Carl Zeiss Reports Record Revenues and Profits for Fiscal Year 2017/18

STUTTGART, Germany, Dec. 24, 2018 /PRNewswire/ -- The ZEISS Group continued to maintain strong growth momentum. In the 2017/18 fiscal year (ended September 30, 2018), the ZEISS Group achieved record highs in both revenue and profit: revenue increased by 9% compared to the previous fiscal year, reaching EUR 5.817 billion (EUR 5.348 billion in the previous fiscal year). On a currency-adjusted basis, revenue growth reached 12%. Affected by adverse foreign exchange fluctuations, the ZEISS Group's earnings before interest and taxes (EBIT) for the 2017/18 fiscal year amounted to EUR 772 million, slightly higher than the EUR 770 million reported in the previous fiscal year, with an EBIT margin of 13%. The total value of new orders reached EUR 6.046 billion, representing a 7% increase.

Chairman and Chief Executive Officer of the Carl Zeiss GroupMichael KaschkeThe CEO stated, “All business divisions and regions have made positive contributions to the outstanding performance of the Carl Zeiss Group. In particular, the innovative products we launched in the semiconductor industry and medical technology sector have injected significant growth momentum into the Group, enabling our performance growth to exceed the market average. We possess a robust and future-oriented product portfolio, and we impress customers with advanced high-tech solutions, comprehensive services, and a strong brand.”

Development Data of Each Business Department

Revenue (in million euros)

2017/18Fiscal Year

2016/17Fiscal Year

Increase

Industrial Quality and Research

1,549

1,538

+1% (+2%)

Medical Technology*

1,546

1,427

+8% (+14%)

Optical Consumer Goods Market

1,106

1,108

±0% (+5%)

Semiconductor Manufacturing Technology

1,531

1,212

+26% (+27%)

*Not entirely consistent with the data published by Carl Zeiss Meditec AG

Despite the varying development trajectories of the aforementioned four business segments, each has made a positive contribution to the profit growth of Carl Zeiss AG:

The Industrial Quality & Research division, which provides metrology and microscopy solutions, continued to benefit from stable demand for measurement technology in the automotive industry, offsetting sluggish growth in its microscopy business. Despite significant adverse effects from currency fluctuations, the Medical Technology division further drove the Group’s growth, maintaining a competitive edge in the highly contested U.S. and Japanese markets thanks to product innovation. The Consumer Markets segment, comprising the Vision Care and Consumer Optical strategic business units, saw its lens business grow in nearly all regions, outpacing the market average—particularly in China, Brazil, other emerging economies, and Europe. However, camera lens sales fell short of expectations due to weakness in the photography market. The Semiconductor Manufacturing Technology division achieved robust growth of over 25%, driven by substantial investments in research and technology as well as expanded production capacity.

Financial Highlights

In the 2017/18 fiscal year, nearly 90% of the ZEISS Group’s business revenue came from markets outside Germany. The booming Asia-Pacific market once again served as the primary driver of the Group’s business growth. Notably, revenue from ZEISS’s direct operations in China surpassed that of Germany, marking a 21% increase. China has become the second-largest sales market for the ZEISS Group, after the United States. Business operations in the Europe, Middle East, and Africa (EMEA) region continued to grow, with revenue increasing by 4%. In the Americas, ZEISS’s business also resumed growth, rising by 5%.

Zeiss’s expenditure in the R&D sector increased by 16%. This fully demonstrates Zeiss’s investment strategy: in the 2017/18 fiscal year, total investment in the R&D sector reached €642 million (compared to €552 million in the same period of the previous fiscal year). Investment in property, plant, and equipment increased to €244 million (compared to €183 million in the same period of the previous fiscal year), while depreciation totaled €164 million (compared to €160 million in the same period of the previous fiscal year). Christian M, who officially assumed the roles of Chief Financial Officer of the Zeiss Group and member of the Executive Board on October 1, 2018üDr. Müller stated, “A focused, sustained investment strategy forms the foundation for the future business growth of the Carl Zeiss Group. We will not only invest in the technology and infrastructure of our existing global Carl Zeiss manufacturing sites, but also gradually increase our investments in the high-tech and digital innovation centers in Karlsruhe, Munich, and Shanghai.”

Over the past fiscal year, Carl Zeiss completed the acquisitions of Bosello High Technology, a provider of industrial X-ray system solutions, and Guardus, a supplier of production analysis and control software. In October 2018, Carl Zeiss announced the acquisition of IanTECH, a company specializing in minimally invasive cataract surgery. Regarding the company’s M&A strategy, Dr. Kaschke explained, “We strategically acquire highly innovative solutions and companies, fully leveraging their potential to integrate them into the Carl Zeiss Group’s strategic portfolio.”

As of September 30, 2018, Carl Zeiss’s net current assets totaled €2.12 billion, an increase of €134 million compared to the end of the 2016/17 fiscal year, providing substantial flexibility for strategic acquisitions and investments.

Carl Zeiss Group’s free cash flow totaled €752 million (€658 million in the same period of the previous fiscal year). Net assets increased by 10% to €3.763 billion (€3.429 billion as of September 30, 2017).

At the upcoming annual general meeting, Carl Zeiss AG plans to pay a dividend of €54.3 million to the Carl Zeiss Foundation. Carl Zeiss AG is wholly owned by the Carl Zeiss Foundation. Established in 1889, the Carl Zeiss Foundation is one of Germany’s oldest private foundations and is actively committed to promoting scientific advancement.

The total number of employees worldwide at the Zeiss Group increased by 9%. Driven by personnel demands in the Semiconductor Manufacturing Technology business segment, the number of employees in Germany rose significantly, with more than 700 new hires locally. As of September 30, 2018, Zeiss employed approximately 30,000 people globally. As in previous years, Zeiss employees around the world shared in the company’s success.

In summarizing the company’s performance for the fiscal year, Dr. Kaschke stated, “The strong business development achieved in the 2017/18 fiscal year demonstrates that our strategy—the ZEISS 2020 Agenda—is progressing steadily along its intended course. This agenda primarily focuses on customer success, cutting-edge innovation and investment, as well as enhancing the Group’s own competitiveness.”

Looking Ahead: “Zeiss aims to expand its revenue to60million euros”

Currently, growth rates in both developed and emerging economies are slowing, and rising trade barriers are posing greater risks to global trade. However, guided by its corporate strategy, the “ZEISS 2020 Agenda,” ZEISS is fully prepared to address various changes and sustain strong momentum for growth. Looking ahead to the 2018/19 fiscal year, Dr. Kaschke stated, “Although growth dynamics across business segments and regions are expected to vary in line with economic forecasts, ZEISS as a whole is anticipated to maintain organic growth, with EBIT margins remaining stable. We will continue to focus on innovation, investment, and development, setting our revenue target at €6 billion.” He further remarked, “High-tech solutions are the primary drivers of the company’s growth and will play a crucial role in addressing major future trends, including digitalization, smart manufacturing, and healthcare services for an aging society.”