Carl Zeiss Meditec achieves double-digit growth in first six months of 2022/23 with declining earnings

Jena/Germany | Carl Zeiss Meditec AG

Carl Zeiss Meditec generated revenue of around €974.5m in the first six months of fiscal year 2022/23 (prior year: €855.4m), equating to growth of +13.9% (adjusted for currency effects: +12.4%). Earnings before interest and taxes (EBIT) declined to around €143.9m (prior year: €177.3m). The EBIT margin was 14.8% (prior year: 20.7%).

“We are very satisfied with the revenue growth we have achieved, as we were still very strongly affected by the effects of the COVID-19 pandemic in China and by the tense supply chains in the first six months of fiscal year 2022/23. Despite these difficult conditions, we still managed to generate further double-digit growth. Our focus continues to be on shortening delivery times for our customers and on reducing the high order backlog. At the same time, we shall continue our strategic investments in research and development at a fast pace,” says Dr. Markus Weber, President and CEO of Carl Zeiss Meditec AG.

Revenue in the Ophthalmic Devices strategic business unit (SBU) increased by +13.9% in the first three months of fiscal year 2022/23 (adjusted for currency effects: +12.3%), to €742.6m (prior year: €651.9m). Hereby Surgical Ophthalmology and Diagnostics made a solid contribution to growth. In spite of the ongoing supply chain shortages, more equipment was delivered. The product mix developed less favorably than in the strong prior-year period.

The strategic business unit Microsurgery achieved revenue growth of +13.9% (adjusted for currency effects: +12.7%), from €203.5m in the prior year to €231.9m. This SBU continues to be impacted by the strain in the supply chains. The order backlog remains high.

Revenue in the EMEA¹ region increased by +7.9% (adjusted for currency effects: +8.4%), to €247.2m (prior year: €229.2m). Positive growth contributions came from Southern Europe, among other places. The core markets Germany, France, Spain and the UK recorded stable growth.

Revenue in the Americas region increased by a significant +27,6% (adjusted for currency effects: +19.4%), from €212.2m to €270.7m. A partial conversion of the high order backlog also contributed to this. The majority of markets, including the USA, recorded growth well into the double-digit percentage range.

The APAC² region made a solid contribution to growth. Revenue increased by 10.3% (adjusted for currency effects: +11.0%) to €456.7m (prior year: €414.1m). India and Southeast Asia, in particular, are making good contributions to revenue growth. The markets Japan and South Korea, on the other hand, were down slightly.

In spite of solid revenue growth, the operating result (earnings before interest and taxes, EBIT) remained below the prior-year level after the first six months of fiscal year 2022/23, at €143.9m (prior year: €177.3m). This downward trend is primarily due to a weaker product mix as a result of a smaller proportion of consumables at the start of the fiscal year, associated, among other things, with the COVID-19 pandemic in China. At the same time, strategic investments in research and development, for example in the area of digitalization, and sales and marketing continue at a fast pace. Also higher procurement costs due to the strained global supply chains and generally rising labor costs are continuing to have an adverse effect.

The EBIT margin was 14.8% after the first six months (prior year: 20.7%). Adjusted for special effects, the EBIT margin was 15.3% (prior year: 21.2%). Although earnings per share benefited from gains on currency hedges, this figure nevertheless declined compared with the same period of the prior year, to €1.26 (prior year: €1.44).

Carl Zeiss Meditec AG plans to continue its high strategic investments in sales and marketing and research and development in the second half of fiscal year 2022/23. The reduction of the high order backlog in the equipment business began in the second quarter and is expected to continue in the course of the fiscal year. The proportion of consumables is expected to improve significantly again compared with the first six months of fiscal year 2022/23, due, among other things, to the expected recovery in the Chinese market.

Carl Zeiss Meditec AG has therefore consolidated its projections for fiscal year 2022/23.

Revenue is expected to increase to around €2.1 billion, which, according to today’s estimates, corresponds to the previous target of growth at least on a par with the underlying markets. The EBIT margin for fiscal year 2022/23 as a whole is expected to be between 17–20%.