DEUTZ (DEZ) Q2 2025 earnings summary

Executive summary

• Achieved strong, profitable growth in H1 2025, with new orders up 30.7% to €1,034.1 million and revenue up 15% to €1,007.1 million, driven by acquisitions and service and energy business momentum.

• Transformation from engine manufacturer to solutions provider yielded results, with the service business now the largest segment by revenue.

• Net income fell to €7.8 million from €25.6 million year-over-year, mainly due to €25 million in Future Fit restructuring costs.

• Portfolio development, including M&A and new business units, offset weak engine demand due to economic conditions.

• Strategic initiatives included the launch of new engine platforms, expansion in services, and the establishment of a Defense business unit.

Financial highlights

• New orders up 30.7% year-over-year, surpassing €1 billion, with €250 million attributed to M&A; core business order intake flat year-over-year.

• Revenue increased 15% year-over-year, also exceeding €1 billion, with €250 million of the increase from acquisitions.

• Adjusted EBIT margin at 4.7%, down 1.0pp year-over-year, impacted by lower engine production volumes but showing a positive trend in Q2.

• Free cash flow improved to €14.4 million, significantly higher year-over-year, with normalization after a strong Q1.

• Book-to-bill ratio at 1.0; order backlog at €490.9 million (H1 2024: €365.9 million).

Outlook and guidance

• 2025 guidance confirmed: revenue expected between €2.1–2.3 billion, adjusted EBIT margin between 5.0–6.0%, and mid double-digit million euro free cash flow.

• Medium-term targets for 2028: revenue of €3.2–3.4 billion and EBIT margin of 8–9%.

• Anticipates recovery in core engine segments after summer, with cost savings from Future Fit program supporting H2 results.

• Ongoing focus on M&A and portfolio expansion, especially in new business lines.

• Guidance assumes modest market recovery in H2 2025 and easing of US-EU trade uncertainties.