Jenoptik posts good start in the first quarter of 2017

Dr. Stefan Traeger is the new President & CEO of the Jenoptik Group

Group revenue rose by 3.5% to EUR 163.7 million; EBIT improved by 13.0% to EUR 11.0 million; significant 39.7% rise in order intake to EUR 221.3 million; Traeger new President & CEO; Executive Board confirms 2017 guidance.

As expected, the Jenoptik Group made a solid start into the 2017 fiscal year and saw further increases over the first quarter, particularly in terms of orders, revenue and earnings.
We made a good start into the new fiscal year and over the first quarter of 2017 managed to build on the successful development of business seen in prior quarters. This, in particular, was facilitated by our broad business base and the increasing internationalization of the Jenoptik Group. An excellent order situation, our consistent focus on megatrends and target markets, and a solid financial footing will also help us to achieve sustainably profitable growth in the future,” says Hans-Dieter Schumacher, CFO of JENOPTIK AG.
Group revenue 
rose to EUR 163.7 million (prior year EUR 158.2 million), with growth seen in optical systems for the information and communication technology as well as the semiconductor equipment industries. The Group also registered stronger demand in the medical technology and traffic safety industries, as well as for metrology from the automotive industry.
On a regional level, growth momentum was primarily attributable to the Americas, where revenue increased sharply, by 38.8% to EUR 34.9 million (prior year EUR 25.1 million). All three segments contributed to this positive development. Overall, Jenoptik generated 68.6% of its revenue abroad (prior year 65.3%).

In the first three months of 2017, 
EBIT improved at a faster rate than revenue. At EUR 11.0 million, the operating result was 13.0% up on the prior year (prior year EUR 9.7 million) thanks to a strong contribution from the Optics & Life Science segment. The EBIT margin of 6.7 was higher than in the prior year (prior year 6.1%). In addition to slightly higher selling expenses, earnings were also influenced by increased administrative expenses, in part associated with changes on the Executive Board. Earnings before interest, taxes, depreciation and amortization (EBITDA) also increased more sharply than revenue, by 6.5% to EUR 17.7 million (prior year EUR 16.6 million).
By the end of March 2017, the 
order intake in the Jenoptik Group had reached a record high for a first quarter, and at EUR 221.3 million was 39.7% up on the prior-year figure of EUR 158.4 million. The book-to-bill ratio, that of order intake to revenue, was consequently also sharply up on the prior year at 1.35 (prior year 1.00). At EUR 461.0 million, the order backlog was 13.8% above the figure at the end of 2016 (31/12/2016: EUR 405.2 million). All three segments contributed to the increase in order figures. There were also frame contracts (framework agreements with customers) worth EUR 156.5 million (31/12/2016: EUR 160.9 million).
Thanks to a still good 
free cash flow of EUR 10.2 million (prior year EUR 12.0 million), the Jenoptik Group remained, at minus EUR 21.8 million, free of net debt in the first quarter (31/12/2016: minus EUR 17.9 million).
As of 31 March 2017, the number of 
employees in the Jenoptik Group increased slightly compared to year-end 2016, to 3,574 (31/12/2016: 3,539 employees). The number of employees abroad grew in the course of the international expansion of business and due to first-time consolidations. At the end of March 2017, 730 people were employed at the foreign locations (31/12/2016: 686 employees), bringing the total workforce abroad up to 20.4% (31/12/2016: 19.4%).
In the first three months of 2017, the 
Optics & Life Science segment generated revenue of EUR 59.0 million, an increase of EUR 13.0 (prior year EUR 52.2 million). EBIT saw a significant improvement of 87.1% to EUR 9.7 million (prior year EUR 5.2 million), particularly due to strong demand for optical system solutions and good development in the lasers area following completion of implemented measures. In the first three months of 2017, the segment thus achieved an EBIT margin of 16.5%  (prior year 10.0%). The segment posted a pleasing 30.5% increase in its order intake to EUR 77.1 million (prior year EUR 59.1 million). Set against revenue, this resulted in a book-to-bill ratio of 1.31 (prior year 1.13). By the end of March 2017, the order backlog in the segment was worth EUR 97.2 million (31/12/2016: EUR 80.7 million). There were also frame contracts worth EUR 14.1 million (31/12/2016: EUR 14.5 million).
In the first three months of 2017, revenue in the 
Mobility segment came to EUR 54.8 million, slightly up on the prior-year figure (prior year EUR 52.1 million). Automotive business developed at a stable rate in the first quarter. Business with traffic safety technology saw minor growth. EBIT in the segment fell by 59.7% to EUR 0.9 million (prior year EUR 2.3 million). The EBIT margin accordingly fell to 1.7% in the first quarter (prior year 4.4%). This development was mainly due to entry into new business fields and the start-up costs for customer-specific projects. These include the toll project awarded to Jenoptik in 2016, on which the company will act as a development and technology partner to deliver new systems to monitor truck toll payments on Germany’s federal highways by 2018. The segment posted a 15.0%  increase in its order intake to EUR 74.5 million (prior year EUR 64.8 million). The order backlog grew 18.3% to EUR 128.1 million (31/12/2016: EUR 108.3 million). There were also frame contracts worth EUR 80.8 million (31/12/2016: EUR 79.1 million).
At the end of the first three months, the 
Defense & Civil Systems segment had achieved revenue in the amount of EUR 50.2 million. As expected, this revenue was 7.7% below the figure for the prior-year quarter (prior year EUR 54.4 million), which saw particularly strong revenues in the field of energy and sensor systems due to the settlement of several major projects. Despite a weaker development of revenue, EBIT of EUR 3.2 million remained stable at the prior-year level (prior year EUR 3.2 million), primarily the result of good service business and a changed product mix. In the period covered by the report, the EBIT margin accordingly improved to 6.3%  (prior year 5.8%). The segment order intake saw a sharp rise of 85.7% to EUR 69.8 million (prior year EUR 37.6 million). The book-to-bill ratio doubled from 0.69 as at 31 December 2016 to the current figure of 1.39. Due to the very good order intake, the segment’s order backlog also grew by EUR 19.2 million in value to EUR 237.1 million (31/12/2016: EUR 217.8 million). There were also frame contracts worth EUR 61.6 million (31/12/2016: EUR 67.4 million).
Dr. Stefan Traeger is the new President & CEO of the Jenoptik Group with effect as of 1 May 2017. He succeeds Dr. Michael Mertin, who has left Jenoptik after almost ten years of service as CEO. Dr. Stefan Traeger was formerly a member of the group management at the Swiss listed company Tecan Group AG. The holder of a doctorate in physics, Dr. Traeger has extensive experience in a range of management positions in the photonics industry and worked at companies such as Leica Microsystems and the Carl Zeiss Group prior to his position at Tecan. “I look forward to my new challenging role, and to playing an active part in shaping the successful development of the company,” says Dr. Stefan Traeger.

Following good development of business as scheduled in the first quarter of 2017, the Executive Board of JENOPTIK AG has confirmed the guidance for the current fiscal year it published in March 2017. Based on a very good order and project pipeline, the Executive Board is anticipating organic growth in revenue and earnings for 2017. Group revenue is expected to come in at between EUR 720 and 740 million. All three segments will contribute to growth. Jenoptik is also expecting EBIT – on the basis of continuing operations – to rise in 2017. Depending on the development of revenue, the EBIT margin is forecast within the range of 9.5 to 10.0%.

Our other plans also remain unchanged: by 2018, we aim to increase annual revenue to around EUR 800 million – including smaller acquisitions – and achieve an EBIT margin of around 10%. The share of revenue in our focus regions of the Americas and Asia/Pacific combined will then grow to over 40% of group revenue,” says CFO Hans-Dieter Schumacher.

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