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© Drägerwerk AG & Co. KGaA, 2020
Capital Markets PresentationDrägerwerk AG & Co. KGaA
August 2020, Lübeck
© Drägerwerk AG & Co. KGaA, 2020
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 and preliminaries are not audited.
© Drägerwerk AG & Co. KGaA, 2020
COVID-19:Strong demandmirrors theinfection trail
Worldwide demand for safetyequipment and ventilatorsincreased drastically with thespread of the coronavirus.
Development of the worldwide infection rate 2020
22.1.
3.2.
4.3.
3.4.
3.5.
27.5.8 M
6 M
4 M
0
2 M
© Drägerwerk AG & Co. KGaA, 2020
Ventilator production
With our modern production site in Lübeck, Dräger is able to massively increase the production of ventilators.
© Drägerwerk AG & Co. KGaA, 2020
Mask production
Production sites in Sweden and South Africa run around the clock.
In order to fulfill the large orderdemand, new production sites arebeing built in the United States, France and the United Kingdom.
© Drägerwerk AG & Co. KGaA, 2020
Frontline servicein the hospital
Even in the center of the storm, Dräger devices must be serviced to ensure their proper function. The Dräger service technicians continue to be on site in the hospitals.
© Drägerwerk AG & Co. KGaA, 2020 7
Outlook
DrägerThe Company
Financials
© Drägerwerk AG & Co. KGaA, 2020 8
protectDräger products
supportsave
lives,
and
Drägerwerk AG & Co. KGaA 9
2.500
3.000
1.000
2.000
1.500
500
0
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
Source: International Monetary Fund, World Economic Outlook Database
Debtcrisis
Financial crisis
Stock-marketcrash Russian
financialcrisis
Mexican pesocrisis
Stock-marketcrash
Dräger net sales in EUR million World gross domestic product
Net sales developmentStrong growth independent of the global economy
© Drägerwerk AG & Co. KGaA, 2020 10
HeadquartersProduction sitesLogistics centersSales and service sites
Dräger worldwidenet sales, employees and sites
Europe
Africa, Asia, Australia
Americas
© Drägerwerk AG & Co. KGaA, 2020
MarketsOur Customers
11
Fire services Oil and gas industry
Mining Chemical industry
Hospital
Other markets
© Drägerwerk AG & Co. KGaA, 2020
Medical division
12
▪ 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
© Drägerwerk AG & Co. KGaA, 2020
Safety division
13
Breathing Systems
Gas Detection Systems
Personal Protection Equipment
Impairment Check Equipment
Engineered Solutions
Service
▪ Fixed and mobile gas detection systems
▪ #1 worldwide and #1 in Europe
▪ Alcohol- and drug screeningdevices
▪ Interlock devices
▪ #1 worldwide and #1 in Europe
▪ Protection equipment for hazardous working environments
▪ Body and Head protection, rescue and escape devices, Masks and Filters, etc.
▪ Self-contained BreathingAppartus for fire fighters
▪ #2 worldwide and #1 in Europe
▪ 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
✓
✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓
✓
✓ ✓ ✓ ✓ ✓
© Drägerwerk AG & Co. KGaA, 2020
Medical and safety technology providing long-term growth prospects
14
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
© Drägerwerk AG & Co. KGaA, 2020
Strategy for profitable growth
15
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
© Drägerwerk AG & Co. KGaA, 2020
Technology and innovation leadership to drive profitable growth
16
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.
*No meaningful capitalization of R&D budget
Atlan®
New anesthesia family with network
connectivity supporting SDC and new user
interface.
X-PID 9000®
First portable gas chromatograph for
mobile measuring ofcarcinogenicsubstances in
laboratory quality.
Evita® V800
Modern ventilatorcombining high
performance ventilationand user friendly
operation.
© Drägerwerk AG & Co. KGaA, 2020
Exploit growth potentials in developing countries
17
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
© Drägerwerk AG & Co. KGaA, 2020
Service- and consumables business a clear focus of our sales activities
18
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
© Drägerwerk AG & Co. KGaA, 2020
Investments will support future growth…
19
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:
© Drägerwerk AG & Co. KGaA, 2020 20
Financials
© Drägerwerk AG & Co. KGaA, 2020
Strong demand due to COVID-19Business development 2020
Order entry half-year* Net sales half-year* EBIT 1. half-year*
* In EUR million
1,320
2,291
2019 2020
+75.7% fx (adj.)73.5% nominal
1,236 1,428
2019 2020
+17.1% fx (adj.)15.6% nominal
-12
102
7.1%EBIT-margin
-1.0%EBIT-margin
2019
2020
21
© Drägerwerk AG & Co. KGaA, 2020
Business developmentDräger Group 5y view
22
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
© Drägerwerk AG & Co. KGaA, 2020
Key figuresDräger Group 5y view
23
Note: Investments 2015 include EUR ~60m for M&A
© Drägerwerk AG & Co. KGaA, 2020 24
Outlook
© Drägerwerk AG & Co. KGaA, 2020
Guidance 2020
25
EXPECTATIONS FOR FISCAL YEAR 2020
2019 2020e
Net sales5.9%
(net of currency effects)
14.0 - 22.0 %
(net of currency effects)
EBIT margin 2.4% 7.0 - 11.0 %1
Dräger Value Added EUR -32.7 million EUR 110 - 260 million
1 Based on exchange rates at the start of fiscal year 2020
© Drägerwerk AG & Co. KGaA, 2020
Expectation for fiscal year 2020
27
+
© Drägerwerk AG & Co. KGaA, 2020
Dräger Management
28
At Dräger since 2015
Chairman of the Executive Board CEO
At Dräger since 1992
At Dräger since 2008
At Dräger since 2015
Stefan Dräger
Vice Chairman of the Executive BoardCFO
Gert-Hartwig Lescow
Board member Safety division
Rainer Klug Dr. Reiner Piske
Board member Sales and HR
At Dräger since 2010
Board member Medical division
Anton Schrofner
© Drägerwerk AG & Co. KGaA, 2020
4.3%
67,2%
28.5%
Members of the Dräger family
Dr. Heinrich Dräger GmbH
Free float
Shareholder structure
29
ShareholdingCommon shares
10,160,000 common shares (28.5 % free float)8,600,000 preferred shares (99.0 % free float)
ShareholdingDr. Heinrich Dräger GmbH
17.6%
59.2%
23,2%
Successors of Dr. Heinrich Dräger
Stefan Dräger GmbH
Dräger Foundation
© Drägerwerk AG & Co. KGaA, 2020
IFRS 16 impact
30
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
© Drägerwerk AG & Co. KGaA, 2020
Business developmentDräger Group – 5 year view
31
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
© Drägerwerk AG & Co. KGaA, 2020
Business developmentGroup / Division / Region
32
© Drägerwerk AG & Co. KGaA, 2020
Key figuresDräger Group – 5 year view
33
© Drägerwerk AG & Co. KGaA, 2020
Business developmentMedical 6M - 5 year view
34
Note: The data, including the quarterly figures, can be downloaded from the Dräger website in .xls-format
© Drägerwerk AG & Co. KGaA, 2020
Business developmentSafety 6M - 5 year view
35
Note: The data, including the quarterly figures, can be downloaded from the Dräger website in .xls-format
© Drägerwerk AG & Co. KGaA, 2020
Functional expensesGroup 5 year view
36
© Drägerwerk AG & Co. KGaA, 2020
Cash flow statementGroup 5 year view
37
© Drägerwerk AG & Co. KGaA, 2020
Balance sheet
38
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
© Drägerwerk AG & Co. KGaA, 2020
Balance sheet
39
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
© Drägerwerk AG & Co. KGaA, 2020
Earnings per share
40
+
=
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
© Drägerwerk AG & Co. KGaA, 2020
Adjustment of capital structureTermination of participation certificates (PC)
41
March:− Termination of participation certificate series D
− # 566,819 pieces at EUR/PC 546.20− Buyback value EUR 310 million, due Jan. 2023
April:− Termination of participation certificate series A
− # 195,245 pieces at EUR/PC 596.00− Buyback value EUR 116 million, due Jan. 2021
− Termination of participation certificate series K− # 69,887 pieces at EUR/PC 596.00− Buyback value EUR 42 million, due Jan. 2021
− Equity increase− # 1,000,000 preferred shares− Priced at EUR 76.50− Gross proceeds of EUR 76.5 million
Equity ratio 30%(June 30 2020 after termination of participation certificates and equity increase)
Net debt/ EBITDA 1.6(June 30 2020 after termination of participation certificates and equity increase)
EPS + ~27%(pro forma as at Dec. 2019, with assumed full dividend payout and including dilution
due to equity increase)
© Drägerwerk AG & Co. KGaA, 2020
Innovation share
42
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%
© Drägerwerk AG & Co. KGaA, 2020
Financial calendar
43
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
© Drägerwerk AG & Co. KGaA, 2020
Contact
44