Subdued demand from the machine construction, automotive and semiconductor equipment industries, project postponements as well as more stringent export restrictions continued to affect the Jenoptik Group’s business performance in the third quarter. “Despite a challenging environment which has also impacted on our customers’ capital spending patterns, we recorded solid order intakes thus ensuring good conditions for growth in the fiscal years ahead,” said the President & CEO Michael Mertin. “With our strategy of internationalization we are well positioned. We expect to show strong growth in particular in Asia which will help us to compensate for weaker demand in other regions.”
At 446.7 million euros, the order intake of the Jenoptik Group in the first nine months of 2014 was 7.6 percent up on the prior year (prior year 415.4 million euros). As of September 30, 2014, the order backlog, at 436.9 million euros, exceeded the 2013 year-end figure by 6.2 percent (31/12/2013: 411.4 million euros).
In the first nine months of 2014, the Jenoptik Group generated revenue totaling 420.1 million euros, slightly down on the prior year (prior year 432.5 million euros). The Lasers & Optical Systems segment grew, while the other two segments reported a drop in revenue due to customers’ reluctance to invest, project postponements and tightened export regulations. At the end of the third quarter 2014, the share of revenue generated abroad was 63.8 percent and thus at the same level as in the prior year (prior year 63.6 percent). Compared to the first nine months of 2013, revenue in Asia/Pacific grew strongly by approximately 46 percent to 60.2 million euros (prior year 41.3 million euros), also due to the transfer of projects from America to this region.
The gross margin improved to 35.2 percent (prior year 34.6 percent). In the period covered by the report, the gross result was influenced by both a changed revenue mix and more efficient operational processes. Group operating result (EBIT) improved slightly in the first nine months, at 37.8 million euros (prior year 37.5 million euros). The EBIT margin rose from 8.7 percent to 9.0 percent.
Earnings before tax remained almost unchanged on the first nine months of 2013, at 33.1 million euros (prior year 33.6 million euros). Earnings after tax came to 28.2 million euros, following 29.1 million euros in the prior year, resulting in earnings per share of 0.49 euros (prior year 0.51 euros).
As at the end of the third quarter 2014, the Jenoptik Group had 3,532 employees (31/12/2013: 3,433 employees). Around 16 percent of the workforce is employed abroad.
Working capital was built up in the first nine months of 2014, in part to generate revenue for the months ahead from a high order intake. This led to a scheduled increase in net debt as of September 30, 2014, to 67.1 million euros (31/12/2013: 44.1 million euros, 30/09/2013: 82.0 million euros).
In the first nine months of 2014, cash flows from operating activities came to 10.8 million euros (prior year 15.1 million euros). In the third quarter 2014 the Group generated cash flows from operating activities of 24.3 million euros (prior year 5.0 million euros).
The Jenoptik Group’s equity ratio increased to 55.2 percent (31/12/2013: 53.0 percent).
“Jenoptik has a good asset position which provides us with sufficient flexibility both for our future organic growth and for corporate acquisitions,” explains CFO Rüdiger Andreas Günther.
The Lasers & Optical Systems segment reported robust business performance in the first nine months of 2014. Compared to the same period in the prior year, revenue rose 7.4 percent to 172.2 million euros (prior year 160.4 million euros). Consistent demand for laser systems for plastics processing as well as successful project starts in the medical technology and life sciences markets helped to bolster development in the period covered by the report, although business with the semiconductor equipment industry slowed unexpectedly and considerably in the third quarter. EBIT increased 21.5 percent from 16.8 million euros in the prior year to 20.4 million euros. At 186.0 million euros, the order intake was both above the level of the prior year (prior year 165.1 million euros) and higher than revenue in the reporting period. This resulted in a further order backlog increase in the segment, which came to 107.2 million euros at the end of September 2014, 13.7 percent higher than at the end of 2013 (31/12/2013: 94.3 million euros).
The prevailing reluctance to invest and uncertainties relating to the sanctions imposed on Russia together with stricter export controls resulted in a further weakening of demand in the area of metrology in the third quarter. Revenue in the Metrology segment accordingly fell by 9.3 percent to 127.7 million euros (prior year 140.8 million euros). The segment’s EBIT reduced by 14.4 percent to 14.7 million euros (prior year 17.2 million euros). This development is primarily attributable to weaker revenue figures in the reporting period. Despite a challenging environment, the segment’s order intake of 126.2 million euros was slightly above the level of the prior year (prior year 125.1 million euros). At 71.8 million euros, the segment order backlog was marginally below the figure for the end of 2013 (31/12/2013: 72.8 million euros).
Primarily due to the postponement or extended time frames of various projects and tighter armaments export restrictions imposed by the German Federal Government, in part following sanctions against Russia, revenue in the Defense & Civil Systems segment fell 8.8 percent to 117.3 million euros in the first nine months (prior year 128.6 million euros). With a weak development of revenue and a project-related lower-margin product mix, the segment EBIT was 0.4 million euros and consequently well below the figure for the prior year (prior year 6.6 million euros). In the prior year, the EBIT was also positively influenced by a one-off effect. The order intake grew 5.3 percent to 130.9 million euros, thus exceeding both revenue in the reporting period and the prior-year order intake level (prior year 124.2 million euros). The segment’s order backlog increased to 259.7 million euros, following 246.9 million euros as of December 31, 2013.
In the light of the current economic environment, the JENOPTIK AG Executive Board has revised its 2014 guidance. On the condition that a major international order for defense technology can still be completed by year-end and existing uncertainties in the defense business do not intensify further, the Executive Board is now expecting Group revenue to come in at around 600 million euros, the same level as in the prior year. The Group operating result is due to total around 50 million euros.
The interim report will available from 8.00 am at http://www.jenoptik.com/en-interim-documents. Visuals can be retrieved from the Jenoptik image database in the Pictures 2014 / Financial Reports 2014 gallery.
This press release may contain statements relating to the future which are based on current assumptions and forecasts made by the corporate management of the Jenoptik Group. Various known and unknown risks, uncertainties and other factors may result in major discrepancies between the actual results, financial position, development or performance of the company and the assessment presented here. Such factors may include exchange-rate swings, interest rate changes, the launch of competitor products or alterations to the corporate strategy. The company shall accept no obligation to update such future projections or adapt them to future events or developments.