Analyst Conference Drägerwerk AG & Co. KGaA. Frankfurt, March 8 th 2018

Transcription

1 Analyst Conference Drägerwerk AG & Co. KGaA Frankfurt, March 8 th 2018

2 Disclaimer 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. 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. Interim financial reports as well as preliminaries are not audited. 2

3 OVERVIEW Fiscal Year

4 FY 2017 Highlights Guidance achieved. Return to Net sales growth after decline in the prior year. Strong order entry gives us a good basis for solid growth in Gross Profit margin stabilized and cost development well controlled. EBIT and DVA increases. Successful completion of the Fit For Growth program. Innovation rate increased again. 5 year decline stopped. Decision to step up investments to support future growth. 4

5 Net sales growth and EBIT improvement Business development Dräger Group Net Sales (in EUR million) 2, % FX adjusted +1.9% Nominal , Q1 Q2 Q3 Q EBIT (in EUR million) 5.4% Margin % Margin Q1 Q2 Q3 Q Highlights Order intake +4.4% cc above the net sales development. Again strong year-end business, despite some issues in the supply chain. Gross profit margin stable at 44.8% (PY 45.0%) Continuous cost containment. Functional expenses on prior year s level. FY EBIT-margin improved to 6.1%. Full-year FX impact negative on net sales and EBIT. (FY FX: Net sales 1.3pp, EBIT margin ~ -1pp) DVA improved to EUR 70.7m (PY EUR 49.8m) 5

6 Positive order intake in all regions Order development Dräger Group Order entry (in EUR million) Group Medical Safety Net Sales America % +1.6% -0.2% +3.5% Africa, Asia, Australia % +2.5% +10.4% +3.5% Europe 1, % +3.4% +8.9% +3.1% Group 2, % +2.6% +7.7% +3.3% Growth rates are net of currency effects; incl. allocations 6

7 Business Development Regions Fiscal Year

8 Region Americas Financial performance Order Entry EBIT Currency 515 adjusted % EBITmargin +1.0% -61% 0.8% EBITmargin Net Sales +3.5% 504 Currency adjusted Comments Order intake: Q4 FY Medical -3.4% +1.5% Safety +3.1% -0.2% Americas -1.6% +1.0% Solid FY Order and net sales growth in North America could off-set the decline in Central-, South-America. Gross profit margin: -0.2 pp yoy Functional expenses (FX adjusted): FY +4.5% yoy Decline in EBIT in large parts due to one-off expenses in Central-/South America DVA EUR -16.6m (PY EUR -10.5m) 8

9 Region Americas Operational performance and priorities Operational performance 2017 Brazil production site closed as planned. Activities transferred to South Africa. New market fulfillment organization implemented in North America. Improvement of working capital in the region Americas Priorities 2018 / 2019 Implementation of new Go to Market approach in North America. Return to growth in Central-, South America Return to stronger growth in Safety markets (order entry in FY17-0,2% FX adj.) 9

10 Region Europe Financial performance Order Entry EBIT Currency 1,383 adjusted 1, % EBITmargin % +28% 7.6% EBITmargin Net Sales +3.1% 1,384 Currency adjusted 1, Comments Order intake: Q4 FY Medical +6.9% +3.3% Safety +9.5% +9.1% Europe +7.9% +5.6% Good top line growth in many European countries. Germany slightly below strong PY level. Gross profit margin: +0.5pp yoy Functional expenses (FX adjusted): FY 0.5% yoy DVA EUR 68.8m (PY EUR 44.5m)

11 Region Europe Operational performance and priorities Operational performance 2017 Implementation of Future Technician Workplace. Strong performance in Safety, driven by Service & Consumables and also Safety Respiratory & Protective Systems. Good recovery in many European markets outside of Germany. Priorities 2018 / 2019 New Krefeld Site to go in operation and support European Rental & Shutdown Service growth. Further roll-out of Future Technician Workplace. Investment program in sales & service capabilities. 11

12 Region Africa, Asia, Australia Financial performance Order Enty +4.5% Currency 641 adjusted Net Sales +3.5% Currency 636 adjusted Comments Order intake: Q4 FY Medical -7.0% +2.3% Safety +6.8% +10.3% AAA -2.8% +4.5% Recovery in the Middle East and continuous good top-line development in China. EBIT 6.6% EBITmargin +4% 6.8% EBITmargin 43.7 Gross profit margin: -1.8pp yoy Functional expenses (FX adjusted): FY -2.4% yoy DVA EUR 18.5m (PY EUR 15.8m)

13 Region Africa, Asia, Australia Operational performance and priorities Operational performance 2017 Main growth driver is Safety with demand growth in all product areas. After a weak 2016, strong recovery in Middle East Africa. Start of production site in India. Production of medical support units targeted at Emerging Markets. ERP roll-out in Australia and New Zealand. Priorities 2018 / 2019 System Center for Gas Detection business Balanced growth in 2018, recovery of the markets that did not grow in

14 FINANCIALS Fiscal Year

15 Business development Dräger Group Net Sales Comments +5.0% Currency adjusted 819,5 835, ,8 +3.3% Currency adjusted 2.572,3 Order intake (FX adjusted) Q4 FY Medical +0.7% +2.6% Safety +7.8% +7.7% Group +3.3% +4.4% Orders on hand ~+9% cc EBIT Q4 16 Q % EBITmargin ,9 Q4 16 Q4 17 FY16 +3% +14% 13.4% EBITmargin 5.4% EBITmargin FY16 FY17 6.1% EBITmargin 155,7 FY17 Gross profit margin 12M 44.8% (py 45.0%) 12M Functional Expenses yoy +0.2% (cc); excluding restructuring in py +1.2% 12M restructuring cost 0m (py ~10m) 12M other fin.& invest. result -4.4m (py 0.7m) EBIT-margin incl. ~ -1 pp from FX DVA 70.7m (py 49.8m) 15

16 Functional Expenses Dräger Group 12M M 2017 Change Change net of FX and restructuring million million % % R&D % of Net Sales -8.7% -9.1% Sales & Marketing % of Net Sales -22.0% -22.0% Administration % of Net Sales -8.2% -7.7% SG&A % of Net Sales -30.2% -29.7% Functional Expenses total % of Net Sales -39.6% -38.6% Headcount 1 13,263 13, Values as of reporting date 16

17 Key Figures Dräger Group 12M M 2017 million million Change % Cashflow from operating activities in % of EBIT 143% 92% Investments Cash and cash equivalents Net financial debt >-100 Net financial debt 1 /EBITDA Capital employed 1 1, , ROCE (EBIT 2 /Capital employed 1 ) 11.0% 12.5% Net Working Capital Equity ratio pp EPS per common shares (on full distribution) EPS per preferred shares (on full distribution) Values as of reporting date 2 EBITDA and accordingly EBIT of the last twelve months 17

18 18 Update Fit For Growth

19 FIT FOR GROWTH Targets achieved Improve SG & A expense ratio SG&A 2017 ~30% SHAPE 1 Optimize global Sales, Marketing & Administration set-up Bring customer value faster to the market and increase innovationshare FIT FOR GROWTH 2FIT! Optimize innovation set-up T2M -50% by Optimize production set-up Global footprint Improve workflow and delivery times and reduce production cost Annual savings ~ 9m 19

20 FIT FOR GROWTH - SHAPE Results of the initiatives SHAPE Improve SG&A expense ratio Optimize global Sales, Marketing & Administration set-up New governance model implemented in Q1/ cost containment measures achieve cost savings of >EUR 100m vs. original budget Reduction of SGA ratio to <30% in 2017 Initiatives continuing in the line organization Continuous cost control in administrative areas Continue optimization of global purchasing to reduce COGS Pricing excellence project to increase price enforcement and grow margin contribution Continue to harmonize ERP landscape and standardize back-office & logistic processes 20

21 FIT FOR GROWTH GLOBAL FOOTPRINT Results of the initiatives Global Footprint Improve workflow and delivery times and reduce production cost Optimize production and logistic set-up New Zukunftsfabrik in Lübeck. Savings ~ EUR 9m p.a. Transfer of production with high labor content to Czech Republic. Site consolidation: Closure of Pittsburgh site, Closure of Brazil production. Initiatives continuing in the line organization Further optimization of logistic structure through new hub for safety products in Frankfurt. Expansion of our Rental & Shutdown Service infrastructure in Krefeld. Global roll-out of market fulfillment concept Focus on Operational Excellence Initiatives 21

22 FIT FOR GROWTH FIT! Results of the initiatives FIT! Bring customer value faster to the market Optimize innovation set-up New Innovation organization implemented. Optimization of the innovation process (e.g. AGILE development, Innovation incubator Garage, rapid prototyping, ). Reduction of complexity (e.g. reduction of internal standards) Acceleration of up to 30% with new development projects Initiatives continuing in the line organization Continue to focus on Time to market achievement (target: reduction by 50% until 2019). Examples: More development by strategic development partners Actively scouting for technology partnerships Upgrade Product Lifecycle Management System 22

23 Faster. Connected. Innovative. Selection of new products 2017 SAFETY MEDICAL IACS VG6/VG7 Vista 120 S Oxylog VE300 Movita Lift Strong 23 Savina 300 Select Pulsar 7000 Secor 7000 Dräger X-am 8000 Dräger-Tubes App Dräger Alcotest 5000

24 Planned investments 2018/2019 will support future growth WE ARE INVESTING IN WE WILL ACHIEVE increasing sales resources & -capabilities EXAMPLES: Strengthening Safety sales channels FGDS System Centers Key Account Management Digital distribution channels Global roll out of Future Technician Workplace a strengthened sales force to support bringing the innovation road map to market. SG&A 2018/19 ~30% SG&A >2020 <30% accelerating R&D roadmap More R&D resources (focus on SWdevelopment) Partnership with external development partners Accelerate EM product portfolio major product releases in 2020, 2021 and Medical Innovation rate % Medical Innovation rate 2020 >28% and will lift EBIT margin above 6% again from

25 care givers have access to all relevant information anywhere, anytime to improve decision making. Our Vision an acute care environment where medical devices are safely accessible remotely for preventive checks to increase uptime stress factors such as nuisance alarms and noise are avoided for patients and care givers alike

26 Alarm management initiatives and Silent ICU Current Situation up to 350 alarms per patient / day (1) ~ % clinically irrelevant (2) 50 % are not noticed (3) ~ 40 different sounds in one ICU (4) up to 40 min. to alarm confirmation (5) 26 (2): Lawless, S., Crit Care Med 1994; Koski, E., Int J Clin Monit Comput 1990, Chambirn, M., Intensiv Care Med 1999 (3), (4): Cropp, A., et al. Chest 1994 (5): Reslan, ZA., University of Connecticut 2007

27 Alarm management Quiet and stress-reduced environments Secure alarm distribution allowing for confirmed alarm on mobile or stationary devices outside the patient room Smart alarms Soft thresholds reduce the number of false alarms significantly to reduce alarm fatigue Alarm history views providing patient specific or departmental overviews for alarm consultation 27

28 OUTLOOK Fiscal Year

29 Dividend proposal for FY (in EUR million) 2017 (in EUR million) Net profit * Dividend ,4 Participation certificates ** Common shares 1.3 4,1 Preferred shares Net payout ratio 5.3% 11.6% Dividend per common share preferred share Dividend policy In future fiscal years, Dräger plans to distribute at least 10% of group net profit (less earnings attributable to non-controlling interests) to the company s shareholders and participation certificate holders. * after earnings attributable to non-controlling interests ** Without minimum dividend, after taxes 29

30 Outlook Net Sales (net of currency effects) 2017 guidance e 0.0 % 3.0 % 3.3 % 2.0 % 5.0 % EBIT margin 5.0 % 7.0 % 6.1 % 4.0 % 6.0 %* Gross profit margin % 44.8 % % Dräger Value Added EUR 40m 90m EUR 70.7m EUR 15m 65m Assumptions for FY 2018 Guidance Downside risk of strong market interruptions, e.g. caused by rising political protectionism, not reflected in guidance. Continuously strong top-line development in AAA Region. Continued growth in North America. Return to growth in Central- / South America. After a strong 2017, growth in the Europe Region expected to be more towards the lower end of the guidance range. Positive growth in both product areas, with a stronger top-line growth for safety offerings. Higher functional expenses due to investments to support future growth. Increase of R&D budget to EUR million. SG&A ratio stable. * based on exchange rates at the start of the year

31 Corporate Social Responsibility at Dräger We protect people OHSAS certified: >80% of Dräger employees We act ethical Compliance System with mandatory trainings We create value Quality Management System ISO 9001 and ISO We respect our environment ~100 Supplier Audits per annum 31

32 32 Questions & Answers

33 Guidance 2018 Net sales e 3.3% % (net of currency effects) (net of currency effects) EBIT margin 6.1% % Dräger Value Added EUR 70.7 million EUR million Other forecast figures: Gross margin 44.8 % % Research and development costs EUR million EUR million Interest result EUR million Slight improvement Days wokring capital (DWC) days on prior year's level Investment volume EUR million EUR million Net financial debt EUR million Slight improvement 1 Based on exchange rates at the start of the year excluding company acquisitions 33

34 Business Development Segments SEGMENT EUROPE Order Entry 1 million 1, , , , ,447.8 Net Sales 1 million 1, , , , ,415.5 EBIT million EBIT margin % SEGMENT AMERICA Order Entry 1 million Net Sales 1 million EBIT million EBIT margin % SEGMENT AFRICA, ASIA, AUSTRALIA Order Entry 1 million Net Sales 1 million EBIT million EBIT margin % years were adjusted pro-forma due to the change in segment reporting. 34 For further analysis, this data (including quarterly figures) can be downloaded as an Excel file from the Dräger website

35 Business development Segments Europe Americas Africa, Asia, Australia Dräger Group Q Q Q Q Q Q Q Q million million million million million million million million Order entry Net Sales EBITDA EBIT EBIT-margin Capital Employed , ,243.6 ROCE 1, DVA Values at due date 2 EBIT of the last twelve months 35

36 Business Development medical and safety products Medical Order Entry million 1, , , , ,683.7 Net Sales million 1, , , , ,668.0 EBIT million EBIT margin % Safety Order Entry million Net Sales million EBIT million EBIT margin % For further analysis, this data (including quarterly figures) can be downloaded as an Excel file from the Dräger website 36

37 Business development Medical products Q Q Change Change 12M M 2017 Change Change million million % % (FX adj.) million million % % (FX adj.) Order entry , , Europe America Africa, Asia, Australia Net Sales , , Europe America Africa, Asia, Australia EBIT EBIT-margin

38 Business development Safety products Q Q Change Change 12M M 2017 Change Change million million % % (FX adj.) million million % % (FX adj.) Order entry Europe America Africa, Asia, Australia Net Sales Europe America Africa, Asia, Australia EBIT EBIT-margin

39 Functional expenses Change net of FX and restructuring million million million million million % R&D % of Net Sales SG&A -8.5% % % % % % of Net Sales -31.1% -30.8% -33.0% -30.2% -29.7% Other operating income Functional Expenses total , % of Net Sales -39.7% -39.7% -42.1% -39.6% -38.6% Headcount 1 1 Values as of reporting date 13,334 13,737 13,936 13,263 13,739 39

40 Cash-flow statement Group net profit Change in inventories Change in receivables Change in payables Depreciation and amortization Other operating cash flow items Operating cash flow Investing cash flow Free cash flow Financing cash flow Change in cash Cash and cash equivalents Change in cash and cash equivalents, i.e. without any effect of exchange rates 2 Values as of reporting date million million million million 2017 million 40

41 Consolidated balance sheet 31 Dec Dec 2017 Change million million % Intangible Assets Property, plant and equipment Other noncurrent assets Noncurrent assets Inventories Trade receivables Other current assets Cash and cash equivalents Current assets 1, , Total assets 2, ,

42 Consolidated balance sheet 31 Dec Dec 2017 Change million million % Equity 1, , Liabilities from participation certificates Provisions for pensions and similar oblig Noncurrent interest bearing loans Other noncurrent liabilities Noncurrent liabilities Current Provisions Current loans and liabilities to banks Trade payables Other current liabilities Current liabilities Total equity and liabilities 2, ,

43 Earnings per share Net profit (less the share of earnings attributable to non controlling interests) '000 33,575 81,391 98,530 Scenario: 100% pay out ratio 100% 100% 100% = tax benefit from pay out to PCs* '000 3,188 7,888 9,493 Earnings attrib. to shares and PCs (incl. tax benefit) '000 36,763 89, , % Earnings attributable to PCs** '000 11,719 28,425 34,420 32% Earnings attributable to shares '000 25,044 60,855 73,603 68% EPS (common share) EPS (preferred share) Scenario: actual/proposed pay out ratio 12.9% 5.3% 11.6% tax benefit from pay out to PCs* ' Earnings attrib. to shares and PCs (incl. tax benefit) '000 33,915 81,732 99, % Earnings attributable to PCs** '000 1,249 1,236 3,482 3% Earnings attributable to shares '000 32,665 80,496 96,008 97% EPS (common share)*** EPS (preferred share)*** * tax benefit arises from the tax deductible pay out to the PCs; please refer to Annual Report 2017, note 19 ** without minimum dividend (as interest, the minimum dividend is already included in net earnings) ** the EPS is not calculated in accordance with IAS 33 PCs = participation certificates (Genussscheine) 43

44 Innovation rate Share on new products and upgrades medical 1 45% 40% Net sales Upgrades New products 35% 30% 25% 20% 15% 10% 33% 23% 34% 28% 32% 22% 27% 20% 20% 18% 26% 22% 5% 0% 10% % % % % % 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. 44

45 Financial calendar 2018 March 8, Analysts meeting April 26, Report for the first three months 2018 Conference call May 4, Annual shareholders' meeting, Lübeck, Germany July 26, Report for the first six months 2018 Conference call October 30, Report for the first nine months 2018 Conference call 45

46 Contact Melanie Kamann Corporate Communications Thomas Fischler Investor Relations Drägerwerk AG & Co. KGaA Drägerwerk AG & Co. KGaA Moislinger Allee Moislinger Allee Lübeck, Germany Lübeck, Germany Tel Tel Fax Fax Mobile Mobile