Jenoptik with positive start in first quarter; positive development of orders and cash flow creates solid basis for future performance over the year, despite corona crisis

• Adjusted order intake grew by 3.6 percent to 211.7 million euros·       
• Sharp improvement in adjusted free cash flow to 15.1 million euros·    
• Revenue declines by 7.8 percent (adjusted) to 164.4 million euros·     
• Adjusted EBITDA margin of 10.5 percent·      
• Successful business model – outlook positive: the Executive Board anticipates to be able to achieve the current average market expectations for revenue and EBITDA in 2020

The Jenoptik Group made a solid start in 2020. Over the first quarter, demand in many areas proved robust despite the corona crisis. The photonics company accordingly posted an increase in order intake (adjusted for the deconsolidation of Hillos GmbH) of 3.6 percent to around 211.7 million euros (prior year: adjusted 204.4 million euros / 210.4 million euros)*. VINCORION and, on an adjusted basis, the Light & Optics division both recorded significantly more orders than in the prior-year period. The Group’s book-to-bill ratio saw a marked increase to 1.29 (prior year: adjusted 1.15 / 1.14). The adjusted order backlog grew by more than 12.4 percent to 522.5 million euros (31/12/2019: adjusted 464.7 million euros / 466.1 million euros),

Over the first quarter of 2020, the corona pandemic had varying effects on Jenoptik’s revenue performance. The pandemic had little or no impact on business with public-sector customers and the semiconductor equipment industry, with both areas posting growth. The Light & Production division was strongly affected by developments in the automotive industry. The Jenoptik Group generated revenue of around 164.4 million euros. Adjusted for the deconsolidation of Hillos GmbH (prior-year revenue of 5.7 million euros), this is a decline in the seasonally weakest quarter of the year of 7.8 percent (prior year: adjusted 178.3 million euros / 184.0 million euros). The Spanish company INTEROB, acquired in January 2020, contributed 1.8 million euros to group revenue over the reporting period.

“Large parts of our business showed a robust development in the first quarter. It is also encouraging to note that we are continuing to see stable demand in the semiconductor equipment sector that is of particular importance to us,” says Stefan Traeger, President & CEO of JENOPTIK AG. “The Light & Safety division and VINCORION both even managed to increase their revenues with public-sector customers in the first quarter. Together with a good order situation and a healthy balance sheet, this is a good basis for us to emerge stronger from the crisis.”

On a regional level, all parts of the world posted declining revenues – with the sole exception of the Middle East/Africa. Asia/Pacific was affected most strongly, where impacts arising from the pandemic were already very clearly apparent in the first three months, especially in China (16.4 million euros compared to 23.0 million euros in the prior year). The share of revenue generated abroad was broadly unchanged at 74.2 percent (prior year: 73.8 percent).

Gross profit of 53.9 million euros was 17.8 percent down on the prior year (prior year: 65.6 million euros). Due to the lower level of utilization, the gross margin was 32.8 percent (prior year: 35.7 percent). The fall in revenue resulted in an adjusted EBITDA of 17.3 million euros (prior year: 23.8 million euros). Adjustments include non-recurring effects for structural adjustment, site optimization and efficiency enhancement measures that will take effect in the fiscal year. The adjusted EBITDA margin was accordingly 10.5 percent (prior year: 12.9 percent). The group EBITDA came to 13.6 million euros, with an EBITDA margin of 8.3 percent. Over the first three months of 2020, EBIT adjusted for non-recurring effects amounted to 6.2 million euros (prior year: 12.8 million euros), while group EBIT came to 2.5 million euros. The adjusted group EBIT margin was 3.8 percent (non-adjusted 1.5 percent / prior year 7.0 percent). EBIT also includes impacts arising from the purchase price allocation due to acquisitions of minus 1.7 million euros (prior year: minus 1.9 million euros).

Solid cash and liquidity situation create good basis for future business performance

At the beginning of the year, the Executive Board adopted a number of precautionary measures to react quickly to the new situation created by the corona pandemic. In addition to ensuring liquidity and profitability, measures were adopted to secure the operating business including the supply chain and to optimize the working capital. As a result, the operating cash flow improved substantially to 26.4 million euros as of March 31, 2020 (prior year: minus 0.9 million euros). This change was essentially due to the fact that the increase in inventories was more than offset by the reduction in trade receivables. As a result of the higher operating cash flow, the free cash flow also saw an encouraging increase to 14.4 million euros (prior year: million 5.1 million euros), despite an increase in capital expenditure over the reporting period. On an adjusted basis, the free cash flow came to even higher 15.1 million euros.

In view of the current situation, the Group is in a comfortable position with short-term liquid funds of 160.0 million euros (31/12/2019: 168.7 million euros). The increase in financial debt and a lower level of cash and cash equivalents (payment of first tranche for INTEROB) resulted in net debt of 16.1 million euros as of March 31, 2020 (31/12/2019: minus 9.1 million euros), which nevertheless still provides scope to ensure the company’s scheduled strategic growth.

Development of the divisions: robust margin level in Light & Optics, good business performance in Light & Safety and VINCORION, and as expected, decline in revenue and earnings in Light & Production

In the first three months of 2020, the Light & Optics division generated revenue of 68.8 million euros, which, adjusted for the deconsolidation of Hillos GmbH, was 11.2 percent down on the prior year (prior year: adjusted 77.5 million euros / 83.2 million euros). Business with the semiconductor equipment industry remained stable, but the Biophotonics and Industrial Solutions units reported declining revenues. EBITDA, adjusted for non-recurring effects, came to 15.9 million euros, with an adjusted EBITDA margin of 23.0 percent. Overall, EBITDA of the division fell to 14.9 million euros (prior year: 16.6 million euros) due to underutilization in the above-mentioned units and the initiated structural adjustments and site optimizations. The EBITDA margin improved to 21.5 percent (prior year: 19.8 percent). As of March 31, 2020, Light & Optics reported an order intake worth 73.4 million euros. On an adjusted basis, this is a plus of 4.1 percent (prior year: adjusted 70.5 million euros / 76.5 million euros). The order backlog came to 141.4 million euros by the end of March 2020 (31/12/2019: adjusted 143.5 million euros / 144.9 million euros).

Due to the developments in the automotive industry, the Light & Production division was strongly impacted by the corona crisis. Despite growth in the automation business and the contribution of 1.8 million euros made by the acquired entity INTEROB, revenue fell by 21.7 percent on the prior year, to 39.5 million euros (prior year: 50.4 million euros) in the first three months of 2020, due to significant declines in the Metrology and Laser Processing units. The division’s EBITDA, adjusted for non-recurring effects for efficiency measures, came to minus 3.5 million euros in the reporting period. In addition to the initiated measures, project postponements and the temporary closure of two Jenoptik plants in this division were primarily responsible for the decrease in EBITDA to minus 4.5 million euros (prior year: 5.6 million euros). The division’s order intake remained relatively stable at 61.2 million euros (prior year: 63.1 million euros). The book-to-bill ratio increased to 1.55 (prior year: 1.25). As of the end of March, the order backlog grew to 122.7 million euros (31/12/2019: 81.6 million euros).

Business with public-sector customers saw a good development. In the first three months of 2020, the Light & Safety division generated revenue of 26.5 million euros – an increase of 8.2 percent (prior year: 24.5 million euros). This growth was primarily due to strong demand for traffic safety solutions in the Americas. It also resulted in improved profitability. EBITDA increased to 4.9 million euros (prior year: 3.7 million euros), the EBITDA margin rose sharply to 18.6 percent (prior year: 15.2 percent). With the division’s focus on project business, the order intake is subject to typical fluctuations. Over the first three months, it fell to 22.3 million euros (prior year: 27.0 million euros), with the order backlog amounting to 63.5 million euros at end of March (31/12/2019: 69.9 million euros).

VINCORION also performed well, generating 28.1 million euros of revenue in the first months, an increase of 11.4 percent (prior year: 25.3 million euros), which also led to improved profitability. EBITDA came to 1.0 million euros, compared to minus 0.4 million euros in the prior year. The EBITDA margin improved from minus 1.6 percent in the prior year to 3.4 percent. The order intake in the period covered by the report grew significantly to 53.4 million euros (prior year: 43.0 million euros). The book-to-bill ratio increased to 1.9 (prior year: 1.7). In light of a very good order intake, the order backlog grew to 194.9 million euros by the end of March (31/12/2019: 169.7 million euros) and was thus considerably higher than in any of the prior-year quarters.

JENOPTIK AG gives positive outlook for the year – Executive Board confident of meeting current market expectations for 2020

“As a result of the countermeasures we have taken and in view of an expected stronger second half-year, we anticipate to be able to meet analysts’ current average market expectations for the full year 2020 – revenue of around 800 million euros and an EBITDA margin of around 14.3 percent – despite corona-related impacts we see in the second quarter. In addition, the projects initiated for structural adjustment, efficiency enhancement and portfolio management should contribute to accelerate growth and improve the Group’s profitability from next year at the latest. We are reporting the associated non-recurring effects separately in this fiscal year,” says Stefan Traeger.

The Quarterly Statement is available in the “Investors/Reports and Presentations” section of the Jenoptik website. The “Jenoptik app” can be used to view the Quarterly Report on mobile devices running iOS or Android. Images for download can be found in the Jenoptik data base at http://media.jenoptik.com.

*Figures without remark are not adjusted

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, pandemic diseases, 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.