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• Revenues, order intake and EBIT up
• Further strong growth abroad
• Six-month figures on budget; revenues and earnings targets for 2005 confirmed
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| Lübeck, August 11, 2005 – Drägerwerk AG, Lübeck, a globally operating medical and safety technology group, had another successful six months in the first half of 2005, demonstrating that the Company can hold its ground even in a deteriorating business climate. |
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| H1/2005
| H1/2004
| Change
| Order intake |
€806.8 million |
€717.0 million |
12.5 % |
| Revenues |
€739.9 million |
€675.0 million |
9.6 % |
EBIT before
non-recurring expenses** |
€47.6 million |
€44.9 million |
6.0 % |
| EBIT margin |
6.4 % |
6.7 % |
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Net profit
Thereof extraordinary income |
€17.9 million
€0.0 million |
€27.1 million
€9.8 million |
-33.9 %
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| Headcount as of June 30 |
9,649 |
9,889 |
-2.4 % |
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*The figures have not been audited.
** Non-recurring expenses in H1/2005: €0 million; H1/2004: €4.8 million |
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As the Company announced in its H1/2005 report, both order intake and revenues are significantly higher than in the prior year (up 12.5 percent and 9.6 percent, respectively). At €806.8 million, order intake for the first time roughly corresponded to half of the anticipated annual figure at mid-year, and, as in prior years, was significantly higher than the revenues of €739.9 million.
Up 24.7 percent to €148.4 million, revenue growth was the most pronounced in the Americas. This increase was driven by Dräger Medical with strong project business in Central and South America. The subgroup’s revenues rose slightly in the US, but were outshone by order intake which grew 26 percent. Positive developments in US core business at Dräger Safety were unable to compensate fully for the decline in project business in the first half.
In Europe excluding Germany, both subgroups contributed equally to revenue growth of 10.9 percent to €295.8 million. In Germany, consolidated revenues were down 4.6 percent at €164.9 million, due in part to Dräger Medical’s weak domestic market, where a fall of 9.0 percent to €113.0 million was reported. Dräger Safety, on the other hand, grew revenues 34.0 percent to €68.4 million.
In the Asia/Pacific region, revenues picked up during the first six months thanks to the upward trend in core business, increasing by 5.2 percent to €90.3 million. Overall, the Dräger Group either maintained its market position or, in the growth regions of the Americas and Asia/Pacific in particular, even extended it.
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| At €47.6 million, the six-month EBIT (before non-recurring expenses) is 6.0 percent higher than in the prior year. This was achieved on the back of higher revenues despite a slightly lower gross margin and a moderate increase in functional costs.
At €17.9 million, net profit is still significantly down on the prior-year figure of €27.1 million, which, as reported, included a significant contribution from the result of the discontinued operations in the prior year (€9.8 million).
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| As a result of the net profit in the first half and currency translation differences, combined with the dividends and profit shares distributed to minority interests, equity rose by €5.3 million to €482.6 million; the equity ratio stood at 32.7 percent (December 31, 2004: 33.5 percent).
The increase in net assets by €52.2 million to €1,475.3 million compared to December 31, 2004 is largely the result of the rise in inventories, in spite of a simultaneous decrease in current receivables. The increase in net assets was financed by additional current bank liabilities. The changes increased capital employed to €845.5 million (December 31, 2004: €792.9 million), while net financial debt also rose to €274.0 million (December 31, 2004: €218.3 million). This change is reflected in the cash flow statement as the total cash flow from operating activities and investing activities plus the dividends and distributions paid out to minority interests. Cash and cash equivalents of €165.9 million (December 31, 2004: €178.0 million) continue to be held as a strategic reserve.
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• Double-digit order intake and revenue growth continues
• EBIT growing faster than revenues
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Dräger Medical closed the first half with EBIT (before non-recurring expenses) of €34.1 million which corresponds to an increase of 22.7 percent (H1/2004: €27.8 million (before non-recurring expenses)). Revenues rose by 12.7 percent to €492.1 million (H1/2004: €436.5 million). The reasons for this development include the further expansion in the global sales structure and the ongoing drive to improve internal processes. At 6.9 percent, the EBIT margin was significantly higher than in the prior year (H1/2004: 6.4 percent).
The subgroup increased its order intake by 19.2 percent to €545.5 million year on year (H1/2004: €457.4 million). The Americas outperformed the other regions, generating an order intake of €123.6 million (up 66.5%) and revenues of €107.9 million (up 45.4%). This is attributable to a number of projects and the investments made in the new subsidiaries in Canada, Chile and Mexico in the prior year, as well as to the account management sales model in the US, where order intake, adjusted for exchange differences, was up 26 percent against the prior year. The integration of Air Shields is also yielding positive contributions in the US. Furthermore, Dräger Medical boosted its access to the US market by concluding new agreements with US hospital chains.
In Germany, order intake and revenues were down again (down 7.2 percent and 9.0 percent, respectively, against the prior year), which is mainly a reflection of the shrinking German market.
In the rest of Europe and in Asia/Pacific, double-digit growth against the prior year was seen in order intake (23.1 percent and 14.5 percent year on year) and revenues (11.2 percent and 10.7 percent year on year). The well established sales structure in Europe is the driving force behind the ongoing success and growth in market share. In Asia/Pacific, Dräger Medical continues to be a successful player in the expanding healthcare sector thanks to its clear sales strategy.
The solutions business conducted in partnership with Siemens Medical Solutions generated a major order from Memorial Health Systems in Springfield, Illinois, USA, in the reporting period. Dräger Medical was able to contribute anesthesia and ventilation machines, incubators and patient monitors.
The progress made by the innovation campaign is evidenced by renewed high research and development expenditure of €38.7 million, which corresponds to 8 percent of revenues.
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• Strong first half in 2005
• Subsidiaries’ development pleasing
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In the first half of 2005, Dräger Safety generated EBIT of €24 million, up 12.7 percent on the prior year (H1/2004: €21.3 million). This result is attributable to further effective measures to improve business processes as well as to encouraging development at the subsidiaries. The EBIT margin rose to 9.1 percent (H1/2004: 8.8 percent). The transfer of a subsidiary of Dräger Interservices GmbH within the Group yielded additional net profit of €2.1 million for Dräger Safety.
The global revenues of Dräger Safety rose in the first six months of 2005 by 9.7 percent to €264.3 million (H1/2004: €240.9 million). This increase was generated across all product and service divisions, both in core business and project business, and through the integration of Dräger Interservices GmbH (€12.3 million). Order intake rose by 6.1 percent to €277.7 million (prior year: €261.8 million).
Adjusted to allow for exchange rate fluctuations, order intake and revenues were down on the prior year in the Americas. This market experienced above-average growth in the first half of 2004 due to projects. In core business, the Company was again able to fend off competition on the American market with its innovative products and services.
With order intake up 17.2 percent in the Asia/Pacific region, Dräger expanded its market position there through core and project business. Revenues were lower than in the prior year. The development in China was particularly pleasing. Japan placed sizeable orders for respiratory protection equipment as well as the relevant logistics for deployment by firefighting crews and emergency care organizations.
For Europe (excluding Germany), revenue growth of 10.3 percent was achieved with order intake up 2.7 percent. Despite the strained financial situation and the resulting tight rein on public spending, Germany generated year-on-year revenue growth of 10 percent in the first six months of 2005, excluding Dräger Interservices GmbH’s revenues of €12.3 million.
The tailor-made system solutions strategy pursued by the Safety Solutions business unit is winning through. With the delivery and positioning of a total of five rescue trains for the Austrian rail authority (ÖBB), Dräger Safety successfully established the new tunnel safety concept drawn up in collaboration with the client.
Research and development expenses amounted to €11.9 million (4.5 percent of revenues) and were mainly incurred in the development of new products.
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“In 2005, we will press ahead with the income and efficiency-boosting measures taken in all of the Dräger Group’s business units and the ongoing expansion in the product and technology portfolio. System solutions by Dräger Medical and Dräger Safety will remain a special priority…” assured Stefan Dräger, Executive Board Chairman since July 1. Both subgroups are aiming to strengthen and develop their market position in all regions and grow EBIT ahead of revenues. Focusing on the US and Asia/Pacific, revenue growth of 5 to 7 percent is forecast for both subgroups.
“With an increase in EBIT and net profit of up to 10 percent for 2005 overall, we also anticipate revenue growth of 5 to 7 percent for the Dräger Group as a whole”.
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(c) Drägerwerk AG & Co. KGaA, 2007 |
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