DGAP-News: DEUTZ AG / Key word(s): Annual Results/Miscellaneous
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. "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
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 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 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
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
Guidance for 2022 due to significant uncertainty under review
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.
Upcoming financial dates
DEUTZ AG / Svenja Deißler / Investor Relations
14.03.2022 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
51149 Köln (Porz-Eil)
+49 (0)221 822 0
+49 (0)221 822 3525
Regulated Market in Dusseldorf, Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID:
End of News
DGAP News Service