Q3 2024 Draegerwerk AG & Co KGaA Earnings Call Transcript
Key Points
- Draegerwerk AG & Co KGaA (DGWPF) reported a slight increase in order intake to EUR2.4 billion, driven by growth in Germany and positive developments in EMEA and America.
- The safety division outperformed the medical division, contributing to an increase in the group's gross profit margin by 0.4 percentage points to 44.4%.
- The company achieved a significant improvement in operating cash flow and free cash flow, with net financial debt further improved during the quarter.
- The safety division saw a significant increase in order intake by roughly 12% in Q3, with strong demand in occupational health and safety equipment.
- The company's equity position improved, with an equity ratio of almost 48% as of September 30, 2024.
- The medical division faced challenges, particularly in China, leading to a decrease in order intake by around 2% and a decline in net sales by around 5% in the first nine months.
- The EBIT margin for the medical division decreased from 0.1% to minus 0.9% in Q3, with a year-to-date EBIT of minus EUR28 million.
- The company is still awaiting a response from the FDA regarding a reinspection of their site in Andover, which could impact future operations.
- Currency effects and higher expenses from inventory adjustments negatively impacted the medical division's profitability.
- The company faced challenges in the APAC region, with reduced demand for ventilators in China and a challenging market environment affecting all western med-tech suppliers.
Good afternoon and thank you for joining our conference call on our financial results for the first nine months of 2024. I have with me Gert-Hartwig Lescow, Group CFO; as well as Thomas Fischler and Nikolaus Hammerschmidt, both Investor Relations. We would like to take you through the results with the presentation that we made available on our web page this morning.
Following the presentation, we will open the floor to your questions. Let's get started on page 5 with the business. In the first nine months of 2024, we successfully paved the way to our annual targets with continued good demand, robust net sales and higher earnings. At EUR2.4 billion, our intake slightly surpassed the high level of the prior year period.
Net sales at EUR2.3 billion, almost reached the high prior year figure which at that time was positively influenced by an improvement in delivery capacity and a surge in demand for ventilators in China. Both in terms of orders and sales, we are able to grow in all regions except APAC.
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