Deutz financial results: not an easy first half of 2020
Last August, Deutz revealed its financial results about the first half of 2020, quite a hard semester indeed for the whole world. Inevitably, the German engine manufacturer had significant losses due to the coronavirus crisis, as the new orders fell by 34.6 percent compared to same period of the previous year. According to the official […]
Last August, Deutz revealed its financial results about the first half of 2020, quite a hard semester indeed for the whole world. Inevitably, the German engine manufacturer had significant losses due to the coronavirus crisis, as the new orders fell by 34.6 percent compared to same period of the previous year. According to the official statement released by the company, «this was due not only to the sharp drop in new orders triggered by the coronavirus crisis but also to the high level of new orders in the prior-year period as a result of customers building up their inventories of engines before new emissions standards came into force. Customers then sold these engines, putting a further strain on the business».
In detail, Deutz performances in the first half of 2020
The Deutz Group sold a total of 73,859 engines in the reporting period, which was 27.3 percent fewer than in the first half of 2019. Miscellaneous was the only application segment with an increase in unit sales, registering a substantial rise of 112.7 percent that was largely attributable to the introduction of small outboard motors known as trolling motors. The ramp-up of these motors enabled Deutz subsidiary Torqeedo to more than double its sales of boat motors to a total of 16,244, which equates to a year-on-year rise of 163.8 percent.
In the EMEA region, Deutz’s biggest sales market, unit sales went down by 30.5 percent compared with the prior-year period to 37,763 engines. In the Americas region, unit sales fell by 47.4 percent to 14,726 engines. By contrast, unit sales in the Asia-Pacific region grew by 10.8 percent owing to the aforementioned ramp-up at Torqeedo.
The DEUTZ Group’s revenue fell by 33.3 percent compared with the first six months of 2019 to 620.0 million euro. Revenue declined across the board, from both a regional and an application segment perspective.
CEO Frank Hiller’s words
CEO Frank Hiller thinks that «the adverse effects of the coronavirus pandemic on the global economy and thus on our engine business cannot be ignored. At present, nobody can predict how the coronavirus crisis will continue to unfold. However, it is clear that the entire Deutz team will do everything they can to ensure that we emerge stronger from the crisis. Despite the current situation, we believe we are on the right track to be able to achieve our medium-term targets. To be competitive in the long term and ensure the Company stays on course for success, it is vital that we regularly review our processes and structures. We have done this and we expect implementation of the resulting action plan to generate annual cost savings totaling around 100 million euro from the end of 2022».