SDF sees increase in net profits for 2019…but 2020 will be ‘particularly challenging’
SDF (Same Deutz-Fahr) has announced a growth in net profit and earnings before tax (EBT) for 2019 – though the company stressed that 2020 would be more of a struggle due to the Covid-19 pandemic.
Last year, the company recorded a turnover of €1.3 billion, down 7.6% on 2018. EBITDA (earnings before interest, taxes, depreciation, and amortization) was 8.7%, amounting to €110 million, down slightly on 9% in 2018.
In terms of profitability, pre-tax profits for the group amounted to €59.3 million, an increase on the €50 million of the previous year, while net profit increased from €42.2 million in 2018 to €44.6 million.
The group’s financial position closed with net borrowings of €281.6 million. This result was obtained by streamlining general warehouse management.
The tractor and combine harvester businesses saw a drop in turnover in line with the negative trend in European markets and the weakness of export markets.
However, Gregoire grape harvesters performed strongly in 2019, with record turnover – up from €54.9 million to €70.7 million – and record profits, up by 55%.
The spare parts business made a strong contribution to overall company results, SDF said. In this sector, the group said that there was particular focus on the development of an online sales platform.
Expenditure during 2019 on investment and product development totaled €60 million, which was in line with previous years.
Digitalisation of products and sales processes was a major part of the innovation activities carried out by the company last year.
This included the “connected tractor” project – with a specific focus on fleet management software which enables remote monitoring of the tractor’s main operating parameters.
SDF’s production activities were impacted in different ways by Covid-19, depending on the location of facilities.
Production in China was halted in February but returned to full operation during March. SDF’s Indian plant was subject to lockdown in April and activities have now been resumed in full.
The situation in Turkey is better, with no severe restrictions to date due to the outbreak of Covid-19. The country is effectively managing the market, SDF noted.
European factories in France and Germany have operated normally, though with some slowdowns caused by difficulty in getting parts from countries under lockdown.
The situation at the Treviglio works in Italy was different, as the plant was forced to stop production for almost two months (Italy has been the hardest-hit country in Europe with the virus).
“Last year was particularly significant for our company, both because of the good earnings performance and the completion of the reorganisation of the sales division, alongside our work on digital transformation projects,” said Lodovico Bussolati, CEO of SDF.
“2020 is and will be particularly challenging for all of us, with everyone doing their utmost to get through this in the best way possible,” he added.