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| Drägerwerk invests in efficiency and innovation |
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- The Safety division performs well
- Medical business in US impacts earnings
- Additional action planned for 2008
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| Lübeck, Germany, November 13, 2007 – “We will invest substantially in research and development in 2008 in order to extend our position as a technology and innovation leader”. This statement was made by Stefan Dräger, Chairman of the Executive Board of Drägerwerk AG. Better use will also be made of synergies between the two divisions, Medical and Safety. |
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| Business in the Safety division continued to perform exceedingly well during the year to date. Order intake after nine months was up 17.2 percent and revenues were up 12.0 on the prior year, while EBIT grew 14.5 percent. Revenues and earnings in the Medical division were also higher year on year in almost all countries and regions. However, two exceedingly big projects were completed in the comparable prior-year period. In addition, earnings were affected by Medical’s business in the US, where growth targets were not achieved. All in all, order intake after nine months was down 3.7 percent and revenues were down 1.5 on the prior year, while EBIT decreased 21.9 percent.
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| The Group’s order intake after nine months stood at EUR 1,410.1 million, up 3.3. percent on the prior year. Revenues came to EUR 1,253.5 million, a rise of 2.8 percent year on year. Net of currency effects, both increases would have been around two percentage points higher. At 48.4 percent, the gross margin was down 0.2 percentage points on the prior year. EBIT came to EUR 70.3 million (down 6.3 percent). The rise in research and development costs to EUR 89.3 million is attributable to the Dräger Group’s ambitious development program. This figure is equivalent to 7.1 percent of revenues (9M/2006: EUR 85.9 million; 7.0 percent). After calculating the tax expense at a group tax rate of 38 percent, the net profit for the three quarters totals EUR 27.8 million, which is EUR 2.6 million below the comparable prior-year period. Earnings per preferred share rose from EUR 1.46 in the prior year to EUR 1.69 as a result of the acquisition of the 10 percent interest in Dräger Medical AG & Co. KG. The acquisition is also clearly reflected in investments, whose total of EUR 103.6 million is substantially different from the prior-year figure of EUR 48.4 million. |
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| As adopted at the annual shareholders’ meeting on May 11, 2007, the change in legal form to that of an association limited by shares, which will give the Company greater financing and operating leeway, will soon be registered. A shareholder brought an action to set aside the resolution to change the legal form or, alternatively, to have it declared null and void. During court approval proceedings, Lübeck District Court and Schleswig Regional Court of Appeal ruled that the action brought does not prevent the registration of the change in legal form. The Company expects the new legal form to be registered and thus become effective in the fourth quarter of the current fiscal year. |
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As stated in the ad hoc report dated October 30, based on the Q3 report and the business performance forecast for the fourth quarter, EBIT is expected to be slightly lower than in the prior year (EUR 148 million).
“We will invest extensively in order to strengthen Drägerwerk AG as a technology and innovation leader”, said Executive Board Chairman Stefan Dräger upon presentation of the Q3/2007 report. “In doing so, our focus will not be on quarters but on the medium and long term, so as to create sustainable value for customers, employees, shareholders and the Company”, said Stefan Dräger. To boost growth and profitability, the Company will add numerous innovations to its portfolio and expand its global sales and service organization. Comprehensive, value-based action plans are currently being drawn up for North America and other regions. At the same time, shared services within the Group as a whole are being expanded with a view to further improving efficiency and quality. “In fiscal years 2008 to 2010, we intend to invest a considerable amount in improving the added value of the entire Group”, said Stefan Dräger. |
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| Q1-Q3/2007
| Q1-Q3/2006
| Change
| Order intake |
€1,410.1 million |
€1,365.6 million |
+ 3.3% |
| Revenues |
€1,253.5 million |
€1,219.5 million |
+ 2.8% |
| EBITDA (1) |
€109.3 million |
€111.5 million |
- 2.0% |
| EBIT (2) |
€70.3 million |
€75.0 million |
- 6.3% |
| EBIT margin |
5.6% |
6.2% |
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| EBIT Medical |
€41.8 million |
€53.5 million |
- 21.9% |
| EBIT Safety |
€41.8 million |
€36.5 million |
+ 14.5% |
| EBT (3) |
€44.9 million |
€50.7 million |
- 11,4% |
Earnings per
preferred share |
€1.69
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€1.46
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+ 15.8%
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| Net profit |
€27.8 million |
€30.4 million |
- 8.6% |
| R&D costs |
€89.3 million |
€85.9 million |
+4.0% |
| Net financial debt |
€352.8 million |
€313.3 million |
+ 12.6% |
Equity ratio
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28.6%
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33.0%
(Dec. 31, 2006) |
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Headcount as of
September 30 |
10,248
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9,897
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+ 3.5%
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(1) EBITDA = Earnings before net interest result, income taxes, depreciation, amortization and non-recurring expenses
(2) EBIT = Earnings before net interest result and income taxes
(3) EBT = Earnings before income taxes
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| This press release contains forward-looking statements regarding the future development of the Dräger Group. These forward-looking statements are based on the current expectations, presumptions, and forecasts of the Executive Board as well as the information available to it to date, and have been made to the best of its knowledge and belief. No guarantee or liability for the occurrence of the future developments and results specified can be assumed in respect of such forward-looking statements. Rather, the future developments and results are dependent on a number of factors; they entail risks and uncertainties beyond our control and are based on assumptions which could prove to be incorrect. Notwithstanding any legal requirements to adjust forecasts, we assume no obligation to update the forward-looking statements contained in this report. |
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(c) Drägerwerk AG & Co. KGaA, 2007 |
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