|
|
|
|
|
|
-
Sustained value enhancement plan taking further effect—upturn four years running
-
Group net income almost doubled in 2003 to €37.8 million
- Non-German share of sales again a high 72 percent
-
Net financial debts slashed from €189 million to €37 million
-
Medical and Safety subgroups especially successful in the growth regions of America and Asia
-
Annual workforce average up by 469 to 10,334
-
Preferred stock dividend up from €0.35 to €0.40
-
Q1/2004 off to a successful start
-
Prospects
|
|
| Lübeck, May 12, 2004—Drägerwerk AG, Lübeck, a leading international medical and safety technol-ogy group, pushed ahead successfully in 2004 with its value enhancement efforts. Compared with Q1/2003, the Group generated 12 percent added sales. The Group's net income for the period of €13.4 million (up from €2.2 million) includes €9 million one-time gains from the disposal of further service (especially IT) companies. And, following the successful start into 2004, the Group will again uphold its position, outpacing the market in terms of sales in 2004 and earnings surging proportion-ately ahead of sales, as commented by CEO Theo Dräger on the occasion of the annual accounts press conference. Over the past three years, the two large subgroups, Dräger Medical and Dräger Safety, have steadily sharpened their competitive edge and now command solid positions in the world market with their product portfolios and sales organizations. |
|
Summary of the Group’s audited key figures for 2003
|
| 2003
| 2002
| Change
(Parity-adjusted)
Net sales, Group
Net sales, Medical
Net sales, Safety |
€1,413.5 mill.
€917.7 mill.
€477.4 mill. |
€1,333.0 mill.
€848.3 mill.
€471.1 mill. |
+6.0% (+12.0%)
+8.2% (+14.5%)
+1.3% (+6.9%) |
| Order intake |
€1,421.9 mill. |
€1,345.0 mill. |
+5.7% (+11.7%) |
EBIT before
one-time JV expenses |
€96.4 mill. |
€71.9 mill. |
+34.1% (+75.0%) |
| EBIT margin |
6.8% |
5.4% |
+25.9% |
EBIT after
one-time JV expenses |
€64.0 mill. |
€66.3 mill. |
-3.5% |
| Group net income |
€37.8 mill. |
€19.8 mill. |
+90.9% |
| Minority interests |
€10.9 mill. |
€2.3 mill. |
|
EpS
(after minority interests) |
€2.12 |
€1.38 |
+53.6% |
| Capital employed |
€857.3 mill. |
€531.5 mill. |
+61.3% |
ROCE
(return on capital employed) |
11.2% |
13.5% |
|
| Equity ratio |
41.7% |
20.1% |
+107.0% |
Dividend (preferred)*
Dividend (common)* |
€0.40
€0.34 |
€0.35
€0.29 |
+14.0%
+17.2% |
Annual avarage
headcount |
10,334 |
9,865 |
+4.8% |
|
*proposed by the Executive and Supervisory Boards |
|
Group business in 2003—on target
Group net income almost doubled—non-German sales 72 percent
With net income at €37.8 million in fiscal 2003, the Dräger Group again almost doubled the year-earlier figure of €19.8 million. EBIT (before one-time joint venture expenses) climbed €24.5 million or 34 per-cent to €96.4 million (up from €71.9 million). The EBIT margin therefore improved by 1.4 percentage points to 6.8 percent. Sales in 2003 rose 6 percent to €1,413.5 million (from 1,333.0 million in 2002), most of the business coming from Western Europe, the USA, and Asia. In all, the Dräger Group gener-ated once again 72 percent of its sales outside of Germany. Group sales were shared two-thirds by Dräger Medical (64.9 percent) and one-third by Dräger Safety (33.8 percent). Order intake within the Group rose by 5.7 percent to €1,422 million (up from €1,345 million). |
|
|
| The joint venture and the Group's net income combined to raise Dräger's equity to €499 million (€170 million at year-end 2002). The equity ratio jumped from 20.1 to 41.7 percent, while net financial debts plunged from €189 million to €37 million as of December 31, 2003. A concomitant effect of the joint venture was to a capital employed soaring by 61 percent to €857.3 million. Nonetheless, an operating EBIT (before one-time JV expenses) of €96.4 million delivered an ROCE of 11.2 percent (down from 13.5 percent). |
|
|
| Most capital outlays were made for tangible and intangible assets, primarily production plant, factory and office equipment, as well as software. Excluding the JV's goodwill and patents, the total spent by the Group rose to €61.9 million (up from €48.2 million); this was €17.1 million above total depreciation and amortization of €44.8 million. The Dräger Group’s R&D expenses amounted to €96.8 million (up from €77.5 million), equivalent to 6.8 percent of sales (up from 5.8); spending for advanced and further training came to around €10 million. The Dräger Group thus invested about 12 percent of sales or €169 million in the bases to secure its future (up from 10 percent). |
|
|
| Worldwide the Dräger Group employed an annual average of 10,334 (up from 9,865) persons, i.e. 4.8 percent more than 2002, including 5,656 (down from 5,843) in Germany. Meanwhile, over 45 percent, i.e. 4,678 employees (up from 4,022), work outside of Germany. Both this trend and the changed em-ployee structure within Germany reflect Dräger's evolution into a globally focused group. Personnel expenses within the Group added up to €567 million or 40.0 percent of sales (up from €529 million or 39.7 percent), adjusted for the one-time expenses incurred for the Siemens JV, to 39.3 percent. |
|
Business at the subgroups
Dräger Medical 2003: 10 percent EBIT margin / joint venture with Siemens
Largely instrumental in the successful performance of Dräger Medical proved to be the resultful enactment of the Siemens joint venture. Expanding the worldwide sales and service network, the new portfolio of monitoring products and Dräger Medical's ongoing refocus into a worldwide process-driven group—these are the factors that characterize the successful rebuilding of Dräger's biggest subgroup. With an EBIT of €91.4 million before the one-time JV expenses (up from €76.6 million before such expenses), the subgroup shows an EBIT margin of 10 percent (LFL parity 12.4 percent) and hence a 19-percent EBIT increase despite the unforeseeable exchange rate effects. Sales moved up 8.2 percent to €917.7 million, parity-adjusted by 14.5 percent. |
|
|
| Despite the strong euro, sales by the Dräger Safety subgroup in fiscal 2003 inched up by 1.3 percent to €477.4 million (from €471.1 million). The parity-adjusted increase was 6.9 percent. The growth and stable performance were due to innovations, acquisitions, alliances, and upgraded processes. Further inroads were laid in the important key markets of Western Europe, USA, and Asia. An EBIT of €39.7 million (down from €41.3 million), which suffered from the strong dollar, yielded an EBIT margin of 8.3 percent (down from 8.8 percent), in terms of LFL exchange rates 9.3 percent. |
|
|
| EpS after minority interests in 2003 climbed 54 percent from €1.38 to €2.12. The solid earnings pro-gress has prompted the Executive Board to propose to the stockholders meeting on June 11, 2004, an increased dividend of €0.40 per preferred share (up from €0.35). Participation certificates rank for 10 times the preferred dividend since their par value corresponds to 10 times the arithmetic unit value of one preferred share. If resolved as proposed, participation certificate holders will receive a dividend of €4.00 per certificate. |
|
|
The uptrend over the past three years within the Dräger Group was continued by the two subgroups Dräger Medical and Dräger Safety during the first three months of 2004.
Group indicators for Q1/2004
|
| Q1/2004
| Q1/2003
| Change
| Net sales |
€313.0 mill. |
€280.2 mill. |
+11.7% |
| Order intake |
€349.9 mill. |
€330.0 mill. |
+6.0% |
| EBIT before one-time JV expenses |
€14.8 mill. |
€12.5 mill. |
+18.4% |
| EBIT margin |
4.7% |
4.5% |
- |
| Net income* |
€13.4 mill. |
€2.2 mill. |
- |
| Quarterly average headcount |
10,122 |
10,147 |
-0.2% |
|
*incl. extraordinary gains from the divestment of IT service companies |
|
Before the one-time joint venture expenses, Dräger Medical generated an EBIT of €11.2 million (up from €10.4 million). The EBIT margin at 5.6 percent was slightly down from the year-earlier 6.2 percent since EBIT was eroded by the extensive structural programs designed to improve worldwide sales coverage. In the USA, in particular, there was a sales organization changeover from product-specific to portfolio-based selling with concurrently a rise in the number of salespersons. In the medium term, such mea-sures will impact favorably on order intake and earnings, although during Q1/2004 the efforts undertaken did burden both. The subgroup also expanded in Chile and Mexico where it established its own subsidiaries, this again entailing additional costs.
Appreciable sales advances were achieved by Dräger Medical especially in the United States, China, and Europe—particularly Italy, Spain, and the Benelux, as well as in Germany, albeit the domestic market is still clouded by uncertainties. In all, sales climbed by 20.6 percent to €200.8 million (up from €166.6 million), at LFL parities by 23.1 percent. Q1 order intake mounted to €220.3 million in 2004 (up from €192.1 million), an increase of 14.7 percent, parity-adjusted up by as much as 17.9 percent.
Dräger Safety lifted its Q1/2004 EBIT to €9.4 million (from €7.9 million), a 19-percent improvement over Q1/2003 and equivalent to an EBIT margin of 8.3 percent (up from 7.3 percent). Worldwide, Dräger Safety raised sales by 3.6 percent (at LFL parities even by 6.3 percent) to €113.2 million in the course of Q1/2004 (up from €109.3 million). In all, business during Q1/2004 reaffirmed the strong mar-ket position, with order intake at €130.7 million even slightly up over the high year-earlier €130.2 mil-lion. Parity-adjusted gains were especially conspicuous in NAFTA (up 10.6 percent) and Asia/Pacific (up 12.4 percent).
Although the number of people employed within the Group worldwide during Q1/2004 was more or less stable at 10,122 (down slightly from 10,147), the figures do reflect the Group's globalization pro-cess. As a consequence of the sale of Dräger Aerospace and the spin-off of the service companies, the domestic workforce shrank from 5,854 to 5,127 while, especially due to the Dräger Medi-cal/Siemens joint venture, the headcount outside of Germany climbed from 4,293 to 4,995. |
|
|
After four months of the current fiscal year, Drägerwerk AG is confident of being able to achieve the sales target set for the Dräger Group of over €1.5 billion and proportionally higher growth rates in EBIT and net income. As a result of the Siemens joint venture, which this year takes full effect for the first time, there will be a sharp rise in minority interests in profit.
Assuming an exchange rate of $1.30/€, Dräger Medical is looking forward to breaking the €1 billion barrier for the first time (€1.09 billion budgeted) and show an EBIT rise of 30+ percent (€122 million budgeted).
During Q2/2004, Dräger Medical expects to receive the last of the antitrust authority go-aheads allowing its takeover of the North American Hill-Rom Company Inc.'s Neonatology unit (operating as Air-Shields). Shortly thereafter, this unit will very likely be integrated and consolidated with Dräger Medical and, for the remainder of the fiscal year, it is expected to add around €20 million in sales and, before one-off ex-penses, break even slightly into the black.
On the basis of the aforementioned exchange rate, Dräger Safety expects steady sales of around €482 million (up from €477 million) albeit this dollar rate will take its toll on EBIT which, accordingly, is predicted at €32 million (down from €40 million). In all, Dräger Safety has reaffirmed its status in all its product and service sectors.
Within the scope of the core business emphasis, some kind of third-party outsourcing or spin-off solution is being sought for the Dräger ProTech GmbH parts and components production. As to the then remaining Dräger Interservices GmbH (Logistics) and Dräger InTek GmbH (Facility Management), these are closely intermeshed with the subgroup's operational processes and will therefore stay within the Group.
This press release contains statements regarding the Dräger Group's future development. No warranty can be given for such statements since they are based on assumptions and estimates which are subject to risks and uncertainties. |
|
|
|
|
|
|
|
|
|
(c) Drägerwerk AG & Co. KGaA, 2007 |
|
 |
|
|
|
|
|
 |
|
