Mobile Machinery Segment Drives Deutz 2014 Revenue Increase

The number of engines sold by German engine manufacturer Deutz AG in 2014 increased 6.7 percent year over year from 184,028 units in 2013 to 196,403 in 2014, largely attributable to stronger demand in the Mobile Machinery application segment. Revenue jumped by 5.3 percent to €1.53 billion (about U.S. $1.67 billion), compared to €1.453 billion in 2013.

The 2014 financial year as a whole was strongly influenced by the changes to emissions standards for engines with lower than 130kW that came into effect across the European Union Oct. 1. Consequently, Deutz said, European customers purchased more engines than they needed in the first three quarters of 2014, which reduced demand accordingly in the fourth quarter of 2014 and will continue to do so in the quarters ahead.

Deutz posted €1.379 billion worth of new orders in 2014, compared to a company record €1.65 billion in 2014, a 16-percent decline.  However, Deutz’ construction-related Mobile Machinery and Stationary Equipment application segments expanded their volume of new orders and grew service business as well.

New orders dropped significantly in Deutz’ Automotive and Agricultural Machinery segments.

Free cash flow almost quadrupled year over year to €52 million.

“We saw in 2014 just how important it is to operate flexibly,” said Dr. Helmut Leube, Deutz chairman. “We are also concentrating on further improving our quality and efficiency. In addition to the measures we have already taken to optimize our production sites in Germany, we plan to consolidate our activities in China and to focus on our successful Deutz Dalian joint venture there.”

Deutz expects 2015 to be a year of transition, characterized by lower demand because of the advanced product in 2014 to meet EU requirements. The company expects revenue to decline about 10 percent and for EBITDA to improve about 3 percent before one-off items.

Deutz is based in Cologne, Germany.