In This Article:
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New Orders: EUR791 million, down 18.1% year-over-year.
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Revenue: EUR876 million, down 12.6% year-over-year.
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EBIT Margin: 5.7%.
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Unit Sales: Approximately 74,000 engines, down 19% year-over-year.
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Service Business Revenue: EUR253 million, up 6.5% year-over-year.
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Material Handling Revenue: Up 9.2%.
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Construction Revenue: EUR212 million, down 26%.
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Agricultural Equipment Revenue: Down 32%.
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Americas Revenue: EUR240 million, slightly up.
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China Revenue: Down 20%.
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APAC (excluding China) Revenue: Down 11%.
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Operating Cash Flow: Positive, but impacted by a EUR44 million increase in working capital.
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Free Cash Flow (including M&A): EUR31.2 million positive.
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Free Cash Flow (before M&A): Minus EUR35 million.
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R&D Spending: Almost EUR50 million.
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Capital Expenditure: EUR45 million, including leasing.
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Equity Ratio: Almost 50% as of June 30.
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Capital Increase: EUR72 million raised through new shares.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Deutz AG (DEUZF) reported a resilient EBIT margin of 5.7% despite challenging market conditions, demonstrating improved operational efficiency.
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The service business grew by 6.5%, now representing almost 30% of the overall business, contributing to revenue stability.
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The company successfully launched a new, flexible assembly line in Cologne, enhancing production capabilities for both diesel and hydrogen engines.
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Deutz AG (DEUZF) completed strategic acquisitions, including Blue Star Power Systems and a transaction with Rolls-Royce Power Systems, expected to positively impact revenue and profit.
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The company achieved significant cost savings, including a 25% reduction in packaging costs and a successful pushback on supplier price increase claims, enhancing profitability.
Negative Points
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New orders decreased by 18.1% compared to the previous year, with significant declines in construction and agriculture sectors.
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Revenue fell by 12.6%, and unit sales dropped by almost 19%, reflecting a challenging market environment.
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The book-to-bill ratio remained below 1, indicating ongoing challenges in order intake versus revenue generation.
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Working capital increased by EUR44 million due to production adjustments, impacting cash flow negatively.
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The green segment reported a loss of EUR17.8 million, highlighting ongoing challenges in achieving profitability in new technology areas.
Q & A Highlights
Q: Can you clarify the cost savings achieved in the first semester? A: Sebastian C Schulte, Chairman - Board of Management: Yes, the cost savings were in the low double-digit million euros.