Captive market/segment

Market segment in which original equipment and commercial vehicle manufacturers have their own engine production facilities to meet their engine needs. Consequently, the captive market is not generally accessible to independent engine manufacturers.

Cash flow statement

The cash flow statement illustrates flows of cash and cash equivalents during a financial year, broken down into cash flows from operating activities, cash flows from investing activities and cash flows from financing activities.


Denotes the entirety of measures taken by a company to comply with laws, regulations and directives and also to comply with contractual obligations and self-imposed obligations. Compliance is a key element of corporate governance.

Corporate governance

Responsible management and control of a company with a view to long-term value creation and increasing shareholder value.


Ancillary provisions under loan agreements with which the borrower must comply during the term of the loan agreement. The provisions govern financial and other obligations and contain legal consequence clauses in the form of sanctions.


D&O insurance

(directors and officers insurance)
A liability insurance policy against financial loss taken out by a company to indemnify its directors and senior managers.

Deferred taxes

Differences between the calculation of profit under tax law and under IAS result in differing tax calculations. These differences in the amount of tax are recognised on the balance sheet as deferred tax assets or liabilities.

DIN EN ISO 14001

(Deutsches Institut für Normung – European Norm – International Organization for Standardization – 14001)
A German, European and international industrial standard for environmental management.


Procurement strategy in which one item is procured from two different suppliers in order to minimise the commercial risk.


Production of engines with reduced technical parameters (e.g. weight, cubic capacity) but the same or similar engine power – leading to greater efficiency and reduced energy consumption.


(DEUTZ Variable Emissions Reduction Technology)
A combination of systems, components and procedures that are used as modules to create technically optimised and, at the same time, cost-effective solutions for reducing exhaust and noise emissions.


Earnings Per Share

Earnings per share is the ratio of the consolidated profit or loss for the year to the average number of shares issued. For diluted earnings per share, the number of shares and the consolidated profit or loss for the year are adjusted by the dilutive effects of any subscription rights that have been or can still be exercised. Subscription rights arise in connection with issues of convertible debentures and share options.


Earnings before interest and tax.


Exhaust standard laid down by the European Union for non-road applications. Sets limits for pollutants such as nitrogen oxide, hydrocarbons and soot particulates in exhaust gas.

Exhaust aftertreatment

Ensures compliance with statutory emissions limits for gaseous pollutants such as nitrogen oxides (NOx) und soot particles through the cleansing of combustion exhaust gases. In vehicles, exhaust aftertreatment is achieved by the use of catalytic converters and diesel particulate filters.



Funding instrument whereby a company secures its short-term liquidity and transfers the default risk associated with receivables by selling trade receivables to a factor (the factor can be a bank or a specialist financial institution).


Individually structured, non-exchange-traded forward transaction.

Free float

The proportion of shares in a public limited company (Aktiengesellschaft) not held by a major shareholder. According to the Deutsche Börse definition, shareholdings of less than 5 per cent are classified as free float.



Hedging interest-rate, currency, price or similar risks through the use of derivative financial instruments which limit the risk associated with the underlying transactions.


Investment grade

Credit rating for high-quality bonds.



Continuous improvement process (CIP) describes a way of thinking aimed at making a company more competitive through a series of small, progressive steps. It is comparable with the Japanese principle of Kaizen. CIP is applied to products, processes and service quality. Specific CIP teams are set up to implement small improvements (as opposed to major, dramatic changes). CIP is a basic principle of quality management and an essential part of ISO 9001. The method of having specific CIP teams develop suggestions for improvement is usually bracketed under the term ‘ideas management’ together with the company suggestion scheme.


Long-term incentive plan

A form of incentive-based remuneration offered to members of the Board of Management and selected senior managers; its purpose is to enable these executives to benefit from the company’s long-term success, thereby encouraging them to stay with the company.


Non-captive market/segment

Market segment in which original equipment and commercial vehicle manufacturers purchase engines from third-party manufacturers to meet their engine needs. The non-captive market is accessible to independent engine manufacturers.


On-road applications

Engine-powered applications that are licensed for use on public roads such as commercial vehicles and buses.

Operatinal excellence

Continuous improvement of the value creation process and of quality.


Contract which, until the expiry date, gives the holder the right to buy – and the writer the obligation to sell – an underlying instrument (a security or a product/commodity) at an exercise price that has been fixed in advance.


Parts per million

Measurement for defective parts.

Prime Standard

The minimum standard set by Deutsche Börse AG for companies looking to raise capital from international investors. These companies have to meet stringent international disclosure requirements. Admission to the Prime Standard is a prerequisite for inclusion in the DAX, MDAX, TecDAX and SDAX indices.



Used to assess the creditworthiness of a company. It gauges the extent to which the company will be able to repay the principal and interest on its outstanding liabilities at the agreed date.

Return on capital employed

Ratio of EBIT to average capital employed. Capital employed: total assets minus cash and cash equivalents, trade payables and other current and non-current liabilities based on average figures from two balance sheet dates.



(Selective Catalytic Reduction)
Catalytic reduction of nitrogen oxide in the exhaust gas of combustion engines, whereby a watery urea solution is used as a reducing agent that is injected into the exhaust gas. In the hot exhaust gas, the urea disintegrates to form ammonia which converts the nitrogen oxide into harmless molecular nitrogen.


The term shop floor management describes a system used in production planning to fine tune manufacturing operations in a dynamic, flexible and resource-efficient way. This means, for example, scheduling processes down to the exact minute, ensuring transparency throughout the production process and achieving optimum use of capacities.

Six Sigma

A statistical quality target and a method of quality management.

Soot and particulate filters

Devices for reducing the particulates contained in the exhaust gases of diesel engines. There are two types of filter, which work in very different ways: wall-flow filters, in which the exhaust gas penetrates a porous wall; and flow filters, in which the exhaust gas flows through the filter itself.


US EPA TIER 1, 2, 3, 4

US emissions standard for non-road applications. Sets limits for pollutants such as nitrogen oxide, hydrocarbons and soot particulates in exhaust gas.


Working capital

Inventories plus trade receivables less trade payables.

Working capital ratio

Ratio of average working capital (inventories plus trade receivables minus trade payables) over four quarters to revenue for the last twelve months.



Stands for ‘Exchange Electronic Trading’ and is the name given to the electronic dealing system run by Deutsche Börse AG (also known as screen-based trading).