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.
Revenue growth of 7.0 percent, earnings increase at a faster rate than revenue
Group revenue rose by 7.0 percent in the first nine months, to 526.8 million euros (prior year 492.6 million euros). Revenue increased by 7.7 percent 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 percent to 120.0 million euros (prior year 89.0 million euros). All three segments contributed toward this positive development. Overall, the share of revenue generated abroad climbed from 65.3 percent in the prior year to a present 71.3 percent.
EBIT improved at a faster rate than revenue. At 52.0 million euros, the operating result was 15.9 percent up on the prior year (prior year 44.9 million euros) mainly thanks to a strong contribution from the Optics & Life Science segment. In the first nine months, the EBIT margin came to 9.9 percent (prior year 9.1 percent). Earnings before interest, taxes, depreciation and amortization (EBITDA) also increased at a faster rate than revenue, by 11.6 percent to a total of 72.9 million euros (prior year 65.4 million euros).
Order situation and financial indicators remain positive
By the end of September 2017, the order intake reached a new record level for a nine-month period and was worth 576.2 million euros – up 5.2 percent on the prior year (prior year 547.7 million euros). 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 totaled 453.0 million euros on the balance sheet date, 11.8 percent more than at year-end 2016 (31/12/2016: 405.2 million euros). There were also frame contracts (framework agreements with customers) worth 132.0 million euros (31/12/2016: 160.9 million euros).
Although significantly higher investments were made, the free cash flow achieved a good level of 32.2 million euros in the first nine months (prior year 43.1 million euros). Furthermore, and despite payment of a dividend, increased capital expenditure and payments for the acquisitions, the Group reported net debt of minus 16.9 million euros and was thus again net debt-free at the end of the reporting period (31/12/2016: minus 17.9 million euros).
Increase in employee numbers was strongest abroad
As of September 30, 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 percent of the workforce, were employed at the foreign locations (31/12/2016: 686 employees or 19.4 percent).
Strong growth in Optics & Life Science, Mobility on upward trend, Defense & Civil Systems as expected slightly down on prior year
In the first nine months of 2017, the Optics & Life Science segment posted a strong increase in revenue of 16.3 percent to 191.3 million euros (prior year 164.5 million euros). 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 percent to 36.9 million euros (prior year 24.5 million euros), the EBIT margin accordingly coming to 19.3 percent (prior year 14.9 percent). The order intake rose sharply by 29.4 percent to 222.8 million euros (prior year 172.2 million euros). 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 105.8 million euros (31/12/2016: 80.7 million euros), and there were also frame contracts worth 13.5 million euros (31/12/2016: 14.5 million euros).
Revenue in the Mobility segment grew by 6.9 percent to 180.6 million euros (prior year 169.0 million euros), 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 percent to 6.2 million euros), the segment could not completely offset the high project start-up costs from the first half-year and posted a nine-month EBIT of 8.6 million euros, well down on the prior year (prior year 12.7 million euros). Over the reporting period, the EBIT margin accordingly came to 4.8 percent (prior year 7.5 percent). The order intake improved from 196.9 million euros to 200.7 million euros, equating to a book-to-bill ratio of 1.11 (prior year 1.16). The order backlog climbed 25.0 percent to a value of 135.3 million euros (31/12/2016: 108.3 million euros). There were also frame contracts worth 68.9 million euros (31/12/2016: 79.1 million euros).
In the first nine months, the Defense & Civil Systems segment generated revenue of 155.1 million euros. This, as expected, was 4.4 percent down on the same period in the prior year (prior year 162.2 million euros), 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 percent in the Americas, in particular due to the orders for the Patriot missile defense system. Due to a weaker development of revenue and significantly higher research and development expenses, EBIT of 12.3 million euros was lower than in the prior year (prior year 13.2 million euros), and the EBIT margin accordingly fell to 7.9 percent (prior year 8.2 percent). The prior year’s order intake included several major orders; its value thus fell in the 2017 reporting period, by 14.8 percent to 154.4 million euros (prior year 181.1 million euros). The book-to-bill ratio was 1.00, compared with 1.12 in the prior year. The order backlog totaled 214.9 million euros (31/12/2016: 217.8 million euros), and there were also frame contracts worth 49.6 million euros (31/12/2016: 67.4 million euros).
On the basis of the positive business development the guidance for 2017 is firmed up
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 720 to 740 million euros 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 percent.
The Interim Report is available in the “Investors/Reports and Presentations” section of the website. The “Jenoptik app” can be used to view the Interim Report on mobile devices running iOS or Android. Images for download can be found in the Jenoptik image database in the “Current Events/Financial Reports” gallery.
Revenue growth of 7.0 percent, earnings increase at a faster rate than revenue
Group revenue rose by 7.0 percent in the first nine months, to 526.8 million euros (prior year 492.6 million euros). Revenue increased by 7.7 percent 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 percent to 120.0 million euros (prior year 89.0 million euros). All three segments contributed toward this positive development. Overall, the share of revenue generated abroad climbed from 65.3 percent in the prior year to a present 71.3 percent.
EBIT improved at a faster rate than revenue. At 52.0 million euros, the operating result was 15.9 percent up on the prior year (prior year 44.9 million euros) mainly thanks to a strong contribution from the Optics & Life Science segment. In the first nine months, the EBIT margin came to 9.9 percent (prior year 9.1 percent). Earnings before interest, taxes, depreciation and amortization (EBITDA) also increased at a faster rate than revenue, by 11.6 percent to a total of 72.9 million euros (prior year 65.4 million euros).
Order situation and financial indicators remain positive
By the end of September 2017, the order intake reached a new record level for a nine-month period and was worth 576.2 million euros – up 5.2 percent on the prior year (prior year 547.7 million euros). 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 totaled 453.0 million euros on the balance sheet date, 11.8 percent more than at year-end 2016 (31/12/2016: 405.2 million euros). There were also frame contracts (framework agreements with customers) worth 132.0 million euros (31/12/2016: 160.9 million euros).
Although significantly higher investments were made, the free cash flow achieved a good level of 32.2 million euros in the first nine months (prior year 43.1 million euros). Furthermore, and despite payment of a dividend, increased capital expenditure and payments for the acquisitions, the Group reported net debt of minus 16.9 million euros and was thus again net debt-free at the end of the reporting period (31/12/2016: minus 17.9 million euros).
Increase in employee numbers was strongest abroad
As of September 30, 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 percent of the workforce, were employed at the foreign locations (31/12/2016: 686 employees or 19.4 percent).
Strong growth in Optics & Life Science, Mobility on upward trend, Defense & Civil Systems as expected slightly down on prior year
In the first nine months of 2017, the Optics & Life Science segment posted a strong increase in revenue of 16.3 percent to 191.3 million euros (prior year 164.5 million euros). 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 percent to 36.9 million euros (prior year 24.5 million euros), the EBIT margin accordingly coming to 19.3 percent (prior year 14.9 percent). The order intake rose sharply by 29.4 percent to 222.8 million euros (prior year 172.2 million euros). 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 105.8 million euros (31/12/2016: 80.7 million euros), and there were also frame contracts worth 13.5 million euros (31/12/2016: 14.5 million euros).
Revenue in the Mobility segment grew by 6.9 percent to 180.6 million euros (prior year 169.0 million euros), 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 percent to 6.2 million euros), the segment could not completely offset the high project start-up costs from the first half-year and posted a nine-month EBIT of 8.6 million euros, well down on the prior year (prior year 12.7 million euros). Over the reporting period, the EBIT margin accordingly came to 4.8 percent (prior year 7.5 percent). The order intake improved from 196.9 million euros to 200.7 million euros, equating to a book-to-bill ratio of 1.11 (prior year 1.16). The order backlog climbed 25.0 percent to a value of 135.3 million euros (31/12/2016: 108.3 million euros). There were also frame contracts worth 68.9 million euros (31/12/2016: 79.1 million euros).
In the first nine months, the Defense & Civil Systems segment generated revenue of 155.1 million euros. This, as expected, was 4.4 percent down on the same period in the prior year (prior year 162.2 million euros), 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 percent in the Americas, in particular due to the orders for the Patriot missile defense system. Due to a weaker development of revenue and significantly higher research and development expenses, EBIT of 12.3 million euros was lower than in the prior year (prior year 13.2 million euros), and the EBIT margin accordingly fell to 7.9 percent (prior year 8.2 percent). The prior year’s order intake included several major orders; its value thus fell in the 2017 reporting period, by 14.8 percent to 154.4 million euros (prior year 181.1 million euros). The book-to-bill ratio was 1.00, compared with 1.12 in the prior year. The order backlog totaled 214.9 million euros (31/12/2016: 217.8 million euros), and there were also frame contracts worth 49.6 million euros (31/12/2016: 67.4 million euros).
On the basis of the positive business development the guidance for 2017 is firmed up
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 720 to 740 million euros 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 percent.
The Interim Report is available in the “Investors/Reports and Presentations” section of the website. The “Jenoptik app” can be used to view the Interim Report on mobile devices running iOS or Android. Images for download can be found in the Jenoptik image database in the “Current Events/Financial Reports” gallery.
