Revenue and earnings are the best news coming from the latest financial data released by Deutz.We cannot say the same about new orders, which reflect indeed weakening of demand as a result of the economic climate. The data of course concern the first nine months of 2019 and are shown clearly in the chart below.
More into detail, Deutz sold a total of 155,780 engines in the first nine months of this year, meaning the Group’s overall unit sales were close to the level of the prior-year period. By contrast, unit sales of Torqeedo’s drive systems, which are included within that figure, rose by a significant 44.7 percent to reach 12,990. Looking at the third quarter in isolation, the Group’s unit sales fell by 5.6 percent to 54,189 engines. This was due to a high double-digit percentage increase in unit sales in the agricultural machinery application segment and, in particular, to the boat drive business. At 6,832, Torqeedo’s unit sales of boat drives were more than twice as high as in the prior-year quarter, primarily due to an increase in demand for smaller outboard motors.
Deutz received orders worth 1,315.2 million euro in the period under review. This was 15.1 percent lower than the robust volume reported for the prior-year period, which had been positively influenced by a change in customers’ ordering patterns. In addition to this year-on-year effect, a weakening of demand as a result of the economic climate had an adverse impact from the end of the second quarter. New orders in the third quarter decreased by 20.0 percent year on year to 361.9 million euro.
The words spoken by the Ceo of the Deutz Group
«Despite a general slowdown in market growth,we saw revenue advance in all regions and major application segments and also demonstrated our operational strengthby delivering a high double-digit percentage increase in earnings», said Frank Hiller, Ceo of the Deutz Group, commenting on the results for the first three quarters of 2019.
«Overall, we believe that we are on track to achieve the current full-year guidance for revenue and earnings. We also reached important milestones in the implementation of our growth strategy. Preparations for our joint venture with Sany to commence production as planned in 2021 are progressing very well. At the end of September, the foundation stone was laid for the new high-performance engine factory in the Chinese city of Changsha. And at the beginning of the fourth quarter, we added high-voltage battery technology as a key component of our e-Deutz strategy by acquiring the battery specialist Futavis, taking us another big step closer to a future of carbon-neutral off-highway vehicles».
Increase in revenue
In the first three quarters of 2019, Deutz’s revenue grew by 6.4 percent to 1,379.9 million euro. The material handling application segment performed particularly strongly, delivering double-digit revenue growth of 11.3 percent, as did the agricultural machinery application segment and high-margin service business, whose revenues were up by 9.5 percent and 7.3 percent respectively.