Jenoptik posts further growth in first quarter

• Substantial increase in revenue and profitability
• Order intake below prior-year level
• Guidance for 2024 confirmed: further profitable growth expected

“With significant growth in revenue and earnings, Jenoptik delivered a solid start to the fiscal year 2024. However, we observe that the general market environment has softened, and demand in some of our business sectors is currently below our expectations. Due to our strong position in our core markets and our sound customer base, we expect demand to pick up in the second half of the year. Based on this and in view of our order backlog, we confirm our guidance for 2024 and expect further profitable growth this year,” says Stefan Traeger, President & CEO of JENOPTIK AG.

Revenue growth of 9.4 percent – profitability again significantly improved

In the first quarter of 2024 the Jenoptik photonics group continued on its course of growth, with revenue up by 9.4 percent to 256.1 million euros (prior year: 234.1 million euros), primarily driven by the Advanced Photonic Solutions division. In Europe (including Germany), Jenoptik recorded the strongest revenue growth of 22.7 percent, while revenues in the Americas and Asia/Pacific did not reach the prior year’s levels.

EBITDA again grew faster than revenue, mainly due to good performance of the Advanced Photonic Solutions division and the improvement in earnings at the Non-Photonic Portfolio Companies. At 44.5 million euros, EBITDA was 21.6 percent up on the prior-year figure of 36.6 million euros. The EBITDA margin was 17.4 percent (prior year: 15.6 percent). Group EBIT grew by 30.4 percent from 19.9 million euros to 26.0 million euros. At 15.4 million euros, group earnings after tax were also significantly higher than the prior year’s figure of 11.8 million euros; earnings per share amounted to 0.27 euros (prior year: 0.21 euros).

Currently subdued demand in some markets; continued capacity expansion

The Group’s order intake in the past quarter reached 242.0 million euros, down on the prior-year figure of 283.0 million euros. Demand was weaker than expected in Optical Test & Measurement, in certain applications in Life Science and Medical Technology, and in the Non-Photonic Portfolio Companies, here in part due to project delays. The Group’s book-to-bill ratio was 0.94 (prior year: 1.21). Accordingly, the order backlog remained at a good level of 731.3 million euros (31/12/2023: 745.0 million euros).

In view of the strong mid-term growth prospects in the three future markets of semiconductor & electronics, life sciences & medical technology, and smart mobility, Jenoptik is further expanding its production capacities, mainly through the construction of a new fab in Dresden for the semiconductor equipment industry, but also with capital expenditure in machinery and equipment. Investments in the past quarter amounted to 19.8 million euros, compared to 22.5 million euros in the prior-year quarter.

Financial and balance sheet position remain very strong

Free cash flow before interest and taxes amounted to 19.5 million euros in the first quarter, reflecting an increase in working capital (prior year: 28.5 million euros). In the first three months of 2024, the cash conversion rate was at 43.8 percent compared to an exceptionally high 78.0 percent in the same period last year. With an equity ratio of 54.3 percent (31/12/2023: 54.2 percent), net debt of 416.7 million euros (31/12/2023: 423.1 million euros), and leverage (net debt in relation to EBITDA) of 1.9x (31/12/2023: 2.0x), Jenoptik continues to have very solid financial and balance sheet ratios.

Business performance of the divisions

The Advanced Photonic Solutions division saw continued dynamic growth, with revenue increasing 10.3 percent from 181.8 million euros in the prior-year quarter to 200.5 million euros. In particular, business with the semiconductor equipment industry grew significantly in the first three months of 2024. The division’s EBITDA margin was 19.7 percent, compared with 20.0 percent in the prior year. Impacted by weak demand in Optical Test & Measurement and some Life Science and Medical Technology applications, among other things, the order intake was 197.9 million euros and thus below the prior year’s 212.1 million euros.

The Smart Mobility Solutions division posted revenue growth of 4.6 percent in the first quarter of 2024, to 24.0 million euros (prior year: 22.9 million euros). EBITDA slightly improved to 0.1 million euros (previous year: minus 0.1 million euros). Due to typical fluctuations in the project business, the division posted an order intake of 29.4 million euros in the first three months of 2024 (prior year: 38.9 million euros).

At 30.9 million euros, revenue of the Non-Photonic Portfolio Companies was a considerably up by 9.4 percent (prior year: 28.3 million euros). Thanks to a higher contribution to earnings from HOMMEL ETAMIC, the EBITDA margin improved from 10.9 percent in the prior-year period to 17.1 percent in the first three months of 2024. In part impacted by project delays, the order intake for the quarter was 14.0 million euros (prior year: 30.6 million euros).

Guidance for fiscal year 2024 confirmed

Despite an increasingly difficult general market environment, the Executive Board of JENOPTIK AG expects further profitable growth in the fiscal year 2024 based on a good order backlog and strong positioning in the Group’s core markets. Demand is anticipated to pick up, particularly in the second half of the year. The Executive Board therefore continues to expect revenue growth in the mid-single-digit percentage range in 2024 (2023: 1,066.0 million euros) and an EBITDA margin of 19.5 to 20.0 percent (2023: 19.7 percent), including an expected impact of approximately 0.5 percentage points for the relocation to the new semiconductor site in Dresden. Capital expenditure is expected to be slightly above the prior-year level of 110.4 million euros.

This forecast is subject to the assumption that geopolitical risks do not escalate. These include, for example, the war in Ukraine with the sanctions that have been implemented and potential impacts on price developments, energy supplies, supply chains, the conflict in the Middle East, and the overall economic environment. Potential portfolio changes are not considered in this forecast.

The presentation on the first quarter of 2024 and the Quarterly Statement for January through March 2024 are available on the Jenoptik website on the Investors / Reports and presentations pages.