After a 50% decline in business in China last year, medical and safety technology company Drägerwerk is adjusting to a permanently reduced importance of the Chinese market. „It was our third most important country after Germany and the US, but that is no longer the case“, said CEO Stefan Dräger during the annual financial press conference. He expects a lasting loss of importance of the market.

Dräger pointed to a general economic and trust crisis in China, government efforts to curb rising healthcare costs, and the strategic importance of medical technology for the Chinese government, which has been favouring local suppliers in public tenders. In 2023, Dräger had benefited from demand for ventilators in China due to improved supply capabilities.

Last year, „challenging market conditions“ in China led to a decrease in order intake in the Asia-Pacific region, down by 4.2% in constant currency and 6% nominally, to 545 million euros. In all other regions, however, the company saw an increase in demand. Group-wide order intake rose by 3.4% in constant currency and 2.8% nominally to 3.38 billion euros in 2024.

CEO Stefan Dräger, who has led the family-owned company since 2005, and whose contract was extended until 2030 in late January, emphasised that the development in China could be absorbed and offset by other regions. „We are not BASF or Volkswagen“, he commented. Dräger expects stabilisation in China at the lower level in 2025, according to CFO Gert-Hartwig Lescow.

The 0.5% revenue increase in 2024, which missed the projected growth range of 1% to 5%, was largely due to the Asia-Pacific region, where revenues fell by 9.1%. Dräger reaffirmed the 2024 forecast, which also anticipates a revenue increase of 1% to 5% in 2025.

At the same time, CEO Dräger stressed that improving profitability remains the company's top goal. The EBIT margin, which exceeded the forecast range of 2.5% to 5.5% with 5.8% last year (compared to 4.9% the previous year), is expected to reach between 3.5% and 6.5% in 2025. When considering one-time effects from the past two years, which positively influenced the results, the expected EBIT margin in 2025 aligns with the goal of increasing the margin by one percentage point annually.

Last year, one-time effects totalling 22 million, including the sale of the fire alarm business in the Netherlands, and the sale of a non-essential property in the US, and a building in Spain, caused EBIT to increase by 16.6% to 194 million euros. According to CFO Lescow, no comparable extraordinary items are expected this year.

Speaking prior to US President Donald Trump’s tariffs announcement, he said the company was not preparing for any particular scenario. He referred to long-term contracts with US customers. A forecast showed that a 25% tariff, with prices remaining the same in the US, would absorb about one-third of the operating profit, which could only be temporarily offset by inventory management.

Dräger sees significant revenue growth opportunities in the coming years in connection with the planned improvement of Germany's defence capabilities. In this sector, Dräger believes that by the end of the decade, it could triple its revenue to 300 million euros.

Dräger's preferred stock, which fell by over 10% in 2024, had gained 37% since the beginning of the year. Based on a 11.4% increase in net income to 124.8 million euros in 2024, the company plans to increase its dividend to 2.03 euros (from 1.80 euros) per preferred share and 1.97 euros (from 1.74 euros) per common share. The payout ratio of 30.1% aligns with the goal of distributing at least 30% of net income, provided the equity ratio is at least 40%. In 2024, this ratio increased to 49.7% (from 45.5%).