DEUTZ AG: DEUTZ achieves targets for revenue and EBIT margin for 2019 – medium-term targets for 2022 confirmed

• Medium-term revenue target for the service business of around €400 million
  brought forward to 2021
• Economic climate and coronavirus make 2020 a year of transition
• ‘Transform for Growth’ efficiency program launched

COLOGNE, GERMANY – EQS
Newswire – 3 March 2020 – DEUTZ, one of the world’s leading
manufacturers of innovative drive systems, today published its provisional
figures for revenue and the EBIT margin before exceptional items for 2019. With
an increase in revenue to €1,840.8 million and an EBIT margin before
exceptional items of 4.3 percent, the updated forecast for 2019 has been
achieved.

 

Dr. Frank Hiller, Chairman of the Board of Management of DEUTZ AG,
commented, “We have successfully pressed ahead with the implementation of
our growth initiatives and are thus still on track to achieve our medium-term
targets for 2022.” Revenue is expected to rise to more than €2 billion by
then, and the EBIT margin before exceptional items to at least 7 to 8 percent.
“The expansion of the high-margin service business is a mainstay of our
growth strategy. We now hope to achieve our 2022 revenue target of
approximately €400 million a year earlier, in 2021,” said Dr. Hiller.

 

DEUTZ expects a decline in business in 2020. The main reason for this is the
downturn in key customer industries as a result of economic conditions. This
led to a low level of orders on hand at the end of 2019, a situation that is
continuing this year. Growth is expected to drop off particularly noticeably in
the first half of 2020 following a weak start. The establishment of second
source suppliers will also have an impact on earnings. Furthermore, the DEUTZ
engine business will be affected this year by customers selling the inventories
of engines they had built up before new emissions standards came into force.

 

The outbreak of coronavirus is taking a significant toll on international
transport, travel, industrial logistics chains, and production capacity, both
in China and globally. As things stand, DEUTZ is not aware of any specific
issues at its suppliers. Due to the globalized nature of its logistics routes,
however, DEUTZ can no longer exclude the possibility of its business and its
supply chain being affected.

 

Consequently, DEUTZ expects the year-on-year fall in revenue in 2020 to be
in the low double-digit percentage range. For the EBIT margin before
exceptional items, the Company expects a decline relative to the prior year
figure in the mid double-digit percentage range.

 

Dr. Frank Hiller added, “In order to counter the forecast impact on
earnings, we have launched an efficiency program, ‘Transform for Growth’.”
This is a global program to strengthen competitiveness by reducing complexity
and increasing efficiency along the whole value chain.

 

The complete financial results for 2019 will be published on March 18, 2020.

Upcoming financial dates

March 18, 2020: 2019 annual report / annual results press conference

May 7, 2020: results for the first quarter of 2020

May 14, 2020: 2020 Annual General Meeting

 

Forward-looking statements

This investor news may contain certain forward-looking statements based on
current assumptions and forecasts made by the DEUTZ management team. Various
known and unknown risks, uncertainties, and other factors may lead to material
differences between the actual results, the financial position, or the
performance of the DEUTZ Group and the estimates and assessments set out here.
These factors include those that DEUTZ has described in published reports, which
are available at www.deutz.com. The Company does not undertake to update these
forward-looking statements or to change them to reflect future events or
developments.

 

The issuer is solely responsible for the content of this announcement.

About DEUTZ AG

DEUTZ AG, a publicly traded company headquartered in Cologne, Germany, is
one of the world’s leading manufacturers of innovative drive systems. Its core
competencies are the development, production, distribution, and servicing of
diesel, gas, and electric drive systems for professional applications. It
offers a broad range of engines delivering up to 620 kW that are used in
construction equipment, agricultural machinery, material handling equipment,
stationary equipment, commercial vehicles, rail vehicles, and other
applications. DEUTZ has around 4,900 employees worldwide and over 800 sales and
service partners in more than 130 countries. According to provisional figures,
it generated revenue of €1,840.8 million in 2019.

Further information is available at www.deutz.com.