DEUTZ AG is introducing a new reporting structure and the segments ‘Classic’ and ‘Green.’
All activities associated with the development and production of new non-diesel drives will be assigned to the Green segment beginning January 1, 2022. This includes electric drives, Torqeedo, and Futavis, a battery management specialist. DEUTZ’s new reporting structure gives the development of hydrogen-powered engines and fuel cells much more visibility. The Classic segment will include activities related to the development, production, sales, and service of diesel engines.
Dr. Frank Hiller, CEO of DEUTZ: “The new segmentation of our commercial operations will, above all, provide the capital markets with a more transparent picture of our work on off-highway technology for a carbon-neutral future. It is backed by a growth strategy that very clearly sets out our milestones and activities in the period up to 2031. At the same time, the new strategy leaves DEUTZ’s employees in no doubt that the Company is fully committed to the transformation of its product portfolio.”
The Green segment’s activities currently generate around €60 million per year, or about 4% of DEUTZ’s revenue. The goal is to increase this proportion to more than 50% by 2031, through both organic growth and targeted acquisitions and takeovers focused on new technologies. DEUTZ expects the new segment to break even in 2027.
Strategic investments, such as the planned investment in Blue World Technologies, a leading manufacturer of fuel cells, will also be included in the Green segment.
Up to 2026, investment in the growth strategy for the Green segment will mainly be funded by the traditional business with diesel engines. Frank Hiller: “Internal combustion engines will be in demand in our application areas for many years yet. We are a global leader in agricultural machinery and construction equipment, and more and more of our customers are showing interest in long-term partnerships.”
For example, DEUTZ recently announced new alliances with John Deere, SDF and AGCO that will see DEUTZ either develop or manufacture entire engine series for these leading players in the world of agricultural machinery. “DEUTZ is getting greener, there is no doubt about that. The switch to new drives is on its way in all customer groups. We want to be – and will be – at the forefront of this transformation. Whether diesel, gas, synthetic fuels, electricity, or hydrogen, we are reinventing the engine. Today, there are all kinds of different drive systems, all with the aim of movement. The era of fossil fuels is coming to an end, but the need for mobility will remain.”