“Agriculture is undergoing a fundamental shift as it transitions to greater climate neutrality. We want to play our part in this huge task by offering the optimum solutions for the specific requirements of our agricultural customers. At the same time, we aim to make the most of the opportunities of this transition in order to continue to grow profitably and to permanently establish DEUTZ among the top three independent drive manufacturers. We are therefore forging ahead with the implementation of our Dual+ strategy so that we can continue to ensure the world – and of course the agricultural industry – keeps moving.”

said Dr. Sebastian C. Schulte, CEO of DEUTZ AG.

At Agritechnica, DEUTZ showcased the TCG 7.8 H2, a hydrogen internal combustion engine that is playing a pioneering role in the quest for climate neutrality. The six-cylinder engine is based on an existing design and will go into volume production at DEUTZ at the end of 2024. It is both carbon-neutral and very quiet, despite producing 220 kW of power. In principle, it can be used in all current DEUTZ applications and in the on-highway segment. DEUTZ recently received its first order from China for a small-scale production run of 100 H2 gensets powered by the TCG 7.8 H2.

DEUTZ exhibited products from the Green segment at the trade fair too, including a compact electric 400-volt drive system that uses a split drive comprising two 40 kW electric motors. The ISO 26262-certified system has a peak output of 80 kW. As is typical for electric drives, the system delivers instant torque, making the machine even more dynamic. The battery is from the Company’s own modular toolbox and offers 42 kWh of capacity. The 22 kW rapid charging system can restore the battery charge to up to 80 percent within an hour.

DEUTZ also has new engines in the Classic segment. The Company firmly believes that clean and efficient internal combustion engines will continue to be required to ensure a seamless transition to the technologies of the future.

At Agritechnica, DEUTZ therefore unveiled the TCD 5.1 engine, which will be available from mid-2028. Featuring a power range of up to 170 kW and maximum torque of 950 Nm, the engine combines the power of six cylinders with the efficiency of four. This provides the flexibility needed for a wide range of industrial applications.

The high-performance DEUTZ TCD 7.7 is also premiering at the trade fair and will be available from mid-2028. Boasting a power range of up to 280 kW and maximum torque of 1,550 Nm, this engine can be deployed in numerous off-highway and industrial applications. The engine is also to be offered with an Agri Performance Concept designed specifically for agricultural machinery, providing a power range of up to 300 kW and torque of up to 1,700 Nm.

“There will continue to be demand for conventional combustion engines going forward, particularly in the agricultural sector. These drives can run on biofuels and synthetic fuels, making them more environmentally friendly. Our plan for the years ahead is therefore not only to enhance our climate-neutral product portfolio but also to further expand our classic engine business.”

said Dr. Markus Müller, CTO and CSO of DEUTZ AG.

DEUTZ has already approved its entire TCD engine range for operation with hydrotreated vegetable oil (HVO).

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Furthermore, the Supervisory Board has decided to appoint a woman to the Board of Management. The search process has already been started. The Board will therefore comprise four persons again in the future.

In addition, the Supervisory Board has elected Dr. Dietmar Voggenreiter as its new chairman. The previous chairman, Dr. Bernd Bohr, has resigned from the position of chairman but will remain an ordinary member of the Supervisory Board. The management team has always appreciated the professional and close working relationship with him.

“Sebastian Schulte is a team player and a leader with strong analytical skills. As the new Chairman of the Board of Management, he brings precisely the expertise needed for the next phase of the company’s development: the profitable transformation of DEUTZ into a leading provider of carbon-neutral drive solutions for the off-highway sector,”

said the new Chairman of the Supervisory Board of DEUTZ, Dr. Dietmar Voggenreiter.

The new Chairman of the Board of Management, Sebastian Schulte, has been a member of the Board of Management of DEUTZ since January 2021, where he was previously responsible for Finance, Human Resources, Purchasing, and Information Services as Chief Financial Officer and Labor Director. After completing his first degree and doctorate at the Ruhr-Universität Bochum and the Judge Business School of the University of Cambridge, the former professional athlete began his career at ThyssenKrupp AG. Prior to joining DEUTZ, he was Managing Director and Chief Financial Officer of the Marine Division of the ThyssenKrupp Group (ThyssenKrupp Marine Systems).

Dr. Sebastian C. Schulte, the new Chairman of the Board of Management of DEUTZ AG,  welcomes Dietmar Voggenreiter:

“In addition to his extensive knowledge of our industry, Dietmar Voggenreiter also stands for continuity. Together, we will maintain the strategic and constructive working relationship between the Supervisory Board and the Board of Management.”

The new Chairman of the Supervisory Board, Dr. Dietmar Voggenreiter, has been a member of the Supervisory Board of DEUTZ AG since April 30, 2019, and has already been able to familiarize himself with the Company and the tasks ahead. He has many years of international experience in corporate management. He was responsible for Audi’s China business for nine years before becoming the Board of Management member for Marketing and Sales at Audi AG, Ingolstadt.

Source: DEUTZ

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“The investment in Blue World Technologies is a perfect fit for our sustainable growth strategy,”

says Deutz’s CEO, Dr. Frank Hiller.

The investment of DEUTZ made together with an investment of Vaektsfonden, the Danish Growth Fund will allow Blue World to set up further automated handling processes throughout production over the course of 2022. These will increase its production capacity with a view to commencing volume production toward the end of next year.

Dr. Frank Hiller:

“At the Deutz Days 21 in November, we unveiled our new ‘Green’ reporting segment to the public. We also presented the Blue World products to our customers. The interest we have been able to generate from this event has been overwhelming. Fuel cells that run on ‘green’ methanol will enable a faster transition to carbon-neutral operation because this is a liquid fuel compatible with existing infrastructure. Deutz is thus making further headway with new technologies that will move it beyond the conventional engine to offer climate-neutral solutions for the off-highway segment. The Blue World investment is another step along the way to achieving the growth target for our ‘Green’ segment.”

Anders Korsgaard, CEO and Co-founder of Blue World Technologies explains and continues:

“Our collaboration with Deutz has been kicked off very well, and we have experienced strong interest from the Deutz partners in our methanol fuel cell technologies. Within the last couple of years, we have seen global market leaders invest heavily throughout the methanol value chain, from production to utilization. With the increasing focus on the production of green methanol, the timing for this collaboration between Deutz and Blue World is perfect”.

Source: Deutz

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“We build the cleanest and most efficient engines for our customers. The sharp rise in unit sales shows that the market has confidence in our innovative drive technologies. As we move toward green off-highway drive solutions, we are stepping up our focus on hydrogen, electric, and e-fuels. This is the only way that we can achieve the Paris climate targets,”

says DEUTZ CEO Dr. Frank Hiller.

As well as a healthy operating performance, DEUTZ reached further strategic milestones. In August, the Company unveiled its first market-ready hydrogen engine. DEUTZ plans to go into full production with the TCG 7.8 H2 in 2024. The first pilot project gets underway with utility company RheinEnergie at the start of 2022 and will involve using the TCG 7.8 H2 in combination with a generator to produce electricity.

“What we are achieving here on a relatively small scale is delivering insights into the decentralized, sustainable, and greenhouse-gas-free supply of energy in urban centers,”

explains Hiller.

DEUTZ had already signed a cooperation agreement with the German Aerospace Center (DLR) regarding a joint project focused on making construction sites more environmentally friendly. The aim of the project is to develop solutions for running construction-site vehicles and agricultural machinery on hydrogen. DEUTZ is also improving the environmental footprint of its engines for the EU Stage V emissions standard. For example, it approved its entire TCD engine portfolio for use with paraffinic diesel fuels at the end of August.

Double-digit percentage increases in new orders, unit sales, and revenue

New orders received by DEUTZ amounted to €1,514.0 million in the first three quarters of 2021, an increase of 62.2 percent compared with the prior-year period, which had been heavily affected by a coronavirus. This growth can be explained by the fact that customers across all application segments and regions continued to be very willing to invest. The exceptionally strong rise was also attributable to the one-off effects of spending brought forward in June and September, which amounted to more than €100 million. This situation came about mainly because of customer orders being brought forward in response to longer lead times resulting from global material shortages and logistics bottlenecks and also in view of price adjustments.

As of September 30, 2021, orders on hand totaled €616.4 million, which was up by 146.2 percent year on year.

With a total of 145,359 engines sold, the DEUTZ Group registered an increase in unit sales of 33.9 percent in the reporting period. The number of DEUTZ engines 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 fewer than 4 liters. Service revenue swelled by 16.2 percent to €298.4 million, primarily due to the substantial growth of the 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 a 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 years 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 of September 30, 2021 (December 31, 2020: €83.8 million).

“Our efficiency program and the cost savings achieved are increasingly paying off. This can be seen from our earnings performance and improvement in cash flow,”

says DEUTZ CFO Dr. Sebastian C. Schulte, commenting on the DEUTZ Group’s financial position.

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. It now expects unit sales of 155,000 to 170,000 DEUTZ engines 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: an overview of key figures

Source: Deutz

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Blue World employs methanol as an energy source, from which it first generates hydrogen and then, in a second step, generates electrical energy in the fuel cell. Blue World is already developing stationary fuel cell-powered gensets today. In the future, Deutz expects that the fuel cell technology shall be used for mobile applications in the off-highway segment, too.

“By partnering with Blue World Technologies, Deutz is expanding its activities in the development of climate-neutral drive systems,”

says Dr. Frank Hiller, CEO of Deutz AG.

The two companies are initially signing a distribution agreement that will allow Deutz to sell the Blue World stationary fuel cell genset exclusively.

Dr. Frank Hiller:

“In the business with gensets, we see an exceptionally attractive market that we are looking to tap into together with Blue World. Genset users are now expecting zero-emission, climate-neutral technology for their applications too. Fuel cells that run on ‘green’ methanol provide an ideal solution here. Deutz is thus making further headway with new technologies that will move it beyond the conventional engine to offer climate-neutral solutions even for the off-highway segment and stationary applications.”

Deutz only very recently presented the TCG 7.8 H2 hydrogen engine, with which the Company is adding to its portfolio of low-emission and zero-emission drive systems. The engine meets the carbon criteria set by the EU for zero emissions.

“We are very excited about this partnership with Deutz. It means we will be able to work with one of the world’s leading developers and manufacturers of engines on the joint development and distribution of our fuel cell technology. Deutz’s investment is also giving us a boost ahead of our planned public listing, and our partnership with Deutz will be a major contribution towards meeting our mutual goals,”

states Anders Korsgaard, Co-founder and Chief Executive Officer of Blue World Technologies, and continues:

“Furthermore, we are happy to announce that Vaekstfonden, the Danish Growth Fund, also expects to take a significant stake in Blue World Technologies. We have a strong relationship with Vaekstfonden and with these two strategic partners on board, we can speed up the process of building one of the largest fuel-cell factories in Europe to meet customer demand.”

Source: Deutz

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“We are at the vanguard of a greener transport sector. Deutz believes that e-fuels provide a sensible alternative, alongside electric drives and hydrogen engines, that will help to achieve the Paris climate targets. For exactly this reason, we commit ourselves to play an active role in the eFuel Alliance,”

says Dr. Frank Hiller, CEO of Deutz AG.

Monika Griefahn, spokeswoman for the eFuel Alliance, adds:

“We are delighted to be able to welcome DEUTZ AG as a partner in our network. The addition of the SDAX-listed, Cologne-based company brings the number of eFuel Alliance members to 150.”

E-fuels are synthetic fuels that are made on a renewable basis from water and carbon dioxide (CO2). The type of fuel used by an engine determines its emissions characteristics. By switching to biofuels or gas, the amount of pollutants and CO2 that the engine emits can be dramatically reduced, even to the point of making it fully carbon neutral.

Because of the heavy-duty nature of the applications and the long hours they are in use, commercial vehicles, tractors, and construction equipment need fuel with a high energy density and rapid refueling. This is where e-fuels have a clear und advantage over purely electric drives. Not only are they easy to transport, but refueling can be done quickly using the existing, globally available infrastructure.

In August 2021, Deutz approved its entire diesel engine portfolio for use with paraffinic fuels such as e-fuels. This means that alternative fuels can now also be used to run Deutz engines that meet the EU Stage V emissions standard. At the same time, Deutz has approved the majority of its latest-generation engines, particularly in the sub-4 liter and above-8 liter range, for biodiesel blends of up to 30 percent. The use of these alternative fuels significantly reduces the carbon footprint of Deutz’s engines and raises the prospect of running engines on a carbon-neutral basis in the future.

Also in August, Deutz unveiled its first purely hydrogen-powered engine for off-highway applications, paving the way for zero-emission operation in this segment. The six-cylinder engine is set to go into series production in 2024.

Source: Deutz

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The company now anticipates unit sales of 155,000 to 170,000 DEUTZ engines (previously: 140,000 to 155,000), which should result in an increase in revenue to between €1.6 billion and €1.7 billion (previously: €1.5 billion to €1.6 billion). The forecast for service revenue is unchanged at around €400 million of the total revenue figure. The EBIT margin before exceptional items is predicted to be in a range of 2.0 percent to 3.0 percent (previously: 1.0 percent to 2.0 percent). This raised forecast is based on the assumption that the ongoing difficulties with the supply of components will not worsen significantly in the coming months.

As a result of the improved operating performance, free cash flow is expected to break even (previously: negative figure in the low double-digit millions of euros).

Further information on business performance will be provided on November 10, 2021, when the quarterly statement for the first to the third quarter of 2021 is published.

Source: DEUTZ

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The German Aerospace Center (Deutsches Zentrum für Luft- und Raumfahrt (DLR)) is working with Cologne-based engine manufacturer DEUTZ to develop new ideas and solutions for the operation of construction equipment and agricultural machinery using hydrogen. Representatives of the two partners signed a cooperation agreement to this effect on August 26, 2021.

The alliance between DEUTZ and the German Aerospace Center is a product of the DLR.InnovationHub, which brings together actors from the worlds of research and commerce. It fast-tracks the trialing of innovative new ideas and in doing so helps new technologies make the leap from research to application.

The current focus is on the ‘green construction site’, which involves converting existing technologies used in building applications to make them low-carbon or even carbon-free. The DLR’s technology marketing team and the DEUTZ Innovation Center are coordinating the joint activities.

“As part of an intensive collaboration process, research and development expertise is being brought to bear to come up with new solutions to specific real-world challenges. Formats such as the DLR.InnovationHub, and the partnerships that result from it, are how the DLR fulfills its mission of turning research into commercially viable innovations,”

says Professor Karsten Lemmer, a member of the DLR Executive Board responsible for innovation, knowledge transfer, and research infrastructure.

“The cooperation agreement with the DLR is an important milestone in our development activities. The aim is to speed up progress in making hydrogen drives viable for the off-highway segment, and we will be combining our expertise and R&D capabilities to achieve this,”

says Dr. Ing. Markus Müller, DEUTZ’s Chief Technology Officer.

Off-highway vehicles – individual solutions for individual requirements

Excavators, wheel loaders, tractors, crawlers, and combine harvesters – they are all designed to carry out specific tasks, and so they have varying requirements in terms of energy consumption, power output, fuel capacity, and operating time.

The researchers from the DLR Institute of Vehicle Concepts will initially be working with their partners at DEUTZ to scope out the necessary parameters – both technological and commercial – for making off-highway vehicles carbon-neutral. The people who operate the machinery will also be asked about their requirements, particularly with regard to vehicle data, machine variants, and load and usage profiles.

DEUTZ will be able to draw on its broad product portfolio to offer invaluable insights in these areas. The next phase of the project will see the partners compare and evaluate the different technological solutions, focusing in particular on energy logistics for selected application scenarios in agriculture and construction. The aim is to come up with solutions that will allow the vehicles used in these scenarios to be powered by hydrogen drives.

The refueling challenge

Vehicles powered by hydrogen need to be refueled more frequently than their diesel equivalents. This is because diesel has a higher energy density than hydrogen. Ideally, refueling should be integrated into the existing workflows. The DEUTZ-DLR collaboration will mainly be looking at solutions focused on this particular aspect. Mobile, intelligent, and connected fueling systems are one potential approach.

This could drastically reduce the distance traveled for refueling and go some way to compensating for the additional effort is involved in planning and carrying out the refueling process.  Mobile, self-driving refueling robots are another idea and could be used when the operators take a break, for example.

The post DLR and DEUTZ Form Alliance for Hydrogen Applications appeared first on North America FarmQuip Magazine.

“We are taking our service to a new dimension by enhancing the digital offering, making it more interactive and, at the same time, easier for customers. Each user should receive the best service to meet their needs, at every stage of the engine lifecycle. Our S-DEUTZ service offering is simply smart,”

says Michael Wellenzohn, a member of the Deutz Board of Management responsible for sales, marketing, and service.

Among the portal’s many highlights are a Lifetime Parts Warranty for repairs and a comprehensive Lifecycle Solutions portfolio. S-DEUTZ provides solutions for all service requirements. The service portal offers DEUTZ customers quick and convenient options for contacting their local service partner and accessing the digital service documentation for their engine.

“Our S-DEUTZ offering and the new service portal help us to strengthen our customer relationships and provide a modern sales channel that integrates our service partners. Regular updates and releases of new functions will make business easier and, most importantly, more efficient for our customers and partners,”

explains Wellenzohn.

The digitalization of processes and services means that aftersales support can be delivered faster and more efficiently. DEUTZ is therefore planning further automation steps in the second half of the year. Wellenzohn gives a little preview:

“Going forward, we will use intelligent software and hardware solutions to give our customers access to a whole host of new smart services relating to the Internet of Things (IoT), such as innovative telematics applications.”

Source: Deutz

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The partnership includes a supply agreement for updated 6.1 liters and 4.1-liter engines to be used in selected Fendt tractors. It also entails development cooperation on future technologies. In addition, AGCO and DEUTZ will explore closer cooperation on engines or engine installation components below 150 hp.

Eric Hansotia, Chairman, President, and CEO of AGCO:

“The Corona pandemic and its related impact on world commodity flows and global supply chains have reinforced the importance of strong, cooperative relationships with suppliers. DEUTZ has been a trusted partner for years and we look forward to continuing to strengthen our relationship.”

Frank Hiller, CEO of DEUTZ:

“We are delighted about the trust that AGCO has placed in us. AGCO has been one of our best customers for decades. We are extremely pleased that we are now contractually securing a common future in the long term.”

Source: Deutz

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