Fiscal year 2010: Dräger's net sales and earnings grow steeply

Wednesday, 16. March 2011 09:45
Drägerwerk AG & Co. KGaA /
Fiscal year 2010: Dräger's net sales and earnings grow steeply
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The issuer is solely responsible for the content of this announcement.

* Record net sales of around EUR 2.18 billion
* Net profit more than tripled
* Dividend to rise by EUR 0.79 per share

Lübeck - 2010 was an outstanding year for Drägerwerk AG & Co. KGaA. Order intake
rose by 4.1 percent (net of currency effects) to EUR 2,145.4 million (2009: EUR
1,978.3 million). Net sales went up by 9.5 percent (net of currency effects) to
a record EUR 2,177.3 million (2009: EUR 1,911.1 million), and EBIT by 140.6
percent to EUR 192.8 million (2009: EUR 80.1 million). The EBIT margin increased
from 4.2 percent to 8.9 percent, coming in at the upper limit of the bandwidth
of 8 percent to 9 percent the Company had forecast in October 2010. Net profit
rose disproportionately, tripling to EUR 104.8 million (2009: EUR 32.5 million).

Turnaround target met one year earlier than planned
"Net sales and earnings developed very positively thanks to an unexpectedly high
order intake in the fourth quarter of 2010, the continuing positive development
in the Americas and Asia/Pacific regions, the launch of our new products and
favorable currency effects. And the turnaround program also had an extremely
positive impact," explained Stefan Dräger, Chairman of the Executive Board of
Drägerwerk Verwaltungs AG. The program aimed at saving costs and increasing
efficiency contributed an additional EUR 41.0 million to earnings compared to
the previous year. Dräger therefore increased its profitability before
implementation costs by a total of EUR 107.3 million in 2010 compared to the
year 2008. The original plan was to achieve sustainable savings of EUR 100
million as from 2011.

Medical division
In fiscal year 2010, order intake in the medical division went up by 3.5 percent
(net of currency effects) to EUR 1,441.9 million (2009: EUR 1,339.6 million).
Net sales rose by 12.4 percent (net of currency effects) to EUR 1,472.0 million
(2009: EUR 1,260.9 million). EBIT soared by 143.3 percent to EUR 186.6 million
(2009: EUR 76.7 million), and the EBIT margin of 12.7 percent was significantly
up on the previous year's value of 6.1 percent.

Safety division
Order intake in the safety division totaled EUR 731.7 million, 5.1 percent (net
of currency effects) higher than in the previous year (2009: EUR 665.9 million).
The division's net sales rose by 3.8 percent (net of currency effects) to EUR
733.8 million year on year (2009: EUR 676.9 million). EBIT in the safety
division doubled to EUR 61.0 million (2009: EUR 30.2 million) as a result of a
higher business volume and gross margin and lower expenses from the business in
deep sea diving systems. The EBIT margin went up to 8.3 percent (2009: 4.5
percent). In the previous year, impairment losses of EUR 30.0 million were
recognized on deep sea diving systems.

Equity ratio rises to 32.2 percent
The equity base of the Company improved significantly after it had dropped to
20.9 percent on account of the buyback of the 25 percent Siemens share in the
previous Dräger Medical AG & Co. KGaA as of December 31, 2009. In 2010, equity
grew by EUR 242.8 million to EUR 636.6 million while other non-current and
current financial liabilities dropped significantly by EUR 239.6 million. This
increased Dräger Group's equity ratio to 32.2 percent. The capital increase
carried out in June 2010, net profit of EUR 104.8 million and the option
component, which was converted into an equity instrument in August 2010,
particularly contributed to this development.

Dividend to rise by EUR 0.79 per share
In view of the positive earnings development and the equity ratio rising to
32.2 percent, the Executive Board and Supervisory Board will propose to the
annual shareholders' meeting on May 6, 2011, to increase the dividend by EUR
0.79 per share compared to the previous year. EUR 1.13 are to be distributed per
common share (2009: EUR 0.34) and EUR 1.19 per preferred share (EUR 0.40). This
corresponds to the distribution rate of 30 percent to shareholders and
participation certificate holders that had been announced in the previous year.


Outlook: Order intake and net sales increase
Dräger anticipates that order intake will grow at least as fast as the entire
global economy (World Bank forecast: +3.3 percent) in fiscal year 2011. This
expectation is based on the assumptions that the economy in Europe will
stabilize, that the economy in the USwill continue to recover, that the market
will continue to grow in the emerging countries and that exchange rates will
remain the same. Net sales growth in 2011 is likely to fall one to two
percentage points short of order intake growth, as net sales in 2010 profited
from above-average order intake in the fourth quarter of 2009.
Dräger expects a Group EBIT margin between 7.5 percent and 8.5 percent (2010:
8.9 percent) in fiscal year 2011 on account of larger investments in product
development as well as the improved sales organization and Group-wide IT
structure. In the medium term, the Company aims at growing stronger than the
market and achieving an EBIT margin of at least 10 percent.


Key figures (in € million)
+-------------------------------------+---------+---------+----------+
|   | 2010 | 2009 | Change |
+-------------------------------------+---------+---------+----------+
| Group |   |   |   |
+-------------------------------------+---------+---------+----------+
| Order intake | 2,145.5 | 1,978.3 | +8.5 % |
+-------------------------------------+---------+---------+----------+
| Net sales | 2,177.3 | 1,911.1 | +13.9 % |
+-------------------------------------+---------+---------+----------+
| EBIT | 192.8 | 80.1 | +140.6 % |
+-------------------------------------+---------+---------+----------+
| EBIT margin | 8.9 % | 4.2 % |   |
+-------------------------------------+---------+---------+----------+
| Net profit | 104.8 | 32.5 | +222.8 % |
+-------------------------------------+---------+---------+----------+
| Earnings per preferred share (€) | 6.25 | 1.20 | +420.8 % |
+-------------------------------------+---------+---------+----------+
| Earnings per common share (€) | 6.19 | 1.14 | +443.0 % |
+-------------------------------------+---------+---------+----------+
| Research and development costs | 148.4 | 149.4 | -0.7 % |
+-------------------------------------+---------+---------+----------+
| Cash flow from operating activities | 219.1 | 193.5 | +13.3 % |
+-------------------------------------+---------+---------+----------+
| Net financial debt | 90.3 | 374.4 | -75.9 % |
+-------------------------------------+---------+---------+----------+
| Investments | 55.8 | 128.3 | -56.5 % |
+-------------------------------------+---------+---------+----------+
| Capital employed | 833.4 | 709.1 | +17.5 % |
+-------------------------------------+---------+---------+----------+
| ROCE | 23.1 % | 11.3 % |   |
+-------------------------------------+---------+---------+----------+
| Dividend per preferred share (€) | 1.19 | 0.40 |   |
+-------------------------------------+---------+---------+----------+
| Dividend per common share (€) | 1.13 | 0.34 |   |
+-------------------------------------+---------+---------+----------+
| DVA | 114.5 | -1.8 |   |
+-------------------------------------+---------+---------+----------+
| Employees | 11,291 | 11,071 | +2.0 % |
+-------------------------------------+---------+---------+----------+
|   |   |   |   |
+-------------------------------------+---------+---------+----------+
| Medical division |   |   |   |
+-------------------------------------+---------+---------+----------+
| Order intake | 1,441.9 | 1,339.6 | +7.6 % |
+-------------------------------------+---------+---------+----------+
| Net sales | 1,472.0 | 1,260.9 | +16.7 % |
+-------------------------------------+---------+---------+----------+
| EBIT | 186.6 | 76.7 | +143.3 % |
+-------------------------------------+---------+---------+----------+
| EBIT margin | 12.7 % | 6.1 % |   |
+-------------------------------------+---------+---------+----------+
| Research and development costs | 101.1 | 107.8 | -6.2 % |
+-------------------------------------+---------+---------+----------+
| Cash flow from operating activities | 178.4 | 153.1 | +16.5 % |
+-------------------------------------+---------+---------+----------+
| Capital employed | 514.7 | 546.6 | -5.8 % |
+-------------------------------------+---------+---------+----------+
| ROCE | 36.3 % | 14.0 % |   |
+-------------------------------------+---------+---------+----------+
|   | 2010 | 2009 | Change |
+-------------------------------------+---------+---------+----------+
| DVA | 136.5 | 23.6 |   |
+-------------------------------------+---------+---------+----------+
| Employees | 6,386 | 6,305 | +1.3 % |
+-------------------------------------+---------+---------+----------+
|   |   |   |   |
+-------------------------------------+---------+---------+----------+
| Safety division |   |   |   |
+-------------------------------------+---------+---------+----------+
| Order intake | 731.7 | 665.9 | +9.9 % |
+-------------------------------------+---------+---------+----------+
| Net sales | 733.8 | 676.9 | +8.4 % |
+-------------------------------------+---------+---------+----------+
| EBIT | 61.0 | 30.2 | +102.3 % |
+-------------------------------------+---------+---------+----------+
| EBIT margin | 8.3 % | 4.5 % |   |
+-------------------------------------+---------+---------+----------+
| Research and development costs | 43.9 | 39.3 | +11.9 % |
+-------------------------------------+---------+---------+----------+
| Cash flow from operating activities | 74.3 | 73.8 | +0.6 % |
+-------------------------------------+---------+---------+----------+
| Capital employed | 181.6 | 190.1 | -4.4 % |
+-------------------------------------+---------+---------+----------+
| ROCE | 33.6 % | 15.9 % |   |
+-------------------------------------+---------+---------+----------+
| DVA | 43.1 | 9.6 |   |
+-------------------------------------+---------+---------+----------+
| Employees | 4,409 | 4,336 | +1.7 % |
+-------------------------------------+---------+---------+----------+


Disclaimer
This press release 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 prepared 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 the
Company's 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 report.
You will find all other financial dates on our website atwww.draeger.com under
Investor Center/Financial Calendar.


Contact

Corporate Communications:
Burkard Dillig
Tel. +49 451 882-2185
burkard.dillig@draeger.com

Investor Relations:
Vanina Hoffmann
Tel. +49 451 882-2685
vanina.hoffmann@draeger.com


Drägerwerk AG & Co. KGaA
Moislinger Allee 53-55
23542 Lübeck, Germany
www.draeger.com


--- End of Message ---

Drägerwerk AG & Co. KGaA
Moislinger Allee 53-55 Lübeck Germany


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