Impact of economic conditions on business performance

Much brighter market environment

On the whole, economic conditions were far more positive in 2017 than in the year before. Prices for oil, commodities and agricultural goods rose in 2017, stimulating capital expenditure in all of the major application segments and in all regions. Moreover, by the end of 2016 DEUTZ’s European customers had used up most of the stock of engines that they had built up ahead of the last change to emissions standards. This had led to reduced demand in previous years. These customers’ ordering patterns have since normalised and, in 2017, were once again largely in line with their requirements. The market’s revival and this depletion of customers’ inventories resulted in a sharp rise in new orders at DEUTZ.

The global economy grew by 3.7 per cent in 2017. DEUTZ’s revenue rose by 17.4 per cent in this period. The economy in the eurozone expanded by 2.4 per cent in the year under review. DEUTZ’s main customer industries – construction equipment, material handling equipment and agricultural machinery – also fared well in this region. Our revenue in our largest market, EMEA (Europe, Middle East and Africa), climbed by 21.9 per cent in 2017.

The US economy remained on its growth trajectory, expanding by 2.3 per cent. Demand for construction equipment and material handling equipment also rose in North America. Our revenue in the Americas region advanced by 11.9 per cent. China, our key international market, generated economic growth of 6.8 per cent, which was on a par with 2016. Against this backdrop, the markets for construction equipment and for light and medium-duty trucks saw slight growth while the heavy-duty truck market expanded significantly. By contrast, DEUTZ’s revenue in the Asia-Pacific region fell slightly, by 0.3 per cent, as the figure for the prior year had included licensing income.

DEUTZ thus outperformed the market in virtually all regions and application segments.