Capital Markets Presentation Drägerwerk AG & Co. KGaA · 2020-06-30 · This presentation contains forward-looking statements regarding the future development of the Dräger Group

© Drägerwerk AG & Co. KGaA, 2020

Capital Markets PresentationDrägerwerk AG & Co. KGaA

May 2020, Lübeck


Disclaimer

2

This presentation contains forward-looking statements regarding the future development of the Dräger Group. These forward-looking statements arebased on the current expectations, presumptions, and forecasts of the Executive Board as well as the information available to it to date, and have beenmade to the best of its knowledge and belief. No guarantee or liability for the occurrence of the future developments and results specified can beassumed in respect of such forward-looking statements. Rather, the future developments and results are dependent on a number of factors; they entailrisks and uncertainties beyond our control and are based on assumptions which could prove to be incorrect. Notwithstanding any legal requirements toadjust 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 orother consideration is being solicited by this presentation.

Interim financial reports as well as preliminaries are not audited.

© Drägerwerk AG & Co. KGaA, 2020 3

Outlook

DrägerThe Company

Financials


protectDräger products

supportsave

lives,

and


Net sales developmentStrong growth independent of the global economy

5

Source: International Monetary Fund, World Economic Outlook Database

Dräger net sales in EUR million

Global gross domestic product

Stock-market crash

GulfWar

Mexican pesocrisis

Russianfinancial

crisis

Stock-marketcrash

IraqWar

Financialcrisis

Debtcrisis

2,500

2,000

1,500

1,000

500

0

3,000

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

2015

2016

2017

2018

2019


Dräger worldwideNet sales, sites and employees

6

55%

25%

20%

Africa, Asia, Australia

Europe

Americas

Net Sales: EUR

~2.8 billionin 2019

70%

16%

14%

14,845employees

in 2019

Dräger-Sites21%

11%

10%

58%

Sales & Service Production, Quality,Logistics, PurchasingR&D

Administration

Production sites inEurope, America, Africa and Asia

Sales and Service organizations worldwide

SafetyDivision~35 %

MedicalDivision~65 %


MarketsOur Customers

7

Fire services Oil and gas industry

Mining Chemical industry

Hospital

Other markets


Medical division

8

▪ 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, Professional Service

▪ Training

Anaesthesiology

Ventilation

Thermoregulation

Patient Monitoring & Clinical IT

Workplace Infrastructure

Hospital Consumables & Service

Intensive Care Operating Room Neonatal CareHospital wide

Solutions

✓ ✓

✓ ✓ ✓ ✓

✓ ✓

✓ ✓ ✓ ✓

✓

✓ ✓ ✓ ✓

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

▪ Anaesthesia workstations and vaporizers

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

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

▪ Respiratory monitoring

▪ #1 in Europe

▪ Incubators and Warming Therapy

▪ #2 worldwide and #1 in Europe


Safety division

9

Breathing Systems

Gas Detection Systems

Personal Protection Equipment

Impairment Check Equipment

Engineered Solutions

Service

▪ Fixed and mobile gas detection systems


▪ Alcohol- and drug screeningdevices

▪ Interlock devices


▪ Protection equipment for hazardous working environments

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

▪ Self-contained BreathingAppartus for fire fighters


▪ Customer specific solutions

▪ mobile and stationary firefighting training systems

▪ Rescue chambers

▪ Spareparts and consumables

▪ Product Service

▪ Rental, On-site shops and Shutdown Service

▪ Marine-Offshore 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

✓

✓ ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓

✓

✓ ✓ ✓ ✓ ✓


Medical and safety technology providing long-term growth prospects

10

Hospital

Attractive growth prospects in sizeable markets …

… in developed markets…

… as well as in emerging markets

Oil & Gas Chemical Mining Fire Service

▪ 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


Strategy for profitable growth

11

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 countries

Expansion of service and consumables business

Investments for future growth

1

2

3

4


Technology and innovation leadership to drive profitable growth

12

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

▪ Approximately 1,300 employees in R&D around the globe.

▪ EUR ~270 million spent for R&D activities in 2019.*

▪ Certified test-center at Lübeck headquartersupports innovation- and approval process.

▪ Qualitymanagement organization with >100 employees.

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

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

Babyleo ®

Incuwarmer: combination of a

classical incubator and warming bed functionalities.

Dräger X-am® 8000

Multigas detector for measurement of up to 7 gases simultaneously.

*No meaningful capitalization of R&D budget

Atlan®

New anesthesia family with network

connectivity supporting SDC and new user

interface


Exploit growth potentials in developing countries

13

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 Region AAA and in Central- and South-America

▪ Enhance engagement with partners in developing countries to expand local presence with R&D,

manufacturing, sales and after sales business

Net sales

Developed Markets76 %

Newly industrialized countries

24 %

Focused product range

Fabius Plus XLVista 120Savina Color


Service- and consumables business a clear focus of our sales activities

14

Further expansion of service and consumables

business

3

Dräger Services 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

▪ Broad offerings of product service

▪ New services in the areas of Rental, Multi-Vendor and Marine-offshore

▪ Capitalize on large installed base to expand after sales business

▪ Focus on combined sale of equipment and after sales contracts

▪ Expansion of disposable consumables business

http://www.draeger.de/DE/de/products/gas_detection/tubes_cms/draeger_tubes/cin_sampling_tubes.jsp?showBackButton=true


Investments will support future growth…

15

WE ARE RESTRUCTURING:

Sales resources

&-capabilities

R&Droadmap

▪ Strengthening Safety sales channels

▪ FGDS System Centers

▪ Key Account Management

▪ Digital distribution channels

▪ Global roll out of Future Technician Workplace

▪ More R&D resources (focus on SW-development)

▪ Partnership with external development partners

▪ Accelerate EM product portfolio

▪ New organizational set-up and business steering according to Medical and Safety:

▪ Introduction of business units with full product and customer accountability.

▪ Business units are combined within a Medical division and a Safety division, each managed by a dedicated board member.

▪ Financial reporting according to the new divisional structure Medical and Safety. (as of FY 2020)

▪ One dedicated board member responsible for the global sales organization.

WE ARE INVESTING:


Financials


Business developmentDräger Group 5y view

17

Note: Restructuring charges included in FY EBIT: EUR 35 million in 2015, EUR 10 million in 2016Dräger Value Added (DVA) = EBIT less cost of capital of average invested capital

Q1 2019 Q1 2020

€ million € million

Net Sales 2,608.90 601.6 640.0

% growth 21.4% 6.4%

% growth (FX adjusted) 20.7% 7.1%

Gross margin 42.3% 44.2%

Functional Expenses -264.0 -281.5

% of Net Sales -43.9% -44.0%

EBIT -10.7 -0.6

EBIT Margin -1.8% -0.1%

DVA -0.6 -22.3

2,572.30 2,595.002,523.80

-1,042.2

-40.2%

62.6

2.4%

2018

€ million

0.9%

3.9%

42.7%

-26.5 49.8

5.4%

2016

€ million

-3.3%

-1.5%

45.0%

66.7

2.6%

44.9%

-1,098.4

-42.1%

-999.2

-39.6%

136.9

-46.3

2017

€ million

1.9%

3.3%

44.8%

2015

€ million

7.2%

2.9%

-992.0

-38.6%

155.7

6.1%

70.7

2019

€ million

2,780.80

7.2%

5.9%

42.7%

-1,116.8

-40.2%

66.6

2.4%

-32.7


Key figuresDräger Group 5y view

18

Note: Investments 2015 include EUR ~60m for M&A


Outlook


Guidance 2020

20

Guidance withdrawn:The former guidance does not include the business impact from COVID 19.

The forecast will be renewed in Q2 2020!

+

EXPECTATIONS FOR FISCAL YEAR 2020

2019 2020e

Net sales5.9%

(net of currency effects)

+1.0 - +4.0 %

(net of currency effects)

EBIT margin 2.4% 1.0 - 4.0 %1

Dräger Value Added EUR -32.7 million EUR -70 - +20 million

1 Based on exchange rates at the start of fiscal year 2020


Dräger Management

22

At Dräger since 2015

Chairman of the Executive Board CEO




Stefan Dräger

Vice Chairman of the Executive BoardCFO

Gert-Hartwig Lescow

Board member Medical division

Rainer Klug Dr. Reiner Piske

Board member Sales and HR


Board member Safety division

Anton Schrofner


4,0%

67,2%

28,8%

Members of the Dräger family

Dr. Heinrich Dräger GmbH

Free float

Shareholder structure

23

ShareholdingCommon shares

10,160,000 common shares (28.8 % free float)8,600,000 preferred shares (99.0 % free float)

ShareholdingDr. Heinrich Dräger GmbH

18,1%

58,7%

23,2%

Successors of Dr. Heinrich Dräger

Stefan Dräger GmbH

Dräger Foundation


IFRS 16 impact

24

in € million

Increase / Improvement as of

December 31,2019

EBITDA 46.8

EBIT 4.4

Cash flow from operating activities 42.4

Net financial debt 107.8

Investments 42.5

Capital employed 100.9


Business developmentDräger Group – 5 year view

25

Note: Restructuring charges included in FY EBIT: EUR 35 million in 2015, EUR 10 million in 2016Dräger Value Added (DVA) = EBIT less cost of capital of average invested capital

Q1 2019 Q1 2020


Net Sales 2,608.90 601.6 640.0 6.4

% growth 21.4% 6.4%

% growth (FX adjusted) 20.7% 7.1%

Gross margin 42.3% 44.2%

Functional Expenses -264.0 -281.5 6.6

% of Net Sales -43.9% -44.0%

EBIT -10.7 -0.6 94.6

EBIT Margin -1.8% -0.1%

DVA -0.6 -22.3 >-100.0

2,572.30 2,595.002,523.80

-1,042.2

-40.2%

62.6

2.4%

2018

€ million

0.9%

3.9%

42.7%

-26.5

%

Change

49.8

5.4%

2016

€ million

-3.3%

-1.5%

45.0%

66.7

2.6%

44.9%

-1,098.4

-42.1%

-999.2

-39.6%

136.9

-46.3

2017

€ million

1.9%

3.3%

44.8%

2015

€ million

7.2%

2.9%

-992.0

-38.6%

155.7

6.1%

70.7

2019

€ million

2,780.80

7.2%

5.9%

42.7%

-1,116.8

-40.2%

66.6

2.4%

-32.7


Business developmentGroup / Division / Region

26

Dräger-Group 2015 2016 2017 2018 2019 Q1 2019 Q1 2020 Change Change

Net Sales YTD € million € million € million € million € million € million € million % % FX (adj.)

Medical Division 1,698.8 1,647.4 1,668.0 1,643.0 1,741.8 368.4 395.6 7.4 8.0

Safety Division 910.1 876.1 904.3 952.0 1,039.1 233.2 244.4 4.8 5.7

Net Sales 2,608.9 2,523.8 2,572.3 2,595.0 2,780.8 601.6 640.0 6.4 7.1

Europe 1,420.7 1,384.3 1,415.5 1,431.9 1,503.3 326.2 362.7 11.2 11.4

America 509.1 503.7 510.4 499.3 547.7 122.2 120.1 -1.7 -0.4

Africa, Asia, Australia 679.1 635.8 646.4 663.8 729.8 152.7 157.2 2.9 3.9

EBIT 66.7 136.9 155.7 62.6 66.6 -10.7 -0.6 94.4

EBIT-margin (%) 2.6 5.4 6.1 2.4 2.4 -1.8 -0.1


Key figuresDräger Group – 5 year view

27


Business developmentMedical Q1 - 5 year view

28

Note: The data, including the quarterly figures, can be downloaded from the Dräger website in .xls-format

Medical Division Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Change Change

€ million € million € million € million € million % % FX (adj.)

Net Sales 338.2 336.4 309.9 368.4 395.6 7.4 8.0

Europe 172.9 174.7 167.2 183.2 205.1 12.0 12.2

America 69.2 68.9 62.1 81.8 78.0 -4.7 -3.1

Africa, Asia, Australia 96.1 92.8 80.6 103.4 112.5 8.9 9.3

EBIT -17.0 -7.1 -36.7 -17.2 -6.9 60.2

EBIT-margin (%) -5.0 -2.1 -11.8 -4.7 -1.7


Business developmentSafety Q1 - 5 year view

29

Note: The data, including the quarterly figures, can be downloaded from the Dräger website in .xls-format

Safety Division Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Change Change

€ million € million € million € million € million % % FX (adj.)

Net Sales 194.2 198.6 185.7 233.2 244.4 4.8 5.7

Europe 126.8 124.1 120.4 143.5 157.6 9.8 10.3

America 34.7 38.6 31.4 40.4 42.1 4.2 5.0

Africa, Asia, Australia 32.7 35.8 33.9 49.3 44.7 -9.3 -7.2

EBIT 1.3 9.5 -3.1 6.6 6.3 -4.5

EBIT-margin (%) 0.7 4.8 -1.7 2.8 2.6


Functional expensesGroup 5 year view

30

Q1 2019 Q1 2020


R&D -63.2 -67.7 7.2

% of Net Sales -10.5% -10.6%

Sales & Marketing -151.2 -159.9 5.7

% of Net Sales -25.1% -25.0%

Administration -49.5 -53.9 8.7

% of Net Sales -8.2% -8.4%

SG&A -200.7 -213.7 6.5

% of Net Sales -33.4% -33.4%

Functional Expenses total -264.0 -281.5 6.6

% of Net Sales -43.9% -44.0%

Headcount1 14,603 14,900 2.0 1 Values as of reporting date

2018

€ million

-252.2

-9.7%

-592.6

-22.8%

-198.5

-7.6%

-791.1

-30.5%

-1,042.2

-40.2%

14,399

-207.4

-8.2%

2016

€ million

-219.0

-8.7%

-554.7

-22.0%

Change

%

-231.1

-8.9%

-611.0

-23.4%

-250.2

-9.6%

2015

€ million

-39.6%

-999.2

13,936 13,263

-861.2

-33.0%

-1,098.4

-42.1%

-762.1

-30.2%

2017

€ million

-234.7

-9.1%

-566.3

-22.0%

-197.7

-7.7%

-764.0

-29.7%

-992.0

-38.6%

13,739

-22.4%

-219.4

-7.9%

-841.3

-30.3%

-1,116.8

-40.2%

14,845

2019

€ million

-263.7

-9.5%

-621.9


Cash flow statement5 year view

31

Change

%

Group net profit 33.3 81.7 98.5 34.9 33.8 -3.2

Change in inventories -5.4 17.4 -30.0 -76.9 -24.5 68.1

Change in receivables -44.6 31.3 -22.4 -41.0 0.4 >+100

Change in payables -22.8 -10.2 22.2 -2.3 3.9 >+100

Depreciation and amortization 84.2 85.8 84.2 85.3 127.1 49.1

Other operating cash flow items -4.8 -10.6 -9.3 4.2 23.7 >+100

Operating cash flow 39.9 195.3 143.3 4.1 164.4 >+100

Investing cash flow -167.0 -77.3 -65.5 -63.5 -62.1 2.3

Free cash flow -127.1 118.1 77.8 -59.4 102.4 >+100

Financing cash flow -1.3 -70.0 -41.9 -6.2 -87.9 >-100

Change in cash1 -128.4 48.1 35.9 -65.6 14.5 >+100

Cash and cash equivalents2 172.8 221.5 247.6 179.6 196.3 9.3

1 Change in cash and cash equivalents, i.e. without any effect of exchange rates

2 Values as of reporting date

2019

€ million

2017

€ million

2016

€ million

2015

€ million

2018

€ million


Balance sheet

32

31 Dec 2018 31 Dec 2019 Change

€ million € million %

Intangible Assets 336.0 334.0 -0.6

Property, plant and equipment

(incl. Right-of-use assets) 429.1 526.3 22.6

Other noncurrent assets 168.6 201.2 19.3

Noncurrent assets 933.7 1,061.4 13.7

Inventories 459.2 485.2 5.7

Trade receivables 703.9 710.7 1.0

Other current assets 133.9 117.3 -12.4

Cash and cash equivalents 179.6 196.3 9.3

Current assets 1,476.5 1,509.5 2.2

Total assets 2,410.2 2,570.9 6.7


Balance sheet

33

31 Dec 2018 31 Dec 2019 Change

€ million € million %

Equity 1,080.7 1,076.4 -0.4

Liabilities from participation certificates 24.8 26.0 4.6

Provisions for pensions and similar obligations 339.3 390.9 15.2

Noncurrent interest bearing loans 125.1 118.6 -5.2

Other noncurrent liabilities 117.0 212.5 81.6

Noncurrent liabilities 606.2 748.0 23.4

Current Provisions 201.3 215.1 6.9

Current loans and liabilities to banks 90.1 51.0 -43.4

Trade payables 201.4 205.1 1.8

Other current liabilities 230.5 275.4 19.4

Current liabilities 723.3 746.6 3.2

Total equity and liabilities 2,410.2 2,570.9 6.7


Earnings per share

34

+

=

PCs = participation certificates (Genussscheine)

2017 2018 2019

Net profit (less the share of earnings attributable to non-controlling interests)

'000 € 98,530 34,355 33,350

Scenario: 100% pay-out ratio 100% 100% 100%

tax benefit from pay-out to PCs* '000 € 9,493 3,302 3,205

Earnings attrib. to shares and PCs (incl. tax benefit) '000 € 108,023 37,657 36,555 100%

Earnings attributable to PCs** '000 € 34,420 11,973 11,621 32%

Earnings attributable to shares '000 € 73,603 25,685 24,934 68%

EPS (common share) € 4.12 1.42 1.38

EPS (preferred share) € 4.18 1.48 1.44

Scenario: actual/proposed pay-out ratio 11.6% 12.7% 13.0%

tax benefit from pay-out to PCs* '000 € 960 341 341

Earnings attrib. to shares and PCs (incl. tax benefit) '000 € 99,490 34,696 33,691 100%

Earnings attributable to PCs** '000 € 3,482 1,236 1,236 4%

Earnings attributable to shares '000 € 96,008 33,460 32,455 96%

EPS (common share)*** € 5.38 1.86 1.80

EPS (preferred share)*** € 5.44 1.92 1.86

* tax benefit arises from the tax deductible pay-out to the PCs; please refer to Annual Report 2019, note 19

** without minimum dividend (as interest, the mimimum dividend is already included in net earnings)

*** the EPS is not calculated in accordance with IAS 33


Innovation share

35

Share on new products and upgrades medical1

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 products

Upgrades

Net sales

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

20%

7%

2015

27%

25%

2019

5%

30%

22%

2014

10%

32%

18%

2%

2016

20%

21%

3%

2017

24%

23%

5%

2018

28%


Financial calendar

36

Dräger publishes preliminary results approximately 2 weeks before the dates of the quarterly reports. Preliminary results for the full year are published in January.

March 5, 2020 Final 2019 figuresConference call

April 30, 2020 Report for the first three months 2020 Conference call

August 13, 2020 Report for the first six months 2020 Conference call

September 30, 2020 (Virtual) Annual shareholders' meeting, Lübeck, Germany 2020 Conference call

October 29, 2020 Report for the first nine months 2020 Conference call


Contact

37

Melanie Kamann Thomas Fischler Franziska Ressel

Head of Communications Head of Treasury & Investor Relations Treasury & Investor Relations

Drägerwerk AG & Co. KGaA Drägerwerk AG & Co. KGaA Drägerwerk AG & Co. KGaA

Moislinger Allee 53−55 Moislinger Allee 53−55 Moislinger Allee 53−55

23558 Lübeck, Germany 23558 Lübeck, Germany 23558 Lübeck, Germany

Tel. +49 451 882-3998 Tel. +49 451 882-2685 Tel. +49 451 882-6133

Fax +49 451 882-3944 Fax +49 451 882-3296

Mobile +49 170 8558152 Mobile +49 151 12245295

[email protected] [email protected] [email protected]

www.draeger.com www.draeger.com www.draeger.com

mailto:[email protected]

http://www.draeger.com/

Documents

Capital Markets Presentation Drägerwerk AG & Co. KGaA · 2020-06-30 · This presentation contains forward-looking statements regarding the future development of the Dräger Group