Drägerwerk AG & Co. KGaA (ETR:DRW3) outlined its current positioning and financial priorities during a presentation at a select German conference, with Head of Treasury and Investor Relations Thomas Fischler highlighting the company’s two-division structure, recent earnings momentum and growth opportunities in hospital interoperability and defense-related security equipment.
Fischler said Dräger’s business is based on its “Technology for Life” philosophy, and described the company’s portfolio as focused on products that “protect, support and save lives.” He noted that the group operates in two divisions: Medical and Security, with an approximate 60/40 split in net sales.
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Geographically, Fischler said that around 20% of net sales are generated in Germany, while Europe and the Middle East account for around 40%. The Americas also account for a significant portion, including approximately $450 million of net sales in the US, while Asia Pacific is the smallest region at 16%.
He added that around 60% of employees are customer-facing, approximately 20% in production, quality and logistics, and around 10% each in R&D and administration. Dräger sells in “virtually every country,” he said, and has its own subsidiaries in about 50 countries. Production and development sites are concentrated in a smaller number of locations, including Lübeck as the largest, a US facility for patient monitoring, SCBA manufacturing in the UK, and operations in China designed to meet local content requirements. Fischler said the company is also building a new facility in India aimed at developing and producing products for that fast-growing market and similar markets in the region.
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Within the medical division, Fischler said Dräger targets high-acuity areas of hospitals, such as operating rooms and intensive care units, rather than lower-acuity wards. It identified anesthesia and ventilation as the largest franchises by sales and profits, followed by labor infrastructure products and thermoregulation (including incubators). Aftermarket sales (services and consumables) account for about “40 percent or more” of the medical division’s net sales depending on the year, he said.
Patient monitoring is a smaller business where Dräger is “a market follower,” Fischler said, but he called it strategically important as the company advances innovation toward interoperability between devices. He argued that basic devices such as anesthesia machines and ventilators are mature and increasingly commoditized, making connectivity and integrated workflows an important differentiator in the future.
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As an example, Fischler described the company’s “silent ICU” concept, based on an open, bidirectional device communication standard developed under the IEEE. In the setup you described, Dräger devices (including ventilators and patient monitors) are connected to infusion pumps from B. Braun and alarm systems from Ascom. The system directs alarms outside the patient’s room to caregivers’ handheld devices or central stations, which Fischler said can improve patient healing by keeping rooms quieter and can improve workflow efficiency by reducing unnecessary room entries and allowing caregivers to check and silence alarms remotely.
In the Q&A session, Fischler cautioned that Silent ICU is “a future topic” and that individual products in this area will not contribute significantly to sales and profits in the short term. Instead, he framed it as an enabler supporting sales of Dräger’s core devices that are “SDC-ready” and “future-ready” through support for the protocol.
Regarding safety, Fischler said the division serves a broader set of industries, with important verticals including fire, oil and gas, chemicals and mining, which together account for about 50% to 60% of Safety’s net sales, with the remainder coming from a wide range of other end markets. Key product categories include self-contained breathing apparatus, gas detection sensors, personal protective equipment and related offerings. Compared with the medical sector, security after-sales are lower, about 20% to 25%, he said.
Fischler also highlighted defense as an increasingly important growth driver. He said Dräger supplies defense and law enforcement customers, especially NATO customers, offering both industrial products and specialized defense equipment, such as filters for military vehicles, vessels and aircraft, along with sensors capable of detecting chemical warfare gases.
He said Dräger believes it can grow its defense business to about 300 million euros of net sales by 2028. By 2025, Fischler reported that net sales increased from less than 100 million euros to more than 100 million euros, while order intake grew “even much higher,” reflecting the long lead times in defense procurement. He cited the example of work related to planned Bundeswehr ships, where delays in shipbuilding decisions can affect downstream suppliers, and described defense growth as “back-loaded.”
Fischler said 2025 was a “very strong year,” with record net sales and currency-adjusted growth of about 5%. EBIT margin increased to 6.7% and free cash flow increased by €16 million to €140 million, which it said supported the strong share price performance.
He also detailed operational improvements despite headwinds. Fischler noted that 2024 EBIT had benefited from one-off gains (including the sale of non-strategic business units and properties) totaling €22 million, which were not repeated in 2025. Additionally, he cited negative impacts of €45 million from foreign exchange and €25 million from US tariffs, for a total of €70 million of headwinds. In that context, Fischler said Dräger achieved an operating EBIT improvement of €90 million in 2025, calling it the strongest year he has seen since he joined the company in 2012, excluding the “abnormal COVID years.”
It reiterated the profitability focus announced after supply chain challenges in 2022, including the goal of expanding the EBIT margin by an average of one percentage point per year over the next few years. With the margin of 6.7% for 2025, he said Dräger is “a little bit ahead of its target.”
Regarding return on capital, Fischler said Dräger will once again increase its dividend (approximately 10%) to “above 2 euros”, which represents a payout ratio of 30% of earnings. It attributed the increase in part to a strong capital ratio of more than 50%.
For 2026, Fischler said the company expects net sales growth of 2% to 6% on a currency-adjusted basis, which corresponds to nominal growth of 1% to 5%, and anticipates currency headwinds of about one percentage point. The EBIT margin outlook is 5% to 7.5%. He acknowledged that based on the midpoint, this would not imply margin expansion, noting that 2025 benefited from a favorable mix and a strong end to the year that may not be repeated. Still, he said Dräger is working to further improve margins and remains committed to margin expansion in the medium term.
When asked about the main drivers of margin improvement, Fischler cited three main levers:
Top line growth
Continued “pricing,” although he said it has become more difficult as inflation fades.
Cost discipline, including the plan not to increase headcount in administrative functions in Lübeck
As for competitive dynamics in medical software, Fischler said hospitals are weighing open ecosystems versus proprietary systems. He said Dräger’s open ecosystem roadmap can be a “compelling proposition” and has helped win tenders, although he added that some customers may still prefer “closed shop” ecosystems.
In gas detection, Fischler said Dräger faces competition from established suppliers such as Honeywell and MSA, and argued that Dräger’s differentiation includes sophisticated sensor technology in many gases and reliability that reduces false alarms, an important factor for customers looking for quality and process stability.
Drägerwerk AG & Co KGaA operates as a medical and safety technology company worldwide. It develops, produces and markets system solutions, equipment and services for critical care, including emergency medicine, perioperative care, intensive care and perinatal medicine. The company also develops, produces and markets products, system solutions and services for personal protection, gas detection technology and integrated risk management for customers in the industrial and mining sectors, as well as public sectors, such as fire, police and disaster protection departments.
The article “Drägerwerk AG & Co. KGaA highlights record 2025, dividend growth and defense growth at conference” was originally published by MarketBeat.
