The US market is extremely important to us from various perspectives. On the one hand, we’ve been producing engines in Germany for many years that we ship to the US. Tariffs would certainly have a significant impact on that. On the other hand, we’ve significantly expanded our service and maintenance business in the US over the past few years, and we're now ramping that up even further. Additionally, we are expanding our power generator business through the acquisition of Blue Star Power Systems.

That’s a manageable factor. But in general, the engines business faces inflationary pressures. The margins aren’t so high that we could simply ignore the tariffs. It affects the entire value chain.

Regardless of tariffs, we always consider such options. However, with the current volumes – up to 35,000 engines – it wouldn’t be feasible. It just wouldn’t be economical.

At the moment, we don't see any significant impact. The additional tariffs are currently suspended for 90 days. If we do see effects, we’ll need to make arrangements with our customers. Typically, prices increase, which leads to questions about the economic consequences.

So far, we haven’t seen a recovery, but we’re still expecting one. The mood at the Bauma trade fair in April was good, and everyone was optimistic. However, the truth is, no one has placed orders yet. Expectations for the infrastructure projects of the new federal government are high.

Absolutely. Infrastructure programmes stimulate activity in construction, which is our largest sector.

Definitely. We are committed to achieving these goals, which include doubling revenue by 2030. The geopolitical situation will keep changing, but structural changes always bring opportunities. Sometimes you need to be bolder and quicker in decision-making than competitors. That way, a company can even benefit from disruptions in the system.

Deutz CEO Sebastian Schulte is known for his straightforward approach. Yes, Deutz was a bit late to embark on its transformation, admits the manager, who has been leading the Cologne-based engine manufacturer since February 2022. Of course, his relatively recent appointment in 2021 helps with this narrative. Prior to his engagement at Deutz, the 46-year-old worked for Thyssenkrupp for twelve years in various roles. His background with the company fueled speculation last year that Deutz might be interested in acquiring Thyssenkrupp’s marine division. Schulte refuses to comment on that matter, and he downplays the hype surrounding Deutz’s defense business.

It doesn’t play a major role in this context. The alternative wouldn’t have been to produce generators in Germany and ship them to the US. The markets are regional, due to the size of the generators.

Blue Star generates annual revenue of 150 million euros and sells around 1,200 generators, meaning the unit prices are very high. Deutz produces about 200,000 engines per year. Even if all the engines came from us, the impact would be limited. We didn’t acquire Blue Star as a sales channel for Deutz engines, but because it’s an interesting business model that aligns with our technological capabilities and distribution network.

Diversification means moving into new business areas. We don’t want to abandon our current business, but it’s not enough to grow successfully. Therefore, we’re now entering fields that have a high overlap with our capabilities, like power generators.

It’s a finite business. The question is only when. It’s certainly not as finite as we expected three, four, or five years ago. According to our forecasts, the market will shrink in the 2030s. However, the competitive landscape will also become smaller. Our classic business falls under the „Last Man Standing“ category. But that’s not a business model for all our segments, because even the „Last Man Standing“ will eventually fall.

Yes, we are a bit late, but better late than never. It must be acknowledged that Deutz didn’t develop much strategic vision before 2021. But now, we’re on the right track.

At the moment, the business is still small. We’re expecting revenue in the low double-digit millions this fiscal year. Before 2022, this wasn’t even a field for us, as for many industrial companies. We market high-performance engines in our classic business that can operate in the most challenging environments – whether underground, in extreme heat, or at minus 20 degrees Celsius. Naturally, these products can also be perfectly used in defence applications. But for now, the business is still a project-based venture.

In the engine sector, we will build it up organically. But of course, we’re also looking around to see if there are meaningful additions. We recently agreed to a small but strategically important acquisition in the area of new propulsion technologies. As a side effect, we’re also acquiring a feasibility study showing how the company UMS equips a military vehicle with a hybrid powertrain. We would have been very confident in this acquisition even without the defence angle. But it shows that we have technologies that can also be used in defence applications. We’re not talking about weapon systems but propulsion systems.

It is a bit different. The logic behind the acquisition is clear: this company, with under 100 employees, develops technology and has gained customer access through prototypes. The company was now faced with the question of how to ensure the scalability of its business. There were two options: either build a factory to produce battery-electric systems or find a partner with industrialisation expertise. We were the ideal partner.

Yes, for now. There are promising order prospects that will go into small or medium-sized series. At this point, manual assembly no longer works. We have the ability to produce small series precisely and plan to set up small-series production at one of our German sites.

I would call it an addition because the business with combustion engines won’t disappear that quickly.

These are two separate things. The economic situation affects the utilisation of factories. We have a capacity of about 200,000 engines per year in the group. In 2023, we produced 187,000 engines. In 2024, it was just over 140,000 engines. I don’t think it will go any lower. The staff reductions are completely unrelated. The restructuring programme mainly targets research and development. It's not influenced by the economic cycle but rather by technological change. That’s why we need to realign our development resources.

That requires a more detailed examination. In recent years, about half of the R&D funds have gone into New Tech, split equally between battery-electric systems and the hydrogen combustion engine. We’ve brought a hydrogen combustion engine to serial production. However, it hasn’t gone beyond a few pilot applications yet. This is due to the lack of hydrogen infrastructure, legal tax hurdles, and high costs. For us, the question is whether we should still develop the next hydrogen engine. We’ve decided against it because we can’t invest without a customer perspective. As soon as demand is there, we’ll continue development.