DGAP-News: DEUTZ AG / Key word(s): Quarterly / Interim Statement/MiscellaneousDEUTZ AG: DEUTZ with significant increase in incoming orders 10.11.2021 / 07:30 The issuer is solely responsible for the content of this announcement .
Cologne, November 10, 2021 - After a successful first half of 2021, DEUTZ remained on course for growth in the third quarter. Due to sustained high demand in all major application areas, incoming orders rose by 56.5% to EUR 485.2 million. With sales increasing by 49.1% to 51,732 engines sold, sales grew by 30.8% to EUR 403.2 million. EBIT before special items improved to EUR 14.1 million after an operating loss of EUR -15.7 million in the same quarter of the previous year. The book-to-bill ratio was 1.29 at the end of the nine-month period.
"We build the most efficient and cleanest engines for our customers. The significant increase in incoming orders shows that we are convincing in the market with our innovative drive technologies. For the path to green off-road mobility, we are increasingly relying on hydrogen, electric and eFuels. This is the only way we can achieve the Paris climate targets," says DEUTZ CEO Dr. Frank Hiller.
In addition to the positive operational business development, DEUTZ also achieved other strategic successes. In August, the company presented its first market-ready hydrogen engine. DEUTZ is planning series production for the TCG 7.8 H2 for 2024. The first pilot project will start early next year: the TCG 7.8 H2 will then generate electricity in combination with a generator for the energy service provider RheinEnergie. "What we are implementing here on a smaller scale provides insights for a decentralized, sustainable and greenhouse gas-free energy supply in urban areas," says Hiller.
DEUTZ had previously concluded a cooperation agreement with the German Aerospace Center (DLR). The subject of this is a joint project with a focus on the "green construction site". In the process, solutions are to be developed in order to be able to operate construction site vehicles and agricultural machinery with hydrogen. DEUTZ is also making EU V emission level engines more sustainable: since the end of August, the company has approved its entire TCD engine range for the use of paraffinic diesel fuels.
Double-digit percentage growth in order intake, sales and revenue In the first nine months of 2021, DEUTZ recorded an increase in order intake compared to the corona-affected prior-year period of 62.2% to 1,514, 0 million euros. This positive development is due to the continued high willingness of customers to invest across all application areas and regions. In addition, extraordinary pull-forward effects of more than EUR 100 million in June and September contributed to the above-average increase. The reasons for this were, in particular, customer orders brought forward as a reaction to extended order deadlines resulting from global material and logistics bottlenecks, as well as price adjustments.
As of September 30, 2021, the order backlog totaled EUR 616.4 million, up 146.2% on the previous year.
With a total of 145,359 engines sold, the DEUTZ Group achieved a sales increase of 33.9% in the period under review, with the number of DEUTZ engines sold[1] increasing by 37.6% to 116,273 units. The DEUTZ subsidiary Torqeedo sold 29,086 electric boat drives and thus achieved a sales increase of 20.9% compared to the nine-month period of 2020. Almost all application areas showed a clearly positive development. Only in the area of stationary systems was it below the previous year's level, which can be attributed to lower sales of power generators. In absolute terms, the EMEA region, currently DEUTZ's largest sales market, recorded the most significant increase. The increase in sales here was 35.2%.
As a result of the positive development in sales, DEUTZ generated consolidated sales of EUR 1,173.4 million in the reporting period. The year-on-year increase of 26.4% came from all application areas. The lower increase in sales compared to the development in sales is due to a disproportionately high increase in demand in the area of small 4-litre engines. Service sales rose by 16.2% to EUR 298.4 million, in particular due to a significant expansion of business in the parts trade. This means that the sales target for the service business of around EUR 400 million set for 2021 is within reach.
All regions contributed to the positive sales development with double-digit percentage growth rates. The German sales market developed particularly dynamically with an increase of 32.4%. In China, the most important sales market in the context of the regional growth strategy, DEUTZ achieved an increase in sales of 32.8% to EUR 116.9 million compared to the same period of the previous year.
Further increase in profitability - efficiency program is paying offThe EBIT before special items (operating result) improved significantly in the first nine months of 2021 compared to a low prior-year basis of -65, 6 million euros to 30.9 million euros. This development is mainly due to the higher business volume and the associated positive economies of scale. Realized cost-saving effects from restructuring measures, which are becoming increasingly noticeable, also made a positive contribution to earnings. Accordingly, the EBIT margin before special effects improved significantly from -7.1% to 2.6%.
The EBIT amounted to EUR 27.8 million in the reporting period after EUR -103.4 million in the previous year. Special effects of EUR -3.1 million, which are caused by the efficiency program initiated at the beginning of 2020, are taken into account. The EBIT margin was 2.4% compared to -11.1% in the nine-month period of 2020.
The positive development of the operating result led to an improvement in the Group result to EUR 23.7 million after EUR -104.5 million in the same period. The earnings per share increased accordingly from EUR -0.86 to EUR 0.20. The Group result before special effects was EUR 26.8 million in the reporting period, the < b>Earnings per share before special effects at EUR 0.22.
Positive free cash flow and comfortable financial positionStarting from a weak basis for comparison due to the pandemic, cash flow from operating activities improved from EUR -19.4 million to EUR 67.9 million. This development is essentially due to the improved operating result and the more stringent group-wide working capital management, particularly in the area of receivables and liabilities. At EUR 15.2 million, the free cash flow was EUR 94.0 million higher than the comparative figure due to the improved cash flow from operating activities and lower investment activity.
The cash flow development led to a slight reduction in net financial debt compared to the end of 2020. As of September 30, 2021, this amounted to EUR 83.1 million (December 31, 2020: EUR 83.8 million).
DEUTZ CFO Dr. Sebastian C. Schulte: "Our efficiency program and the cost savings achieved are increasingly paying off. This is reflected in our earnings development and in the positive cash flow development." Due to the improved business situation, DEUTZ prematurely returned the credit line of EUR 150 million granted with the support of the Kreditbank für Wiederaufbau (KfW) at the beginning of September. The so-called Covid-19 tranche was originally limited to November 2021. In addition to the existing syndicated loan of EUR 160 million with a term until June 2024, DEUTZ has also secured a further EUR 75 million in bilateral credit lines from three banks for a period of 18 months. "We can fall back on unused credit lines of EUR 200 million. This gives us sufficient financial leeway to restructure the financing of our current and future growth projects over the long term," Schulte continued. The company's equity ratio remains comfortable at 45.0%.
Raised full-year forecast for 2021 confirmed Global supply problems for primary materials will continue to weigh on business development and delivery problems with some components will persist. Based on the positive business development in the reporting period and a sustained upward trend in relevant customer sectors, DEUTZ is nevertheless confirming the full-year forecast it raised in September sup>[3], which should lead to an increase in sales to EUR 1.6 to 1.7 billion. The pro rata service turnover should amount to around 400 million euros. Based on the expected sales and revenue development and the realization of additional cost-saving potential, the EBIT margin before special items should range between 2.0 and 3.0%. It is assumed that there will be no significant deterioration in the supply of components, which continues to be strained, in the coming weeks. In terms of free cash flow, a balanced result is being sought in conjunction with the improved operating development.DEUTZ Group: Key figures at a glance
| in million euros | 9M/2021 | 9M/2020 | Delta | Q3/2021 | Q3/2020 | Delta |
| Incoming orders | 1,514.0 | 933.6 | 62.2% | 485 .2 | 310.0 | 56.5% |
| Group sales (in units) | 145,359 | 108,559 | 33.9% | 51,732 | 34,700 | 49.1% |
| of which DEUTZ engines[4] | 116,273 | 84,502 | 37, 6% | 40,842 | 26,887 | 51.9% |
| of which Torqeedo | < td>29,08624,057 | 20.9% | 10,890 | 7,813 | 39.4%< /td> | |
| Sales | 1,173.4 | 928.2 | 26.4% | < td>403.2308.2 | 30.8% | |
| EBIT | 27, 8 | -103.4 | - | 11.7 | -53.5 | -< /td> |
| of which special effects | -3.1 | -37.8 | 91.8% | -2.4 | -37.8 | 93.7% |
| Operating result (EBIT before special effects) | 30.9 | -65.6 | - | 14.1 | -15 .7 | - |
| EBIT margin (in %) | 2.4 | -11 .1 | +13.5PP | 2.9 | -17.4 | +20.3PP |
| EBIT margin before special items (in %) | 2.6 | -7.1 | +9 .7PP | 3.5 | -5.1 | +8.6PP |
| Net income | 23.7 | -104.5 | - | 10.4 | -52, 2 | - |
| Group result before special items | 26.8 | -68.3 | -12.8 | -16.0 | - | |
| Result each Share (in euros) | 0.20 | -0.86 | - | 0.09 | -0.43 | - |
| Earnings per share before special effects (in euros) | 0.22 | -0.57 | - | 0.10 | -0.14 | - |
| Equity (30.09./31.12.) | 567.1 | 535.2 | 4.7% | 567.1 | 535.2 | 4.7% |
| Equity ratio (in %) | 45.0 | 45.3 | -0.3 PP | 45.0 | 45.3< /td> | -0.3 pp |
| Cash flow from operating activities | 67.9 | -19.4 | - | 23.2 | 24.3 | -4.5% |
| 15.2 | -78.8 | - | 5.5 | < td>6.9-20.3% | ||
| Net financial position (30.09./31.12.) | -83.1 | -83.8 | 0.8% | -83.1 | -83.8 | 0.8% |
| Employees[5] (30.09.) | 4,701 | 4,575 | 2.8% | 4,701 | 4,575 | 2.8% |
The full quarterly statement is available at https://www.deutz.com/investor-relations.Contact DEUTZ AG / Christian Ludwig / SVP Communications & Investor RelationsTel.: +49 (0)221 822-3600 / email: Christian.Ludwig@deutz.com
DEUTZ AG / Svenja Deißler / Investor RelationsTel.: +49 (0)221 822-2491 / E-Mail: Svenja.Deissler@deutz.comForward-Looking StatementsThis press release may contain certain information about the future contain statements based on current assumptions and forecasts made by DEUTZ management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation or development of the DEUTZ Group and the estimates given here. These factors include those that DEUTZ has described in published reports. These reports are available at www.deutz.com. The company assumes no obligation to update such future-oriented statements and to adapt them to future events or developments.[1] Excluding electric boat drives from the DEUTZ subsidiary Torqeedo.[2] Cf. Ad -hoc release of September 13, 2021.[3] Excluding electric boat drives from the DEUTZ subsidiary Torqeedo.[4] Excluding electric boat drives from the DEUTZ subsidiary Torqeedo.[5] FTE's, without contract workers.
11/10/2021 Release of a corporate news/financial news, transmitted by DGAP - a service of EQS Group AG.The issuer / publisher is responsible for the content of the announcement.The DGAP distribution services include statutory reporting requirements, corporate news/financial news and press releases. Media archive at http://www.dgap.de
