Deutz maintains Q1 profits despite revenue dip

Deutz AG reported a revenue of €454.7 million for the first quarter of 2024, maintaining profitability despite a 10.3% decline compared to Q1 2023. Unit sales were down sharply and new orders from continuing operations decreased by 18.7%, which the company attributed to the weak economic climate and normalization effects. Despite the decrease year on year, new orders were up by just over €68 million (20%) over Q4 2023.

The company exhibited a positive and stable EBIT margin of 6.1% for continuing operations. The corresponding adjusted EBIT figure was down from the prior year but remained in positive territory for Q1 2024 at €27.7 million.

Dr. Sebastian Schulte

Deutz CEO Dr. Sebastian C. Schulte acknowledged that the much weaker economic environment was starting to have an effect on the company’s performance, as evidenced in its figures for the first quarter. “The good news is that we are considerably more robust than before,” he continued. “This is the result of the operational measures that have already been taken as part of our new strategy including our growing service business. The restructuring of our portfolio is also helping to ensure that we are better able to withstand a difficult economic environment than we were in the past.”

Deutz entered into an alliance with Daimler Trucks last year, followed in December 2023 with the take-over of sales and service activities of Rolls-Royce Power Systems that gave it access to the Daimler Trucks engines. The relevant agreements were signed in the Q1 2024 and represent a further milestone in the implementation of Dual+ strategy, said Deutz. The transaction, which is likely to be completed in summer 2024, is expected to generate additional annual revenue of around €300 million and a corresponding increase in EBIT margin.

The sale of the Torqeedo Group, part of a strategic realignment of the Green segment, was completed on April 3, 2024. The proceeds of the sale, reported in the high double-digit millions of euros, are expected to result in the recognition of a book gain in the low double-digit millions of euros in Q4 2024.

In its first-quarter reporting, Deutz confirmed its previously issued guidance. In 2024, on the basis of the continuing operations, the company is expecting to achieve unit sales of between 160,000 and 180,000 Deutz engines, revenue of €1.9 billion to €2.1 billion and an adjusted EBIT margin of between 5.0% and 6.5%.