Deutz first half 2024. And Blue Star Power Systems

At Deutz, there is no stopping for a moment, not even in summer, as is evident from the first half 2024 results. With the icing on the cake of the transaction that brought the entire share capital of Blue Star Power Systems under the Cologne banner.

Deutz’s first half 2024 brings a smile despite difficult economic trend

“Our business performance shows that we are not immune to what happens in the market. Unlike in the past, however, we are operating profitably and earning money during this phase,” explains DEUTZ CEO Sebastian C. Schulte. “This is thanks to the operational measures that we have implemented and the strategic milestones that we have reached. They are enabling us to put DEUTZ on a broader and thus more future-proof footing.” This, according to Schulte, is clearly illustrated by the expansion of the service business and the acquisition of Blue Star Power Systems. DEUTZ anticipates that the acquisition of Blue Star Power Systems will provide additional profitable revenue ranging from more than US$ 100 million to (in the medium term) more than US$ 150 million per year. Building on this, revenue in the energy business is expected to increase to approximately €500 million by 2030 through both organic growth and growth by acquisition.

Some figures

At the start of July, DEUTZ placed 12.6 million new shares with institutional investors, generating gross issue proceeds of around €72 million and thus creating the flexibility it needs, for example to fund further growth projects. Given the fall in demand as a result of the economic situation, DEUTZ now anticipates that, at best, it will reach the lower end of its forecast range for unit sales of 160,000 to 180,000 engines in 2024. Nevertheless, the Company still expects to generate revenue within a range of €1.9 billion to €2.1 billion thanks to its increasing resilience.

As expected, new orders received by the DEUTZ Group fell sharply in the first half of 2024, declining by -18.1% year on year to €791.0 million owing to the decrease in demand caused by the difficult economic situation. Among the application segments, only the service business recorded order growth, with its new orders rising by 6.5% year on year to €257.2 million. This increase was due to stronger demand in parts sales and, in particular, the business of the service company Diesel Motor Nordic, which was acquired in the second half of 2023 and was renamed DEUTZ Nordic in January 2024. The positive trend in the high-margin service business affirms the Company’s strategic focus on these activities and, at the same time, is proof of the success of the service-related growth initiatives that DEUTZ is pursuing under its Dual+ strategy. All regions reported a significant fall in new orders compared with the first half of 2023. As at June 30, 2024, orders on hand stood at €365.9 million, compared with €450.4 million at the end of 2023. Within this total, the orders on hand attributable to the service business were up sharply at €44.5 million (December 31, 2023: €40.3 million).