DGAP-News: DEUTZ AG / Key word(s): Annual Report 
DEUTZ AG: DEUTZ finishes with a solid fourth quarter in a year dominated by coronavirus 
2021-03-18 / 07:30 
The issuer is solely responsible for the content of this announcement. 
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  . Significant improvement in operating profit in the fourth quarter of 2020 compared with the previous quarter - free 
    cash flow in positive territory at EUR43.0 million 
  . Healthy balance sheet underpinned by equity ratio of 45.3 percent and unutilized credit lines of EUR245 million 
  . Successful introduction of Transform for Growth with expected gross cost savings of around EUR100 million from the 
    end of 2022 - restructuring costs of nearly EUR32 million recognized as an exceptional item in 2020 
  . No dividend to be distributed due to the accumulated loss 
  . DEUTZ expecting, at the very least, to break even in terms of operating profit in 2021 and anticipates revenue of 
    at least EUR1.4 billion 
Cologne, March 18, 2021 - DEUTZ was able to finish a year dominated by coronavirus with a much improved fourth quarter. 
A book-to-bill ratio of over 1 was achieved for the year thanks to the pick-up in demand. Moreover, proactive 
management of working capital and the first positive effects from the restructuring program enabled DEUTZ to generate 
positive free cash flow of EUR43.0 million in the fourth quarter. 
"We continued with our strategic growth initiatives in what proved to be a challenging year. The positive performance 
of our Chinese joint venture with SANY and the development alliance with John Deere, which we announced at the end of 
the year, demonstrate that we can look to the future with confidence. Over the coming months, we expect to see a 
recovery in our main sales markets. From a current perspective, however, it appears likely that they will need a long 
time to return to their pre-crisis levels," said DEUTZ CEO Dr. Frank Hiller. 
Strategic growth initiatives continue despite coronavirus crisis 
The joint venture with SANY, China's biggest construction equipment group, notched up some early success by generating 
a profit in its first year. The production volume is set to be increased from around 20,000 engines in 2020 to around 
40,000 engines in 2021. At the end of the second quarter of 2020, DEUTZ increased its revenue target for China for 2022 
from approximately EUR500 million to around EUR800 million^[1] on the grounds that market demand is already on a par with 
the production volume planned for the joint venture and in light of the expected further gains in market share. 
Significant progress was also made with the global expansion of the high-margin service business, which is a key pillar 
of the growth strategy. Under this strategy, DEUTZ acquired DEUTZ Austria GmbH, Motorcenter Austria GmbH, and Pro Motor 
Servis CZ at the start of the fourth quarter of 2020. These former subsidiaries of the Austrian company PRO MOTOR 
Beteiligungsgesellschaft mbH sell and service diesel engines in Austria, the Czech Republic, Hungary, Slovakia, and 
Slovenia, providing DEUTZ with direct access to the markets in these countries. 
Progress with the global Transform for Growth efficiency program 
At the start of 2020, DEUTZ launched its Transform for Growth efficiency program in order to maintain its long-term 
competitiveness. The measures are aimed at optimizing the global production network, automating and digitalizing 
operating and administrative processes, and reducing complexity. 
By implementing the restructuring program, DEUTZ intends to achieve gross annual cost savings of around EUR100 million 
compared with the base year of 2019. The full effect is expected to be achieved from the end of 2022 onward. As well as 
adjusting operating costs, a large part of the savings are to be achieved by reducing staff costs. This includes a 
voluntary redundancy program for the German sites in order to reduce the number of employees by up to 350 with the 
minimum possible social impact. Total restructuring costs of almost EUR32 million were recognized as an exceptional item 
in 2020. As at March 12, 2021, 302 employees had taken up the Company's voluntary redundancy program. 
Year-on-year improvement in new orders in the fourth quarter of 2020 
In 2020, the value of new orders received by DEUTZ fell by 20.1 percent to EUR1,322.5 million. New engine business was 
adversely affected by the huge slump in demand as a result of the coronavirus crisis and by the high number of engines 
that had been sold in 2019 before new emissions standards came into force. However, there was a very encouraging sharp 
rise in orders of 14.7 percent in the fourth quarter. As a result, the book-to-bill ratio rose to 1.02 at the end of 
the year (December 31, 2019: 0.90). 
As at December 31, 2020, orders on hand stood at EUR269.0 million (December 31, 2019: EUR253.3 million). 
28.7 percent decline in unit sales to 150,928 engines 
The DEUTZ Group sold a total of 150,928 engines in the reporting year, which was 28.7 percent fewer than in 2019. Among 
the segments, the Other segment was the only one to see an increase in unit sales, reporting significant growth of 42.7 
percent. This was due to the ramp-up of motors at DEUTZ subsidiary Torqeedo, which recorded a sharp rise in unit sales 
to 29,894 electric motors in 2020. In the core internal combustion engine business, unit sales were down by a 
substantial 36.5 percent. 
Revenue falls by 29.6 percent to EUR1,295.6 million 
The DEUTZ Group's revenue decreased by 29.6 percent to EUR1,295.6 million in 2020, with nearly all application segments 
and regions seeing a sharp reduction in revenue. The Material Handling and Agricultural Machinery application segments 
were hit particularly hard, registering decreases of 56.8 percent and 39.1 percent respectively. Encouragingly, the 
high-margin service business bucked the trend with a fall of just 1.2 percent. As a result, the share of consolidated 
revenue attributable to the service business rose from 19 percent in 2019 to 27 percent in 2020. 
Compared with the previous quarter, DEUTZ's revenue advanced by 19.2 percent in the fourth quarter, with all regions 
contributing to this positive result. 
Operating loss of EUR74.7 million, resulting in a net loss for the year 
The economic impact of the coronavirus crisis on the business activities of the DEUTZ Group meant that the Company 
reported an operating loss (EBIT before exceptional items) of EUR74.7 million in 2020. This significant decline compared 
with the prior year was attributable, in particular, to the fall in revenue and the resulting diseconomies of scale. 
There was also a drag on operating profit from payments of around EUR9 million made under continuation agreements with 
suppliers that are going through insolvency proceedings and demand-related impairment losses of around EUR17 million 
recognized on capitalized development projects and sales licenses. General cost reductions and the use of short-time 
working had a positive influence on earnings performance. The EBIT margin before exceptional items stood at minus 5.8 
percent in the reporting year, compared with 4.3 percent in 2019. 
After taking restructuring costs of EUR31.9 million for Transform for Growth into account, EBIT amounted to minus EUR106.6 
million (2019: EUR88.1 million) and the EBIT margin fell from 4.8 percent in 2019 to minus 8.2 percent in 2020. 
Consequently, DEUTZ reported a net loss of EUR107.6 million in 2020, a decline of EUR159.9 million compared with the net 
income of EUR52.3 million in the previous year. Earnings per share stood at minus EUR0.89 (2019: EUR0.43). The net loss 
before exceptional items was EUR75.7 million (2019: net income of EUR44.2 million) and earnings per share before 
exceptional items was minus EUR0.63 (2019: EUR0.37). 
Comfortable financial situation despite accumulated loss 
Despite the net loss, the Company continues be in a comfortable financial position. Cash flow from operating activities 
amounted to EUR64.3 million in the fourth quarter of 2020, which meant that the net cash provided by operating activities 
in 2020 amounted to EUR44.9 million. This was largely due to proactive management of capital expenditure and working 
capital and to the first positive effects from the restructuring program. At the end of the year, working capital stood 
at EUR235.0 million, which was almost EUR60 million lower than at the end of 2019. Free cash flow amounted to -EUR35.8 
million, which was a slight improvement on the prior-year figure of -EUR36.6 million. Net debt rose by just under EUR70 
million to EUR83.8 million at the end of the year, in part due to additions of lease liabilities in accordance with IFRS 
16. The Company has additional unutilized credit lines of around EUR245 million at its disposal. 
Dr. Sebastian C. Schulte, DEUTZ CFO, commented: "We have credit lines totaling EUR310 million at our disposal, of which 
EUR150 million is a credit line from Germany's KfW development bank that we secured in 2020 but have not yet used. We are 
therefore in a solid financial position and are well prepared for the anticipated increase in business activity as well 
as any unexpected developments." 
The equity ratio stood at 45.3 percent as at the reporting date, compared with 50.1 percent a year earlier. 
No dividend to be distributed due to the accumulated loss in 2020 
No dividend will be distributed for 2020 due to the accumulated loss. DEUTZ is retaining its fundamental, medium-term 
dividend policy, under which it aims to distribute 15 percent to 30 percent of net income over a multi-year period. 
Significant improvement in operating performance expected in 2021 
The industries in which DEUTZ's customers operate had already begun to show signs of a gradual recovery in the second 
half of 2020, which led to a much improved business performance in the fourth quarter compared with the previous

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