Rise in first-quarter order figures provides sound basis for further development
- In the first three months of 2019, order intake was up 5.6 percent to 210.4 million euros, order backlog rose from 27.4 million euros to 548.9 million euros.
- Group generated revenue of 184.0 million euros (prior year: 189.9 million euros).
- In line with expectations, EBITDA came to 23.8 million euros, down on prior-year 27.7 million euros.
- Jenoptik confirms annual targets for 2019.
In the first three months of 2019, Jenoptik reported good demand in the semiconductor equipment and automotive markets. Export restrictions in the defense business, however, had a negative impact on growth. In addition and as expected, the high level of prior-year revenue in the Light & Safety division could not be fully compensated. Group revenue in the first quarter of 2019 was therefore down 3.1 percent at 184.0 million euros (prior year: 189.9 million euros). Prodomax and the OTTO Group, the companies acquired in the prior year, contributed over 12 million euros of revenue to the Group’s current business performance.
On a regional level, growth was exclusively achieved outside Europe. Jenoptik registered its strongest growth in the Americas, where revenue increased a significant 23.4 percent to 47.5 million euros (prior year: 38.5 million euros), primarily due to the contribution made by Prodomax.
The fall in revenue, stronger investments in R+D, and higher functional costs compared to the prior-year quarter resulted in EBITDA falling by 14.2 percent to 23.8 million euros (prior year: 27.7 million euros). The EBITDA margin was 12.9 percent (prior year 14.6 percent). At 12.8 million euros, EBIT, too, was down on the prior-year figure of 20.8 million euros, a decrease of 38.6 percent. EBIT for the companies acquired in the prior year came to 0.3 million euros, including financial impacts arising from the purchase price allocation in the amount of minus 1.7 million euros. The Group EBIT margin fell to 7.0 percent (prior year: 11.0 percent).
“As expected, our divisions showed a mixed picture in their business development at the beginning of 2019. On the one hand, export restrictions in the defense business are inhibiting growth and, as anticipated, we could not fully compensate the high revenues of around 15 million euros we generated with toll monitoring systems in our traffic safety business in the prior year. We are, however, seeing continuing good demand in our important semiconductor equipment and automotive markets and, overall, remain on course for growth, as our order book shows,” says Stefan Traeger, President & CEO of JENOPTIK AG.
Encouraging growth in order intake; order backlog reached new record value
Jenoptik recorded a very good first quarter in terms of order intake. In the first three months of 2019, the Group received orders worth 210.4 million euros, an increase of 5.6 percent (prior year: 199.2 million euros). The order intake was thus above revenue, resulting in a significant rise in the book-to-bill ratio from 1.05 in the prior year to 1.14. The order backlog reached a new record value of 548.9 million euros, also considerably exceeding the figure at year-end 2018 (31/12/2018: 521.5 million euros). As of March 31, 2019, there were also frame contracts worth 57.9 million euros (31/12/2018: 62.5 million euros).
As a result of a lower operating cash flow than in the prior year and higher capital expenditure, the free cash flow in the reporting period fell to minus 5.1 million euros (prior year: 13.3 million euros). In addition, customer payments originally expected in early 2019 were already received at the end of December 2018. An increase in financial debt – in particular due to the introduction of the international financial reporting standard IFRS 16 – and a slightly lower level of cash and cash equivalents resulted in net debt amounting to 39.2 million euros at the end of this reporting period (31/12/2018: minus 27.2 million euros).
Development of the divisions: growth in photonics business, export restrictions impact on VINCORION
In the first three months of 2019, the Light & Optics division posted revenue growth of 2.6 percent, to 83.2 million euros (prior year: 81.1 million euros). This development was supported by continuing good business with solutions for the semiconductor equipment industry. Income from operations before depreciation and amortization (EBITDA) fell in comparison with the prior-year quarter by 3.7 percent to 16.6 million euros, primarily due to product mix impacts (prior year: 17.3 million euros). The EBITDA margin remained at a very good level of 19.8 percent (prior year: 21.1 percent). In the first quarter, the division posted an order intake worth 76.5 million euros, equating to a fall of 21.5 percent on the prior year (prior year: 97.4 million euros). This development is attributable to the fact that high-volume orders for semiconductor equipment were placed earlier than expected in 2018. The order backlog was worth 172.4 million euros at the end of March 2019 (31/12/2018: 180.6 million euros).
First-quarter revenue in the Light & Production division was 28.9 percent up on the prior-year period, at 50.4 million euros (prior year: 39.1 million euros). Sales of innovative measuring systems for the automotive industry increased, and the newly acquired companies contributed over 12 million euros to revenue growth. On the basis of good revenue performance, the division posted an EBITDA of 5.6 million euros, as expected again reflecting a considerably improved quality of earnings compared to the prior year (prior year: 2.5 million euros). The EBITDA margin grew to 11.0 percent, compared with 6.4 percent in the prior year. The order intake was worth 63.1 million euros (prior year: 44.0 million euros). Demand for automation solutions, in particular, saw strong growth, as shown by our recently announced projects in North America. The order backlog at the end of March was worth 126.9 million euros (31/12/2018: 112.5 million euros).
In the first three months of 2019, the Light & Safety division generated revenue of 24.5 million euros (prior year: 33.2 million euros). In the prior year, particularly the delivery of toll monitoring systems had contributed to strong growth in the first quarter. As expected, this fall in revenue was also reflected in EBITDA, which came to 3.7 million euros in the current reporting period following 5.8 million euros in the prior-year quarter. The EBITDA margin thus fell to 15.2 percent (prior year: 17.5 percent). By contrast, the order intake saw good growth, rising by 9.6 percent to 27.0 million euros (prior year: 24.6 million euros). The division’s order backlog consequently also increased by 5.3 percent to 73.2 million euros (31/12/2018: 69.5 million euros).
Over the first three months of 2019, VINCORION generated revenue of 25.3 million euros, 29.7 percent down on the prior-year quarter (prior year: 35.9 million euros). This, in particular, was the result of the German government’s decision to extend arms export restrictions in the context of the embargo, among other things on Saudi Arabia. As a result of the fall in revenue and a lower-margin product mix, EBITDA in the first quarter came to minus 0.4 million euros (prior year: 3.5 million euros). The EBITDA margin fell from 9.7 percent in the prior-year quarter to a present minus 1.6 percent. By contrast, the order intake showed an upward trend what is very positive for future business performance. It grew by 32.4 percent to 43.0 million euros (prior year: 32.5 million euros), in part due to new Patriot missile defense and Eurofighter projects. Due to an increased order intake and delayed revenue generation, the division’s order backlog also increased, by 17.4 million euros to 176.2 million euros (31/12/2018: 158.9 million euros).
2019 guidance confirmed
“On the back of sustained good demand in key markets, recently acquired projects, and good order intake growth, we are confident to see good business performance, particularly in the second half of the year, and to achieve our financial targets for 2019,” says Stefan Traeger.
The Executive Board of JENOPTIK AG continues to expect momentum to increase over the year and therefore confirms its guidance for 2019. Revenue growth for the full year is due to be in the mid-single-digit percentage range (without any major portfolio changes). The EBITDA margin is expected within the range of 15.5 to 16.0 percent.
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This announcement can contain forward-looking statements that are based on current expectations and certain assumptions of the management of the Jenoptik Group. A variety of known and unknown risks, uncertainties and other factors can cause the actual results, the financial situation, the development or the performance of the company to be materially different from the announced forward-looking statements. Such factors can be, among others, changes in currency exchange rates and interest rates, the introduction of competing products or the change of the business strategy. The company does not assume any obligation to update such forward-looking statements in the light of future developments.
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.