RCS - Deutz AG - Annual Results

Deutz AGAnnouncement

14/03/2022 08:15

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RNS Number : 6374E  Deutz AG  14 March 2022

 DEUTZ AG / Key word(s): Annual Results/Miscellaneous

DEUTZ AG: DEUTZ reports significant increase in revenue and earnings for 2021

14.03.2022

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

 ·      Orders on hand at around €680 million, more than double the
 figure as at the end of 2020

 ·      Significant improvement in operating profit and free cash flow

 ·      Proposed dividend of €0.15 per share

 ·      Guidance for 2022 under review

 Cologne, March 14, 2022 -DEUTZ, one of the world's leading manufacturers of
 innovative drive systems for off-highway applications, can look back on a
 successful 2021. The Company achieved its guidance, which it had most recently
 raised in September 2021.( 1 ) "For DEUTZ, 2021 was a highly successful year
 from both an operational and a strategic perspective. We increased our revenue
 by almost 25 percent to €1.62 billion and improved our EBIT margin before
 exceptional items by around 8 percentage points to 2.3 percent. The
 book-to-bill ratio stood at 1.24 at the end of the year. At the same time, we
 made substantial progress with transforming our business to focus more on
 alternative, green drive systems. Our hydrogen engine is just one example of
 how DEUTZ is positioning itself in the field of off-highway drive technologies
 for a sustainable future," says CEO Dr. Sebastian C. Schulte. Commenting on
 the current year, he adds: "The supply situation remains difficult, and we
 anticipate that the supply chain will continue to contribute to the pressure
 on margins. Moreover, nobody can predict the economic impact of the war
 between Russia and Ukraine. We are therefore preparing for a challenging
 year."

 To report even more transparently on its transformation, DEUTZ introduced a
 new Green segment on January 1, 2022 that will cover all activities connected
 with the development and production of new non-diesel drives. The new
 reporting structure will be used for the first time in connection with the
 results for the first quarter of 2022.

 In 2021, DEUTZ also expanded its high-margin service business - a key pillar
 of its growth strategy - and tailored it even more closely to the requirements
 of its customers. This included the launch of S-DEUTZ Telematics, the Lifetime
 Parts Warranty, and DEUTZ Lifecycle Solutions. DEUTZ reached its service
 revenue target of around €400 million for 2021.

 Double-digit percentage increases in new orders, unit sales, and revenue

At €2,012.6 million in 2021, DEUTZ's new orders were up by 52.2 percent
 compared with 2020, which had been heavily affected by coronavirus. This
 growth can be explained by the fact that customers were very willing to
 invest, reflected in double-digit percentage increases across all application
 segments and regions. The exceptionally strong rise was also attributable to
 one-off effects of spending brought forward in June and September, which
 amounted to more than €100 million. This situation came about mainly because
 of customer orders being brought forward in response both to price adjustments
 and to longer lead times.

 As at December 31, 2021, orders on hand stood at €676.7 million (December
 31, 2020: €269.0 million), which indicates continued growth. The proportion
 of orders on hand attributable to the service business stood at €35.7
 million (December 31, 2020: €24.4 million).

 With a total of 201,283 engines sold, the DEUTZ Group registered an increase
 in unit sales of 33.4 percent in the reporting period. The number of DEUTZ
 engines( 2 ) sold rose by 32.9 percent to 160,882. The DEUTZ subsidiary
 Torqeedo sold 40,401 electric boat drives, which was 35.1 percent more than in
 2020.

 Reflecting the growth in unit sales, DEUTZ generated consolidated revenue of
 €1,617.3 million in 2021. All application segments contributed to this
 year-on-year growth of 24.8 percent. Service revenue rose by 15.7 percent to
 €403.1 million in the reporting period.

 All regions contributed to the increase in revenue with double-digit
 percentage growth rates. The EMEA region saw a particularly sharp rise.

 Strong improvement in profitability

EBIT before exceptional items (operating profit) amounted to €37.2 million
 in 2021, following an operating loss of €74.7 million in 2020. This
 improvement was primarily due to the jump in revenue, the related economies of
 scale, and the increasingly tangible savings resulting from the restructuring
 and cost-cutting measures that have been initiated. However, operating profit
 was once again squeezed by the loss reported by DEUTZ subsidiary Torqeedo,
 which has not yet managed to break even. The EBIT margin before exceptional
 items made a strong year-on-year improvement from minus 5.8 percent to plus
 2.3 percent.

 EBIT for 2021 stood at €34.1 million (2020: minus €106.6 million). This
 figure includes exceptional items of minus €3.1 million. These related to
 the efficiency program and were the result of the adjustment of the provision
 for restructuring, which had been recognized for the first time in the
 previous year. In 2020, restructuring costs of €31.9 million had been
 recognized as an exceptional item in connection with this program. The EBIT
 margin came to 2.1 percent (2020: minus 8.2 percent).

 Net income amounted to €38.2 million in 2021, following a net loss of
 €107.6 million reported in 2020. Earnings per share increased from minus
 €0.89 in 2020 to €0.32 in the reporting year. Adjusted for exceptional
 items, net income improved to €41.3 million (2020: net loss of €75.7
 million) and adjusted earnings per share improved to €0.34 (2020: minus
 €0.63).

 Clear improvement in free cash flow; financial position remains comfortable

Cash flow from operating activities more than doubled in 2021 compared with
 the figure of €44.9 million in 2020, when cash flow had been weakened by the
 pandemic. The improvement to €93.3 million was primarily attributable to the
 increased volume of business and the higher level of operating profit. At the
 same time, careful monitoring enabled working capital to be kept virtually
 unchanged year on year, despite the growth in the volume of business. As a
 result of the increase in cash flow from operating activities, free cash flow
 was also up substantially year on year at €21.6 million, having been at
 minus €35.8 million in 2020.

 Reflecting these changes in cash flow in 2021, net financial debt improved
 slightly compared with the end of 2020, falling by €4.1 million to €79.7
 million as at December 31, 2021.

 With an equity ratio of 45.6 percent, which is above the general target figure
 of greater than 40 percent, the DEUTZ Group's financial position remains very
 comfortable. Despite having ended the €150 million credit line that was
 granted to it with the assistance of Germany's KfW development bank (known as
 the COVID-19 tranche), DEUTZ has unused credit lines totaling around €200
 million at its disposal.

 Dividend of €0.15 per share proposed for 2021

Last year, DEUTZ did not pay its shareholders a dividend for 2020 due to the
 coronavirus-related accumulated loss. For 2021, however, DEUTZ AG would like
 its shareholders to reap the benefits of its success once again, and the Board
 of Management and Supervisory Board are jointly proposing to the Annual
 General Meeting that €18.1 million of the accumulated income be used to pay
 a dividend of €0.15 per share. This would give a dividend ratio of 46.9
 percent. Under its dividend policy, the Company aims for a ratio of around 30
 percent.

 Guidance for 2022 due to significant uncertainty under review

The geopolitical impact of the war between Russia and Ukraine on the global
 economy and on the flow of goods around the world is highly uncertain.
 Fortunately, none of DEUTZ's direct suppliers are located in these regions.
 Also our direct business activities in the regions affected by the war account
 for a relatively small portion of our revenue. But the indirect impact for the
 DEUTZ business is currently impossible to assess. We therefore have put the
 guidance as published in our annual report 2021 under review. All new engine
 business with Russia and Belarus has been discontinued until further notice.

 Before the war between Russia and Ukraine broke out, we had assumed that the
 upturn in the relevant customer industries would be sustained this year. At
 that time, it was also assumed that global problems with the supply of input
 materials would continue to weigh on business performance and that supply
 issues for certain components would persist. Based on these assumptions, we
 predicted unit sales of 165,000 to 180,000 DEUTZ engines in 2022, which would
 have resulted in an increase in revenue to between €1.70 billion and €1.85
 billion. The EBIT margin before exceptional items would likely have been
 between 3.5 percent and 5.5 percent. This span reflects not only the
 aforementioned revenue range but also the expectation that prices for
 commodities and energy would rise further and that it would not be possible to
 pass on the additional costs to customers straight away due to the high level
 of orders on hand. Free cash flow would likely have been an amount in the low
 to mid-double-digit millions of euros.

 The 2021 annual report is available on our website at
 www.deutz.com/en/investor-relations (http://www.deutz.com/investor-relations)
 .

 DEUTZ Group: overview of key figures

€ million                                              FY 2021  FY 2020  Change   Q4 2021  Q4 2020  Change
 New orders                                             2,012.6  1,322.5  52.2%    498.6    388.9    28.2%
 Group unit sales (units)                               201,283  150,928  33.4%    55,924   42,369   32.0%
 thereof DEUTZ engines                                  160,882  121,034  32.9%    44,609   36,532   22.1%
 thereof Torqeedo                                       40,401   29,894   35.1%    11,315   5,837    93.8%
 Revenue                                                1,617.3  1,295.6  24.8%    443.9    367.4    20.8%
 EBIT                                                   34.1     -106.6   -        6.3      -3.2     -
 thereof exceptional items                              -3.1     -31.9    90.3%    0.0      5.9      -
 Operating profit/loss (EBIT before exceptional items)  37.2     -74.7    -        6.3      -9.1     -
 EBIT margin (%)                                        2.1      -8.2     +10.3pp  1.4      -0.9     +2.3pp
 EBIT margin before exceptional items (%)               2.3      -5.8     +8.1pp   1.4      -2.5     +3.9pp
 Net income                                             38.2     -107.6   -        14.5     -3.1     -
 Net income before exceptional items                    41.3     -75.7    -        14.5     -7.4     -
 Earnings per share (€)                                 0.32     -0.89    -        0.12     -0.03    -
 Earnings per share before exceptional items (€)        0.34     -0.63    -        0.12     -0.06    -
 Equity                                                 588.4    535.2    9.9%     -        -        -
 Equity ratio (%)                                       45.6     45.3     +0.3pp   -        -        -
 Cash flow from operating activities                    93.3     44.9     107.8%   25.4     64.3     -60.5%
 Free cash flow                                         21.6     -35.8    -        6.4      43.0     -85.1%
 Net financial position (Dec. 31)                       -79.7    -83.8    4.9%     -        -        -
 Employees( 3 )( )(Dec. 31)                             4,751    4,586    3.6%     -        -        -

 

 Upcoming financial dates

April 28, 2022: Annual General Meeting (virtual)

May 5, 2022: Quarterly statement for the first quarter of 2022

August 11, 2022: Interim report for the first half of 2022

 Contact

DEUTZ AG / Christian Ludwig / SVP Communications & Investor Relations

Tel: +49 (0)221 822 3600 / Email: Christian.Ludwig@deutz.com

 DEUTZ AG / Svenja Deißler / Investor Relations

Tel: +49 (0)221 822 2491 / Email: Svenja.Deissler@deutz.com

Forward-looking statements

This press release 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.

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
 drive solutions in the power range up to 620 kW for off-highway applications.
 The current portfolio extends from diesel, gas, and hydrogen engines to hybrid
 and all-electric drives. DEUTZ drives are used in a wide range of applications
 including construction equipment, agricultural machinery, material handling
 equipment such as forklift trucks and lifting platforms, commercial vehicles,
 rail vehicles, and boats used for private or commercial purposes. DEUTZ has
 around 4,750 employees worldwide and over 800 sales and service partners in
 more than 130 countries. It generated revenue of around €1.6 billion in
 2021. Further information is available at www.deutz.com
 (http://www.deutz.com/) .

( 1 ) See the ad hoc disclosure dated September 13, 2021.

( 2 ) Excluding electric boat drives from DEUTZ subsidiary Torqeedo.

( 3 ) Number of full-time equivalents (FTEs).

 14.03.2022 Dissemination of a Corporate News, transmitted by DGAP - a service
 of EQS Group AG.

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

The DGAP Distribution Services include Regulatory Announcements,
 Financial/Corporate News and Press Releases.

Archive at www.dgap.de

 

Upcoming financial dates

April 28, 2022: Annual General Meeting (virtual)

May 5, 2022: Quarterly statement for the first quarter of 2022

August 11, 2022: Interim report for the first half of 2022

Contact

DEUTZ AG / Christian Ludwig / SVP Communications & Investor Relations

Tel: +49 (0)221 822 3600 / Email: Christian.Ludwig@deutz.com

DEUTZ AG / Svenja Deißler / Investor Relations

Tel: +49 (0)221 822 2491 / Email: Svenja.Deissler@deutz.com

Forward-looking statements

This press release 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.

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
drive solutions in the power range up to 620 kW for off-highway applications.
The current portfolio extends from diesel, gas, and hydrogen engines to hybrid
and all-electric drives. DEUTZ drives are used in a wide range of applications
including construction equipment, agricultural machinery, material handling
equipment such as forklift trucks and lifting platforms, commercial vehicles,
rail vehicles, and boats used for private or commercial purposes. DEUTZ has
around 4,750 employees worldwide and over 800 sales and service partners in
more than 130 countries. It generated revenue of around €1.6 billion in
2021. Further information is available at www.deutz.com
(http://www.deutz.com/) .

( 1 ) See the ad hoc disclosure dated September 13, 2021.

( 2 ) Excluding electric boat drives from DEUTZ subsidiary Torqeedo.

( 3 ) Number of full-time equivalents (FTEs).

 

 

14.03.2022 Dissemination of a Corporate News, transmitted by DGAP - a service
of EQS Group AG.

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

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.

Archive at www.dgap.de

 

 

 Language:     English
 Company:      DEUTZ AG
               Ottostraße 1
               51149 Köln (Porz-Eil)
               Germany
 Phone:        +49 (0)221 822 0
 Fax:          +49 (0)221 822 3525
 E-mail:       ir@deutz.com
 Internet:     www.deutz.com
 ISIN:         DE0006305006
 WKN:          630500
 Indices:      SDAX
 Listed:       Regulated Market in Dusseldorf, Frankfurt (Prime Standard); Regulated
               Unofficial Market in Berlin, Hamburg, Hanover, Munich, Stuttgart, Tradegate
               Exchange
 EQS News ID:  1301067

 

 

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