Draegerwerk AG & Co. KGaA (0MT8) ((DE:DRW8)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, Draegerwerk AG & Co. KGaA (0MT8) expressed a generally positive sentiment, highlighting strong order intake and sales growth, significant improvements in EBIT and share prices, and a promising future outlook. However, the company acknowledged challenges such as currency and tariff headwinds, weaker performance in China, and increased functional expenses, which tempered these achievements.
Strong Order Intake and Sales Growth
Order intake for Draegerwerk rose by 9% to approximately EUR 2.6 billion in the first nine months of 2025, driven by robust demand in the Americas, which saw a 19% increase. Net sales also saw a healthy rise of roughly 4%, reaching around EUR 2.3 billion during the same period.
Significant EBIT and Share Price Increase
The company reported that its EBIT more than doubled in Q3 to approximately EUR 57 million, with the EBIT margin increasing from 3.6% to 6.8%. This financial success was mirrored in the stock market, where preferred shares rose by about 63% year-to-date.
Improved Operating Cash Flow
Draegerwerk’s operating cash flow saw a significant improvement, increasing by more than EUR 35 million to around EUR 93 million in the first nine months. This indicates strong working capital management by the company.
Positive Outlook for 2025
Looking ahead, Draegerwerk expects net sales growth and EBIT margin to be in the upper half of their forecast range, with net sales growth projected at 3.0% to 5.0% and an EBIT margin between 4.5% and 6.5%.
Currency and Tariff Headwinds
Despite the positive financial metrics, the company faced substantial challenges from currencies and tariffs, which negatively impacted earnings. Foreign exchange fluctuations alone had a negative impact of roughly EUR 22 million on EBIT.
Weak Business in China
The company experienced a cooling in demand in China during Q3, leading to a decline in net sales compared to the previous year’s quarter, despite earlier growth in the APAC region.
Functional Expense Increase
Functional expenses increased by around 6% in the first nine months, mainly due to the absence of a EUR 30 million one-off income from the previous year.
Forward-Looking Guidance
Draegerwerk’s forward-looking guidance remains optimistic, with the company revising its net sales growth and EBIT margin expectations to the upper half of their forecast range. They project net sales growth of 3.0% to 5.0% and an EBIT margin of 4.5% to 6.5% for the year, supported by a strong order book and sales momentum, despite economic challenges.
In summary, Draegerwerk AG & Co. KGaA’s earnings call conveyed a positive outlook, with strong financial performance and growth prospects. While challenges such as currency impacts and weaker performance in China were acknowledged, the company’s robust order intake and sales growth, along with improved EBIT and cash flow, underscore a promising trajectory for the remainder of 2025.