Quarterly Report • Nov 10, 2009
Quarterly Report
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Interim Financial Report of the Jenoptik Group for the months January to September 2009.
| Figures in million euros before the Group charges | Jan.–Sept. 2009 | Jan.– Sept. 2008 | Change in % | July–Sept. 2009 | July– Sept. 2008 | Change in % |
|---|---|---|---|---|---|---|
| Sales | 336.7 | 397.4 | – 15.3 | 105.4 | 132.9 | – 20.7 |
| Lasers & Optical Systems | 110.4 | 153.3 | – 28.0 | 36.3 | 45.7 | – 20.6 |
| Metrology | 70.6 | 87.0 | – 18.9 | 22.6 | 33.1 | – 31.7 |
| Defense & Civil Systems | 152.5 | 152.1 | 0.3 | 47.3 | 51.4 | – 8.0 |
| Others** | 3.2 | 5.0 | – 36.0 | – 0.8 | 2.7 | – 129.6 |
| EBITDA* | 20.9 | 46.1 | – 54.7 | 5.9 | 15.4 | – 61.7 |
| Lasers & Optical Systems | 3.3 | 24.3 | – 86.4 | 1.4 | 4.5 | – 68.9 |
| Metrology | – 1.8 | 4.6 | – 139.1 | – 0.6 | 3.8 | – 115.8 |
| Defense & Civil Systems | 14.5 | 13.6 | 6.6 | 3.1 | 4.9 | – 36.7 |
| Others** | 4.9 | 3.6 | 36.1 | 2.0 | 2.2 | – 9.1 |
| EBIT before one-off effects | 2.1 | 24.6 | – 91.5 | – 1.2 | 8.5 | – 114.1 |
| Lasers & Optical Systems | – 3.2 | 15.0 | – 121.3 | – 1.4 | 2.9 | – 148.3 |
| Metrology | – 4.7 | 2.0 | – 335.0 | – 1.5 | 3.0 | – 150.0 |
| Defense & Civil Systems | 9.4 | 8.7 | 8.0 | 1.4 | 3.3 | – 57.6 |
| Others** | 0.6 | –1.1 | 154.5 | 0.3 | –0.7 | 142.9 |
| EBIT margin before one-off effects*** | 0.6 % | 6.2 % | – 1.1 % | 6.4 % | ||
| Lasers & Optical Systems | – 2.9 % | 9.8 % | – 3.9 % | 6.3 % | ||
| Metrology | – 6.7 % | 2.3 % | – 6.6 % | 9.1 % | ||
| Defense & Civil Systems | 6.2 % | 5.7 % | 3.0 % | 6.4 % | ||
| Others** | 18.8 % | –22.0 % | – 37.5 % | – 25.9 % | ||
| One-off effects | – 8.4 | 0 | – 0.5 | 0 | ||
| EBIT* | – 6.3 | 24.6 | – 125.6 | – 1.7 | 8.5 | – 120.0 |
| Earnings before tax* | – 15.1 | 13.4 | – 212.7 | – 3.8 | 5.1 | – 174.5 |
| Earnings after tax* | – 14.9 | 10.2 | – 246.1 | – 3.8 | 3.9 | – 197.4 |
| Order intake | 330.4 | 398.4 | – 17.1 | 112.3 | 130.8 | – 14.1 |
| Lasers & Optical Systems | 118.4 | 153.7 | – 23.0 | 38.3 | 41.2 | – 7.0 |
| Metrology | 59.4 | 105.3 | – 43.6 | 19.3 | 39.5 | – 51.1 |
| Defense & Civil Systems | 149.4 | 134.4 | 11.2 | 55.1 | 47.4 | 16.2 |
| Others** | 3.2 | 5.0 | – 36.0 | – 0.4 | 2.7 | – 114.8 |
| Sept. 30, 2009 | Dec. 31, 2008 | Sept. 30, 2008 | ||||
| Order backlog | 379.4 | 395.1 | 438.5 | |||
| Lasers & Optical Systems | 67.5 | 63.6 | 77.3 | |||
| Metrology | 24.2 | 37.0 | 48.2 | |||
| Defense & Civil Systems | 288.0 | 294.6 | 313.4 | |||
| Others** | – 0.3 | – 0.1 | – 0.4 | |||
| Employees (incl. trainees) | 3,310 | 3,400 | 3,430 | |||
| Lasers & Optical Systems | 1,307 | 1,412 | 1,431 |
* After one-off effects.
Metrology
Others**
Defense & Civil Systems
** Other includes holding, SSC, real-estate, consolidation.
779 1,088 136
820 1,100 68
827 1,105 67
*** EBIT as percent of sales.
See Forecast report – Page 19.
See Forecast report – Page 22 to 23.
As an integrated opto-electronics group, Jenoptik oper ates in the following five divisions
These five divisions are combined in the Lasers & Opti cal Systems, Metrology and Defense & Civil Sys tems segments and this consequently reflects the segment reporting.
Jenoptik is primarily a supplier of capital goods and therefore a partner for industrial companies. In the Traffic Solutions and Defense & Civil Systems divisions we are also a major supplier to the public sector, directly or indirectly through system integrators. Consumer markets do not form part of our focus.
Our product portfolio extends from complex systems, industrial facilities and production lines, to modules and subsystems, through to components. We also market comprehensive total solutions or operator models, comprising the integration of systems and facilities and their corresponding networking, as well as project management, data processing and after-sales.
Our key markets primarily include security and defense technology, the market for metrology and material processing, the civil aviation and aerospace industry, medical technology, the traffic solutions technology market as well as digital imaging and the semiconductor in dustry.
Expectations of an economic recovery had a positive impact on the capital market environment in the 3rd quarter 2009. This was the reason why the German DAX and TecDax share indices continued their upward trend, posting gains both in the 3rd quarter as well as on a nine month basis. As such, since the start of the year, the DAX has risen by 14.1 percent, closing on September 30, 2009 at 5,675.16 points. The TecDax closed at 757.80 points – a rise of 44.2 percent compared with the start of the year.
The Jenoptik share followed the positive developments in the 3rd quarter 2009, ending trading on the Xetra on September 30, 2009 at 3.65 euros and posting a rise of 22.1 percent on a quarterly basis. However, despite this trend the Jenoptik share was unable to compensate for the loss recorded in the 1st half-year and consequently recorded a fall of 34.2 percent on a nine month basis. In October 2009, the Jenoptik share continued its positive course – with a closing price on the Xetra of 3.70 euros on October 30, 2009.
| 30.9.2009 | 30.9.2008 | |
|---|---|---|
| Net profit in TEUR | – 17,059 | 7,120 |
| Number of outstanding shares | 52,034,651 | 52,034,651 |
| Earnings per share in euros | – 0.33 | 0.14 |
| Dilution effect* in TEUR | – | 2,380 |
| Weight. average number of outst. shares** | – | 56,918,070 |
| Earnings per share in euros** | – | 0.14 |
Earnings per share are the net profit divided by the weighted average number of shares outstanding. In calculating the diluted earnings per share the dilution effects are accounted for in deter mining the weighted average number of shares outstanding.
* After taking deferred taxes into account. ** Diluted
On the publication of the results for the first half year 2009, the management presented the figures and outlook for the current fiscal year at an analysts' conference in Frankfurt/Main. Since the beginning of July, roadshows have been held in Frankfurt/Main, London and Copenhagen. In addition, Jenoptik participated in various banking conferences.
In September 2009, Jenoptik was awarded 1st prize in the TecDax stock exchange segment for its 2008 Annual Report in the Annual Report Competition held by the Manager magazine. This competition assessed the quality of the information in particular.
The global economy is on course for recovery. Nevertheless, according to the International Monetary Fund (IMF), this recovery is still "fragile". Governments throughout the world have set up economic programs involving billions and central banks have reduced their interest rates in order to counter the critical situation.
The US economy is recovering. According to the Federal Reserve (FED), industrial production in Septem ber rose by 0.7 percent. In June there was evidence of a slight pick-up for the first time in two years. Never theless the recession is not yet over. According to the FED, the automotive industry is the main beneficiary of government measures.
In mid-September this year, the EU Commission spoke of first signs of a recovery of the European economy. The stabilization of the economic situation is attribut able to state economic aid.
According to information from leading economic institutes, the recession in Germany is over. The Federal Ministry for Trade and Technology announced that the dramatic fall in German economic output had already been halted in the second quarter 2009. The gross domestic product (GDP) showed a 0.3 percent rise compared with the previous quarter. Germany nevertheless recorded the sharpest fall amongst Europe's major economies, particularly affecting exports.
Within the first half-year 2009, China became the export world champion for the first time. Consumer goods in particular are being exported to the USA. It is benefiting from state economic aid.
Optical technologies have been hit very hard by the economic crisis. The sector association SPECTARIS calculated that sales fell by an average of 23 percent in the first half-year 2009. There was a 35 percent fall in exports within the EU, according to SPECTARIS. Domestic sales were down by approx. 20 percent. However, the World Market Index for Optical Tech no l ogies stabilized again in the second quarter.
Following the decline over recent months, the semiconductor industry is showing the first signs of recovery. According to a survey by the market research company Gartner, global semiconductor sales increased
by 17 percent in the second quarter 2009 compared with the previous quarter. According to the Semicon ductor Industry Association SIA, sales in the global semiconductor market in September 2009 reported a 8.2 percent rise compared with the previous month, to 20.1 billion dollars. This trend is underlined by the sector figures for the third quarter.
The photovoltaic industry is reporting growth, nevertheless German companies are able to benefit from this development only to a limited extent. The global market is dominated by suppliers from the USA and China. German companies are also increasingly relocating their production facilities abroad.
According to figures from the Automotive Industry Association (Verband der Automobilindustrie, VDA), there was a further increase in the global demand for passenger vehicles in August 2009. This is primarily attributable to the government incentives in numerous countries designed to encourage consumers to pur chase new vehicles. There was a boom in demand particularly in China and India. According to the VDA, the number of new vehicle registrations in Western Europe rose by nearly 8 percent. In Europe, the German automobile market shows the strongest sales.
The situation in the mechanical engineering sector remains problematic. In August, the German Engi neering Federation (Verband Deutscher Maschinenund Anlagenbau e.V., VDMA) reported a 43 percent fall in orders, with this order intake has probably hit the bottom.
The aviation sector reported massively falling demand since the late summer of last year. As such, according to details from the IATA, the International Air Transport Association, passenger and freight volumes continued to fall in August. However, IATA believes that the crisis is not yet over.
There are signs of an upward trend in the security and defense technology sector. In July the Federal German Government placed an order for 405 Puma infantry fighting vehicles.
Note. The details on the three segments in the report on the earnings situation and in the segment reporting can essentially be compared with the details in the report on the 3rd quarter in the previous year. Differ ences due to Group charges and SSC (staff numbers) are explained separately.
Development of sales. In the first nine business months of 2009, the Jenoptik Group achieved total sales of 336.7 million euros (prev. year 397.4 million euros). This represented a fall of 15.3 percent com pared with the same period in the previous year and was attributable to the Lasers & Optical Systems and Metrology segments where weak demand from the semiconductor and automotive industries continued to have an effect. The Defense & Civil Systems segment made a consistent contribution to the development of sales. Approx. 57 percent of the sales for the nine month period were generated by the Jenoptik Group abroad (prev. year 56 percent). By quarterly comparison, sales in the 3rd quarter 2009 fell further against the two previous quarters, as in the first months of the year some areas of the Group were still benefiting from the order backlog prior to the financial and economic crisis. However, the slight pickup in demand, from the semiconductor industry amongst others, was not yet reflected in the sales for the 3rd quarter just past.
Development of earnings. The EBITDA for the first nine months of 2009 was 20.9 million euros (prev. year 46.1 million euros). As at the end of the 3rd quarter 2009, Jenoptik posted a Group EBIT of minus 6.3 million euros (prev. year 24.6 million euros). This figure in cludes oneoff effects of approx. 8.4 million euros which were incurred as the result of the withdrawal from the midformat camera business in the summer of this year. The Group had decided on this step due to the insolvency of a key suppliers and the fact that the business potential in the market for high-end digital photography had been significantly impaired. The one-off effects arising from this withdrawal from this business for the most part comprised non-cash value adjustments.
In view of the one-off effects the Jenoptik Group is also showing the development of earnings before oneoff effects in the paragraphs below.
Development of earnings before one-off effects. In the first nine business months 2009 the Group posted an EBIT before one-off effects of 2.1 million euros (prev. year 24.6 million euros). Whilst the Lasers & Optical Systems and Metrology segments reported a negative EBIT, the Defense & Civil Systems segment made a positive contribution of 9.4 million euros to the EBIT which was 8.0 percent higher than the figure for the same period in the previous year.
| Sales | in million euros | ||
|---|---|---|---|
| 1.1. to 30.9.2009 |
1.1. to 30.9.2008 |
Change | |
| Total | 336.7 | 397.4 | – 15.3 % |
| Lasers & Optical Systems | 110.4 | 153.3 | – 28.0 % |
| Metrology | 70.6 | 87.0 | – 18.9 % |
| Defense & Civil Systems | 152.5 | 152.1 | 0.3 % |
| Other | 3.2 | 5.0 | 36.0 % |
| EBIT before one-off-effects | in million euros | ||
|---|---|---|---|
| 1.1. to 30.9.2009 |
1.1. to 30.9.2008 |
Change | |
| Total | 2.1 | 24.6 | – 91.5 % |
| Lasers & Optical Systems | – 3.2 | 15.0 | –121.3 % |
| Metrology | – 4.7 | 2.0 | –335.0 % |
| Defense & Civil Systems | 9.4 | 8.7 | 8.0 % |
| Other | 0.6 | – 1.1 | 154.5 % |
| * before Group charges |
The Group EBIT for the 3rd quarter 2009 came in at minus 1.2 million euros and thus slightly below the level in the 1st and 2nd quarter 2009. This was also attributable to the usually lower sales during the summer months and the suspension of short-time work during the holiday season. As expect ed, the Lasers & Optical Systems segment recorded a parti cularly sharp fall in earnings due to the continuing crisis in the semiconductor and automotive industries, which also had a negative impact on the Metrology segment. With falling sales volumes there is increasingly fierce competi tion for the remaining business.
The net financial result increased to minus 8.8 million euros (prev. year minus 11.3 million euros), attributable to an improvement in the net interest result due to lower interest costs. Jenoptik benefited from low shortterm interest rates. However, average interest costs for the Jenoptik Group will increase at the year end as the result of the take-up of medium-term loans in order to replace short-term lines of credit. At minus 2.0 million euros, the net investment result came in at approxi mately the same level as in the previous year. This figure is being shaped by the most important development project in the Lasers & Material Processing segment, the fiber laser, which is being pursued by Jenop tik in conjunction with Trumpf as part of a joint venture under taking as well as smaller depreciations on finan cial assets, among other things as a result of the cessation of the mid-format camera business.
Earnings before tax totaled minus 15.1 million euros (prev. year 13.4 million euros) due to the fall in the
Group operating EBIT and the one-off effects. There were virtually no taxes incurred. Non-cash deferred tax income totaled 0.3 million euros compared with a deferred tax expense for the same period in the previous year in the sum of 1.8 million euros. Earnings after tax totaled minus 14.9 million euros (prev. year 10.2 million euros). Excluding the one-off effects, earnings after tax would have been approx. minus 6.5 million euros.
Order book situation. The financial and economic crisis was reflected in the order intake of the Jenoptik Group, which totaled 330.4 million euros, approx. 17 percent below the figure for the previous year (prev. year 398.4 million euros). Orders in the Lasers & Optical Systems and Industrial Metrology segments showed a marked fall compared with the same period in the previous year. However, the 3rd quarter reported a slight pickup in the demand from the semiconductor industry compared with the 1st and 2nd quarter of the current fiscal year. The order book situation in the automotive indus try business stabilized at a low level in the 3rd quarter. The Defense & Civil Systems segment posted a slight increase in its order intake.
This led to a slight increase in the Group order intake compared with the end of June 2009, totaling 379.4 million euros as at September 30, 2009. This represent ed a fall of 4 percent compared with the level as at the end of 2008 (31.12.2008: 395.1 million euros).
Detailed information on the performance of the segments' key indicators can be found in the segment reporting starting from P. 13 of this report.
.
| Order intake | in million euros | ||
|---|---|---|---|
| 1.1. to 30.9.2009 |
1.1. to 30.9.2008 |
Change | |
| Total | 330.4 | 398.4 | – 17.1 % |
| Lasers & Optical Systems | 118.4 | 153.7 | – 23.0 % |
| Metrology | 59.4 | 105.3 | – 43.6 % |
| Defense & Civil Systems | 149.4 | 134.4 | 11.2 % |
| Others | 3.2 | 5.0 | – 36.0 % |
| Order backlog in million euros |
|||
|---|---|---|---|
| 30.9.2009 | 31.12.2008 | Change | |
| Total | 379.4 | 395.1 | – 4.0 % |
| Lasers & Optical Systems | 67.5 | 63.6 | 6.1 % |
| Metrology | 24.2 | 37.0 | – 34.6 % |
| Defense & Civil Systems | 288.0 | 294.6 | – 2.2 % |
| Others | – 0.3 | – 0.1 | – 200.0 % |
Cost of sales. As the result of the reduction in sales, the cost of sales fell by 12.7 percent to 247.6 million euros (prev. year 283.7 million euros). This fall was at a slightly lower rate proportional to the reduction in sales as a result of the change in the sales mix, the delayed effect of measures aimed at reducing costs and the current level of fixed costs with a reduced capacity utilization. Measures aimed at reducing costs as part of the Jenoptik Excellence Program are beginning to take effect in the 2nd half-year 2009.
The gross margin fell to 26.5 percent (prev. year 28.6 percent). Selling expenses were also down by 8.5 percent, general administrative expenses by 3.7 percent.
At 23.6 million euros, research and development expenses increased slightly on the level in the previous year (prev. year 22.5 million euros). R+D expenses do not include developments in the sum of 42.2 million euros (prev. year 45.0 million euros) which are directly apportionable to customers and shown as cost of sales. The costs for the development of the fiber laser, the key development project in the Lasers & Material Processing division, are included in the investment result on a proportional basis via the joint venture JT Optical Engine GmbH & Co. KG. The figure also excludes the expenses resulting from amortization of development expenses in connection with the cessa tion of the mid-format camera business which are shown separately as part of the expenses arising from one-off effects.
The Group R+D quota, the ratio between R+D expenses and sales, rose to nearly 7 percent as the result of the reduction in sales (prev. year 5.7 percent).
Employees & management. The number of employees in the Jenoptik Group as at September 30, 2009 fell by 90 to 3,310 (31.12.2008: 3,400). The effects of the cessation of the mid-format camera business are largely included; by contrast, the figure does not include the impact of the closure of the Gießen optical site which has already been initiated. In the first nine business months there was a reduction in the number of employees in the Lasers & Optical Systems segment as well as in the Industrial Metrology division of the Metrology segment.
Transfers between the segments and Others took place after the end of 2008 as the result of employees being switched to the Jenoptik Shared Service Center (SSC), which began its operational activities on January 1, 2009 with a total of 66 employees. These employees are no longer included in the staff figures for segments but are apportioned to Other.
Adjustments to meet lower capacity utilization in individual areas of Jenoptik, mainly in the Optical Systems and Industrial Metrology divisions, were carried out by reducing the number of temporary personnel and introducing short-time working. As at September 30, 2009, a total of 682 employees were on short-time working within the Jenoptik Group in Germany (30.06.2009: 687). 87 employees in the Optical Systems division at the Jena site are undergoing further
| R+D expenses | in million euros | ||
|---|---|---|---|
| 1.1. to 30.9.2009 |
1.1. to 30.9.2008 |
Change | |
| Total | 23.6 | 22.5 | 4.9 % |
| Lasers & Optical Systems | 10.7 | 12.9 | – 17.1 % |
| Metrology | 6.4 | 7.5 | – 14.7 % |
| Defense & Civil Systems | 6.8 | 4.3 | 58.1 % |
| Others | – 0.3 | – 2.2 | 86.4 % |
| 30.9.2009 | 31.12.2008 | Change | |
|---|---|---|---|
| Total | 3,310 | 3,400 | – 2.6 % |
| Lasers & Optical Systems | 1,307 | 1,412 | – 7.4 % |
| Metrology | 779 | 820 | – 5.0 % |
| Defense & Civil Systems | 1,088 | 1,100 | – 1.1 % |
| Others | 136 | 68 | 100 % |
training measures within the framework of the shorttime working.
Since April 2009 the Jena Training Center has been responsible for training recruits in the optical, precision mechanical, electronic and commercial professions within the region in and around Jena. Here and at the other locations of the Group a total of 28 trainees and four students from the Career Academy began their training in August of this year.
Financing structure. As the result of extending the periods of financial liabilities, the Group's financing structure was successfully converted during the 3rd quarter of this year. At 161.7 million euros, non-current financial liabilities accounted for over 89 percent of all the financial liabilities. By contrast, current financial liabilities reduced to 19.8 million euros (31.12.2008: 113.7 million euros). At 1.31, the level of debt as a ratio of borrowings (362.3 million euros) to sharehold ers' equity (275.7 million euros) was below the level for the full year 2008 (31.12.2008: 1.35). As at September 30, 2009 Jenoptik also had a liquidity framework of around 70.0 million euros at its disposal.
The net debt of the Jenoptik Group, at 168.1 million euros as at September 30, 2009, was lower than the level for the full year 2008 (31.12.2008: 191.6 million euros) mainly as the result of a reduced working capital due to lower accounts receivable and reduced inventories as well as the contribution of a property to the Jenoptik Pension Trust.
Analysis of capital expenditure. At 10.6 million euros, capital expenditure in intangible and tangible assets was less than in the same period for the previous year (prev. year 15.2 million euros). At 7.6 million euros, more than 70 percent was invested in tangible assets, the key items being investments in factory and office equipment plus on-account payments made.
The capital expenditure was offset by regular depreciation/amortization in the sum of 21.4 million euros (prev. year 21.4 million euros).
The payment flows in the analysis of cash flows in 2009 can be compared in full with the figures for the previous year.
The cash flow from operating activities (after tax), at 30.2 million, remained in the double figure million euro range (prev. year 20.1 million euros) despite the nega tive earnings and increased in particular in the 3rd quarter 2009. Active management of inventories and receivables was the reason for the positive perform ance. This led to a reduction in accounts receivables and inventories and reduced the working capital.
The cash flow from investing activities in the first nine months totaled minus 8.5 million euros (prev. year minus 9.6 million euros) and was characterized by lower payments for investments in tangible assets in the sum of 7.6 million euros (prev. year 10.4 million
euros) as well as for investments in intangible assets in the sum of 3.1 million euros (prev. year 4.8 million euros).
The free cash flow, the difference derived from the cash flow from operating activities before taxes of 30.6 million euros less the cash flow from operative invest ing activities of 9.9 million euros, increased to 20.6 million euros (prev. year 9.6 million euros). With 15.0 mil lion euros the Jenoptik Group generated the major amount of the free cash flow in the 3rd quarter alone. As at June 30, 2009 the free cash flow amounted to 5.6 million euros.
The cash flow from financing activities was minus 21.4 million euros (prev. year minus 13.8 million euros) and led to a lower net debt. It mainly includes repayments of bonds and loans in the sum of 70.9 million euros resulting from the refinanc ing of the convertible bond in July 2009 (prev. year 9.2 million euros) which was offset by increased receipts from the issue of bonds and loans in the sum of 56.6 million euros (prev. year 20.9 million euros).
Balance sheet analysis. The balance sheet total of the Jenoptik Group as of September 30, 2009 reduced to 638.0 million euros (31.12.2008: 689.1 million euros). This was attributable to a reduction in both noncurrent as well as current assets.
Non-current assets fell to 347.3 million euros (31.12. 2008: 376.3 million euros). This is attributable to the amount of capital expenditure which was lower than the depreciation/amortization in the period under
report, in particular in the real estate area. In addition, intangible assets fell as a result of value adjustments, mainly to development costs. Furthermore, as the result of the contribution of a property to the Pension Trust investment properties reduced by approx. 9.5 mil lion euros, since these assets are now allocated to plan assets. Financial assets, including shares in associated companies, showed virtually no change at 18.3 million euros (31.12.2008: 20.2 million euros).
At 290.7 million euros, current assets were also down on the figure as of the end of 2008 (31.12.2008: 312.8 million euros). The reduction is primarily attribut able to lower receivables and other assets as a result of lower sales and an improvement in receivables manage ment in the first nine months of 2009. Inventories showed a slight fall to 174.1 million euros (31.12.2008: 179.5 million euros). Cash and cash equivalents remained virtually constant at 12.4 million euros (31.12.2008: 12.5 million euros).
The working capital, defined as the total receivables from the operating business activities and inventories, less liabilities to suppliers, liabilities arising from PoC (percentage of completion) and on-account payments received, fell to 181.3 million euros (31.12.2008: 201.6 million euros), primarily as a result of the reduction in accounts receivable.
At 275.7 million euros, the Jenoptik Group sharehold ers' equity was 17.1 million euros down on the figure for December 2008 (31.12.2008: 292.8 million euros) due to the result. However, since there was a simultaneous sharper reduction in the balance sheet total, the
| Net debt | in million euros | ||
|---|---|---|---|
| 30.9.2009 | 31.12.2008 | 30.9.2008 | |
| Total | – 168.1 | – 191.6 | – 198.3 |
| Securities | 1.1 | 2.0 | 1.3 |
| Cash and cash equivalents | 12.4 | 12.5 | 10.9 |
| Non-current financial liabilities | 161.7 | 92.4 | 80.1 |
| Current financial liabilities | 19.8 | 113.7 | 130.4 |
shareholders' equity quota, defined as the ratio between shareholders' equity and balance sheet total, rose slightly from 42.5 percent at the end of 2008 to the new figure of 43.2 percent.
The 5-year convertible bond expired in July this year and was initially repaid in full using the existing current lines of credit. In September 2009, Jenoptik concluded a medium to long-term financing package of just under 90 million euros which was used to reduce current financial liabilities. This led to a marked increase in noncurrent liabilities to banks and consequently in non-current liabilities, to 201.1 million euros (31.12. 2008: 133.1 million euros) and at the same time to a fall in current liabilities. At 161.7 million euros, non-current financial liabilities now account for more than 89 percent of all financial liabilities. There were only minimal changes in pension liabilities, other long-term provisions as well as other non-current liabilities.
For the reasons mentioned above, current liabilities reduced by 101.9 million euros to 161.2 million euros (31.12.2008: 263.1 million euros). In this context, lia bilities to banks reduced to 19.2 million euros (31.12. 2008: 64.7 million euros), short-term bonds reduced to zero as a result of the repayment of the convertible bond.
Purchases and sales of companies. In July 2009, in conjunction with the Korean company Telstar-Hommel Corp., Jenoptik established the joint venture JENOPTIK Korea Corp. which will primarily target the Asian electronics, flat panel and photovoltaic industries.
JENOPTIK AG is the majority shareholder in this joint venture with a 66.6 percent stake.
The Group also relinquished its mid-format camera business. This business has now been incorporated within Sinar AG, Feuerthalen (Switzerland).
There were no purchases or sales of companies in the third quarter of the current fiscal year.
For information on assets and liabilities not included in the balance sheet we refer to the details in the 2008 Annual Report on Page 72 as well as the information on guarantees in the Risk Report of the 2008 Annual Report from Page 87.
In December 2007, Jenoptik had placed three deben ture loans in the total sum of 30.0 million euros. As a result of lower contributions to earnings which led to a marked reduction in the EBITDA during the course of the year, as at September 30, 2009 Jenoptik no longer fulfilled one of three specified financial key indicators linked to the debenture loans due to unscheduled expenses resulting from the withdrawal from the midformat camera business. This permits the creditors to call in the loans. Within the framework of the new financing package which has been conclud ed, Jenoptik is prepared for possible repayments. Credits of a corresponding amount have already been made avail able for this within the long-term based financing package.
Note: The details on the three segments in the reporting on the earnings situation as well as in the segment reporting can be fully compared with the details in the report on the first nine business months of the previous year. For this reason, the EBIT of the segments before group charges has been shown both in the comments and the tables on the cover page.
The Lasers & Material Processing and Optical Systems divisions are combined within this segment. In 2009, both divisions felt the impact of the global economic crisis. Sales, results and order intake were therefore down on the levels for the previous year, with some areas showing sharp falls. The segment's earnings were also influenced by one-off effects arising from the withdrawal from the mid-format camera business. Therefore, as with the details for the Group as a whole, the development of earnings before one-off effects is also shown separately.
Sales totaled 110.4 million euros (prev. year 153.3 mil lion euros), with both divisions contributing to the 28 percent reduction. The Optical Systems division contin ues to be affected by the ongoing crisis in the semiconductor industry, although since the 2nd quarter there have been signs of a 'bottoming out' and, in the 3rd quarter, of a slight recovery in the order book situation. However this will only be reflected in the
sales of the next quarters. The weak demand from the automotive and industrial business was reflected in the Lasers & Material Processing division. By contrast, the areas of photovoltaic and medical technology reported a largely positive development.
Reflecting the reduction in sales, the result from oper ating activities (EBIT) before one-off effects totaled minus 3.2 million euros (prev. year 15.0 million euros). Seen over the period of the three quarters, there has been virtually no change in the segment's earnings situation. The one-off effects in the sum of 8.4 million euros de scribed in the overall Group earnings and attributable to the withdrawal from the mid-format camera business impacted in full on the Lasers & Optical Systems segment.
There was a slight pick-up in the order book situation in the 3rd quarter. At 118.4 million euros, however, the order intake in the first nine months was once again clearly down on the figure for the same period in the previous year (prev. year 153.7 million euros). The Lasers & Material Processing division secured a number of important orders from the photovoltaic industry, the electronics and microelectronics industry and the area of medical lasers. In the Optical Systems divi sion, Micro-Optics in particular reported an increase in its order intake from the semiconductor industry. This was clearly reflected in the segment's order backlog which totaled 67.5 million euros as at September 30, 2009 and therefore rose by 6.1 percent compared with the order backlog as at the end of 2008 (31.12.2008: 63.6 million euros). The book-to-bill rate, the ratio between order intake and sales, was 1.07.
| Lasers & Optical Systems Segment | in million euros | ||
|---|---|---|---|
| 30.9.2009 | 30.9.2008 | Change | |
| Sales | 110.4 | 153.3 | – 28.0 % |
| EBIT* | – 3.2 | 15.0 | –121.3 % |
| Order intake | 118.4 | 153.7 | – 23.0 % |
| Order backlog | 67.5 | 63.6** | 6.1 % |
| Employees | 1,307 | 1,412** | –7.4 % |
| * before Group charges and one-off effects ** Figures as at December 31, 2008 |
The number of employees in the Lasers & Optical Systems segment reduced to 1,307 as at September 30, 2009 (31.12.2008: 1,412). The net reduction was 105 employees or 7.4 percent and came from both divisions. The reduction in staff numbers of the segment was mainly carried out abroad as the result of the with drawal from the mid-format camera business. This fi gure does not yet include the effects of the closure of the optics site in Gießen.
The Lasers & Material Processing division strength ened its activities in Asia. At the beginning of July, in conjunction with the Telstar-Hommel Corp., Jenoptik formed the joint venture JENOPTIK Korea Corp., which will primarily be targeting the Asiatic electronics, flat panel and photovoltaic industry. JENOPTIK AG has a majority 66.6 percent holding in the company which is based in Pyeongtaek (Gyeonggi Province). By the be ginning of next year, the partners will jointly be build ing a local laser application center and investing approx. 4.4 million US dollars. The center is expected to be opened at the beginning of 2010 and will address the whole of the Asian market. At this center, Jenoptik will present a range of laser material processing systems for processing brittle materials such as display glass, solar cells, ceramics and silicon wafers as well as for the special laser separation process used for these materials, so-called TLS dicing (TLS = Thermal Laser Beam Separation). Customers will be able to test production methods on the systems and optimize these for their own processes.
The Optical Systems division continued to focus its activities in the current fiscal year. This encompassed the business portfolio, the corporate bases and its locations. Important strategic partnerships were also concluded.
In the US American market, the division amalgamated the two subsidiaries Coastal Optical Systems Inc., Jupiter (Florida) and Liebmann Optical Co., East hamp ton (MA) on July 1 this year to form JENOPTIK Optical Systems Inc. The company, whose headquarters are in Jupiter, has a total of approx. 100 employees. Its main clients include the US American defense, medical technology as well as show and entertainment industries. Liebmann became part of the Jenoptik Group in 1999, Coastal in 2002.
Since March 2009, the Optical Systems division has had a direct presence in the Israeli market through a joint venture company. In conjunction with the Israeli company Dagesh, it formed JENOPTIK OptiSys Ltd. with the aim of supplying opto-mechanical modules to Israeli customers in the semiconductor and security industry. Dagesh and Jenoptik each hold 50 percent of the shares. As a systems company, JENOPTIK OptiSys will offer the design, assembly, alignment and testing of complete modules. There are plans for investment in clean room production environments.
In September this year, the firm of Lumenova GmbH, Esslingen, part of the PSI Group, concluded a strategic partnership with Jenoptik in the area of LED lighting. The aim of this is to achieve rapid entry into the strong growth market of LED lighting in public spaces and in commercial applications as well as to develop new areas of application such as e.g. lighting for tunnels.
The cooperation arrangement, which is geared for the long term, encompasses the technical collaboration in the further development of LED lighting technology based on the "Lightengine" developed by Lumenova, the development of new reflector optics for a range of applications as well as the further improvement in optical quality.
In addition to this, the new Leica M9 camera received its market launch in September 2009. Jenoptik devel op ed the electronic modules for camera control and digital imaging in conjunction with Leica. Here, Leica and Jenoptik built on the experiences they gained from their successful collaboration on the M8 camera.
The Metrology segment comprises the Industrial Metrology and Traffic Solutions divisions. The effects of the crisis in the automotive industry were able to be partially but not totally offset by the more stable Traffic Solutions division.
Sales of the segment therefore reduced by 18.9 percent compared with the figure in the previous year, to 70.6 million euros (prev. year 87.0 million euros). The Industrial Metrology division posted a sharp fall in sales over recent months, whereas at the beginning of the year it was still benefitting from the order backlog from the period before the crisis. However, in the 3rd quarter there were signs of a 'bottoming out' of sales and order intake at a low level. In the 3rd quar ter, the Traffic Solutions division succeeded in main taining the level of sales achieved in the 2nd quarter.
The result from operating activities (EBIT) totaled minus 4.7 million euros (prev. year 2.0 million euros). The situation in the Industrial Metrology segment remains difficult due to the decline in sales. Measures aimed at reducing costs could cushion but not compen sate for this the devel opment in the current 2nd half year. In the Traffic Solutions division, the development of sales and earn ings in the individual quarters is more and more influenced by major orders. In addition, the costs arising from the development of the new business area of Traffic Service Providing continue to re duce the EBIT.
Order intake fell by 43.6 percent to 59.4 million euros (prev. year 105.3 million euros). There were no major changes in the order in take compared with the other quarters. This situation equates to a bottoming out at a low level. Major projects are increasingly influencing the order intake in the Traffic Solutions division. The segment's book-to-bill rate in the first nine business months was 0.84. The order backlog also reduced accordingly: at the end of September, the figure was 24.2 million euros (31.12.2008: 37.0 million euros).
The number of employees as at September 30, 2009 totaled 779 compared with 820 at the end of 2008. The overall reduction of 41 employees or 5.0 percent of the total staff is attribut able primarily to the reduc tion in the number of employees both on the domestic front and abroad. Measures aimed at further reducing staff numbers abroad were introduced in the 3rd quarter just past.
| Metrology | |
|---|---|
| Segment |
| Metrology Segment | in million euros | ||
|---|---|---|---|
| 30.9.2009 | 30.9.2008 | Change | |
| Sales | 70.6 | 87.0 | – 18.9 % |
| EBIT* | –4.7 | 2.0 | –335.0 % |
| Order intake | 59.4 | 105.3 | – 43.6 % |
| Order backlog | 24.2 | 37.0** | – 34.6 % |
| Employees | 779 | 820** | – 5.0% |
* before Group charges and one-off effects ** Figures as at December 31, 2008
The Industrial Metrology division strengthened its international presence with the acquisition of parts of the Chinese company Shanghai AES Auto Equipment Co. Ltd. in February 2009. The takeover will particularly enable the division to expand its assembly capacities for industrial metrology as well as its procurement know-how in respect of electronic and mechanical components. The new parts of the company are currently being amalgamated with the division's existing activities in China and will be available to the whole Group for procurement purposes.
The Defense & Civil Systems segment comprises the division of the same name and in the 3rd quarter 2009 continued its successful development of business with in a market environment that remains stable to good.
As expected, at the end of the 3rd quarter, sales of the segment, at 152.5 million euros, reached the same level as the previous year (prev. year 152.1 million euros). At the start of the year, the segment had posted strong growth in sales compared with the same period in the previous year as the result of the delivery of a major order. All three business units contributed towards the segment's stable development.
At 8.0 percent, the result from operating activities (EBIT) again showed a higher increase than sales. It improved to 9.4 million euros (prev. year 8.7 million euros), here again the main contribution came from the Sensors business unit thanks to the economies of scale within the framework of a major order in the 1st half year.
The order intake rose by 11.2 percent to 149.4 million euros (prev. year 134.4 million euros). In this business major and long-term orders are a characteristic feature, therefore the analyses on the qualifying dates can be distorted by fluctuations during the course of the year. Amongst other things there were orders for the power supply to tracking systems for military use, for train electricity supply systems, Airbus components as well as for auxiliary power units and air processing units for trolley buses. In the period under review, the order backlog of the segment, at 288.0 million euros, was down against the figure at the end of 2008 (31.12. 2008: 294.6 million euros) as the result of a slightly higher volume of sales compared to the order intake (book-to-bill rate: 0.98). By contrast, there was a slight rise in the order backlog compared with June 30, 2009.
The business for the new Puma infantry fighting tank for the Bundeswehr (German Army) worth a total of approx. 70 million euros to Jenoptik, took an important step forward for the Jenoptik Group at the beginning of July with the signing of the procurement contract with the Federal Department for Defense Technology and Procurement (Bundesamt für Wehrtechnik und Beschaffung, BWB) in Koblenz. The order intake is expected. The overall project has been awarded to PSM GmbH, Kassel, in which Rheinmetall and Krauss-Maffei Wegmann each hold 50 percent of the shares. The Jenoptik Defense & Civil Systems division will be supplying systems and components, such as for example for energy supply and stabilization, in close coope-
| Defense & Civil Systems Segment | in million euros | ||
|---|---|---|---|
| 30.9.2009 | 30.9.2008 | Change | |
| Sales | 152.5 | 152.1 | 0.3 % |
| EBIT* | 9.4 | 8.7 | 8.0 % |
| Order intake | 149.4 | 134.4 | 11.2 % |
| Order backlog | 288.0 | 294.6** | –2.2 % |
| Employees | 1,088 | 1,100** | –1.1 % |
* before Group charges and one-off effects ** Figures as at December 31, 2008
ration with its project partners Krauss-Maffei Wegmann GmbH & Co. KG, Rheinmetall Landsysteme GmbH, MTU Friedrichshafen as well as PSM GmbH, Kassel which has been put in overall charge of the project.
The number of employees in the Defense & Civil Systems segment reduced by 12 to 1,088 (31.12.2008: 1,100) essentially as the result of employees being transferred to the Jenoptik Shared Service Center.
Individual developments in the current 4th quarter have already been dealt with within the framework of this report.
There were no significant events occurring after the qualifying date.
Within the framework of the risk reporting, we refer to the information on pages 87 to 96 in the 2008 Annual Report published at the end of March 2009. Up to the clos ing editorial date of this report, there have been no major changes in the risks described in the report during the course of the first nine business months of 2009 with the exception of the following specified below.
The economic environment had continued to deteriorate during the course of the 1st quarter 2009. In our assessment, there were no major changes in the course of the 2nd and 3rd quarters 2009. At this present time, we do not see any sustainable economic recovery with the exception of the slight pickup in demand from the semiconductor industry. We are therefore reaffirming our assessments of May and August this year that the risks relating to financing and the cyclical nature of key individual markets as described on pages 89 and 90 in the 2008 Annual Report have increased.
With regard to the financing risks, we continue to view the market for corporate credits as problematic. However, by contrast to the 1st half-year 2009, the Jenoptik Group now has long-term financing in place as the result of the switch in the financing structure in September 2009. At 161.7 million euros, non-current financial liabilities now account for 89 percent of all financial liabilities, with the proportion of current liabilities showing a correspondingly marked fall. Jenoptik received a federal-state guarantee in the sum of 44 million euros for part of the financing package. As at September 30, 2009, the Group had free liquidity framework with credit lines and unused credits in the sum of more than 70 million euros. Current loan commitments had already been extended for a mediumterm period during the course of the 1st half year 2009 and in the process 23.0 mil lion euros were taken up as medium-term loans. The residual balance of the convertible bond in the sum of 47.9 million euros was repaid in full on July 23, 2009.
With regards to the sector risks, the fall in demand in the automotive industry continued in the 1st quarter 2009 and stagnated at a very low level in the 2nd and 3rd quarters just past. This development of orders has led to sharp falls in sales and earnings since May this year to-date in the Industrial Metrology division, which at the start of the year in particular had still benefited from the existing order backlog from the year 2008. The demand from the semiconductor industry con tinued to stabilize at the very low level of the 4th quarter 2008 and recovered slightly during the course of the 3rd quarter 2009.
The risk arising from the insolvency proceedings relat ing to Franke & Heidecke GmbH, Brunswick, Jenoptik's major supplier for the mid-format camera business, materialized to a significant extent following the deci sion by Jenoptik to withdraw from this business. Oneoff costs in the sum of 8.4 million euros, which were taken fully into account in the earnings, have so far been incurred as a result of the withdrawal from this business, a decision which was also taken after giving consideration to the ongoing difficulties in the development of this market. Existing supply commitments with the customer were terminated by mutual agreement.
The application for protection from creditors under Chapter 11 issued by Asyst Technologies Inc., Jenop tik's former opponent in the litigation proceed ings, has no major consequences for Jenoptik. Last year, the courts finally ruled in favor of Jenoptik in a legal dis pute which had been litigious for more than ten years. A crisis team set up in the 2nd quarter is analyzing the risk that arises from a worldwide spread of Mexican flu and a resultant higher than average level of sicknessrelated absenteeism amongst the workforce over an extended period. Local crisis teams have been set up at the Jenoptik Group's sites.
Despite the global economic downturn, we see the situation after the crisis as offering good long-term conditions for the sales of our products and services. We believe we will be well placed as a result of the Group's strategic reorganization.
Jenoptik aims to further expand its position as one of the world's leading optoelectronics providers. In order to achieve this, we have defined specific, long-term objectives and set these out in detail on pages 103 to 105 in the 2008 Annual Report.
Measures designed to reduce costs were introduced within the Group as part of the strategic reorganization and in conjunction with the financial and economic crisis. For the full year 2009, these are expected to pro duce cost savings of more than 10 million euros which will help to reduce fixed costs and, as such, partially compensate for the reduction in sales and margins. The measures include:
-- Cost savings of more than 10 million euros by the end of the year expected.
short-time working for 682 employees as at Sep tem ber 30, 2009 and utilization of employee fluctuation to reduce employee numbers,
In order to remain competitive with a level of sales below that of 2008, the measures aimed at reducing costs were expanded in the 3rd quarter just past. They include in particular process and structural adjustments that will involve a reduction in the number of regular staff to about 3,000.
The Jenoptik Excellence Program, which started at the beginning of 2009 within the framework of the strategic reorganization, is currently being implemented in all parts of the Group. It includes the comprehensive and continuous optimization of processes to reduce costs and assure quality, the further consolidation of the divisional structure as well as the setting of group-wide process standards that will increase efficiency and quality. The analysis phase of the Jenoptik Excellence Program was completed in March. Implementation began in the 2nd quarter 2009 with those themes that will have the greatest positive impact, these primarily
include group purchasing and the optimization of the production processes. The core measures of the program include the introduction of lean and design-tocost structures, the further optimization of procurement, an active management of inventories and working capital as well as the standardization of IT struc tures.
Preparations have already been made for the closure of the optics site at Gießen and relocation of production to Jena, which starts in the current 2nd half-year. Preparations for the continued optimization of the sites are being made also in the Industrial Metrology division, which has to compensate for the sharp fall in demand from the automotive industry. The withdrawal from the mid-format camera business of the Optical Systems division has already been completed in the 3rd quarter.
The Shared Service Center started up its operational duties in January 2009. These currently encompass the areas of information technology (IT), human resources, group purchasing, real estate management, health and safety at work and environmental protection, security as well as technical services, and are to be expanded on a gradual basis over the coming years. The current focus is on harmonizing the Group's IT. A major step forward in achieving this was the commissioning of a new central computer center and the group network. With the new purchasing manager who started work on October 1, 2009, Jenoptik will continue to optimize the purchasing and supply chain management.
Our view of the future development in the segments is based on the assumption that the markets which
have been affected by the crisis to varying degrees will generally recover once again but within different time frames. To what extent the economic crisis will have a sustainable impact on general market trends is im possible to forecast at this point in time.
In the Lasers & Optical Systems segment, the duration and the extent of the current crisis in the semiconductor industry and development of its associated indus tries will have a major affect on the course of business, particularly in the Optical Systems division. We are seeing a slight pickup in this area, which starts, however, from a very low level. In the Lasers & Material Pro cessing division, success will depend upon, amongst other things, a rapid and successful market launch of new developments. The Group attaches great importance to the photovoltaic and medical technology market as well as to the development of the fiber laser and consequently to the entry into new markets for laser material processing. According to a study of VDMA of October 2009, a recovery of the market and growth are expected pre cisely in those regions, which Jenoptik is adressing with its current internationalization.
In the Metrology segment, the duration and extent of the crisis in the automotive industry will significantly impact on the course of business over the coming quarters. We do not anticipate a return to the market volumes of 2007/beginning 2008 in the medium term, i.e. in the next 2-3 years. Measures designed to adjust the cost structures have been taken and are currently being expanded. Foreign sites in particular will be restructur ed, R&D and production will be combined at
the sites in Germany. However, the Industrial Metrology division will be able to benefit from the global demand for fuel-saving and low emission engines. The Traffic Solutions division has firmly established itself in a market that continues to remain largely stable and is backed by the ongoing modernization and replacement business as well as some major orders from abroad. As a global market leader in traffic solu tions technology, the divi sion benefits from a comprehensive product port folio as well as from the trend amongst public sector clients towards Public Private Partnership models in the Traffic Service Providing business area.
The Defense & Civil Systems segment is operating in what is essentially a stable market environment. The reasons for this include the standard methods for awarding major orders which can extend over periods of ten years or more. This applies in particular to the Mechatronics and Optronics business areas where Jenoptik supplies system companies and has longstand ing and intensive relationships with its clients. Through out the division and particularly in the Sensors business area, there were signs of a trend towards security systems – both in the civil as well as the military areas.
According to IMF, there is still no end in sight to the crisis in the global economy. Although it is expected to grow by 3.1 percent next year, IMF forecasts that this impetus will be eroded by an increase in the number of unemployed.
The economists of the Federal Reserve do not expect a quick recovery by the US economy after the crisis. The Institute for Economic Research (Institut der Deutschen Wirtschaft) forecasts a 1.5 percent growth in US GDP in 2010.
The EU Commission in Brussels anticipates a 4.0 percent fall in the GDP of the euro zone for the year 2009. For 2010, the EU Commission anticipates a slow recovery in the euro zone market.
The EU Commission adjusted its forecast for the economic performance in Germany from minus 5.4 to minus 5.1 percent. In their autumn report, the economic re search institutes forecast a rise of 1.2 percent for 2010.
The prognoses for the Chinese economy are all very positive. The International Monetary Fund forecasts eco nomic growth of 9 percent for 2010, making China the engine which is driving growth of the global economy.
Forecasts on the further development of sectors that are important to Jenoptik differ. This year, the companies in the optical technologies sector must assume a 20 percent fall in sales according to the sector association SPECTARIS. This equated to the level of sales achieved in 2005.
The analysts at Gartner predict a positive performance by the global semiconductor industry next year, but predict a 48 percent fall for the full year 2009. In 2010 they expect to see the sector achieving growth of 34 percent. In this context, the recovery in the sector will
be led by new product launches and not by the in crease in wafer capacities.
It is still unclear how the German photovoltaic industry will perform. Sector associations anticipate a reduction in the level of investment in the German solar sector over the coming months. Small firms in particular are suffering from the low prices being offered by their competitors in China and the USA. This is also the reason why also German solar companies are relocat ing some of their production facilities to Asia, where the sector is recording a boom, in particular in China, Taiwan and Korea.
In the German automotive industry, the figures for exports and production levels for the full year 2009 will be down on those of the previous year, although these have leveled out according to information from the VDA. Following the discontinuation of the government aid, the automotive industry sees 2010 as a critical year. A recovery of the demand for cars is not to be expected before 2011, according the Business Data Worldwide research institute.
In 2009, the mechanical engineering sector will experience its sharpest fall in orders and production levels over the last decades and shrink by about 40 percent according to VDW. For 2010 VDMA however expects a reversal in this trend at the latest in the 2nd half year, which is primarily attributable to an upward momentum in demand in the Asian market.
In 2009, the aviation industry will suffer a higher level of losses than had originally been forecast. IATA, the
International Air Transport Association, predicts that airlines will suffer significant losses. The Association is therefore adjusting its forecast global losses from 9 billion to 11 billion dollars. The sector is also expected to post a loss in 2010.
The results posted by the Jenoptik Group up to Sep tember 30, 2009 do not necessarily allow us to make predictions on the development of the further course of business. All the details provided below are subject to there being no further deterioration in the economic situation or to a slight recovery taking place. State ments on the future development of the business situation are based on current information.
Forecast assumptions. The course of the further devel opment of business by the three segments is based on the following assumptions:
Lasers & Optical Systems segment: The crisis in the semiconductor industry eased slightly during the second half 2009 and is expected to slightly stimulate the business in 2010 primarily in the 2nd half year. The withdrawal from the mid-format camera business which showed a loss in the current business, the transfer of production at the Gießen site to Jena and the amalgamation of the optics activities in the USA are expected to have a positive effect on earnings. The Lasers & Material Processing division anticipates a 4th quarter with stronger sales due to the delivery of sever - al laser processing systems. As a result of the decrease in the business with lasers for the automotive and mechanical engineering industries the division will not be able to completely achieve the figures of the last year in spite of the largely positive development of the business with medical lasers and the photovoltaic in dustry. The EBIT of the Lasers & Optical Systems segment has also been hit by the one-off effects in the sum of 8.4 mil lion euros arising from the withdrawal from the mid-format camera business.
Metrology segment: The order intake in the Industrial Metrology division has been at a very low level since the beginning of 2009. This will give lead to a further slight fall in sales in the current 4th quarter which the essentially stable Traffic Solutions division will be unable to offset. In addition to a predominantly stable devel opment of the market, the full product range, our position as a global market leader in the equipment business as well as potential new orders in Traffic Service Providing will also create opportunities for the Traffic Solutions division. The expenses arising from the devel opment of this traffic service providing business are taken into account in the EBIT.
Defense & Civil Systems segment: As a result of the high, long-term order intake, there is a relatively high level of planning certainty for the development of sales and earnings in this segment. Jenoptik will be supplying components and subsystems to the value of approx. 70.0 million euros for the new, modern Puma infantry fighting vehicle for the Bundeswehr (German Army), which were not yet included in the order backlog as at September 30, 2009.
Forecast of the business development. Sales and earn ings by the Jenoptik Group in the full year 2009 will not reach the levels achieved in 2008. However, as described above, the segments are being affected by the difficult sales conditions to varying degrees.
Even in the difficult environment this year, Jenoptik will benefit from the stable business of the Defense & Civil Systems segment, where we anticipate a contribution to sales in excess of 200 million euros (2008: 208.5 million euros) in 2009. We also expect to see a relatively stable sales performance in the Traffic Solu tions division (Metrology segment) as well as in the Lasers & Material Processing division. However, as a result of the fall in demand, we expect the Optical Systems and Industrial Metrology divisions to post markedly lower sales in 2009 compared with the 2008 fiscal year. Jenoptik therefore forecasts group sales of between 460 and 500 million euros for the full year 2009.
The result of operating activities of the Jenoptik Group will be determined by market conditions which are highly competitive as a result of the economic crisis and the anticipated reduction in the volume of sales. On the basis of the stable contribution from the Defense & Civil Systems segment as well as our presence in various markets, we do however anticipate a positive group operating result before one-off effects. However, in conjunction with the economic crisis we expect additional one-off effects that will impact on the results – for example one-off expenses as a result of the measures aimed at reducing costs and increasing efficiency within the Jenoptik Group and the related staff personnel measures as well as value adjustments (impairments), among other things due to the tough market situation. As a result of the comprehen sive measures to reduce costs, the Jenoptik Group expects a Group operating result in the two-figure mil lion euro range in 2010.
With regard to the order situation, Jenoptik will benefit from its presence in various markets. In the 3rd quarter, a slight pickup in order intakes from the semiconductor industry was identified – starting from a very low level –, as was a 'bottoming out' of the order intake from the automotive industry. By contrast, defense and security technology as well as traffic solutions recorded virtually stable order intakes. Since order intakes in the Defense & Civil Systems as well as Traffic Solutions divisions can be in the double figure million euro range, although these cannot be forecast with sufficient probability, it is therefore impossible to give reliable statements on order intakes and consequently on the anticipated backlog.
The number of employees in the Jenoptik Group is expected to fall for the full year 2009. As a conse quence of the process, business and location optimizations, together with the expectation that the abovementioned sectors will recover but not return to their old market levels in the foreseeable future, additional adjustments to personnel numbers will be needed in the Group. As at December 31, 2008 Jenoptik had 3,400 employees and aims at a target regular work force of approx. 3,000 employees. Approx. 160 jobs will be affected abroad. Talks with employee representatives began in the 3rd quarter 2009. Adjustments to the personnel capacities were made in the 1st half-year 2009 mainly by reducing overtime and the number of temporary personnel, as well as through the introduc tion of short-time working. However, Jenoptik's fundamental aim is to retain qualified employees.
The financing for the Group has been secured for the long-term through the new financing package. In addition, Jenoptik not only has cash and credit balances with banks as well as current securities in the sum of 13.5 million euros available to it as at September 30, 2009 but also a free liquidity framework of approx. 70 million euros with credit lines and unused credits.
| in TEUR 1.1. – 30.9. 2009 1.1. – 30.9. 2008 Sales 336,747 397,428 Cost of sales 247,571 283,677 Gross profit 89,176 113,751 Research and development expenses 23,570 22,501 Selling expenses 38,768 42,390 General administrative expenses 26,909 27,933 Other operating income 14,655 14,192 Other operating expenses 12,500 10,470 EBIT before one-off effects 2,084 24,649 One-off effects* – 8,392 0 EBIT – 6,308 24,649 Result from investments in associated companies – 1,265 – 762 Result from other investments – 782 – 1,219 Interest income 2,258 1,867 Interest expenses 9,040 11,143 Financial result – 8,829 – 11,257 Earnings before tax – 15,137 13,392 Income taxes – 7 1,449 Deferred taxes – 278 1,749 Earnings after tax – 14,852 10,194 Minority interests´ share of profit/less 2,207 3,074 Net profit – 17,059 7,120 Earnings per share in euros – 0.33 0.14 Earnings per share (diluted) in euros – 0.14 |
||
|---|---|---|
*One-off effects include other operating expenses in connection with the withdrawal from the mid-format camera business.
| in TEUR | Sept. 30, 2009 | Dec. 31, 2008 | Change |
|---|---|---|---|
| Non-current assets | 347,310 | 376,335 | – 29,025 |
| Intangible assets | 82,273 | 88,929 | – 6,656 |
| Tangible assets | 158,381 | 170,489 | – 12,108 |
| Investment properties | 25,326 | 34,794 | – 9,468 |
| Shares in associated companies | 967 | 1,358 | –391 |
| Financial assets | 17,299 | 18,802 | – 1,503 |
| Other non-current assets | 11,454 | 10,589 | 865 |
| Deferred tax assets | 51,610 | 51,374 | 236 |
| Current assets | 290,739 | 312,764 | – 22,025 |
| Inventories | 174,104 | 179,450 | – 5,346 |
| Current accounts receivable and other assets | 103,132 | 118,832 | – 15,700 |
| Securities | 1,080 | 1,959 | – 879 |
| Cash and cash equivalents | 12,423 | 12,523 | – 100 |
| Total assets | 638,049 | 689,099 | – 51,050 |
| in TEUR | Sept. 30, 2009 | Dec. 31, 2008 | Change |
|---|---|---|---|
| Shareholders´ equity | 275,700 | 292,837 | – 17,137 |
| Subscribed capital | 135,290 | 135,290 | 0 |
| Capital reserves | 186,137 | 186,137 | 0 |
| Other reserves | – 69,386 | – 50,507 | – 18,879 |
| Own shares | 23,659 | 21,917 | 1,742 |
| Non-current liabilities | 201,136 | 133,114 | 68,022 |
| Pension provisions | 6,429 | 6,437 | – 8 |
| Other non-current provisions | 17,782 | 18,370 | – 588 |
| Non-current financial liabilities | 161,719 | 92,418 | 69,301 |
| Other non-current liabilities | 12,446 | 12,967 | – 521 |
| Deferred tax liabilities | 2,760 | 2,922 | – 162 |
| Current liabilities | 161,213 | 263,148 | – 101,935 |
| Tax provisions | 2,579 | 2,934 | – 355 |
| Other current provisions | 30,794 | 35,751 | – 4,957 |
| Current financial liabilities | 19,835 | 113,684 | – 93,849 |
| Other current liabilities | 108,005 | 110,779 | – 2,774 |
| Total shareholders´ equity and liabilities | 638,049 | 689,099 | – 51,050 |
Statement of comprehensive income.
| in TEUR | 1.1. to 30.9.2009 | 1.1. to 30.9.2008 |
|---|---|---|
| Earnings after tax | – 14,852 | 10,194 |
| Differences from currency translation | – 1,078 | 1,105 |
| Available-for-sale financial assets | 353 | – 1,231 |
| Cash flow hedge | – 1,100 | – 1,557 |
| Total income | – 16,677 | 8,511 |
| of which attributable to: | ||
| Minority interests | 2,207 | 3,074 |
| Shareholders | – 18,884 | 5,437 |
| in TEUR | Subscribed capital |
Capital reserve | Cumulated profit |
Available for-sale financial assets |
Cash flow hedge |
|---|---|---|---|---|---|
| Balance as at 01.01.2008 | 135,290 | 186,726 | – 65,550 | – 6 | 6,229 |
| Valuation of financial instruments | – 1,231 | – 1,557 | |||
| Currency differences | 25 | ||||
| Earnings after tax | 7,120 | ||||
| Dividend payments | |||||
| Other changes | – 293 | ||||
| Balance as at 30.09.2008 | 135,290 | 186,726 | – 58,698 | – 1,237 | 4,672 |
| Balance as at 01.01.2009 | 135,290 | 186,137 | – 53,776 | – 1,888 | 6,552 |
| Valuation of financial instruments | 357 | – 1,100 | |||
| Currency differences | 162 | ||||
| Earnings after tax | – 17,059 | ||||
| Dividend payments | |||||
| Balance as at 30.09.2009 | 135,290 | 186,137 | – 70,673 | – 1,531 | 5,452 |
| Cumulative currency differences |
Minority interests |
Total |
|---|---|---|
| – 3,399 | 21,634 | 280,924 |
| – 2,788 | ||
| 1,080 | 1,105 | |
| 3,074 | 10,194 | |
| – 921 | – 921 | |
| 293 | 0 | |
| –2,319 | 24,080 | 288,514 |
| –1,395 | 21,917 | 292,837 |
| – 4 | – 747 | |
| – 1,240 | – 1,078 | |
| 2,207 | – 14,852 | |
| – 460 | – 460 | |
| –2,635 | 23,660 | 275,700 |
Consolidated statement of cash flow.
| in TEUR | 1.1. to 30.9. 2009 | 1.1. to 30.9. 2008 |
|---|---|---|
| Earnings before tax | – 15,137 | 13,392 |
| Interest | 6,782 | 9,275 |
| Depreciation/write up | 21,422 | 23,127 |
| Impairment | 6,763 | 0 |
| Loss/profit on disposal of fixed assets | – 362 | 11 |
| Other non-cash expenses/income | 602 | 349 |
| Operating profit/loss before working capital changes | 20,070 | 46,154 |
| Increase/decrease in provisions | – 7,226 | – 6,399 |
| Increase/decrease in working capital | 21,472 | – 17,291 |
| Increase/decrease in other assets and liabilities | – 3,757 | – 1,476 |
| Cash flow from/used in operating activities before income taxes | 30,559 | 20,988 |
| Income taxes paid | – 330 | – 883 |
| Cash flow from/used in operating activities | 30,229 | 20,105 |
| Receipts from disposal of intangible assets | 214 | 392 |
| Payments for investments in intangible assets | – 3,065 | – 4,759 |
| Receipts from disposal of tangible assets | 510 | 3,460 |
| Payments for investments in tangible assets | – 7,570 | – 10,434 |
| Receipts from disposal of financial assets | 2,727 | 3,477 |
| Payments for investments in financial assets | – 2,631 | – 3,441 |
| Payments for acquisition of consolidated companies | 47 | 42 |
| Interest received | 1,313 | 1,644 |
| Cash flow from/used in investing activities | – 8,455 | – 9,619 |
| Payments to minority shareholders | – 460 | – 922 |
| Receipts from issue of bonds and loans | 56,551 | 20,866 |
| Repayments of bonds and loans | – 70,899 | – 9,216 |
| Repayments of finance leases | – 554 | – 11,423 |
| Change in group financing | – 1,643 | – 7,876 |
| Interest paid | – 4,353 | – 5,277 |
| Cash flow from/used in financing activities | – 21,358 | – 13,848 |
| Change in cash and cash equivalents | ||
| 416 | – 3,362 | |
| Foreign currency translation changes in cash and cash equivalents Cash and cash equivalents at the beginning of the period |
– 516 12,523 |
420 13,792 |
| Cash and cash equivalents at the end of the period | 12,423 | 10,850 |
January 1 – September 30, 2009 (previous year´s figures in brackets)
| in TEUR | Lasers & Opti cal Systems |
Metrology | Defense & Civil Systems |
Other Consolidation |
Group |
|---|---|---|---|---|---|
| Sales | 110,363 | 70,583 | 152,532 | 3,269 | 336,747 |
| (153,335) | (87,041) | (152,076) | (4,976) | (397,428) | |
| of which Germany | 33,831 | 27,536 | 79,701 | 3,477 | 144,545 |
| (51,567) | (32,833) | (85,689) | (5,221) | (175,310) | |
| European Union | 32,575 | 14,847 | 45,919 | 0 | 93,341 |
| (50,227) | (21,035) | (37,501) | (0) | (108,763) | |
| Other Europe | 4,057 | 4,140 | 12,348 | 0 | 20,545 |
| (4,416) | (5,075) | (13,367) | (0) | (22,858) | |
| NAFTA | 26,693 | 11,624 | 5,886 | – 208 | 43,995 |
| (24,804) | (14,722) | (6,627) | (– 245) | (45,908) | |
| South East Asia/Pacific | 9,133 | 7,389 | 7,975 | 0 | 24,497 |
| (10,760) | (10,136) | (7,397) | (0) | (28,293) | |
| Other | 4,074 | 5,047 | 703 | 0 | 9,824 |
| (11,561) | (3,240) | (1,495) | (0) | (16,296) | |
| EBIT before Group charges, before one-off effects | –3,155 | –4,702 | 9,383 | 558 | 2,084 |
| EBIT (prev. year) | (15,061) | (1,973) | (8,694) | (–1,079) | (24,649) |
| Group charges | –1,696 | – 1,060 | – 1,518 | 4,274 | 0 |
| One-off effects | –8,392 | 0 | 0 | 0 | –8,392 |
| EBIT after Group charges, after one-off effects | – 13,243 | – 5,762 | 7,865 | 4,832 | – 6,308 |
| EBITDA before Group charges, after one-off effects* | 3,318 | –1,801 | 14,499 | 4,840 | 20,856 |
| EBITDA (prev. year)* | (25,197) | (4,568) | (13,597) | (2,690) | (46,052) |
| Earnings from investment in associated companies | –1,265 | 0 | 0 | 0 | – 1,265 |
| (– 762) | (0) | (0) | (0) | (– 762) | |
| Result from other investments | –928 | 107 | 247 | – 208 | – 782 |
| (– 1,525) | (40) | (260) | (6) | (– 1,219) | |
| Research and development expenses | 10,707 | 6,357 | 6,772 | –266 | 23,570 |
| (12,884) | (7,461) | (4,319) | (– 2,163) | (22,501) | |
| Free cash flow (before income taxes) | 3,660 | 2,031 | 17,032 | – 2,075 | 20,648 |
| (8,355) | (–3,007) | (5,010) | (– 711) | (9,647) | |
| Working capital** | 52,055 | 39,990 | 93,073 | – 3,791 | 181,327 |
| (59,024) | (48,125) | (100,285) | (– 5,816) | (201,618) | |
| Order intake | 118,402 | 59,391 | 149,410 | 3,192 | 330,395 |
| (153,678) | (105,253) | (134,439) | (5,064) | (398,434) | |
| Tangible assets, investment properties and intangible | 96,529 | 19,576 | 38,363 | 111,512 | 265,980 |
| assets** | (109,949) | (20,986) | (40,241) | (123,036) | (294,212) |
| Investments excluding company acquisitions | 3,713 | 1,960 | 3,362 | 1,600 | 10,635 |
| (7,953) | (2,788) | (4,408) | (43) | (15,192) | |
| Depreciation and amortization | 14,865 | 2,901 | 5,116 | 4,282 | 27,164 |
| (10,136) | (2,595) | (4,903) | (3,769) | (21,403) | |
| Employees on annual average | 1,299 | 767 | 1,032 | 133 | 3,231 |
| (without trainees) | (1,376) | (801) | (1,047) | (66) | (3,290) |
* EBITDA = Earnings before interest, taxes, depreciation and amortization
** Previous year´s figures as at December 31, 2008.
The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) and the interpreta tion of these standards by the International Financial Reporting Interpretations Committee (IFRIC).
The consolidated financial statements of JENOPTIK AG have been prepared in accordance with § 315a HGB (German Commercial Code) in line with the rules of the IASB with an exemption from preparation of consoli dated financial statements under HGB. At the same time the consolidated financial statements and group management report are in line with the European Union Directive on Consolidated Accounting.
In the consolidated interim report ("interim report") as at September 30, 2009, prepared on the basis of the International Accounting Standard (IAS) 34 "Interim Reporting", the same accounting methods were used as in the consolidated financial statements for the fiscal year 2008. These were prepared in accordance with the International Financial Reporting Standards (IFRS) which have to be applied for reasons of comparison within the European Union. These methods are pub lished individually and described in detail in the Notes to the Annual Report 2008. The Annual Report can be called up on the Internet at www.jenoptik.com, on the Investors page under the heading Accounts & Reports/ Downloads.
The interim report was prepared in the group currency of the Euro and the figures are stated in TEUR unless specified otherwise.
In the opinion of the management these consolidated interim financial statements include all necessary standard adjustments to present a true and fair view of the development of the business of the company in the periods under report. The consolidated interim financial statements were reviewed.
The consolidated financial statements include 19 (prev. year 21) domestic and 9 (prev. year 10) foreign com panies fully consolidated. In accordance with IAS 31 "Interests in Joint Ventures" 1 (prev. year 1) joint ven ture company is included in the quarterly report proportionally at 50% and, under IAS 28 "Interests in Associates" 2 (prev. year 2) domestic associated companies are shown at equity.
During the first nine months 2009 as well as in the corresponding period in 2008 the Group of JENOPTIK AG had no business transactions with related companies.
| Tangible assets | in TEUR | |
|---|---|---|
| 30.9.2009 | 31.12.2008 | |
| Land and buildings | 92,331 | 95,635 |
| Technical equipment and machines | 38,227 | 44,548 |
| Other equipment, factory and office | ||
| equipment | 21,188 | 23,752 |
| On-account payments and assets under | ||
| construction | 6,635 | 6,554 |
| 158,381 | 170,489 |
| Inventories | in TEUR | |
|---|---|---|
| 30.9.2009 | 31.12.2008 | |
| Raw materials and supplies | 58,760 | 67,314 |
| Work in progress | 96,515 | 90,376 |
| Finished goods and merchandise | 18,829 | 21,760 |
| 174,104 | 179,450 |
| Accounts receivable and other assets | in TEUR | |
|---|---|---|
| 30.9.2009 | 31.12.2008 | |
| Trade accounts receivable | 69,088 | 93,389 |
| Receivables from construction contracts | 10,681 | 4,400 |
| Receivables from non-consolidated | ||
| affiliated companies | 5,549 | 3,390 |
| Receivables from participating interests | 1,384 | 2,792 |
| Other assets | 16,430 | 14,861 |
| 103,132 | 118,832 |
| Non-current financial liabilities | in TEUR | |
|---|---|---|
| 30.9.2009 | 31.12.2008 | |
| Non-current bank liabilities | 157,998 | 88,241 |
| Non-current liabilities from finance leases | 3,721 | 4,177 |
| 161,719 | 92,418 |
| Current financial liabilities | in TEUR | |
|---|---|---|
| 30.9.2009 | 31.12.2008 | |
| Current bonds | 0 | 48,258 |
| Bank liabilities | 19,205 | 64,697 |
| Liabilities from finance leases | 630 | 729 |
| 19,835 | 113,684 |
| Other current liabilities | in TEUR | |
|---|---|---|
| 30.9.2009 | 31.12.2008 | |
| Liabilities from on-account payments | ||
| received | 29,203 | 33,825 |
| Trade account payable | 37,670 | 41,289 |
| Liabilities from construction contracts | 5,673 | 507 |
| Receivables from affiliated companies | 1,668 | 2,009 |
| Liabilities to participating interests | 2,578 | 2,623 |
| Other current liabilities | 31,213 | 30,526 |
| 108,005 | 110,779 |
The current declarations under § 161 AktG (German Stock Corporation Act) by the Executive Board and Supervisory Board relating to the German Corporate Governance Code have been made available to the shareholders at all times via the JENOPTIK AG Internet site. The declaration can also be viewed at JENOPTIK AG.
JENOPTIK AG and the one or the other of its group companies are involved in several legal or arbitration proceedings. If these could have a substantial effect on the Group's economic situation, these are described in the consolidated financial statements of Jenoptik for the year 2008.
There were no events of special importance occurring after the period covered by the interim report.
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group 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 Group for the remaining months of the fiscal year.
Jena, November 9, 2009
Dr. Michael Mertin Frank Einhellinger Chairman of the Member of the Executive Board Executive Board
November 10, 2009 Interim Report on the 3rd quarter 2009
March 30, 2010 Annual Report 2009
Investor Relations Phone ++ 49 (0) 3641 65-2244 Fax ++ 49 (0) 3641 65-2804
Phone ++ 49 (0) 3641 65-2255 Fax ++ 49 (0) 3641 65-2484
These and other publications of JENOPTIK AG
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