- Revenue rose by 11.6 percent to 834.6 million EUR, order intake by 8.8 percent to 873.7 million EUR
- EBITDA up 19.3 percent to 127.5 million EUR; EBIT grew a significant 21.6 percent to 94.9 million EUR
- Order backlog up 15.0 percent to 521.5 million EUR
- Dividend is to increase to 0.35 EUR
- Jenoptik is expecting further growth in revenue and earnings in 2019
2018 was a year of new record figures for Jenoptik. The Group revenue rose by 11.6 percent to 834.6 million EUR (prior year: 747.9 million EUR). The fourth quarter was the strongest in 2018, with 241.2 million EUR (prior year: 221.1 million EUR).
This highly encouraging performance was mainly driven by strong demand from the semiconductor equipment industry and the delivery of toll monitoring systems in the traffic safety business.
The Group also successfully completed its acquisitions of the Canadian company Prodomax in July and the Jena-based OTTO Group in August of 2018. Both companies were integrated in the Light & Production division. These acquisitions already made a substantial contribution to revenue of 37.0 million EUR in the past fiscal year.
On a regional level, revenue generated both in Germany and abroad contributed to growth. Outside Germany, Europe remained the region with the highest revenue, followed by the Americas.
EBITDA increased at a faster rate than revenue, to 127.5 million EUR (prior year: 106.9 million EUR), equating to an EBITDA margin of 15.3 percent (prior year: 14.3 percent). Included in the EBITDA are impacts of minus 7.0 million EUR arising from the purchase price allocation (PPA) and acquisition costs of 1.9 million EUR. EBIT saw an even sharper rise, of 21.6 percent to 94.9 million EUR (prior year: 78.0 million EUR). The earnings contribution of the acquired companies came to minus 0.5 million EUR. EBIT included PPA effects of minus 10.5 million EUR. Nevertheless, the margin improved to 11.4 percent (prior year: 10.4 percent).
“2018 was a very successful year for Jenoptik. We started to implement our new strategy and considerably exceeded our financial targets for revenue, profit, order intake and free cash flow,” said Jenoptik President & CEO Stefan Traeger. “We saw good momentum on our major markets in the past year and, with Prodomax in Canada and the OTTO Group in Jena, successfully acquired two interesting companies. Their product ranges, markets and customers ideally complement Jenoptik’s activities.”
Record order figures and strong cash flow are a solid basis for further growth
Jenoptik also saw a strong fourth quarter in terms of order intake. In 2018 as a whole, the Group received orders worth 873.7 million EUR, an increase of 8.8 percent (prior year: 802.9 million EUR). The order intake also includes the orders received by Prodomax and the OTTO Group since the acquisition date, in total worth around 24 million EUR. Thus, the order intake was above revenue, resulting in a book-to-bill ratio of 1.05 (prior year: 1.07). At 15.0 percent, the order backlog also grew sharply, its value of 521.5 million EUR (prior year: 453.5 million EUR) forming a stable basis for 2019. There were also frame contracts (framework agreements with customers) worth 62.5 million EUR (prior year: 87.6 million EUR).
Although capital expenditure increased significantly, the free cash flow markedly improved to 108.3 million EUR (prior year: 72.2 million EUR). Despite the internally financed acquisitions, a higher dividend payment of 17.2 million EUR (prior year: 14.3 million EUR), and increased capital expenditure, Jenoptik was again free of net debt at the end of the fiscal year due to the good cash flow. As of December 31, 2018, net debt came to minus 27.2 million EUR (December 31, 2017: minus 69.0 million EUR).
Higher dividend proposed
On the basis of the Group’s solid earnings and good financial position, the Executive and Supervisory Boards of JENOPTIK AG will propose, as in the prior years, an increased dividend of 0.35 EUR per share for the 2018 fiscal year (prior year: 0.30 EUR) to the Annual General Meeting on June 12, 2019. Subject to shareholder approval, the total amount to be paid out will be 20.0 million EUR (prior year: 17.2 million EUR).
The Jenoptik Executive and Supervisory Boards attach great importance to a steady and long-term development of the dividend that is comprehensible for shareholders. This year Jenoptik managed to improve the earnings per share from 1.27 EUR to 1.53 EUR. Alongside the effects of good business performance, these also include deferred tax income, which is not cash-effective. With this year’s proposed dividend of 0.35 EUR, the company aims to pay out around 17 percent more to its shareholders than in the prior year.
”With this proposal we can, on the one hand, let our shareholders participate in Jenoptik’s good development,” said Hans-Dieter Schumacher, CFO of JENOPTIK AG. ”On the other hand, we are financially well equipped also in 2019 to look for opportunities to strengthen Jenoptik through further acquisitions and thus support our growth strategy in the best possible way.”
Employee numbers continue to grow particularly abroad
The number of Jenoptik employees (incl. trainees) rose by 9.9 percent (363 employees) to 4,043 as of December 31, 2018 (December 31, 2017: 3,680 employees). As a consequence of the internationalization strategy, the number of people employed abroad increased, by 22.3 percent to 981 employees (December 31,2017: 802), bringing the total workforce abroad up to 24.3 percent (prior year: 21.8 percent).
Development of the segments
The Optics & Life Science segment achieved a new revenue and earnings record in the 2018 fiscal year. Revenue rose 11.8 percent to 290.0 million EUR (prior year: 259.4 million EUR), with the segment particularly benefiting from good business with solutions for the semiconductor equipment industry and a positive development in the healthcare and industry business. With an EBIT of 62.3 million EUR (prior year: 50.5 million EUR), the segment achieved a 23.4 percent improvement in its operating results. The EBIT margin increased to 21.5 percent (prior year: 19.5 percent). EBITDA also saw a strong increase of 19.1 percent to 69.9 million EUR (prior year: 58.7 million EUR); the EBITDA margin grew to 24.1 percent (prior year: 22.6 percent). In the 2018 fiscal year, the order intake significantly exceeded the prior-year level by 18.7 percent, particularly following a strong fourth quarter, and was worth 350.8 million EUR (prior year: 295.5 million EUR). This increase was particularly facilitated by stronger demand for optical systems. The book-to-bill ratio grew to 1.21 (prior year: 1.14). The order backlog climbed accordingly by 55.9 percent to 165.0 million EUR at the end of 2018 (December 31, 2017: 109.1 million EUR), thus providing a good basis for the current fiscal year.
Revenue in the Mobility segment grew 21.4 percent to 327.8 million EUR in 2018 (prior year: 270.1 million EUR), with the acquired companies contributing 37.0 million EUR to this figure. Both solutions for the automotive industry and traffic safety technology systems saw increased demand, the latter primarily due to the delivery of truck toll monitoring systems for the German federal roads project. Based on this good overall revenue growth, the segment EBIT grew to a figure of 27.7 million EUR (prior year: 18.5 million EUR), as expected reflecting a significantly improved quality of earnings compared to the prior year. The EBIT margin improved to 8.4 percent (prior year: 6.9 percent). EBITDA rose 45.4 percent to 40.5 million EUR (prior year: 27.9 million EUR). The EBITDA margin grew to 12.4 percent, compared to 10.3 percent in the prior year. Both earnings figures increased in spite of substantial PPA effects and acquisition costs. In 2018, the segment order intake increased by 5.2 percent to 319.3 million EUR (prior year: 303.7 million EUR). This growth was generated in the automotive business, while in the traffic safety business the major order to supply toll monitoring systems included in the order intake for the prior year could not be fully compensated in 2018. The book-to-bill ratio in 2018 reached a figure of 0.97 (prior year: 1.12). The value of the order backlog increased by 25.8 percent, to 182.0 million EUR at the end of 2018 (December 31, 2017: 144.7 million EUR).
As expected, revenue in the Defense & Civil Systems segment of 218.6 million EUR was largely unchanged on the prior year (prior year: 219.3 million EUR). At 20.1 million EUR, the segment EBIT was slightly up on the prior-year figure (prior year: 19.2 million EUR). A changed product mix, lower currency losses, and cost savings in sales resulted in the EBIT margin increasing to 9.2 percent (prior year: 8.7 percent). EBITDA also rose marginally, to 24.4 million EUR (prior year: 23.8 million EUR). The EBITDA margin improved to 11.2 percent (prior year: 10.9 percent). As expected, the segment increased its order intake in the fourth quarter, posting new orders worth some 60 million EUR. For the full year, however, the order intake, worth 203.5 million EUR, was still slightly down on the prior year, which had included several major projects (prior year: 206.2 million EUR). Particularly in the first quarter of 2017, Jenoptik had received various major orders for energy and sensor systems. The book-to-bill ratio came to 0.93 in 2018 (prior year: 0.94), while the order backlog grew to 175.4 million EUR as of December 31, 2018 (December 31, 2017: 202.6 million EUR).
Growth set to continue in 2019
“The past fiscal year was again the best in the company’s history,” said Stefan Traeger, Jenoptik’s President & CEO. “As part of the gradual implementation of our ‘Strategy 2022’, we have achieved key milestones with the introduction of our new corporate structure in early January 2019, the launch of the new, independent VINCORION brand for our mechatronics business in September 2018, and the reorganization of our activities in Asia. We are convinced that we are on the right track with the realignment of our structures, a stronger focus on photonic markets and the initiatives launched to promote innovation within the Group.”
Based on a very good order backlog, the Executive Board looks to 2019 with confidence. In the current fiscal year, it anticipates further growth and higher earnings. Revenue is to grow in the mid single-digit percentage range (before major portfolio changes). EBITDA growth is also expected, resulting in an EBITDA margin of between 15.5 and 16.0 percent.
“We are expecting momentum to accelerate in the course of the new fiscal year, resulting in a stronger second half of the year,” confirmed Stefan Traeger. “In addition, deliveries of the toll monitoring systems in the traffic safety business had made a significant contribution to our revenue in the first half-year of 2018. Therefore, we are presently expecting a somewhat weaker business development in the first half-year, but anticipate further growth in the full year 2019.”
The Annual 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.