CAPITAL MARKETS PRESENTATION DRÄGERWERK AG & CO. KGAA - AUGUST 2020, LÜBECK - DRAEGER
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Capital Markets Presentation
Drägerwerk AG & Co. KGaA
August 2020, Lübeck
© Drägerwerk AG & Co. KGaA, 2020
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 and preliminaries are not audited.
© Drägerwerk AG & Co. KGaA, 2020 2
COVID-19: Development of the worldwide infection rate
2020
Strong demand 8M
6M
27.5.
mirrors the 4M
3.5.
infection trail
2M 3.4.
3.2.
0
22.1. 4.3.
Worldwide demand for safety
equipment and ventilators
increased drastically with the
spread of the coronavirus.
© 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 order
demand, new production sites are
being built in the United States, France
and the United Kingdom.
© Drägerwerk AG & Co. KGaA, 2020
Frontline service
in 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
Dräger
The Company
Financials
Outlook
© Drägerwerk AG & Co. KGaA, 2020 7
Dräger products
protect, lives
support and
save
© Drägerwerk AG & Co. KGaA, 2020 8
Net sales development
Strong growth independent of the global economy
Financial Debt
3.000 crisis crisis
2.500
Stock-
2.000 market
Russian crash
Mexican financial
1.500 Stock- peso crisis
market crisis
1.000 crash
500
0
2011
1984
1985
2010
2012
2013
2016
2017
2018
2019
1987
2014
2015
1988
1998
2000
1983
1986
1989
1990
1992
1993
1999
2001
2002
2003
2006
2007
2008
2009
1991
1994
1995
1996
1997
2004
2005
Source: International Monetary Fund, World Economic Outlook Database
Dräger net sales in EUR million World gross domestic product
Drägerwerk AG & Co. KGaA 9
Dräger worldwide
net sales, employees and sites
Headquarters
Production sites Europe
Logistics centers
Sales and service sites Africa, Asia, Australia
Americas
© Drägerwerk AG & Co. KGaA, 2020 10Markets
Our Customers
Hospital Fire services Oil and gas industry
Mining Chemical industry Other markets
© Drägerwerk AG & Co. KGaA, 2020 11Medical division
Hospital wide
Intensive Care Operating Room Neonatal Care
Solutions
Anaesthesiology
▪ Anaesthesia workstations Patient Monitoring &
Clinical IT
and vaporizers
▪ #1 in Europe and
✓ ✓
#2 in the US market ▪ Infinity Acute Care System
▪ Clincal software solutions
▪ Telemetry and IT-solutions
Ventilation
✓ ✓ ✓ ✓
▪ Emergency & Transport-, Workplace Infrastructure
Neonatal- and Intensive
Care ventilators ✓ ✓ ▪ Medical supply units
▪ Respiratory monitoring ▪ Medical Gas supply systems
▪ #1 in Europe ▪ Medical lights and video
Thermoregulation ✓ ✓ ✓ ✓ solutions
▪ Incubators and
Warming Therapy Hospital Consumables & Service
▪ #2 worldwide and
#1 in Europe
✓ ▪ Consumables and
accessories
▪ Classical-, Multivendor
product service, Professional
✓ ✓ ✓ ✓ Service
▪ Training
Note: Market positions based on Dräger‘s market knowledge and its own assessment of market position; positions ranked according to net sales.
© Drägerwerk AG & Co. KGaA, 2020 12Safety division
Fire Service Oil & Gas Chemical Mining Other Markets
Breathing Systems
▪ Self-contained Breathing Impairment Check Equipment
Appartus for fire fighters
▪ #2 worldwide and
✓ ✓ ✓ ✓ ✓ ▪ Alcohol- and drug screening
#1 in Europe devices
▪ Interlock devices
Gas Detection Systems
✓ ▪ #1 worldwide and
#1 in Europe
▪ Fixed and mobile gas Engineered Solutions
detection systems
▪ #1 worldwide and
✓ ✓ ✓ ✓ ✓ ▪ Customer specific
solutions
#1 in Europe ▪ mobile and stationary
firefighting training systems
Personal Protection Equipment ✓ ✓ ✓ ✓ ✓ ▪ Rescue chambers
▪ Protection equipment for
hazardous working environments
Service
▪ Body and Head protection, rescue
and escape devices, Masks and
✓ ✓ ✓ ✓ ✓ ▪ Spareparts and consumables
▪ Product Service
Filters, etc.
▪ 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.
© Drägerwerk AG & Co. KGaA, 2020 13Medical and safety technology providing
long-term growth prospects
Hospital Oil & Gas Chemical Mining Fire Service
Attractive ▪ Average expected annual market growth for ▪ Very diversified markets with numerous
growth the global medical equipment market product and service offerings
significantly exceeding growth in many other
prospects sectors ▪ Attractive growth prospects for target
in sizeable sectors (e.g. industry) and growing safety
markets … ▪ Strong growth prospects in both developed investments
and emerging markets
… in ▪ Rapidly aging population and consequently ▪ Increasingly stricter safety regulations
developed increasing healthcare expenditure ▪ Rising environmental awareness
markets… ▪ Increasing demand for medical equipment to ▪ Improved outlook for target markets
improve clinical workflows and efficiency
▪ Strong growth of GDP and population
… as well resulting in a demand for improved medical ▪ Increasingly higher safety standards
as in services ▪ Increasing industrial hygiene awareness
emerging ▪ Political benefits from investments in health ▪ Strong growth of key customer sectors
markets care sector
© Drägerwerk AG & Co. KGaA, 2020 14Strategy for profitable growth
Management of innovation rate
1
through continuous improvements in quality and R&D processes
Expansion of market positions in attractive markets.
2
Special focus on profitable growth in developing countries
3 Expansion of service and consumables business
4 Investments for future growth
© Drägerwerk AG & Co. KGaA, 2020 15Technology and innovation leadership to
drive profitable growth
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 headquarter
supports innovation- and approval process.
▪ Qualitymanagement organization with >100
employees. X-PID 9000® Atlan®
Evita® V800
▪ Very close collaboration with customers to develop Modern ventilator First portable gas New anesthesia family
new and improve existing products. combining high chromatograph for with network
performance ventilation mobile measuring of connectivity supporting
▪ Technological competency and high quality and user friendly carcinogenic SDC and new user
standards result in leading market positions and operation. substances in interface.
high barriers to entry. laboratory quality.
*No meaningful capitalization of R&D budget
© Drägerwerk AG & Co. KGaA, 2020 16Exploit growth potentials in developing
countries
▪ Focus on the specific needs of customer in developing countries
Investments in ▪ Identify growth potential in strong growing markets like China, Brazil and India
profitable growth ▪ Capitalize on the significant investments into the Sales & Service infrastructure and specific
2
in developing market knowledge, especially in our Region AAA and in Central- and South-America
countries
▪ Enhance engagement with partners in developing countries to expand local presence with R&D,
manufacturing, sales and after sales business
Net sales
Newly industrialized Focused product range
countries
24 %
Developed Savina Color Vista 120 Fabius Plus XL
Markets
76 %
© Drägerwerk AG & Co. KGaA, 2020 17Service- and consumables business a
clear focus of our sales activities
Further expansion ▪ Capitalize on large installed base to expand after sales business
of service and
3 consumables ▪ Focus on combined sale of equipment and after sales contracts
business ▪ Expansion of disposable consumables business
Dräger Services Dräger Consumables
▪ Globally over 3,000 service technicians ▪ Functionalities with added value, e.g. optimizing workflow with RFID-
based communication between consumables part and therapy
▪ Fast and reliable service (repairs and spare parts) is a critical factor
machine
for customers
▪ Dräger quality to improve hygienic standards
▪ Dräger Service technicians important for customer loyalty
▪ Dräger value add especially in development of consumables.
▪ Efficient service solutions via remote service
Production usually via suppliers
▪ Broad offerings of product service
▪ Partly proprietary consumable products, e.g. Dräger-Tubes
▪ New services in the areas of Rental, Multi-Vendor and Marine-
offshore
© Drägerwerk AG & Co. KGaA, 2020
18Investments will support future growth…
WE ARE INVESTING: WE ARE RESTRUCTURING:
▪ Strengthening Safety sales
channels ▪ New organizational set-up and business steering according
Sales to Medical and Safety:
▪ FGDS System Centers
resources
▪ Key Account Management ▪ Introduction of business units with full product and
&
customer accountability.
-capabilities ▪ Digital distribution channels
▪ Global roll out of Future ▪ Business units are combined within a Medical division
Technician Workplace and a Safety division, each managed by a dedicated
board member.
▪ More R&D resources (focus on ▪ Financial reporting according to the new divisional
SW-development) structure Medical and Safety.
R&D (as of FY 2020)
▪ Partnership with external
roadmap ▪ One dedicated board member responsible for the global
development partners
sales organization.
▪ Accelerate EM product portfolio
© Drägerwerk AG & Co. KGaA, 2020 19Financials © Drägerwerk AG & Co. KGaA, 2020 20
Strong demand due to COVID-19
Business development 2020
Order entry half-year* Net sales half-year* EBIT 1. half-year*
+75.7% fx (adj.) +17.1% fx (adj.) -1.0% 7.1%
73.5% nominal 15.6% nominal EBIT- EBIT-
margin margin
2,291 1,428 102
1,236
1,320
2019 2020 2019 2020 2020
-12
2019
* In EUR million
© Drägerwerk AG & Co. KGaA, 2020 21Business development
Dräger Group 5y view
Note: Restructuring charges included in FY EBIT: EUR 35 million in 2015, EUR 10 million in 2016
Dräger Value Added (DVA) = EBIT less cost of capital of average invested capital
© Drägerwerk AG & Co. KGaA, 2020 22Key figures
Dräger Group 5y view
Note: Investments 2015 include EUR ~60m for M&A
© Drägerwerk AG & Co. KGaA, 2020 23Outlook © Drägerwerk AG & Co. KGaA, 2020 24
Guidance 2020
EXPECTATIONS FOR FISCAL YEAR 2020
2019 2020e
5.9% 14.0 - 22.0 %
Net sales
(net of currency effects) (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 25Expectation for fiscal year 2020
+
© Drägerwerk AG & Co. KGaA, 2020 27Dräger Management
Stefan Dräger Gert-Hartwig Lescow Rainer Klug Dr. Reiner Piske Anton Schrofner
Chairman of the Vice Chairman of the Board member Board member Sales Board member
Executive Board Executive Board Safety division and HR Medical division
CEO CFO
At Dräger since At Dräger since At Dräger since At Dräger since At Dräger since
1992 2008 2015 2015 2010
© Drägerwerk AG & Co. KGaA, 2020 28Shareholder structure
10,160,000 common shares (28.5 % free float)
8,600,000 preferred shares (99.0 % free float)
Shareholding Shareholding
Common shares Dr. Heinrich Dräger GmbH
4.3%
17.6%
28.5% 23,2%
67,2%
59.2%
Members of the Dräger family Successors of Dr. Heinrich Dräger
Dr. Heinrich Dräger GmbH Stefan Dräger GmbH
Free float Dräger Foundation
© Drägerwerk AG & Co. KGaA, 2020 29IFRS 16 impact
Increase / Improvement as of
in € million 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 30Business development
Dräger Group – 5 year view
Note: Restructuring charges included in FY EBIT: EUR 35 million in 2015, EUR 10 million in 2016
Dräger Value Added (DVA) = EBIT less cost of capital of average invested capital
© Drägerwerk AG & Co. KGaA, 2020 31Business development
Group / Division / Region
© Drägerwerk AG & Co. KGaA, 2020 32Key figures
Dräger Group – 5 year view
© Drägerwerk AG & Co. KGaA, 2020 33Business development
Medical 6M - 5 year view
Note: The data, including the quarterly figures, can be downloaded from the Dräger website in .xls-format
© Drägerwerk AG & Co. KGaA, 2020 34Business development
Safety 6M - 5 year view
Note: The data, including the quarterly figures, can be downloaded from the Dräger website in .xls-format
© Drägerwerk AG & Co. KGaA, 2020 35Functional expenses
Group 5 year view
© Drägerwerk AG & Co. KGaA, 2020 36Cash flow statement
Group 5 year view
© Drägerwerk AG & Co. KGaA, 2020 37Balance sheet
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 38Balance sheet
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 39Earnings per share
2 017 2 018 2 019
Net profit '000 € 98,530 34,355 33,350
(less the share of earnings attributable to non-controlling interests)
+
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
PCs = participation certificates (Genussscheine)
** without minimum dividend (as interest, the mimimum dividend is already included in net earnings)
© Drägerwerk AG & Co. KGaA, 2020 40
*** the EPS is not calculated in accordance with IAS 33Adjustment of capital structure
Termination of participation certificates (PC)
March:
− Termination of participation certificate series D
− # 566,819 pieces at EUR/PC 546.20
Equity ratio 30%
(June 30 2020 after termination of participation certificates and equity increase)
− Buyback value EUR 310 million, due Jan. 2023
April:
− Termination of participation certificate series A
− # 195,245 pieces at EUR/PC 596.00 Net debt/ EBITDA 1.6
(June 30 2020 after termination of participation certificates and equity increase)
− 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 EPS + ~27%
− # 1,000,000 preferred shares (pro forma as at Dec. 2019, with assumed full dividend payout and including dilution
due to equity increase)
− Priced at EUR 76.50
− Gross proceeds of EUR 76.5 million
© Drägerwerk AG & Co. KGaA, 2020 41Innovation share
Share on new products and upgrades medical1
Net sales
45%
Upgrades
New products
40%
35%
32%
28% 30%
30% 27%
25% 24%
22% 20%
20%
20% 25%
15% 21% 23%
10% 18%
5% 10%
7% 5% 5%
2% 3%
0%
2014 2015 2016 2017 2018 2019
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.
© Drägerwerk AG & Co. KGaA, 2020 42Financial calendar
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 figures
Conference 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 43Contact © Drägerwerk AG & Co. KGaA, 2020 44
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