drägerwerk ag & co. kgaa capital markets presentation€¦ · respiratory monitoring #1 in...
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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.
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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
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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
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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 %
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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
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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
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Breathing Systems
Gas Detection Systems
Personal Protection Equipment
Impairment Check Equipment
Engineered Solutions
Service
� Fixed and mobile gas detection systems
� #1 worldwide and #1 in Europe
� 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
� #2 worldwide and #1 in Europe
� 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
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Oil & Gas Chemical Mining Other Markets
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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
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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
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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
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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
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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
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* 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
€ million € million € million € million € million
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
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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)
At Dräger since 1992
Executive Board member for Innovation, Quality and IT
At Dräger since 2010
Executive Board member for Purchasing, Production and Logistics
At Dräger since 2015
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
€ million € million € million € million € million
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
€ million € million € million € million € million
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
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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