Engine manufacturer
The company says that business performance is in line with expectations and that there has been a decline in unit sales and revenue due to effects of advance production of engines in the prior-year period.
The new orders received by the Deutz Group during the reporting period totalled €321.0 million, which was down by 22.5% year-on-year (Q1 2014: €414.2 million).
The company says the first quarter was the strongest of the four quarters last year because of the high demand for engines ahead of the latest EU exhaust emissions standard. In the first quarter of 2015, new orders surpassed the figure for the fourth quarter of 2014 (€302.2 million) by 6.2%.
Unit sales fell by 17%, from 44,457 engines in the first three months of last year to 36,907 engines in the same period of this year. Deutz had also sold more engines in the previous quarter (Q4 2014: 41,304).
Revenue amounted to €318.1 million, down by 7.2% on the figure of €342.7 million reported a year earlier. The Americas and Asia-Pacific regions achieved revenue growth, whereas the EMEA region (Europe, Middle East and Africa) saw a decline. Deutz registered increases in the stationary equipment application segment and the service business, but decreases in the mobile machinery and agricultural machinery application segments.
Revenue had amounted to €352.3 million in the fourth quarter of 2014.
Despite the reduction in revenue, there was a five-fold rise in operating profit (EBIT), which climbed from €1.9 million to €10.1 million. This represents an EBIT margin of 3.2%. There were no one-off items in the period under review. The increase in the margin is in large part due to the positive impact from changes in exchange rates. Other reasons were growth in revenue from the service business and lower production costs and warranty costs.
“We now have a substantial competitive edge thanks to our fully upgraded product portfolio. All of the TCD engines with diesel particulate filters in the 2.9-7.8litre capacity range already meet the limits that are to be expected from 2019 according to the European Commission. To make this message clear to the market, we have named our recently launched product campaign Stage V ready,” says Dr Helmut Leube, chairman of the board of management of Deutz.
Deutz expects 2015 to be a year of transition dominated by lower demand resulting from the advance production of engines in 2014. The company is therefore forecasting that revenue will decline by around 10% compared with 2014 and that the EBIT margin (before one-off items) will improve slightly to about 3%.
