Jenoptik remains on course of growth after nine months; guidance firmed up at upper end

The Jenoptik Group consolidated its performance over the first half-year

Group revenue increased by 7.0% to EUR 526.8 million, EBIT improved strongly by 15.9% to EUR 52.0 million, Executive Board is expecting revenue and EBIT margin for the full year 2017 at the upper end of the original guidance.

In the third quarter of 2017 the Jenoptik Group consolidated its performance over the first half-year and has continued to see successful growth, particularly in its order figures, revenue and earnings.
“Momentum in our business is strong and demand in our markets remains buoyant. In the third quarter, we also successfully completed another acquisition that will give us access to new markets and boost future growth in the USA. Following positive business performance and with the prospect of a strong fourth quarter, we have firmed up the outlook for the full year at the upper end of the originally forecasted range – including acquisitions revenue will be even slightly above,” says Stefan Traeger, President & CEO of Jenoptik AG.
Group revenue rose by 7.0% in the first nine months, to EUR 526.8 million (prior year EUR 492.6 million). Revenue increased by 7.7% in the third quarter alone, with growth seen in optical systems for the semiconductor equipment industry and in the healthcare & industry sector. The Group also reported increased demand for traffic safety technology.
On a regional level, growth momentum came from abroad, in particular from the Americas. Revenue here increased by a significant 34.9% to EUR 120.0 million (prior year EUR 89.0 million). All three segments contributed toward this positive development. Overall, the share of revenue generated abroad climbed from 65.3% in the prior year to a present 71.3%.
EBIT improved at a faster rate than revenue. At EUR 52.0 million, the operating result was 15.9% up on the prior year (prior year EUR 44.9 million) mainly thanks to a strong contribution from the Optics & Life Science segment. In the first nine months, the EBIT margin came to 9.9% (prior year 9.1%). Earnings before interest, taxes, depreciation and amortization (EBITDA) also increased at a faster rate than revenue, by 11.6% to a total of EUR 72.9 million (prior year EUR 65.4 million).
By the end of September 2017, the order intake reached a new record level for a nine-month period and was worth EUR 576.2 million– up 5.2% on the prior year (prior year EUR 547.7 million). The book-to-bill ratio, that of order intake to revenue, was 1.09 and thus virtually unchanged on the prior year (prior year 1.11). The order backlog totalled EUR 453.0 million on the balance sheet date, 11.8% more than at year-end 2016 (31/12/2016: EUR 405.2 million). There were also frame contracts (framework agreements with customers) worth EUR 132.0 million (31/12/2016: EUR 160.9 million).
Although significantly higher investments were made, the free cash flow achieved a good level of EUR 32.2 million in the first nine months (prior year EUR 43.1 million). Furthermore, and despite payment of a dividend, increased capital expenditure and payments for the acquisitions, the Group reported net debt of minus EUR 16.9 million and was thus again net debt-free at the end of the reporting period (31/12/2016: minus EUR 17.9 million).
As of 30 September 2017, there were 3,646 employees in the Jenoptik Group, more than at year-end 2016 (31/12/2016: 3,539). Their numbers abroad grew at a stronger rate than in Germany in the course of the expansion of the international business and due to first-time consolidations. At the end of September 2017, 773 employees, equating to 21.2% of the workforce, were employed at the foreign locations (31/12/2016: 686 employees or 19.4%).
In the first nine months of 2017, the Optics & Life Science segment posted a strong increase in revenue of 16.3% to EUR 191.3 million (prior year EUR 164.5 million). As in the first half-year, this performance was driven by a continuation of good business with solutions for the semiconductor equipment industry. The Healthcare & Industry business unit also performed well. On the back of strong demand, the segment EBIT improved significantly, by 50.6% to EUR 36.9 million (prior year EUR 24.5 million), the EBIT margin accordingly coming to 19.3% (prior year 14.9%). The order intake rose sharply by 29.4% to EUR 222.8 million (prior year EUR 172.2 million). Set against revenue, this results in a book-to-bill ratio of 1.16 (prior year 1.05). By the end of September, the order backlog was worth EUR 105.8 million (31/12/2016: EUR 80.7 million), and there were also frame contracts worth EUR 13.5 million (31/12/2016: EUR 14.5 million).
Revenue in the Mobility segment grew by 6.9% to EUR 180.6 million (prior year EUR 169.0 million), with growth in business involving applications for the automotive industry as well as traffic safety technology. Despite a positive earnings trend in the third quarter (up 11.4% to EUR 6.2 million), the segment could not completely offset the high project start-up costs from the first half-year and posted a nine-month EBIT of EUR 8.6 million, well down on the prior year (prior year EUR 12.7 million). Over the reporting period, the EBIT margin accordingly came to 4.8% (prior year 7.5%). The order intake improved from EUR 196.9 million to EUR 200.7 million, equating to a book-to-bill ratio of 1.11 (prior year 1.16). The order backlog climbed 25.0% to a value of EUR 135.3 million (31/12/2016: EUR 108.3 million). There were also frame contracts worth EUR 68.9 million (31/12/2016: EUR 79.1 million).
In the first nine months, the Defense & Civil Systems segment generated revenue of EUR 155.1 million. This, as expected, was 4.4% down on the same period in the prior year (prior year EUR 162.2 million), which had seen particularly strong revenues in energy and sensor systems as a result of the invoicing of several major projects. On a regional level, the segment achieved its best revenue growth of 24.1% in the Americas, in particular due to the orders for the Patriot missile defence system. Due to a weaker development of revenue and significantly higher research and development expenses, EBIT of EUR 12.3 million was lower than in the prior year (prior year EUR 13.2 million), and the EBIT margin accordingly fell to 7.9% (prior year 8.2%). The prior year’s order intake included several major orders; its value thus fell in the 2017 reporting period, by 14.8% to EUR 154.4 million (prior year EUR 181.1 million). The book-to-bill ratio was 1.00, compared with 1.12 in the prior year. The order backlog totalled EUR 214.9 million (31/12/2016: EUR 217.8 million), and there were also frame contracts worth EUR 49.6 million (31/12/2016: EUR 67.4 million).
Following a good development of business over the first nine months of 2017, the Jenoptik AG Executive Board has firmed up the guidance for the current fiscal year published in March 2017. Based on good order figures and traditionally strong year-end business, the Executive Board now expects revenue for the full year to come in at the upper end of the projected range of EUR 720 to 740 million organically – including acquisitions even slightly exceeding the range. It also expects the EBIT margin to be at the upper end of the previously forecasted range of 9.5 to 10%.