Drägerwerk AG & Co. KGaA Analysts Meeting Frankfurt, March 4, 202
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 40
Content. Beneficial reinforcement 2. Shaping the future 2. One Dräger 2.2 Innovation 2.3 Operations 3. Financials 4. Outlook 5. Appendix 3 40
4 40 Beneficial reinforcement
Beneficial reinforcement Success through conscious focus on strong basics Guiding philosophy Technology for Life is the common element that gives our daily activities a deeper meaning People The people who work with us understand who we are and what motivates us Diversity Diversity in a wide variety of aspects protects us from the effects of crises and economic fluctuations Ownership structure Our ownership structure provides for thinking in the long term and sustainable growth Culture Our culture is characterized by solution-driven thinking, motivation and a human face Strengths Customer intimacy, our employees, innovation and quality have driven our success for more than 20 years 5 40
6 40 Shaping the future
7 40 Shaping the future One Dräger
8 40 Shaping the future One Dräger Sales and Service regions
Shaping the future One Dräger Sales and Service worldwide 20 initiative Effects in 202 and following years Extending the One Dräger initiative in Sales and Service: Dividing the world in seven sales regions, with common management of all Dräger business fields at the regional level Leveraging synergies by appointing a responsible country manager for every country with Dräger subsidiaries Implementing the functional organization across all subsidiaries worldwide Extensively using existing Dräger infrastructure for faster growth Goal: Reducing relative selling expenses by at least one percentage point by the end of 204 9 40
0 40 Shaping the future Innovation New products are the best margin improvers
Shaping the future Reduction of time to market for new products 20 initiative Effects in 202 and following years Do it right the first time Integrating strategic suppliers in the innovation process Enhancing project management and speeding up the innovation process Improved reliability engineering during the innovation process and statistical verification of individual development steps Simulating expansion and basing calculations on the component level Gradually building strategic suppliers Integrating supplier s skills Enhancing Dräger s core competencies Increased DVA due to: Better integration of R&D, Purchasing, Production and Logistics Shorter approval times in non-ce countries 40
Shaping the future Enhancement of quality leadership in products and solutions 20 initiative Effects in 202 and following years Reducing guarantee costs and quality costs 20: Savings in the single-digit million euro range Making greater use of quality methods such as Six Sigma or FMEA Annual savings in the single-digit million euro range Improving the quality of delivery to the customer Goal: zero defects in delivery Positive effect on the brand image Measurable increase in customer satisfaction Reduction in opportunity costs 2 40
Shaping the future Cost reduction in all segments through excellence in Purchasing 20 initiative Effects in 202 and following years Expanding NPI and IT purchasing activities (NPI non productive items) 20: Improvement in earnings and increase in efficiency exceed the single-digit million euro range Further consolidation and cost reduction at the global level Improvement in earnings in the middle singledigit million euro range 3 40
4 40 Shaping the future Operations
Shaping the future Optimizing the structure and processes in Operations 20 initiative Effects in 202 and following years Build and commission of the factory for Infrastructure Projects Significant process and quality enhancements Productivity has been raised by 8% Lead model for continuous optimization of value creation Project ONE: Long-term planning of the design and use of all production and logistics buildings at the Lübeck site has been initiated Optimized materials flow at the Lübeck site (inside and outside the factory) Optimized production layout Prerequisite to realize the planned rise in volumes while reducing the total floor space 5 40
Shaping the future Expanding manufacturing plants for customer benefit 20 initiative Effects in 202 and following years Inauguration of the new production building in Beijing Continuous optimization of value creation based on the lead model Supports market growth in the Asia/Pacific region Planning the expansion of the Shanghai site for Development and Production lead factory Meeting the continuously growing demand Proximity to the market, in particular for customers in the Asia/Pacific region Analyzing local value creation in the sales companies Recording and optimization of local value creation activities Ideal and efficient fulfillment of country-specific customer needs 6 40
Shaping the future Harmonizing the value chain 20 initiative Effects in 202 and following years Introducing the Supply Chain Operations Reference model (SCOR) Stronger customer focus along the entire supply chain (push to pull) Consistent optimization of the entire process chain Harmonizing value creation processes and master data Group-wide uniform process landscape (at the international level and across divisions) Flexibility across sites Transparency throughout the entire process chain Basis for a standard ERP system 7 40
Shaping the future Optimizing the IT infrastructure and ERP systems 20 initiative Effects in 202 and following years Strategic Hosting substantial consolidation of the data center activities with an external service provider Increased operating reliability Improved availability Global transparency regarding system interfaces as the basis for further optimization Analyzing processes and architecture of the existing ERP environment, defining of objectives Starting migration to an international, uniform SAP template Enhancing vertical integration between headquarters in Germany and international subsidiaries 8 40
9 40 Financials
Business development Order intake Orders on hand Net sales 698.5 46.3 2,255.8 Gross margin 46.4 % 47.6 % 48.0 % 49. % EBITDA 70.2 90.2 +28.5 246.7 269.6 +9.3 EBIT 56. 74. +32. 92.8 23.8 +0.9 EBIT margin Income taxes Tax rate 25.5 % 26.9 % 3.8 % 30.8 % after Earnings 34.6 45.7 +32.3 04.8 25. DVA income taxes Q4 200 million 577. 635.3 8.8 %.8 Q4 20 Change 200 20 million 63.5 0.6 % 6.8 % million million % +6.3 2,45.5 42.7 +0.0 2,77.3 4.5 Currency adjusted: Q4 20: order intake +6.7 %, net sales +0.4 % 20: order intake +7.6 %, orders on hand +8.5 %, net sales +4.4 % 2,293.2 34.6 Change +6.9 +9.4 +3.6 8.9 % 9.5 % +4.9 48.9 55.7 +3.9 +9.3 +7.6 20 40
Business development Medical division Q4 200 Q4 20 Change 200 20 Change million million % million million % Order intake 385.6 42.3 +9.3 Orders on hand 280.6 39.8 Net sales 443. 486.3 +9.8,44.9,58.8,472.0,484.5 +5.3 +4.0 +0.9 EBITDA 64.8 90.8 +40. 209.8 25.7 +2.8 EBIT 58.3 84.0 +44.0 86.6 9.8 +2.8 EBIT margin 3.2 % 7.3 % 2.7 % 2.9 % DVA 36.5 44.0 +5.5 Currency adjusted: Q4 20: order intake +9.7 %, net sales +0.4 % 20: order intake +6.3 %, orders on hand +2.7 %, net sales +.8 % 2 40
Business development Safety division Q4 200 Q4 20 Change 200 20 Change million million % million million % Order intake 99.0 200.2 +0.6 Orders on hand 42.3 42.8 Net sales 202.2 22.4 +9.5 73.7 805.0 733.8 802.7 +0.0 +0.3 +9.4 EBITDA 9. 5. -20.7 8.8 96.6 +8.0 EBIT 3.9 9.4-32.5 6.0 76. +24.6 EBIT margin 6.9 % 4.2 % 8.3 % 9.5 % DVA 43. 57.5 +33.3 Currency adjusted: Q4 20: order intake +0.9 %, net sales +9.6 % 20: order intake +0.3 %, orders on hand +0.2 %, net sales +9.7 % 22 40
Key figures 200 20 Change million million % Cash flow from operating activities 29. 59.9-27.0 Investments 55.8 7.5 +27.9 Cash and cash equivalents 320.0 42.3 +28.8 Net financial debt 90.3 Net financial debt /EBITDA 2 0.4 39.8 0. -56.0 Capital employed 833.4 877. +5.3 ROCE 2 23. % 24.4 % Net working capital 32.4 362.8 +6. Values at due date 2 EBITDA and accordingly EBIT of the last twelve months 23 40
Functional expenses Q4 200 Q4 20 Change 200 20 Change million million % million million % Research and development costs 43.2 45.3 +4.8 48.4 60.5 +8.2 in % of net sales 6.8 % 6.5 % 6.8 % 7. % Marketing and selling expenses 59.8 59.6-0. 57.2 575.3 +0.7 in % of net sales 25.2 % 22.9 % 26.2 % 25.5 % General administrative expenses 32. 49. +53.0 7.9 49.5 +26.8 in % of net sales 5. % 7.0 % 5.4 % 6.6 % 24 40
Consolidated balance sheet Assets 3 Dec 200 3 Dec 20 Change million million % Intangible assets 277.4 280.3 +. Property, plant and equipment 253.7 263.4 +3.8 Other non-current assets 50,0 46.5-2.3 Non-current assets 68.0 690.2 +.3 Inventories 356.7 340.3-4.6 Trade receivables 533.2 586.5 +0.0 Other current assets 86.0 85.9-0. Cash and cash equivalents 320.0 42.3 +28.8 Current assets,295.9,425.0 +0.0 Total assets,976.9 2,5.2 +7.0 25 40
Maturity structure note loans as of December 3, 20 Maturity 202 203 204 205 206 207 208 Total million million million million million million million million Note loans 55.0 79.0 50.0 86.0 57.5 0.0 38.5 366.5 The free cash flow of the Draeger Group was 94.2 million as of December 3, 20 and was partially used to amortise note loans. Within the financial planning it is stipulated for the forthcoming years that note loans will be paid back out of the yearly free cash flow. 26 40
Consolidated balance sheet Equity and liabilities 3 Dec 200 3 Dec 20 Change million million % Equity 636.5 729.6 +4.6 Liabilities from participation certificates 29.9 3.2 +4.2 Provisions for pensions and similar obligations 83.4 79.4-2.2 Non-current interest-bearing loans 38.0 365.3 +4.8 Other non-current liabilities 55.2 74.6 +34.7 Non-current liabilities 586.6 650.4 +0.9 Current provisions 267.6 268. +0.2 Current loans and liabilities to banks 89.5 84.5-5.6 Trade payables 7.3 72. +0.5 Other current liabilities 225.4 20.5-6.6 Current liabilities 753.8 735.2-2.5 Total equity and liabilities,976.9 2,5.2 +7.0 27 40
Capital structure optimization transaction In order to optimize our capital structure we are currently awaiting offers for certain financial instruments issued by Dräger in the time of 983 to 200. This solicitation is not made to any U.S. Person (as defined in Regulation S under the United States Securities Act of 933, as amended) or person located or resident in the U.S.A. The solicitation will be operated pursuant to the terms and conditions set out in the Tender Offer Memorandum dated 5 February 202 and is subject to further restrictions and conditions as contained therein. Due to regulatory reasons we cannot give the audience more insight into the current transaction than contained in this presentation. We will publish the result of the solicitation following 22 March 202. Depending on the amount of financial instruments tendered, the transaction may have an single million EUR impact on the income statement. 28 40
Capital structure optimization transaction Depending on the amount of financial instruments tendered, the following effects on several key figures of the Dräger Group are likely to occur: Tendered volume ( million) 74.2 48.4 296.8 25 % 50 % 00 % Cash and cash equivalents 338. 263.9 5.5 Equity 663.2 596.8 464.0 Non-current liabilities 97.3 89.5 73.9 Equity ratio 32.5 30.3 25.5 Net financial debt 4.0 88.2 336.6 EBITDA 269.6 269.6 269.6 Net financial debt/ebitda 0.4 0.7.2 Based on the financial statements dated December 3, 20 29 40
Cash flow statement Operating activities Investiting activities Financing activities Change in cash* 300 250 29. 200 50 00 59.9 89.7 50 0-50 -00-52.2-65.7-4.6-43.2-50 -200-250 -20. -300 * Without effects of exchange rates on cash and cash equivalents 200 20 30 40
Dividend proposal 20 Net profit Earnings attributable to non-controlling interests Net profit after earnings attributable to non-controlling interests Dividend - Participation certificates - Common shares - Preferred shares 3 Dec 200 million 04.8 2.2 02.6 30.9.9.4 7.6 3 Dec 20 million 25. 2.8 22.3 4..6.3.2 Net payout ratio Gross payout ratio 30. % Plus minimum dividend and tax effect of the participation certificates 5.0 35.0 % 3.3 %. 4.3 % Without minimum dividend, after taxes 3 40
32 40 Outlook
Outlook and mid-term perspective 200 20 202 Mid-term Order intake +8.5 % (currency adjusted +4. %) +6.9 % (currency adjusted +7.6 %) At least world economic growth Net sales +3.9 % (currency adjusted +9.5 %) +3.6 % (currency adjusted +4.4 %) At least world economic growth Growing faster than relevant markets EBIT margin 8.9 % 9.5 % EBIT margin between 8.0 % and 9.5 % 2 At least 0 % target margin IMF forecast (January 202) +3.3 % 2 Higher expenses for planned investments into research and development and the improvement of the worldwide IT infrastructure 33 40
34 40 Appendix
Appendix Executive Board Shareholder structure Financial calendar Contact 35 40
Executive Board Executive Board of Drägerwerk Verwaltungs AG Stefan Dräger CEO Dr. Herbert Fehrecke CTO Gert-Hartwig Lescow CFO Toni Schrofner COO 36 40
Shareholder structure 0,60,000 common shares (28.5 % free float) 6,350,000 preferred shares (00.0 % free float) Shareholding Common shares Shareholding Dr. Heinrich Dräger GmbH 28.5 % 4.3 % 8. % 58.7 % 67.2 % 23.2 % Dr. Heinrich Dräger GmbH Free float Members of the Dräger family Stefan Dräger GmbH Dräger Foundation Successors of Dr. Heinrich Dräger 37 40
Financial calendar February 202 Preliminaries 20 March 4, 202 Accounts press conference, Hamburg Analysts meeting, Frankfurt May 3, 202 Report for the first three months 202 Conference call, Lübeck May 4, 202 Annual shareholders meeting, Lübeck August 2, 202 Report for the first six months 202 Conference call, Lübeck November, 202 Report for the first nine months 202 Conference call, Lübeck 38 40
Contact Melanie Kamann Corporate Communications Vanina Hoffmann Investor Relations Drägerwerk AG & Co. KGaA Drägerwerk AG & Co. KGaA Moislinger Allee 53 55 Moislinger Allee 53 55 23558 Lübeck, Germany 23558 Lübeck, Germany Tel +49 45 882-3998 Tel +49 45 882-2685 Fax +49 45 882-3944 Fax +49 45 882-3296 Mobile +49 70 855852 Mobile +49 60 93980273 melanie.kamann@draeger.com www.draeger.com vanina.hoffmann@draeger.com www.draeger.com 39 40