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Jenoptik result 2009: Positive operating result
Fiscal year used for focusing and reducing costs / Growth in sales and leap in profits expected in 2010(PresseBox) ( Jena, )
The Jenoptik Group posted sales of 473.6 million euros (prev. year 548.3 million euros) in fiscal year 2009. The 13.6 percent fall is primarily the result of the crisis in the semiconductor and automotive industries. Thanks to its long-term and consequently stable business the Defense & Civil Systems segment made a significant contribution to the Group sales and results in 2009. Despite the economic crisis, lasers for medical technology, laser processing systems for the photovoltaics industry as well as the Traffic Solutions division all reported a stable to good performance.
In 2009 the Group operating result (Group EBIT) was burdened by one-off effects. The Group EBIT before one-off effects came in at 7.8 million euros and was therefore in positive territory as had been forecast. One-off effects in the total sum of 27.4 million euros were incurred by the withdrawal from areas of business, restructuring as well as measures associated with the economic crisis. These mainly included the withdrawal from the mid-format camera business (9.6 million euros), personnel measures (10.4 million euros) as well as other value adjustments connected with these measures (7.4 million euros).
"These cuts were painful but necessary in order to secure sustainable and profitable development over the fiscal years ahead", said Jenoptik Chairman Michael Mertin at the Jenoptik annual accounts press conference in Jena on Tuesday. As a result of the withdrawal from the midformat camera business, the optimization of locations and the personnel measures, the number of employees in the Group reduces to approx. 3,000.
The one-off effects led to negative earnings before tax totaling minus 34.3 million euros (prev. year 20.2 million euros). Earnings after tax were minus 33.9 million euros (prev. year 16.6 million euros).
Order intake in the fiscal year just past down by 14.8 percent compared with 2008. Rising demand from the semiconductor industry since autumn 2009.
At 432.8 million euros the Group order intake was approx. 14.8 percent lower than in 2008 (prev. year 508.2 million euros). There was a particularly sharp fall in demand from the automotive and semiconductor industries. Whilst the order situation from the automotive industry has stabilized at a low level, since autumn 2009 we have seen a pick-up in the semiconductor industry which has continued to date. "It remains to be seen whether this trend continues during the course of the year. But the signs at the moment are good" said Michael Mertin. According to the Jenoptik Chairman however, even if the recovery in the sector is maintained during the course of 2010 it will still not return to the levels in 2007 and 2008.
Financing completely restructured.
With a changeover in the Group financing in autumn 2009 as well as a capital increase at the beginning of March this year, the Jenoptik Group is now on a new financial footing. The convertible bond with a term of 5 years became due for repayment in July last year and was essentially repaid out of available credit lines. This led to a significant increase in the Group's current liabilities during the course of 2009. In autumn the Group financing was converted to a medium to long-term timeframe with the help of a total financing package of nearly 90 million euros, with Jenoptik receiving a federal government-state guarantee for part of the financing package in the sum of 44 million euros. The current financial liabilities were reduced further in the 4th quarter 2009 out of positive cash flows so current financial liabilities accounted for less than 10 percent as at end 2009. By way of a capital increase Jenoptik received proceeds in the sum of approx. 22 million euros at the beginning of March this year; this is to be used for growth in the core business areas and the continuing process of internationalization.
Clear positive cash flows partially used to reduce net debt.
The consistent focus on cash flows, amongst other things as the result of active inventory and receivables management, produced results also in 2009. At 41.0 million euros the free cash flow (before interest and taxes) showed a clear increase over the figure for the previous year (prev. year 27.9 million euros). In addition to paying in full investments and interests, liquid assets were utilized to further reduce current liabilities, particularly in the last quarter 2009. This led to a marked fall in net debt to 159.5 million euros as at end 2009 (31.12.2008 2008: 191.6 million euros). "We took advantage of 2009 and continued to focus sharply on our finance and balance sheet structure" said Chief Financial Officer Frank Einhellinger. As a result of the further reduction in the balance sheet total the shareholders' equity ratio, at 39.5 percent, was only just below the figure for the previous year (31.12.2008: 42.5 percent) despite the reported loss. Following the capital increase in March 2010 the figure rose back above 40 percent.
Operating business in the divisions reports varying performance.
In 2009 Jenoptik once again benefited from its presence in various markets. This meant it was able to partially compensate for the falls caused by the economic crisis. The results of the segments were adjusted for the one-off effects.
In the Lasers & Optical Systems segment the crisis in the semiconductor industry influenced the development of the key indicators. Sales of the segment fell by 19.5 percent to 166.7 million euros (prev. year 207.0 million euros). The impact on the result was clearly stronger, with this coming in at 1.4 million euros (prev. year 15.0 million euros). Despite some areas of the Lasers & Material Processing division reporting stable to good performances they were unable to compensate for the reduction in sales and earnings as a result of the weak business in the semiconductor sector. At 168.4 million euros the order intake was approx. 13.6 percent down on 2008 (prev. year 194.8 million euros). At the end of the year 2009 and over the past few months of the current fiscal year the semiconductor market has been showing a slight recovery; this will lead to an increase in sales and consequently the result in the current fiscal year although they will not return to the levels achieved in 2008.
In the Metrology segment the key indicators are influenced by the automotive crisis since the Industrial Metrology division is primarily a supplier to automotive companies and automotive suppliers. Here demand has fallen markedly since the end of 2008. During the first months of 2009 the division was still benefiting from the existing order backlog. However, the reduction in sales and results due to the sharp fall in demand accelerated during the course of 2009 and could not be compensated for by the Traffic Solutions division. At 96.0 million euros the segment posted a 24.0 percent fall in sales in 2009 (prev. year 126.3 million euros). The results also showed a corresponding reduction to minus 4.9 million euros (prev. year 6.9 million euros). The order intake was down by 37.6 percent to 83.2 million euros (prev. year 133.3 million euros), with the Industrial Metrology division stabilizing at a low level. Significant orders had been anticipated in the Traffic Solutions division for 2009, some of which were deferred. One of these orders has now been awarded at the beginning of March 2010. We are seeing a continuation of the trend towards large projects with contracts taking longer to being awarded.
The Defense & Civil Systems segment reported a stable performance, posting sales of 205.3 million euros, approximately at the same level as in the previous year (prev. year 208.5 million euros). The 12 percent fall in the result to 13.9 million euros (prev. year 15.8 million euros) is attributable to a change in the sales mix. Long-term, stable business is a characteristic feature of the segment, with major orders being the norm and resulting in a strongly fluctuating order intake. In 2009 the order intake of approx. 178.0 million euros (prev. year 173.4 million euros) does not yet include the major order for the new PUMA armored fighting vehicle for the German Army worth around 70 million euros which is expected to be awarded in the current fiscal year.
Process of internationalization picked up speed in 2009, particularly in Asia.
"We took advantage of 2009 to continue working on our strategic agenda along our five value levers defined in 2007. We are pleased to have succeeded in this despite the difficult economic framework conditions. We have directed our financial resources towards themes that will take us forward over the coming years" said Jenoptik Chairman Michael Mertin. In addition to the measures aimed at reducing costs and optimizing the locations, targeted investments were made in 2009, particularly abroad. In conjunction with the Israeli company Dagesh, Jenoptik formed a joint venture which has now become an acknowledged development and production partner in Israel and is processing the first orders locally. In the USA the optics business has been merged within JENOPTIK Optical Systems Inc. Here an increase in sales and results is expected in 2010. The purchase of parts of the Chinese company Shanghai AES Auto Equipment Co. Ltd. (AES) strengthened our presence in China, particularly on the purchasing side. In the meantime, these have been merged with the existing Chinese activities of the Industrial Metrology division. Thanks to the new laser application center in Korea, opened at the beginning of March 2010, clients in Asia have the facility to utilize various laser processing systems and the help of Jenoptik specialists on site for the testing and further development of laser applications on a joint basis. Jenoptik invested approx. 3.4 million euros in this center.
Sales and earnings expected to rise in 2010.
"In 2010 we will be consistently continuing our strategic realignment. The focus of this will remain on optimizing our processes and fixed costs. In 2009 we were successful in reducing costs by approx. 10 million euros with the help of a comprehensive package of measures" said Michael Mertin.
The Jenoptik Group anticipates an increase in sales and a marked improvement in results for 2010. "We are seeing a recovery in individual areas of the markets and this is currently being maintained. That's also demonstrated by the latest reported order intakes in the area of traffic safety and lasers for medical technology", said the Jenoptik Chairman. Provided the pick-up in the semiconductor industry market continues and based on the current assessment, the Group forecasts a Group operating result of 15 to 25 million euros and a positive net profit in the current fiscal year. Sales are expected to rise to between 475 and 500 million euros. We do not anticipate any one-off effects in 2010.
The Jenoptik Group has a solid foundation: in addition to the financing structure which is now medium to long-term oriented and the capital increase, the cost structures have been optimized. The measures introduced in 2009 aimed at reducing costs will come to fruition in the current fiscal year and will be consistently continued in 2010 together with the Jenoptik Excellence Program in order to generate further savings of more than 10 million euros. Promising growth themes for the future have been defined and will be further expanded. These include, amongst others, infrared optics and systems for civil and military applications, lasers for medical technology as well as laser processes for the electronics, photovoltaics and automotive industries, major projects and operator models in the traffic solutions area as well as the expansion of our international presence in Asia and North America.
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