DEUTZ AG, DE0006305006

DEUTZ AG, DE0006305006

10.11.2021 - 07:33:52

DEUTZ AG: DEUTZ sees significant growth of new orders

sold rose by 37.6 percent to 116,273. The DEUTZ subsidiary Torqeedo sold 29,086 electric boat drives, which was 20.9 percent more than in the first three quarters of 2020. Almost all application segments saw big increases in unit sales. Only Stationary Equipment fell short of the level in the prior-year period due to a decrease in unit sales of gensets. The EMEA region, which is currently DEUTZ's largest sales market, saw the sharpest rise in absolute terms. Unit sales in this region climbed by 35.2 percent.

Reflecting the growth in unit sales, DEUTZ generated consolidated revenue of ?1,173.4 million in the period under review. All application segments contributed to this year-on-year growth of 26.4 percent. The lower rise in revenue, relative to the rise in unit sales, was mainly the result of the disproportionately sharp increase in demand for engines with a capacity of less than 4 liters. Service revenue swelled by 16.2 percent to ?298.4 million, primarily due to the substantial growth of business from parts sales. This means that the revenue target of around ?400 million for the service business in 2021 is in reach.

All regions contributed to the increase in revenue with double-digit percentage growth rates. The German sales market saw a particularly sharp rise of 32.4 percent. In China, the most important sales market for the regional growth strategy, DEUTZ advanced its revenue by 32.8 percent compared with the prior-year period to reach ?116.9 million.

Further rise in profitability; efficiency program is paying off EBIT before exceptional items (operating profit/loss) improved markedly from a loss of ?65.6 million in the prior-year period to a profit of ?30.9 million in the first three quarters of 2021. This improvement was mainly attributable to the growth in the volume of business and the associated economies of scale. Earnings were further boosted by the increasingly noticeable effect of cost savings resulting from the restructuring process. Similarly, the EBIT margin before exceptional items made a strong year-on-year improvement from minus 7.1 percent to plus 2.6 percent.

EBIT for the period under review stood at ?27.8 million (Q1-Q3 2020: loss of ?103.4 million). This figure takes account of exceptional items amounting to an expense of ?3.1 million that related to the efficiency program initiated at the start of 2020. The EBIT margin came to 2.4 percent (Q1-Q3 2020: minus 11.1 percent).

The increase in operating profit meant that the Company generated net income of ?23.7 million, compared with a net loss of ?104.5 million in the prior-year period. As a result, earnings per share increased from minus ?0.86 to plus ?0.20.Net income before exceptional items stood at ?26.8 million in the reporting period; earnings per share before exceptional items came to ?0.22.

Positive free cash flow and a comfortable financial position Compared with the prior-year period, when cash flow had been weakened by the pandemic, cash flow from operating activities improved from a net outflow of ?19.4 million to a net inflow of ?67.9 million. This was predominantly due to the improvement in operating profit combined with more rigorous management of working capital across the Group, especially with regard to receivables and liabilities. As a result of the improvement in cash flow from operating activities and the reduction in investing activities, free cash flow was up by ?94.0 million year on year to ?15.2 million.

Reflecting these changes in cash flow, net financial debt was slightly lower than at the end of 2020. It amounted to ?83.1 million as at September 30, 2021 (December 31, 2020: ?83.8 million).

"Our efficiency program and the cost savings achieved are increasingly paying off," says DEUTZ CFO Dr. Sebastian C. Schulte, commenting on the DEUTZ Group's financial position. "This can be seen from our earnings performance and improvement in cash flow." At the beginning of September, in light of its improved business situation, DEUTZ ended the ?150 million credit line that had been granted to it with the assistance of Germany's KfW development bank. The term of this COVID-19 tranche had been due to finish in November 2021. In addition to the existing syndicated loan of ?160 million with a term until June 2024, DEUTZ has also secured bilateral credit lines totaling ?75 million from three banks for a duration of 18 months. "We have unused credit lines of ?200 million at our disposal. This gives us sufficient financial headroom to be able to restructure the funding of our current and future growth projects and put it on a secure long-term footing," adds Schulte. The Company's equity ratio remains at a comfortable level at 45.0 percent.

Confirmation of raised full-year guidance for 2021 It can be assumed that global problems with the supply of input materials will continue to weigh on business performance and that supply issues for certain components will persist. Nevertheless, DEUTZ confirms its full-year guidance, which it raised in September, in view of its healthy business performance in the reporting period and the sustained upward trajectory of the industries in which the Company's customers operate.[2] It now expects unit sales of 155,000 to 170,000 DEUTZ engines[3] in 2021, which should result in an increase in revenue to between ?1.6 billion and ?1.7 billion. Service revenue is forecast to account for around ?400 million of the total revenue figure. The anticipated increase in unit sales and revenue and the realization of further potential cost savings indicate that the EBIT margin before exceptional items is likely to be in a range of 2.0 percent to 3.0 percent. This is based on the assumption that the ongoing difficulties with the supply of components will not worsen significantly in the coming weeks. Reflecting the improved operating performance, DEUTZ is aiming for free cash flow to be neutral.DEUTZ Group: overview of key figures

? million Q1-Q3 2021 Q1-Q3 2020 Change Q3 2021 Q3 2020 Change New orders 1,514.0 933.6 62.2% 485.2 310.0 56.5% Group unit sales (units) 145,359 108,559 33.9% 51,732 34,700 49.1% thereof DEUTZ engines[4] 116,273 84,502 37.6% 40,842 26,887 51.9% thereof Torqeedo 29,086 24,057 20.9% 10,890 7,813 39.4% Revenue 1,173.4 928.2 26.4% 403.2 308.2 30.8% EBIT 27.8 -103.4 - 11.7 -53.5 - thereof exceptional items -3.1 -37.8 91.8% -2.4 -37.8 93.7% Operating profit/loss (EBIT before exceptional items) 30.9 -65.6 - 14.1 -15.7 - EBIT margin (%) 2.4 -11.1 +13.5pp 2.9 -17.4 +20.3pp EBIT margin before exceptional items (%) 2.6 -7.1 +9.7pp 3.5 -5.1 +8.6pp Net income 23.7 -104.5 - 10.4 -52.2 - Net income before exceptional items 26.8 -68.3 - 12.8 -16.0 - Earnings per share (?) 0.20 -0.86 - 0.09 -0.43 - Earnings per share before exceptional items (?) 0.22 -0.57 - 0.10 -0.14 - Equity (Sep. 30/Dec. 31) 567.1 535.2 4.7% 567.1 535.2 4.7% Equity ratio (%) 45.0 45.3 -0.3pp 45.0 45.3 -0.3pp Cash flow from operating activities 67.9 -19.4 - 23.2 24.3 -4.5% Free cash flow 15.2 -78.8 - 5.5 6.9 -20.3% Net financial position (Sep. 30/Dec. 31) -83.1 -83.8 0.8% -83.1 -83.8 0.8% Employees[5] (Sep. 30) 4,701 4,575 2.8% 4,701 4,575 2.8%

The full quarterly statement is available at https://www.deutz.com/investor-relations. ?

Contact DEUTZ AG / Christian Ludwig / SVP Communications & Investor Relations Tel: +49 (0)221 822 3600 / Email: Christian.Ludwig@deutz.com

DEUTZ AG / Svenja Dei?ler / Investor Relations Tel: +49 (0)221 822 2491 / Email: Svenja.Deissler@deutz.comForward-looking statements This press release may contain certain forward-looking statements based on current assumptions and forecasts made by the DEUTZ management team. Various known and unknown risks, uncertainties, and other factors may lead to material differences between the actual results, the financial position, or the performance of the DEUTZ Group and the estimates and assessments set out here. These factors include those that DEUTZ has described in published reports, which are available at www.deutz.com. The Company does not undertake to update these forward-looking statements or to change them to reflect future events or developments.[1] Excluding electric boat drives from DEUTZ subsidiary Torqeedo.[2] See the ad hoc disclosure dated September 13, 2021.[3] Excluding electric boat drives from DEUTZ subsidiary Torqeedo.[4] Excluding electric boat drives from DEUTZ subsidiary Torqeedo.[5] FTEs, excluding temporary workers.

10.11.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.Archive at www.dgap.de

Language: English Company: DEUTZ AG Ottostra?e 1 51149 K?ln (Porz-Eil)

Germany Phone: +49 (0)221 822 0 Fax: +49 (0)221 822 3525 E-mail: ir@deutz.com Internet: www.deutz.com ISIN: DE0006305006 WKN: 630500 Indices: SDAX Listed: Regulated Market in Dusseldorf, Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange EQS News ID: 1247661 ? End of News DGAP News Service

1247661??10.11.2021?

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