Drägerwerk (DRW3) Q3 2024 earnings summary

Executive summary

• Order intake for the first nine months of 2024 reached €2,420.5 million, slightly surpassing the prior year, with robust demand and higher earnings supporting progress toward annual targets.

• Net sales nearly matched the prior year at €2,295.1 million, down 0.4% net of currency effects, despite last year's surge in ventilator demand in China.

• EBIT increased by 4.2% to €80.1 million, supported by operational improvements and one-off gains totaling around €32 million.

• Safety division outperformed the medical division, which was impacted by a challenging market in China; EBIT rose, aided by one-time effects.

• Operating cash flow improved to €62.7 million in Q3, up year-over-year.

Financial highlights

• Gross profit margin improved to 44.4%, supported by strong safety division margins.

• Net profit rose 4.7% year-over-year to €49.4 million; earnings per preferred share reached €2.61, up 6.5%.

• Net financial debt decreased by 24.1% to €229.0 million; leverage improved to 0.7.

• ROCE improved to 10.9% from 8.4% year-over-year; equity ratio rose to 47.8% as of September 30, 2024.

• Investment volume dropped 17.7% to €78.9 million.

Outlook and guidance

• Full-year 2024 targets are confirmed, with expected net sales growth of 1.0% to 5.0% (net of currency effects) and EBIT margin in the upper half of the 2.5% to 5.5% range.

• Gross margin forecasted at 43.0% to 45.0%; DVA forecasted between €-60 million and €40 million.

• Q4 is expected to be the strongest quarter, with significant contributions from both divisions, except for continued weakness in China.

• Net financial debt projected below prior-year level; investment volume to remain at prior-year level.

• Days working capital expected between 108 and 113 days.