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- Growth in order intake (up 4.0 percent, parity-adjusted 10.8 percent) and sales (up 4.4 percent, parity-adjusted 11.2 percent)
- EBIT €43.0 million (up from €42.5 million) despite €16 million nonrecurring expenses (up from €5 million) chiefly caused by the Dräger Medical/Siemens joint venture
- Net income grown to €34.4 million (up from €12.1 million), including the €20.5 million gain from the sale of Aerospace
- Equity ratio at 39 percent (up from 20.1 percent), improved through Siemens JV
- Strong earnings expected for Q4/2003 and all of 2003
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| Lübeck, November 13, 2003—The first nine months of the current fiscal year have proven a successful period for Lübeck-based Drägerwerk AG. As reported by this Medical and Safety Technology Group, order intake advanced to €1,027 million (up from €987.8 million), sales to €949 million (up from 909.4 million), and EBIT to €43 million (up from €42.5 million). Group net income leapt to €34.4 million (up from €12.1 million).
This performance is all the more remarkable as a strong euro, a weak economy, and group action for structural realignment and focus on core businesses all took their toll on earnings. The €43 million EBIT contains one-time expenses of €16 million (up from €5 million). These expenses are offset against nonrecurring gains and include a burden of €5.2 million from currency translation. The €16 million one-off expenses cover the €13.4 million incurred for the Siemens joint venture. Including the extraordinary gain from the disposal of Aerospace (€20.5 million), 3-quarter net income totals €34.4 million (up from €12.1 million) after currency translation losses of €4 million.
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- Operating EBIT up 31 percent
- Order intake up 6.1 percent and sales up 8.2 percent over year-earlier figures (par-ity-adjusted 13.1 and 15.3 percent, respectively)
- Joint venture off to a flying start
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| For the first nine months of fiscal 2003 Dräger Medical posted an operating EBIT of €42.4 million (before the JV-related one-off expenses of €11.5 million). Compared with the €32.3 million in 3Q/2002 this is a leap of 31 percent and equivalent to an EBIT margin of 7.1 per-cent (up from 5.8 percent). At €13.8 million (before JV expenses), Q3 EBIT by Dräger Medi-cal was for the 11th time in series above the year-earlier figure (€11.4 million). This repeat-edly profitable performance is not least of all the outcome of the ongoing optimization of global business processes and the related even more efficient cost structures within Dräger Medical. |
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| 3Q/2003 sales total €597.7 million (up from €553 million), a gain of 8.2 percent. This means that in the third quarter (just as in the second), Dräger Medical has made good the first quarter's shortfall. The same applies to order intake where the aggregate decline over 2002 has been made good, with order influx for 3Q/2003 amounting to €654.8 million or 6.1 per-cent over the €617.2 million of 2002. Despite a sound regional balance in value-added terms, the weak US dollar had quite some impact on earnings at Dräger Medical: applying like-for-like currency translation rates, EBIT adds up to €50.7 million, equivalent to a 58-percent hike, while the sales and order intake additions are 15.3 and 13.1 percent, respectively. |
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| This repeatedly commendable performance is the outcome of a purposeful and swift enact-ment of a wide variety of process and productivity programs. The third quarter saw, more-over, the smooth operational implementation of the joint venture. From the very inception date of operations (July 1, 2003), it proved possible in all major countries worldwide to per-form the services for the installed base of the former Siemens units. In over 150 countries, patient monitoring business was transferred from Siemens Medical Solutions to Dräger Medical. Also completed without a hitch was the assimilation of the almost 600 extra em-ployees. Now that operational integration had been completed as early as August, a number of support programs for cultural convergence will continue until year-end. |
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| Despite uncertainty in Germany concerning future health policies and ongoing spending re-luctance, Dräger Medical is still holding on to its strong domestic market position. As to the US market, Dräger Medical made good its sales shortage versus 2002 during the period and at a nominal 3 percent, is now slightly above the year-earlier level. Business in China and a number of European countries is als making very good progress. |
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| Upon the consummated takeover of Siemens Life Support Systems by GETINGE AB, Dräger Medical expects the cash to flow in some time in Q4/2003. Regarding the announced acqui-sition of the Neonatology division of the North American Hill-Rom Company, Inc. (operating worldwide under the name of Air-Shields), Dräger Medical looks forward to the start-up of operations in the course of Q1/2004, once the authorities have given the required go-ahead.
Following a seasonally strong September, Dräger Medical is budgeting for Q4/2003 excep-tionally good year-end business and is hoping for 2003 sales of around €940 million and an EBIT of €95 million before the one-off expenses caused by the Siemens JV. |
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- Again global growth in high-volume products
- Gains in NAFTA and Asia/Pacific
- European market share upheld
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| In the first nine months of 2003, Dräger Safety achieved an EBIT of €24.9 million, a result that suffered from the strong euro. Applying LFL parities to operating business and retranslating the numbers yield an EBIT of €30.6 million, just short of the year-earlier €31.1 million. At €339.5 million, sales were a slight 1.2 percent short of the year-earlier €343.6 million yet in terms of LFL parities again grew, by 5.4 percent. Order intake measured by current parities climbed 2.6 percent to €361.3 million (up from €352 million). Adjusted, the gain was 9.6 percent.
Q3/2003 order influx dropped from €123.1 million to €112.5 million (down 8.6 percent, LFL down 1.8 percent), sales from €116.0 million to €109.3 million (down 5.8 percent, LFL up 0.8 percent), EBIT from €8.1 million to €5.6 million.
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| Market shares were gained in NAFTA, in LFL parities a 31.8-percent increase in orders received. Alongside contracts for "domestic preparedness," Dräger Safety posted orders for gas detection and personal protection gear from the public sector, fire departments, and industry. In some instances, the subgroup was also entrusted with the accompanying safety training for the fire-fighters and the service management for the respiratory equipment. |
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| Parity-adjusted, order intake surged by 31.3 percent in the Asia/Pacific region. Here, too, Dräger Safety further expanded its market share, contracts including a further order for the Piccola filtrating respiratory protection masks against the SARS pulmonary epidemic and for Australia 2,000 units for detecting gassing agents housed in containers. |
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| In Europe, Dräger Safety reaffirmed its strong market position, orders advancing slightly by 2 percent. Q3 contracts included a second rescue train for the St. Gotthard tunnel presently under construction. In response to its customer-specific systems solutions approach, Dräger Safety was commissioned by a chemicals company with planning, engineering, and building a combined gas monitoring and warning system. In order to expand its product portfolio. Dräger Safety acquired in October 2003 the respiratory air business of RWE Piller GmbH, thus underscoring its role as a supplier of holistic hazard management solutions. Based in Osterode in the Harz mountains, this respiratory air division of RWE Piller is a specialist in the development, engineering and assembly of vehicle-mounted respiratory supply systems.
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| With business making good progress in Q4/2003, Dräger Safety foresees slightly reduced annual sales of €460 million (in nominal terms, down from €471.1 million) due to the again disadvantageous parities. In terms of LFL parities, the budgeted sales gain is still expected to materialize. As to EBIT, Dräger Safety likewise believes it will achieve the budgeted €39 mil-lion (down from €41.3 million). |
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| On the basis of the current 3Q figures, Dräger AG's Executive Board reaffirms its predictions for the seasonally strong final quarter and all of 2003: Q4 sales will show another increase over the year-earlier magnitude and, taking into account exchange rate burdens and the JV, 12-month sales are likely to advance by 5 to 6 percent to around €1.4 billion and EBIT to rise from €65 million to €98 million before one-off expenses from the Siemens JV. As previously announced, including the €20.5 million gain from the disposal of Aerospace, net income is then set to surge from €19.8 million to €37 million. "We're well on track," stated CEO Theo Dräger when commenting on the outlook. |
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(c) Drägerwerk AG & Co. KGaA, 2007 |
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