worldwide. on site....africa, asia, australia europe americas net sales: eur 2.5 billion in 2016 70%...
TRANSCRIPT
Worldwide. On Site.
Drägerwerk AG & Co. KGaACapital Markets Presentation
May, 2017
Interim financial reports as well as preliminaries are not audited.
Disclaimer
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.
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.
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Outlook
DrägerThe Company
Financials
3
DrägerThe Company
4
protectDräger products
supportsave
lives,
and
.
5
Net sales developmentStrong growth independent of the global economy
Source: International Monetary Fund, World Economic Outlook Database
Net sales developmentDräger net sales in EUR million
Global gross domestic product
2,500
2,000
1,500
1,000
500
0
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Stock-market crash
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GulfWarGulfWarGulfWar
Mexican pesocrisis
Mexican pesocrisis
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Russianfinancial
crisis
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crisis
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crisis
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55%25%
20%
Africa, Asia, AustraliaEurope
Americas
Net Sales: EUR
2.5 billionin 2016
70%
16%
14%
13,263employees
in 2016
Dräger-Sites25%
11%
10%
55%
Sales & Service Production, Quality,Logistics, Purchasing
F&E Administration
Production sites inEurope, America, Africa und AsiaSales and Service organizations worldwide
Safety~35 %
Medical~65 %
Dräger worldwideNet sales, sites and employees
MarketsOur customers
Fire services Oil and gas industry
Mining Chemical industry
Hospital
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Other markets
9
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 Care Hospital wideSolutions
Note: Market position based on Dräger‘s market knowledge and its own assessment of market position; positions ranked according to net sales, for monitoring depending on market definition.
Anaesthesia workstations and vaporizers
#1 in Europe and #2 in the US market
Emergency & Transport-, Neonatal Care and Intensive Care ventilators
Respiratory monitoring #1 in Europe
Incubators and Warming Therapy
#2 worldwide and #1 in Europe
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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 drugscreening devices
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-containedBreathing Appartus forfire 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
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Medical and safety technology providing long-term growth prospects in developed and emerging markets
Hospital
Attractive growth prospects in sizeable markets …
… in Europe and the US …
… as well as in emerging markets
Oil&Gas Chemical Mining FireService
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
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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
FIT FOR GROWTH efficiency program
1
2
3
4
Strategy for profitable growth
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1
Strong R&D focus Innovation to enhance future growth (examples)
Approximately 1,300 employees in R&D around the globe.
EUR 219 million spent for R&D activities in 2016 (8.7 % of net sales).
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.
Technology and innovation leadership to drive profitable growth
Mview®
Integration of hand-held devices in thepatient monitoring
landscape ofhospitals.
Babyleo ®
Incuwarmer: combination of a
classical incubatorand warming bed
functionalities.
Regard® 7000
core controlling unitfor fixed gas
detection systems.
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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 Regions Asia / Pacific, Central- and South-America
Enhance engagement with partners in developing countries to expand local presence with R&D, manufacturing, sales and after sales business
2
Net sales 2016
Developed Markets
77 %
Newly industrialized
countries23 %
Focused product range
Exploit growth potentials in developing countries
Fabius Plus XLVista 120Savina Color
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Further expansion of service and
consumables business
3
Service- and consumables business a clear focus of our Sales activities
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
FIT FOR GROWTH Overview Initiatives
New governance model in Q1/16 implemented. 250 cost containment measures: ~70% of the measures implemented in 2016.
Remaining ~30% will be implemented in 2017. cost reduction net of FX and restructuring charges: -6.1% in 2016. Reduction of SGA ratio* to ~30% in 2017.
Improve SG&A expense ratio
SHAPE Optimize global Sales, Marketing & Administration set-up
Bring customer value faster to the market
Fit!
Improve workflow and delivery times
and reduce production cost
Global footprint
New Innovation organization implemented. Numerous changes in the innovation process (e.g. strengthen system and
platform based development, AGILE development, Dräger “Garage”, etc. ). Improve “Time to market” by 50% until 2019.
Optimize innovation set-up
New „Zukunftsfabrik“ in Lübeck (go-live in Q2/2016).
Transfer of production with high labor content to Czech Republic (completed).
Closure of Pittsburgh site (completed).
Optimize production set-up
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* at comparable FX rates Jan. 2016 and before possible on-off expenses for restructuring or similar
Financials
17
Business developmentDräger Group
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Note: restructuring charges included in FY EBIT: EUR 35 million in 2015, EUR 10 million in 2016; EUR 10 million (planned) in 2017
2013 Q1 2016 Q1 2017
€ million € million
Net Sales 532.4 535.0 % growth -2.4% 0.5%% growth (FX adjusted) 0.2% -1.1%
Gross Profit 223.4 240.4 Gross margin 42.0% 44.9%
Functional Expenses -239.1 -237.3 % of Net Sales -44.9% -44.4%
EBIT -15.7 2.3 EBIT Margin -2.9% 0.4%
Net Profit -13.6 -0.7
DVA -39.5 68.4
2015
€ million
2,608.9 7.2%2.9%
€ million
200.8 8.5%
119.9
113.9
-942.2 -39.7%
2,374.2 0.0%3.1%
1,147.6 48.3%
104.7
178.6
-39.7%
81.6
-967.8
7.3%
33.3
-46.3
-1,098.4 -42.1%
66.7 2.6%
81.7
49.8
2014
€ million
2,434.7 2.5%
2016
€ million
2,523.8 -3.3%-1.5%
1,134.5 45.0%
4.0%
1,138.0 46.7%
1,171.7 44.9%
-999.2 -39.6%
136.9 5.4%
Key figuresDräger Group
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Q1 2016 Q1 2017
€ million € million
Cashflow (from operating activities) 27.8
Investments 24.2 18.0
Cash and cash equivalents1 207.2 176.9
Net financial debt1 153.3 18.0 Net financial debt 1/EBITDA 2 1.14 0.07
Capital employed 1 1,248.2 1,218.6 ROCE (EBIT 2 /Capital employed 1 ) 4.0% 12.7%
Net Working Capital1 562.5 538.4
Headcount1 13,679 13,3521 Values as of reporting date2 EBITDA and accordingly EBIT of the last twelve months
10.4
13,936
39.9
196.9
172.8
145.3 0.96
13,334
110.0 0.4
1,052.9 19.1%
524.3
2013
€ million
68.3
110.6
232.1
16.1%
0.04
1,107.2
€ million
188.0
124.7
296.9
10.7
539.4
2015
€ million
13,737
2014
€ million
195.3
99.9
221.5
13,263
2016
1,269.3 5.3%
582.3
34.7 0.16
1,247.0 11.0%
563.2
Outlook
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Outlook
2016 2017e
Net Sales(net of currency effects)
- 1.5 % 0.0 % – 3.0 %
EBIT margin 5.4 % 5.0 % – 7.0 %*
Gross profit margin 45.0 % 44.0 – 46.0 %
Dräger Value Added EUR 49.8m EUR 40m – 90m
* based on exchange rates at the start of the year 2017
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Assumptions for FY 2017 Guidance Downside risk of strong market interruptions caused by rising political protectionism (new import taxes, cancellation of
international trade agreements) or caused by high level of uncertainty (e.g. repeal of Obamacare) not reflected in guidance. Demand improvement in AAA region and Europe (ex DACH). Continuously strong development in North America , but
increasing challenges in Central- and South America. Possibly softer development in DACH in light of strong 2016. FX effects of ~+1 pp on net sales. No support from FX on EBIT-margin.* Restructuring cost of EUR ~10 million (PY EUR 10 million).
Guiding philosophyWhat we stand for
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Dräger management
Fifth generation of the Dräger family to lead the company
Chairman of the Executive Board (Chief Executive Officer)
At Dräger since 1992
Stefan Dräger
Vice Chairman of the Executive BoardExecutive Board member for Finance and IT
At Dräger since 2008
Gert-Hartwig Lescow
Executive Board member for Purchasing, Production and Logistics
At Dräger since 2015
Rainer Klug Dr. Reiner Piske
Chief Human Resources Officer
At Dräger since 2015
Executive Board member for Innovation and Quality
At Dräger since 2010
Anton Schrofner
Responsible for the Americas region
Responsible for the Europe region
Responsible for the Africa, Asia and Australia regions
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Shareholder structure
ShareholdingCommon shares
67.2 %
28.8%
4.0%
Dr. Heinrich Dräger GmbHFree floatMembers of the Dräger family
10,160,000 common shares (28.8 % free float)7,600,000 preferred shares (100.0 % free float)
ShareholdingDr. Heinrich Dräger GmbH
Stefan Dräger GmbHDräger FoundationSuccessors of Dr. Heinrich Dräger
58.7%
23.2%
18.1%
Guidance 2017
26
2016 Forecast 2017
Net sales -1.5%(net of currency effects)
0.0 - 3.0%(net of currency effects)
EBIT margin 5.4% 5.0 - 7.0%1
Dräger Value Added EUR 49.8 million EUR 40 - 90 million
Other forecast figures:Gross margin 45.0% 44.0 - 46.0 %
Research and development costs EUR 219 million EUR 230 - 245 million
Interest result EUR -15.5 million EUR -13 to -17 million
Days wokring capital (DWC) 121.7 days Slight improvement
Investment volume EUR 99.9 million EUR 90 - 105 million
Net financial debt EUR 34.7 million Improvement
1 Based on exchange rates at the start of the year2 excluding company acquisitions
Business Development Segments
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2012 2013 2014 2015 2016SEGMENT EUROPEOrder Entry 1 € million 1,396.8 1,322.4 1,357.0 1,391.0 1,382.5Net Sales 1 € million 1,367.8 1,333.5 1,362.2 1,420.7 1,384.3EBIT € million 142.4 131.2 128.5 59.4 84.5EBIT margin % 10.4 9.8 9.4 4.2 6.1
SEGMENT AMERICAOrder Entry 1 € million 453.2 465.2 461.5 496.8 515.0Net Sales 1 € million 455.8 458.7 471.2 509.1 503.7EBIT € million 16.3 8.5 -0.4 -18.6 10.3EBIT margin % 3.6 1.8 -0.1 -3.7 2.0
SEGMENT AFRICA, ASIA, AUSTRALIAOrder Entry 1 € million 555.5 597.0 597.0 644.5 641.2Net Sales 1 € million 549.8 581.9 601.3 679.1 635.8EBIT € million 71.5 61.2 50.5 25.8 42.1EBIT margin % 13.0 10.5 8.4 3.8 6.6
1 years 2012–2014 were adjusted pro-forma due to the change in segment reporting.
For further analysis, this data (including quarterly figures) can be downloaded as an Excel file from the Dräger websiteAnmerkung: die Daten, inklusive der Quartalszahlen, können auf der Dräger Website im .xls-Format herunter geladen werdenAnmerkung: die Daten, inklusive der Quartalszahlen, können auf der Dräger Website im .xls-Format herunter geladen werden
Business Development medical and safety products
28
For further analysis, this data (including quarterly figures) can be downloaded as an Excel file from the Dräger website
2012 2013 2014 2015 2016
MedicalOrder Entry € million 1,558.9 1,559.3 1,569.8 1,646.0 1,662.6Net Sales € million 1,558.4 1,545.2 1,577.2 1,698.8 1,647.4
EBIT € million 151.0 126.1 107.6 46.2 85.3EBIT margin % 9.7 8.2 6.8 2.7 5.2
SafetyOrder Entry € million 846.5 825.3 845.7 886.2 876.1Net Sales € million 815.1 829.0 857.5 910.1 876.5EBIT € million 79.2 74.7 71.0 20.5 51.6EBIT margin % 9.7 9.0 8.3 2.2 5.9
Functional expenses
29
Q1 2016 Q1 2017
€ million € million
R&D -54.2 -56.0 % of Net Sales -10.2% -10.5%
SG&A -185.4 -182.9 % of Net Sales -34.8% -34.2%
Functional Expenses total -239.1 -237.3 % of Net Sales -44.9% -44.4%
Headcount1 13,679 13,3521 Values as of reporting date
13,334 13,737 13,936 13,263
-861.2 -33.0%
-1,098.4 -42.1%-39.7% -39.6%
-762.1 -30.2%
-999.2
-231.1 -8.9%
2015
€ million€ million
-201.5 -8.5%
-738.4 -31.1%
-942.2
2013
-212.0
-30.8%
-967.8 -39.7%
€ million
2014
-8.7%
-749.2
2016
€ million
-219.0 -8.7%
Cash-flow statement
30
Q1 2016 Q1 2017€ million € million
Group net profit 119.9 104.7 33.3 81.7 -0.7 -13.6
Change in inventories -36.5 -1.2 -5.4 17.4 -43.8 -19.1
Change in receivables -69.5 1.6 -44.6 31.3 113.7 102.4
Change in payables 6.4 25.2 -22.8 -10.2 -19.1 -46.8
Depreciation and amortization 69.0 77.0 84.2 85.8 20.4 19.7
Other operating cash flow item -31.1 -19.3 -4.8 -10.6 -42.7 -32.1
Operating cash flow 68.3 188.0 39.9 195.3 27.8 10.4
Investing cash flow -86.5 -102.6 -167.0 -77.3 -12.2 -17.4
Free cash flow -18.2 85.4 -127.1 118.1 15.6 -6.9
Financing cash flow -70.8 -26.3 -1.3 -70.0 -31.3 13.3
Change in cash1 -88.9 59.0 -128.4 48.1 -15.7 6.4
Cash and cash equivalents2 232.1 296.9 172.8 221.5 207.2 176.9 1 Change in cash and cash equivalents, i.e. without any effect of exchange rates2 Values as of reporting date
20152013 2014 2016€ million€ million € million € million
Consolidated balance sheet
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31 Dec 2015 31 Dec 2016 Change€ million € million %
Intangible Assets 351.8 347.6 -1.2 Property, plant and equipment 406.4 420.9 3.57Other noncurrent assets 149.0 150.1 0.73Noncurrent assets 907.2 918.6 1.26
Inventories 402.0 386.8 -3.79Trade receivables 711.3 681.7 -4.16Other current assets 114.8 103.8 -9.62Cash and cash equivalents 172.8 221.5 28.20Current assets 1,400.9 1,393.8 -0.51
Total assets 2,308.1 2,312.3 0.18
Consolidated balance sheet
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31 Dec 2015 31 Dec 2016 Change€ million € million %
Equity 945.9 1,003.5 6.09
Liabilities from participation certificates 21.8 22.7 4.17Provisions for pensions and similar oblig 288.1 318.3 10.47Noncurrent interest bearing loans 138.1 188.6 36.57Other noncurrent liabilities 97.8 108.6 11.00Noncurrent liabilities 545.9 638.2 16.92
Current Provisions 233.0 211.2 -9.35Current loans and liabilities to banks 169.7 57.0 -66.39Trade payables 186.4 179.8 -3.56Other current liabilities 230.5 222.6 -3.46Current liabilities 819.6 670.6 -18.18
Total equity and liabilities 2,311.4 2,312.3 0.04
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Innovation rate
Share on new products and upgrades medical division1
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 productsUpgrades
Net sales
20%
15% 23%
14%7%
20152011 20120%
5%
10%
15%
20%
25%
30%
35%
40%
45%
10%
27%
33%29%
28%
2013
6%
34%
22%
2014
10%
32%
18%
2%2016
20%
Earnings per share
34
2012 2013 2014 2015 2016Net profit in € thousand 135,680 119,895 104,666 33,288 81,736Earnings attributable to non‐controlling interests in € thousand 3,319 563 105 287 345
Szenario: 100% distribution:pay‐out ratio 100% 100% 100% 100% 100%Earnings attributable to participation certificates* in € thousand 35,523 31,917 27,686 8,530 20,537Earnings attributable to shareholders in € thousand 96,838 87,415 77,085 25,044 60,855
Earnings per common share € 5.84 5.24 4.52 1.40 3.40Earnings per preferred share € 5.90 5.30 4.58 1.46 3.46
Szenario: actual/proposed distributionpay‐out ratio 15.1% 15.1% 30.1% 10.9% 4.5%Earnings attributable to participation certificates* in € thousand 5,325 4,780 8,174 909 895Earnings attributable to shareholders in € thousand 127,036 114,553 96,598 32,665 80,496
Earnings per common share** € 7.67 6.88 5.67 1.83 4.51Earnings per preferred share** € 7.73 6.94 5.73 1.89 4.57
* excluding minimum dividend, after taxes** the EPS is not in accordance with IAS 33
March 8, 2017 - Accounts press conference, Lübeck- Analysts meeting
May 4, 2017 - Report for the first three months 2017 Conference call, Lübeck
May 10, 2017 - Annual shareholders' meeting, Lübeck
July 27, 2017 - Report for the first six months 2017 Conference call, Lübeck
November 2, 2017 - Report for the first nine months 2017 Conference call, Lübeck
Financial calendar 2017
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Melanie Kamann Thomas FischlerCorporate Communications Investor Relations
Drägerwerk AG & Co. KGaA Drägerwerk AG & Co. KGaAMoislinger Allee 53−55 Moislinger Allee 53−5523558 Lübeck, Germany 23558 Lübeck, Germany
Tel +49 451 882-3998 Tel +49 451 882-2685 Fax +49 451 882-3944 Fax +49 451 882-3296Mobile +49 170 8558152 Mobile +49 151 12245295
[email protected] [email protected] www.draeger.com
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