DRAGERWERK AG & CO. KGAA (FRA:DRW8) Drägerwerk AG & Co. KGaA: Dräger revises 2014 earnings and net sales forcast

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14/07/2014 20:19
Drägerwerk AG & Co. KGaA / Key word(s): Change in Forecast/Interim Report 14.07.2014 20:19 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Ad hoc report in accordance with Sec. 15 of the German Securities Trading Act Drägerwerk AG & Co. KGaA: Dräger revises 2014 earnings and net sales forecast Based on provisional figures Drägerwerk AG & Co. KGaA revises its 2014 earnings and net sales forecast. Besides the continuously strong Euro, the substantially lower business from Russia compared to prior years and the momentarily slow demand from medical customers in the US as well as a weak business performance in some countries in Asia-Pacific are responsible for the deteriorating business prospects. Second quarter 2014: In the second quarter of the year, Dräger recorded a decline in order intake of 2.3 percent to EUR 574.8 million (Q2 2013: EUR 588.5 million). Net sales fell by 1.2 percent to EUR 559.9 million (Q2 2013: EUR 566.8 million). Net of currency effects, order intake rose by 1.5 percent and net sales rose by 2.0 percent. In the medical division, orders were down by 2.9 percent (an increase of 1.2 percent net of currency effects), while orders in the safety division climbed by 2.1 percent (5.3 percent net of currency effects). Group EBIT came in at EUR 15.0 million in the second quarter (Q2 2013: EUR 39.4 million), equating to an EBIT margin of 2.7 percent (Q2 2013: 7.0 percent). First half 2014: As a result, orders in the first half of the year were down by 3.5 percent year on year (increase of 0.4 percent net of currency effects). Net sales at Dräger in the first half of the year fell by 2.5 percent (increase of 1.2 percent net of currency effects). Total EBIT stood at EUR 34.0 million (6 months 2013: EUR 79.2 million). The EBIT margin fell from 7.2 percent in the prior-year period to 3.2 percent. Next to the slow demand from some countries mentioned above, delays in the licensing of new products in the safety division contributed to the decline in net sales on the U.S. market. Furthermore, an unfavorable country mix and a change in the product mix toward lower-margin products, as well as a number of lower-margin projects also had a substantial negative impact on the gross margin. Currencies had an additional negative impact so that the gross margin stood at 45.7 percent (6 months 2013: 49.7 percent). Due to positive currency effects, functional expenses fell by 2.0 percent compared to the prior-year figure. Net of currency effects functional expenses rose slightly by 0.5 percent. The persistently strong euro continued to have a negative impact of about 1.5 percentage points on the EBIT margin. New guidance for fiscal 2014: Against the backdrop of weaker-than-expected demand in the first six months of 2014, Dräger anticipates full-year net sales growth (net of currency effects) of 2.0 to 4.0 percent (until now: 3.0 to 6.0 percent). Based on current exchange rates, this would result in a negative effect of more than 2 percentage points on full-year reported net sales growth when compared to the average exchange rates of the prior year (until now: approximately 3 percentage points). The gross margin is not likely to match the prior year's level. Dräger now forecasts a full-year EBIT margin including currency effects of between 4.5 and 6.5 percent. The current weaker-than-expected development of net sales and profitability means that the medium-term guidance needs to be reviewed. Any necessary adjustments to the medium-term profitability and net sales targets will be made once the results for fiscal year 2014 are published. Dräger is working on a set of measures that will lead to greater efficiency in the short to medium term. Dräger will publish its full results for the first six months of the fiscal year on July 31, 2014. Drägerwerk AG & Co. KGaA Moislinger Allee 53-55 23558 Lübeck, Germany www.draeger.com Investor Relations: Thomas Fischler Phone: +49 451 882-2685 thomas.fischler@draeger.com Corporate Communications: Melanie Kamann Phone: +49 451 882-3998 melanie.kamann@draeger.com Disclaimer This ad hoc report contains statements on the future development of 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 date. They were compiled to the best of the company's knowledge. Dräger does not provide any warranty nor assume any responsibility for the future developments and results described above. These are dependent on a number of factors. They entail various risks and contingencies outside of the company's influence and are based on assumptions which could prove to be incorrect. Dräger does not assume any responsibility for updating the forward-looking statements contained in this report. This does not infringe any legal stipulations on the adjustment of forecasts. Please go to Investor Relations / Financial Calendar at www.draeger.com for information on all important financial dates. 14.07.2014 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: Drägerwerk AG & Co. KGaA Moislinger Allee 53-55 23542 Lübeck Germany Phone: +49 (0)451 882-0 Fax: +49 (0)451 882-2080 E-mail: info@draeger.com Internet: www.draeger.com ISIN: DE0005550602, DE 000 555 063 6, DE 000 555 065 1, DE 000 555 067 7, DE 000 555 071 9 WKN: 555060, 555063 Vorzüge, 555065 Genussschein A, 555067 Genussschein K, 555071 Genussschein D Indices: TecDAX Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime Standard), Hamburg, Hannover, München; Freiverkehr in Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------