DEUTZ Reports Successful Start to 2019

A high level of new orders has been sustained, and revenue is even higher than in the prior-year period.

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DEUTZ, one of the world’s leading manufacturers of innovative drive systems, has published its preliminary results for the first quarter of 2019. 

“We have succeeded in maintaining our growth trajectory and, as expected, have made a very good start to the current year,” says CEO Dr. Frank Hiller, summing up DEUTZ’s positive performance in the first three months of 2019. “We exceeded the high level of revenue achieved in the prior-year period and, at the same time, significantly improved our profitability. The level of new orders also remains high, which – combined with a book-to-bill ratio of 1.1 – gives us cause for optimism about the months ahead.”

High level of new orders sustained; substantial revenue growth

DEUTZ is continuing to benefit from the sustained strength of customer demand, receiving orders worth €514.5 million in the first quarter of 2019. Although still at a high level, new orders were 10.5% lower than the figure for the prior-year period, which had been positively influenced by exceptional items. Compared with the fourth quarter of 2018 (new orders of €403.9 million), new orders at DEUTZ were up by 27.4%.

Consolidated revenue rose by 9.2% to €452.8 million in the first quarter of 2019. All regions and application segments contributed to this growth.

Double-digit increase in operating profit

Reflecting the greater volume of business and ongoing efficiency improvements, operating profit (EBIT before exceptional items) climbed at a faster rate than revenue, advancing by 15.7% year on year to reach €25.1 million. As a result, the EBIT margin before exceptional items improved by 30 basis points to 5.5%.

Group forecast for 2019 confirmed

The continued strong demand from customers and the current level of orders on hand should provide a good degree of security for the DEUTZ engine business, particularly in the first half of the year. The Board of Management therefore confirms its forecast for 2019 as a whole in spite of the currently generally challenging macroeconomic and geopolitical environment. The Board of Management therefore confirms its forecast for 2019 as a whole: revenue is expected to rise to more than €1.8 billion and the EBIT margin before exceptional items to at least 5.0%. The payment of the final installment of the purchase consideration from the disposal of the Cologne-Deutz site could result in an exceptional item that would increase earnings by around €50 million this year.