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| Lübeck, May 30, 2000 - Despite a still weak domestic and world economy, the Lübeck-based medical, safety, and aerospace technology group sees itself well geared despite keener competition. As Drägerwerk AG’s CEO Theo Dräger explained when presenting the 2001 annual accounts, the past fiscal year has certainly been a sound launching pad for further sales and earnings improvements. Within the Dräger Group, especially at the Medical and Safety subgroups, good progress has been made, the CEO said. Structures and products are right, processes are aimed at the global market and the distribution and services networks are again broadened in the growth regions of Asia and America, he stated. However, the outcome of the wage negotiations will, he feels, require further process improvements.
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| Only one year after the earnings drop in fiscal 2000 due to the high provisions for restructuring Dräger Medizintechnik GmbH and Dräger Pro Tech GmbH, the Dräger Group in 2001 managed a turnaround to show a net income of €10.2 million (up from a net loss of €58 million). A decisive factor in this rebound was that the Dräger Safety subgroup again raised its earnings in fiscal 2001 to reach an EBIT of €30.3 million (up from €27.4 million). Also of importance for the return to the black was the successful launch of the three-year restructuring program at Dräger Medical, where EBIT quadrupled to €39.0 million (from €9.1 million) and the decline in working capital led to a sustained positive cash flow. The payroll ratio was reduced while the productivity enhancement measures in the operating and administration processes were taking effect. |
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| Group earnings, offset of goodwill, parity changes and other consolidation entries raised the Dräger Group’s equity to €172 million or 19.8 percent of total assets (up from €612 million or 18.9 percent). After netting accounts due from and to banks, liabilities to banks decreased by €27 million to €190 million.
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| With total assets slightly up, capital employed (CE) inched down from €542 million the year before to €535 million in 2001. By stepping up EBIT to €49.5 million, the return on capital employed (ROCE) soared from 5.5 to 9.2 percent |
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| The Dräger Group continued its growth in fiscal 2001. Group sales rose by 10.6 percent to €1,257.2 million (up from €1,136.7 million), this clearly outpacing the market growth rates of an average 3 to 5 percent. Sales were boosted by all divisions, at Dräger Medical by 10 percent, at Dräger Safety by 11.4 percent, and at Dräger Aerospace by 11.8 percent. Whereas German sales climbed only 2.6 percent, business abroad rose by 14.5 percent, which again ratcheted up the international share, to 70 percent. The main growth markets were Europe outside of Germany and America. The division share of total sales remained almost unchanged. At 64 percent, Dräger Medical is the largest division, followed by Dräger Safety at 33 percent, and Dräger Aerospace at 2.1 percent. With their innovative product ranges and holistic solution concepts (care areas, hazard management), the Dräger companies are very well geared in their respective market segments and always among the leaders. Apart from technological and service leadership, the aim is now to achieve a sustained reduction in costs through globally focused business processes.
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| In 2001, capital expenditures amounted to €44.3 million (down from €48.7 million), focusing primarily on tangible and intangible assets, mainly technical developments, factory and office equipment, and computer software. Research and development in 2001 accounted for around €72.6 million (up from €71.5 million), some 6 percent of sales. Dräger is hence clearly above the average for German industry. In 2001, Dräger spent DM 10.7 million on adult and ongoing training (down from €11.2 million). Capital expenditures, R&D expenses, plus outlays for adult and ongoing training-all aimed at securing Dräger’s future and extending its technological leadership-came to €127 million or 10.1 percent of sales, a ratio Dräger intends to maintain even in times of recession.
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| On an annual average, altogether 9,535 people (up from 9,376) were employed in 2001, including 3,630 (up from 3,356) abroad. This is equivalent to a rise of 1.7 percent, the actual growth at 8 percent being attributable to the further expanded the distribution and services network abroad, whereas the domestic workforce shrank by 115 employees or 1.9 percent. Dräger Medical employed 4,837, Dräger Safety 3,030, and Dräger Aerospace 201 people. |
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| The Executive and Supervisory Boards will propose to the annual stockholders’ meeting to distribute, out of Drägerwerk AG’s net earnings, a total cash dividend of €2.5 million (€0.13 each per common or preferred share, plus another €0.13 per preferred share for 2000) and transfer the balance of €53.7 million to the reserves retained from earnings. Participation certificates entitle to a dividend ten times the preferred stock dividend since their arithmetic par value is ten times that of one preferred share. If resolved as proposed, the dividend for participation certificates will amount to €1.30 each, series D participation certificate holders receiving an additional €1.30 for 2000 since this series does not guarantee any minimum dividend. The stock price trend, too, should please the stockholders. Since the 8-point restructuring program for Dräger Medical was announced in October 2000 until May 29, 2002, the price of preferred stock rallied from €8 to €18+, thus more than doubling and outperforming all stock market indices.
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| As already mentioned, the Dräger Group managed to successfully continue its upward trend in the first quarter of 2002 (sales rising by 14 percent, and at €3 million, Dräger for the first time ever reported black-figure quarterly earnings). The Executive Board expects the consistently implemented restructuring and performance enhancement programs to further improve earnings this year, too. Present forecasts predict a better-than-average earnings advance and a sales rise of more than 5 percent for the Dräger Group.
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(c) Drägerwerk AG & Co. KGaA, 2007 |
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