Ottobock - Professor Näder invites you to an audience

2022-06-04
7 min read

welt.de 4 June 2022 OTTOBOCK: Professor Näder lädt zur Audienz, by J. Dams, A. Ettel

It was originally supposed to be an interview with the main shareholder of the prosthesis manufacturer Ottobock. But after the canceled IPO, he didn’t feel like answering many questions.

Hans Georg Näder is the main owner and head of the board of directors at the family company Ottobock

Hans Georg Näder likes to show what’s his. The former Bötzow brewery in Berlin, for example, on the edge of Prenzlauer Berg. He has the two journalists from WELT guided around the site by an employee. She tells what “Professor Näder”, the billionaire from Duderstadt, is up to here.

Where beer used to flow, a neighborhood within a neighborhood is to be created with apartments, offices, workshops and a basement area for festivals. Näder bought the site more than ten years ago. Star architect David Chipperfield is said to have designed the master plan for the area. And the Berlin star chef Tim Raue has already cooked here temporarily. Näder wants to invest 100 million euros in the brewery, wrote the “Tagesspiegel” in 2013.

Näder has now moved his Berlin office to the corner tower of the former main building. The capital is an important location for the prosthesis manufacturer Ottobock, part of the branched Näder family holding company. The brewery’s chimney towers behind the office, with the word “Futuring” emblazoned on it. The fantasy word should stand for departure, says the employee. At Ottobock, however, it was more of a discontinuation that was the order of the day.

Ironically, in the week in which a long-planned interview by WELT with Näder was to take place, Ottobock first separated from his chief financial officer. A few days later, the company also lost the CEO and CTO. At the same time, Näder stopped the company’s stock market plans.

Enough material for a long conversation, one would think. Especially since Näder, who has managed the family business himself for decades, continues to call the shots as the main owner and head of the board of directors when it comes to important strategic decisions, together with the venture capital firm EQT, which has been involved since 2017 and holds 20 percent of the shares.

But in the conversation after the tour, the 60-year-old honorary professor at the Technical University of Göttingen and the private university HAWK, whom employees therefore often refer to as “Professor Näder”, showed little desire to answer questions: neither about the IPO, nor about this According to him, the time was still up to date, still about the surprising personnel carousel at Ottobock. And certainly not to the figures of Ottobock SE & Co. KGaA, which - published in the Federal Gazette - raises a lot of questions.

There is a need for an explanation for a company that wants other people’s money when it goes public: For example, why the published balance sheets of Ottobock SE & Co. KGaA at least give the impression that the entrepreneurial family has been taking more money from the company for years than the latter earned? Näder doesn’t feel like such questions: “Since we’re not getting any further in this communication, ask me about the results and ask Tralala the questions in writing, we’ll answer them,” he says.

The hint that we would end the interview if Näder didn’t want to answer any questions about the company’s figures didn’t help. “I was looking forward to a diverse afternoon with you,” said Näder. The call was terminated. WELT then sent the questions in writing to Ottobock. Excerpts of the company’s responses are printed here.

WELT: A few days apart, you first announced the departure of CFO Kathrin Dahnke and then CEO Philipp Schulte-Noelle and Technical Director Andreas Goppelt. Why in such a short space of time one after the other?

Answer: Due to the current geopolitical situation and the capital market environment it affects, the Board of Directors has decided that an IPO is not desirable for the time being. The board of directors then sought individual talks with the managing directors. After we had spoken to the respective managing directors, we communicated this.

WELT: Is it true that Schulte-Noelle left on his own?

Answer: Philipp Schulte-Noelle came to Ottobock with the ambition of taking the company public. Mr. Näder, Mr. Brennecke (Markus Brennecke is Co-Head of Private Equity at EQT, editor’s note) and Mr. Schulte-Noelle have always maintained a respectful and trusting relationship. When the owners decided that an IPO was not desirable for the time being due to the current geopolitical situation and the capital market environment it affected, Mr. Näder, Mr. Brennecke and Mr. Schulte-Noelle discussed the future and decided by mutual agreement that Philipp Schulte-Noelle leaves the company.

WELT: Why is the number of personnel changes at the executive level so big?

Answer: Ottobock is a dynamically growing healthtech company. With the entry of EQT in the summer of 2017, a new phase began for the family business: At that time, the owner-managed company was switched to management by external managers. This process is complex in most family businesses.

WELT: According to earlier reports, Ottobock wanted to use the IPO to access new sources of money to finance growth. Is that correct?

Answer: Access to the capital market is always a good alternative to debt financing and the strong internal financing potential of our organization from operating cash flow. Ottobock is pursuing an offensive growth strategy. We want to continue growing both organically and through targeted acquisitions. We will also continue on our path of digitizing the value chain in orthopedic technology.

WELT: How do you want to implement the planned growth strategy without having fresh capital available from an IPO? Or are you shelving this strategy now?

Answer: An IPO would have been one of several options to bring additional funds into the company. At the same time, Ottobock has longstanding banking partners at its side, with whom we have also been able to finance our growth in recent years. This option is still available to Ottobock.

WELT: Is it correct that EQT was already looking for a buyer for its own 20 percent stake in Ottobock?

Answer: No, that is not the case. To date, Ottobock has met all the criteria for a successful investment for EQT. EQT has a long-term investment horizon and sees itself under no obligation to act.

WELT: In 2020 you made a loss of 20 million euros with Ottobock SE & Co.KGaA, the competition from Ossur made a plus of eight million. How can this difference be explained?

Answer: The result you quoted is the annual surplus of the individual financial statements of Ottobock SE & Co. KGaA. Ottobock SE & Co.KGaA is only part of the Ottobock SE & Co. KGaA group of companies. In the period you mentioned, the IFRS consolidated financial statements of Ottobock SE & Co. KGaA generated net income in the double-digit million range.

WELT: Even before Corona in 2018, the company reported losses according to the Federal Gazette. How can this be explained?

Answer: Ottobock has been successfully implementing its sustainable growth strategy for years. The focus was and is clearly on profitable growth. The fact is that the Ottobock SE & Co. KGaA group of companies continuously increased its sales between 2010 and 2019 to more than one billion euros. Operating profit has also increased in recent years. An exception is the year 2018, in which a negative annual result was reported due to high special depreciation in connection with the Freedom Innovations acquisition.

WELT: Between 2016 and 2020, the owners of Ottobock withdrew around 455 (2019: 420 million) million euros more than they show in the net income. Why?

Answer: The withdrawals made by the owners in the years mentioned include special proceeds from the owners, not from Ottobock SE & Co. KG. These are therefore independent of the surplus of Ottobock SE & Co. KG. Please note the different group levels and companies. The following applies to the Ottobock SE & Co.KGaA group of companies: Due to the successful development of our company, there have been regular dividend payments to the owners in recent years. These followed the agreement between the owners. The dividend has always been in healthy proportion to the earning power and cash flow of the Ottobock Group. Only funds that were not necessary for the implementation of the group’s strategy were withdrawn.

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