From right: Jenoptik President & CEO Dr. Stefan Traeger and CFO Hans-Dieter Schumacher
Jenoptik closed the 2017 fiscal year with new record figures, particularly in revenue and earnings. On a regional level, growth came from the strategic target regions of the Americas and Asia/Pacific.
* Revenue rises to EUR 747.9 million (+9.2%); EBIT grows even more strongly, to EUR 77.8 million (+17.6%)
* Solid order intake of EUR 802.9 million in 2017
* Dividend increased to EUR 0.30 per share
* Further strong growth and margin expansion expected in 2018
* New Group “Strategy 2022” based on more focus, innovation, and internationalization
Jenoptik closed the 2017 fiscal year with new record figures, particularly in revenue and earnings. Group revenue rose by 9.2% to EUR 747.9 million (prior year EUR 684.8 million), with growth seen in the Optics & Life Science and Mobility segments. Overall very good business performance was facilitated by greater demand for optical systems in the semiconductor equipment industry and for traffic safety technology. The Group also successfully completed its acquisitions of the British company ESSA Technology, in January 2017, and the US firm Five Lakes Automation, in August 2017. Both companies have already been integrated in the Mobility segment.
“After the good performance seen in the first nine months of 2017, our business gained further momentum toward the end of the year. With revenue of EUR 192.2 million and EBIT of EUR 21.3 million, the fourth quarter was the strongest both in the past fiscal year and in comparison with prior years. We are looking into the future with a lot of optimism. Going forward, we will focus even more on our core areas of expertise in the fields of optics and photonics,” says Stefan Traeger, President & CEO of the Executive Board of JENOPTIK AG since 1 May 2017.
On a regional level, growth came from the strategic target regions of the Americas and Asia/Pacific. These two regions combined saw very positive development, with revenue rising to 38.1% of group revenue (prior year 34.4%). At EUR 525.3 million, Jenoptik generated 70.2% of revenue abroad (prior year EUR 458.2 million/66.9%).
Jenoptik also achieved new record EBIT and EBITDA figures. Due to mix effects, EBIT outperformed revenue, growing by 17.6% to EUR 77.8 million (prior year EUR 66.2 million), equivalent to an EBIT margin of 10.4% (prior year 9.7%). Thus the Group exceeded its target corridor of 9.5 to 10.0% in 2017 – despite one-off expenses for a traffic safety project and the impacts of the two acquisitions in the Mobility segment. In particular the Optics & Life Science segment made a considerably increased contribution to the improvement in earnings.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased steadily over the course of the year and also outperformed revenue, growing 12.5% to EUR 106.7 million (prior year EUR 94.7 million). The EBIT margin thus improved to 14.2% (prior year 13.8%).
Jenoptik also saw a strong fourth quarter in terms of order intake; over the full year, the Group received new orders with a value of EUR 802.9 million (prior year EUR 733.8 million). The book-to-bill ratio remained stable at 1.07 (prior year: 1.07). The order backlog saw a sharp increase, and with a value of EUR 453.5 million (prior year EUR 405.2 million) forms a good basis for 2018. There were also frame contracts with customers that fell to EUR 87.6 million (prior year EUR 160.9 million) due to reclassification to order intake and backlog.
Despite a significant increase in capital expenditure, the free cash flow, at EUR 72.2 million, remained at a high level (prior year EUR 80.4 million). As of 31 December 2017, net debt came to minus EUR 69 million (prior year minus EUR 17.9 million), a net asset – despite acquisitions, investment, and the payment of a higher dividend.
“We have the best prerequisites for future organic growth and acquisitions now that we’ve eliminated debt, and with the earnings we achieved, healthy cash flows, and the available financing framework,” says Hans-Dieter Schumacher, Chief Financial Officer of JENOPTIK AG.
On the basis of the Group’s solid earnings and good financial resources, the Executive and Supervisory Boards of JENOPTIK AG will propose an increased dividend payment of EUR 0.30 per share (prior year EUR 0.25) for the 2017 fiscal year to the Annual General Meeting on 5 June 2018. Subject to shareholder approval, the pay-out ratio based on earnings attributable to shareholders will be 23.7% for a dividend payment of EUR 17.2 million (prior year 24.9%).
The number of Jenoptik employees (incl. trainees) rose 4.0% (141 employees) to 3,680 as of 31 December 2017 (31/12/2016: 3,539 employees). As a consequence of the ongoing internationalization strategy and related acquisitions, the number of people employed abroad saw an increase of 16.9% to 802 employees (31/12/2016: 686 employees), bringing the total workforce abroad up to 22.6% (prior year 19.4%).
The Optics & Life Science segment ended the 2017 fiscal year with a new revenue and earnings record, primarily due to a very positive growth in the semiconductor equipment industry. Revenue rose by 17.1% to EUR 259.4 million, while EBIT improved significantly, by 51.1% to EUR 50.5 million (prior year 221.5/EUR 33.4 million). Both Optical Systems and Healthcare & Industry contributed to growth in the segment. The EBIT margin reached a new record high of 19.5% (prior year 15.1%). At EUR 295.5 million, the segment order intake also exceeded the figure in the prior year by 29.4% (prior year EUR 236.6 million). Providing optical components, modules, and systems for applications, the segment will remain a strong OEM partner in areas such as the semiconductor equipment, the information and communication technology, and the biophotonics industries.
The Mobility segment reported growth of 9.0%, to EUR 270.1 million (prior year EUR 247.7 million). EBIT came to EUR 18.5 million, around EUR 6 million down on the prior year (prior year EUR 24.4 million) – chiefly due to one-off expenses for a traffic safety project and impacts relating to the acquisitions. The EBIT margin was 6.9%, compared with 9.9% in the prior year. The order intake rose 13.6% to a value of EUR 303.7 million (prior year EUR 267.4 million), driven by increased demand from the automotive industry and the reclassification of frame contracts. As part of the new strategy, the Mobility business with the Automotive and Traffic Solutions divisions will focus on attractive end-customer markets in the fields of industrial manufacturing, known as “smart manufacturing”, as well as public safety and infrastructure. Here the key driver of growth will be the combination of our expertise with modern sensor systems, imaging, and data competency.
In the Defense & Civil Systems segment, revenue and EBIT remained stable, at EUR 219.3 and EUR 19.2 million respectively (prior year EUR 218.3/19.1 million). The segment thus managed to match the high level of the prior year. The EBIT margin was 8.8% (prior year 8.7%). At EUR 206.2 million, the order intake was down on the very high prior-year figure of EUR 231.6 million, which included several major projects. In the future, business based on photonic technologies will be carved-out from the Defense & Civil Systems segment and integrated into today’s Optics & Life Science segment. To boost its market position, business based on mechatronic technologies will operate under a new, independent brand.
For 2018, the Executive Board is confirming its original growth target and aiming for revenue to be between EUR 790 and 810 million. The EBIT margin is projected to be in a range between 10.5 and 11.0% – higher than the former forecast of around 10.0%.
By 2022, revenue is expected to increase in the mid- to high-single-digit percentage range per year on average. The EBITDA margin will also improve to around 16% by 2022. “We want to outgrow the market and gain shares in our market segments,” says Stefan Traeger. The mid-term growth targets defined in the new strategy include active portfolio management with potential divestments and acquisitions.
The new strategy has a stronger focus on photonic technologies in all of the company’s initiatives and developments: “In a nutshell, this is Jenoptik’s strength and its core area of expertise. In this new stage of our development, internationalization and innovation are becoming ever more important. We want to increase our R+D output to around 10% of revenue by 2022. International diversity will also characterize Jenoptik more than ever before. That means international teams and also more local decision-making. Ultimately, at least one division will have its headquarters outside of Germany by the year 2022,” summarizes Stefan Traeger.
As one of the first steps in implementing the new strategy under the headline of “More Light,” we will develop the divisions’ strategic roadmaps and implement an active portfolio management in 2018. Business in Asia will be reorganized in 2018, and the mechatronics business managed under an independent brand. A new corporate culture will form the basis for future success. Chief Financial Officer Hans-Dieter Schumacher: “Our business and reporting structures will accordingly change on 1 January 2019. Up until the end of 2018, Jenoptik will continue to report on the basis of its current segment structure.”
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