Dragerwerk Ag Prd Shs Non

Ladies and gentlemen, welcome to the Q3 2025 earnings conference call. I am Matilde, 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 a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Stefan Träger, CEO. Please go ahead.

Yes, good afternoon, and thank you for joining our conference call on our financial results for the first nine months of 2025. I have with me today Gert-Heinrich Lesbos, CFO, as well as Tom Fischer and Nikolaus Hammerschmidt, 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 the floor to your questions. Let's get started on page five with the business highlights. With a significant increase in orders, noticeable growth in sales and very good earnings, We delivered a strong business performance in the first nine months of 2025. Despite difficult economic conditions, demand for our technology for life rose to around 2.6 billion euros. The last time we had such a high order intake after three quarters was in our record year 2020. Growth was determined by both divisions and all reasons. The same is true for net sales, which increased to around 2.3 billion euros. Earnings before interest and taxes almost reached the prior year level at around 77 million euros, despite the positive one of the effects which supported last year's. As a reminder, last year we had divested a non-core business in the Netherlands and unused property in the United States and a building in Spain, totaling around 30 million euro in one-off effects. Similar effects are missing this year. In addition, this year, we need to compensate for some quite strong headwinds, currencies and tariffs had a substantial negative impact on our earnings. So without these headwinds, our EBIT which has been significantly above the prior year level. Our business in the third quarter made a substantial contribution to the strong overall performance in the first nine months. That says we're significantly above the prior year level in Q3, while EBIT more than doubled. In addition to our top line, we were able to improve our operating cash flow in the first nine months with a considerable increase by more than €35 million to around €93 million. This development has also been recognized by investors. Until the publication of our preliminary figures, our preferred shares had already increased by around 44% year to date. On the day after the publication, they rose by 12% resulting in an increase of around 63% in the current year. Our common shares have shown strong performance as well, with an increase of around 41% year-to-date. Ladies and gentlemen, as communicated two weeks ago, we now tend to expect the net sales goals at the EBIT margin in the upper half of our forecast range. I'll come back to our outlook at the end of our presentation. For that, I turn over to Gerd Hartwig for a review of the financials. Gerd Hartwig, please.

Thank you, Stefan, and welcome, everyone. Please turn to page seven for a group overview. As usual, all growth rates are quoted on a currency-adjusted basis. As Stefan Dreger said, we continue to see strong demand for our technology for life in both divisions in all regions. Order intake rose by 9% to around 2.6 billion in the first nine months of 2025. The Americas led the growth with an increase of around 19%, followed by EMEA and APEC. In Germany, the order volume was slightly above the prior year level. In the third quarter, orders grew by roughly 7%, as the slight decline in Germany and APEC was more than offset by an increase in the other regions. Our net sales development has further accelerated in the future. We are well on track to compensate for the slow start in the year caused by some supply chain slashes. Net sales rose by more than 10% in the third quarter. In the first nine months, they increased by roughly in the EMEA and the Americas regions. I'll comment on that when we get to the divisions. Our gross profit margin increased by 0.7 percentage points in the first nine months to 45.1%, despite currency headwinds and higher tariffs. The margin improvement was stronger in the medical division than in the safety division. Operating costs rose only moderately disciplined expense management. Our financial expenses increased around 6% in the first nine months, but mainly driven by the absence of last year's $30 million one-off income. Excluding the positive one-off effects mentioned above, the cost increase amounted to 2.4% in the first nine months and to 1.5% in the third quarter. In nominal terms, however, financial expenses were on a slight decline in Q3. Due to the only moderate increase in costs and the significant growth in net sales, we more than doubled our EBIT to around 57 million in Q3, coming from around 24 million in the prior year quarter, which had been still supported by the positive one-time effects amounting to 10 million in the quarter. Our EBIT margin rose from 3.6 at 3.1 to 6.8%, a strong earnings performance in the quarter. Over the first nine months, EBIT came in at around 77%, a 3.3% margin, slightly below last year's 80 million and a 3.5% margin. Again, the positive and one-off effects from the prior year are now missing. In addition, headwinds on currencies and tariffs strained our EBIT as the euro appreciated sharply against key trading currencies. carefully monitored the development of foreign currencies and managed its risks proactively through hedging and price adjustments. Having said that, FX still had a negative impact of roughly €22 million a year. Our operating performance improved year on year, and that improvement nearly, but not fully, upset the absence of one-offs and VFX and tariff drag. Thus, our EBIT declined slightly. Finally, our rolling 12-month BVA improved significantly from roughly 30 million to around 49 billion euros. Let us now take a closer look at the numbers on page 8. We grew order intake by almost 12% to around 1.5 billion in the first nine months of 2025, driven by high demand for ventilators, anesthesia machines, services, and consumers. In the second quarter, the mid-double-digit million euro order for hospital infrastructure from hospital further powered our growth in demand. But even without this large order, demand in the medical division rose here and here. In the third quarter, order intake in the medical division increased by more than 5%. The decline in APEC was compensated by the significant growth in EMEA and by the positive developments in the other regions. Thanks to EMEA and the Americas in particular, net sales rose significantly by more than 10% third quarter after a slight decline in the prior year period. Looking at the first nine months, net sales increased by around 5% to 1.3 billion euros driven by all regions. In APEC, Growth was driven mainly by India and China, with business development somewhat uneven in China. After solid growth in the first six months, demand has cooled considerably in the third quarter. Although the resolution of our Q1 supply chain problems had a positive impact in Q3 as expected, resulting in a decline in net sales compared to the prior year quarter. Our gross margin expanded by nearly three percentage points in Q3 and by 1.1 percentage points in the first nine months, thanks to a favorable product and country mix and lower quality expenses from field actions. Functional expenses rose by 6% in the first nine months of 2025 and by roughly 8% in the third quarter. Excluding the proportionate positive one-off effects from the sale of real estate in the prior year, the increase amounted to roughly 4% in the first nine months and also in the third quarter. Earnings in medical returned to positive territory in June, as we are making progress Our EBIT grew considerably from minus 4 million to plus 11 million, lifting the EBIT margin from minus 0.9% to 0.3%. For the first nine months, EBIT must have amounted to around minus 23 million euros after around minus 28 million euros in the prior year period. As mentioned before, one of the facts in the prior year's period played a role. Our role in 12 months DBA improved significantly by around 22 million to around minus 45 million. I will now turn to our safety division. We're on page nine. In the first nine months, order intake rose by roughly 6% driven by gas reduction, respiratory and personal protection products, and intermediate solutions. Orders for occupational health and safety normalized after last year's large order for NBC protective filters leading to a lower demand for EMEA and the Americas, delivered strong double-digit order growth, while APEC remained almost stable. After a somewhat slower development in the second quarter, order intake accelerated through three, with orders rising by roughly 9%. In addition to the significant increase in EMEA and the Americas, growth in APEC also contributed to this development. Q3 net sales rose significantly by roughly 10%, driven by India and the Americas in particular. The first nine months, net sales increased by more than 2%, thanks to growth in all regions. That said, our safety business is back on track after its slight weakness at Q2. Our gross margin expanded by 1% at Q3 and was stable in the first nine months, thanks to a favorable product mix. Functional expenses rose about 5% in the first nine months. This was mainly due to other operating income in the prior year period from the sale of our fire alarm systems business in the Netherlands and the sale of real estate. Higher marketing expenses also had a negative impact on functional costs. Excluding the other operating income of the prior year period, functional expenses decreased slightly by 0.3% in the first nine months of the year and by 2.4% in the third quarter. So good expense management and safety needs. Q3 EBIT improved significantly to roughly $46 million after $28 million by year quarter. The EBIT margin increased to 12.6%. After the first nine months, the EBIT came to just under €100 million down from €108 million. The EBIT margin was just below 10%. Rolling 12-month BVA decreased slightly by roughly €3 million to around €94 million, coming from €97 million in the previous year. That concludes the Safety Division review. Let's move on to the development of our cash flow and other key figures on to slide 10. In the first nine months, We significantly improved operating cash flow by around 35 million euro to roughly 93 million euro. This was mainly due to effective work in capital management, especially better development of trade receivables, trade payables, and other liabilities. Outflows from investing activities more than tripled from euros to about 76 million euros, resulting in a free cash flow 17 million euros after round 35. Among other things, the significant increase in outflow was due to a base fact. In the prior year, the sale of our fire alarm systems business in the Netherlands, the sale of the property in the US, had led to a considerable inflow, which is now missing. On the other hand, Draeger added an investment to one of which has contributed to a higher outflow year-to-date. Looking at our net financial debt, we had modest reduction keeping our leverage at a healthy 0.7 net financial debt to the PTA. Our 12-month return on capital employed rose from 10.9% to 12%. This was due to the significant increase considerable growth of our rolling 12-month EBIT resulted from the good performance in the fourth quarter of 24, which had delivered much higher earnings compared to Q4 23. Net working capital was around 3% higher than in the prior year at around 721 million euros. Our equity ratio is of