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DEUTZ upbeat about full-year results

Wednesday, November 10th, 2010

The strong growth that has characterised business at DEUTZ in recent months continued in the third quarter. The volume of new orders received in the third quarter totalled €327.3 million, which was almost 60 per cent higher than it had been a year earlier (Q3 2009: €205.9 million).
Unit sales also rose significantly by 53.9 per cent to 40,493 engines (Q3 2009: 26,307 engines). At €285.9 million, revenue was up 47.8 per cent on the corresponding period last year (Q3 2009: €193.4 million) and, despite the normal seasonal fluctuations caused by the holiday months of July and August, it was only 4.1 per cent lower than in the second quarter of 2010.
During the first nine months of 2010, new orders, unit sales and revenue all increased significantly year on year. For example, the Company took new orders amounting to €986.8 million between January and September 2010, 61 per cent more than in the first nine months of 2009 (€611.8 million). Unit sales were up almost 34 per cent on the previous year at 116,000 engines. Revenue was also much higher than in the same period of the previous year. Whereas the year-on-year revenue gain for the first half of 2010 had been 21.3 per cent, it amounted to 29.4 per cent for the first nine months of 2010, with revenue reaching €820.4 million.
The volume of orders on hand is a positive sign for future business performance. As at 30 September 2010, the DEUTZ Group’s total orders on hand amounted to €320.6 million, which was more than twice as high as the year before (30 September 2009: €153.7 million). Growth in the new engine business was again particularly strong. Orders on hand for engines totalled €309.6 million, 115.4 per cent higher than they had been twelve months earlier (30 September 2009: €143.7 million). This volume of orders on hand means that capacity utilisation at DEUTZ will remain high for the rest of 2010.
With EBIT before one-off items of €12.1 million, DEUTZ’s operating profit for the third quarter of 2010 was again in the double-digit millions. Total operating profit for the first nine months of 2010 amounted to €25.4 million, contrasting with the loss of €40.7 million that the Company had posted a year earlier. Besides the strong increase in revenues, this positive news can be attributed above all to the successful MOVE action programme, which was launched at the end of 2008 to bring lasting improvements in the Company’s profitability. The programme has also enabled DEUTZ to permanently reduce fixed costs by €85 million per year.
Against this background, the chairman of the DEUTZ Board of Management Dr Helmut Leube is positive about the future: “We are significantly raising our forecast for this year. Due to our extremely encouraging business performance, we now expect to sell more than 165,000 engines in 2010. We forecast revenue of almost €1.2 billion and operating profit (before one-off items) of over €30 million.”
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