The Deutz Group last week reported it enjoyed a successful year in 2007 with significant improvements in all key performance indicators. On the back of strong demand, particularly in the compact engines segment, new orders saw a year-on-year increase of 22.2 percent to €1.58 billion (about U.S. $2.48 billion based on current currency conversion rates) from €1.30 billion (U.S. $2.04 billion) in 2006.

Unit sales climbed to 285,861 engines from 236,679 in the year-ago period, a rise of 20.8 percent. Group revenue increased by 28.8 percent to €1.52 billion (U.S. $2.38 billion) from €1.18 billion (U.S. $1.85 billion) in 2006, driven primarily by the international business. The operational strength of the group is illustrated by the 43.4-percent increase in EBIT to €95.5 million (U.S. $149.8 million) from €66.6 million (U.S. $104.4 million) a year ago. At 6.3 percent, the EBIT margin showed an appreciable increase on 2006’s 5.6 percent.

Net income during the period under review rose to €183.3 million (U.S. $149.8 million) from €61.5 million (U.S. $96.4 million) a year ago, significantly boosted by the €123.9 million (U.S. $194.3 million) gain on the sale of Deutz Power Systems on Sept. 30, 2007 (including current net income for the period ending on that date). After adjusting for this one-off item, net income on continuing operations still increased by 54.3 percent from €38.5 million (U.S. $60.4 million) in 2006 to €59.4 million (U.S. $93.2 million).

“2007 was a very successful year for the Deutz Group,” said Dr. Helmut Leube, chairman of the Deutz AG management board. “Our company has overcome substantial challenges and we can look back with pride on what we have achieved.

“On the back of our strong earnings growth, we and the supervisory board are proposing a dividend of €0.40 (U.S. $0.63) per share.”

The group’s growth was driven primarily by growth in the Compact Engines segment, where new orders increased by 26.7 percent to €1.2 billion (U.S. $1.88 billion) from €950.4 million (U.S. $1.49 billion) in the year-ago period. Unit sales were up 25 percent on the previous year at 248,971 engines from 199,202. Engine sales in the 4- to 8-liter range were up 38 percent on the previous year, thanks to the quadrupling of unit sales of the commercial-vehicle engine that was launched in 2006.

Deutz anticipates further revenue and earnings growth in 2008. In terms of new orders and consolidated revenue, the company anticipates an increase between 10 and 15 percent. EBIT is also expected to improve further, with a target return of around 7 percent. In terms of unit sales, Deutz anticipates growth of around 10 percent to more than 300,000 engines.

“Strategically, Deutz is exceptionally well positioned to achieve the targets that have been set in 2008,” said Leube. “We aim to continue growing organically on a sustainable and profitable basis — although we do not by any means rule out the possibility of acquisitions, particularly if they would complement or strengthen our core competences.”