Draegerwerk accelerates cost cuts to counter full year earnings drop

Draegerwerk AG & Co KGaA

14/04/2016 22:15

FRANKFURT, April 14 (Reuters) - Draegerwerk  DRWG.DE  on 
Thursday said currency headwinds and restructuring costs led to 
a 63 percent drop in full-year operating profit, forcing the 
German medical equipment maker to lower its dividend and 
accelerate cost cuts.  
    In a statement late on Thursday, Draegerwerk said 2015 
earnings before interest and taxes (EBIT) fell by 62.7 percent 
to 66.7 million euros ($75.10 million) weighed down by a strong 
U.S. dollar, and falling currencies in emerging market 
countries.  
    "Fiscal year 2015 was disappointing overall," Stefan 
Draeger, Chief Executive of Draegerwerk Verwaltungs AG said.  
    The company said cost cutting measures in the fourth 
quarter, impacted 2015 earnings in the amount of close to 35 
million euros. 
    For 2015, Draegerwerk plans to propose a dividend of 0.19 
euros per preferred share, and 0.13 euros per common share for 
2015, down from 1.39 euros and 1.33 euros in the year-earlier 
period.  
    Draegerwerk said it will decide on its future earnings 
appropriation policy only once earnings have improved 
significantly and stabilized. 
    For 2016, Draegerwerk will accelerate its cost programme, 
cutting 200 staff in Luebeck by the end of fiscal year 2016 
through a voluntary redundancy programme. Restructuring costs 
will dent Draegerwerk's EBIT by roughly 10 million euros this 
year.  
    Draeger expects its full-year EBIT margin to stand at 
between 3.5 and 5.5 percent, the company said. 
 ($1 = 0.8881 euro) 
 
 (Reporting by Edward Taylor; editing by Grant McCool) 
 ((Edward.Taylor@thomsonreuters.com; +49-69-7565-1187)) 
 
Keywords: DRAEGERWERK CUTS/EMPLOYMENT