DEUTZ (DEZ) Q3 2024 earnings summary

Executive summary

• Profitability was maintained in a challenging market, with positive results despite a difficult third quarter and declining core markets.

• Revenue and unit sales declined year-over-year, but service business and Americas region showed resilience, offsetting some declines in core engine markets.

• Strategic acquisitions, including Blue Star Power Systems, Daimler Truck engine portfolio, and RRPS sales/service, were completed in Q3, contributing to order intake and revenue.

• Significant cost reduction and efficiency measures were implemented, including workforce adjustments and strict expenditure controls.

Financial highlights

• Revenue for the first nine months of 2024 was €1,305.9 million, down 13.4% year-over-year; new orders at €1,346.2 million, down 3.8%.

• Adjusted EBIT margin for nine months was 4.4%; Q3 margin dropped to 1.7% due to production stoppage.

• Net income for 9M 2024 was €23.6 million; EPS at €0.18.

• Free cash flow before M&A was negative at €(28.6) million year-to-date, with guidance for at least balanced by year-end.

• Equity ratio at 47.5% as of September 30, 2024.

Outlook and guidance

• Full-year 2024 guidance confirmed: unit sales below 150,000 engines, revenue around €1.8 billion, adjusted EBIT margin 4.0–5.0%, and at least balanced free cash flow.

• Midterm targets for 2028: revenue €3.2–3.4 billion, adjusted EBIT margin 8–9%, and stable or growing dividends.

• 2030 ambition: €4.0 billion revenue and 10% profitability, with significant growth in Solutions and Service.

• Cost-cutting program aims to reduce costs by €50 million by end of 2026, with at least 40% impacting 2025 earnings.