„Draegerwerk with reserved forecast“

Last Updated: 18. Januar 2024By

Investors reacted indecisively to the news reported by Dr├Ągerwerk. Positive: According to preliminary calculations, the medical and safety group was able to exceed the previously raised revenue and earnings targets in the past fiscal year. Negative: The 2024 forecast could have been better.

Dr├Ągerwerk – a family-owned company with tradition…. Before I delve into the current figures and forecast, I would like to introduce the company Dr├Ągerwerk to you in detail. The company from L├╝beck is a real traditional company, founded in 1889 and has been mainly family-owned (>71% of shares) for five generations.

… and a wide range of products. Dr├Ągerwerk has been developing, producing and distributing devices and systems in the fields of medical and safety technology. The company’s customers include hospitals, fire departments, rescue services, authorities, the military, mining and industry.

The range of products offered is extremely diverse: Products include anesthesia workstations, ventilators, patient monitoring, and devices for the care of newborns and specifically preterm babies. In addition, the company also offers IT solutions for the operating room and gas management systems, providing comprehensive equipment for hospitals.

In the safety sector, the company serves its customers with respiratory protective equipment, gas measurement systems, diving technology, or alcohol and drug testing devices.

Dr├Ągerwerk on a growth path: better than expected in 2024. In the past year, according to preliminary calculations, Dr├Ągerwerk was able to continue growing. This was also due to significantly fewer supply chain problems. At the beginning of the year, the group also benefited from the surge in demand for ventilators in China. In terms of earnings, the successful cost management also had a positive effect.

Accordingly, revenue increased by 10.8% to 3.37 billion euros. Adjusted for currency effects, there was even an increase of 13.2%. The medical technology segment, which accounts for 58% of revenues, showed a revenue growth of 8% to 1.96 billion euros. In the safety technology segment, revenues increased by 15% to around 1.40 billion euros.

Meanwhile, earnings before interest and taxes (EBIT) improved to around 167 million euros, compared to -88.6 million euros in the previous year.

Weaker growth expected. For the current fiscal year 2024, management expects a currency-adjusted increase in revenue of 1% to 5%. However, only a slight increase in earnings before interest and taxes (EBIT) is expected. The target range for the EBIT margin is currently 2.5% to 5.5% (2023: 4.9%). Investors reacted cautiously to the new forecast. There was also positive news about the dividend: Due to the higher profitability and a strong equity ratio of well over 40%, a significant increase in the dividend is planned ÔÇô around 30% of the group’s annual surplus is to be distributed.

On the news, Dr├Ąger’s share price remained almost unchanged and was trading at 52.60 euros in yesterday’s afternoon trading, around 50% below the record set during the peak of the corona pandemic on March 30, 2001 (102.80 euros).

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