In the first three months of 2020, Drägerwerk AG & Co. KGaA (Dräger) has announced reporting an extraordinary increase in order intake, as well as a rise in net sales. Earnings were up significantly year on year. Order intake saw a sharp rise, increasing by 116.7 percent (net of currency effects) in the first three months. High order intake At EUR 1,392.7 million, order intake was up 115.1 percent year on year in nominal terms (3 months 2019: EUR 647.6 million). Orders increased in all regions, with the Europe region accounting for the strongest rise. In the medical division, orders rose by 177.2 percent (net of currency effects), driven primarily by demand for ventilators. In the safety division, order intake increased by 31.6 percent (net of currency effects), with a particularly sharp rise in demand for light respiratory protection masks. Net sales at Dräger grew by 7.1 percent (net of currency effects) in the first three months of 2020. In nominal terms, net sales increased by 6.4 percent to EUR 640.0 million (3 months 2019: EUR 601.6 million). Net sales increased in both the medical and safety divisions. rise in orders for ventilators and respiratory protection masks At Dräger, COVID-19 has led to a massive increase in orders for ventilators and respiratory protection masks" “The coronavirus (COVID-19) pandemic is affecting the whole world. At Dräger, it has led to an massive increase in orders for ventilators and respiratory protection masks. But demand for hospital consumables, patient monitoring, and anesthesia devices has also increased,” said Stefan Dräger, Chairman of the Executive Board of Drägerwerk Verwaltungs AG. Stefan adds, “Our ‘Technology for Life’ has never been so sought after. It is now paying off that we have invested in a state-of-the-art factory in Lübeck and we have agreed flexible working hours and innovative labor organization models with the works council and trade unions. This allows us to quadruple the production volumes.” He further stated, “We do as much as we can to fulfil our social responsibility to provide for society. We do our utmost to serve our country and people all over the world. It is with pride and humility that we face the importance of this task. Despite all our efforts and know-how the overall demand cannot be met. It is estimated that it is ten times the capabilities of the entire industry. ” EBIT and Earnings after taxes Earnings before interest and taxes (EBIT) improved significantly in the first quarter of 2020 to stand at EUR -0.6 million (Q1 2019: EUR -10.7 million), with an EBIT margin of -0.1 percent (Q1 2019: -1.8 percent). Earnings after taxes stood at EUR -6.7 million (Q1 2019: EUR -10.1 million). The stronger net sales volume and higher gross margin made a significant contribution to the improvement in earnings, whereas currency effects and higher functional costs strained earnings. In addition to investment in sales, logistics costs increased due to the higher net sales volume and freight rates. Participation certificates terminated, capital increase Dräger has terminated the series A, D and K in March and April. Repayment for the series A and K will be in January 2021 and for the Series D in January 2023. All participation certificates will then be redeemed. In April, Dräger successfully completed a capital increase and raised the share capital by 1 million preferred shares subject to the exclusion of subscription rights. The net proceeds from the capital increase will be used in part to finance the termination of the series A and K participation certificates while strengthening liquidity and the equity base in light of the high order intake resulting from the COVID-19 pandemic. Simplifying equity structure We are simplifying our equity structure, consisting of common and preferred shares" “By terminating the participation certificates, we are replacing a financing instrument that was not well known among international investors, in particular and that had largely lost its importance as an equity instrument for Dräger,” said Gert-Hartwig Lescow, CFO of Drägerwerk Verwaltungs AG. He adds, “We are simplifying our equity structure, consisting of common and preferred shares. In the future the dividend will completely go to the shareholders and the earnings per share as a result of all these measures will increase by up to 27 percent. That will make the Dräger share more attractive.” Annual shareholders’ meeting rescheduled for Sep 2020 Dräger has decided to cancel the annual shareholders’ meeting of Drägerwerk AG & Co. KGaA, Lübeck, which was originally scheduled for May 8, 2020. The meeting was called off due to the measures by federal, state, and local governments related to the spread of the coronavirus, as well as the guidance on the status of the infection published by the Robert Koch Institute and the responsible authorities in Germany. The health of shareholders, employees, and the service providers involved in the annual shareholders’ meeting is Dräger’s top priority. The cancellation of the annual shareholders’ meeting also results in a delay in the resolution on the appropriation of net earnings for fiscal year 2019 and the payment of the dividend. Dräger intends to hold the annual shareholders’ meeting presumably on September 30, 2020, as a virtual annual shareholders’ meeting without the physical presence of the shareholders or their representatives. Exceeding planned net sales in positive outlook Dräger will provide more specific forecasts for fiscal year 2020, when it publishes its half-year results for 2020 Due to the very dynamic development of order intake, as a result of the COVID19 pandemic, Dräger has very good opportunities to significantly exceed planned net sales and earnings. Dräger will provide more specific forecasts for fiscal year 2020, when it publishes its half-year results for 2020. “The results of the first quarter reflect what we see when we look in the rearview mirror, which is basically the past,” said Stefan Dräger, Chairman of the Executive Board of Drägerwerk Verwaltungs AG. ‘Technology for Life’ He adds, “More interesting is what we see looking ahead toward a new day, toward a post-coronavirus era. I think many things will be different than in the past. Things that appeared important before will no longer be as relevant. Meanwhile, other things will be more important, values such as stability, reliability, and humanity.” Stefan concludes, by stating “I personally believe that the purpose of our company and the meaning of our work will be met with greater appreciation from our customers, employees, and investors. ‘Technology for Life’ will be valued more highly. That is why I personally participated in the capital increase.”
The worldwide spread of the corona virus is also a concern for Dräger (Drägerwerk Verwaltungs AG). They are seeing a significant increase in demand worldwide for ventilators, the corresponding accessories and personal protective equipment for especially health staff and frontline workers, along with the general global population at large. Employee safety and protection At the same time, Dräger (Drägerwerk Verwaltungs AG) stated that it is the company’s duty of care to provide the employees with the best possible protection and care. This presents Dräger with challenges that they reassess and solve every day. Our goal is to maintain business operations with the purpose to fulfill our duty to provide our technology for life" "Our goal is to maintain business operations with the purpose to fulfill our duty to provide our technology for life to as many as needed. This motivates us to give our best every day, even in these difficult times," said Stefan Dräger, Chairman of the Executive Board of Drägerwerk Verwaltungs AG. respiratory and face masks To meet the high demand for products, Dräger (Drägerwerk Verwaltungs AG) has already significantly expanded the company’s facilities’ production capacities in recent weeks. The production facilities for respiratory masks in Sweden and South Africa are working at full capacity and are running around the clock to churn out medical products required during the on-going Coronavirus (COVID-19) pandemic. In medical technology, for example, Dräger is currently producing almost twice as many ventilators as before. They are working flat out to expand the production capacities even further. The fact that they invested in a future-oriented factory with state-of-the-art industrial production methods several years ago is paying off here. They have agreed innovative work organization and working time models with our employees. This gives us the necessary flexibility to react to the high volume of orders. They especially appreciate the commitment of the employees and are very grateful for their daily efforts to support the customers in helping others. ventilators and monitors In times of a pandemic, Dräger is committed to doing everything in power to fulfill social responsibility to provide for society worldwide. They have recently received major orders from the German Federal Ministry of Health to supply ventilators and monitors. However, also internationally incoming orders and deliveries of personal protective equipment and ventilators are significantly higher than in the previous year. Yesterday alone, for example, Dräger shipped over 100 ventilators from Germany to Italy. Repairs and installations will be in the foreground, routine activities will be handled subordinate to this It is not only the delivery of new equipment that is important for patient care. Existing medical technology must also function perfectly. That is why Dräger will maintain the service on site in the hospitals as long as possible and focus on the priority of the work on the functionality of products and services. Repairs and installations will be in the foreground, routine activities will be handled subordinate to this. They are in close coordination with the authorities in order to be able to continue to provide services even under difficult conditions. On-site service Stefan Dräger said, "I am aware that despite all our efforts we can only partially meet the current demand in the world. And believe me, we would like to do even more. But I can assure you: We do what we can. Our thoughts are with the doctors, nurses and rescue workers who are currently doing a great job for patients and society at large." Dräger is an international renowned medical company in the fields of medical and safety technology. Their products protect, support and save lives. Founded in 1889, The Dräger Group is currently present in more than 190 countries and has more than 14,000 employees worldwide.
Drägerwerk AG & Co. KGaA opened talks with the works council and trade union IG Metall over a package of measures to reduce personnel costs. The reason for the measures is the ongoing weak earnings performance. Through the ongoing restructuring, Dräger is laying the foundations to make the company fit for the future once again. Dräger will continue to invest in sales and its own capacity for innovation in order to strengthen its competitiveness over the long term. Securing company’s future potential However, the positive effects will only materialize in the medium term. Personnel cost savings are required in order to become more efficient and secure financial leeway. Stefan Dräger, Chairman of the Executive Board of Drägerwerk Verwaltungs AG: “Our principal objective is to secure the future potential of the company, and ultimately also the jobs in Lübeck. We have arrived at a point where we cannot continue without a contribution from the workforce. We are striving to ensure that everyone contributes their fair share in the cost reductions and to limit job cuts as much as possible. That is why we are now in talks with the works council and IG Metall to negotiate a targeted headcount reduction in certain areas as well as collective financial measures. We are certain that everyone here takes their responsibility seriously and that we will reach an agreement together as quickly as possible.”