Deutz Ag · XETR:DEZ
Deutz — H1 2024 Earnings Presentation
32 slides from Deutz's earnings presentation, Aug 8, 2024
Slide 1: Results for H1 2024
DEUTZ Results for H1 2024 August 8, 2024
Slide 2: Disclaimer
Disclaimer Unless stated otherwise, all the figures given in this presentation refer to continuing operations. The details given in this document are based on the information available at the time it was prepared. This presents the risk that actual figures may differ from forward-looking statements.
Slide 3: Agenda: Overview H1 2024 & update on strategic initiatives
AGENDA Overview H1 2024 & update on strategic initiatives Dr. Sebastian C. Schulte Dr. Sebastian C. Schulte | CEO 3 DEUTZ Geschäftszahlen H1 2024 | 8. August 2024
Slide 4: DEUTZ shows resilience in H1 2024 in a downturn environment
DEUTZ shows resilience in H1 2024 in a downturn environment characterized by weak demand from core customer industries New orders Revenue EBIT margin1 €791 million €876 million 5.7% Overall -18.1% on prior-year -12.6% on prior-year period, Business shows improved period due to weak orders hence sign
Slide 5: Our core markets currently still a mixed bag – caught in the cycle
Our core markets currently still a mixed bag – caught in the cycle with continuing US strenghts Segment view (revenues in € million) Regional view (revenues in € million) -26% -19% 287 584 475 212 +2% -32% 136 235 240 92 America +9% -20% 215 235 64 51 +6% -11% 238 253 82 73 APAC H1 2023 H1 2024 ex C
Slide 6: Profitability still robust despite cyclical decline in revenue
Profitability still robust despite cyclical decline in revenue Profit 7.3% 7.0% 7.0% 6.7% 8 6.1% 30 5.3% 6 5.0–6.5% 20 36.8 34.6 35.2 37.0 4 27.7 22.4 Adjusted EBIT margin 10 2 Adjusted EBIT (€ million) 0 0 Guidance FY 2024 +9.9% -2.5% +2.4% -18.2% Revenue 556.0 -7.5% 507.0 494.2 506.0 454.7 420.8 R
Slide 7: Strategic cost reduction & avoidance program in procurement on track
Strategic cost reduction & avoidance program in procurement on track: 450 measures under realization Direct spend savings Indirect spend savings ▪ Realized savings in H1 2024 of a low double-digit ▪ Realized savings in H1 2024 of higher single-digit million-euro amount million-euro amount ▪ Savings
Slide 8: New assembly system at DEUTZ' Cologne site
Great flexibility in terms of volume and engine variants: New assembly system at DEUTZ’ Cologne site ▪ Successful start of scalable and flexible production system ‘Band 6’ in April – allowing to respond to changing market requirements more efficiently ▪ Equipped for full production of 4–8 liter both
Slide 9: Recent strategic moves along Dual+ strategy strengthen growth and resilience
Recent strategic moves along Dual+ strategy strengthen growth and resilience June 27, 2024 Acquisition of Blue Star Power Systems (closed beginning of August) July 1, 2024 Strategic Cooperation with TAFE Motors August 1, 2024 Transaction with Rolls-Royce Power Systems closed 9 DEUTZ Results H1 2024
Slide 10: Agenda: H1 2024 in figures
AGENDA H1 2024 in figures Timo Krutoff Dr. Sebastian C. Schulte | CEO 10 DEUTZ Geschäftszahlen H1 2024 | 8. August 2024
Slide 11: Results for H1 2024
Results for H1 20241 New orders Unit sales Revenue € million Units € million -18.1% -18.9% -12.6% 965.9 91,451 1,001.2 791.0 74,162 875.5 H1 2023 H1 2024 H1 2023 H1 2024 H1 2023 H1 2024 ▪ Book-to-bill ratio at 0.90 (H1 2023: 0.96) and orders on hand at €365.9 million (December 31, 2023: €450.4 milli
Slide 12: Revenue in detail
Revenue in detail1 Revenue breakdown by application segment Revenue breakdown by region H1 2024 (H1 2023) H1 2024 (H1 2023) Stationary Equipment Miscellaneous Africa/Middle East Europe 6% (9%) 3% (4%) 4% (4%) (excl. Germany) €56.2 million €27.9 million €35.6 million 36% (38%) -37.5% -22.9% -0.6% €31
Slide 13: Profitability remains within guidance range
Profitability remains within guidance range EBIT before exceptional items1 (€ million) % Adjusted EBIT margin ▪ EBIT margin before exceptional items1 came in at 5.7% in H1 2024, still well within the guidance range for FY 2024 -29.8% due to: ▪ Expansion of profitable service business 7.1% ▪ Successf
Slide 14: R&D spending, capital expenditure, and working capital
R&D spending, capital expenditure, and working capital1 Net R&D spending2 Capital expenditure2,3 Working capital € million € million € million +4.5% +11.5% 49.2 -48.5% 423.6 47.1 88.4 379.8 6.0 4.7% 5.6% 18.4% 21.9% 45.5 12.4 H1 2023 H1 2024 H1 2023 H1 2024 Dec. 31, 2023 June 30, 2024 R&D ratio3 The
Slide 15: Changes in cash flow and net financial position
Changes in cash flow and net financial position Cash flow from Free cash flow2, 3 Free cash flow before M&A1, 3 Net financial position1, 4 € million € million € million operating activities1 € million -52.9 -2.8 56.2 +22.9 -53.2 Thereof leases 18.1 31.2 Thereof leases 8.3 -81.5 -85.1 3.3 -35.1 -163.
Slide 16: Results for H1 2024: Classic and Green segments
Results for H1 2024 Classic and Green segments Classic Green1 H1 2023 H1 2024 H1 2023 H1 2024 ▪ Classic segment dominates the Group’s New orders financial results 964.2 788.0 1.7 3.0 € million ▪ Due to start-up nature of the Green segment's activities, incoming orders Unit sales 91,424 73,806 27 356
Slide 17: Additional funds for growth: Successful capital increase
Additional funds for growth: Successful capital increase carried out beginning of Q3 ▪ 10% capital increase against cash contributions from authorized capital with the exclusion of pre-emption rights carried out early July1 via accelerated bookbuilding ▪ Approx. 12.6 million new shares were placed a
Slide 18: Agenda: Strategic milestones for future growth & outlook
AGENDA Strategic milestones for future growth & outlook Dr. Sebastian C. Schulte Dr. Sebastian C. Schulte | CEO 18 DEUTZ Results H1 2024 | August 8, 2024
Slide 19: DEUTZ becomes a solution provider: acquisition of Blue Star Power Systems
DEUTZ becomes a solution provider: Entering the market of decentralized energy supply by acquisition of Blue Star Power Systems ▪ Blue Star Power Systems is one of the top 10 Transaction genset producers in the North American market ▪ Purchase agreement signed on June 27, ▪ Production and sales of d
Slide 20: Blue Star Power Systems is the new centerpiece of our Energy business
Blue Star Power Systems is the new centerpiece of our “Energy” business which we will build and buy Why "Energy" for DEUTZ Strengthening all areas of "Dual+" ▪ Tapping into the attractive and less cyclical ▪ CLASSIC: Further strengthening of the DEUTZ energy market and establishment of an brand by l
Slide 21: Benefits for DEUTZ
Benefits for DEUTZ Benefits for DEUTZ Creates business, which is more profitable and has sustainably Profitability stronger growth – also additional opportunity for DEUTZ engines Broadens business to be a solution provider and offers opportunities to Portfolio scale hydrogen business faster and to d
Slide 22: Strategic cooperation with TAFE Motors
Access to strongly growing markets with long-term prospects: Strategic cooperation with TAFE Motors ▪ DEUTZ signed long-term cooperation with TAFE Motors for licensed production of DEUTZ engines starting 2027 ▪ Objective: Production of up to 30,000 DEUTZ-engines per year until 2030 in 2.2 liter (50-
Slide 23: Benefits for DEUTZ
Benefits for DEUTZ Creates profitable business Profitability in growth markets with new customers; DEUTZ receives license fees Enables additional Portfolio marketing of proven technologies Provides access to new Resilience suppliers and broadens regional footprint TAFE Motors is a subsidiary of TAFE
Slide 24: Defense: a growth opportunity for DEUTZ
Defense: a growth opportunity for DEUTZ Our approach ▪ Systematically exploiting growth opportunities in defense given changed geopolitical outlook globally ▪ Leveraging our strong engine expertise and brand – we are already in the market on a small scale ▪ Partnering where required to gain scale an
Slide 25: Agreement with Rolls-Royce Power Systems closed on August 1, 2024
Consolidating the non-captive engine market: Agreement with Rolls-Royce Power Systems closed on August 1, 2024 ▪ Transaction with Rolls-Royce Power Systems (RRPS) ▪ DEUTZ took over a portfolio of approx. €300 million revenue p.a. for engines and service with adjusted EBIT margin above current DEUTZ
Slide 26: Daimler Truck partnership opens up new markets and customers
Daimler Truck partnership opens up new markets and customers 26 DEUTZ Results H1 2024 | August 8, 2024
Slide 27: Guidance for 2024
Guidance for 2024 2023 2024e ▪ Guidance confirmed for revenue, Max. of 160,000 engines adj. EBIT and FCF; in terms of unit Unit sales 186,718 engines (previously: 160,000 to sales now lower end of previous 180,000) range expected at the best ▪ Closing of agreement with Rolls- Revenue €2.1 billion €1
Slide 28: Medium-term targets based on the Dual+ strategy
Medium-term targets based on the Dual+ strategy Outlook for 2025 Revenue >€2.5 billion Service business approx. share of revenue €600 million Adjusted 6.0% to 7.0% EBIT margin1 DEUTZ confirms its medium-term targets for 2025 28 1 Before exceptional items. DEUTZ Results H1 2024 | August 8, 2024
Slide 29: DEUTZ Capital Markets Day 2024 – Save the date
DEUTZ CAPITAL MARKETS DAY 2024 SAVE THE DATE October 8, 2024 DEUTZ AG Headquarters Cologne
Slide 30: Any questions?
Thank you for your time. Any questions?
Slide 31: Financial calendar and contact details
Financial calendar and contact details Financial calendar Contact Capital Markets Day October 8, 2024 Investor Relations Q3 2024 quarterly statement November 7, 2024 +49 (0) 221 822 3600 2024 Annual report 2024 March 20, 2025 ir@deutz.com Follow us: 2023 ONLINE ANNUAL REPORT DEUTZ 2023 – THE MAGAZIN
Slide 32: DEUTZ Results H1 2024 | August 8, 2024
DEUTZ Results H1 2024 | August 8, 2024