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In fiscal 1999, sales of Drägerwerk AG, Lübeck, considerably outstripped expectations at plus 9 percent, with the Dräger Group coming close for the first time to the DM 2 billion mark (1998: DM 1.82 billion). Group net income will slightly surpass the expected DM 18 million, but will remain below the previous year's result of DM 26.9 million. The fall in income was influenced in part by declining sales in the German medical technology market which was characterized, especially in the hospitals sector, by a marked reluctance to purchase and invest which continued into the fourth quarter of 1999. Even the above-average rise in foreign orders was not enough to compensate for the resulting lost sales. At the same time, exceptional factors affected the Group's operating results, for example the high costs of making in-house electronic equipment and life-support systems in the marketplace Year 2000 compliant. This was further compounded by considerable advance investments necessary to expand Dräger's service business in the hospitals sector - the market is increasingly proving that this was the right decision. Important advance investments were also undertaken for the DrägerDive business unit to establish a sales system for the recreational/sports diving market in the key German and US markets.
Medical and safety technology enjoyed positive development in West Europe, USA and Asia-Pacific. Dräger proved not only able to expand its international technological leadership in medical and safety technology, but also, for example, its market leadership in emergency oxygen units in the international aerospace sector. Dräger Aerospace GmbH has just been awarded a major contract worth over DM 50 million to supply passenger emergency oxygen units to Airbus over the next eight years.
In addition, the company has gained a new customer in United Airlines, one of the world's largest airlines.
In view of a very positive incoming order situation at present, with orders from both Germany and abroad for all the core products of the Dräger Group, the Group is confident that it will be able to perpetuate growth in the year 2000. Assuming continuing favourable framework conditions, Dräger intends to regain its 1998 result of DM 26.9 million. As also announced by the company, through product innovations, improved business processes and the expansion of US sales and production the way has already been paved for increased international />competitiveness. The restrictions on the export of an anaesthesia system, imposed for a time by the American FDA as a result of a quality system audit carried out at the Lübeck main plant, have now also been lifted. Management is not satisfied with the current share price of Dräger preferential shares (at around 8 euro), but in view of the internal strengthening of the Group during the past year and the good prospects for growth for Dräger products and services both in Germany and abroad, the share price is also expected to hold good future potential. Dräger also announces that it will be donating around DM 2 million to the compensation fund of German Industry. |
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(c) Drägerwerk AG & Co. KGaA, 2007 |
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