DEUTZ set to expand business in Asia
New joint ventures to underpin growth across all segments despite weaker demand for products
THE current slowdown in the global economy has affected DEUTZ AG’s business performance so far this year. The company received orders worth €701.0 million in the first half of 2012, which constituted a decrease of 12.1%, compared with the same period last year, during which customers had placed their orders early in response to the prevailing economic situation and DEUTZ’s excellent production capacity utilization.
Unit sales of engines were also down, as DEUTZ sold 93,853 engines in the first half of 2012, which was 12.4% down than in the corresponding period of last year. Unit sales and revenue, however, have been slightly higher in the second quarter of 2012. Unit sales rose from 46,461 engines in the first quarter to 47,392 units in the second quarter of this year.
At €344.1 million, revenue also posted a modest increase on the previous quarter (Q1 2012: €336.9 million), while operating profit came to €11.3 million in the second quarter, which was around €1.0 million higher than in the first three months of the year (Q1 2012: €10.3 million).
DEUTZ say they have responded to the weaker demand for their products by cutting forecasts for this year. It now expects its revenue for 2012 as a whole to be within a range of €1.3 billion–€1.4 billion and its EBIT margin to be between 3.0 and 4.0%.
‘In the first half of 2012 we were unable to build on our impressive start to the year,’ said Dr Helmut Leube, chairman of DEUTZ’s board of management. ‘This was largely due to the macroeconomic situation, which is still afflicted by considerable uncertainty. Nonetheless, we are confident that DEUTZ is well positioned for the future and will continue to grow profitably over the medium to long term.
‘Our new joint venture in Shandong is rapidly gaining momentum and should soon enable us to achieve our ambitious goals in Asia. Our plans to set up a joint venture in China with Volvo are also making good headway. In addition, we have opened new service centres in Moscow and Madrid in order to expand our service-related business.’
