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DEUTZ AG Annual Report 2022

The way forward

Through its Dual+ strategy, DEUTZ is tackling the challenges
of the transition to more sustainable drive systems.

“We want our engines to keep the world moving in the future too,” said CEO Dr. Sebastian C. Schulte. In January 2023, he and his fellow members of the Board of Management presented the new Dual+ strategy, developed by the management team in 2022, to employees and journalists. Its priorities are to prepare the Group for the transition to more sustainable drive systems, to further expand the service business, and to unlock potential for growth in the classic engine business.

Clear targets for Classic, Green – and the service business

In addition to clear priorities, the Dual+ strategy also sets firm targets for each of its three elements. DEUTZ firmly believes that the internal combustion engine will continue to have a dominant role in mobile machinery applications for some time yet, so as to facilitate a smooth transition to more sustainable drive systems. This is why DEUTZ is working hard to make these engines more environ­mentally friendly, for example by enabling them to run on HVO, hydrogen, or synthetic fuels. At the same time, DEUTZ wants to play an active part in the con­solidation of the market and thus strengthen its market position. The Company aims to produce at least 200,000 engines a year in the Classic segment and use the income to fund the development of its green initiatives and other activities. 

For example, DEUTZ will invest over €100 million in its sustainable technology portfolio by 2025. It also plans to open up new value chains for charging infrastructure and the refueling of hydrogen vehicles. As DEUTZ engines last for a long time, the service business – the plus in the Dual+ strategy – offers great potential, which the Company aims to unlock around the world. The target here is to increase service revenue to around €600 million by 2025. To make this possible, DEUTZ is boosting its regional presence (e.g. through acquisitions and alliances), extending its service activities to non-DEUTZ engines, and expanding its service portfolio to include, in particular, more digital solutions.

‘Powering Progress’ initiatives established

DEUTZ engines keep the world moving – as they did in the past and will do in the future. The Company believes that the Dual+ strategy will pave the way for profitable growth and aims to increase its adjusted EBIT margin to between 6 and 7 percent by 2025. DEUTZ has implemented several initiatives as part of its Powering Progress program in order to achieve this. These include a greater focus on disciplined cost management, a market-oriented pricing policy, greater digitalization, and employee development. As DEUTZ aims to achieve its financial targets in harmony with its environmental responsibilities, the drive specialist will offer its customers a completely emission-free product and technology portfolio by no later than 2050.