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ZEISS: High-Tech Drives Growth

Medical technology and industrial metrology business still on track for growth

18-May-2018

The first six months of fiscal year 2017/18 (ended 31 March 2018) were successful for the ZEISS Group and saw its revenue rise by 9 percent to EUR 2.773 billion (1st six months of 2016/17: EUR 2.550 billion), and as much as 13 percent after adjustments for currency effects. At EUR 380 million, the earnings before interest and tax (EBIT) were high despite clearly negative currency effects compared to the previous year (EUR 384 million). The EBIT margin is at 14 percent. Incoming orders hit EUR 2.839 billion (1st six months of 2016/17: EUR 2.743 billion).

“It is our business in the high-tech fields of semiconductor manufacturing technology, industrial metrology and medical technology in particular that are enabling our growth and helping further advance the ZEISS Group,” said Prof. Dr. Michael Kaschke, President and CEO of ZEISS. “We are benefitting once again from our balanced and future-oriented portfolio and our broad global footprint.”

Segment development

 Revenue (in € million)
  1st six months of
2017/18
1st six months of
2016/17
Change (like-for-like)
Research & Quality Technology 737 743 −1% (+4%)
Medical Technology 724 682 +6% (+13%)
Vision Care/Consumer Products 538 553 −3% (+3%)
Semiconductor Manufacturing Technology 732 541 +35% (+36%)

In the first half of fiscal year, the segments have been developing according to different dynamics. Particular growth drivers in the Research & Quality Technology segment are still the automotive industry and the great demand for Smart Production solutions. This contrasts with a weaker development in the microscopy business during the first half of the fiscal year. The Medical Technology segment is experiencing strong growth as it is able to gain market share on the hotly contested healthcare market thanks to its many innovative products. In the Vision Care/Consumer Products segment, the excellent developments in ophthalmology stand in contrast to an unsatisfactory business situation for camera lenses. The Semiconductor Manufacturing Technology segment is benefitting from the capacity increases in the semiconductor fabs and is growing by 35 percent, while the number of incoming orders for future-oriented technology Extreme Ultra Violet (EUV) lithography is constantly rising.

Key figures

ZEISS generates around 90 percent of its business outside Germany. The pace of growth differs greatly by region. This positive business trend is borne in particular by the dynamically developing economies in the APAC region.

ZEISS has increased expenditure on research and development by around 20 percent: in the first half of fiscal year 2017/18 this amounted to EUR 298 million (1st half of 2016/17: EUR 247 million).

Investments in property, plant and equipment amounted to EUR 115 million in the reporting period (1st half of 2016/17: EUR 75 million). These compared to depreciations totaling EUR 77 million (1st half of 2016/17: EUR 76 million).

On 31 March 2018, net liquidity amounted to EUR 2,036 million, which was EUR 50 million above the figure posted at the end of fiscal year 2016/17.

Free cash flow totaled EUR 349 million (1st half of 2016/17: EUR 264 million). With a figure totaling EUR 3,549 million, the company’s equity rose by around 3 percent over the end-of-year figure for fiscal year 2016/17 (30 September 2017: EUR 3,429 million).

The number of employees increased by 8 percent. Almost 800 new employees were hired in Germany alone. On 31 March 2018, ZEISS had a global workforce of around 28,300 employees.

Outlook: Continuing the growth trajectory

ZEISS has assessed the current economic situation as good: “At the present time, there is still excellent momentum for growth in Asia. Added to that is the sustained favorable impact of the global megatrends and a high demand in the semiconductor manufacturing technology segment,” says Kaschke. “The pleasing half-year figures motivate us to make fiscal year 2017/18 a record year for the ninth time in a row. Provided the overall economic framework conditions do not change in any major way, e.g. as a result of trade barriers, we are confident that we will succeed,” predicts the ZEISS CEO.

Kaschke believes that “Digitalization constitutes a tremendous chance for ZEISS to grow, because high-tech solutions from ZEISS play a major role in shaping the digital future.”

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