(c) Marta Orosz, Business Insider
Ottobock is a company dedicated to restoring quality of life for its numerous clients. The man behind the corporation appears to share a similar philosophy, financing his own lifestyle from the company treasury. This involves millions of euros – even during challenging economic periods.
For most employees of this German hidden champion and self-proclaimed global market leader, aligning with the company’s objectives likely comes naturally. The prosthetics manufacturer develops and produces knee joints, arm and leg prostheses, and operates medical supply stores. Each product helps users reclaim a piece of their normal lives – a business model that has afforded Ottobock a unique position in the industry for over a century. The company’s rich history undoubtedly serves as a valuable asset for the planned IPO, which has been in the works since 2015. However, the financial statements of both the company and its parent organization paint a different picture, one that is equally a part of the corporate narrative.
Prosthetics manufacturer Ottobock disbursed 15 million euros in dividends for the pandemic-blighted 2020, with 12 million going primarily to billionaire Hans Georg Näder. The 59-year-old is the majority shareholder of the family business based in Duderstadt, which he now leads in its third generation. This represents a modest distribution for Näder, whose wealth Forbes estimates at 3.2 billion euros. Over the past decade, the billionaire has withdrawn approximately half a billion euros from the parent company, including during years when the company reported losses.
Business Insider learned from multiple sources close to the company that Näder’s personal withdrawals have been a recurring topic of discussion in the advisory board over the past ten years. As the shareholder of such a company, he has the freedom to decide how much money to withdraw for personal use. In response to our inquiry, the company stated that the Näder family, as sole owners, made withdrawals “to the extent deemed appropriate for the Ottobock group in the respective fiscal year.”
Despite Losses, Näder Extracted Over 40 Million
A notable trend emerges when examining Näder’s financial behavior from 2012 to 2018. During this period, he consistently withdrew sums exceeding the company’s profits. In 2012, while the parent company Näder Holding recorded a profit of 10.8 million euros, Näder extracted nearly five times that amount. By 2015, as profits rose to 63.8 million euros, the billionaire’s withdrawal increased to 95 million. Remarkably, even during periods of corporate losses, Näder continued to draw funds from the company coffers. The organization maintains that only funds “not essential for the planning of the corporate group” were withdrawn.
One might question whether the company could truly afford these substantial outflows. Notably, in 2017, the subsidiary Ottobock secured a bank loan of approximately half a billion euros. That same year, Näder divested 20 percent of Ottobock shares to Swedish financial investor EQT. According to the company, Ottobock Group’s debt level “aligns precisely with projections in the current phase of the growth strategy.”
Declining Equity Over Years Signals Corporate Instability
These withdrawals take on added significance when viewed in relation to the company’s debt. An analysis of financial statements over the past decade reveals a clear trajectory. Since 2010, the prosthetics manufacturer’s equity has visibly diminished. While equity represented over half of the company’s total assets in 2016, by 2019, this proportion had dwindled to 15.5 percent. Equity levels, among other factors, serve as a key indicator of a company’s financial robustness.
Balance sheet expert Carola Rinker, in her capacity as spokesperson for the Schutzgemeinschaft der Kapitalanleger (Capital Investors’ Protection Association), regularly analyzes corporate financial statements. Regarding the importance of the equity ratio, Rinker observes, “As the proportion of equity continually decreases, the company’s stability becomes increasingly precarious.”
The current state of the company and whether Ottobock’s growth strategy is reflected in the latest figures remains unclear. Ottobock has yet to release financial data for 2020. The only insight comes from the 2020 dividend announcement, which indicates that the balance sheet profit for 2020 exceeded the previous year’s at 46 million euros.
How does Näder utilize these substantial sums? In response to our inquiry about the high withdrawals, the company states, “As part of its long-term and sustainably oriented strategy, the Näder family office employs a broad diversification of its investments.”
One of Näder’s high-profile investments is located on the site of the former Bötzow Brewery in Berlin. Here, Näder envisions a mixed-use development featuring rental apartments, dining establishments, a startup hub, and a medical campus to be leased by Ottobock. Unlike many German billionaires who cultivate an image of frugality and down-to-earth business acumen, Näder appears unabashed about his billionaire lifestyle. His portfolio of luxury assets includes an extravagant yacht, private jets, art collections, and prestige projects such as the Bötzow Brewery and the now-permanently closed Science Center at Potsdamer Platz.
As Ottobock prepares for its planned IPO, currently vaguely scheduled for “after 2020,” it remains to be seen whether Näder’s “ready-to-spend” billionaire persona as managing partner will resonate as positively with investors as the company’s impressive corporate history.