- Revenue of 595.7 million EUR in nine-month period was slightly up on high prior-year figure of 593.4 million EUR. Significant rise in revenue generated abroad.
- Despite higher spending for future growth, EBITDA grew to 91.4 million EUR (prior year: 89.0 million EUR).
- Order intake, worth 574.9 million EUR, was slightly down on prior year (prior year: 588.4 million EUR).
- Jenoptik continues to expect growth in 2019 and is therefore confirming its revenue forecast of 850 to 860 million EUR and an EBITDA margin of around 15.5 percent.
Over the first nine months of 2019, Jenoptik generated revenue of 595.7 million EUR, slightly up on the high level of the prior-year figure of 593.4 million EUR. Key drivers of this growth were the contributions to revenue of approximately 52 million EUR from the companies acquired in 2018 (prior year: 21.8 million EUR), good business with the semiconductor equipment industry, and in the field of automation.
“I’m pleased to note that we again grew in the third quarter, managing to close the gap in revenue from the prior quarters,” said Stefan Traeger, President & CEO of JENOPTIK AG. “In particular Prodomax which has been growing with automation solutions in the automotive area and our optical business boosted revenue. We made up the shortfall, in spite of export ban in the defense business and strong revenue with toll monitoring systems in 2018.”
On a regional level, growth momentum came exclusively from abroad, in particular from North America, where revenue increased a significant 14.5 percent to 171.4 million EUR (prior year: 149.7 million EUR). Revenue in Europe (without Germany) was also slightly up, at 172.8 million EUR (prior year: 170.2 million EUR). The share of revenue generated abroad increased overall to 72.9 percent (prior year: 69.6 percent).
Gross profit came to 209.5 million EUR (prior year: 209.6 million EUR). The gross margin remained stable at 35.2 percent (prior year: 35.3 percent). Despite higher functional costs than in the prior year, EBITDA increased by 2.7 percent to 91.4 million EUR (prior year: 89.0 million EUR). This was mainly the result of contributions made by the companies acquired in the prior year and positive impacts arising from the adoption of the international financial reporting standard IFRS 16. The EBITDA margin thus improved to 15.3 percent (prior year: 15.0 percent). In the first nine months of 2019, EBIT of 58.1 million EUR was, as expected, below the prior-year figure of 66.7 million EUR, a drop of 13.0 percent. The companies acquired in 2018 contributed 4.8 million EUR to EBIT, including impacts arising from the purchase price allocation of minus 4.2 million EUR (prior year: earnings minus 0.2 million EUR/ PPA minus 6.3 million EUR). The Group EBIT margin came to 9.7 percent (prior year: 11.2 percent).
Order figures slightly down on prior year
The order intake was worth 574.9 million EUR (prior year: 588.4 million EUR. The Group’s book-to-bill ratio thus fell slightly to 0.96 (prior year: 0.99). The very strong order backlog at the end of 2018 decreased to 491.2 million EUR as of September 30, 2019 (31/12/2018: 521.5 million EUR). Of this order backlog, 226.1 million EUR or 46.0 percent will be converted to revenue in the present fiscal year.
Inventories and contract assets grew due to higher payments in advance for future revenue and the export ban affecting VINCORION through the end of September. As a result of the rise in working capital and increased capital expenditure, the free cash flow fell to 7.3 million EUR in the period covered by the report (prior year: 57.2 million EUR).
The increase in financial debt by 55.9 million EUR – owing to the adoption of IFRS 16 –and lower cash and cash equivalents resulted in net debt of 57.4 million EUR on September 30, 2019 (31/12/2018: minus 27.2 million EUR).
Development of the divisions: growth in core business, VINCORION export restrictions lifted at the beginning of October
At 250.8 million EUR, the revenue generated in the Light & Optics division in the first nine months of 2019 was above the prior-year figure of 246.6 million EUR). Despite the good business with the semiconductor equipment industry and positive impacts arising from first-time application of IFRS 16, EBITDA was down 10.5 percent at 49.5 million EUR, primarily due to lower margins in the Industrial Solutions unit (prior year: 55.2 million EUR). The EBITDA margin, however, remained at a very good level of 19.6 percent (prior year: 22.2 percent). By September 30, 2019, the division had reported an order intake worth 233.0 million EUR, equating to a fall of 11.9 percent on the prior year (prior year: 264.5 million EUR). This development was partly attributable to the fact that a high-volume order for semiconductor equipment was placed earlier than expected in late 2018. The order backlog was worth 154.0 million EUR at the end of September 2019 (31/12/2018: 180.6 million EUR).
In the first three quarters of 2019, revenue in the Light & Production division grew by 22.0 percent on the prior-year period, to 170.9 million EUR (prior year: 140.1 million EUR). The Automation & Integration unit made a significant contribution to this growth. On the basis of good revenue performance, the Light & Production division posted EBITDA of 19.2 million EUR in the first nine months of 2019, reflecting a significantly improved quality of earnings compared to the prior year (prior year: 14.3 million EUR). The EBITDA margin grew to 11.2 percent, compared with 10.2 percent in the prior year. The division’s order intake rose to 158.7 million EUR (prior year: 138.4 million EUR). As of the end of September, the order backlog was worth 100.6 million EUR (31/12/2018: 112.5 million EUR).
In the first nine months of 2019, the Light & Safety division generated revenue of 75.1 million EUR (prior year: 83.3 million EUR). In the prior year, the delivery of toll monitoring systems had returned approximately 25 million EUR of revenue. Nevertheless, revenue in the third quarter was 24.5 percent up on the prior year, at 26.7 million EUR. EBITDA in the nine-month period increased to 11.9 million EUR, despite the fall in revenue (prior year: 11.0 million EUR). The EBITDA margin improved significantly to 15.9 percent (prior year: 13.3 percent). Over the first nine months, the value of the order intake fell slightly to 72.2 million EUR (prior year: 73.8 million EUR); the order backlog remained virtually unchanged at 67.2 million EUR (prior year 69.5 million EUR).
In the first three quarters, VINCORION generated revenue of 96.8 million EUR, 20.4 percent down on the prior year (prior year: 121.6 million EUR). This, in particular, was the result of the German government’s decision to extend arms export restrictions. In early October, the division received approval from the German Federal Ministry for Economic Affairs and Energy to export energy systems for the “Patriot” missile defense system to the United Arab Emirates (U.A.E.). The order is worth around 10 million EUR. As a result of the fall in revenue, EBITDA came to 10.6 million EUR (prior year: 14.4 million EUR). The EBITDA margin fell from 11.8 percent in the prior year to a present 10.9 percent. At 108.0 million EUR, the order intake in the period covered by the report was almost at the prior-year level (prior year: 109.8 million EUR). Due to delayed revenue recognition, the division’s order backlog increased by 9.8 percent to 168.7 million EUR at the end of September (31/12/2018: 158.9 million EUR).
2019 guidance for revenue and earnings confirmed
“Based on good business performance in the first nine months, and now supported by an export license for VINCORION, we are confident that we will be able to achieve our financial targets for 2019. In the fourth quarter, we are also expecting a good development of order intake and a strong cash flow compared with the previous quarters,” says Stefan Traeger.
The Executive Board of JENOPTIK AG therefore confirms its 2019 financial guidance, announced in August. Revenue for the full year is expected to come in at between 850 and 860 million EUR (without major portfolio changes), with an EBITDA margin of around 15.5 percent. Due to a weaker than expected development of order intake, in particular in the automotive industry, the Group will not reach the high prior-year figure in 2019.
The interim report is available in the “Investors/Reports and Presentations” section of the website. The “Jenoptik app” can be used to view the Quarterly Report on mobile devices running iOS or Android.