Half Year 2024 DEUTZ AG Earnings Call Transcript
Key Points
- Deutz AG (DEUZF) reported a resilient EBIT margin of 5.7% despite challenging market conditions, demonstrating improved operational efficiency.
- The service business grew by 6.5%, now representing almost 30% of the overall business, contributing to revenue stability.
- The company successfully launched a new, flexible assembly line in Cologne, enhancing production capabilities for both diesel and hydrogen engines.
- Deutz AG (DEUZF) completed strategic acquisitions, including Blue Star Power Systems and a transaction with Rolls-Royce Power Systems, expected to positively impact revenue and profit.
- The company achieved significant cost savings, including a 25% reduction in packaging costs and a successful pushback on supplier price increase claims, enhancing profitability.
- New orders decreased by 18.1% compared to the previous year, with significant declines in construction and agriculture sectors.
- Revenue fell by 12.6%, and unit sales dropped by almost 19%, reflecting a challenging market environment.
- The book-to-bill ratio remained below 1, indicating ongoing challenges in order intake versus revenue generation.
- Working capital increased by EUR44 million due to production adjustments, impacting cash flow negatively.
- The green segment reported a loss of EUR17.8 million, highlighting ongoing challenges in achieving profitability in new technology areas.
Good morning to everyone from Cologne. Please note that this call is being recorded, and a replay will be available on our website at deutz.com later today. Your participation in the call implies your consent. Joining me today are our CEO, Sebastian Schulte; and our CFO, Timo Krutoff. Sebastian starts with operational and strategic milestones of the first half of the year. Timo will then provide a deeper insight into the financial data.
Following this, our CEO will go into more detail on the most important points of our strategy implementation in recent calls. As always, we conclude with a look at the forecast and outlook before we look forward to your questions. Please note that management's comments during this call will include forward-looking statements, which involve risks and uncertainties. For the discussion of risk factors, I encourage you to review the disclaimer contained in our annual report and this presentation.
All documents relating to our first half of 2024 reporting are
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