Drägerwerk Expects Decline In Net Sales And Earnings For Coming Fiscal Year

Drägerwerk AG & Co. KGaA (DRWKF.PK) expects a decline in net sales and earnings for the coming fiscal year.

For 2022, the company expects a net sales volume of around 3 billion euros to 3.1 billion. The net sales volume is thus significantly below the two strong previous years supported by the Corona pandemic. However, compared with 2019, the year before the Corona pandemic, it corresponds to net sales growth of around 8 to 11 percent. EBIT margin in 2022 is expected to be between 1 and 4 percent.

In recent weeks, demand for products related to the Corona pandemic has weakened noticeably. This trend will continue in 2022. In some markets, there was exceptionally high investment in intensive care equipment, such as ventilators, over the course of the last two years, which will not continue in this form, the company said.

In addition to the lower net sales volume, an expected lower gross profit margin will also have a negative impact on earnings in 2022. Declining sales of ventilators will lead to a lower average margin.

From 2023, the company will return to positive growth and also report higher profitability again, Drägerwerk said.

For 2021, the company continues to expect a currency-adjusted decline in net sales of between -2 and -6 percent compared to 2020 and an EBIT margin of between 8 and 11 percent. EBIT at the lower end of the range is now more likely due to one-time expenses.

Drägerwerk said that, due to the severe overcapacities in the global market for FFP masks and the resulting slump in demand, next year the company will not be able to utilize its production capacities for masks built up in the course of the pandemic response.

Consequently, some of the investments made in 2020 and 2021 will have to be written down. Production of the Dräger COVID-19 Home Test will also be discontinued until further notice, as video-monitored self-testing is no longer recognized as a 3G-valid test certificate for political reasons. The one-time expenses of around 30 million euros will impact fourth-quarter earnings.

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