Jenoptik grows in the second quarter of 2019
- Group revenue was up in second quarter; in the first six months revenue came to 383.1 million euros (prior year: 384.7 million euros)
- Order intake totaled 392.5 million euros in first half-year, slightly down on prior year (prior year 397.2 million euros)
- EBITDA came to 54.0 million euros (prior year: 56.3 million euros)
- Jenoptik still expects growth in 2019; revenue is now forecast in a range between 850 and 860 million euros
Jenoptik generated revenue of 383.1 million euros over the first six months of 2019. Revenue was thus at the same high level as in the prior-year period (prior year: 384.7 million euros). As expected, momentum picked up in the second quarter. When compared to the prior quarter revenue increased by 8.2 percent. Set against the prior year, revenue for the months of April to June grew 2.2 percent to 199.1 million euros. Key drivers of this growth were good business with the semiconductor equipment sector and the contributions to revenue of some 29 million euros from the companies acquired in 2018.
“I’m pleased to see that we grew in the second quarter, and managed to almost close the gap in revenue from the prior quarter,” says Stefan Traeger, President & CEO of JENOPTIK AG. “And this despite the fact that current export restrictions in the defense business are slowing our growth, and the strong revenue with our toll monitoring systems in the first half-year 2018 could not, as expected, be fully compensated for in our traffic safety business.”
On a regional level, growth was achieved exclusively outside Europe. Jenoptik registered its strongest growth in the Americas, where revenue increased a significant 27.0 percent to 104.8 million euros (prior year: 82.5 million euros), primarily due to the contribution made by Prodomax. Revenue in Asia/Pacific grew by 10.9 percent to 48.8 million euros (prior year: 44.0 million euros).
Gross profit improved slightly, by 2.1 percent, to 138.1 million euros, resulting in an increase in the gross margin from 35.2 percent to 36.0 percent. Due to higher investments in future growth compared to the prior year, functional costs rose and contributed to a slight fall of 4.1 percent in EBITDA, to 54.0 million euros (prior year: 56.3 million euros). The EBITDA margin decreased slightly, from 14.6 percent in the prior year to a present 14.1 percent. At 32.2 million euros, EBIT, too, was down on the prior-year figure of 42.8 million euros in the first half-year 2019, a marked decline of 24.8 percent, also due to PPA effects. EBIT of the companies acquired in 2018 was 1.5 million euros, including impacts arising from the purchase price allocation of minus 3.0 million euros. The Group EBIT margin came to 8.4 percent (prior year: 11.1 percent).
Order intake only slightly down on prior year; order backlog remained at high level
At 392.5 million euros, the order intake was slightly down on the prior year (prior year: 397.2 million euros). The book-to-bill-ratio remained almost unchanged at 1.02 (prior year: 1.03). At 522.5 million euros, the order backlog was at the 2018 year-end level (31/12/2018: 521.5 million euros). Of this order backlog, 338.0 million euros is due to be converted into revenue in the present fiscal year.
Over the first half-year 2019, higher advance payments and preparations were made for future revenue. In addition, both inventories and contract assets rose in part due to the export ban affecting VINCORION and deliveries postponed at the request of customers. As a result of the rise in working capital and increased capital expenditure the free cash flow fell to minus 14.6 million euros in the period covered by the report (prior year: 28.8 million euros). An increase in financial debt of 56.6 million euros due to the introduction of the international reporting standard IFRS 16, and a lower level of cash and cash equivalents resulted in net debt amounting to 79.0 million euros at the end of the reporting period (31/12/2018: minus 27.2 million euros).
Development of the divisions: growth in core business, export restrictions impact VINCORION
Revenue in the Light & Optics division in the first half-year 2019 came to 162.7 million euros, and was thus at the prior-year level (prior year: 163.3 million euros). Good business with the semiconductor equipment industry continued in the second quarter. Income from operations before depreciation and amortization (EBITDA) fell in comparison with the prior year by 9.4 percent to 32.0 million euros (prior year: 35.4 million euros), primarily due to a revenue-related margin decline in the Biophotonics and Industrial Solutions areas. The EBITDA margin remained at a very good level of 19.5 percent (prior year: 21.5 percent). By June 30, 2019, the division had reported an order intake worth 153.0 million euros, equating to a fall of 14.7 percent on the prior year (prior year: 179.3 million euros). This development was partly attributable to the fact that a high-volume order for semiconductor equipment was placed earlier than expected in late 2018. The order backlog was worth 162.6 million euros at the end of June 2019 (31/12/2018: 180.6 million euros).
In the first half-year 2019, revenue in the Light & Production division was 45.3 percent up on the prior-year period, at 111.3 million euros (prior year: 76.6 million euros). The Automation area was the main contributor to growth. On the basis of good revenue performance, Light & Production again posted a significantly improved quality of earnings, as expected, with EBITDA of 11.9 million euros (prior year: 6.7 million euros). The EBITDA margin improved to 10.7 percent, compared with 8.8 percent in the prior year. The order intake in the Light & Production division increased to 113.0 million euros (prior year: 92.0 million euros), with demand for automation solutions again showing good growth. At the end of June, the division’s order backlog was worth 114.8 million euros (31/12/2018: 112.5 million euros).
In the first six months of 2019, the Light & Safety division generated revenue of 48.4 million euros (prior year: 61.8 million euros). In the prior year, the delivery of toll monitoring systems had contributed around 25 million euros to revenue. As expected, the reduction in revenue was also reflected in EBITDA, which came to 6.6 million euros in the current reporting period following 9.4 million euros in the prior year. The EBITDA margin thus fell to 13.5 percent (prior year: 15.2 percent). By contrast, the order intake in the first six months of 2019 saw good growth, rising by 5.1 percent to 50.6 million euros (prior year: 48.1 million euros). The division’s order backlog consequently also increased to 71.6 million euros (31/12/2018: 69.5 million euros).
In the first half-year 2019, VINCORION generated revenue of 59.1 million euros, 27.6 percent down on the prior year (prior year: 81.6 million euros). This, in particular, was the result of the German government’s decision to extend arms export restrictions, in part due to the sanctions imposed on a number of Arab states. As a result of the lower revenue, EBITDA came to 4.5 million euros (prior year: 8.7 million euros). The EBITDA margin fell from 10.6 percent in the prior year to a present 7.6 percent. At 73.8 million euros, the order intake in the period covered by the report was 3.4 percent lower than in the prior year (prior year: 76.4 million euros), in part due to growing uncertainty regarding German involvement in international defense projects. Due to delayed revenue recognition, the division’s order backlog increased by 14.1 percent to 173.0 million euros (31/12/2018: 158.9 million euros).
Jenoptik still expects growth in 2019; revenue now forecast in a range between 850 and 860 million euros
Due to the continuing reluctance to invest, especially in the automotive industry, the JENOPTIK AG Executive Board now expects revenue without any major portfolio changes in a range between 850 and 860 million euros (before: growth in the mid-single-digit percentage range). The EBITDA margin is forecast to come to around 15.5 percent (before: 15.5 to 16.0 percent).
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Key figures at a glance (PDF attached)
Jenoptik is a globally operating technology group. Optical technologies are the very basis of our business with the majority of our products and services being provided to the photonics market. Our key target markets primarily include the semiconductor equipment industry, the medical technology, automotive and mechanical engineering, traffic, aviation as well as the security and defense technology industries. Jenoptik has about 4,000 employees worldwide.
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