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Hans Georg Näder has a fear of flying, at least that’s what many people around him used to think. As the owner of orthopaedics specialist Ottobock, he sometimes even traveled by ship to attend business meetings in the USA, according to his companions. A considerable effort: the Queen Mary takes nine days to get from Hamburg to New York.
However, since HGN, as he calls himself, discovered traveling by private plane, his supposed fear of flying is said to be over. The plane with the healing effect is said to be a Bombardier Global 7500, which is considered decadent even in billionaire circles. Range: more than 14,000 kilometers, with room for more than twelve passengers. Cost: at least 70 million euros. The initials HGN were also found in the identification of the means of transport.
According to several online flight registers, the aircraft was operated or owned by HGN Productions & Verlag. The imprint on the publisher’s website states that it is represented by Professor Hans Georg Näder. A spokeswoman for the Ottobock Group explains: “Neither the Ottobock Group, nor Näder Holding, nor Mr. Näder himself owns aircraft.” HGN Verlag does not own any aircraft either. The spokesperson did not answer whether the publishing house was the operator or owner of the aircraft until recently. She also did not say whether HGN suffered from a fear of flying in the past. She is concerned with the present: Näder does not suffer from a fear of flying.
Profit: in decline
“It always has to be bigger, better and better,” says a former companion about Hans Georg Näder. This applies not only to airplanes, but also to real estate, works of art and luxury yachts that Näder calls his own.
What’s the big deal? The man can do what he wants with his money. And: Hans Georg Näder, 63 years old, is after all a world champion who has elevated the medium-sized company from Duderstadt in Lower Saxony to world market leader. A visionary, he has been at the helm of the family business since 1990, first as Managing Director and now as Chairman of the powerful Board of Directors. Against the advice of many doubters, he once brought the world’s first fully mechatronic knee joint onto the market. To this day, the computer chip-controlled C-Leg is one of Ottobock’s most important sales drivers.
That’s one side of the story. The other: He finances his lifestyle and investments from outside the industry with the help of his group of companies. This is now causing increasing resentment among his own employees.
Bigger, better and better - this three-pronged approach worked as long as Ottobock’s business was going well. However, research by WirtschaftsWoche shows a very different picture: the Ottobock Group’s profit has recently been declining and the margin generated in 2023 looks anything but comfortable.
The Ottobock spokesperson says that the pre-tax and net profit were significantly influenced by the increased interest rate level on the market.
Näder is under enormous financial pressure: together with his subsidiaries, he holds 100 percent of the shares in Ottobock via the Näder Holding Group. This was not always the case. In 2017, Näder sold 20 percent to the Swedish investment company EQT. The joint plan was to float Ottobock on the stock market. But this did not happen. Instead, the Näder family bought back the shares last year. To do so, they borrowed 1.1 billion euros from credit funds in the form of a loan where the interest is only due at the end of the term. An interest rate of around ten percent is common for such loans. In the end, an amount can become due for interest and repayment that is not so easy to generate.
Especially as the Näder Holding Group is weakened. Between 2010 and 2022, the shareholders treated themselves to dividends and withdrawals amounting to almost 600 million euros. That is around 260 million euros more than the Group earned as earnings after all taxes in the same period. In addition, the shareholders had debts of 40 million euros to the Näder Holding Group at the end of 2022.
In the 2023 financial year, Ottobock achieved record sales of 1.47 billion euros, an impressive 12.1% more than in the previous year. According to the Ottobock spokesperson, the increase in sales was “largely” the result of organic growth.
Sales boost bought at a high price
However, a significant part of the increase in turnover is likely to be due to acquisitions. According to internal figures, the Ottobock Group only spent around 14 million on acquisitions in 2023 - less cash and cash equivalents held in the accounts of the acquired companies. In 2022, however, it was still around 96 million euros. And companies were also acquired in previous years.
In 2022, for example, the Dutch prosthesis vendor Livit was added with 50 supply centers. Annual turnover: 43.3 million euros. Purchase price: 46 million euros. In the same year, the Belgian prosthesis and wheelchair vendor Orthomed also became part of the Ottobock Group. Sure: Ottobock buys turnover with such acquisitions. But do they also move the Group forward, is it really worth the effort? Since Ottobock joined, the earnings of both companies have declined. Livit reported a loss last year, Orthomed only a six-figure net profit.
And how is business going overall? WirtschaftsWoche has access to the Ottobock Group’s previously unpublished annual report for the 2023 financial year. According to the report, Ottobock earned 839 million euros with its core business, prostheses. However, the bottom line was a profit of only 48 million euros - around 27 million euros less than in the previous year. This in turn has to do with the Ottobock Group’s debts. They amounted to 1.75 billion euros at the end of 2023. The associated expenses have apparently exploded. In 2022, financing costs were still around 31 million euros. One year later, they were more than twice as high at around 72 million euros. The most important cost factor in 2023 was interest, at 48 million euros. The Ottobock Group spent three times as much on this as in the previous year. In the end, the profit margin was only a narrow 3.2 percent.
This is anything but impressive, as the competition shows. Like Ottobock, Össur, a company with roots in Iceland, primarily earns money with prostheses. Turnover in 2022 amounted to 719 million euros. The company was therefore around half the size of Ottobock, but generated 107 million euros before interest and taxes, significantly more than the Ottobock Group, which only generated around 76 million euros in the same year. Össur has “a very good acquisition strategy”, says a former Ottobock manager approvingly. Thanks to their IPO, the Scandinavians had a full coffers for clever takeovers. In addition, Össur’s structure is much leaner and more agile than Ottobock.
Turbulence with employees
One or two Ottobock employees are now expressing concerns. The company had rested too long on its former successes and had not taken the competition seriously enough. Countermeasures are being taken with company acquisitions. However, one of them says that there is no recognizable strategy. However, it is the debts that Näder has accumulated that are causing the most uncertainty. What will happen to Ottobock and the jobs if Näder is unable to repay the money?
The market for prostheses is still a health insurance market, and high-tech products such as those from Ottobock are not reimbursed. The fact that Näder bought back Ottobock shares from EQT in this difficult market situation and took on a lot of debt to do so? “That will hurt him again,” says a former manager. Will another attempt at an IPO succeed? Many in Duderstadt have doubts.
The Ottobock spokesperson apparently does not: Ottobock was able to “successfully continue” its growth course in 2023, she says.
Oliver Mizera’s appearance at the Festival of Democracy in Duderstadt last autumn is evidence of the fractured relationship between the company and its workforce. Mizera is the head of the shop stewards at Ottobock, i.e. IG Metall employees from the company who are elected by other members of the union. At the party, he accused the Ottobock management of “partially gutting” the company. A murmur went through the audience, then loud applause broke out. The Ottobock spokesperson did not comment on this when asked.
If Hans Georg Näder wanted to meet some really successful employees, all he would have to do is hop on a private plane. The journey would also take less time than a trip to the USA. It would be a flight to Russia, a country at war that has invaded Ukraine. Many German companies have withdrawn from Russia. Ottobock has not. “Business with roubles made a substantial contribution to the Group’s sales growth in 2023,” Ottobock’s annual report states. The company bosses expect demand for prostheses in Russia to continue to rise.
Russian business takes off
For the first time, internal documents show the results achieved by Ottobock’s subsidiaries in the 2023 financial year. For example, Otto Bock Service Moscow achieved a result of 5.48 million euros, Otto Bock - Orthopedic Technique LLC earned 2.8 million euros, Otto Bock St. Petersburg 1.33 million euros, Otto Bock Mobility LLC 1.55 million euros and Otto Bock Yekaterinburg achieved a result of 87,000 euros. Together, this amounts to more than twelve million euros. The companies make a significant contribution to the Group result.
Ottobock also supplies Ukraine with prostheses and other healthcare products. In 2023, a company was even founded in Ukraine to “ensure the country’s supply”, as stated in the annual report. Business in the war-torn country is set to pick up again, it continues. The company spokesperson explains: “Ottobock is sticking to its humanitarian mission in Russia and continues to supply civilians there.” There is no cooperation with the Russian military. The sales generated in Russia and Ukraine only account for a single-digit percentage of total sales.
And so Ottobock continues to do business on both sides of the front.
“Why should we take away the mobility of someone who has been wearing Ottobock products for so long?” Näder said last year in an interview with ‘Die Zeit’ about Ottobock customers in Russia, some of whom have been with the company for many years. That his prostheses could still end up in Putin’s military? “Even if that happens via detours that we can’t control: They are not cannons, but humanitarian goods.” Which also bring good results.
(c) Wirtschaftswoche 2025, Philip Kaleta, Volker ter Haseborg
