Good afternoon, and thank you for joining our conference call on our financial results for the fiscal year 2025. I have with me today Gert-Hartwig Lescow, CFO, as well as Tom Fischler and Nicolas Hammerschmidt, both investor relations.

We would like to take you through the results with the presentation that we made available on our web page this morning. Following the presentation, we will open the floor to your questions.

Let's get started on page 5 with the business highlights. In 2025, we continued our successful course and generated the highest net sales in our company's history.

Both divisions and all regions contributed to this. At around €3.5 billion, net sales was slightly above our last forecast and around €25 million above the level of the exceptionally strong coronavirus year 2020.

Unlike during the pandemic, this is a new record that we achieved entirely without a special economic situation. Thanks to the operating momentum, our earnings before interest and taxes also developed very well.

EBIT rose by more than 20% to around €233 million despite difficult conditions. The EBIT margin increased by roughly 1 percentage point to 6.7%, also exceeding our last forecast.

This shows that we are making progress in improving our profitability. Order intake also developed very well.

As with net sales, both divisions contributed to growth. This underlines the continued demand for our Technology for Life and gives us a positive outlook for the future.

Positive is also the keyword with regard to our cash flow development, which Gert-Hartwig Lescow will explain later. We have also performed well on the stock market.

Last year, our common shares rose by more than 1/3, while our preferred shares even increased by almost half and were included in the TecDAX. This means that we are once again one of the 30 largest listed technology companies in Germany.

This listing increases our visibility on the capital market and could make us even more attractive to investors. In mid-January, we published our preliminary business figures for 2025 and our forecast for 2026.

Our shares then rose significantly again and reached their highest level since July 2017. This shows that investor confidence in Dräger is higher than it has been for a long time.

Our first goal remains to increase profitability such that our EBIT margin is the same as the last digit of the calendar year. We have more goals that are strategic to steer the company.

We are strengthening our innovative power and expanding our competence in the systems business and further expanding our services and recurring business. In our Medical division, we are particularly driving forward the marketing of networked solutions.

To this end, we launched a large marketing campaign in 2025. Our goal is to strengthen Dräger's position as the leading provider of connected solutions in the hospital sector.

That said, we are also launching a big wave of SDC-based solutions. That is service-oriented device connectivity, the new standard for interoperability of medical devices according to IEEE 11073.

It creates new functionalities and therefore added value. With our new Silent Care package, for example, we contribute to solving one of the biggest problems on the ICU by reducing the alarm noises fatigue.

In the Safety division, connectivity is becoming more important, too. Our fire ground monitoring system, for example, helped us to win the Paris Fire Department as a new customer in 2025.

Speaking of firefighting, we also received the important approval for our PSS AirBoss SCBA in North America, reaching a milestone for strengthening our position in this key market. In addition to our core business, we are consistently investing in new business opportunities in areas such as clean tech and defense.

Last year, our defense business grew significantly. We are well on track to triple our defense sales to more than €300 million by 2028.

I will talk about the other highlights of the past fiscal year, the dividend, and the outlook at the end of our presentation. I would first like to explain in more detail on page 6 what challenges we had to overcome last year.

Page 6, headwinds compensated. Ladies and gentlemen, 2025 was a very successful year, particularly in light of the difficult conditions.

In 2024, we had benefited from positive one-off effects from the sale of a non-strategic business activity—this was the smoke and fire alarm systems in the Netherlands—and some real estate sold in the United States. This had boosted our EBIT by around €22 million.

In the past year, we missed these effects and also faced strong headwinds from tariffs and currencies. The tariffs imposed by the US government had a negative impact of roughly €26 million on our EBIT.

Around €21 million out of this was attributable to the Medical division and around €5 million to the Safety division. In addition, EBIT was impacted by currency effects initiated from the White House and propagated over the world totally to around €45 million.

Thereof, €28 million were attributable to the Medical division and around €16 million to the Safety division. Overall, we had to compensate opposing effects of more than €90 million.

The fact that we even overcompensated these effects is a clear proof of our resilience. We were therefore able to improve our profitability even under difficult conditions.

Let's take a look at the margin development of recent years on page 7. Following the significant loss in '22, we have shifted our focus from net sales growth to earnings growth.

We have thus set ourselves the goal of increasing our EBIT margin by an average of 1 percentage point per year from 2024. The focus on profitability in accordance with our corporate objective number one has worked well so far.

After the strong turnaround in '23, we were able to improve our EBIT margin by roughly 1 percentage point in both '24 and '25. While positive one-off effects in particular contributed to the improvement in '24, the improvement in '25 came mainly from the operating business.

This is a development that we very much welcome. We have our strategic goals.

Our corporate objective two is innovation, and our corporate objective three is systems business and recurring business. Now I would like to hand over to Gert-Hartwig to explain our business development further.

I will then turn back with the dividend and the outlook. Gert-Hartwig.

Thanks,

Stefan. I would also like to extend a warm welcome to everyone joining this conference call for our results for the fiscal year 2025.

Please turn to page 6 for a view on the Dräger Group. As usual, I will be stating currency-adjusted figures when I will be relating—referring to growth rates.

As Stefan mentioned, demand for our Technology for Life remains strong. Overall, orders increased by 7.7% to around €3.6 billion.

In Q4, orders rose by 5.6%. Both divisions contributed to growth in both reporting periods.

Net sales climbed by 5.3% in the full year and by 8.7% in the fourth quarter. This was due to good development in both divisions and all regions.

By quarters, the Americas region and the EMEA region were the biggest growth drivers. At around €3.5 billion, net sales reached 2025 the highest level in the company's history.

In addition through the high order intake, this was mainly due to the strong year-end business. Benefiting from the record net sales in December and the margin improvement in the Medical division, our group's gross margin rose slightly by 0.3 percentage points to 45.2% in the full year.

Functional expenses rose by 4.6% in 2025, after they had been positively impacted by one-off effects of around €32 million in the prior year. These effects included the net sale of a non-strategic business activity in the Netherlands and the sale of real estate in Spain and the US.

Excluding these one-off effects, the increase of functional expenses in 2025 was only 2.5%. This increase is attributable to higher personnel expenses, which went up due to collective wage increases in Germany and higher number of employees, among other things.

Despite the missing positive one-off effects from '24 and the negative currency and tariff effects in '25, our EBIT increased by more than 20% to around €233 million. Consequently, our EBIT margin rose from 5.8% to 6.7%.

The mentioned headwinds were overcompensated by the high order intake, the strong net sales momentum, and the improved gross margin. In addition, the strong year-end business contributed to the resilient development.

Our EBIT improved by roughly 37% in the fourth quarter, while the EBIT margin climbed to 13.7% from 10.6% in that period. The full year EBIT development is in line with our medium-term goal to increase the EBIT margin by 1 percentage point per annum on average.

Guided 2026 EBIT margin includes an additional margin improvement on the higher end of the guidance range. As a result of the strong increase in earnings, our DVA in 2025 improved by roughly €36 million to around €90 million.

Let us now take a closer look at the development of the two divisions, starting with the Medical division on page 10. Following a slight increase in the prior year, our order intake in the Medical division rose by roughly 9% in 2025.

This was primarily due to the high demand for our anesthesia machines, ventilators, services, and consumables. In addition, we received a major multiyear order for hospital infrastructure systems from Mexico, which significantly supported the above-average growth in the Americas region.

Demand also developed positively in the other regions, particularly EMEA. In the fourth quarter, order intake rose by 2.2%, as the decline in APAC and EMEA was overcompensated by significant growth in the Americas and higher demand in Germany.

Driven by growth in all regions, net sales in the Medical division increased by 7.4% in 2025 after a decline in the prior year. In Q4, net sales rose by 13% thanks to considerable growth in EMEA, the Americas, and Germany.

Net sales in the APAC region were around 3% below the prior-year level. Our gross margin in the division rose by 0.6 percentage points to 43.6%.

Negative currency and tariff effects were overcompensated by the favorable product and country mix. In Q4, on the other hand, the gross margin decreased by 0.6 percentage points due to higher inventory write-downs.

Functional expenses climbed by 5.7% in 2025, having been positively impacted in the prior year by one-off effects of around €15 million from the sale of real estate and the adjustment of the put option. Without these effects, the increase in 2025 amounted to only 3.7%, with higher personnel expenses being the main cause.

The EBIT of the Medical division doubled to €57 million after a decline in the prior year. Consequently, the EBIT margin rose from 1.5% to 2.9%.

In Q4, the EBIT increased significantly to—by around 40% to roughly €80 million thanks to the strong year-end business. As a result of the strong increase in earnings, our DVA in the Medical division improved considerably in 2025 from around -€50 million to -€23 million.

I will now turn to our Safety division, which delivered another good performance. We are now on page 11.

Our safety business continues to grow. Order intake rose by more than 6% in 2025.

This was primarily due to the high demand for engineered solutions and gas detection devices. In addition, respiratory and personal protection products as well as alcohol and drug testing devices contributed.

The EMEA and Americas regions recorded a significant increase in orders, while the APAC region also developed positively. In Germany, demand declined after we had received a major order for NBC protection filters in the prior year.

However, industrial demand in Germany is also generally restrained at present. Net sales increased by 2.6% in the fiscal year, driven by the positive development in the EMEA and APAC regions.

In Germany, net sales were roughly on par with the prior year, while the Americas recorded a decline. In Q4, net sales rose by just under 3%, as the decline in the Americas and Germany was overcompensated by the growth in EMEA and APAC.

Our gross margin in the division remained stable at 47.3% in 2025, with the negative currency and tariff effects being offset by the more favorable product mix and price adjustments. In Q4, the gross margin slightly decreased by 0.2 percentage points.

Functional expenses went up by roughly 3%, having been positively impacted in the prior year by one-off effects of around €17 million from the sale of a non-strategic business area and from the sale of real estate. Excluding these effects, functional expenses fell by 0.4%.

The capitalization of development costs led to a reduction in functional expenses in the reporting year. The EBIT of the Safety division increased in 2025 by 6.4% to around €176 million, while the EBIT margin rose from 11.3% to 11.9%.

In Q4, the EBIT climbed by around 32% to roughly €77 million as a result of the strong year-end business. The EBIT margin also improved significantly by 4 percentage points to 16.5%.

Our DVA in the Safety division increased by around €9 million to around €113 million, coming from around €104 million in the prior year. All in all, a very positive development in our safety business.

Let's move on to some key ratios on page 12. Thanks to the strong growth in earnings, our cash flow from operating activities improved significantly by around €71 million to around €238 million in 2025.

At the same time, outflow from investing activities rose from just under €55 million to around €98 million. Among other things, this was due to a supplier loan granted at the purchase of further share—shares in an investment.

Moreover, the sale of our fire alarm systems business in the Netherlands and the sale of the property in the US had led to a considerable inflow in 2024. All in all, our free cash flow amounted to around €140 million, which is a considerable improvement of around €60 million compared to the prior year.

Since free cash flow was on par with net profit, the cash conversion rate amounted to 100%, a level we also expect for the current year. As a result of the increase in free cash flow, cash and cash equivalents rose significantly by around €22 million to €282 million.

This led to a considerable decline in net financial debt by around 25% to €123 million. That said, the ratio of net financial debt to EBITDA declined from 0.5 to 0.3, keeping our leverage at a very healthy level.

With regard to net financial debt, we expect the figure to increase in the current year. A large distribution center is currently being built in Lübeck, where we intend to consolidate various logistics warehouses in the future.

Dräger will rent the property on the long-term basis, with—which under IFRS results in a higher lease liability. This, together with higher investments, is in turn a key driver for the higher expected net debt in 2026.

With an increase of around 4% to €1.7 million capital employed—capital, €1.7 billion capital employed rose much lower than our EBIT. Therefore, our 12 months return on capital employed went up from 12.1 to 14.2%.

Net working capital was around 2% higher than in the prior year at around €755 million. Due to the good business development in particular, our equity ratio stood at around 52% as of December 31st, coming from roughly 50% at the end of the prior year.

Let's take a closer look at our EPS on page 13. With the increase in earnings since 2022 that Stefan Dräger mentioned at the beginning of his presentation, our EPS has also improved continuously over the past years.

Coming from around -€3.50 per share in 2022, earnings per common share climbed to more than €7.40 in 2025. At the same time, earnings per preferred share rose from around -€3.40 to roughly €7.50 per share.

Again, this clearly underlines the progress we are making in improving our profitability. Now, back to Stefan Dräger for the outlook, starting with our dividend proposal on page 14.

Thank you, Gert-Hartwig. In line with our dividend policy, we intend to distribute around 30% of our net profit to our shareholders.

Since our net profit has increased significantly, we will also increase the dividend significantly again for the third time in a row since 2023. We intend to propose a dividend of €2.21 per common share and €2.27 per preferred share for our annual shareholders' meeting in May.

Our equity ratio is clearly over 50%. Provided that the equity situation remains as positive as it is now, we will continue to distribute at least 30% of our net profit in the coming years.

That said, let's move on to our outlook for 2026 on page 15. Ladies and gentlemen, with good demand, record sales, and significantly improved earnings, 2025 was a very successful year.

This is even more apparent when you consider the headwinds from a difficult economic environment. Our operating business is showing good momentum.

Both order intake and order backlog are at a high level. We therefore want to increase net sales again in the current fiscal year.

For 2026, we expect an increase in net sales of 2 to 6% of net of currency effects at an EBIT margin between 5 and 7.5%. Both divisions are likely to contribute to net sales growth and a positive EBIT.

We will continue to counter the US import tariffs by raising prices. In the past fiscal year, we developed a package of measures to compensate for some of the customs duties.

We expect this compensation to be more effective in the course of the 2026 fiscal year than before. For '26, we expect the level of custom duties at group level to be similar to the prior year overall.

The burdens in the Medical division are likely to be significantly higher than in the Safety division, where we have more possibilities to compensate and forward with improved prices. In corporate planning, therefore the net sales and EBIT forecast for '26 are based on the assumption that custom duties will remain at the level of the reporting date for the annual financial statements.

However, when we recall the Greenland discussion over a certain weekend in this spring, this is not guaranteed, and it motivates us to further pursue increased profitability to be able to live through the challenges and uncertainties. When it comes to the war in Iran, we do not see any material impact on our business so far.

We are present in the Middle East with our own Dräger people in Saudi Arabia and Dubai. Our local employees are doing well so far.

In general, the region remains a growth market for us. Risks from the war depend heavily on its duration and regional extent and its impact on the global economy.

We are able to mitigate risks through our high level of diversification. We are very broadly positioned in terms of markets, products, geographies, business mechanics, and customers.

This strengthens our resilience and gives us a positive outlook to the future. With this, I would like to end the presentation and hand over to the operator to open the floor for your questions.

Please.

Good afternoon, thanks so much for taking my questions. Three if I may.

Firstly, just on the Middle East situation, as you just confirmed that you don't expect any kind of larger impact, can you just confirm that there's also not any kind of expected impact on the development basically in terms of supply chains and inflation? That would be question number one.

Secondly, can you just provide an update on the ventilation market? We've seen quite some changes basically with Medtronic and Vyaire actually exiting the market.

I think Mindray is now entering into the US market. It's also high based.

Do you continue to expect actually significant growth in this market segment? Any update on developments here would be helpful.

Then thirdly, as you called out corporate objective number three to increase the kind of recurring business at Drägerwerk, can you just provide some kind of flavor, where do you stand these days percentage-wise and any kind of targets that you can share in that regard? Thank you.

On the Middle East, yeah, I confirm that we do not see a material impact of the war on our business at the moment and in the foreseeable future including the supply chain. There is not to our knowledge a significant impact on a specific component of our production that we can see so far.

We have taken some measures in the past to work with our suppliers more carefully with whom we work and have some reasonable stocking levels for our inventory for components. We of course cannot compensate for all thinkable effects, and we will remain interdependent from the world and the supply chain.

However, I confirm there is no impact that we can see from the current conflicts in the Middle East. What I do see though is that energy prices will remain worldwide on the current level and not return to the level they were six weeks ago including the electricity, gas, and fuel at the gas station.

However, our sensitivity to energy in Dräger is quite limited, so that has no material effect on our outlook and prognosis. Your second question, Mr.

Reinberg, on the ventilation. There were two major players have exited the market and Mindray is there.

On the other hand, we do not see a significant effect or even, I would say, threat from Mindray having a more comprehensive offer in the US. Where we see they're more active is in Africa in remote regions where Chinese government has political influence in financing some of the African governments or very obvious direct influence and control on government and purchasing decisions.

There we're out. On the more developed markets, I wouldn't say it is a significant new development or a threat.

On a global scale, yes, it is a good copy of Dräger with similar offerings and a similar portfolio on both the geographical scale and the portfolio. It is a very viable market companion.

Not only on ventilation, but in many modalities to watch them geographically mostly in Africa. Your question on our corporate objective number three, which is developing the business model further from transaction-based device selling towards interoperability and systems, the business competence and the executing including recurring business with services based on contracts instead of transactions.

Yes, we can say that last year we crossed the €1 billion threshold in services, and in some countries in Europe, the majority already is in services more than in devices, including our home market in Germany. Some other European countries as well, services sales is greater than devices.

Thanks so much. Can you share any kind of targets, where you want to go with this kind of offering?

The goal is to grow this further as the way to defend our business is over, let's say, a business that is purely on cost, like only some of the business mentioned from Mindray is in Africa. When a decision is on cost alone, when we have a larger share of mind and are more deeply entrenched with the customer in offering a service, we have a better understanding of the customer needs and it's more challenging to replace than if it's on a pure device that the trend is that it may become a commodity.

Super. Thanks so much.

Thank you for taking my question. As we talked about the Iran conflict already, just two questions left from my side.

The first one is talking about tariffs, the situation has changed significantly. What does this mean for Dräger and will you apply for reimbursements?

The second question is how has the defense activities developed so far in 2026?

Happy to. Firstly, there is a couple of developments.

Firstly, the court decided that the tariffs that the Trump administration has put in place are not legal, and we have in fact also filed for reimbursement. As of today, it is open how fast the courts will decide and when or if a reimbursement will in fact be paid out.

Secondly,

It's not part of the plan.

It's not part of the plan at this point. If there was a significant outpayment, that would be upside so to speak.

The signals have been mixed how quickly that can happen. I think you have read the news.

Two courts, as far as I've remember, have decided they are not allowed to delay it, but so far nothing has happened. There is a a chance that we can recollect some of our tariffs.

Having said that, given that the previous tariffs have been declared illegal, the Trump administration has put in place another set of tariffs which are a little bit lower, by 5 percentage points, but they are in fact for the full year instead just instead of just 2/3 of the year. If that if/when those run out after 150 days, there are other potential tariffs to be enacted.

The one that may run out, the so-called Section 122 tariffs, may be replaced by Section 301 and Section 232, and we would expect that that will actually take place in the second half of the year. When it comes to effective tariff burden, we still assume that they will remain in place.

As we have seen earlier this year and as Stefan Dräger has pointed out, sometimes there's even a discussion about additional Greenland tariffs or not. Far, we expect actual tariff burden to to be of the same magnitude as last year.

Your other question on the defense business. In general, we benefit in both divisions.

Medical also benefits if there is the need, for instance, to additionally serve 1,500 wounded soldiers that come per day from the Eastern Front, what they are currently preparing and planning for. That means capacity in the German hospital system or the field hospitals, or hospitals aboard warships.

That is regular medical equipment, what we sell. We would not directly classify that as defense business.

What we do call such is part of the safety portfolio that can be specific products for personal protection like the classical gas mask for a soldier, or gas detection equipment, special filters for military vehicles to protect those who protect us and our freedom to operate and our democracy. Last year, around the same time of the year, we predicted that would actually more than triple until the year 2028 to approximately €300 million.

Already last year we saw a good development and we crossed the €100 million threshold with these elements of the portfolio. We confirm that we think in 2028 it can be €300 million because there are quite some opportunities out there.

Thanks. Just a quick follow-up.

When talking about tariff reimbursement, do you communicate volume? How much is the figure that could be reimbursed?

We communicated that we paid €26 million.

That's actually the net effect. To the degree that it will be the net effect, it will be in that order.

The gross effect is a tad higher, runs around €30 million. That would be the impact if we get full reimbursement without the need to pass on anything to customers in that context.

As I said, at this point, we view that as, well, perhaps not speculative, but we have not received clear indication that we should account for that in the near future, but we'll keep you posted obviously when that situation changes.

Sure. Thanks a lot for these answers.

Yes, good afternoon, thank you. My question relates to your capital spending.

You had quite a big surge in '25. Is that likely to last, or is it some sort of a bump that we will not see in '26, '27?

Thank you for your answer.

Part of the higher investment are due to the loan which actually has to be accounted for to one of our suppliers, which helps to be accounted for under IFRS as an investment. I'm not sure whether that actually was one of the reasons for the bump, and we do not expect '26 nor later.

We do however, as I pointed out in the presentation, have to account for an investment for a rental agreement. Again, that's due to the IFRS statement.

All in, we expect an increase in the investment net volume from around €103 million to €110 to €130 million. The substantial portion is in fact the long-term rental agreement, which is, as these things are, not cash effective for the full amount in the period of '26, but over the course of the rental agreement.

Yes, thank you.

Oh, yeah, thanks very much for taking my follow-up. Three if I may.

One on China, can you just provide an update what you see there on the ground? It's not a huge market, but any kind of pick-up would be helpful to just get the latest dynamics here.

Secondly, I think Q1 nearly comes to an end. Any kind of light you can share how you start into the year?

Then last question just on currencies. I think in last call we guided for quite a significant impact.

If currencies stay where they currently are, can you just give us any kind of flavor what kind of isolated margin impact you have? Thank you.

I can—Stefan Dräger speaking—I pick the start in '26. We started with a good order backlog after the order intake at the fourth quarter was also very good.

With this, we had a good start in '26. Order intake and sales at this moment is according to the expectations and planning, it's on a way to deliver on our forecast and prognosis.

With regards to the FX development, in addition to the headwind that we had in '25, we overall see a further deterioration, but not by another similar amount. Our currency headwind when we look at net sales is around 1 percentage point, and when it comes to the EBIT margin, it's between 30 to 60 basis points.

I think, Mr. Reinberg, this is important to figure in when you compare our actual '25 result, particularly the EBIT margin, and the prognosis for '26.

Because the prognosis for '26 and the whole planning for '26 is based on less favorable exchange rates. If these develop and they would be the same as the last year's actual exchange rates, then the outcome of course would be better than the current forecast and prognosis.

It's from our perspective not safe to assume that it would be the same. We have our best guess included into the planning.

That is the major reason if you wonder why our forecast does not show a stronger improvement, because our goal is to improve our profitability by 1 percentage point per year. On average, that is unchanged.

China.

China. We didn't touch China.

There is no relevant news on that. That is so relatively stable and continues to be on a much lower level than it used to.

Super. Thanks so much indeed for the follow-up.

Thank you very much for all of you being with us today during our annual results conference for '25. Thank you for your questions and the interaction.

Look forward to meeting you again either online or, preferably, some point in time in the not too distant future in person. Have a pleasant afternoon and evening.