- Group revenue up by 13.3 percent to 668.8 million euros; Group EBIT boosted by 18.7 percent to 61.2 million euros
- Net debt reduced to 43.9 million euros
- Dividend to be increased to 0.22 euros per share
- New market-oriented divisional structure since January 2016
- Growth in revenue and earnings planned for 2016
“We achieved our targets and have taken a major step forward in the strategic development of the company. Operational excellence, innovation and further internationalization remain the cornerstones of our approach. In 2015, for example, we generated first major revenues with new products in communications technology, a market we previously have not served, and secured new customers from the life science industry outside Europe. More than two thirds of our revenue came from abroad in 2015,” says Jenoptik President & CEO Michael Mertin, summing up the past fiscal year.
In regional terms, North America and Europe showed the greatest growth, but revenue also increased in Asia. The revenue boost in Europe was in part due to the first-time inclusion of Vysionics, the specialist for traffic safety technology from the United Kingdom that was acquired in late 2014.
Group operating result rose at a stronger rate than revenue
With 18.7 percent, the group EBIT showed considerably stronger growth than revenue, and came to 61.2 million euros (prior year 51.6 million euros). The EBIT margin greatly improved to 9.2 percent (prior year 8.7 percent). This growth was in part due to a changed revenue mix and the contribution to earnings from Vysionics. Group earnings before interest, taxes, depreciation and amortization (group EBITDA) also increased at a faster rate than revenue, by 16.7 percent to 88.8 million euros (prior year 76.1 million euros). In 2015, Jenoptik generated earnings after tax of 49.9 million euros (prior year 41.6 million euros). Earnings per share rose to 0.87 euros (prior year 0.73 euros).
Higher dividend proposed
The Executive Board and Supervisory Board of JENOPTIK AG will propose a higher dividend for the 2015 fiscal year at the Annual General Meeting on June 8, 2016, amounting to 0.22 euros per share (prior year 0.20 euros). The payout ratio would therefore be 25.4 percent (prior year 27.5 percent).
Order intake up on prior year
The group order intake rose by 47.5 million euros, or 8.1 percent, to 636.7 million euros (prior year 589.2 million euros). It included a major order to equip the Patriot missile defense system. At 373.4 million euros, the order backlog was down on the prior-year figure of 422.5 million euros, in part due to work on major orders scheduled for several years in the Defense & Civil Systems segment.
Net debt significantly cut
On the back of a good free cash flow, Jenoptik reduced its net debt to one of its lowest ever levels as of December 31, 2015, despite continuing to finance its strong growth, the dividend payment and the payment to the last remaining silent real estate investor. At the end of 2015, net debt came to 43.9 million euros, thus less than half the figure in the prior year (31/12/2014: 104 million euros, including liabilities to silent real estate investors).
Free cash flow improved significantly to 71.8 million euros (prior year 22.5 million euros). As a result of the earnings after tax, equity rose to 435.1 million euros (prior year 386.6 million euros). With a virtually unchanged balance sheet total (31/12/2014: 771.7 million euros), the equity ratio grew sharply to 56.6 percent (prior year 50.1 percent).
In 2015, Jenoptik expanded its financing framework to create additional leeway for future organic growth and acquisitions. The total volume of the debenture loans issued in April 2015, including existing loans, increased from 90 to 125 million euros. March 2015 also saw the conclusion of a new syndicated loan agreement for 230 million euros (previously 120 million euros).
“We took advantage of favorable conditions on the financial markets to secure financial flexibility at short notice in the future,” says Hans-Dieter Schumacher, CFO of JENOPTIK AG. In conjunction with a further rise in the equity ratio and strong cash flows, Schumacher sees this as a very good footing on which to finance scheduled future growth and new business opportunities.
Minor increase in employee numbers abroad
The number of employees (incl. trainees) at Jenoptik fell slightly in 2015, to 3,512 (31/12/2014: 3,553). The annual average number of employees (not that at December 31) rose to 3,421 (prior year 3,375).
In the course of the internationalization strategy the number of employees abroad increased to 629 (31/12/2014: 617) or 17.9 percent of the entire workforce.
Revenue growth in all three segments
In 2015, the Lasers & Optical Systems segment continued its development to become a supplier of optical system solutions. Revenue rose by 7.8 percent to 249.4 million euros (prior year 231.3 million euros). Demand for laser machines and optoelectronic modules was particularly strong. Following a slow start to the year, revenues with semiconductor equipment partners improved in the second half-year. The segment’s EBIT, at 23.7 million euros, was 12.0 percent down on the prior year (prior year 27.0 million euros) due to lower margins in the product mix and provisions for restructuring part of the laser business in Jena. At 248.2 million euros, the order intake exceeded the prior-year level (prior year 240.1 million euros).
An upswing in investment in the automotive industry and the integration of Vysionics, the British traffic safety technology company, were the key drivers of growth in the Metrology segment. Revenue rose by 11.9 percent to 207.0 million euros (prior year 185.0 million euros). At 23.0 million euros, the segment’s EBIT was at the prior-year level (prior year 22.5 million euros), in part due to subdued development in the US market for traffic safety technology and amortization associated with the acquisition of Vysionics. The segment order intake grew by 20.8 percent to 211.1 million euros (prior year 174.7 million euros).
2015 was the best year in the history of the Defense & Civil Systems segment. Revenue rose exceptionally, by 23.8 percent to 211.4 million euros (prior year 170.8 million euros), due both to a good course of business and the settlement of a major order. The process of internationalization also bore fruit, producing an increase in the share of revenue generated abroad to 47 percent (prior year 42 percent). The segment EBIT multiplied to 17.9 million euros (prior year 2.1 million euros). Alongside international growth and a consistently market-oriented business focus, this was also attributable to improved margins in the revenue mix. Earnings from the sale of a foreign minority investment also had a positive effect. At 177.8 million euros, the order intake increased by 4.5 percent (prior year 170.2 million euros).
Growth in revenue and earnings scheduled for 2016
The Jenoptik Group expects organic growth to generate revenue of between 680 and 700 million euros in 2016. This growth is due to be generated in the Optics & Life Science and Mobility segments. Following the increase in revenue and earnings seen in 2015, the Defense & Civil Systems segment is expected to develop at a stable rate. Group EBIT is also due to rise moderately; depending on revenue, the group EBIT margin will come in at between 9.0 and 9.5 percent. Acquisitions are not included in these forecasts but have not been ruled out for the current fiscal year.
“A solid order and project pipeline will allow us to maintain our course, even in a challenging environment,” says Jenoptik President & CEO Michael Mertin with a view to the political and economic conditions. As he adds, these are increasing in complexity for all companies and are very difficult to forecast reliably – for example regulations at European level, turmoil on the financial markets, export restrictions, ongoing developments in China and the other BRIC countries and the conflicts in the Middle East and between Russia and Ukraine.
Jenoptik will continue to rigorously pursue its strategic agenda in 2016: “It has proven its worth in the past and enables lasting growth, even in a challenging environment. Our new divisional structure means we can focus better on growth markets that serve global megatrends and are thus well on our way to becoming a global player,” says Michael Mertin. Jenoptik will continue to invest in expanding its systems and services business in 2016, as well as in boosting its international reach. Work on internal projects related to the operational excellence program and efforts to produce cost savings will continue unabated.
Our medium-term planning remains unchanged: “By 2018, we aim to increase annual revenue to around 800 million euros – including smaller acquisitions – and achieve an average EBIT margin of around 9 to 10 percent over the market cycles. The share of revenue in our focus regions of the Americas and Asia/Pacific combined should then grow to over 40 percent of group revenue,” adds Michael Mertin.
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