Drägerwerk AG & Co. KGaA

Ladies and gentlemen, welcome to the Q2 2025 earnings call. I am George, the course call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Stefan Drager, CEO. Please go ahead.

Yes, good afternoon, and thank you for joining our conference call and our financial results for the first half of 2025. And thank you all for your flexibility before rescheduling the course of one hour due to organizational reasons. Thank you. for being with us. I have with me today, Gerd Habeck-Lesko, CFO, as well as Tom Fischer and Nicola Thomas-Schmidt, both investor relations. We would like to take you through the results of the presentation that we made available on our webpage this morning. Following the presentation, we will open this floor to your questions. So let's get started on page five with the business highlights. stable net sales and a positive operating result, we achieved a solid business performance in the first half of 2025. At around 1.5 billion euro, net sales were nominally slightly below the prior year, but adjusted for currency effects, they slightly increased. On the other hand, Other than in the first half of 2024, growth was driven by the medical division instead of the safety department. Prices before interest and taxes could not keep up with net sales as our EBIT fell short of the prior year figure at just over 20 million euros. This was due particularly to the positive one-off effects in the prior year, which are now not repeated. As a reminder, last year we had divested a non-core business in the Netherlands and an unused lot of land totaling at around 20 million in one-off effects. Next to the space effects, currency effects, and custom duties had a negative impact on earnings. Considering the missing space effects and the surface furniture had been from currencies and tariffs, The earnings performance is actually quite good for our typical seasonality. In addition, the order intake makes us confident about the further course of our business for the remainder of the year. In the first six months, demand for our technology for life increased significantly to around 1.7 billion euros. Despite the difficult economic conditions caused by the U.S. customs policy, we were able to grow order intake in both divisions and all regions and even achieve the highest order intake in its first half year since the record half of 2020. This gives us a good foundation for accelerated net sales growth in the coming months. In addition to the good demand, we were able to improve our operating cash flow, which came back to positive territory at around 18 million euro after a minus 5 million in the prior year period. The performance of the bigger shares was successful as well. The price of our common shares rose by more than a third, and the price of our preferred shares by more than 40% in the first half of the year. The preferred shares, which are listed in the S DAX, are also included in the Tech DAX. This makes us even more visible to tech investors. Our goal remains improving profitability. In some cases, this might include the reduction of complexity. Therefore, I would like to share some news regarding our U.S. site, Hotel for Pennsylvania, and our new nail care business. Neonatal care is the smallest care area within the business unit therapy, and it operates with a rather complex setup. This operation is divided over two sites, in Germany and in Pennsylvania in the U.S. due to other reasons of the acquisition of the business from , originally, in Hasbro, which is nearby . So to ensure the long-term success, we have now decided to consolidate the three existing sites into one. This means all related activities will be consolidated in Lubeck by the end of 2026. By bringing both units together into one optimized location, we will improve efficiency, reduce fixed costs, and enable stronger platform development by continuing to deliver high-quality solutions to its customers. The U.S. property will be divested. Ladies and gentlemen, as communicated two weeks ago, we've confirmed our annual accounts. I will come back to this in our outlook at the end of the presentation. With that, I turn now over to Gerd Hartwig for a review of the financials. Gerd Hartwig, please.

Thank you, Stefan, and welcome everyone to our H1 results call. We continue to see strong demand for our technology for life in both segments and regions. Oil intake rose by more than 10% to over 1.7 billion in the first half of 2025. The Americans left the growth with an increase of around 25%, followed by EMEA and APEC. In Germany, the oil volume was slightly above the Americas, EMEA, and Germany. Net sales rose by 1.8% in the second quarter after a slight decline in the first quarter. In the first half of the year, net sales increased by 0.4% to around 1.5 billion. Apex strong performance and a noticeable increase in Germany offset the decline in EMEA and the Americas. We maintained a 44.8% gross margin as the slight dip in the state's division was fully offset by an increase in the medical division. Our function expenses rose around 6% in H1, driven by the absence of last year's €20 million one-off income and a one-off agent payment term for use in Germany. Excluding the positive one of the facts mentioned above, Our operating results have improved over the course of the year, after Q1, Q2, Q3 reached 20 million, listing our margin from 0.1% in Q1 to 2.6% in Q2. In the prior year's second quarter, however, those figures had been much higher at around 41 million and 5.7%. For the six-month period, EBIT totalled 20.4 million with a 1.3% EBIT margin. Below last year's EBIT of 55.8 million and a 3.7% EBIT margin. The main reason for this decline was a positive one of the tax from the prior year, which are now missing. In addition to these base effects, headwinds from currency, trading currencies. We carefully monitor the development of foreign currencies and manage these risks proactively through hedging and price adjustments. Having said that, ethics had a negative impact of roughly 20 million euros. Finally, a role in 12 months BVA did retreated to around 17 million euros. Let's now take a closer look at the development of the medical division on page eight. We grew our intake by almost 15% to more than 1 billion in the first half of 2005, driven by strong demand for ventilators, anesthesia machines, work services, and consumer products. In Q2, the mid-double-digit-million-euro multi-year order for hospital infrastructure for Mexico further powered our growth in the Americas. Even without this large order, demand in the medical division rose here. second quarter, order intake in the medical division increased by around 25%, thanks to significant growth in all regions. Net sales rose by 5% in the second quarter after a significant decline in the first quarter. Looking at the first six months, net sales increased by around 2% to 851 million euros, mainly driven by APEC in Germany. In APEC, mainly India and China drove our growth. growth in the People's Republic cooled down considerably in the second quarter, underscoring market volatility in China. We resolved Q1 supply chain disruption and production is up and running again. We expect sales to accelerate as soon as the current quarter. Despite currency headwinds and higher custom duties, our gross margin expanded by 1.2 percentage points in Q1 and 0.2 percentage points in H1. to a favorable country makes lower quality expenses from field taxes. Partial expenses rose by around 5% in the first half of 25 and by around 4% in the second quarter. Excluding the proportionate positive one-off effect from the sale of the property in the U.S., the increase amounts to 4.4% in the first half of the year and 3% in the second quarter. Our Q2 EBIT improved considerably from minus 12.9 million to minus 5.9 million, lifting the EBIT margin from minus 3 to minus 1.4 percent. For H1, EBIT amounted to around minus 34 million euros, was therefore significantly below the prior year figure of around minus 24 million. The EBIT margin increased from minus 2.9 percent to minus 4 percent. Our rolling 12-month DBA, improved by around 5 million to minus 60 million. I will now turn to our safety division and patient arm. In H1, water intake rose by more than 4% driven by engineered solutions, respiratory and personal protection products, and gas detections. Orders for occupational health and safety normalized after last year's large work of the German armed forces for protective filters. EMEA and the Americas delivered strong double-strip order APEC saw a pullback. In the second quarter, oil intake was just under the prime year level with robust single-digit growth in Germany and EMEA balanced by a decline in the Americas and APEC. Q2 net sales declined 2% and H1 fell 1.4% as the decline in EMEA and the Americas was not fully offset by growth in Germany and APEC. Our business often has fluctuations of oil intake and net sales from one quarter to the next without too much need to read across for the long-term development. These ups and downs are normal in our business. For the full year 25, we expect net sales, growth, and safety over a strong prior year. This requires a further acceleration of water intake in the coming month. Lower net sales and currency headwinds drove a gross margin drop of 1.2, 0.4 percentage points in the second quarter and 0.2 percentage points in the first six months. Functional expenses rose. about 8% in H1, mainly reflecting the absence of last year's income from the sale of all fire alarm assisted business in the Netherlands and higher market expense. The strong relative increase in functional expenses in the second quarter is due to the aforementioned base attacks, excluding the extraordinary. The increase in the first half of the year amounted to 0.8% in the second quarter, by 1.5 percent. Q2 EBIT reached 26 million in the second quarter after roughly 54 million euros in the private quarter. The EBIT margin fell from 15.1 percent to 7.6 percent. After the first six months, the EBIT came to 54 million euros, down from 80 million euros. The EBIT margin was 8.2 percent after 11.9 percent in the private period. Rolling 12-month DBA decreased significantly by around 21 million euros to around 77 million euros, coming from 98 million euros in the prior year period. That concludes the case individual review. Let's move on to the development of our cash flow and our capital structure on slide 10. In H1, we delivered a significant improvement in operations. for around minus 5 million euros in the prior year period. This was mainly due to effective working capital management, especially better development of trade receivables and other liabilities like the cash inflow from ethics derivatives. Investing activities used about 60 million euros in H1 versus 11 billion a year ago, resulting in a free cash flow for around minus 42 million euros. around minus 16 million euros in the prior year period. We modestly reduced net financial debt, keeping our leverage at a healthy 0.9 net financial debt . Network capital also remained at the prior year level at around 739 million euros. Lower rolling 12-month even paired with stable capital employed brought our 12-month return on capital employed to around 9.9% down from 10.9%. Our equity ratio as of June 30th stood at 49.1%, just slightly below year-end 24 level. Now, I'd like to hand back to Stefan Dreger for our outlook on H-12.