DEUTZ (DEZ) CMD 2024 summary

Strategy update and future plans

• DUAL+ strategy realigned for 2025–2030, focusing on Classic, Service, and Solutions segments, with Solutions (Energy & New Tech) replacing the former Green business.

• Ambition to double revenue to ~€4 billion by 2030, with 11% CAGR, driven by organic and inorganic growth, especially in Solutions and Service.

• Solutions expected to grow at 30% CAGR, targeting >€500 million from Energy and >€300 million from New Technology by 2030.

• Service business to reach €1 billion revenue by 2030, expanding geographically and through digital and 3rd party models.

• Classic business to grow in absolute terms but decrease in overall share, with focus on consolidation, cost efficiency, and new market segments (e.g., Defense).

Financial guidance and targets

• 2024 guidance revised: unit sales <150,000 engines (was max. 160,000), revenue ~€1.8bn (was €1.9–2.1bn), EBIT margin 4–5% (was 5–6.5%), free cash flow at least balanced (was mid-double-digit million €).

• 2028 mid-term targets: sales €3.2–3.4bn, adjusted EBIT margin 8–9%, dividend stable or higher than previous year.

• 2030 ambition: €4bn revenue, 10% EBIT margin, with Classic ~54%, Service 25%, Solutions 21% of revenue.

• Cost reduction program to deliver €50 million annual savings by 2026, with €20 million in 2025.

• Increased financial resilience allows for higher leverage (net debt/EBITDA up to 1–2) and continued value-accretive M&A.

New business developments and operational measures

• Blue Star Power Systems acquisition strengthens Energy business in North America, targeting >$100 million revenue in 2024 and >€500 million for Energy by 2030.

• New 3.9L engine co-developed with John Deere launching in 2025; TAFE partnership for licensed production in India from 2027.

• H2 engine (TCG 7.8 H2) certified for next-gen regional trains, with first projects in China and Germany; New Tech investments reduced by 30% due to slower market uptake.

• Service network expansion, especially in the US, and digitalization (FusionHUB) to drive next-level services and revenue.

• Structural cost measures include production flexibility, procurement savings, R&D realignment, and footprint optimization (e.g., closure of Cologne Kalk by 2026, ramp-up in India).