Small rise for Deutz
By Sandy Guthrie20 March 2017
Engine maker Deutz saw a small rise in revenue despite the market trend in 2016, as well as an increase in operating profit, and it is claiming a positive outlook for 2017.
In its consolidated financial results for 2016, the German-based company said that new orders amounted to €1.26 billion, up by 2.9% on the previous year's figure of €1.23 billion.
It said the level of new orders rose in the construction equipment, material handling and agricultural machinery application segments, and in the service business.
In total 132,539 engines were sold, representing a drop of 3.8% compared to last year's figure of 137,781 engines.
The stationary equipment and automotive application segments, in particular, reported fewer engine sales.
Revenue amounted to €1.26 billion, up by 1.0% from €1.25 billion reported a year earlier.
Revenue was up by 3.3% in the EMEA (Europe, Middle East and Africa) region and by 15.9% in the Asia-Pacific region, but down by 13.0% in the Americas.
EBIT (earnings before interest and taxes) rose by €18.5 million to €23.4 million in 2016.
Deutz said the EBIT margin had improved to reach 1.9%, compared with 0.4% the year before.
Dr Margarete Haase, CFO, said, “We have seen earnings improve on the back of lower material costs, and depreciation and amortisation.
"We have also benefited from the first positive effects of optimising our site network in 2016. These measures are well advanced and will deliver a positive contribution to earnings of around €10 million in 2017 – and an even higher contribution in future years as capacity utilisation rises.”
Although Deutz said it expected the market to stagnate in 2017, or perhaps grow slightly, it could already see early signs of a potential improvement in the market. It said a strong base effect had resulted from customers in Europe coming to the end of their inventories.
As a result, the company forecast a marked increase in revenue. The EBIT margin before exceptional items is expected to increase moderately, mainly thanks to better capacity usage and the positive effects of optimising the site network.