Drägerwerk AG & Co. KGaA Capital Markets Presentation€¦ · Respiratory monitoring #1 in Europe...

Drägerwerk AG & Co. KGaACapital Markets Presentation

November, 2015

Interim financial reports as well as preliminaries are not audited.

Disclaimer

This presentation 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 presentation.

This presentation does not constitute an offer of securities for sale or a solicitation of an offer to purchase any securities. No money, securities or other consideration is being solicited by this presentation.

2

Outlook

DrägerThe Company

Financials

3

DrägerThe Company

4

protectDräger products

supportsave

lives,

and

.

5

Net sales developmentStrong growth independent of the global economy

Source: International Monetary Fund, World Economic Outlook Database

Net sales developmentDräger net sales in EUR million

Global gross domestic product

2,500

2,000

1,500

1,000

500

0

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Stock-market crash

Stock-market crash

Stock-market crash

GulfWarGulfWarGulfWar

Mexican pesocrisis

Mexican pesocrisis

Mexican pesocrisis

Russianfinancial

crisis

Russianfinancial

crisis

Russianfinancial

crisis

Stock-marketcrash

Stock-marketcrash

Stock-marketcrash

IraqWarIraqWarIraqWar

Financialcrisis

Financialcrisis

Financialcrisis

Second oil crisisSecond oil crisisSecond oil crisis

6

Dräger worldwideNet sales, sites and employees

56 %

19 %

17 %

8 %

70 %

15 %

12 %3 %

AmericaEurope

Middle East, Africaand Other

Asia/Pacific

Dräger at a glance

Net Sales:EUR 2.4 bn

13,737employees

in 2014

Production sites inEurope, America, Africa und Asia

Sales and Service organizations worldwide

Dräger-Sites

Safety-division36 %

Medical-division64 %

7

MarketsOur customers

Fire services Oil and gas industry

Mining Chemical industry

Hospital

8

Other markets

9

� Infinity Acute Care System � Clincal software solutions� Telemetry and IT-solutions

� Medical supply units� Medical Gas supply

systems � Medical lights and video

solutions

� Consumables and accessories

� Classical-, Multivendor product service

� Training

Anaesthesiology

Ventilation

Thermoregulation

Patient Monitoring & Clinical IT

Workplace Infrastructure

Hospital Consumables & Service

Intensive Care Operating Room Neonatal CareHospital wide

Solutions

��

��

��

��

��

��

Note: Market position based on Dräger‘s market knowledge and its own assessment of market position; positions ranked according to net sales, for monitoring depending on market definition.

� Anaesthesia workstations and vaporizers

� #1 in Europe and #2 in the US market

� Emergency & Transport-, Neonatal Care and Intensive Care ventilators

� Respiratory monitoring� #1 in Europe

� Incubators and Warming Therapy

� #2 worldwide and #1 in Europe

10

Breathing Systems

Gas Detection Systems

Personal Protection Equipment

Impairment Check Equipment

Engineered Solutions

Service

� Fixed and mobile gas detection systems


� Alcohol- and drugscreening devices

� Interlock devices� #1 worldwide and

#1 in Europe

� Protection equipment for hazardous working environments

� Body and Head protection, rescue and escape devices, Masks and Filters, etc.

� Self-containedBreathing Appartus forfire fighters


� Customer specific solutions

� mobile and stationary firefighting training systems

� Rescue chambers

� Spareparts and consumables

� Classical-, Multivendor-Product Service

� Shutdown and Rental Service

Note: Market positions based on Dräger‘s market knowledge and its own assessment of market position; positions ranked according to net sales.

Fire Service

��

Oil & Gas Chemical Mining Other Markets

��

��

��

��

��

��

11

Medical and safety technology providing long-term g rowth prospects in developed and emerging markets

Hospital

Attractive growth prospects in sizeable markets …

… in Europe and the US …

… as well as in emerging markets

Oil&Gas Chemical Mining FireService

� Average expected annual market growth for the global medical equipment market significantly exceeding growth in many other sectors

� Strong growth prospects in both developed and emerging markets

� Very diversified markets with numerous product and service offerings

� Attractive growth prospects for target sectors (e.g. industry) and growing safety investments

� Rapidly aging population and consequently increasing healthcare expenditure

� Increasing demand for medical equipment to improve clinical workflows and efficiency

� Increasingly stricter safety regulations� Rising environmental awareness� Improved outlook for target markets

� Strong growth of GDP and population resulting in a demand for improved medical services

� Political benefits from investments in health care sector

� Increasingly higher safety standards� Increasing industrial hygiene awareness� Strong growth of key customer sectors

12

Management of innovation rate through continuous improvements in quality and R&D processes

Expansion of market positions in attractive markets . Special focus on profitable growth in developing co untries

Expansion of service and consumables business

FIT FOR GROWTH efficiency program

1

2

3

4

Strategy for profitable growth

13

1

Strong R&D focus Innovation to enhance future growth (examples)

Clinical Apps

Software based decision support to improve medical

outcomes. E.g. Smart Pilot View,

Sepsis-Guard

� Approximately 1,400 employees in R&D around the globe

� EUR 212 million spent for R&D activities in 2014 (8.7 % of net sales)

� Tradition of innovation and quality leadership

� Very close collaboration with customers to develop new and improve existing products

� R&D focus on integration of products and services to provide solutions which support customer workflows

� R&D strives to leverage advantage of using same technology for different market segments and products (e.g. in gas sensors)

� Technological competency and high quality standards result in leading market positions and high barriers to entry

Technology and innovation leadership to drive profi table growth

Sensor Portfolio

Permanent expansion of the sensor portfolio:

broad spectrum of detectible gases,

low concentration, high reliability, long

life time

Integration Monitoring and

Anesthesia Device

Anesthesia device Perseus A500 with IACS Monitoring

integration for optimized workflow

in the OR

14

Investments in profitable

growth in developing countries

2

� Focus on the specific needs of customer in developing countries� Identify growth potential in strong growing markets like China, Brazil and India� Capitalize on the significant investments into the Sales & Service infrastructure and

specific market knowledge, especially in our Regions Asia / Pacific, Central- and South-America

� Enhance engagement with partners in developing countries to expand local presence with R&D, manufacturing, sales and after sales business

2

Net sales 2014

Developed Markets

76 %

Newly industrialized

countries24 %

Focused product range

Exploit growth potentials in developing countries

Fabius Plus XLVista 120Savina Color

15

Further expansion of service and

consumables business

3

Service- and consumables business a clear focus of o ur Sales activities

3

Dräger Service Dräger Consumables

� Functionalities with added value, e.g. optimizing workflow with RFID-based communication between consumables part and therapy machine

� Dräger quality to improve hygienic standards

� Dräger value add especially in development of consumables. Production usually via suppliers

� Partly proprietary consumable products, e.g. Dräger-Tubes

� Globally over 3,000 service technicians

� Fast and reliable service (repairs and spare parts) is a critical factor for customers

� Dräger Service technicians important for customer loyalty

� Efficient service solutions via remote service

� Multi Vendor Service

� Administration and Service-Documentation of customers equipment pool

� Capitalize on large installed base to expand after sales business� Continued expansion of service and spare parts offering� Focus on combined sale of equipment and after sales contracts

FIT FOR GROWTH Overview Initiatives

� Legal entity consolidation within sales organization� Streamlining, standardization and pooling of central, regional and local tasks and

processes� Effective expense management� Reduction of SGA ratio* by 1pp in 2017 and additional 1pp 2019

Improve SG & A expense ratio and

working capital

SHAPE Optimize global Sales, Marketing & Administration set-up

Bring customer value faster to the market

and increase innovation share

Fit!

Improve workflow and delivery times

and reduce production cost

Global footprint

� E.g. Improve competency-, capability- and technology management, strengthen system and platform based development, increase global standardization, reengineer launch process to improve ramp-up speed, expand product portfolio targeted at Emerging Markets,…

� Improve “Time to market” by 50% until 2019 and increase innovation share

Optimize innovation set-up

� Investment into „Zukunftsfabrik“ in Lübeck, Germany

� Transfer of production with high labor content to Chomutov, Czech Republic

� Consolidation of US-facilities (closure of Pittsburgh site)

Optimize production set-up

4

16

* compared to 2014 (SG&A ratio = 31%) at comparable FX rates and before possible on-off expenses for restructuring or similar

Financials

17

Business developmentDräger Group

18

2010 2011 2012 2013 9M 2014 9M 2015

€ million € million € million € million € million

Order Intake 2,145.5 2,293.2 2,405.5 1,743.4 1,895.1 8.7 1

Net Sales 2,177.3 2,255.8 2,373.5 1,664.9 1,783.6 7.1 1

% growth 13.9% 3.6% 5.2% 0.5% 7.1%% growth (currency adjusted) 9.5% 4.4% 2.5% 3.0% 2.3%

Gross Profit 1,044.1 1,108.3 1,167.0 773.4 793.5 2.6 Gross margin 48.0% 49.1% 49.2% 46.5% 44.5%

Functional Expenses -838.8 -894.5 -935.4 -700.3 -787.5 -12.4 % of Net Sales -38.5% -39.7% -39.4% -42.1% -44.2%

EBITDA 246.7 274.6 296.0 135.8 62.0 -54.4 EBITDA Margin 11.3% 12.2% 12.5% 8.2% 3.5%

EBIT 192.8 213.8 230.3 81.2 0.2 -99.8 EBIT Margin 8.9% 9.5% 9.7% 4.9% 0.0%

Interest Result -39.1 -33.0 -32.8 -17.8 -14.4 19.5

Tax rate 31.8% 30.8% 31.3% 32.9% 21.6%

Net Profit 104.8 125.1 135.7 42.5 -11.1 -126.1

DVA 114.5 134.6 150.0 76.2 -11.8 -115.5

2014

€ million

2,415.5

2,434.7 2.5%

-39.7%

255.6

4.0%

1,138.0

81.6

10.5%

-967.8

7.3%

46.7%

104.7

178.6

-25.0

31.8%

Change

%

2,384.6

2,374.2 0.0%3.1%

1,147.6 48.3%

-942.2 -39.7%

270.3 11.4%

200.8 8.5%

119.9

-23.5

32.4%

113.9

€ million

1,558 1,545 1,585

185 152 1290

200

400

600

800

1000

1200

1400

1600

1800

2012 2013 2014

Medical division (in EUR million)

849 864891

97 89 880

100

200

300

400

500

600

700

800

900

1000

2012 2013 2014

Safety division (in EUR million)

11.5% 10.3%9.9%8.1%9.9%11.9%

Business developmentMedical division, Safety division

Net Sales EBIT % EBIT-margin

19

Key figures

20

2010 2011 2012 9M 2014 9M 2015


Cashflow (from operating activities) 219.1 161.7 176.8 71.0 -7.2 -110.1 in % of EBIT 114% 76% 77%

Investments 55.8 78.1 78.2 84.1 156.7 86.3

Cash and cash equivalents1 320.0 412.3 332.4 175.4 128.7 -26.6

Net financial debt1 90.3 39.8 56.8 118.9 165.5 39.1

Net financial debt 1 /EBITDA 2 0.4 0.1 0.2 0.5 0.9

Capital employed 1 833.4 880.0 901.9 1,112.9 1,256.4 12.9 ROCE (EBIT 2/Capital employed 1) 23.1% 24.3% 25.5% 15.3% 7.8%

Net Working Capital1 312.4 362.8 404.1 550.1 592.4 7.7

Headcount1 11,291 11,924 12,516 13,698 14,014 2.3

1 Values at due date2 EBITDA and accordingly EBIT of the last twelve months

539.4

10.7

188.0

124.7

296.9

13,737

105%

2014

16.1%

0.04

1,107.2

€ million

Change

%

2013

€ million

68.3

110.6

232.1

34%

110.0 0.4

1,052.9 19.1%

524.3

13,334

Outlook

21

Outlook

2014 2015e

Net Sales + 4.0%(net of currency effects)

1.0% – 3.0%(net of currency effects)

EBIT-margin 7.3% 2.5% – 4.5%*

Gross-margin 46.7% below the prior year’slevel

Cash flow fromoperating activities

105.0% of EBIT

> 50.0% of EBIT

Equity ratio 40.1% > 40.0%

22

* Based on exchange rates at the end of Q3; excluding potential additional restructuring expenses in Q4

Guiding philosophyWhat we stand for

23

Dräger management

25

Fifth generation of the Drägerfamily to lead the company

Executive Board member forFinance (Chief Financial Officer)

At Dräger since 2008

Chairman of the Executive Board (Chief Executive Officer)


Executive Board member for Innovation, Quality and IT


Executive Board member for Purchasing, Production and Logistics


Stefan Dräger Anton Schrofner Gert-Hartwig Lescow Rainer Klug

26

Shareholder structure

ShareholdingCommon shares

67.2 %

28.5%

4.3%

Dr. Heinrich Dräger GmbH

Free float

Members of the Dräger family

10,160,000 common shares (28.5 % free float)7,600,000 preferred shares (100.0 % free float)

ShareholdingDr. Heinrich Dräger GmbH

Stefan Dräger GmbH

Dräger Foundation

Successors of Dr. Heinrich Dräger

58.7%

23.2%

18.1%

2,234.1

1,452.6

Consolidated balance sheet

€ million

Change31 Dec 201431 Dec 2013Assets

7.81,347.8Current assets

4.4

2.6

7.1

27.9

388.5

657.4

109.9

296.9

372.3

640.8

102.6

232.1

Inventories

Trade receivables

Other current assets

Cash and cash equivalents

9.0781.5717.2Non-current assets

4.0

12.6

11.2

294.2

349.9

137.3

283.0

310.8

123.4

Intangible assets

Property, plant and equipment

Other non-current assets

%€ million

8.22,065.0Total assets

27

2,234.1

20.9

297.0

168.6

100.9

Consolidated balance sheet

€ million

Change31 Dec 201431 Dec 2013Equity and liabilities

10.7750.1677.4Current liabilities

1.5

58.6

16.8

-2.6

189.3

127.7

201.3

231.8

186.4

80.5

172.4

238.1

2.8587.4571.6Non-current liabilities

4.3

36.8

-33.2

22.8

20.0

217.2

252.3

82.2

Liabilities from participation certificates

Provisions for pensions and similar obligations

Non-current interest-bearing loans

Other non-current liabilities

9.9896.6816.0Equity

%€ million

8.22,065.0Total equity and liabilities

Current provisions

Current loans and liabilities to banks

Trade payables

Other current liabilities

28

Business developmentMedical and Safety divisions

29

Medical 2010 2011 2012 9M 2014 9M 2015


Order Intake 1,441.9 1,518.8 1,558.4 1,558.6 1,576.2 1,132.7 1,235.0 9.0 1

Net Sales 1,472.0 1,484.5 1,558.0 1,544.7 1,585.4 1,063.1 1,148.2 8.0 1

EBIT 186.6 191.8 185.3 153.3 128.9 35.8 -9.1 -125.4

EBIT Margin 12.7% 12.9% 11.9% 9.9% 8.1% 3.4% -0.8%

DVA 136.5 144.0 135.2 97.5 69.2 40.5 -2.2 -105.4

1 Currency adjusted 9M: order intake +3.8%, net sales +2.6%.

Safety 2010 2011 2012 9M 2014 9M 2015


Order Intake 731.7 805.0 880.8 859.8 883.7 610.7 660.0 8.1 1

Net Sales 733.8 802.7 849.3 864.4 890.9 601.8 635.3 5.6 1

EBIT 61.0 76.1 97.3 89.2 88.4 45.5 9.3 -79.6

EBIT Margin 8.3% 9.5% 11.5% 10.3% 9.9% 7.6% 1.5%

DVA 43.1 57.5 79.0 69.3 66.1 47.8 8.7 -81.8

1 Currency adjusted 9M: order intake +3.8%, net sales +1.6%.

2014

€ million

2014

€ million %

Change

%

Change

2013

€ million

2013

€ million

Functional expenses

30

2011 2012 9M 2014 9M 2015Change FX adj.

million € million € million € million € %

R&D -160.5 -197.3 -155.4 -174.9 12.6 6.5 % of Net Sales -7.1% -8.3% -9.3% -9.8%

SG&A -724.8 -735.4 -542.5 -610.4 12.5 7.4 % of Net Sales -32.1% -31.0% -32.6% -34.2%

Functional Expenses total -894.5 -935.4 -700.3 -787.5 12.4 7.4 % of Net Sales -39.7% -39.4% -42.1% -44.2%

-30.8%

-967.8 -39.7%

million €

2014

-8.7%

-749.2

Change

%

-212.0

2013

-39.7%

million €

-201.5 -8.5%

-738.4 -31.1%

-942.2

Cash-flow statement

31

2011 2012 9M 2014 9M 2015€ million € million € million € million

Group net profit 125.1 135.7 119.9 104.7 42.5 -11.1 >-100

Change in inventories 19.2 -31.6 -36.5 -1.2 -50.8 -76.4 -50.4

Change in accounts receivables -52.4 -15.2 -69.5 1.6 81.7 71.3 -12.8

Change in accounts payables -0.2 -2.5 6.4 25.2 -23.1 -25.0 -8.0

Depreciation and amortization 61.6 65.8 69.0 77.0 54.5 61.9 13.6

Other operating cash flow items 8.4 24.6 -31.1 -19.3 -33.8 -27.9 17.6

Operating cash flow 161.7 176.8 68.3 188.0 71.0 -7.2 >-100

Investing cash flow -67.4 -65.5 -86.5 -102.6 -72.8 -141.2 -93.9

Free cash flow 94.3 111.3 -18.2 85.4 -1.8 -148.4 >-1 00

Financing cash flow -4.6 -192.0 -70.8 -26.3 -60.8 -23.6 61.1

Change in cash 1 89.7 -80.7 -88.9 59.0 -62.6 -172.0 >-100

Cash and cash equivalents 2 412.3 332.4 232.1 296.9 175.4 128.7 -26.6

1 Change in cash and cash equivalents, i.e. without any effect of exchange rates2 Values at due date

2013€ million

2014€ million

Change%

32

Innovation rate to manage power of innovation

Improvement of Innovation process

� Continued development of new innovative products and introduction of product upgrades� Increasing net sales share of new products� Continued strong investments in R&D

Share on new products and upgrades medical division1

1 Launched in the last 3 years; products are regarded as new, if they enable Dräger to either enter a new market segment or if products are regarded as completely new according to Dräger‘s customers and Dräger‘s sales force. Upgrades are those products, which serve existing Dräger markets, but their functionality is perceived as significantly enhanced by Dräger‘s customers and Dräger‘s sales force.

New productsUpgrades

Net sales

26%

26%15% 23%

14%11%7%

2009 2010 2011 20120%

5%

10%

15%

20%

25%

30%

35%

40%

45%

10%

33%

37%

33%29%

28%

2013

6%

34%

22%

2014

10%

32%

March 11, 2015 - Accounts press conference, Lübeck- Analysts meeting, Frankfurt

April 29, 2015 - Report for the first three months 2015 - Conference call, Lübeck

April 30, 2015 - Annual shareholders' meeting, Lübeck

July 30, 2015 - Report for the first six months 2015 - Conference call, Lübeck

November 5, 2015 - Report for the first nine months 2015 - Conference call, Lübeck

Financial calendar

33

34

Melanie Kamann Thomas FischlerCorporate Communications Investor Relations

Drägerwerk AG & Co. KGaA Drägerwerk AG & Co. KGaAMoislinger Allee 53−55 Moislinger Allee 53−5523558 Lübeck, Germany 23558 Lübeck, Germany

Tel +49 451 882-3998 Tel +49 451 882-2685 Fax +49 451 882-3944 Fax +49 451 882-3296

Mobile +49 170 8558152 Mobile +49 151 12245295

[email protected] [email protected] www.draeger.com

Contact

Drägerwerk AG & Co. KGaA Capital Markets Presentation€¦ · Respiratory monitoring #1 in Europe...

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