Quarterly Report • May 13, 2015
Quarterly Report
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(Figures in € '000, unless otherwise stated)
| 6 Months | 6 Months | 6 Months | |
|---|---|---|---|
| 2014/15 | 2013/14 | 2012/134 | |
| Revenue | 497,957 | 460,922 | 442,957 |
| Research and development expenses | 56,170 | 47,973 | 46,031 |
| Research and development expenses in % of consolidated revenue | 11.3 % | 10.4 % | 10.4 % |
| EBIT | 60,997 | 63,660 | 64,767 |
| EBIT in % of consolidated revenue | 12.2 % | 13.8 % | 14.6 % |
| EBIT (adjusted) 1 | 67,928 | 64,672 | – |
| EBIT in % of consolidated revenue (adjusted) 1 | 13.6 % | 14.0 % | – |
| Net income | 32,400 | 44,147 | 46,912 |
| Attributable to: Shareholder of parent company Non-controlling interest |
30,062 2,338 |
39,473 4,674 |
42,447 4,465 |
| Profi t per share 2 (in €) | 0.37 € | 0.49 € | 0.52 € |
| Cash fl ows from operating activities | 3,501 | 22,308 | 18,191 |
| Cash fl ows from investing activities | - 19,390 | - 44,385 | - 25,541 |
| Cash fl ows from fi nancing activities | 12,124 | 27,790 | 6,406 |
| 31 March 2014/15 |
31 March 2013/14 |
31 March 2012/13 |
| Total assets | 1,129,981 | 986,149 | 946,969 |
|---|---|---|---|
| Total equity | 764,104 | 709,283 | 679,300 |
| Total equity in % | 67.6 % | 71.9 % | 73.2 % |
| Net Cash³ | 241,834 | 265,132 | 326,699 |
Profi t/(loss) per share, attributable to the shareholders of the current fi nancial year.
Cash and cash equivalents plus treasury receivables from/payables to the group treasury of Carl Zeiss AG.
4 Adjusted due to the amendment to IAS 19.
Adjusted for special items.
| To our shareholders | |
|---|---|
| Letter to the shareholders | 4 |
| Interim fi nancial statements | |
| Consolidated management report for the interim fi nancial statements | 6 |
| 1 Summary | 6 |
| 2 Results of operations | 7 |
| 3 Financial position | 11 |
| 4 Net assets | 13 |
| 5 Orders on hand | 15 |
| 6 Events of particular signifi cance | 15 |
| 7 Supplementary report | 15 |
| 8 Employees | 15 |
| 9 Research and development | 15 |
| 10 Outlook | 17 |
| 11 Directors' dealings – notifi able securities transactions by members of the executive bodies of Carl Zeiss Meditec AG in the fi rst six months of fi nancial year 2014/15 |
19 |
| 12 Voting rights announcements | 19 |
| 13 Shareholder structure | 19 |
| Consolidated income statement (IFRS) | 20 |
| Consolidated statement of comprehensive income (IFRS) | 21 |
| Consolidated statement of fi nancial position (IFRS) | 22 |
| Consolidated statement of cash fl ows (IFRS) | 24 |
| Consolidated statement of changes in equity (IFRS) | 25 |
| Notes | |
| Notes to the consolidated interim fi nancial statements | 26 |
| 1. General information | 26 |
|---|---|
| 2. Purchase and sale of business operations | 28 |
| 3. Notes to the consolidated income statement | 28 |
| 4. Notes to the consolidated statement of fi nancial position | 29 |
| 5. Disclosures on fair value | 29 |
| 6. Events after the end of the interim reporting period | 30 |
| Responsibility statement | 31 |
|---|---|
| -------------------------- | ---- |
After starting the new fi nancial year with good revenue growth in the fi rst quarter, the six-month statement of fi nancial position for the reporting period 2014/15 is also showing an upward trend for the Carl Zeiss Meditec Group. Total revenue for the fi rst six months amounts to around € 498 million. This corresponds to growth of 8 percent. Adjusted for currency effects, revenue increased by 3.7 percent. Earnings before interest and taxes (EBIT) amount to around € 61 million, which approximates the previous year's fi gure. The EBIT margin is 12.2 percent. On a adjusted basis, EBIT would have been increased by 5 percent compared to the previous year, and the EBIT margin at 13.6 percent would be slightly lower than the previous year's level at 14.0 percent.
Earnings per share amount to € 0.37 after six months. This decline of approximately 24 percent compared with the previous year is mainly due to a negative result from currency hedging transactions.
Growth is distributed among the three strategic business units as follows: Once again, the "Surgical Ophthalmology" SBU grew the most, increasing its revenue by just over 17 percent in the reporting period, to € 173 million. The continuing high demand on the market for innovative intraocular lenses had a positive effect here. Surgical microscopes for ophthalmic surgery also developed positively in the reporting period. The development of business in the "Ophthalmic Systems" SBU remains split: There is a positive trend for refractive lasers and in the service area, while the diagnostic systems business remains subdued, due to continued strong pricing and competitive pressure. Below the line, the SBU achieved sound revenue growth of 8.8 percent, and made the largest contribution to revenue with € 183.2 million. Sales fi gures here benefi ted signifi cantly from the positive currency effects in the Americas business. Adjusted for currency effects, the increase is 2.4 percent. The "Microsurgery" SBU generated revenue of € 141.7 million and is thus down by 2.1 percent compared with the previous year. After adjustment for currency effects, business with surgical microscopes and visualization solutions declined by 5.8 percent. The trend is comprehensible, however, in view of an exceptionally strong year-ago period in "Microsurgery", particularly in the Japanese market.
In regional terms, the "EMEA" region generated the highest revenue after six months. In differing individual markets, revenue of € 171.3 million was generated all in all, corresponding to an increase of 8.1 percent. The "Americas" region increased its revenue again for the fi rst time since the beginning of fi nancial year 2013/14. Boosted by the strength of the U.S. dollar, revenue increased to € 166.9 million. Adjusted for currency effects, however, this substantial increase of 17.8 percent falls to 5.2 percent. The "APAC" region achieved fi gures that were almost on a par with the very strong fi rst six months of the previous year, and closed the reporting period with almost unchanged revenue of € 159.8 million, in spite of the downturn in the important Japanese market, as anticipated.
The overall satisfactory half-time statement of fi nancial position is the result of our corporate strategy to create true value-added with innovative products and customer-focused solutions. Examples of this include the CT LUCIA® intraocular lens for the standard segment, manufactured at the new site in Ontario, and the IOLMaster® 700, as a new product generation in biometry, both of which were launched in 2014. In March 2015 we introduced the Humphrey Field Analyzer 3, a new generation of our gold standard in glaucoma diagnosis which promises further growth in the future.
Due to our broad product range and high-quality medical technology solutions, as well as our technological innovative strength, we are confi dent that we will be able to maintain and expand our market shares during the further course of this fi nancial year. We expect our revenue for fi nancial year 2014/15 to range between € 960 million and € 1,000 million. This corresponds to growth of between 5.6 percent and 10 percent compared with the previous year. In the medium term, we continue to strive for an EBIT margin between 13 and 15 percent. The EBIT margin for the current fi nancial year, adjusted for special items, is also expected to be within this range.
I would like to thank you for the trust you have placed in us, and would be very pleased if you continue to provide us with your support.
Jena, May 2015
Dr Ludwin Monz President and CEO Carl Zeiss Meditec AG
Carl Zeiss Meditec AG, Jena, Germany, is the parent company of the Carl Zeiss Meditec Group ("Carl Zeiss Meditec Group", the "Company", the "Group"), which comprises additional subsidiaries.
The following changes occurred with respect to the Group's reporting entity and the structure of its consolidated fi nancial statements in the fi rst six months of fi nancial year 2014/15:
On 22 December 2014, Carl Zeiss Meditec Inc., Dublin, USA, a wholly owned subsidiary of Carl Zeiss Meditec AG, Jena, Germany (ISIN: DE0005313704), concluded a cooperation agreement with the current shareholders of Oraya Therapeutics Inc., Newark, USA. Under this cooperation agreement, the Carl Zeiss Meditec Group shall, over a period of up to two years, provide funding for the further implementation of the growth strategy of Oraya Therapeutics Inc., and shall, in return, essentially receive rights to purchase shares reaching up to a majority holding in Oraya Therapeutics Inc. after two years. Since December 2014 such rights to assume shares in the company have been acquired by way of a payment of € 4.4 million. Oraya has developed and commercialized an x-ray radiation therapy (Oraya Therapy™) to treat wet age-related macular degeneration (wet AMD). Oraya Therapy™ is available on the market in Germany, the UK and Switzerland. The strategic focus shall initially be on expanding the position in these three markets.
In addition, the organizational structure within the Carl Zeiss Meditec Group was modifi ed at the beginning of fi nancial year 2014/15. The previous organizational structure essentially combined locations to form strategic business units (SBUs). In order to better substantiate our claim to be a solutions provider, the new organizational structure is consistently geared to customer groups. Accordingly, the composition of the product portfolio of the three strategic business units changed at the beginning of fi nancial year 2014/15. Surgical microscopes for ophthalmic surgery shall no longer be part of the "Microsurgery" SBU in future; instead, these shall be assigned to the "Surgical Ophthalmology" SBU. Diagnostic products used preoperatively for cataract surgery were previously assigned to the "Ophthalmic Systems" SBU. These products have also been part of the "Surgical Ophthalmology" SBU since the start of fi nancial year 2014/15.
For better comparability it is assumed in the present management report that the modifi ed organizational structure was already in place in the previous fi nancial year, and thus the previous year's fi gures have been adjusted accordingly.
Table 1: Summary of key ratios in the consolidated income statement (fi gures in € '000, unless otherwise stated)
| 6 Months 2013/14 |
6 Months 2014/15 |
Change | |
|---|---|---|---|
| Revenue | 460,922 | 497,957 | + 8.0 % |
| Gross margin | 52.6 % | 52.4 % | - 0.2 %-pts |
| EBITDA | 73,008 | 70,419 | - 3.5 % |
| EBITDA margin | 15.8 % | 14.1 % | - 1.7 %-pts |
| EBIT | 63,660 | 60,997 | - 4.2 % |
| EBIT margin | 13.8 % | 12.2 % | - 1.6 %-pts |
| EBIT (adjusted) 2 | 64,672 | 67,928 | + 5.0 % |
| EBIT margin (adjusted) 2 | 14.0 % | 13.6 % | - 0.4 %-pts |
| Earnings before tax | 66,502 | 47,424 | - 28.7 % |
| Tax rate | 33.6 % | 31.7 % | 1.9 %-pts |
| Consolidated net income after non-controlling interests | 39,473 | 30,062 | - 23.8 % |
| Earnings per share after non-controlling interests | € 0.49 | € 0.37 | - 23.8 % |
The Carl Zeiss Meditec Group increased its revenue by 8.0 % in the fi rst six months of fi nancial year 2014/15, from € 460.9 million in the same period of the previous year, to € 498.0 million. After adjustment for currency effects, this corresponds to growth of 3.7 %.
The "Surgical Ophthalmology" SBU made the greatest contribution to growth, increasing its revenue by 17.1 % (adjusted for currency effects: + 14.9 %), compared with the fi rst six months of the previous year. The "Ophthalmic Systems" SBU was boosted by currency trends and contributed to the development of revenue with growth of 8.8 % (adjusted for currency effects: + 2.4 %). Business development in the "Microsurgery" SBU must be seen in view to an exceptionally strong year-ago period. Revenue declined by 2.1 % (adjusted for currency effects: - 5.8 %).
Regionally, currency fl uctuations in the USA signifi cantly boosted growth in the "Americas" region, helping it to achieve double-digit growth of 17.8 % (adjusted for currency effects: 5.2 %). The trend in the region "Europe, Middle East and Africa (EMEA)" remained positive, with revenue growth of 8.1 %. Adjusted for currency effects, this region made the largest contribution to growth, of 7.8 %. In the "Asia/Pacifi c (APAC)" region, revenue in Japan declined where pull-forward effects due to a value-added tax increase contributed to a particularly strong year-ago period. The other countries in the "APAC" region grew in the double-digit range.
Due to the modifi cation of the Group's organizational structure, the share of revenue generated by the "Surgical Ophthalmology" SBU in the fi rst six months of the current fi nancial year amounts to 34.7 % of total revenue generated within the Group. This SBU's share of Group revenue therefore increased by 2.6 percentage points year-on-year (previous year 32.1 %). A total of 36.8 % (previous year 36.5 %) of consolidated revenue is attributable to the "Ophthalmic Systems" SBU. The "Microsurgery" SBU's share of consolidated revenue decreased, compared with the adjusted year-ago basis, from 31.4 % to 28.5 %.
| Figure 1: Share of strategic business units in consolidated revenue in the fi rst six months of fi nancial year 2014/15 |
|---|
Aided by currency fl uctuations, revenue in the "Ophthalmic Systems" SBU increased by 8.8 % to € 183.2 million in the fi rst six months of 2014/15 (previous year € 168.4 million). Adjusted for currency effects, the business grew by 2.4 %. The environment remains diffi cult due to the intense competitive pressure, particularly in the diagnostic instruments sector, and calls for further cost-cutting measures in the current fi nancial year. In contrast, the refractive laser business and services continued to make a positive contribution to the development of revenue in the "Ophthalmic Systems" SBU.
Revenue in the "Surgical Ophthalmology" SBU increased by 17.1 % during the fi rst six months (adjusted for currency effects: + 14.9 %), to € 173.0 million (previous year € 147.8 million). Even without taking the fi rst-time consolidation of Aaren Scientifi c Inc. into account, the SBU achieved a double-digit percentage organic growth rate. This business unit benefi ted in particular from the growing demand for innovative intraocular lenses and multifocal and toric premium lenses for minimally invasive cataract surgery. Surgical microscopes for ophthalmic surgery also made a substantial contribution to the growth of this business unit.
The "Microsurgery" SBU recorded revenue of € 141.7 million in the fi rst six months, thus 2.1 % lower than in the previous year's period (€ 144.8 million). Adjusted for currency effects, the decrease was signifi cantly higher at 5.8 %. Business development must be seen in view of an exceptionally strong year-ago period. The development of revenue in Japan compared with the previous year also played a major role in this, where growth was exceptionally high in the fi rst six months, due to the planned VAT increase. The strongest sales drivers were the surgical microscopes for neurosurgery and ENT surgery.
6 Months 2014/15 6 Months 2013/14 Ophthalmic Systems SBU 183,199 178,921 + 2.4 % Surgical Ophthalmology SBU 173,040 150,623 + 14.9 % Microsurgery SBU 141,718 150,497 - 5.8 % Consolidated revenue 497,957 480,041
Figure 3: Consolidated revenue by strategic business unit based on constant exchange rates (fi gures in € '000)
The Carl Zeiss Meditec Group has a very balanced range of business activities worldwide, with each of its three strategic business regions generating around one third of its total revenue. In the fi rst six months of fi nancial year 2014/15, the "EMEA" and "Americas" regions made a positive contribution to revenue growth.
After the fi rst six months of fi nancial year 2014/15, the "EMEA" region accounted for 34.4 % of consolidated revenue. The "Americas" and "APAC" regions generated 33.5 % and 32.1 %, respectively, of the Group's total revenue.
| EMEA | 34.4 % | |
|---|---|---|
| Americas | 33.5 % | |
| APAC | 32.1 % |
Revenue in the "EMEA" region increased by 8.1 % in the fi rst six months (adjusted for currency effects: + 7.8 %), to a total of € 171.3 million (previous year € 158.5 million). The core markets Germany, France and the UK exhibited a positive trend overall. As a whole the countries of Southern Europe, including Spain, Italy, Greece and Portugal, also continued to grow. The Middle East also continued to make a positive contribution to revenue growth.
The "Americas" region increased its revenue by 17.8 % to € 166.9 million, compared with € 141.7 million the previous year. This region benefi ted signifi cantly from the movements of the U.S. dollar. Adjusted for currency effects, the region achieved growth of 5.2 %; however, this is the fi rst time the region has seen a positive trend again since the start of fi nancial year 2013/14. A crucial factor in this was the business in the USA, which regained some momentum in the second quarter of the current fi nancial year and noticeably contributed to growth. The countries of South America also performed well.
In the "APAC" region, the Carl Zeiss Meditec Group generated revenue of € 159.8 million and, aided by currency effects, came close to reaching the previous year's fi gure (previous year € 160.8 million; - 0.6 %; adjusted for currency effects: - 1.6 %). Revenue in Japan declined signifi cantly compared with an exceptionally strong year-ago period, during which there were pull-forward effects due to a VAT increase. Outside Japan, there was a double-digit percentage increase in revenue of almost 22 % in the region, with China, Australia, the countries of Southeast Asia, and India, being the main contributors.
Figure 6: Consolidated revenue by region based on constant exchange rates (fi gures in € '000)
Gross profi t amounted to € 261.1 million at the end of the fi rst six months of the current fi nancial year (previous year € 242.3 million). The corresponding margin for the period under review, of 52.4 % (previous year 52.6 %), was almost on par with the previous year's fi gure.
Functional costs for the fi rst six months of the current fi nancial year amounted to € 200.1 million (previous year € 178.6 million). The ratio of functional costs to revenue increased slightly compared with the previous year, to 40.2 % (previous year 38.8 %). A considerable portion of the absolute increase is due to movements in exchange rates.
The Carl Zeiss Meditec Group uses earnings before interest and taxes (EBIT = operating result) as a key performance indicator. EBIT amounted to € 61.0 million for the period from October 2014 to end March 2015 (previous year € 63.7 million). This corresponds to an EBIT margin of 12.2 % (previous year 13.8 %). The decline in the EBIT margin year-on-year is mainly due to the rise in research and development costs. Adjusted for special items, the EBIT margin, at 13.6 %, would have been just slightly lower than the previous year's margin of 14.0 %. In this context, expenses for the strategic project announced in December 2014 amounted to € 6.9 million in the reporting period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at € 70.4 million in the reporting period (previous year € 73.0 million). Relative to revenue, this results in an EBITDA margin of 14.1 % (previous year 15.8 %). Adjusted for special items, the EBITDA margin would have been at 15.5 % (previous year 16.1 %).
Foreign currency losses, mainly arising from the valuation of currency hedging transactions, in the amount of € 12.5 million, are offset by foreign currency gains in the previous year in the amount of € 3.5 million. The tax rate was at 31.7 % (previous year 33.6 %). As a general rule, an average annual tax rate of between 31 % and 33 % is assumed.
In the fi rst six months basic consolidated net income3 amounted to € 30.0 million (previous year € 39.5 million). Non-controlling interests accounted for € 2.3 million of this (previous year € 4.7 million). In the fi rst six months, basic earnings per share of the parent company thus amounted to € 0.37 (previous year € 0.49). This is largely attributable to the decidedly negative result from currency hedging, due to the current strength of the U.S. dollar against the euro.
The Carl Zeiss Meditec Group's statement of cash fl ows shows the origins and utilization of the cash fl ows during the reporting period. A distinction is made between cash fl ows from operating activities and cash fl ows from investing and fi nancing activities.
Changes in individual items in the income statement and the statement of fi nancial position are recorded in the statement of cash fl ows. In contrast, the consolidated statement of fi nancial position presents the fi gures as they stood at the end of the reporting period on 31 March 2015. As a result, the statements in the analysis of the fi nancial position may differ from the presentation of net assets based on the consolidated statement of fi nancial position.
Figure 7: Summary of key ratios in the consolidated statement of cash fl ows (fi gures in € '000) 6 Months 2014/15 6 Months 2013/14 Cash fl ow from operating activities 3,501 22,308 Cash fl ow from investing activities - 19,390 - 44,385 Cash fl ow from fi nancing activities 12,124 27,790 Change in cash and cash equivalents - 2,855 5,431
Cash fl ow from operating activities amounted to € 3.5 million in the reporting period (previous year € 22.3 million). Cash fl ow from operating activities was reduced compared with the previous year, due, on the one hand, to the lower operating result. A higher amount of cash outfl ow resulted in particular from the increase in trade receivables relating, on the one hand, to the end of the reporting period, as a result of a signifi cant revenue increase at the end of the second quarter, and, on the other hand, to a growing share of fi nancial solutions business. Receivables from related parties also rose at the end of the reporting period. Inventories also increased to a greater extent than in the fi rst six months of the previous year, due to a number of current product launches since the end of the past calendar year, as well as to ensure delivery capacity for a number of top-selling products.
Cash fl ow from investing activities amounted to € - 19.4 million in the reporting period (previous year € - 44.4 million). The cash outfl ow is the result, among other things, of the fi nancial resources provided to date to Oraya Therapeutics Inc. The lower cash outfl ow compared with the previous year is primarily attributable to the acquisition of long-term distribution partner Optronik A.S. in Turkey and the intraocular lens manufacturer Aaren Scientifi c Inc. in the USA within the fi rst six months of the previous year.
Cash fl ow from fi nancing activities in the fi rst six months of the current fi nancial year amounts to € 12.1 million (previous year € 27.8 million). The difference here is mainly due to a smaller decline in treasury receivables from the treasury of Carl Zeiss Financial Services.
| Key ratio | Defi nition | 30 September 2014 |
31 March 2015 |
Change |
|---|---|---|---|---|
| Cash and cash equivalents |
Cash-on-hand and bank balances | 10,727 | 7,872 | - 26.6 % |
| Net cash | Cash-on-hand and bank balances + Treasury receivables from Group treasury of Carl Zeiss AG4 ./. Treasury payables to Group treasury of Carl Zeiss AG |
293,319 | 241,834 | - 17.6 % |
| Net working capital | Current assets including fi nancial investments ./. Cash and cash equivalents ./. Treasury receivables from Group treasury of Carl Zeiss AG5 ./. Current liabilities excl. treasury payables to Group treasury of Carl Zeiss AG |
312,453 | 366,856 | + 17.4 % |
| Working Capital | Current assets ./. Current liabilities |
495,772 | 498,690 | + 0.6 % |
Table 2: Key ratios relating to fi nancial position (fi gures in € '000)
Table 3: Key ratios relating to fi nancial position
| Key ratio | Defi nition | 6 Months 2013/14 |
6 Months 2014/15 |
Change |
|---|---|---|---|---|
| Cash fl ow per share | Cash fl ow from operating activities | 0.27 € | 0.04 € | - 84.3 % |
| Weighted average of shares outstanding | ||||
| Capex ratio | Investment (cash) in property, plant and equipment | 1.2 % | 1.3 % | + 0.1 %-pts |
| Consolidated revenue |
Total assets amounted to € 1,130 million as of 31 March 2015 (30 September 2014: € 1,039 million). The increase in individual items in the statement of fi nancial position is due in part to currency effects at the end of the reporting period.
Non-current assets increased to € 391.5 million as of 31 March 2015 (30 September 2014: € 343.3 million), due, among other things, to the acquisition of rights to assume shares in Oraya Therapeutics Inc., as well as loans to Oraya Therapeutics Inc., and the increase in non-current trade receivables, due to the growing fi nance leasing business.
There were signifi cant changes in current assets as of 31 March 2015, which amounted to € 738.5 million (30 September 2014: € 695.9 million), due to the stockpiling of inventories within the scope of several current new product launches since the end of the past calendar year, and to ensure delivery capacity for a number of top-selling products. Current assets also increased as a result of the rise in trade receivables and receivables from related parties at the end of the reporting period, due, among other things, to the signifi cant increase in revenue at the end of the second quarter. Due, among other things, to the dividend payment in March of this year, and the provision of funding to Oraya Therapeutics Inc., treasury receivables also decreased.
The equity recognized in Carl Zeiss Meditec's consolidated statement of fi nancial position amounts to € 764.1 million as of 31 March 2015 (30 September 2014: € 754.2 million). The equity ratio amounted to 67.6 % as of 31 March 2015 (30 September 2014: 72.6 %) and thus remains high.
Non-current liabilities amounted to € 126.1 million as of 31 March 2015 (30 September 2014: € 84.8 million). This increase is mainly attributable to the rise in provisions for pensions, which is mainly the result of an adjustment of interest due to the fall in interest rates.
Under current liabilities (€ 239.8 million; 30 September 2014: € 200.1 million) trade payables and liabilities to related parties increased, due, among other things, to effects relating to the end of the reporting period.
| Table 4: Key ratios relating to net assets | ||||
|---|---|---|---|---|
| Key ratio | Defi nition | 30 September 2014 |
31 March 2015 |
Change |
| Equity ratio | Equity (incl. non-controlling interests) | 72.6 % | 67.6 % | - 5.0 %-pts |
| Total assets | ||||
| Inventories in % | Inventories (net) | 19.0 % | 21.7 % | + 2.7 %-pts |
| of rolling 12-month revenue |
Rolling revenue of the past twelve months as of the end of the reporting period |
|||
| Receivables in % of rolling |
Trade receivables as of the end of the reporting period (net) (including non-current receivables) |
23.1 % | 27.5 % | + 4.4 %-pts |
| 12-month revenue |
Rolling revenue of the past twelve months as of the end of the reporting period
As of 31 March 2015 orders on hand of the Carl Zeiss Meditec Group amounted to € 153.3 million, which corresponds to an increase of 21 % compared with the previous year (30 September 2014: € 126.6 million), and is attributable, among other things, to the phasing out of the distributor business of Aaren Scientifi c Inc.
At the end of the fi rst quarter, on 22 December 2014, Carl Zeiss Meditec Inc., Dublin, USA, a wholly owned subsidiary of Carl Zeiss Meditec AG, Jena, Germany (ISIN: DE0005313704), concluded a cooperation agreement with the current shareholders of Oraya Therapeutics Inc., Newark, USA. Under this cooperation agreement, the Carl Zeiss Meditec Group shall, over a period of up to two years, provide funding for the further implementation of the growth strategy of Oraya Therapeutics Inc., and shall, in return, essentially receive rights to purchase shares reaching up to a majority holding in Oraya Therapeutics Inc. after two years. Since December 2014 such rights to assume shares in the company have been acquired by way of a payment of € 4.4 million.
No further events of material signifi cance for the net assets, fi nancial position and results of operations of the Company occurred in the fi rst six months of fi nancial year 2014/15.
No events of material signifi cance for the Group's net assets, fi nancial position and results of operations occurred after the end of the fi rst six months of fi nancial year 2014/15. The development of business at the beginning of the third quarter of fi nancial year 2014/15 validates the statements made in the "Outlook" below.
As of 31 March 2015 the Carl Zeiss Meditec Group had 2,967 employees worldwide (30 September 2014: 2,972).
Research and development (R&D) plays an important role within the Carl Zeiss Meditec Group. Pursuant to its strategy, innovations are a key driver of future growth. The Carl Zeiss Meditec Group has the necessary resources to secure the Company's future earnings power through its research and development activities. The Company shall therefore continue to offer innovations in future that make leading technologies available to its customers, enable improvements in effi ciency and continuously enhance treatment results for patients.
For this reason the Company is aiming to expand its product portfolio and continuously improve products that are already on the market. The main priority shall be to increase the effi ciency and effectiveness of diagnosis and treatment. The Company attaches great importance to the needs of its customers and continuously works closely with them.
In the fi rst six months of fi nancial year 2014/15 research and development expenses increased by 17.1 % to € 56.2 million (previous year € 48.0 million). The R&D ratio increased at the same time, from 10.4 % in the previous year, to 11.3 %.
On 31 March 2015, 14.5 % (30 September 2014: 14.7 %) of the Carl Zeiss Meditec Group's entire workforce were working in Research and Development.
The Company's development activities include:
At the end of calendar year 2013/14, and during the reporting period, the Company therefore launched yet another range of innovations on the market.
The IOLMaster® 700 with SWEPT Source Biometry™ enables physicians to identify irregular geometries of the eye in their patients at an early stage. In addition to optical biometry, it also offers OCT imaging (optical coherence tomography) across the entire length of the eye. Experts say that this produces more reliable refractive results. Up until now, even a fl awless operation and high-quality lenses could result in an unsatisfactory outcome, if irregular eye geometries were overlooked. The device simplifi es the workfl ow: like the IOLMaster® 500, it takes a reference image of the limbal blood vessels, which allows the cylinder axis to be displayed intraoperatively in the surgical microscope as a navigational aid for the surgeon. As a component of the ZEISS Cataract Suite markerless, the IOLMaster® 700 thus also helps to improve effi ciency in the implantation of toric lenses.
The Company already offers an extensive range of hydrophilic intraocular lenses, which are suitable for microincision cataract surgery with a large dioptre range. With the launch of the hydrophobic monofocal intraocular lens CT LUCIA®, the Carl Zeiss Meditec Group now offers one of the most comprehensive IOL portfolios on the market, thus giving cataract surgeons more options. The C-loop design of the CT LUCIA® is based on "glistening-free", hydrophobic biomaterial and has aberration-correcting, aspheric ZEISS optics. A fully preloaded injector system ensures absolute ease of use and trouble-free unfolding of the intraocular lens. It also offers surgeons an effi cient workfl ow during surgery, and it gives patients optimum visual results, due to the optical design.
With the Essential Line the Group offers its customers a broader diagnostics portfolio for basic ophthalmic diagnostics. In addition to the tried-and-tested slit lamps with imaging functions, this range also includes products for measuring objective refraction (VISUREF® 100, VISULENS® 500 and i.Profi ler®plus), as well as an applanation tonometer and the non-contact tonometer VISUPLAN® 500. New to the range are the digital phoropter VISUPHOR® 500 and the VISUSCREEN 100/500 Acuity Charts, which are used to measure subjective refraction. Immediately available for examining the retina is the portable fundus camera, VISUSCOUT® 100. With this comprehensive range of products, the Essential Line helps customers to achieve the best measurement results and improve the effi ciency of their workfl ows. Ophthalmologists and optometrists can start off with individual pieces of equipment and gradually add more devices to build a complete workstation. The Essential Line devices can be combined with each other, and with other devices already available in the practice, via established practice management systems (Electronic Medical Record, EMR), for smooth workfl ows.
The ZEISS Cataract Suite markerless enables a comprehensive, end-to-end workfl ow for cataract surgery with astigmatism correction, with all components working together in perfect harmony. It incorporates components such as the ZEISS IOLMaster® for quick and fully networked reference images of the eye, the comprehensive data management system FORUM®, the OR assistance system CALLISTO eye®, and the OPMI LUMERA® 700 surgical microscope. Surgeons can therefore devote their full attention to the surgical procedure and patients benefi t from a more comfortable treatment.
New add-ons are available for the CIRRUS™ HD-OCT 5000 in terms of the diagnostic and treatment tools for the entire ophthalmic spectrum. The Chamber View™ imaging system and the new wide-fi eld visualizations of the CIRRUS™ PanoMap help physicians to make a structural diagnosis of glaucoma patients.
With the new FastTrac Retinal Tracking System, precise macular thickness measurements, the Fovea Finder™ technology, detailed segmentations and more than 100 B-scans, the CIRRUS™ offers all key functions necessary to make a full diagnosis of the patient's retina.
The Humphrey® projection perimeter (HFA™) is the recognized standard for glaucoma diagnostics and glaucoma management. The new-generation HFA3 is upholding the tradition as the gold standard in visual fi eld testing. It is designed to optimize clinical workfl ows, while also retaining proven standards for test strategies and progression analyses. The HFA3 is the fi rst perimeter to use the patented Liquid Trial Lens™ instead of conventional corrective lenses. The best-possible refractive correction is automatically set based on the patient data entered into the device for refraction and presbyopia. The automatic setting of the spherical refraction saves time and prevents confusion of the corrective lenses. Additional advantages for a more effi cient workfl ow are offered by the SmartTouch™ user interface, for example, or the RelEYE™ for more reliable test results.
ZEISS is expanding its product range for precision dental work with the 1Chip HD camera. This digital camera for the OPMI PROergo® delivers particularly sharp, high-contrast overview images of the oral cavity and detailed, high-resolution images of the root canal. It can also be easily integrated in the workfl ow: physicians can save videos and still images to a USB storage medium or a network drive on the handle of the surgical microscope.
The aim of our strategy is to improve the diagnosis and treatment of diseases by further developing our products. The focus is therefore on the success factors innovation, integrated solutions for diagnostics and therapy, and customer focus. Innovation, in particular, plays a key role in this.
In view of the underlying and persistent long-term growth trends – such as the growing global population, the rising proportion of older people and the growing percentage of the global population with access to medical care – as well as the Company's balanced regional presence, its broad product range and the high level of investment in research and development, we expect further revenue growth for the current fi nancial year that is at least on a par with market growth. From a current perspective, and excluding currency effects, this corresponds to growth in the low to mid-single-digit percentage range.
We anticipate renewed growth in the "Ophthalmic Systems" SBU in 2014/15, after a decline in revenue the previous year. In particular the leading products already on the market for diagnosing and treating ophthalmic diseases shall help us to achieve this growth, as well as the new innovations launched in recent months. With our broad product range it is our ambition to be able to provide our customers with effi cient solutions for a smooth workfl ow, with the best possible benefi t for the patient. System networking and integrated data management are an important strategic focus in this respect. Our comprehensive data management system FORUM®, in particular, offers excellent solutions for this.
Another example is in the area of refractive lasers, where, three years after its international market launch, the ReLEx® SMILE procedure has established itself as the third generation of laser vision correction. Compared with previous procedures, ReLEx® SMILE stands out by being considerably less invasive and offering very good predictability of correction. To date, around 200,000 eyes worldwide have been successfully treated using this microinvasive method.
The "Ophthalmic Systems" SBU continues to be characterized by a strong competitive pressure, particularly for diagnostic instruments. The competitive situation will make further cost-cutting measures necessary in the current fi nancial year. Due to product innovations, however, the new products we have launched in the market, and a good performance by refractive lasers, we are looking forward to the second half of the current fi nancial year with cautious optimism, and are confi dent that we shall grow at least to the same extent as the underlying market. The EBIT margin is currently expected to improve. However, it is still anticipated that this will be below the Group average.
The "Surgical Ophthalmology" SBU continued to grow in the fi rst six months. We expect this growth to continue in fi nancial year 2014/15. To achieve this, we need to exploit and exhaust any potential that remains in the markets in which we operate, and further strengthen our market position. MICS lenses, which are already well established in the market, play a key role in this, as well as the injectors suitable for implantation, and the VISALIS® 500 phaco system, which is capable of microincision surgery. The Company's AT LISA® tri and AT LISA® tri toric, in combination with the BLUEMIXS™ 180 injector, is the unique preloaded MICS-compliant trifocal intraocular lens on the market. The CT LUCIA®, launched in September 2014, is the fi rst intraocular lens in the standard segment to be manufactured at our new site in Ontario. Due to the change in the organizational structure, growth in "Surgical Ophthalmology" shall now also be driven by surgical microscopes for cataract surgery, which performed well in the fi rst half. Excluding currency effects, we are confi dent that we will once again grow faster than the underlying market in 2014/15, which is currently expected to grow in the low- to mid-single-digit percentage range. As things stand, the EBIT margin is expected to be around the average for the Group.
We have an extraordinarily strong market position in the "Microsurgery" SBU. Our surgical microscopes, the OPMI® Pentero® for neuro, spinal or plastic surgery, and the OPMI® VARIO, which is used in ENT surgery, for example, mean we are broadly diversifi ed and are exploiting the associated market opportunities to an even greater degree by upgrading the products in terms of additional supporting applications. We expect the "Microsurgery" SBU to continue to make signifi cant contributions to earnings in future. As things stand, the EBIT margin is expected to remain above the Group average.
A crucial advantage for even greater stability of our overall business is a higher proportion of revenue with case-number-dependent products and services, since there is generally less fl uctuation in these areas than in the capital goods business, for example. From a current perspective, we expect a further increase in fi nancial year 2014/15. In the medium term we aim to increase this revenue share to around one third of consolidated revenue by fi nancial year 2018/19.
The management remains confi dent that the Company can maintain and expand its market shares and anticipates revenue of between € 960 million and € 1,000 million for the current fi nancial year7 . The EBIT margin is expected to range between 13 % and 15 % in the medium term. The EBIT margin is also expected to be within this range in fi nancial year 2014/15, after adjustment for special items.
Should there be any signifi cant changes in the economic environment currently forecast over the course of the fi nancial year, and should it thus become necessary to amend the statements made here on the development of business from today's perspective, we shall publish these amendments promptly and specify our expectations in more detail.
In the fi rst six months of the current fi nancial year no member of the Management Board or Supervisory Board and no individual closely related to a member of the Management Board or Supervisory Board executed any notifi able securities transactions pursuant to Section 15a German Securities Trading Act (Wertpapierhandelsgesetz, WpHG).
The details of all securities transactions executed by members of the Management Board and Supervisory Board are published immediately after their disclosure on the Company's website at www.meditec.zeiss.com/ir | Corporate Governance | Directors' Dealings in accordance with the prevailing legal requirements of Section 15b WpHG. The publication documents and the relevant disclosures are forwarded to the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin).
At the current time, no Company shares are held by members of the Management Board or Supervisory Board of Carl Zeiss Meditec AG.
Carl Zeiss Meditec AG was not notifi ed of any changes in the shares of voting rights pursuant to Section 26 (1) WpHG during the fi rst six months of the current fi nancial year. The details of all voting rights announcements are published immediately after their disclosure, in the version prevailing at that date, on the Company's website at www.meditec.zeiss.com/ir | Corporate Governance | Vote Rights Disclosures in accordance with the provisions of Section 26 (1) WpHG. The publication documents and the relevant disclosures are forwarded to the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin).
Figure 10: Shareholder structure of Carl Zeiss Meditec AG (as of 31 March 2015) Carl Zeiss Group ca. 65 % Free fl oat ca. 35 %
| (Figures in € '000) | ||||
|---|---|---|---|---|
| 2nd quarter 2014/15 1 January 2015 – 31 March 2015 |
2nd quarter 2013/14 1 January 2014 – 31 March 2014 |
Financial year 2014/15 1 October 2014 – 31 March 2015 |
Financial year 2013/14 1 October 2013 – 31 March 2014 |
|
| Revenue | 256,867 | 248,643 | 497,957 | 460,922 |
| Cost of goods sold | (123,346) | (120,335) | (236,892) | (218,649) |
| Gross profi t | 133,521 | 128,308 | 261,065 | 242,273 |
| Selling and marketing expenses | (59,023) | (55,606) | (118,764) | (109,277) |
| General administrative expenses | (13,607) | (11,336) | (25,134) | (21,363) |
| Research and development expenses | (27,775) | (24,200) | (56,170) | (47,973) |
| Earnings before interests, income taxes, depreciation and amortization |
37,925 | 42,468 | 70,419 | 73,008 |
| Depreciation and amortization | 4,809 | 5,302 | 9,422 | 9,348 |
| Earnings before interests and income taxes |
33,116 | 37,166 | 60,997 | 63,660 |
| Results from investments accounted for using the equity method |
(189) | – | (189) | – |
| Interest income | 280 | 285 | 550 | 907 |
| Interest expense | (356) | (752) | (705) | (1,395) |
| Interest balance from defi ned benefi t pension plans |
(303) | (359) | (581) | (505) |
| Foreign currency gains/(losses), net | (13,645) | (1,981) | (12,530) | 3,529 |
| Other fi nancial result | (118) | 306 | (118) | 306 |
| Earnings before income taxes | 18,785 | 34,665 | 47,424 | 66,502 |
| Income tax expense | (5,798) | (11,942) | (15,024) | (22,355) |
| Net income | 12,987 | 22,723 | 32,400 | 44,147 |
| Attributable to: Shareholders of the parent company Non-controlling interest |
11,735 1,252 |
19,375 3,348 |
30,062 2,338 |
39,473 4,674 |
| Profi t/(loss) per share, attributable to the shareholders of the parent company in the current fi nancial year (€): – Basic/diluted |
0.14 | 0.24 | 0.37 | 0.49 |
Consolidated statement of comprehensive income (IFRS) for the period from 1 October 2014 to 31 March 2015
| (Figures in € '000) | ||||
|---|---|---|---|---|
| 2nd quarter 2014/15 1 January 2015 – 31 March 2015 |
2nd quarter 2013/14 1 January 2014 – 31 March 2014 |
Financial year 2014/15 1 October 2014 – 31 March 2015 |
Financial year 2013/14 1 October 2013 – 31 March 2014 |
|
| Net income | 12,987 | 22,723 | 32,400 | 44,147 |
| Other comprehensive income: | ||||
| Items, that may be reclassifi ed subsequently to net income/loss |
||||
| Foreign currency translation | 30,935 | 679 | 32,580 | (8,529) |
| Total of items that may be reclassifi ed subsequently to net income/loss |
30,935 | 679 | 32,580 | (8,529) |
| Items, that will not be reclassifi ed subsequently to net income/loss |
||||
| Actuarial gains (losses) on defi ned benefi t pension plans |
(14,514) | (5,649) | (22,579) | (5,060) |
| Total of items that will not be reclassifi ed subsequently to net income/loss |
(14,514) | (5,649) | (22,579) | (5,060) |
| Other comprehensive income | 16,421 | (4,970) | 10,001 | (13,589) |
| Comprehensive Income | 29,408 | 17,753 | 42,401 | 30,558 |
| Attributable to: Shareholders of the parent company Non-controlling interest |
23,396 6,012 |
13,981 3,772 |
37,122 5,279 |
28,598 1,960 |
| (Figures in € '000) | ||
|---|---|---|
| 31 March 2015 | 30 September 2014 | |
| ASSETS | ||
| Goodwill | 166,764 | 158,876 |
| Other intangible assets | 46,400 | 41,633 |
| Property, plant and equipment | 69,011 | 65,049 |
| Investments accounted for using the equity method | 4,463 | – |
| Loans to investments acc. for using the equity method | 6,052 | – |
| Investments | 124 | 124 |
| Deferred tax assets | 81,089 | 65,941 |
| Non-current trade receivables | 15,603 | 10,161 |
| Other non-current assets | 2,021 | 1,471 |
| Total non-current assets | 391,527 | 343,255 |
| Inventories | 205,412 | 172,402 |
| Trade receivables | 165,488 | 142,607 |
| Accounts receivable from related parties | 78,718 | 57,103 |
| Treasury receivables | 254,697 | 290,614 |
| Tax refund claims | 4,066 | 3,670 |
| Other current fi nancial assets | 4,017 | 3,141 |
| Other current non-fi nancial assets | 18,184 | 15,591 |
| Cash and cash equivalents | 7,872 | 10,727 |
| Total current assets | 738,454 | 695,855 |
Total assets 1,129,981 1,039,110
(Figures in € '000)
| 31 March 2015 | 30 September 2014 | ||
|---|---|---|---|
| LIABILITIES AND EQUITY | |||
| Share capital | 81,310 | 81,310 | |
| Capital reserve | 313,863 | 313,863 | |
| Retained earnings | 358,668 | 361,130 | |
| Other components of equity | (33,971) | (41,031) | |
| Equity before non-controlling interest | 719,870 | 715,272 | |
| Non-controlling interest | 44,234 | 38,955 | |
| Total equity | 764,104 | 754,227 | |
| Provisions for pensions and similar commitments | 85,736 | 48,888 | |
| Other non-current provisions | 3,748 | 3,911 | |
| Non-current fi nancial liabilities | 3,906 | 1,588 | |
| Non-current leasing liabilities | 10,705 | 10,415 | |
| Other non-current non-fi nancial liabilities | 8,097 | 7,596 | |
| Deferred tax liabilities | 13,921 | 12,402 | |
| Total non-current liabilities | 126,113 | 84,800 | |
| Current provisions | 22,728 | 26,901 | |
| Current accrued liabilities | 67,131 | 60,576 | |
| Current fi nancial liabilities | 23,903 | 13,435 | |
| Current portion of non-current fi nancial liabilities | 480 | 477 | |
| Current portion of non-current leasing liabilities | 2,807 | 2,359 | |
| Trade payables | 37,360 | 33,421 | |
| Current income tax liabilities | 6,216 | 7,741 | |
| Accounts payable to related parties | 20,466 | 16,527 | |
| Treasury payables | 20,735 | 8,022 | |
| Other current non-fi nancial liabilities | 37,938 | 30,624 | |
| Total current liabilities | 239,764 | 200,083 | |
| Total liabilities | 1,129,981 | 1,039,110 |
| (Figures in € '000) | ||
|---|---|---|
| Financial year 2014/15 1 October 2014 – 31 March 2015 |
Financial year 2013/14 1 October 2013 – 31 March 2014 |
|
| Cash fl ows from operating activities: | ||
| Net income | 32,400 | 44,147 |
| Adjustments to reconcile net income to net cash provided by/(used in) |
||
| Income tax expenses | 15,024 | 22,355 |
| Result from carve-out of microscopy business of Optronik A.S. | – | (146) |
| Interest income/expenses | 736 | 993 |
| Results from investments accounted for using the equity method | 189 | - |
| Depreciation and amortization | 9,422 | 9,348 |
| Gains/losses on disposal of fi xed assets | 42 | 61 |
| Interest received | 225 | 928 |
| Interest paid | (657) | (620) |
| Income tax reimbursement | 3,239 | 1,217 |
| Income taxes paid | (20,751) | (30,170) |
| Other non-cash expense and income | 69 | (1,327) |
| Changes in working capital: | ||
| Trade receivables | (38,124) | (1,399) |
| Inventories | (18,015) | (11,923) |
| Other assets | (2,791) | (6,319) |
| Trade payables | 5,251 | (8,517) |
| Provisions and fi nancial liabilities | 13,916 | 3,550 |
| Other liabilities | 3,326 | 130 |
| Total adjustments | (28,899) | (21,839) |
| Net cash provided by operating activities | 3,501 | 22,308 |
| Cash fl ows from investing activities: | ||
| Investment in property, plant and equipment | (6,040) | (4,040) |
| Investment in intangible assets | (2,252) | (2,242) |
| Proceeds from fi xed assets | 24 | 411 |
| Purchase of investments accounted for using the equity method | (4,375) | - |
| Payments for loans to investments acc. for using the equity method | (5,680) | - |
| Proceeds from fi xed term deposits | – | 140,000 |
| Investments in fi xed term deposits | – | (118,000) |
| Acquisition of IOL/OVD-business IMEX Clinic S.L., Spain | – | (716) |
| Acquisition of consolidated companies/businesses, net of cash acquired (Optronik A.S., Turkey; Aaren Scientifi c Inc., USA) |
(1,067) – |
(10,800) (51,206) |
| Carve-out of microscopy business of Optronik A.S. | – | 2,208 |
| Net cash used in investing activities | (19,390) | (44,385) |
| Cash fl ows from fi nancing activities: | ||
| Proceeds from/(repayment of) short-term debt | (837) | (101) |
| Proceeds from/(repayment of) noncurrent fi nancial liabilities | (238) | (277) |
| (Increase)/decrease in treasury receivables | 35,436 | 64,807 |
| Increase/(decrease) in treasury payables | 11,531 | 840 |
| Change of leasing liabilities | (1,244) | (890) |
| Dividend payments to shareholders of Carl Zeiss Meditec AG | (32,524) | (36,589) |
| Net cash provided by/(used in) fi nancing activities | 12,124 | 27,790 |
| Effect of exchange rate fl uctuation on cash and cash equivalents | 910 | (282) |
| Net increase/(decrease) in cash and cash equivalents | (2,855) | 5,431 |
| Cash and cash equivalents, beginning of reporting period | 10,727 | 6,286 |
| Cash and cash equivalents, end of reporting period | 7,872 | 11,717 |
(Figures in € '000) Share capital Capital reserve Retained earnings Other components of equity Equity before noncontrolling interest Noncontrolling interest Total equity As of 1 October 2013 81,310 313,863 322,765 (39,058) 678,880 36,434 715,314 Foreign currency translation – – – 9,682 9,682 (1,565) 8,117 Changes in equity from the remeasurement of pensions liabilities – – – (11,655) (11,655) (117) (11,772) Changes in value recognized directly in equity –––(1,973) (1,973) (1,682) (3,655) Net income ––74,954 –74,954 4,203 79,157 Sum of comprehensive income for the period ––74,954 (1,973) 72,981 2,521 75,502 Dividend payments ––(36,589) –(36,589) –(36,589) As of 30 September 2014 81,310 313,863 361,130 (41,031) 715,272 38,955 754,227 Foreign currency translation – – – 29,639 29,639 2,941 32,580 Changes in equity from the remeasurement of pensions liabilities –––(22,579) (22,579) –(22,579) Changes in value recognized directly in equity –––7,060 7,060 2,941 10,001 Net income ––30,062 –30,062 2,338 32,400 Sum of comprehensive income for the period ––30,062 7,060 37,122 5,279 42,401 Dividend payments – – (32,524) – (32,524) – (32,524) As of 31 March 2015 81,310 313,863 358,668 (33,971) 719,870 44,234 764,104
Carl Zeiss Meditec AG prepared its consolidated fi nancial statements as of 30 September 2014 in accordance with the International Financial Reporting Standards (IFRSs) promulgated by the International Accounting Standards Board (IASB), London, as applicable in the EU as of that date. Accordingly, this interim report has been prepared in accordance with IAS 34 "Interim Reporting".
The accounting and valuation principles applied for the interim fi nancial statements as of 31 March 2015 correspond to those applied for the consolidated fi nancial statements for fi nancial year 2013/14, with the exceptions described below. A detailed description of these methods was published in the notes to the consolidated fi nancial statements as of 30 September 2014.
The Group was obliged to apply the following standards and interpretations for the fi rst time at the beginning of this fi nancial year:
| Date of issue Standard/Interpretation |
Amendment/New statutory regulation | ||||
|---|---|---|---|---|---|
| 12 May 2011 | IFRS 10 "Consolidated Financial Statements" | Accounting regulations for the presentation of consolidated fi nancial statements and notes on the principle of control |
|||
| 12 May 2011 | IFRS 11 "Joint Arrangements" | Expansion of requirements for joint arrangements and their accounting treatment |
|||
| 12 May 2011 | IFRS 12 "Disclosure of Interests in Other Entities" | Enhanced disclosure requirements for subsidiaries, joint ventures and associates, as well as unconsolidated structured entities |
|||
| 12 May 2011 | IAS 27 "Separate Financial Statements" | Guidance on the accounting treatment of investments in subsidiaries, associates and joint ventures in separate fi nancial statements |
|||
| 12 May 2011 | IAS 28 "Investments in Associates and Joint Ventures" |
Guidelines for the accounting treatment of associates and principles for applying the equity method |
|||
| 16 December 2011 | Amendment to IAS 32 "Financial instruments: Presentation" |
Amendment to provisions for offsetting fi nancial assets and liabilities |
|||
| 31 October 2012 | Amendment to IFRS 10, IFRS 12 and IAS 27 "Investment Entities" |
Special regulations for fi nancial statements of investment entities |
|||
| 20 May 2013 | IFRIC Interpretation 21: Levies | Accounting treatment of levies imposed by governments |
|||
| 29 May 2013 | Amendment to IAS 36 "Impairment of Assets" | Amendment of recoverable amount disclosures for non-fi nancial assets following the adoption of IFRS 13 |
|||
| 27 June 2013 | Amendment to IAS 39 "Financial instruments: Recognition and Measurement" |
Novation of derivatives and continuation of hedge accounting |
For all standards and interpretations applied for the fi rst time there were no signifi cant changes to the accounting and valuation methods, nor are such changes expected.
The IASB and IFRS IC also issued the following standards, interpretations and revisions of existing standards; application of these is not yet mandatory for Carl Zeiss Meditec. The Company did not opt to apply these standards early:
| Date of issue | Standard/Interpretation Amendment/New statutory regulation |
Date of fi rst mandatory application |
Adopted by the EU |
||
|---|---|---|---|---|---|
| 21 November 2013 | Amendment IAS 19 "Employee Benefi ts" | Specifi cation of the accounting treatment of employee contributions or third-party contributions for defi ned benefi t plans |
Financial years beginning on or after 1 February 2015 |
Yes | |
| 12 December 2013 | Improvements to IFRSs (2010 – 2012) | Amendments to Standards IFRS 2, 3, 8, 13, IAS 16, 24 and 38 |
Financial years beginning on or after 1 February 2015 |
Yes | |
| 12 December 2013 | Improvements to IFRSs (2011 – 2013) | Amendments to Standards IFRS 1, 3, 13 and IAS 40 |
Financial years beginning on or after 1 January 2015 |
Yes | |
| 30 January 2014 | IFRS 14 "Regulatory Deferral Accounts" | Interim standard for regulation of regulatory deferral accounts for transition to IFRS accounting |
Financial years beginning on or after 1 January 2016 |
No | |
| 6 May 2014 | Amendment IAS 11 "Joint Arrangements" | Additional guidelines on the accounting presentation of an acquisition of an interest in a joint operation |
Financial years beginning on or after 1 January 2016 |
No | |
| 12 May 2014 | Financial assets pursuant to IAS 16 and 38 | Guidelines on which methods can be applied for the depreciation of property, plant and equipment and the amortization of intangible assets |
Financial years beginning on or after 1 January 2016 |
No | |
| 28 May 2014 | IFRS 15 "Revenue from Contracts with Customers" |
Amalgamation of existing standards and interpretations on revenue recognition (IAS 11, IAS 18, IFRIC 13, IFRIC 15, IFRIC 18 and SIC 13) |
Financial years beginning on or after 1 January 2017 |
No | |
| 24 July 2014 | IFRS 9 "Financial instruments" | Classifi cation and measurement of fi nancial assets |
Financial years beginning on or after 1 January 2018 |
No | |
| 12 August 2014 | Amendment to IAS 27 "Separate Financial Statements" |
Approval of the equity method as an accounting option for investments in subsidiaries, joint ventures and associates |
Financial years beginning on or after 1 January 2016 |
No | |
| 11 September 2014 | Amendment to IFRS 10 and IAS 28 | Guidelines on the recognition of unrealized gains or losses from transactions with assets between an investor and associates |
Financial years beginning on or after 1 January 2016 |
No | |
| 25 September 2014 | Improvements to IFRSs (2012 – 2014) | Amendments to Standards IFRS 5, 7, IAS 19 and 34 |
Financial years beginning on or after 1 January 2016 |
No | |
| 18 December 2014 | Amendment to IFRS 10, 12 and IAS 28 | Confi rmation of the exemption from preparing consolidated fi nancial statements for subsidiaries of an investment entity |
Financial years beginning on or after 1 January 2016 |
No | |
| 18 December 2014 | Amendment to IAS 1 "Presentation of Financial Statements" |
Improvement in the reporting with regard to disclosures in the notes |
Financial years beginning on or after 1 January 2016 |
No |
Carl Zeiss Meditec is not expected to apply any of the standards listed above until the date of fi rst mandatory application. According to the current state of knowledge, the future application of these standards is only expected to have material effects on the accounting and valuation with respect to IFRS 9. The specifi c effects of the fi rst-time application of IFRS 9 are still being reviewed. The other standards listed shall, in some cases, also lead to more extensive disclosures in the notes to the fi nancial statements. In addition, IFRS 15 "Revenue from Contracts with Customers", was published in May 2014. This Standard amalgamates a number of different standards and interpretations relating to revenue recognition. The effects of this standard are still being reviewed.
On 5 December 2013 a purchase agreement was concluded between Carl Zeiss Meditec AG and Mr. Ömer Engin Kalinyazgan, Ankara, Turkey, which provides for the purchase of 100 percent of the shares in the distribution and service company Optronik Optik Ve Elektronik Cihazlar Ticaret Ve Sanayi Anonim Sirketi (hereinafter referred to as Optronik), domiciled in Ankara, Turkey.
The purchase price amounted to € 12.5 million and consisted of a fi xed sum of € 11.5 million and a contingent earn-out component of € 1.0 million.
Pursuant to the agreement, the fi xed price of € 11.5 million was paid at the end of December 2013; a small adjustment payment of signifi cantly less than € 0.1 million was made in February 2014 as part of the fi nal purchase price calculation. The earn-out component was paid in the amount of € 1.1 million in March 2015. The amount of € 0.1 million exceeding the provision was recognized through profi t or loss under "Other fi nancial result".
The Group has three operating segments, which are simultaneously the Group's Strategic Business Units ("SBUs"). Previously, the allocation to the individual segments was based on market segments whereas overlapping technological aspects dominated in particular cases. From this fi nancial year onwards, allocation to the various SBUs will be determined by business fi elds and thus stringently by market segments. This means that all activities in the area of cataracts, such as intraocular lenses, consumables, surgical visualization solutions in the fi eld of ophthalmic surgery, as well as the diagnostic devices which are used prior to cataract surgery, shall be allocated to the "Surgical Ophthalmology" SBU. The "Microsurgery" segment shall continue to comprise the activities of neuro, ear, nose and throat surgery, as well as the activities in the fi eld of intraoperative radiation. The medical laser and diagnostic systems that do not specifi cally apply to the condition cataracts are allocated to the "Ophthalmic Systems" SBU.
Internal management reports are evaluated by the Management Board on a regular basis for each of the strategic business units. The segment assets are not, however, the subject of these internal management reports.
The comparative values have been adjusted in line with the new structure.
(Figures in € '000) Ophthalmic Systems 6 Months Surgical Ophthalmology 6 Months Microsurgery 6 Months Total 6 Months 2014/15 2013/14* 2014/15 2013/14* 2014/15 2013/14* 2014/15 2013/14 External revenue 183,199 168,365 173,040 147,771 141,718 144,786 497,957 460,922 EBIT 4,215 2,514 22,060 21,950 34,722 39,196 60,997 63,660 Reconciliation of segments' comprehensive income to the Group's period-end result. Comprehensive income of the segments 60,997 63,660 Consolidated earnings before interest and taxes (EBIT) 60,997 63,660 Financial result (13,573) 2,842 Consolidated earnings before income taxes 47,424 66,502 Income tax expense (15,024) (22,355) Consolidated net income 32,400 44,147
The operating segments for the reporting period are as follows:
* Comparative values adjusted in line with new structure.
As a general rule there were no intersegment sales.
In the reporting period 2014/15, transactions with related parties result in revenue of € 154,670 thousand (previous year € 127,262 thousand). The term "related parties" refers here to Carl Zeiss AG and its subsidiaries.
On 22 December 2014 a contract was concluded between Carl Zeiss Meditec Inc., Dublin, USA, and Oraya Therapeutics, Inc., Newark, USA, (hereinafter: Oraya), under the terms of which Carl Zeiss Meditec Inc. may – during a period of two years from conclusion of the contract – acquire rights to purchase shares in Oraya reaching up to a majority holding. The acquired rights may be converted into shares under normal circumstances at the earliest in January 2017. In the period from December 2014 to March 2015 such rights to purchase shares in the company were acquired by way of a payment of € 4.4 million. Due to the role played by employees of the Carl Zeiss Meditec Group in the advisory board of Oraya, the company shall be classifi ed as an associate pursuant to IFRS 28.6. Up until a controlling infl uence is achieved, the company shall be accounted for according to the equity method.
The principles and methods for measuring at fair value are essentially the same as in the previous year. Detailed notes on the evaluation principles and methods can be found in the Annual Report from 30 September 2014.
The allocation of the fair values to the three categories of fair value hierarchy is based on the availability of observable market prices on an active market. The valuation categories are defi ned as follows:
Category 1
Financial instruments traded on active markets, for which the listed prices were assumed unchanged for valuation.
Category 2
Valuation is based on valuation methods where input factors are derived directly or indirectly from observable market data.
Valuation is based on valuation methods where input factors are not based exclusively on observable market data.
The table below provides an overview of the items in the statement of fi nancial position measured at fair value:
| (Figures in € '000) | |||||
|---|---|---|---|---|---|
| Category 1 | Category 2 | Category 3 | Total | ||
| Financial assets recognized at fair value through profi t or loss |
31 March 2015 | – | 3,079 | – | 3,079 |
| 30 September 2014 | – | 1,869 | – | 1,869 | |
| Financial liabilities recognized at fair value through profi t or loss |
31 March 2015 | – | (26,190) | – | (26,190) |
| 30 September 2014 | – | (12,602) | – | (12,602) |
Carl Zeiss Meditec shall review at the end of each reporting period whether there are grounds for reclassifi cation to or from a valuation category. There were no reclassifi cations amongst the valuation categories during the reporting period.
The fair value of the fi nancial instruments measured at amortized cost, such as receivables and liabilities, is determined through discounting, taking into account a risk-based market interest rate with matching maturity. In comparison with 30 September 2014 there are no signifi cant changes in the ratios between carrying amount and fair value with respect to non-current assets and liabilities. For reasons of materiality the fair value shall be equated to the carrying amount for current items in the statement of fi nancial position.
There were no events of particular signifi cance after the end of the reporting period, 31 March 2015.
To the best of our knowledge, and in accordance with the applicable interim reporting principles, the consolidated interim fi nancial statements of Carl Zeiss Meditec give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the Group, and the consolidated interim management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Carl Zeiss Meditec Group. p
Dr Ludwin Monz Dr Christian Müller Thomas Simmerer President and Member of the Member of the
Chief Executive Offi cer Management Board Management Board
Simmerer
| Date | Financial year 2014/15 |
|---|---|
| 7 August 2015 | 9 Month Report |
| 7 August 2015 | Telephone conference |
| 14 December 2015 | Annual Financial Statements 2014/15 |
| 14 December 2015 | Analyst's Conference |
Investor Relations Sebastian Frericks
Phone: + 49 3641 220 116 Fax: + 49 3641 220 117 [email protected]
Concept and editing by: Henriette Meyer
Visual concept and design by: Publicis Pixelpark, Erlangen, Germany www.publicispixelpark.de
Translation service by: Herold Fachübersetzungen, Bad Vilbel, Germany www.heroldservice.de
This report has been published on 7 May 2015.
This is a translation of the original German-language six-month interim fi nancial report October 2014 to March 2015 of the Carl Zeiss Meditec Group. The Carl Zeiss Meditec AG shall not assume any liability for the correctness of this translation. If the text differ, the German report shall take precedence.
The 6 Month Report 2014/15 of the Carl Zeiss Meditec Group has been published in German and English.
Both versions and the key fi gures contained in this report can be downloaded from the following address:
www.meditec.zeiss.com/ir
Carl Zeiss Meditec AG Phone: + 49 3641 220 115 Goeschwitzer Strasse 51 – 52 Fax: + 49 3641 220 117 07745 Jena [email protected] Germany www.meditec.zeiss.com/ir
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