Deutz updates Strategy and reduces costs sustainably

Deutz is pursuing diversification for profitable growth, targeting €4.0 billion in revenue by 2030 through a new Solutions segment, while aiming for €50 million in sustainable cost savings.

Cologne, Germany- At its Capital Markets Day in Cologne, Deutz AG provided an update on its Dual+ strategy and introduced a cost-cutting program to address declining demand. The strategy focuses on diversifying its portfolio and adapting to demand for alternative drives. Deutz aims to build on recent milestones, including market consolidation in conventional combustion engines, growth in the service business, and a realignment of its green portfolio.

Dr. Sebastian C. Schulte, Deutz CEO, said, “With our new segment Solutions, we will position ourselves much more strongly as a solution provider along the value chains we are familiar with – to grow profitably with relevant products and to make DEUTZ more resilient overall. At the same time, we see considerable potential for further profitable expansion of our business with classic combustion engines and in the service business.”

In its new Solutions segment, DEUTZ integrates alternative drives and expands into markets beyond engine production and servicing, leveraging its technology and expertise. The rebranded New Technology segment will focus on e-products and hydrogen combustion engines. Following the acquisition of Blue Star Power Systems, DEUTZ anticipates the Energy segment will exceed €500 million in revenue by 2030, enhancing its role as a solution provider in the growing energy market.

DEUTZ aims for revenue growth to reach approximately €4.0 billion by 2030, with the Solutions segment projected to grow at a CAGR of 30%. The New Technologies business is expected to exceed €300 million, with growth coming from both organic and inorganic sources. Revenue from conventional combustion engines is anticipated to be around €2.2 billion, contributing about half of total revenue. The service business is expected to account for 25% of revenue, significantly impacting earnings. Mid-term targets include projected revenue of €3.2 to €3.4 billion by 2028, with an adjusted EBIT margin of 8-9%. Shareholders can expect a stable or increasing dividend.

DEUTZ aims to achieve €1.0 billion in revenue in its high-margin service business by 2030 through strategic acquisitions in underdeveloped regions and better utilization of existing services. The company plans to expand its locations and introduce smart, digitalized service offerings as part of its Dual+ strategy.

In light of ongoing economic challenges, DEUTZ has also announced a cost-cutting program to reduce expenses by €50 million by the end of 2026, complementing short-term measures

Mr. Oliver Neu, Chief Financial Officer and Labor Director of Deutz AG, said, “The result of our performance and, in particular, our portfolio measures over the last two years are that we are making money even in these difficult times. However, the current situation shows that additional structural measures are needed to successfully position ourselves for the future. These will include structural changes and thus job cuts. We will do all this in close consultation with the employee representatives.”