Jenoptik remains profitable in a challenging environment
Despite a difficult economic and political environment, the Jenoptik Group maintained profitability in 2014 at around the same level as in the prior year.
- Group revenue at 590.2 million euros
- Slight rise in Group earnings before interest, taxes, depreciation and amortization (EBITDA) to 76.1 million euros
- Group operating result (EBIT) at 51.6 million euros
- Dividend due to amount to 0.20 euros per share
- Jenoptik expects strong growth in 2015 again
In view of the Group’s sound earnings and financial position, the Executive Board and Supervisory Board of JENOPTIK AG will propose a dividend payment of 0.20 euros per share to the Annual General Meeting (prior year 0.20 euros). The payout ratio thus rises to 27.5 percent (prior year 24.3 percent).
Solid quality of earnings maintained despite slight fall in revenue.In the challenging environment of the 2014 fiscal year, the Jenoptik Group generated revenue of 590.2 million euros, 1.7 percent down on the prior year (prior year 600.3 million euros). The Lasers & Optical Systems segment boosted its revenue in 2014, while the other two segments – Metrology and Defense & Civil Systems – reported falls due to customer reluctance to invest, export restrictions and project postponements. The automotive/machine construction sector remained the most important market, accounting for 27.0 percent of revenue (prior year 27.9 percent). On a regional level, Asia/Pacific saw the most dynamic growth (40.9 percent increase on the prior year). Jenoptik generated 64.2 percent of its revenue abroad (prior year 62.0 percent).
Group earnings before interest, taxes, depreciation and amortization (Group EBITDA) rose moderately to 76.1 million euros (prior year 74.8 million euros). Group operating results (EBIT) came to 51.6 million euros (prior year 52.7 million euros). A changed revenue mix and more efficient operational processes resulting from the Jenoptik Excellence Program had a positive influence on revenue trends in the past fiscal year; by contrast, order revaluations in the defense business impacted negatively. At 8.7 percent, the EBIT margin was almost at the same level as the prior year (prior year 8.8 percent). The slight decline in EBIT was also reflected in earnings before tax (Group EBT), which at 46.1 million euros were down on the prior year (prior year 47.2 million euros). Earnings per share were 0.73 euros (prior year 0.82 euros).
Order intake and backlog improved on prior year. Well-filled project pipeline for 2015.In the 2014 fiscal year, the order intake rose to 589.2 million euros (prior year 575.3 million euros), thus matching the level of revenue. The Lasers & Optical Systems and Metrology segments saw growth in their intakes.
The order backlog rose to 422.5 million euros at the end of 2014, and together with a well-filled project pipeline forms a solid basis for the growth projected in the 2015 fiscal year (31/12/2013: 411.4 million euros).
Stable financial and asset position offers scope for future growth.In the 2014 fiscal year, the Jenoptik Group once again enjoyed a stable financial and asset position, providing the company with sufficient flexibility to secure future growth and push on with its strategy. “Thanks to positive cash flows, we were and are able to finance our operating business, capital expenditure and acquisitions from our own resources,” explains Chief Financial Officer Rüdiger Andreas Günther.
Due to a higher level of working capital and an increase in capital expenditure, the free cash flow fell to 22.5 million euros (prior year 47.0 million euros). Net debt rose to 92.1 million euros as at December 31, 2014 (prior year 44.1 million euros), mainly due to corporate acquisitions. Equity rose by 19.5 million euros to 386.6 million euros (31/12/2013: 367.1 million euros). As a result of company acquisitions and the higher working capital, the balance sheet total of the Jenoptik Group rose to 771.7 million euros as at the year-end (31/12/2013: 692.4 million euros). The equity ratio therefore reduced to 50.1 percent (prior year 53.0 percent).
More employees abroad.The number of Jenoptik employees (incl. trainees) increased 3.5 percent as at year-end 2014 to 3,553 (prior year 3,433). The largest increase was seen in the Metrology segment, chiefly due to the acquisition of Vysionics, a British supplier of traffic safety technology. In the course of the internationalization strategy, the number of employees abroad increased to 617 (prior year 475), equating to 17.4 percent of the total workforce (31/12/2013: 13.8 percent).
Heterogeneous development of the three segments.Due to their different target markets and international reach, the Jenoptik Group’s three operating segments developed differently in 2014. Success in implementing the internationalization strategy and actions to optimize internal processes again had a positive impact on the segments’ development of business and earnings over the year.
In the Lasers & Optical Systems segment, Jenoptik further strengthened its position as a leading supplier of photonic systems solutions. In the 2014 fiscal year, revenue slightly rose 3.0 percent to 231.3 million euros (prior year 224.7 million euros). The segment EBIT increased at a faster rate than revenue, by 9.6 percent to 27.0 million euros (prior year 24.6 million euros), primarily due to a good development of revenue and an optimized product mix. The EBIT margin consequently improved to 11.7 percent (prior year 10.9 percent). At 240.1 million euros, the order intake exceeded the high prior-year level by 8.4 percent (prior year 221.4 million euros). The segment’s order backlog at year-end was 100.8 million euros (31/12/2013: 94.3 million euros).
Revenue in the Metrology segment fell marginally in 2014, by 1.3 percent to 185.0 million euros (prior year 187.4 million euros). Demand from the automotive industry, the key customer sector for Industrial Metrology, declined due to a continuing reluctance to invest and stricter export regulations. There were, however, positive run-on effects from the acquisition of Vysionics Ltd. in November 2014 and major orders for traffic safety technology. The segment’s EBIT, at 22.5 million euros, and an EBIT margin of 12.2 percent were almost at the prior-year level (prior year 22.6 million euros, 12.0 percent). The segment order intake increased by 1.3 percent in 2014 to 174.7 million euros (prior year 172.5 million euros), while the order backlog increased 6.1 percent at year-end to 77.2 million euros (31/12/2013: 72.8 million euros).
Revenue in the Defense & Civil Systems segment fell to 170.8 million euros in 2014, 7.7 percent down on the prior year (prior year 185.1 million euros). This drop is due primarily to the tighter restrictions on armaments exports imposed by the German government as well as the postponement and extended time frames of international defense projects. With only a moderate development of revenue and order revaluations, the segment EBIT was 2.1 million euros and consequently far below the figure in the prior year (prior year 11.6 million euros). The EBIT margin thus fell to 1.3 percent (prior year 6.2 percent). At 170.2 million euros, the segment’s order intake in 2014 was 5.0 percent down on the prior year (prior year 179.2 million euros). As of December 31, 2014, the order backlog of 245.9 million euros was at the same level as the prior year (31/12/2013: 246.9 million euros).
Return to profitable growth expected in 2015.In 2015, the Jenoptik Group will continue to pursue its strategic agenda with the aim of achieving profitable growth in all its segments. Revenue growth, the resulting economies of scale, cost discipline and higher margins from the growing systems and service business are due to lead to sustainably improved earnings. “We want to return to growth in the 2015 fiscal year. Our aim is to achieve Group revenue within the 650 to 690 million euro range and an EBIT margin of between 8.5 and 9.5 percent,” says Michael Mertin.
In addition, Jenoptik is taking advantage of the very attractive capital market environment and restructuring the non-current Group financing. The first step, the extension and increase of the existing syndicated loan, will soon be completed. At the same time, the tranches of the outstanding debenture loans will be refinanced and increased. “After completing these measures Jenoptik will have further improved financing power which is supporting the future international growth of Group”, Rüdiger Andreas Günther adds.
The full Annual Report is available on the Investors Relations section of the website. The “Jenoptik app” can be used to view the Annual Report on mobile devices running iOS or Android.
This announcement can contain forward-looking statements that are based on current expectations and certain assumptions of the management of the Jenoptik Group. A variety of known and unknown risks, uncertainties and other factors can cause the actual results, the financial situation, the development or the performance of the company to be materially different from the announced forward-looking statements. Such factors can be, among others, changes in currency exchange rates and interest rates, the introduction of competing products or the change of the business strategy. The company does not assume any obligation to update such forward-looking statements in the light of future developments.