Deutz continues positive momentum in Q2
By Mike Brezonick11 August 2022
After a successful start to the year, Deutz reports it has continued to benefit from the sustained recovery in relevant downstream industries in the second quarter and improved its earnings in the first half of 2022.
“In spite of the outbreak of the war in Ukraine, we increased our revenue by around 21% to €930.4 million,” said CEO Dr. Sebastian C. Schulte. “At the same time, we raised our adjusted EBIT margin by 2.4 percentage points to 4.6%. We want to sustain this growth because we still have a long way to go to reach our envisaged target range. But we have taken the first important steps toward achieving this goal, for example by strengthening our focus on disciplined cost management.”
In the first half of 2022, new orders increased by 4.7% year on year to €1.077 billion. Orders on hand climbed to €768.9 million as of June 30th. Having sold a total of 108,741 engines, the Deutz Group grew its unit sales by 16.1% in the first half of 2022 with the two largest sales regions, EMEA and the Americas, contributing double-digit percentage growth.
Unit sales of Deutz engines rose by 19.9% to reach 90,462 engines sold. Unit sales of electric boat drives at the company’s Torqeedo subsidiary were slightly higher year on year at 18,279. Reflecting the growth in unit sales, revenue swelled by 20.8% to €930.4 million in the reporting period. This rise was driven by all regions and major application segments, the company said.
Deutz said its guidance for the remainder of 2022 is still subject to change due to persistently high levels of uncertainty. Although the outbreak of the war in Ukraine did not have a material adverse impact on demand in the first half of 2022, the geopolitical implications of the war and its future trajectory are still creating significant uncertainty that may affect the company with regard to energy and commodity prices, the availability of materials and freight capacity and the possibility of Russia cutting off the supply of gas to parts of Europe.
“Our orders on hand totaled more than three-quarters of a billion euros at the end of June and were thus at a very high level,” Schulte said. “This means that we are tackling the coming months from a solid position.
“Nonetheless, our full-year guidance is still subject to change. The supply situation remains challenging and the geopolitical implications of the war in Ukraine are very uncertain. The trajectory of macroeconomic conditions is a cause for concern and highlights once again that we need to make Deutz even more resilient to economic downturns. However, we are making good progress on this front.”