An exoskeleton is carried almost like a hiking backpack. Put on shoulder straps, buckle the straps on your stomach and arms and off you go. The Paexo Shoulder support system weighs just under two kilograms and relieves workers when they have to work overhead. The upper arms lie in two shells, the cables of which run over the back in a waist belt. If there is weight on the shoulders, it is transferred to the legs and floor. And despite the belts, there is still enough room to move.
Part of Ottobock’s future lies in its exoskeletons. The company from southern Lower Saxony has been developing and selling them since 2018. The support systems are intended to keep the body fit for work. It’s a segment with growth potential. Every worker who lifts and assembles makes a physical effort. Literally helping him out minimizes the risk of injury and lowers production costs in logistics, industry or care, in all areas in which people are exposed.
The medium-sized company has developed into the world market leader in prosthetics over the decades. Ottobock generated around one billion euros in sales in 2019 with prosthetic legs and arms, orthotics, wheelchairs and exoskeletons. This makes the group of companies one of the ten largest health tech companies in Germany. An IPO is now planned for 2022, which should bring the capital for even more innovation.
“If and when remains open”
The details are not yet official. CEO Philipp Schulte-Noelle only says: “As a company, we want to be ready to go public by 2022. Whether and when we will go public remains open.”
Ottobock needs money for digitization, for example. Orthopedic technicians now use a scanner to measure what used to be cast using plaster of paris. 3D printers and CNC milling machines are doing more and more of what is otherwise manual work. The products are made of titanium, aluminum, carbon and polyurethane instead of poplar wood, as was previously the case. The wooden leg has been replaced by mechatronic prostheses that measure how fast the wearer is moving a hundred times a second and recognize from the movement of the hips whether they want to climb a flight of stairs or are about to jump. The tools already work with artificial intelligence and app control; in the future they should become even smarter.
The family company Ottobock has been manufacturing prostheses for more than a hundred years. Today’s high-tech prostheses have little in common with earlier models made of poplar wood.
(Photo: Marco Moog / Ottobock)
That was inconceivable two generations ago. When Otto Bock founded his company in 1919, prostheses were carved individually for each patient. And disabled people were plentiful after the end of the First World War. Bock dismantled the prosthesis into its individual parts and produced what is always the same in series: joints, connecting pieces and prosthetic feet. That was the basis of his success.
Who is the boss?
At that time, production took place in Königssee in Thuringia. After their expropriation, the Bock family moved to Duderstadt. There, in the district of Göttingen, the company has been located since 1947, rebuilt by Max Näder, the founder’s son-in-law. In 1990 Näder handed over the management to his son Hans Georg.
The billionaire is considered a dazzling figure. An art lover who wears a scarf instead of a tie and loves sailing yachts. Whose private life is measured in tabloid media like Bild and Bunte and who sponsors projects in the region just as generously as the CDU and FDP that he does in August 250,000 euros each sent. Under his leadership, the family company expanded, which today employs around 8,000 people in 60 countries.
When it comes to the future success of the group, Hans Georg Näder, 60, is possibly the great stranger, because who is in charge? In 2017 he restructured the whole store. His daughter Georgia, now 24, got a seat on the board of directors. A GmbH became a partnership limited by shares, and an IPO was planned. Näder decided against it and instead brought EQT on board. The Swedish investment company has already made many companies public, including the Nuremberg software company Suse and itself.
An atypical IPO
At the beginning of 2018 there was a managing director outside the family for the first time. Oliver Scheel stayed at the post for only ten months. Philipp Schulte-Noelle, 45, then CFO, became the new CEO. Näder chairs the board of directors; He holds 80 percent of Ottobock through his holding company, and EQT owns 20 percent.
Schulte-Noelle is a business lawyer. He worked for the private equity firm Permira and the drug manufacturer Fresenius Kabi, among others. “I manage the operative business and coordinate with Mr. Näder on a regular basis,” says the native of Cologne about the cooperation. “We are of the same opinion in almost all cases – and if not, we will find a way.”
Philipp Schulte-Noelle has been a member of the Ottobock management team and a member of the Board of Directors since August 2018.
(Photo: Ottobock)
Christoph Schalast teaches at the Frankfurt School of Finance & Management. He describes the possible IPO of Ottobock as atypical: on the one hand, because it is a family company with a long history and a rather eccentric partner, this step is unusual. On the other hand, because an IPO had already been attempted, but it was canceled. It was very good for Ottobock to have used EQT instead. That shows how a large, traditional medium-sized company can work successfully with a private equity firm without being taken over by it, says Schalast. With the focus on exoskeletons and new technologies, the company is also “positioned for the future”.
Become attractive digitally
Every IPO requires a good story. And the people of Duderstadt can tell a lot, for example on social networks and through brand ambassadors like the athlete Heinrich Popow. As a sponsor of the Paralympics, Ottobock repairs and maintains the sports equipment and prostheses of the participants. In the “Patient Care” area, the team at the company headquarters cares for Libyan civil war victims, paid for by their embassy. All over the world, people in many countries have access to the aids from the Lower Saxony province.
This also includes orthotics that support muscles and joints from the outside, for example in the case of paralysis after a stroke, multiple sclerosis or cerebral palsy – diagnoses that affect hundreds of thousands every year in Germany alone. “We expect waves of growth, the more clinical pictures we can serve,” says Schulte-Noelle. “That is why we want to get closer to our patients: If we can understand their needs even better, we can implement this in our developments.” Most of those patients are never cured. Those who take care of them usually do so for the rest of their lives.
However, all the innovations cost a lot of money. The customers of Ottobock’s medical division are medical supply stores, not the end users. As innovative as the products may be, what the health insurance company pays for is usually not the very latest on the market. The medium-sized company invests seven percent of its turnover in research and development – and thus makes an advance payment with the aim of getting into the reimbursement catalog of the health insurers. Depending on the product, this can take years.
This is another reason why the exoskeletons are important: They are sold directly to companies and are not medical products, but are considered machines. A support system costs up to 6,000 euros. The sum pays for itself within twelve months if workers are absent less often and production losses decrease.
The digital path is important for the family business for another reason. Duderstadt is pretty, but structurally weak. Ottobock is a popular employer in the region, but you can also tell there that some job descriptions seem uncool if it sounds too much like a craft. If you want to become an orthopedic technician, you may be more attracted to a 3D printer than to work in the plaster room.