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- Sharp rise in operating EBIT to €96.4 million (up 34 percent) and group net income to €37.8 million (up 91 percent)
- Sales advance 6.0 percent to €1.413 billion (parity-adjusted, up 12.0 percent)
- Net financial debts down by €152 million and equity ratio up to 41.7 percent
- Dräger Medical's joint venture with Siemens off to a flying start in H2/2003
- Dividend increase proposed
- Prospects for 2004 upbeat—better-than-average gain in sales and earnings expected
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| Lübeck, March 24, 2004 – The Dräger Group, a worldwide leader in medical and safety technology, closed fiscal 2003 with sales and earnings again surging. According to provisional figures announced by the Group on Wednesday, its sales climbed 6.0 percent from €1.333 billion to €1.413 billion in 2003, the parity-adjusted growth being as much as 12.0 percent. Some of these extra sales are accounted for by new products from the joint venture. Group net income surged 91 percent from €19.8 million in 2002 to €37.8 million in 2003, due to both improved operating performance and an extraordinary gain of around €20 million from the disposal of the Aerospace division. This latter contrasts with one time expenses of €32 million for realignment programs and the integration related to the joint venture between Dräger Medical and Siemens. Excluding these one time expenses, the Group's operating EBIT advanced by 34 percent, from €72 million to €96 million. A still strong euro, higher costs (especially at Safety) of equipment shipped to the United States and payment effects all eroded EBIT by some €29 million. Despite the expensive euro, again all-time highs were achieved in 2003. |
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As a consequence of the joint venture, the Dräger Group's equity mounted by €321 million, substantially equivalent to the Siemens Electromedical Systems business underlying the joint venture. Since a part of Electromedical Systems was excluded from the joint venture on account of cartel authority objections, the net gain (after taxes and disposal costs) from the transfer by Siemens of this unit was added to the joint venture.
In all, equity rose from €170 million to €499 million, the equity ratio doubling from 20 percent to 42 percent. Because of the joint venture, capital employed climbed to €857 million (from €532 million as of Dec. 31, 2002). Nonetheless, ROCE fell only slightly from 13.5 percent in 2002 to 11.3 percent. |
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| The cash inflow from the formation of the joint venture and the disposal of Dräger Aerospace has slashed net financial debts from €189 million to around €37 million. |
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Both subgroups—Dräger Medical and Dräger Safety—managed to achieve targeted earnings despite major burdens imposed by the exchange rate changes in 2003. In fiscal 2003, Dräger Medical posted an EBIT (before the one time joint venture expenses) of €91.4 million (up from €76.6 million). This is 10 percent of sales and matches the figures budgeted for 2003 in the 2000 restructuring program. At around €39.7 million, Dräger Safety managed to almost repeat its year-earlier EBIT of €41.3 million.
Sales by Dräger Medical moved 8.3 percent up to €917.7 million (parity-adjusted by 14.5 percent). Dräger Safety, too, upheld its position within a difficult market environment, its sales inching up by 1.3 percent to €477 million, adjusted for exchange rate effects a 6.9-percent growth for Dräger Safety. |
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| The Executive and Supervisory Boards of Lübeck-based Drägerwerk AG will pro-pose to the annual stockholders' meeting on June 11, 2004, to increase the dividend for 2003 to €0.40 per preferred share and €0.34 per common share (up from €0.35 and €0.29, respectively). In line with the tenfold arithmetic par value, holders of participation certificates will then receive €4.00 (10 times the preferred dividend, which governs the distribution to participation certificate holders). |
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Despite lingering uncertainty given the still weak dollar and the difficult economy, Dräger is confident of achieving 10+ percent extra sales in 2004 and raising the Group's EBIT and net income by close to 30 percent and over 20 percent, respectively (EBIT target for 2004: around €124 million; net income: about €46 million). As a result of the Siemens joint venture, which in 2004 will cover a full 12 months for the first time), minority interests in profit will rise from €10.4 million in 2003 to about €24 million in 2004.
Dräger Medical, in particular, will again make solid progress, with the joint venture exercising full 12-month impact. This subgroup is targeted to show sales of some €1,090 million and an EBIT (before another €20 million joint venture costs) of €122 million, assuming a €1.30 dollar. On the same parity basis, Safety should at around €480 million repeat last year's ales albeit such an exchange rate will take its toll on earnings; therefore, an EBIT in the region of €32 million is predicted. For both sub-groups, growth momentum will again come from their innovative product portfolios and ongoing growth in in-ternational markets. |
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| The definitive figures for fiscal 2003 along with the Q1/2004 report will be announced at the annual accounts press conference in Lübeck on May 12, 2004. On May 13, an analysts conference will be held in Frankfurt/Main and on June 11, this year's annual stockholders' meeting once more in Lübeck. |
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| 2003
| 2002
| Change
(Parity-
adjusted)
Net sales
Group
Medical
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%) |
EBIT before
one time JV expenses |
€96.4 mill. |
€71.9 mill. |
+34.0% (+75.0%) |
| EBIT margin |
6.8% |
5.4% |
+26.0% |
EBIT after
one time JV expenses |
€64.0 mill. |
€66.3 mill. |
-3.4% |
| Group net income |
€37.8 mill. |
€19.8 mill. |
+91.0% |
| Minority interests in profit |
€10.4 mill. |
€2.3 mill. |
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| Earnings per share (EpS) |
€2.98 |
€1.56 |
+91.0% |
EpS after
minority interests |
€2.16 |
€1.38 |
+56.5% |
| Capital Employed |
€857.3 mill. |
€531.5 mill. |
+61.0% |
ROCE (return on capital
employed) |
11.3% |
13.5% |
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| Equity ratio |
41.7% |
20.1% |
+107.0% |
| Dividend per preferred share* |
€0.40 |
€0.35 |
+14.0% |
| Annual average headcount |
10,334 |
9,865 |
+4,8% |
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*As proposed by the Executive and Supervisory Boards
Change in CE and EBIT disclosure principles: other than in 2002 publications, capital employed now includes cash & cash equivalents (previously deducted), and EBIT represents the earnings before interest expense (formerly net interest result) and all taxes. The year-earlier comparatives have been restated accordingly.
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Drägerwerk AG is an international leader in the markets for medical and safety technology. In 2003, this technology group generated sales of €1,413.5 million. Founded in 1889, Dräger, Lübeck, nowadays employs over 10,000 people in more than 190 countries, hereof more than 45 percent outside of Germany. In the market for emergency care products, the Dräger Med-ical subgroup offers products and services plus integrated system solutions along the entire patient process chain in the CareAreas™ emergency care, OR/anesthesia, critical and perinatal care, as well as home care. The Dräger Safety sub-group's portfolio covers products and system solutions for holistic hazard management: gas detection, personal and property protection products including a wide variety of services. Dräger's key customers are from the hospital sector, on the one hand, and industry, mining, fire fighting, municipal utilities, and police, on the other.
This press release contains statements as to the future trends within the Dräger Group. Such statements cannot be guaranteed since they are based on assumptions and estimates that are linked to certain risks and uncertainties. |
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(c) Drägerwerk AG & Co. KGaA, 2007 |
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