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- Growth in sales, order intake, and EBIT
- Dräger Medical and Dräger Safety business buoyant outside of Germany
- Divestment of ProTech GmbH seals the outsourcing of services previously insourced / Medical making good progress with the integration of Air-Shields
- Expansion of product portfolio and system solutions
- As budgeted, 10 percent sales and earnings growth predicted for 2004
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| Lübeck, Aug. 12, 2004 — H1/2004 proved to be another successful six months for the worldwide medical and safety technology group of Lübeck-based Drägerwerk AG which continued its uptrend. |
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| H1/2004
| H1/2003
| Change
| Net sales |
€674.7 mill. |
€616.3 mill. |
+9.5% |
| Order intake |
€716.3 mill. |
€665.7 mill. |
+7.6% |
| EBIT before one-time expenses |
€41.0 mill. |
€38.6 mill. |
+6.2% |
| EBIT margin |
6.1% |
6.3% |
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Net income
thereof extraordinary gains |
€25.2 mill.
€9.0 mill. |
€34.2 mill.
€20.5 mill. |
-26.3%
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| Semiannual average headcount |
10,115 |
10,213 |
-1.0% |
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*unaudited. |
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| By the end of June 2004, both order intake and sales outperformed H1/2003 by 7.6 and 9.5 percent, respectively; in terms of like-for-like currency parities, order intake even climbed 9.5 percent and sales 11.5. For seasonal reasons, order intake at €716.3 million is well over sales at €674.7 million. |
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| Sales gains outside of Germany were most pronounced, with America surging by 20.5 percent (LFL parity 30.6 percent) even though the reorganization of Dräger Medical's USA distribution network has yet to take full effect. Outside of Germany and inside Europe, growth was a better-than-average 12.7 percent (parity-adjusted 13.1 percent). In Asia, group sales mounted 8.3 percent (LFL parities 10.9 percent). In Germany, in contrast, sales inched up a mere 0.2 percent although deducting the 2003 revenues contributed by Dräger Aerospace (sold in June 2003), the improvement is 6.7 percent. |
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| As in previous years, the first half of 2004 generated less than one-half of annual sales. Given the basically regular incurrence of fixed costs, the H1 earnings do match expectations. EBIT before one-time expenses of €4.8 million at Dräger Medical reached €41.0 million (up 6.2 percent) or 6.1 percent of sales (compared with €38.6 million or 6.3 percent for H1/2003). |
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| At €25.2 million, the Group’s net income was short of the year-earlier €34.2 million which had included an extraordinary gain of €20.5 million from the disposal of Dräger Aerospace. This year's figure includes an extraordinary gain of €9.0 million from the divestment of various service companies. |
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| The disposal of Dräger ProTech GmbH is the final step in the Dräger Group's services outsourcing process whose outcome is greater independence from suppliers and full concentration on Medical and Safety's main-stream businesses. |
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- Sales and order inflow rising by double-digit percentages
- Air-Shields takeover approved and operations running
- Dräger Medical unveiling new Infinity solutions for patient monitoring
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| Virtually unchanged from the year-earlier level of €28.6 million, Dräger Medical closed H1/2004 with an operating result of €28.7 million (before the one-time expenses of €4.8 million for the Siemens joint venture and Air-Shields integration). At 6.6 percent the EBIT margin was down by one percentage point. As in Q1, ongoing restructuring efforts and the resulting cost structure improvements impacted favorably on the operating result, even though the continuing cost input for reshaping the US distribution organization did erode earnings and shrink the EBIT margin as budgeted. Nonetheless, North American sales rose by 37 percent over H1/2003 and order intake by 13 percent. Patient monitoring business progressed as expected. |
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| Despite the continuing price squeeze and fiercer competition, the Dräger Medical subgroup did lift both sales and order intake over H1/2003. New orders were booked for €454.7 million (up 12 percent from €405.8 million). Sales advanced 15 percent to €435.0 million (up from €377 million a year ago). Exchange rate-adjusted, the increase was around 2 percent higher in each instance. Significant sales growth was registered mainly in Germany, France, Italy, the Benelux, and Great Britain. |
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| Q2/2004 sales and order intake were likewise pushed up, in some cases by double-digit percentages. Compared with Q2/2003, new orders rose by 9 percent to €234.4 million (up from €214 million). In the same period, sales mounted 11 percent from €211 million to €234.2 million. Parity-adjusted, the advances were 13.0 percent (sales) and 10.5 percent (order intake). EBIT at €17.5 million was just short of the Q2/2003 €18.2 million. The Q2 EBIT margin was 7.5 percent (down from 8.6 percent). |
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| Q2/2004 sales and order intake were likewise pushed up, in some cases by double-digit percentages. Compared with Q2/2003, new orders rose by 9 percent to €234.4 million (up from €214 million). In the same period, sales mounted 11 percent from €211 million to €234.2 million. Parity-adjusted, the advances were 13.0 percent (sales) and 10.5 percent (order intake). EBIT at €17.5 million was just short of the Q2/2003 €18.2 million. The Q2 EBIT margin was 7.5 percent (down from 8.6 percent). |
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| The Air-Shields takeover received official approval in June and the operational start-up took place in the course of the period. In ten countries Air-Shields has already been assimilated into the Dräger Medical process environment and organization. The related preparation and integration bill added up in Q2/2004 to around €2.7 million. |
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| €40.2 million went toward R&D in H1/2004 (9.2 percent of the subgroup's sales). |
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| Q1/2004 had seen the US presentation of the new information system Innovian™ Anesthesia specifically devised for anesthesiological workstations. This was followed in April by the European rollout at the Paris World Congress of Anesthesia. Also unveiled were a number of patient monitoring solutions. Among the products presented by Dräger Medical at this year's German Anesthesia Congress was the new Infinity® Kappa XLT monitor that simultaneously visualizes real-time vital parameters, patient data, as well as other relevant documentation and information. |
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- EBIT outpacing sales and up by 8.8 percent
- Processes improved, costs pruned
H1/2004 saw Dräger Safety generate an EBIT of €21.0 million, up 8.8 percent over the year-earlier €19.3 million and the reward for effective process improvement and cost-cutting programs. The EBIT margin climbed from 8.4 to 8.7 percent. |
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| Worldwide H1/2004 sales by Dräger Safety mounted by 4.6 percent to €240.9 million (up from €230.2 million). In terms of LFL exchange rates, the gain was 6.4 percent, meaning that Dräger Safety's H1 earnings again outpaced sales. Order intake grew to €262.3 million (up from €248.8 million by 5.4 percent or a parity-adjusted 7.2 percent). |
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| It was the sharp surge in Q2 orders and sales that upgraded H1/2004 performance: Q2 order intake rose 11 percent (LFL parities 11.5 percent) to €131.6 million and sales 5.6 percent (LFL parities 6.6 percent) to €127.7 million, both well ahead of the year-earlier figures. The Q2 EBIT amounted to €11.6 million (up from €11.4 million). |
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| Measuring 5.1 percent of sales, R&D expenditure added up to €12.4 million and mainly went toward work on new products. The new Polytron 7000 gas detection and measuring system typifies the direction in which this subgroup is heading, its modularity enabling users to themselves preselect ambient properties necessary for their monitoring duties. The two new X-am 3000 and X-am 7000 portable gas detectors firmed their footing in the marketplace. The two enable a multitude of pollution and contaminant sensors to be combined for a wide variety of measuring and monitoring functions in hazard management for industrial, utilities, waste disposal, fire-fighting and mining environments. |
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| The subgroup's strategy of customer-driven safety systems solutions also met with a ready reception as demonstrated by a contract to develop, build and deliver rescue and firefighting trains for operation in stretches of Austrian Rail (ÖBB) tunnels. |
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| America business was especially buoyant, with LFL-parity order influx up by 21 percent and sales by 20.6. While Asia/Pacific order intake was no longer driven by the SARS epidemic, volume business branched out. It was the firefighting, mining and maritime customers in particular that were ordering Dräger's safety gear to protect their staff and production facilities. Parity-adjusted sales surged 23.6 percent. In many European countries, H1 business made good progress, too, with Europe in all advancing by 4.4 percent (order intake) and 2 percent (sales). Inside Germany, strained public-sector budgets depressed sales by a slight 2.0 percent. Elsewhere, the €2.3 million sales slide was caused exclusively by nonrecurring year-earlier project contracts, albeit here, too, volume business forged ahead. The new Dräger DrugTest found an eager echo on the European market. |
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| In response to the Group's H1/2004 performance Dräger CEO Theo Dräger was again confident regarding the achievability of the budgeted 10-percent gain in group sales for fiscal 2004. "As planned, we will therefore also top the €96.4 million EBIT and €37.8 million net income posted in 2003. Once again it will be the successful subgroups Dräger Medical and Dräger Safety that, with their innovative and holistic product portfolios and system solutions, find themselves very solidly positioned amid a globally focused and keenly competitive market." |
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| With the takeover of Air-Shields and this company's actual inception in June, Dräger Medical is set to complete the integration of operations into the subgroup by the end of August. The pending bill is covered by the €20 mil-lion integration and one-time expenses earmarked for this year. |
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| Effective July 1, 2004, Dräger Safety took over the respiratory protection mask manufacturer Zenith Safety Products Trust, King William's Town, South Africa, a move that promotes Dräger Safety to a prominent provider of light respiration masks for the southern African market. With its new production company Dräger Safety Zenith (Pty) Ltd., Dräger Safety has strengthened its presence in South Africa as a marketing, after-sales service and production company. As a consequence, the regional market (especially mining and industry) can now resort to its wide-ranging safety technology services and products. |
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| 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. |
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| Press release |
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