Drägerwerk : Report for the first quarter of 2024

Quarterly Statement January 1 to March 31, 2024 Dräger Group

The Dräger Group over the past five years

									Three months
			2024	2023	2022	2021	2020
Order intake	€ million		810.8	803.8	825.7		739.8		1,392.7
Net sales	€ million		735.8	761.1	649.5		792.1		640.0
Gross profit	€ million		333.6	342.8	274.4		412.9		283.2
Gross profit / net sales	%		45.3	45.0	42.2		52.1		44.2
				63.9
EBITDA 1	€ million	47.6	-1.2	160.6	29.8
EBIT 2	€ million		15.1	29.1	-35.1		128.9		-0.6
EBIT 2/ net sales	%		2.0	3.8	-5.4		16.3		-0.1
				-4.7
Interest result	€ million	-4.5	-4.5	-7.8	-9.1
Income taxes	€ million		-3.0	-7.2	12.6		-38.3		3.0
Net profit	€ million		7.5	17.2	-27.1		82.8		-6.7
Earnings per share
per preferred share	€		0.39	0.92	-1.42		3.84		-0.36
per common share	€		0.37	0.90	-1.44		3.82		-0.38
DVA 3, 4	€ million		10.9	-134.8	7.6		426.0		-22.3
				1,331.5
Equity 5	€ million	1,435.0	1,275.2	1,156.9	862.0
Equity ratio 5	%		47.4	44.3	40.5		36.3		32.0
Capital employed 5, 6	€ million		1,526.5	1,569.2	1,417.6		1,455.6		1,377.0
EBIT 2, 3 / capital employed 5, 6 (ROCE)	%		10.0	-1.6	7.6		36.1		5.6
Net financial debt 5, 7	€ million		192.4	290.4	36.1		149.5		358.7
			16,284
Headcount as at March 31			16,476	15,973		15,907		14,900

1. EBITDA = Earnings before net interest result, income taxes, depreciation and amortization
2. EBIT = Earnings before net interest result and income taxes
3. Value of the last twelve months
4. Dräger Value Added = EBIT less cost of capital of average invested capital
5. Value as at reporting date
6. Capital employed = Total assets less deferred tax assets, securities, cash and cash equivalents, non-interest bearing liabilities and other non-operating items
7. For the years 2020 to 2022, including the payment obligations from the termination of the participation certificates.

Change in the regional structure 1

In 2024, we reorganized our regional structure in order to focus our sales activities even more strongly and specifically on our customers. The Germany region was separated from the Europe region as a new independent region. The Middle East and Africa sub-region was spun off from the Africa, Asia, and Australia (AAA) region and merged with the Europe region to form the new Europe, Middle East, and Africa (EMEA) region. The remaining part of the AAA region was combined to form the Asia-Pacific (APAC) region. Nothing has changed for our Americas region.

1 A reclassification of net sales since the 2020 fiscal year into the new regional structure is available for download on the following website: https://www.draeger.com/en-us_us/Investor-Relations/Publications#finanzergebnisse.

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Quarterly Statement Dräger Group Q1 2024 Business performance of the Dräger Group

The first three months of 2024 at a glance

Dräger with solid business performance in the first quarter of 2024

• Order intake slightly above high prior-year level
• Net sales and earnings below strong prior-year quarter due to base effects
• Annual forecast confirmed

"Our order intake increased in the first quarter. This shows that demand for our Technology for Life remains high," says Stefan Dräger, Chairman of the Executive Board of Drägerwerk Verwaltungs AG. "The fact that net sales and earnings were down on the strong prior-year quarter is no surprise. Firstly, we had benefited from a noticeable improvement in delivery capability, and thus from the processing of the order backlog. Secondly, the relaxation of the zero-Covid policy in China had led to a surge in demand for our ventilators. As expected, neither effect was repeated."

"Despite the first quarter traditionally being the weakest in our fiscal year, we achieved a positive result. We are therefore confident that we will achieve our forecast for the year," says Stefan Dräger.

Possible rounding differences in this financial report may lead to slight discrepancies.

This financial report has been set up in German and English language. In case of any discrepancy between the German and English version, the German version shall prevail.

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Quarterly Statement Dräger Group Q1 2024 Business performance of the Dräger Group

Business performance of the Dräger Group

Business performance of the Dräger Group

Order intake	€ million
Net sales	€ million
Gross profit	€ million
Gross profit / net sales 1	%
EBITDA 2	€ million
EBIT 3	€ million
EBIT 3 / net sales 1	%
Net profit	€ million
Earnings per share
per preferred share	€
per common share	€
DVA 4, 5	€ million
Research and development costs	€ million
Equity ratio 1, 6	%
Cash flow from operating activities	€ million
Net financial debt 6	€ million
Investments	€ million
Capital employed 6, 7	€ million
Net working capital 6, 8	€ million
EBIT 3, 4 / capital employed 6, 7 (ROCE) 1	%
Net financial debt 6 / EBITDA 2, 4	Factor
Gearing 9	Factor
Headcount as at March 31

				Three months
				Change
2024	2023		in %
810.8		803.8		+0.9
735.8		761.1		-3.3
333.6		342.8		-2.7
45.3		45.0		+0.3 pp
47.6	63.9	-25.5
15.1		29.1		-48.1
2.0		3.8		-1.8 pp
7.5		17.2		-56.1
0.39	0.92	-57.6
0.37		0.90		-58.9
10.9		-134.8		> +100
80.9		83.4		-2.9
47.4		44.3		+3.1 pp
33.5		-4.2		> +100
192.4		290.4		-33.7
22.7		30.4		-25.2
1,526.5		1,569.2		-2.7
671.7		699.2		-3.9
10.0	-1.6		+11.5 pp
0.64		2.40
0.13		0.22
16,476	16,284	+1.2

1. pp = Percentage points
2. EBITDA = Earnings before net interest result, income taxes, depreciation and amortization
3. EBIT = Earnings before net interest result and income taxes
4. Value of the last twelve months
5. Dräger Value Added = EBIT less cost of capital of average invested capital
6. Value as at reporting date
7. Capital employed = Total assets less deferred tax assets, securities, cash and cash equivalents, non-interest bearing liabilities and other non-operating items
8. Net working capital = Trade receivables and inventories less trade payables, customer prepayments, short-term operating provisions and other short-term operating items
9. Gearing = Net financial debt / equity

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Quarterly Statement Dräger Group Q1 2024 Business performance of the Dräger Group

Order intake

Order intake 1

								Three months
						Change		Net of currency
in € million	2024	2023		in %		effects in %
Medical division		453.7		465.3		-2.5		-1.9
Safety division		357.2		338.4		+5.5		+6.1
Total		810.8		803.8		+0.9		+1.5
thereof Germany		212.1		200.7		+5.7		+5.7
thereof Europe, Middle East, and Africa		312.0		288.8		+8.0		+7.9
thereof Americas		160.4		143.4		+11.9		+10.8
thereof Asia-Pacific		126.3		170.8		-26.1		-22.2

1 Due to the new regional structure, prior-year figures have been adjusted partially.

In the first quarter of 2024, our order intake increased by 1.5% (net of currency effects), in particular due to the positive development in the Europe, Middle East, and Africa (EMEA) region. Demand also increased in the Americas region and the Germany region. In the Asia-Pacific region (APAC), however, it fell significantly.

In the medical division, order intake fell by just under two percent (net of currency effects). This was attributable to a significant decline in the APAC region, which, as expected, was primarily due to the lack of a renewed wave of demand for ventilators in China. In contrast, demand increased in the Americas, EMEA, and Germany regions.

In the safety division, order intake increased by more than six percent (net of currency effects), due to significant growth in the EMEA and Germany regions. Demand fell slightly in the Americas and APAC regions.

Net sales

Net sales 1

								Three months
						Change		Net of currency
in € million	2024	2023		in %		effects in %
Medical division		417.4		469.9		-11.2		-10.4
Safety division		318.4		291.2		+9.3		+10.0
Total		735.8		761.1		-3.3		-2.6
thereof Germany		170.0		162.4		+4.7		+4.7
thereof Europe, Middle East, and Africa		301.8		281.2		+7.3		+7.2
thereof Americas		156.5		160.1		-2.3		-2.7
thereof Asia-Pacific		107.6		157.4		-31.7		-27.6

1 Due to the new regional structure, prior-year figures have been adjusted partially.

Following the exceptional improvement in the same period of the prior year, our net sales declined as expected in the first quarter of 2024 and were 2.6% below the prior-year level (net of currency effects). In the first quarter of 2023, we had benefited from strong catch-up effects as a result of the noticeable improvement in delivery capability. In addition, a surge in demand for ventilators in China had led to higher net sales. As expected, both effects were absent in the first quarter of 2024.

Net sales increased in the EMEA and Germany regions. The APAC region recorded a significant decline due to the absence of the China effect. Net sales in the Americas region were also down on the prior year.

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Quarterly Statement Dräger Group Q1 2024 Business performance of the Dräger Group

Earnings

In the first quarter of 2024, our gross profit fell by 2.7% to EUR 333.6 million (3 months 2023: EUR 342.8 million). This was due to the decrease in net sales. By contrast, the gross margin rose from 45.0 to 45.3% due to the good margin development in the safety division. In the medical division, the gross margin declined as a result of a less profitable product mix.

Our functional expenses were up by 1.9% (net of currency effects) year on year (1.4% in nominal terms) in the first quarter of 2024.

Research and development (R&D) spending fell by 2.8% (net of currency effects; 2.9% in nominal terms). Due to the concurrent decrease in net sales, the ratio of R&D costs to net sales (R&D ratio) was at the prior-year level at 11.0% (3 months 2023: 11.0%).

The financial result (without interest result) amounted to EUR -0.8 million (3 months 2023: EUR -0.2 million). One of the reasons for the change were exchange rate effects.

Due to the decrease in net sales and the slight increase in functional expenses, our Group earnings before interest and taxes (EBIT) of EUR 15.1 million in the first quarter of 2024 were significantly below the high prior-year figure (3 months 2023: EUR 29.1 million). The EBIT margin was 2.0% (3 months 2023: 3.8 %).

The interest result improved slightly by EUR 0.2 million to EUR -4.5 million in the first quarter of 2024 due to lower interest expenses (3 months 2023: EUR -4.7 million).

Investments

In the first three months of 2024, the investment volume stood at EUR 22.7 million, or 25.2% lower than in the prior year (3 months 2023: EUR 30.4 million). We invested EUR 11.4 million in property, plant and equipment (3 months 2023: EUR 22.4 million), EUR 0.3 million in intangible assets (3 months 2023: EUR 0.4 million), and EUR 11.0 million in capitalized right-of-use assets pursuant to IFRS 16 (3 months 2023: EUR 7.5 million). Depreciation and amortization amounted to EUR 32.5 million in the first quarter of 2024 (3 months 2023: EUR 34.8 million). Total investment amounted to 69.9% of depreciation and amortization, resulting in a decrease in fixed assets of EUR 9.8 million.

Equity

Equity rose by EUR 25.7 million to EUR 1,435.0 million in the first three months of 2024. The equity ratio stood at 47.4% as at March 31, 2024, higher than the figure from December 31, 2023 (45.5%). The reasons for the increase in the equity ratio were the earnings after income taxes of EUR 7.5 million, as well as the EUR 18.2 million improvement in other comprehensive income in equity, and the simultaneous decrease in total assets.

Dräger Value Added

Dräger Value Added (DVA) increased by EUR 145.7 million to EUR 10.9 million year on year in the 12 months to March 31, 2024 (12 months to March 31, 2023: EUR -134.8 million). Rolling EBIT increased year on year by EUR 176.9 million. The cost of capital increased by EUR 31.1 million due to the rise in the cost of capital. For 2024, we increased the WACC from 7.0 to 9.0% and took account of the changed interest rate environment, among other things.

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Quarterly Statement Dräger Group Q1 2024 Business performance of the medical division

Business performance of the medical division

Business performance of the medical division

			Three months
		Change	Net of currency
2024	2023	in %	effects in %

Order intake	€ million
thereof Germany 1	€ million
Net sales	€ million
thereof Germany 1	€ million
EBITDA 2	€ million
EBIT 3	€ million
EBIT 3/ net sales 4	%
Capital employed 5, 6	€ million
EBIT 3, 7/ Capital employed 5, 6 (ROCE) 4	%
DVA 7, 8	€ million

453.7		465.3		-2.5		-1.9
108.2		107.1		+1.0		+1.0
417.4		469.9		-11.2		-10.4
94.8		94.3		+0.6		+0.6
4.3		26.3		-83.5
-11.2		10.2		> -100
-2.7		2.2		-4.9 pp
858.2		916.3		-6.3
1.8		-5.5		+7.3 pp
-65.2		-114.7		+43.2

1. Due to the new regional structure, prior-year figures have been adjusted.
2. EBITDA = Earnings before net interest result, income taxes, depreciation and amortization
3. EBIT = Earnings before net interest result and income taxes
4. pp = Percentage points
5. Capital employed = Total assets less deferred tax assets, securities, cash and cash equivalents, non-interest bearing liabilities and other non-operating items
6. Value as at reporting date
7. Value of the last twelve months
8. Dräger Value Added = EBIT less cost of capital of average invested capital

Order intake

Order intake 1

								Three months
						Change		Net of currency
in € million	2024	2023		in %		effects in %
Germany		108.2		107.1		+1.0		+1.0
Europe, Middle East, and Africa		159.4		148.3		+7.5		+7.5
Americas		106.9		88.4		+20.9		+18.9
Asia-Pacific		79.2		121.5		-34.8		-31.1
Total		453.7		465.3		-2.5		-1.9

1 Due to the new regional structure, prior-year figures have been adjusted partially.

Our order intake in the medical division during the first quarter of 2024 was just under 2% lower year on year (net of currency effects). Increased demand for devices in the areas of thermoregulation, patient monitoring, and anesthesia was offset by a decline in demand for ventilators, hospital infrastructure, consumables, and services.

In Germany, order intake during the first quarter was slightly higher than in the same period of the prior year (net of currency effects). The Europe, Middle East, and Africa region, and the Americas region recorded significant growth. In the Asia-Pacific region, order intake fell significantly, partly due to the high demand for ventilators in the same quarter of the prior year.

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Quarterly Statement Dräger Group Q1 2024 Business performance of the medical division

Net sales

Net sales 1

								Three months
						Change		Net of currency
in € million	2024	2023		in %		effects in %
Germany		94.8		94.3		+0.6		+0.6
Europe, Middle East, and Africa		152.4		151.2		+0.8		+0.7
Americas		100.9		107.1		-5.9		-6.7
Asia-Pacific		69.4		117.3		-40.8		-37.0
Total		417.4		469.9		-11.2		-10.4

1 Due to the new regional structure, prior-year figures have been adjusted partially.

Our net sales in the medical division during the first quarter of 2024 were 10.4% lower year on year (net of currency effects). This was attributable in particular to a significant decrease in net sales in the Asia-Pacific region, which, as expected, was primarily due to the lack of a renewed wave of demand for ventilators in China. In the same period of the prior year, the segment had benefited from catch-up effects as a result of the noticeable improvement in delivery capability. The Americas region also recorded a decrease in net sales in the first quarter of 2024. In the Germany and the Europe, Middle East, and Africa regions, however, net sales were just above the prior-year level (net of currency effects).

Earnings

Our gross profit in the medical division in the first quarter of 2024 was 13.8% lower than the prior-year figure. This was due to the significant decrease in net sales and the gross margin, which fell by 1.3 percentage points as a result of a less profitable product mix and lower production utilization.

Functional expenses were down by 3.2% (net of currency effects) year on year (3.8% in nominal terms) in the first quarter of 2024. This was mainly due to lower expenses for research and development and lower logistics expenses.

EBIT in the medical division stood at EUR -11.2 million in the first quarter of 2024, and was significantly lower than the prior-year figure (3 months 2023: EUR 10.2 million). The EBIT margin fell from 2.2 to -2.7%.

Dräger Value Added (DVA) increased by EUR 49.5 million to EUR -65.2 million year on year to March 31, 2024 (12 months to March 31, 2023: EUR -114.7 million). Our rolling EBIT increased by EUR 65.7 million compared to the prior year. The cost of capital rose by EUR 16.2 million due to the increase in the WACC from 7.0 to 9.0%, although capital employed decreased.

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Quarterly Statement Dräger Group Q1 2024 Business performance of the safety division

Business performance of the safety division

Business performance of the safety division

Order intake	€ million
thereof Germany 1	€ million
Net sales	€ million
thereof Germany 1	€ million
EBITDA 2	€ million
EBIT 3	€ million
EBIT 3/ net sales 4	%
Capital employed 5, 6	€ million
EBIT 3, 7/ Capital employed 5, 6 (ROCE) 4	%
DVA 7, 8	€ million

						Three months
				Change		Net of currency
2024	2023		in %		effects in %
357.2		338.4		+5.5		+6.1
104.0		93.7		+11.0		+11.0
318.4		291.2		+9.3		+10.0
75.2		68.1		+10.4		+10.4
43.3		37.7		+14.9
26.3		18.8		+39.5
8.3		6.5		+1.8 pp
668.4		652.9		2.4
20.5		3.9		+16.5 pp
76.1		-20.2		> +100

1. Due to the new regional structure, prior-year figures have been adjusted.
2. EBITDA = Earnings before net interest result, income taxes, depreciation and amortization
3. EBIT = Earnings before net interest result and income taxes
4. pp = Percentage points
5. Capital employed = Total assets less deferred tax assets, securities, cash and cash equivalents, non-interest bearing liabilities and other non-operating items
6. Value as at reporting date
7. Value of the last twelve months
8. Dräger Value Added = EBIT less cost of capital of average invested capital

Order intake

Order intake 1

								Three months
						Change		Net of currency
in € million	2024	2023		in %		effects in %
Germany		104.0		93.7		+11.0		+11.0
Europe, Middle East, and Africa		152.6		140.4		+8.6		+8.3
Americas		53.5		54.9		-2.6		-2.2
Asia-Pacific		47.1		49.4		-4.5		-0.1
Total		357.2		338.4		+5.5		+6.1

1 Due to the new regional structure, prior-year figures have been adjusted partially.

Our order intake in the safety division rose by more than six percent in the first quarter of 2024 (net of currency effects). Occupational health and safety equipment, respiratory and personal protection products, as well as alcohol and drug testing devices were particular growth drivers. Demand for gas detection devices, engineered solutions, and services declined.

Demand increased significantly in the Germany and Europe, Middle East, and Africa regions. In the Americas and Asia-Pacific regions, it was slightly below the prior-year level.

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Quarterly Statement Dräger Group Q1 2024 Business performance of the safety division

Net sales

Net sales 1

								Three months
						Change		Net of currency
in € million	2024	2023		in %		effects in %
Germany		75.2		68.1		+10.4		+10.4
Europe, Middle East, and Africa		149.4		130.0		+14.9		+14.8
Americas		55.7		53.0		+5.0		+5.4
Asia-Pacific		38.2		40.2		-5.0		-0.3
Total		318.4		291.2		+9.3		+10.0

1 Due to the new regional structure, prior-year figures have been adjusted partially.

Our net sales in the safety division increased by 10% in the first quarter of 2024 (net of currency effects), in particular due to the good order situation. Growth was driven by the regions of Europe, Middle East, and Africa, as well as Germany, both of which recorded significant growth. The Americas region also recorded an increase. Net sales in the Asia-Pacific region were slightly below the prior-year level (net of currency effects).

Earnings

Our gross profit in the safety division increased significantly by 14.5% in the first quarter of 2024. This was due to strong net sales growth and the improved gross margin, which increased by 2.2 percentage points, mainly as a result of high production utilization.

Functional expenses were up 10.5% year on year (net of currency effects) in the first quarter of 2024 (10.1% in nominal terms), in particular due to higher expenses in our sales subsidiaries.

EBIT in the safety division stood at EUR 26.3 million in the first quarter of 2024, and was significantly higher than the same period of the prior year (3 months 2023: EUR 18.8 million). The EBIT margin improved by 1.8 percentage points to 8.3%.

Dräger Value Added (DVA) increased by EUR 96.2 million to EUR 76.1 million year on year to March 31, 2024 (12 months to March 31, 2023: EUR -20.2 million). Our rolling EBIT increased by EUR 111.2 million year on year, while the cost of capital rose by EUR 15.0 million to EUR 60.7 million (March 31, 2023: EUR 45.8 million) due to the increase in the WACC from 7.0 to 9.0% and a slight increase in capital employed.