ZEISS Presents Half-year Financial Figures: Despite weak trend in Semiconductor Manufacturing Technology, investment programs continue at fast pace
OBERKOCHEN/Germany, 14.05.2013. During the first six months of fiscal year 2012/13 the business trend in the ZEISS Group was marked by the difficult conditions experienced in some markets. Nevertheless, the Group concluded the first half of the year (ended 31 March) with revenue totaling EUR 1.978 billion (first six months of 2011/12: EUR 2.040 billion). Earnings (EBIT) reached a level of EUR 109 million (first six months of 2011/12: EUR 236 million). “As expected, the first half of fiscal year 2012/13 was more difficult than the equivalent period last year,” said Dr. Michael Kaschke, President and CEO of Carl Zeiss AG. “Revenue and earnings are characterized by the partly very different and challenging developments in our markets and by the recessionary trends in the global economy. However, our half-year figures are solid and at the level that we planned.”
Downturn in Semiconductor Manufacturing Technology business – growth in direct business, primarily in rapidly developing economies
In this difficult scenario the Industrial Metrology and Medical Technology business groups generated further growth in revenue. The Vision Care and Microscopy business groups showed a largely stable development. The revenue reported by the Semiconductor Manufacturing Technology business group remained considerably below last year's figure, as demand for this technology in the very volatile semiconductor sector continued to be very slow in the first six months of the fiscal year.
ZEISS generated around 84 percent of revenue through direct business, and the remaining 16 percent with cooperation partners. The company transacted over 85 percent of its direct business on the international markets.
After currency adjustments, the Group grew its revenue in the Asia/Pacific region (APAC) by four percent to a figure totaling EUR 395 million (first six months of 2011/12: EUR 385 million). In the Americas ZEISS reported growth of two percent. In this region revenue reached the EUR 552 million mark (first six months of fiscal year 2011/12: EUR 534 million). In Europe, the Middle East and Africa (EMEA) ZEISS generated revenue totaling EUR 460 million, a plus of one percent (first six months of fiscal year 2011/12: EUR 455 million). Business in Germany amounted to EUR 244 million (first six months of fiscal year 2011/12: EUR 242 million).
Direct business in the rapidly developing economies such as China, India or Latin America showed a particularly positive development and increased by 16 percent over the previous year. Overall, ZEISS is now generating just under 22 percent of revenue through direct business on these markets (first six months of 2011/12: 19 percent).
The development of the business generated with cooperation partners, on the other hand, is being impacted by the downturn evident in the Semiconductor Manufacturing Technology business group, where revenue dropped 23 percent to EUR 327 million (first six months of 2011/12: EUR 423 million).
Further increase in headcount
On 31 March 2013, 24,803 people were working for ZEISS around the globe. The headcount rose by around three percent – the equivalent of 690 employees – over the first six months of fiscal year 2011/12 (31 March 2012: 24,113 employees). In the first six months of fiscal year 2012/13 ZEISS hired 470 new recruits, predominantly in Asia and Germany.
Further increase in expenditure on research and development
In the first half of the current fiscal year ZEISS invested EUR 191 million, or ten percent of revenue, into its research and development activities. This means that – despite a slight drop in revenue – expenditure on research and development was six percent above last year's level (first six months of 2011/12: EUR 180 million).
Investments in expansion and modernization of the Group
In the first half of fiscal year 2012/13 Carl Zeiss invested EUR 107 million in property, plant and equipment (first six months of 2011/12: EUR 108 million). These funds were primarily channeled into global infrastructure projects and into production technology for the Semiconductor Manufacturing Technology and Medical Technology business groups. “Despite the slowdown in the global economy we are increasing our spending on research and development. We are neither halting nor postponing important investments in the company's future, but are pursuing them with unchanged consistency,” Kaschke emphasized. “Such continuity is key for a high-tech company like ZEISS. This will safeguard our innovative strength in the future.” As announced in 2011, ZEISS will invest around EUR 500 million in the expansion and modernization of its German sites in the period to 2014. This includes the facilities and plant expansions opened at headquarters in Oberkochen in April. The construction of a logistics center and a conference center is currently underway. These investments compared to depreciations totaling EUR 65 million (first six months of 2011/12: EUR 65 million).
ZEISS finances multi-year investment program from its own resources
ZEISS made massive investments in the previous year and in the first half of the current fiscal year. This is reflected in the trend displayed by gross liquidity. On 31 March 2013 this amounted to EUR 566 million – EUR 196 million less than at the end of fiscal year 2011/12 (30 September 2012: EUR 762 million). Net liquidity totaled EUR 179 million (30 September 2012: EUR 373 million). “This expected development in liquidity in the first six months of fiscal year 2012/13 is attributable not only to the downward trend in the revenue of the Semiconductor Manufacturing Technology business group but also, and above all, to our high level of investment. We are pleased that we have been able to achieve this without external financial support,” said Thomas Spitzenpfeil, CFO of Carl Zeiss AG. The high level of investment is also reflected in the free cash flow which fell to minus EUR 34 million (first six months of fiscal year 2011/12: EUR 71 million).
Equity showed a stable development. On 31 March 2013 it totaled EUR 1.204 billion (30 September 2012: EUR 1.213 billion). Spitzenpfeil stressed: “Our equity ratio remains at a solid level of 26 percent – just as at the end of fiscal year 2011/12.”
Trends in the business groups
In the first half of the fiscal year, the Semiconductor Manufacturing Technology business group generated revenue of EUR 392 million. Due to the continuing reluctance to invest evident in the semiconductor sector, this was a decrease of 18 percent on a like-for-like basis (first six months of 2011/12: EUR 478 million). Therefore, the revenue trend remained within the expected framework.
After the first six months of fiscal year 2012/13 the Industrial Metrology business group reported an 11 percent increase in revenue to EUR 264 million (first six months of 2011/12: EUR 237 million). Particular success was reported for the business group's service business and for its sales in the USA.
The Microscopy business group ended the first six months of fiscal year 2012/13 with revenue of EUR 303 million. This equates to a slight reduction of two percent on a like-for-like basis (first six months of 2011/12: EUR 310 million). The business group is particularly feeling the impact of the continued cost-saving measures being implemented by the public sector in its investments into research.
The Medical Technology business group achieved a slight increase in revenue of two percent to EUR 494 million (first six months of fiscal year 2011/12: EUR 484 million). The business with surgical microscopes and intraocular lenses was particularly pleasing. The business group also scored considerable success in the rapidly developing economies. These values deviate from the published figures of the publicly listed company Carl Zeiss Meditec AG as a result of different consolidation models.
The Vision Care business group ended the first half of 2012/13 with revenue of EUR 419 million, slightly less than last year's figure (first six months of 2011/12: EUR 432 million). The business group's operating result was clearly positive. Vision Care has developed into a stable and important pillar of the ZEISS portfolio since its integration into the Carl Zeiss Group on 1 October 2010.
In the first half of fiscal year 2012/13 the Camera Lenses, Sports Optics and Planetariums strategic business groups together generated revenue totaling EUR 90 million, an increase of five percent (first six months of 2011/12: EUR 86 million).
Outlook
For the second half of the fiscal year, ZEISS anticipates continued economic stagnation in many regions and sectors. Nevertheless, Kaschke underscored the Group's plan for fiscal year 2012/13: “We are still aiming for total revenue of around four billion euros for the Carl Zeiss Group.” The Group assumes that the global economy will persist at its current level.
“ZEISS has a future-oriented portfolio and is well positioned to address the challenges posed by the global markets. However, we will further optimize our structures and processes on an ongoing basis to enable us to react quickly and flexibly to constantly changing market conditions. We will continue to consistently invest in expanding the company's international footprint and, above all, in research and development,” said Kaschke.
The previous year's figures are calculated on a like-for-like basis.
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