Deutz, the German marine engine manufacturer that acquired Torqeedo in September this year, has reported consolidated financial results for the first three quarters of 2017.
New orders were up by 25.5% compared to the same time last year, generating sales of €1,173.8m (Q1-Q3 2016: €935.3m).
In the third quarter of 2017, new orders came to €370.8m, which was an increase of 43.7% compared with last year's figure of €258.1m.
The number of engines sold went up by 17.8% to 118,279 units in the first nine months of 2017 (Q1-Q3 2016: 100,439 engines). Unit sales in the third quarter of 2017 totalled 38,680 engines, which was 25.9% more than in the prior-year period (Q3 2016: 30,733 engines).
Revenue rose by 15.6% to €1,093.2m in the nine-month period (Q1-Q3 2016: €945.5m).
The largest region, EMEA (Europe, Middle East, Africa), saw revenue grow by 18.7%, while revenue in the Americas was up by 13.9%. Revenue in the Asia-Pacific region was on a par with the corresponding period of 2016, in which the first quarter had been boosted by licensing income. Revenue for the third quarter of 2017 amounted to €358.7m, a year-on-year increase of 19.1% (Q3 2016: €301.1m).
Operating profit (EBIT before exceptional items) improved by €8.1m compared with the first nine months of 2016, reaching €27.8m. The EBIT margin (before exceptional items) widened from 2.1% to 2.5%. At €21.3m, net income for the first three quarters of 2017 was €2.5m higher than the corresponding period of last year (Q1-Q3 2016: €18.8m). Earnings per share therefore amounted to €0.18 (Q1-Q3 2016: €0.16). Free cash flow improved by a substantial €102.4m year-on-year to reach €74.4m.
"In 2017, we are benefiting from a broad and sustained brightening of the market environment. We are strategically investing the proceeds from the sale of the land at the former Cologne-Deutz site in innovation, service and internationalisation," says Deutz's chief financial officer, Margarete Haase.
In September 2017, Deutz became the world's first engine manufacturer to be certified for the EU Stage V emissions standard, which will apply from 2019. It has therefore kept its promise to its customers as ‘Stage V ready’ becomes ‘Stage V certified’.
And through the alliance with Liebherr Machines Bulle SA, agreed in the third quarter of 2017, Deutz will also be expanding its product portfolio in the upper power range of 200kW-620kW. Production start-up is planned for 2019.
"The E-Deutz strategy is putting us on the right path to becoming the leading provider of innovative drive systems," says Frank Hiller, chairman of the Deutz Board of Management. "The acquisition of Torqeedo is the critical catalyst for our electrification strategy. It gives us an extensive portfolio of expertise and technology in all relevant areas of drive electrification. We will fully exploit this technological edge over our competitors."
Deutz AG has also acquired its Italian sales and service partner IML Motori, which will now operate in the market under the name Deutz Italy. The aim is to drive growth in the already profitable service business.
For 2017 as a whole, Deutz is reiterating its forecast of a marked rise in revenue and a moderate year-on-year increase in the EBIT margin (before exceptional items). It also expects the sale of the Cologne-Deutz site in the fourth quarter to deliver a positive contribution to earnings in the high double-digit million euros, which will be recognised as an exceptional item.