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• Order Intake: EUR2.4 billion, a 1.4% increase driven by growth in Germany, EMEA, and America.

• Net Sales: EUR2.3 billion, 0.4% lower than the prior year.

• EBIT: Over EUR80 million, with one-time effects contributing EUR32 million.

• EBIT Margin: 3.5%, slightly above the prior year level.

• Gross Profit Margin: Increased by 0.4 percentage points to 44.4%.

• Functional Costs: Decreased by 0.4% due to higher other operating income.

• Medical Division Net Sales: EUR1.3 billion, around 5% below the prior year level.

• Medical Division EBIT: Minus EUR28 million, with an EBIT margin of minus 2.2%.

• Safety Division Order Intake: Increased by roughly 7% to around EUR1.1 billion.

• Safety Division Net Sales: Increased by roughly 6% to just over EUR1 billion.

• Safety Division EBIT: Increased from EUR79 million to roughly EUR108 million, with an EBIT margin rising to 10.7%.

• Operating Cash Flow: Significant improvement noted.

• Free Cash Flow: Back in positive territory after nine months.

• Net Financial Debt to EBITDA: Average of 0.7, indicating a healthy level.

• Net Working Capital: Around 6% below the prior year level, just below EUR700 million.

• Return on Capital Employed: Improved to around 11% from 8.4% in the prior year.

• Equity Ratio: Almost 48% as of September 30.

• Warning! GuruFocus has detected 6 Warning Sign with DGWPF.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive 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.

Negative Points

• 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.