Carl Zeiss Meditec Group
Carl Zeiss Meditec Group
Dr. Ludwin Monz, President and CEO Mai 11, 2020Justus Felix Wehmer, CFO
Carl Zeiss Meditec Group
Agenda
6M 2019/20 at a Glance
Financial Performance
Focus Topics
Outlook
Carl Zeiss Meditec Group 3
Half-year 2019/20 Revenue Growth of 7% - Significant Slowdown in Business in Months of February & March
667.2
6M 2019/20
6M 2018/19
Revenue Half year-revenue still in upward trajectory (FX-adj. growth of 5.8%) - significant slowdown during
February and March due to impact of COVID-19 pandemic
Q2 2019/20 with sideways revenue vs. previous year
Weak start into Q3 2019/20 – April 2020 order entry & revenues down approx. 20-30% y/y
+ 7.2%
million
110.4
€ 102.56M 2019/20
6M 2018/19
EBIT EBIT margin down to 14.3% (prev. year 16.5%) in particular due to continued investment in
R&D, lack of growth in Q2 as well as less favorable product and regional mix.
Adj. EBIT margin amounted to 14.7% (prev. year 16.8%) - 7.1%
million
0.65
€ 0.713M 2019/20
3M 2018/19
EPS The previous year’s EPS had included significant hedging losses
+ 10.0%
€ 714.9
Carl Zeiss Meditec Group
Agenda
6M 2019/20 at a Glance
Financial Performance
Focus Topics
Outlook
Carl Zeiss Meditec Group 5
Ophthalmic DevicesSignificant Slowdown in Business Growth & Profit Mix in February & March
490.7
€ 517.76M 2019/20
6M 2018/19
Revenue FX-adj. revenue growth of +4.2% in H1 2019/20
Both products for ophthalmic surgery and diagnostics contributed
Significant impact on business activity from COVID-19 pandemic particularly
in months of February and March, weak start into Q3 during month of April
+5.5%million
of total revenue
Revenue Split
72.4%
13.8%
9.5%6M 2019/20
6M 2018/19
EBIT margin EBIT margin declined significantly due to ongoing investments,
lack of growth in Q2 and lower revenue of consumables
following cancellations of non-essential surgical procedures in
several countries
OPT
MCS
Carl Zeiss Meditec Group 6
Microsurgery Deceleration in Growth Trend in February & March
176.5
€ 197.26M 2019/20
6M 2018/19
Revenue FX-adj. revenue growth of +10.1%
Continuing positive revenue trend neurosurgical and spinal product category
Impact of COVID-19 pandemic clearly visible towards end of quarter,
weak start into Q3 during month of April
+11.7%million
of total revenue
Revenue Split
27.6%
24.2%
27.1%6M 2019/20
6M 2018/19
EBIT margin EBIT margin further increased compared to previous year
mainly due to operating leverage
OPT
MCS
Carl Zeiss Meditec Group 7
Growth Trending Lower Across World Regions in February & March
180.9
205.56M 2019/20
6M 2018/19
Americas FX-adj. revenue growth of +10.8%
Positive development in the US market and good contributions from LatAm
Significant slowdown in March and weak start into April
+13.6%million28.8%
213.7
208.76M 2019/20
6M 2018/19
EMEA FX-adj. revenue growth of -2.3%
Heterogeneous development in major markets
Significant declines in order intake since March 2020 as a result of the COVID-19 pandemic and very weak start into April
-2.3%million29.2%
272.6
6M 2019/20
6M 2018/19
APAC FX-adj. revenue growth of +8.8%
Strong performance in South Korea and Japan, no growth in China
Early indicators improving for China, while many other Asian markets also off to a weak start in April
+10.3%million42.0%
Americas
EMEA
APAC300.7
Carl Zeiss Meditec Group 8
Selling & marketing expenses
Gross profit
General admin. expenses
R&D expenses
EBIT[adj.]
Headwind to EBIT Margin From Product Mix And Continued Strategic R&D Investment
in € million in % of sales
6M 2019/20 6M 2018/19
Income Statement
397.7 55.6373.0 55.9
160.0 22.4156.1 23.4
29.7 4.228.0 4.2
105.5 14.878.5 11.8
102.5[105.3]
14.3[14.7]
110.4[112.1]
16.5[16.8]
Gross margin slightly down, particularly due to
negative trend in months of February and March
as consumables revenue in China declined
Further pressure on gross margin expected in Q3
due to cancellation of non-essential procedures in
many countries as a consequence of the
COVID-19 pandemic
Strong operating cost controls implemented in
March, but further near-term pressure on opex
ratios anticipated due to weakening revenue
outlook
Strategic R&D investment largely ring-fenced and
continues as planned
Carl Zeiss Meditec Group 9
Adjusted EBIT Margin Amounted to 14.7%
6M 2019/20 € million
6M 2018/19€ million
Change to PY%
EBIT 102.5 110.4 - 7.1
Acquisition-related special effects 2.8 1.7
Adjusted EBIT 105.3 112.1 - 6.1
Adjusted EBIT in % of revenue 14.7% 16.8% -2.1% pts.
Adjusted EBIT margin
Only modest level of adjustments from acquisitions / PPA
Carl Zeiss Meditec Group 10
37.1
-122.9
89.1
-29.3
-18.7
40.7
691.6581.3
Operating Cash-flow Reduction Partly Due to Increase in Safety Stocks to Ensure Deliveries
Operating cash flow declined compared to prev. year partly due to an increase in safety stocks of certain products and components to secure deliveries in the context of the COVID-19 pandemic
Cash flow from investing activities was € -122.9 million in the previous year mainly due to the acquisition of IanTECH, Inc.
Cash flow from financing activities in the previous year impacted by fund flows in relation to acquisition of IanTECH, Inc.
Cash flow from investing activities
Cash flow from operating activities
Cash flow from financing activities
Net liquidity
Cash flow statement
6M 2019/20 6M 2018/19
Carl Zeiss Meditec Group
Agenda
6M 2019/20 at a Glance
Financial Performance
Focus Topics
Outlook
Carl Zeiss Meditec Group 12
Our Priorities During & Emerging From COVID-19 Pandemic (I)
Safety of employees
Safety precautions in production & admin such as distancing, masks, mobile work implemented early – minimal impact from COVID-19 infections on our workforce so far
Continuity of production
No interruption to production and supply chains
Safety Stocks increased to ensure deliveries
Financial Stability
Tight management of capacity in production & admin, including use of local flexibilization instruments (e.g “Kurzarbeit” (short term working hours), furloughs)
Reducing sales & marketing expenses (partly through increased use of digital instruments)
Strict monitoring of Net Working Capital
Carl Zeiss Meditec Group 13
Our Priorities During & Emerging From COVID-19 Pandemic (II)
Support Our Customers During Crisis
Engage with customers through digital tools & outreach
Support with professional education and practice consulting services
Support Business Ramp-Up Emerging From Crisis
Ensure readiness to deliver key products and swiftly increase volumes when required
Continue strategic R&D to uphold product roadmap
Embrace Structural Changes & Market Shifts Post Crisis
Rising relevance of tele-medicine, online education
Development of Digital Solutions to be continued at full speed
Carl Zeiss Meditec Group
Agenda
6M 2019/20 at a Glance
Financial Performance
Focus Topics
Outlook
Carl Zeiss Meditec Group 15
Long-Term Drivers of Our Business Remain Intact while Near-term Visibility is very Limited
Favourable Long-Term Trends
Our StrategicPriorities
FY 2019/20Outlook
Aging of the population and growing affluence
Rising access to health care in RDEs
Increasing information access and awareness
Growing patient load, growing patient expectations
Further expand recurring revenue generation
Extend technology leadership in cataract
Drive global market penetration of SMILE Refractive Laser surgery
Lead Neuro/ENT market by turning next-generation product into business growth
Significant negative impact of COVID-19 pandemic expected throughout second half of 2019/20
A reliable forecast of business development is currently not possible as visibility remains low
Carl Zeiss Meditec Group