Carl Zeiss Meditec increased revenue in fiscal year 2022/23 by around 10 percent

Carl Zeiss Meditec generated revenue of €2,089m in fiscal year 2022/23 (prior year: €1,903m), corresponding to growth of +9.8% (adjusted for currency effects: +10.1%). Earnings before interest and taxes (EBIT) declined to around €348m (prior year: €397m). The EBIT margin was 16.7% (prior year: 20.9%). Adjusted for special effects, this figure was 17.4% (prior year: 21.4%). The lower end of the forecast range for the EBIT margin of 17 to 20 percent has therefore been approximately met, as announced in the forecast in August 2023.

Dr. Markus Weber, President and CEO of Carl Zeiss Meditec AG: “We were able to further expand our market shares in both strategic business units despite an increasingly weakening economy. At the same time, we were able to significantly reduce the production and delivery times, which were still considerably longer in the first half of the year. We have also made significant investments in future growth, particularly in the area of research and development.”

With revenue of €2,089m (prior year: €1,903m), the revenue target for fiscal year 2022/23, which was initially forecast on 19 April 2023, has been approximately achieved. The slight deviation from the nominal target value was due in particular to the unfavorable development of the exchange rates of the US and Chinese currencies against the euro in the second half of the fiscal year.

Revenue in the strategic business unit (SBU) Ophthalmology increased by +7.3% in fiscal year 2022/23 (adjusted for currency effects: +7.6%), to €1,576m (prior year: €1,469m). This increase was due to an increased reduction in the existing order backlog, especially in the device business segment. The intraocular lens business also made solid contributions to revenue.

The Microsurgery strategic business unit achieved strong revenue growth of 18.3% (adjusted for currency effects: +18.7%) to €513m (prior year: €434 million), thus outperforming the market. Good progress in equipment deliveries during the course of the fiscal year was a major contributor to revenue growth.

Revenue in the EMEA¹ region increased by +12.7% (adjusted for currency effects: +13.7%), to €517m (prior year: €459m). The core markets Germany, France and Southern Europe recorded robust growth.

In the Americas region, a significant revenue increase of +17.2% (adjusted for currency effects: +15.7%) to €571.0m (prior year: €487m) was achieved. The increase was fueled in particular by the accelerated reduction in the existing order backlog in the equipment business due to improved production times, especially in the second half of the fiscal year. High growth rates were achieved by the USA and the Latin American markets.

The APAC² region is making a solid contribution to growth, with a revenue increase of +4.6% (adjusted for currency effects: +5.6%). Revenue increased to €1.001m (prior year: €957m). India and Southeast Asia, in particular, made a positive contribution to revenue growth, while the markets of China and Korea showed a slight decline.

In fiscal year 2022/23, the operating result (earnings before interest and taxes, EBIT) declined to €348m (prior year: €397m). The decline is partly due to a less favorable product mix with a lower proportion of recurring revenue of 43% (prior year: 46%). In the prior year, high deliveries of surgical consumables to the Chinese sales channel as a safety stock for possible COVID-19-related supply shortfalls led to higher results. In addition, strategic investments were made in future growth in sales and marketing as well as research and development. The research and development ratio rose from 15.3% in the prior year to 16.7%, partly due to investments in digitalization. Negative currency effects also had a negative impact.

The EBIT margin was 16.7% (previous year: 20.9%). Adjusted for special effects, this figure was 17.4% (prior year: 21.4%). The lower end of the forecast range for the EBIT margin of 17 to 20 percent has therefore been approximately met, as announced in the forecast in August 2023 if adjusted for negative special effects of around €4m in the fourth quarter from the deconsolidation of two investments in the area of diagnostic devices as part of a realignment of this sub-segment. Earnings per share amounted to €3,25 (prior year: €3,29). The Management Board and Supervisory Board plan to propose a dividend of EUR 1.10 to the Annual General Meeting, unchanged from the prior year.

The Company considers the outlook for fiscal year 2023/24 to be largely positive, as the underlying long-term development trends continue to persist. Nevertheless, macroeconomic and political uncertainties, such as the global supply chain situation, high inflation, consumer behavior characterized by fears of recession, as well as geopolitical conflicts, trade sanctions and currency fluctuations, among other factors, impact the development of business. Assuming that, the above-mentioned risk factors do not worsen further in the course of the year, however, revenue growth for fiscal year 2023/24 as a whole is expected to be at least as high as market growth.

Due to the planned reduction of surgical consumables in the Chinese sales channel in Ophthalmology and the introduction of new state procurement systems in the intraocular lens market in China, the growth rate is expected to temporarily decrease compared with the prior year. The product mix will therefore have a smaller proportion of consumables, particularly in the first half of the fiscal year. EBIT is expected be at roughly the same level as in the prior year in fiscal year 2023/24. EBIT and EBIT margin should be higher again in the second half of 2023/24 than in the second half of 2022/23.

In the medium term, the Company expects to be able to stabilize its EBIT margin sustainably above 20%. The increasing share of recurring revenue generally offers further opportunities for a rising EBIT margin. At the same time, extensive investments are to be continued, particularly in the areas of research and development as well as sales and marketing.