 27.7 | 36.8 | -24.7% | |||
EBIT margin (before exceptional items, %) | 6.1 | 7.3 | -1.2 pp | |||
Net income | 16.5 | 28.8 | -42.7% | |||
Earnings per share (€) | 0.13 | 0.24 | -45.8% | |||
Earnings per share (before exceptional items, €) | 0.16 | 0.24 | -33.3% | |||
Free cash flow3 | 5.1 | 14.3 | -64.3% | |||
Net financial position (March 31/ December 31)4 | -171.9 | -163.4 | -5.2% | |||
Working capital5 | 389.9 | 328.5 | 18.7% | |||
Working capital ratio (average, %)6 | 18.9 | 16.1 | +2.8 pp | |||
Capital expenditure (after deducting grants)7 | 19.8 | 67.5 | -70.7% | |||
Employees (number as at March 31)8 | 5,122 | 4,835 | 5.9% |
DEUTZ GROUP: OVERVIEW (Overall view - management view)
Revenue
Adjusted EBIT margin (before exceptional items)
EBIT margin (before exceptional items, %)
Net income
Earnings per share (€)
Equity (March 31/December 31)
Equity ratio (%)
Free cash flow
Working capital
Working capital ratio (average, %)
Employees (number as at March 31)
DEUTZ Classic (continued operations)
Q1 2024 | Q1 2023 | Change | ||||
New orders (€ million) | 418.3 | 515.0 | -18.8% | |||
Unit sales (units) | 38,054 | 46,104 | -17.5% | |||
Revenue (€ milltion) | 453.5 | 506.1 | -10.4% | |||
Adjusted EBIT (€ million) | 37.2 | 44.4 | -16.2% | |||
Adjusted EBIT margin (%) | 8.2 | 8.8 | -0.6 pp |
462.4 | 517.2 | -10.6% | |||||||||||
27.7 | 32.1 | -13.7% | |||||||||||
6.0 | 6.2 | -0.2 pp | |||||||||||
8.8 | 23.8 | -63.0% | |||||||||||
0.07 | 0.20 | -65.0% | |||||||||||
752.8 | 743.2 | 1.3% | |||||||||||
47.3 | 46.7 | +0.6 pp | |||||||||||
-1.4 | 10.8 | - | |||||||||||
415.4 | 359.1 | 15.7% | |||||||||||
19.9 | 17.2 | +2.7 pp | |||||||||||
5,322 | 5,029 | 5.8% | |||||||||||
DEUTZ Green (continued operations) | |||||||||||||
Q1 2024 | Q1 2023 | Change | |||||||||||
New orders (€ million) | 0.9 | 0.8 | 12.5% | ||||||||||
Unit sales (units) | 188 | 6 | 3,033.3% | ||||||||||
Revenue (€ milltion) | 1.2 | 0.9 | 33.3% | ||||||||||
Adjusted EBIT (€ million) | -9.6 | -7.4 | -29.7% | ||||||||||
Adjusted EBIT margin (%) | -800.0 | -822.2 | +22.2 pp |
- In accordance with IFRS 5, continuing operations do not include the Torqeedo Group.
-
The figures for the prior year have been restated in accordance with the provisions of IFRS 5.
3 Cash flow from operating activities and from investing activities less interest expense.
4 Cash and cash equivalents less current and non-currentinterest-bearing financial debt.
5 Inventories plus trade receivables less trade payables.
6 Average working capital at the last four quarterly reporting dates divided by revenue for the previous twelve months.
7 Capital expenditure on property, plant and equipment (including right-of-use assets in connection with leases) and intangible assets, excluding capitalized development expenditure. 8 Full-time equivalents (FTEs).
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 2 |
QUARTERLY STATEMENT Q1 2024 | BUSINESS PERFORMANCE IN THE DEUTZ GROUP
Note regarding DEUTZ AG
DEUTZ AG is continuously analyzing its portfolio and focusing on the fast-growing core business. For this reason, in January 2024, the Company signed an agreement regarding the sale of its subsidiary Torqeedo, which specializes in electric drives for boats. The transaction was completed on April 3, 2024, i.e. after the reporting period. In accordance with IFRS 5, the activities of the Torqeedo Group therefore continue to be reported as discontinued operations. Unless otherwise indicated, the figures that follow for the Group and for the segments DEUTZ Classic and DEUTZ Green are reported solely as continuing operations. To ensure comparability, the figures for the prior year have been restated accordingly. Only where figures for the entire Group are disclosed does this include the Torqeedo Group, which was still part of the Company up to the point of deconsolidation.
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 3 |
QUARTERLY STATEMENT Q1 2024 | BUSINESS PERFORMANCE IN THE DEUTZ GROUP
BUSINESS PERFROMANCE IN THE DEUTZ GROUP
In the first quarter of 2024, in a market environment that remained challenging and beset by weak economic conditions in most application segments and regions, the DEUTZ Group succeeded in generating a profit despite revenue and new orders falling year on year. The DEUTZ Group is therefore proving to be increasingly resilient in times of economic weakness when sales decline. The progress resulting from implementation of the Dual+ strategy and, in particular, the related positive impact from cost reductions and improvements in performance are increasingly evident. Meanwhile, the price adjustments made in the previous months continue to have a positive effect.
The Company is forging ahead with the strategic realignment of the Green segment, which began in summer 2023. The disposal of the Torqeedo Group was announced in November 2023 in this context and has now been executed. The sale of these activities to Yamaha Motor Co., Ltd., which had been announced in mid-January, was completed soon after the end of the reporting period on April 3, 2024. The effect of the disposal and deconsolidation of Torqeedo amounts to a figure in the low double-digit millions of euros and will be recognized in the second quarter of 2024. In accordance with IFRS 5, the activities of the Torqeedo Group continue to be reported as discontinued operations in the first quarter of 2024. Unless otherwise indicated, the figures that follow in relation to the Group and to the DEUTZ Green segment are for continuing operations only. The figures for the prior year have been restated in accordance with the provisions of IFRS 5.
NEW ORDERS
DEUTZ Group: New orders by application segment
€ million
Q1 2024 | Q1 2023 | Change | ||||
Service | 129.1 | 127.6 | 1.2% | |||
Material Handling | 121.2 | 130.4 | -7.1% | |||
Construction Equipment | 88.2 | 122.8 | -28.2% | |||
Agricultural Machinery | 35.4 | 69.1 | -48.8% | |||
Stationary Equipment | 29.1 | 33.8 | -13.9% | |||
Miscellaneous | 16.2 | 32.1 | -49.5% | |||
Total | 419.2 | 515.8 | -18.7% |
DEUTZ Group: New orders by regions
in Mio. €
Q1 2024 | Q1 2023 | Veränderung | ||||
EMEA | 261.1 | 298.7 | -12.2% | |||
Amerika | 109.9 | 136.3 | -19.4% | |||
Asien/Pazifik | 48.2 | 80.8 | -40.4% | |||
Gesamt | 419.2 | 515.8 | -18.7% |
New orders received by the DEUTZ Group in the first quarter of 2024 amounted to €419.2 million, which was down by 18.7 percent year on year. This decline reflects not only the aforementioned economic effects on the demand side but also the fact that the first quarter of 2024 is being compared against a very strong prior-year quarter. The first quarter of 2023 had been substantially boosted by huge demand in the Material Handling application segment and in the Americas region.
Demand remained weak in most application segments in the reporting period, but to a much lesser extent than in the final quarter of 2023 when the trend had been particularly pronounced. A positive factor for the first quarter of 2024 was the performance of the service business, whose growth during the period underlined the effectiveness of the Dual+ strategy. This concerted expansion of the service business is continuing to help stabilize the level of new orders and is making the Group more resilient to the cyclical nature of the new engine business.
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 4 |
QUARTERLY STATEMENT Q1 2024 | BUSINESS PERFORMANCE IN THE DEUTZ GROUP
In terms of regions, Asia-Pacific saw the biggest decline in new orders compared with the prior-year quarter. New orders in this region fell by around 40 percent. This was mainly due to a lower level of orders in China, most notably in the case of two major customers in the Construction Equipment application segment. The other regions - with the exception of Africa - also registered a decrease in the volume of new orders in the first quarter of 2024. Orders on hand declined overall to €414.9 million, compared with €772.5 million as at March 31, 2023 and €450.4 million as at December 31, 2023.
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 5 |
QUARTERLY STATEMENT Q1 2024 | BUSINESS PERFORMANCE IN THE DEUTZ GROUP
UNIT SALES
DEUTZ Group: Unit sales by application segment
units
Q1 2024 | Q1 2023 | Change | ||||
Material Handling | 17,755 | 15,524 | 14.4% | |||
Construction Equipment | 11,967 | 17,604 | -32.0% | |||
Agricultural Machinery | 4,691 | 6,450 | -27.3% | |||
Stationary Equipment | 3,259 | 4,704 | -30.7% | |||
Miscellaneous | 570 | 1,828 | -68.8% | |||
Total | 38,242 | 46,110 | -17.1% |
DEUTZ Group: Unit sales by regions
units
Q1 2024 | Q1 2023 | Change | ||||
EMEA | 20,996 | 27,300 | -23.1% | |||
Americas | 10,432 | 11,253 | -7.3% | |||
Asia-Pacific | 6,814 | 7,557 | -9.8% | |||
Total | 38,242 | 46,110 | -17.1% |
The DEUTZ Group's unit sales fell by 17.1 percent year on year to 38,242 in the first quarter of 2024. Unit sales were down significantly in most application segments, broadly in line with the trends in new orders described above. A positive aspect to emphasize is the Material Handling application segment, which saw sharp growth in unit sales - particularly in the EMEA and Americas regions - thanks to rising demand from several big-ticket customers. Unit sales in Asia-Pacific were down slightly for this application segment, however.
All regions recorded declines in unit sales in the first quarter of 2024 compared with the first quarter of the prior year. Most of the overall double-digit percentage decline was attributable to the EMEA region. The conclusion of part of a customer project, difficult conditions in the construction equipment segment, and a general weakening of demand in the Italian market were among the factors at play here. In Asia, the downturn in unit sales was due primarily to a double-digit percentage decline in China. The Americas and Asia- Pacific regions both saw their unit sales fall by single-digit percentage figures. The Africa region, which is part of EMEA, bucked the trend with a very strong increase in unit sales of just over 50 percent, albeit from a low level due to the size of the market. The DEUTZ Group benefited here from a new project customer in Algeria that it had not yet begun supplying in the prior-year quarter.
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 6 |
QUARTERLY STATEMENT Q1 2024 | BUSINESS PERFORMANCE IN THE DEUTZ GROUP
REVENUE
DEUTZ Group: Revenue by application segment
€ million
Q1 2024 | Q1 2023 | Change | ||||
Service | 125.9 | 121.3 | 3.8% | |||
Construction Equipment | 115.9 | 144.8 | -20.0% | |||
Material Handling | 119.1 | 110.1 | 8.2% | |||
Agricultural Machinery | 51.4 | 70.6 | -27.2% | |||
Stationary Equipment | 28.1 | 39.7 | -29.2% | |||
Miscellaneous | 14.3 | 20.5 | -30.2% | |||
Total | 454.7 | 507.0 | -10.3% |
DEUTZ Group: Revenue by regions
€ million
Q1 2024 | Q1 2023 | Change | ||||
EMEA | 268.8 | 311.2 | -13.6% | |||
Americas | 118.9 | 120.1 | -1.0% | |||
Asia-Pacific | 67.0 | 75.7 | -11.5% | |||
Total | 454.7 | 507.0 | -10.3% |
The decline in unit sales described above resulted in the DEUTZ Group's revenue falling by 10.3 percent year on year to €454.7 million in the first quarter of 2024. All of DEUTZ's designated regions contributed to this decrease in revenue, although the level of revenue generated in the Americas region held more or less steady compared with the prior-year quarter (down by 1.0 percent).
The fall in revenue was significantly less pronounced than the fall in unit sales. In addition to the product mix, this primarily reflected pricing effects, a result of the price adjustments that had been negotiated with customers in the preceding periods.
The decline in the Group's revenue was primarily attributable to the Construction Equipment and Agricultural Machinery application segments. The fall in revenue in the Agricultural Machinery application segment was roughly proportionate to the fall in unit sales, whereas the decrease in revenue in the Construction Equipment application segment was less pronounced, primarily due to the positive effects of the price adjustments.
Service and Material Handling - in terms of revenue the two largest applications segments - generated the biggest increases in revenue compared with the prior-year period. However, their revenue growth was unable to fully offset the decreases in revenue in the other application segments. The Service business was the biggest driver of revenue among the application segments in the first quarter of 2024, with revenue of €125.9 million (up 3.8 percent year on year). This provides further confirmation that the expansion of the service and parts business is progressing well and that DEUTZ is on track to achieve its target of growing annual revenue from service activities to around €600 million by 2025.
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 7 |
QUARTERLY STATEMENT Q1 2024 | BUSINESS PERFORMANCE IN THE DEUTZ GROUP
EARNINGS
DEUTZ Group: Overview of results of operations9
€ million
Revenue
Cost of sales
Research and development costs
Selling and administrative expenses
Other operating income
Other operating expenses
Impairment of financial assets and reversals thereof
Profit/loss on equity-accounted investments
EBIT
Interest income
Interest expense
Other financial income/finance cost
Financial income, net
Income taxes
Net income continuing operations
Net income discontinued operations
Net income
Adjusted EBIT - Green (EBIT before exceptional items)
Adjusted EBIT - Classic (EBIT before exceptional items)
Consolidation/ Other10
Adjusted EBIT (EBIT before exceptional items)
Exceptional items
EBIT
Q1 2024 | Q1 2023 | Change | ||
454.7 | 507.0 | -10.3% | ||
-344.9 | -396.3 | -13.0% | ||
-25.4 | -22.1 | 14.9% | ||
-59.6 | -49.7 | 19.9% | ||
4.7 | 6.0 | -21.7% | ||
-5.1 | -8.1 | -37.0% | ||
0.5 | 0.6 | -16.7% | ||
-1.1 | -0.6 | -83.3% | ||
23.8 | 36.8 | -35.3% | ||
0.3 | 0.3 | -% | ||
-4.6 | -3.0 | 53.3% | ||
0.0 | -0.1 | - | ||
-4.3 | -2.8 | -53.6% | ||
-3.0 | -5.2 | 42.3% | ||
16.5 | 28.8 | -42.7% | ||
-7.7 | -5.0 | -54.0% | ||
8.8 | 23.8 | -63.0% | ||
-9.6 | -7.4 | -29.7% | ||
37.2 | 44.4 | -16.2% | ||
0.1 | -0.2 | - | ||
27.7 | 36.8 | -24.7% | ||
-3.9 | 0.0 | - | ||
23.8 | 36.8 | -35.3% |
DEUTZ Group: Key figures for the entire Group11
€ million
Q1 2024 | Q1 2023 | Change | ||||
Revenue | 462.4 | 517.2 | -10.6% | |||
EBIT | 16.5 | 32.1 | -48.6% | |||
Net income | 8.8 | 23.8 | -63.0% | |||
Adjusted EBIT - Green (EBIT before exceptional items) | -9.6 | -12.1 | 20.7% | |||
Adjusted EBIT - Classic (EBIT before exceptional items) | 37.2 | 44.4 | -16.2% | |||
Consolidation/ Other | 0.1 | -0.2 | - | |||
Adjusted EBIT (EBIT before exceptional items) | 27.7 | 32.1 | -13.7% | |||
Exceptional items12 | -11.2 | 0.0 | - | |||
EBIT | 16.5 | 32.1 | -48.6% |
Adjusted EBIT (EBIT before exceptional items) fell to €27.7 million in the first quarter of 2024 (Q1 2023: €36.8 million). The decline in revenue had less of an impact on adjusted EBIT than might be expected because of the relatively sharp decrease in the cost of sales as a result of positive effects in the product mix and positive price effects. This meant the DEUTZ Group was able to improve its gross margin by more than 2 percentage points to 24.1 percent in the first quarter of 2024 (Q1 2023: 21.8 percent). On a comparable basis, operating profit was negatively impacted by higher research and development costs, particularly for new drive technologies, and by an increase in administrative and selling costs. In addition to an overall rise in headcount, the latter resulted from regional growth
-
Since December 2023, amortization of capitalized development expenditure has been recognized under 'cost of sales' rather than under 'research and development costs' where it had been
recognized previously. The prior-year figure in the results of operations has been restated accordingly to ensure comparability.
10 Consolidation/Other predominantly consists of non-operating centralized activities as well as effects on earnings resulting from the elimination of intragroup transactions between the segments. 11 The key figures for the entire Group include the continuing and discontinued operations.
12 Exceptional items for the entire Group (including discontinued operations) include the Torqeedo Group's EBIT (loss of €7.3 million) for the first quarter of 2024.
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 8 |
QUARTERLY STATEMENT Q1 2024 | BUSINESS PERFORMANCE IN THE DEUTZ GROUP
initiatives, mainly in the Americas region, and from acquisitions (Mauricio Hochschild Ingeniería y Servicios S.A., DEUTZ Nordic) made in the past two financial years. The negative effects of these factors were partly offset by positive currency effects. Consequently, the adjusted EBIT margin - despite the unfavorable revenue trend - fell only moderately by just over 1 percentage point to 6.1 percent in the first quarter of 2024 (Q1 2023: 7.3 percent).
EBIT in the reporting period amounted to €23.8 million (Q1 2023: €36.8 million). In the first quarter of 2024, there were exceptional items amounting to an expense of €3.9 million. These relate to costs for strategic projects and costs in connection with the sale of the Torqeedo Group. The corresponding EBIT margin stood at 5.2 percent compared with 7.3 percent in the first quarter of 2023. The decrease in operating profit (EBIT) resulted in net income from continuing operations falling year on year from €28.8 million to €16.5 million.
In addition, DEUTZ incurred a net loss of €7.7 million from the discontinued operations of the Torqeedo Group (Q1 2023: net loss of €5.0 million). Net income from continuing and discontinued operations ('entire Group') therefore amounted to €8.8 million compared with €23.8 million in the prior-year quarter. This brought earnings per share down year on year from €0.20 to €0.07, or from €0.24 to €0.13 for continuing operations only.
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 9 |
QUARTERLY STATEMENT Q1 2024 | BUSINESS PERFORMANCE IN THE DEUTZ GROUP
BUSINESS PERFORMANCE IN THE SEGMENTS
The DEUTZ Group's operating activities are divided into the segments Classic and Green. The Classic segment encompasses all activities related to the development, production, distribution, and maintenance of diesel and gas engines as well as the related service business. The Green segment consists of all activities related to alternative drive solutions and to the creation of a new, zero-emission product ecosystem. This includes hydrogen engines, electric drives, mobile rapid charging stations, the related service business, and the battery management specialist Futavis. Given that DEUTZ is currently only at the start of its transformation, the earnings-related key figures for the Green segment strongly reflect a substantial level of research and development in the field of electric and hydrogen- powered drive systems.
In accordance with IFRS 5, and as described above in the section 'Business performance in the DEUTZ Group', the activities of the Torqeedo Group are again being reported as discontinued operations in the first quarter of 2024, which means that they are no longer reported in the Green segment. As a result, the information provided above about the unit sales and revenue data for the DEUTZ Group predominantly relate to the Classic segment, which currently accounts for nearly 100 percent of consolidated revenue.
DEUTZ Classic
€ million
Q1 2024 | Q1 2023 | Change | ||||
New orders | 418.3 | 515.0 | -18.8% | |||
Unit sales (units) | 38,054 | 46,104 | -17.5% | |||
Revenue | 453.5 | 506.1 | -10.4% | |||
EMEA | 268.4 | 310.3 | -13.5% | |||
Americas | 118.3 | 120.1 | -1.5% | |||
Asia-Pacific | 66.8 | 75.7 | -11.8% | |||
Service | 125.8 | 121.3 | 3.7% | |||
Construction Equipment | 115.6 | 144.8 | -20.2% | |||
Material Handling | 119.1 | 110.1 | 8.2% | |||
Agricultural Machinery | 51.4 | 70.6 | -27.2% | |||
Stationary Equipment | 28.1 | 39.7 | -29.2% | |||
Miscellaneous | 13.5 | 19.6 | -31.1% | |||
EBIT before exceptional items | 37.2 | 44.4 | -16.2% | |||
EBIT margin before exceptional items (%) | 8.2 | 8.8 | -0.6 pp |
New orders in the Classic segment came to €418.3 million in the first quarter of 2024. This was down by 18.8 percent on the figure for the prior-year quarter, which had been exceptionally strong as described above, but nearly €70 million higher than the figure of €350.6 million for new orders in the fourth quarter of 2023. Orders on hand in the Classic segment totaled €410.6 million as at March 31, 2024 (down by 46.7 percent year on year). Of this figure, €367.2 million (down by 49.0 percent) was attributable to the engine business and €43.4 million (down by 13.7 percent) to the service business, whereby the latter typically has a low level of orders on hand because these are turned around almost immediately. At 38,054 engines sold, the Classic segment's unit sales were down by 17.5 percent on the first quarter of 2023. By contrast, revenue declined by only 10.4 percent to €453.5 million. A more favorable product mix and positive effects from the successful implementation of price increases were the main reasons why the fall in revenue was relatively low compared with the fall in unit sales.
Adjusted EBIT for the Classic segment (EBIT before exceptional items) decreased by €7.2 million year on year to €37.2 million. However, the segment's adjusted EBIT margin declined only slightly, from 8.8 percent to 8.2 percent. So despite the fall in revenue, the Classic segment maintained a very high level of profitability in the first quarter of 2024 that was close to the record high of the prior year.
QUARTERLY STATEMENT Q1 2024 DEUTZ AG | 10 |
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Deutz AG published this content on 29 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 16:25:16 UTC.
