Jenoptik substantially increases earnings and sales in the first nine months of 2010 / High order intake includes several major orders
On a nine-month basis Group sales increased by 11 percent to 373.6 million euros (prev. year 336.7 million euros), with nearly 70 percent of this being generated by Jenoptik abroad. The Lasers & Optical Systems segment was the main overall contributor to the rise in sales emanating from the high level of demand from the semiconductor industry and medical technology. The Metrology segment also contributed to the sales increase in particular through the invoicing of a major order of more than12 million euros in the Traffic solutions division.
"Our orientation towards the global markets has taken effect. We have optimized our structures and processes and are now able to show an improved quality of earnings. Combined with the excellent order situation we have seen a significant improvement both in the Group's business and financial situation. With this we now have a totally different starting situation that will enable us to achieve sustainable growth and profitability", said Michael Mertin, Chairman of the Executive Board, in summarizing the performance over recent months.
Improved cost structures, the growth in sales and the settlement of a major order of the Traffic Solutions division are all reflected in the improved quality of the Group EBIT. The Group operating result (EBIT) rose to 22.5 million euros for the first nine months of 2010. As announced in June it includes a one-off income from the sale of the shares in caverion GmbH. During the same period in the previous year Jenoptik reported an EBIT of minus 6.3 million euros, this figure including one-off effects arising from the withdrawal from an area of business. Thanks to the improvement in the Group EBIT, earnings before tax totaled 13.7 million euros (prev. year minus 15.1 million euros). The effective tax rate was approx. 13 percent as a result of the utilization of the tax loss carried forward. Earnings after tax totaled 11.9 million euros (prev. year minus 14.9 million euros) and were therefore up on the same period in the year 2008 (10.2 million euros).
Order intake rose by nearly 40 percent. Reduction in employee numbers.
At 458.2 million euros the order intake of the Jenoptik Group was up by 38.7 percent or 127.8 million euros compared with the previous year's level (prev. year 330.4 million euros). Each of the Group's segments contributed towards the strong growth which was attributable not only to the recovery but also major orders, some of which represented the largest individual orders ever recorded in the corresponding divisions. Order intake rose stronger than sales. The order backlog therefore increased to 417.2 million euros (30.12.2009: 339.4 million euros).
As planned, the number of employees in the Jenoptik Group fell by 200 compared with the end of 2009 to 3,068 (31.12.2009: 3,268). By comparison with June 30 this year the figure remained constant; the personnel measures were completed during the course of the 1st half-year 2010. The figure for the number of employees as at September 30, 2010 still includes the 131 employees of Jena-Optronik GmbH as the process for its sale to the EADS subsidiary Astrium is only expected to be completed during the current 4th quarter 2010.
Further reduction in net debt. High cash flow despite expansion of business. Slight increase reported in the shareholders' equity quota.
As at the end of the 3rd quarter 2010 the net debt of the Jenoptik Group reduced to 126.8 million euros. The main reasons for this were the cash inflow in the high single figure million euro range following completion of the sale of the minority shareholding in caverion GmbH, as well as the active approach to the management of the working capital and accounts receivable. Net debt showed a further fall, after already having been significantly reduced in fiscal year 2009 (31.12.2009: 159.5 million euros). Following the cash inflow resulting from the sale of Jena-Optronik GmbH, which is expected to be completed during the 4the quarter of this year, we anticipate that net debt will be reduced to below 100 million euros.
At 22.0 million euros, cash flow from operating activities was down on the level for the same period in the previous year (prev. year 30.2 million euros). The reduction is attributable to, amongst other things, the payments made in the first half-year 2010 in conjunction with the personnel measures that were implemented in 2009. As a result of the major orders there was a temporary increase in the working capital. This was offset by the positive earnings before tax. The free cash flow, the difference resulting from the cash flow from operating activities before taxes less the cash flow from operational investing activities, totaled 15.8 million euros (prev. year 20.6 million euros). The bulk of the free cash flow, at 12.7 million euros, was generated by the Jenoptik Group in the 3rd quarter 2010 alone.
As a result of the capital increase at the beginning of March and the profits posted in the first three quarters of 2010 the shareholders' equity rose to 271.5 million euros (31.12.2009: 240.0 million euros). Despite the increased balance sheet total the shareholders' equity quota, the ratio between shareholders' equity and balance sheet total, improved from 39.5 percent as at the end of 2009 to the new figure of 43.4 percent.
Information on the development of the segments.
As a result of the continuing high level of demand from the semiconductor industry, together with a good performance by the Lasers business unit, the Lasers & Optical Systems segment posted a significant increase in its key indicators. In the first nine months of 2010 sales rose by 24.4 percent to 137.3 million euros (prev. year 110.4 million euros). The result from operating activities (segment EBIT) totaled 10.7 million euros (prev. year minus 4.8 million euros) and were therefore 15.5 million euros above the same period in the previous year in absolute terms. In addition to the continuing high level of demand from the semiconductor industry another of the reasons for the improvement are the improved cost structures. The order book situation reported a continuation of the positive development. At 173.9 million euros the order intake was 46.9 percent up on the level for the previous year (prev. year 118.4 million euros). In 2010 the Lasers & Material Processing division was awarded an important major order for medical technology lasers which will be delivered until 2012.
The Metrology segment achieved the turnaround at the end of the 3rd quarter 2010, with sales up by 18.1 percent to 83.4 million euros (prev. year 70.6 million euros). This is attributable to the Traffic Solutions division whose major order awarded earlier in the year was settled in full in the 3rd quarter. In the Industrial Metrology division the long throughput times meant that the increasing demand has not yet been fully reflected in sales which however continued to improve in the 3rd quarter. The segment EBIT was in positive territory at 3.9 million euros (prev. year minus 5.8 million euros). In addition to the settlement of the major order the result is a reflection of the optimized cost structures resulting from restructuring and the optimization of processes, amongst others on the manufacturing side, as well as of the personnel measures taken in 2009 particularly in the Industrial Metrology division. The order intake rose by more than 75 percent to 104.4 million euros (prev. year 59.4 million euros). The Traffic Solutions division won key orders from abroad. The Industrial Metrology division reported a continuing pickup in demand from the automotive industry which has led to a rise in sales since the 3rd quarter. Both divisions benefit from their broad international presence.
The Defense & Civil Systems segment continued its stable development. Its business is of a long-term nature. As at the end of the 3rd quarter the segment posted sales of 152.7 million euros, the same level as in the previous year (prev. year 152.5 million euros). The segment EBIT, at 7.7 million euros, was also at the level achieved in the previous year (prev. year 7.9 million euros). The order intake increased by 19.4 percent to 178.4 million euros (prev. year 149.4 million euros). Major, long-term orders are a characteristic feature of the business. In addition to the new tranche of radomes for the Eurofighter valued at 20 million euros in the 2nd quarter, at the end of the 3rd quarter the segment was awarded an order by the US Government worth more than 23 million US dollars to supply power generators for the Patriot missile defense system.
The sale of the aerospace business that forms part of this segment has not yet been reflected in the figures for the 3rd quarter. The sale process is expected to be completed in the current 4th quarter, therefore the loss of contributions to sales and earnings will be minimal in the full year 2010.
2010 forecast reaffirmed. Sales expected to amount to approx.
500 million euros, with a group EBIT of at least 25 million euros.
As a result of the positive development of sales and earnings Jenoptik reaffirms the forecasts for the current fiscal year which had been increased in the August: in 2010 the Jenoptik Group expects sales to reach approx. 500 million euros and the group operating result at least 25 million euros. The figure does not include any income from the sale of Jena-Optronik GmbH. The improvement in the EBIT will also be reflected in the net income for the year.
"We expect the positive overall performance to continue in the current 4th quarter and beyond" said Jenoptik Chairman Michael Mertin. The future development of business will be driven by the continuing high level of demand from the semiconductor industry, a further increase in demand from the automotive industry, medical technology and traffic solutions as well as by the stable business of the Defense & Civil Systems segment. "We are also seeing our cost reductions and process improvements having an effect" said the Jenoptik Chairman in summary. In 2011 Jenoptik anticipates an organic growth in sales and improved earnings.