Business performance in the DEUTZ Compact Engines (DCE) segment

Significantly more orders than in 2016

In the year under review, the DEUTZ Compact Engines (DCE) segment received new orders worth €1,290.4 million, which was 27.6 per cent up on 2016 when orders worth €1,011.6 million were received. All application segments except Automotive saw rises. Orders on hand amounted to €209.0 million at the end of the year, up by 43.6 per cent compared with the end of 2016.

Unit sales up by 23.1 per cent

The DCE segment’s unit sales rose sharply to reach 151,671 engines, compared with 123,179 engines in 2016. In EMEA, our largest market, we sold 105,381 engines, which was 26.9 per cent more than in 2016. Unit sales climbed by 12.5 per cent in the Americas region and by 23.3 per cent in the Asia-Pacific region. All application segments except Automotive and Stationary Equipment saw increased unit sales.

Considerably higher revenue

At €1,227.5 million, revenue in the DCE segment was up by 22.7 per cent year on year (2016: €1,000.8 million). The EMEA region’s revenue advanced by 26.4 per cent to €911.7 million. Furthermore, revenue in the Americas region rose by 12.5 per cent to €225.5 million and in the Asia-Pacific region by 14.0 per cent to €90.3 million. The breakdown of revenue by application segment reveals a very positive picture, except in the case of Automotive. The strongest increases were reported in the Material Handling (43.0 per cent), Agricultural Machinery (31.4 per cent) and Construction Equipment (25.1 per cent) application segments. There were also rises in revenue, of 5.1 per cent and 11.1 per cent respectively, for the Stationary Equipment application segment and the service business. However, revenue in the Automotive application segment declined by 26.8 per cent.

Good final quarter

In the DCE segment, new orders reached €321.1 million in the fourth quarter of 2017. This was 19.9 per cent more than in the fourth quarter of the previous year and 4.4 per cent up on the previous quarter. Unit sales rose by 33.0 per cent year on year to 39,724 engines and also exceeded the figure for the previous quarter by 8.9 per cent. Revenue in the final quarter of 2017 amounted to €319.9 million, which was 27.4 per cent more than in the fourth quarter of 2016 and 8.8 per cent more than in the third quarter of 2017.

DEUTZ Compact Engines: Revenue by application segment

P044_Chart: DEUTZ Compact Engines: Revenue by application segment

Strong improvement in DCE’s operating profit

The DEUTZ Compact Engines segment reported an operating profit (EBIT before exceptional items) of €22.5 million in 2017 (2016: operating loss of €6.1 million). This turnaround of €28.6 million was largely attributable to the larger volume of business and the improvement in the share of profit (loss) of equity-accounted investments. The main countervailing effects were higher research and development costs, negative currency effects and increased freight costs. Research and development costs included an impairment loss of €8.8 million recognised in respect of a development project.