Rermag 5027 Deutztcd36 1
Rermag 5027 Deutztcd36 1
Rermag 5027 Deutztcd36 1
Rermag 5027 Deutztcd36 1
Rermag 5027 Deutztcd36 1

Deutz’s Unit Sales Decline While Profitability Improves

May 5, 2015
Deutz received new orders totaling €321 million (about U.S. $360.4 million) in the first quarter of 2015, down by 22.5 percent compared to €414.2 million) in the first quarter of 2014, which was the strongest quarter last year because of the high demand for engines ahead of the latest EU exhaust emissions standard.

Deutz received new orders totaling €321 million (about U.S. $360.4 million) in the first quarter of 2015, down by 22.5 percent compared to €414.2 million) in the first quarter of 2014, which was the strongest quarter last year because of the high demand for engines ahead of the latest EU exhaust emissions standard. Demand in the first quarter of 2015, however, surpassed the fourth quarter of 2014 by 6.2 percent.

Revenue also dropped by 7.2 percent to €318.1 million compared to €342.7 million in the year-ago quarter. However, Deutz posted a five-fold increase in operating profit (EBIT), which leapt from €1.9 million to €10.1 million, in large part because of the positive impact in exchange rates. Also, growth in revenue from the service business and lower production costs and warranty costs contributed to enhanced profitability, outweighing the reduction in sales.

“Our business performance in the first quarter of 2015 was in line with our expectations,” said Deutz’s chief financial officer Dr. Margaret Haase. “The action taken to increase productivity is working, while changes in exchange rates are boosting our earnings.”

“We now have a substantial competitive edge thanks to our fully upgraded product portfolio,” added Dr. Helmut Leube, chairman of the board. “All of the TCD engines with diesel particulate filters in the 2.9- to 7.8-liter cubic capacity range already meet the limits that are to be expected from 2019 according to the European commission.”

Deutz expects 2015 to be a year of transition dominated by lower demand from the advance production in 2014, with revenue declining by about 10 percent while the EBIT margin improves about 3 percent.

Deutz AG is based in Cologne, Germany, with U.S. headquarters in Norcross, Ga.