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Annual accounts press conference 2005: Dräger continues its success story
- 2004: Dräger Medical and Dräger Safety boast strong foreign business
- Success factors - innovative products and services, process optimization, and expansion of international sales and service network
- R&D exceeds €100 million for the first time
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| Lübeck, April 28, 2005 – Drägerwerk AG, Lübeck, a leading international medical and safety technology group, is continuing its success story. At the Group’s annual accounts press conference, Drägerwerk AG Executive Board Chairman Theo Dräger attributed the fourth consecutive year of improved results in fiscal year 2004 to a greater international business focus and the consistent optimization of processes at all levels. Despite unfavorable conditions rooted in a sedentary global economy and a weak US dollar, these efforts have noticeably increased the share of revenues generated abroad (now over 75 percent), as well as boosted productivity and cut costs. |
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| Overall, the Dräger Group saw revenues increase by 6.9 percent to €1.52 billion to produce a year-on-year rise in net profit of 39 percent to €47 million. EBIT (before non-recurring expenses) increased by 23 percent to €117 million. |
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| 2004
IFRSs
| 2003
IFRSs
| Change
Group revenues
Share
generated abroard |
€1,520.5 million
75.4 % |
€1,422.1 million
71.2 % |
6.9 %
(change net
of currency
effects 9.1 %)
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Order intake
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€1,523.3 million
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€1,421.9 million
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7.1 %
(change net
of currency
effects 9.3 %) |
| EBIT |
€117.2 million |
€94.8 million |
23.6 % |
| EBIT margin |
7.7 % |
6.7 % |
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| Net profit |
€47.3 million |
€34.0 million |
39.1 % |
Result after
minority interests |
€25.3 million |
€22.1 million |
14.5 % |
Earning per preferred share
after minority interests |
€2.02 |
€1.77 |
14.1 % |
| Capital employed |
€792.9 million |
€694.1 million |
14.2 % |
ROCE (return on
capital employed) |
14.8 % |
13.7 % |
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| Equity ratio |
33.5 % |
33.4 % |
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Dividend per common share*
Dividend per preferred share* |
€0.39
€0.45 |
€0.34
€0.40 |
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Headcount as of
December 31 |
9,706 |
10,064 |
-3.6 % |
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*As proposed by the Executive and Supervisory Boards |
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| Significant changes to the content and presentation of the Group’s net assets, equity and liabilities have resulted from the transition to IFRSs. The inclusion of real estate companies, lower inventory allowances, deferred tax assets and liabilities, and other items, for example, has noticeably increased the balance sheet total. By contrast, equity has decreased, particularly due to the reclassification of participation capital to non-current liabilities. The application of IFRSs produces an equity ratio of around 33 percent. |
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| 2004
IFRSs
| 2003
IFRSs
| Change
| Balance sheet total |
€1,423.1 million |
€1,326.6 million |
+7.3% |
| Equity |
€477.3 million |
€443.3 million |
+7.7% |
| Equity ratio |
33.5% |
33.4% |
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| Capital employed |
€792.9 million |
€694.1 million |
+14.2% |
| Net financial debt |
€218.3 million |
€138.7 million |
+57.4% |
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| Investments were focused on property, plant and equipment and intangible assets, primarily production plant, factory and office equipment, and computer software. Altogether, the Group invested €57.2 million (2003: €213.1 million incl. goodwill and patents from the joint venture with Siemens), €11.6 million more than the €45.6 million in depreciation and amortization charges. The Dräger Group spent a total of €103.8 million, or 6.8 percent of revenues (2003: €95.4 million, or 6.7 percent), on research and development (R&D). Dräger Medical spent €79.5 million, or 7.8 percent of revenues, on research and development (2003: €67.0 million, or 7.3 percent), and Dräger Safety €23.7 million, or 4.7 percent of revenues (2003: €24.3 million, or 5.1 percent). Expenses incurred by Drägerwerk AG and not charged on to the projects of the subgroups amounted to €0.6 million (2003: €2.6 million).
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| In 2004, Dräger filed a total of 65 patent applications and three utility models with the German Patent and Trademark Office. Altogether, 49 new patents were submitted to international patent offices. The Company spent around €10 million on training. The Dräger Group thus invested a total of €171 million or 11 percent of revenues in its future (2003: €162 million, or 11 percent). |
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| At the end of 2004, the Dräger Group had 9,706 (2003: 10,064) employees on its payroll, 4,378 (2003: 5,099) of whom are based in Germany. Today, more than 55 percent, or 5,328 employees (2003: 4,965), are employed outside of Germany. The change in the structure of the Group’s workforce reflects its outsourcing activities, foreign acquisitions, and the expansion of its international sales and service network. The Group’s personnel expenses amounted to €565.9 million or 37.2 percent of revenues (2003: €567.4 million or 39.9 percent).
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| The two subgroups, Dräger Medical and Dräger Safety, contributed to the Group’s positive performance, which was characterized by healthy revenues in the core businesses across all regions. Success factors for the subgroups included innovative products and services as well as the aforementioned expansion of the sales and service network and the extension of the product ranges by way of acquisitions. |
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| The subgroups experienced the largest rise in revenues net of currency effects in the US (Dräger Medical: 26.6 percent; Dräger Safety: 19.5 percent). |
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| 2004
IFRSs
| 2003
IFRSs
| Change
Dräger Medical
Revenues
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€1,023.4 million
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€920.2 million
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11.2%
change net
of currency effects 13.7% |
| EBIT |
€94.2 million |
€85.3 million |
10.4% |
| EBIT margin |
9.2% |
9.3% |
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| ROCE |
16.7% |
17.8% |
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Headcount as of
December 31 |
5,859 |
5,596 |
4.7% |
Dräger Safety
Revenues
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€503.0 million
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€477.3 million
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5.4 %
change net
of currency effects 7.1% |
| EBIT |
€40.9 million |
€36.5 million |
12.1% |
| EBIT margin |
8.1% |
7.6% |
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| ROCE |
26.0% |
23.7% |
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Headcount as of
December 31 |
3,329 |
3,298 |
0.9% |
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| Earnings per preferred share after minority interests rose by 14.1 percent in 2004 to €2.02 (2003: €1.77). Prompted by the favorable earnings trend, the Executive and Supervisory Boards will propose to the annual stockholders’ meeting on June 10, 2005 to increase the dividend to €0.39 per common share (2003: €0.34) and €0.45 per preferred share (2003: €0.40). A dividend of 10 times the preferred stock dividend will be paid for participation certificates since their arithmetic par value is 10 times that of a preferred share. Based on the proposed dividend, the dividend for participation certificates will be €4.50 per certificate. |
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| “The successful restructuring of the Group over the last few years has significantly improved its profitability and financial clout”, commented Theo Dräger. “The Dräger Medical and Dräger Safety subgroups are stronger than ever. Sustainable growth and profitability remain our objectives and will secure the competitiveness of the Dräger Group in the future. We are confident that revenues in 2005 will rise by five to seven percent, producing a five to ten percent rise in EBIT and net profit.” These forecasts take into account the current market situation, the ongoing success of the Group’s efforts to improve the organization of its operations, and a USD/€ exchange rate of 1.28.
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| On May 12, 2005, the Q1/2005 figures will be published. |
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| This press release contains forward-looking statements regarding the development of the Dräger Group. No assurance can be given as to the content of these statements as they are based on assumptions and estimates that comprise certain risks and uncertainties. |
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(c) Drägerwerk AG & Co. KGaA, 2007 |
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