Mobile machinery sales help Deutz in year end 2014 results

Deutz reported new orders received in 2014 totalled €1,379 million, which was 16.4% below the record figure reported for 2013 (€1,649.7 million). The number of engines sold rose by 6.7% year on year from 184,028 units in 2013 to 196,403 in 2014. This was largely due to stronger demand in the mobile machinery application segment. By contrast, new orders fell significantly in the automotive and agricultural machinery application segments. Corporate revenue was up 5.3% to €1,530.2 million (2013: €1,453.2 milli
March 20, 2015 Read time: 2 mins
201 Deutz reported new orders received in 2014 totalled €1,379 million, which was 16.4% below the record figure reported for 2013 (€1,649.7 million).

The number of engines sold rose by 6.7% year on year from 184,028 units in 2013 to 196,403 in 2014. This was largely due to stronger demand in the mobile machinery application segment.

By contrast, new orders fell significantly in the automotive and agricultural machinery application segments.

Corporate revenue was up 5.3% to €1,530.2 million (2013: €1,453.2 million).

Operating profit (EBIT before one-off items) fell from €47.5 million in 2013 to €31.7 million.

Net income for the year fell by €16.5 million to €19.5 million (2013: €36 million). However, Deutz remained upbeat, saying its free cash flow almost quadrupled year on year to €52 million. After expenses for new product launches, the net financial position improved by €45.4 million to €13.7 million in -- positive for the first time since 2009.

The new orders received in the fourth quarter of 2014 fell by 32.3% year on year to €302.2 million.

In the final quarter, sales fell 16.3% to 41,304 units and revenue weakened by 14.1% year on year to €352.3 million. “In addition to the impact of the advance production of engines, this was also attributable to an economic downturn towards the end of the year. Operating profit (EBIT before one-off items) fell from €20.3 million to €8.9 million.”

As a whole, 2014 was strongly influenced by the changes to emissions standards for engines under 130kW that came into effect across the European Union on 1 October 2014, according to the report. “Consequently, European customers purchased more engines than they needed in the first three quarters of the reporting year, which reduced demand accordingly in the fourth quarter of 2014” and will continue to do so in the quarters ahead.”

Deutz expects 2015 to be a year of transition. The company forecasts that revenue will decline by around 10% year on year. In addition to improving efficiencies at its German sites, Deutz said it will “consolidate” its activities in China and “focus on our successful DEUTZ Dalian joint venture there", said Helmut Leube, chairman of Deutz.
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