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Carl Zeiss Meditec AG / Key word(s): Annual Report/Annual Results
Carl Zeiss Meditec closes fiscal year 2023/24 with slightly lower revenue - forecast for adjusted EBIT achieved
11.12.2024 / 07:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
Carl Zeiss Meditec closes fiscal year 2023/24 with slightly lower revenue - forecast for adjusted EBIT achieved
Restrictive investment climate and weak consumer sentiment weigh on revenue and earnings development
JENA, December 11, 2024
Carl Zeiss Meditec achieved revenue of around EUR 2,066.1 million in fiscal year 2023/24 (previous year: EUR 2,089.3 million). This corresponds to a decline in revenue of -1.1% (adjusted for currency and acquisition effects: -4.8%). Adjusted earnings before interest and taxes (EBIT) fell to around EUR 245.9 million (previous year: EUR 362.9 million) and was therefore around the mid-point of the guidance after 9M 2023/24 of EUR 225 - 275 million. The adjusted EBIT margin, based on sales excluding the contribution from the DORC acquisition, amounted to 12.5% (previous year: 17.4%).
In the 2023/24 financial year, the Strategic Business Unit (SBU) Ophthalmology recorded slight growth of +0.8% (adjusted for currency effects: +1.8%, adjusted for currency and acquisition effects: -4.5%) with sales of 1,589.2 million euros (previous year: 1,576.5 million euros). The first-time contribution from the acquisition of DORC[1], a company specializing in retinal surgery, amounted to 99.9 million euros.
In the reporting period, weaker sales of consumables, particularly in connection with the reduction in inventories of surgical consumables in the Chinese sales channel, which was successfully completed in the first half of the year, and the volume-based procurement of intraocular lenses in China, as well as declining demand in the device business, due among other things to high interest rates and increased financing costs as well as health policy uncertainties in some core markets such as North America, Germany and Japan, led to a fall in sales. The consolidation of DORC in the second half of the year had a supporting effect.
The Microsurgery strategic business unit achieved sales of 477.0 million euros (previous year: 512.8 million euros), which corresponds to a decline of -7.0% (adjusted for currency effects: -5.6%). This was primarily due to weak neurosurgery business, which was also affected by a reluctance to invest in various markets, particularly in North America due to high financing costs.
EMEA with double-digit percentage sales growth
In the EMEA region[2], sales increased by +12.9% (adjusted for currency effects: +14.3%) to EUR 584.3 million (previous year: EUR 517.3 million) in the reporting period. Positive contributions to growth came from France, Italy and Spain, among others.
Sales in the Americas region fell significantly by -6.6% (adjusted for currency effects: -5.4%) from 570.7 million euros to 532.9 million euros. Sales in both the USA and Latin America declined.
The APAC region[3] also recorded a decline in sales. Sales amounted to 949.0 million euros (previous year: 1,001.2 million euros) and therefore fell by -5.2% (adjusted for currency effects: -4.3%). Growth contributions came in particular from the markets of South East Asia and Australia. China declined due to a subdued peak season for refractive laser surgery in the summer months of 2024 compared to the previous year and the normalization of refractive consumables inventories.
EBIT and EBIT margin significantly below previous year
In fiscal year 2023/24, Carl Zeiss Meditec generated operating earnings (earnings before interest and taxes: EBIT) of EUR 194.5 million (previous year: EUR 348.1 million). The decline is mainly due to the weak revenue development and a significantly less favorable product mix compared to the previous year, mainly as a result of the reduction in inventories of surgical consumables in the Chinese sales channel and the weaker than expected demand for refractive treatments in China in the seasonally important summer months. Adjusted for the effects associated with the DORC acquisition, operating costs were reduced slightly by around 1% for the year as a whole - this was due in particular to more stringent resilience measures in the areas of research and development as well as sales and marketing over the course of the financial year.
The EBIT margin was 9.4% in the 2023/24 financial year (previous year: 16.7%). This includes scheduled negative special effects in connection with the acquisition of DORC. In Q4 2023/24, amortization from purchase price allocation was incurred for the first time. Other significant burdens resulted from the inventory revaluation in connection with the initial consolidation of DORC and integration costs. Furthermore, intangible assets from a previous acquisition (CZM Cataract Technologies Inc., Reno, formerly "IanTECH, Inc.") were impaired in the fourth quarter of 2023/24 due to new, more conservative planning assumptions. This was offset by proceeds already recognized in Q2 2023/24 from a settlement payment to settle a legal dispute with competitor Topcon Ltd. in the USA.
Adjusted for one-off effects and the pro rata earnings contribution from the DORC acquisition, the EBIT margin amounted to 12.5% (previous year: 17.4%). EBITA, which only includes amortization from purchase price allocation (including the impairment of the assets of CZM Cataract Technologies Inc.), amounted to EUR 248.9 million (previous year: EUR 358.6 million), while the EBITA margin was 12.0% (previous year: 17.2%). Earnings per share also declined to EUR 2.01 (previous year: EUR 3.25). Taking into account the lower profit and the net financial debt of EUR -327.4 million (previous year: net liquidity of EUR 863.8 million) that arose for the first time as a result of the DORC acquisition, a dividend of EUR 0.60 (previous year: EUR 1.10) will be proposed.
Forecast for the new financial year 2024/25
The company expects the global macroeconomic environment to remain challenging in financial year 2024/25 and does not anticipate a rapid recovery in the investment climate for devices or continued pressure on consumer spending on elective procedures - although the underlying long-term positive development trends for the market described above remain fundamentally intact. Moderate sales growth is expected for the 2024/25 financial year, including the additional contribution from the full-year consolidation of DORC.
In the 2024/25 financial year, EBITA and the EBITA margin are expected to be stable to slightly higher (FY 2023/24: EBITA EUR 248.9 million, EBITA margin: 12.0%).
To ensure that targets are achieved, the cost containment measures ("Resilience" program) will remain in place in order to keep the cost trend before consolidation of DORC roughly stable.
New product launches such as KINEVO® 900 S and possible further VISUMAX® 800 approvals offer additional potential for business development over the course of the year, despite some remaining uncertainties regarding the timing of approvals. There are also additional opportunities in targeted public measures to promote the economy and healthcare investments, particularly in the Chinese market.
The aim is to gradually increase the EBITA margin in subsequent years. In the long term, the company expects to achieve an EBITA margin of around 16-20% again (2023/24: 12.0%). This is to be supported by the increasing share of recurring revenue, for example from consumables, implants and services. Recurring revenue amounted to 47% in the 2023/24 financial year (previous year: 43%), with the DORC acquisition making a particularly positive contribution.
Dr. Markus Weber, CEO of Carl Zeiss Meditec AG, comments on the results of the fiscal year: "2023/24 was a difficult fiscal year for us - we had to cope with a significant slowdown in the global economy and the consumer climate as well as a pronounced reluctance to invest in the device business in several core markets - especially in North America. The resilience measures that were tightened up over the course of the financial year have had the expected effect and the forecast for adjusted EBIT, which was lowered in June, has therefore been safely achieved. The general conditions for 2024/25 are not expected to become any easier - the weakness currently being observed in the Chinese market in particular prompts us to adopt a cautious outlook. Nevertheless, we are confident that we will be able to return to growth and achieve at least stable to slightly positive EBITA development in the coming financial year. In subsequent years, we will also gradually return to higher profitability, supported by the growth of our recurring sales."
Turnover by strategic business division
Figures in million euros 12 months
2023/24 12 months
2022/23 Change on previous year % Change
on previous year % (currency-adjusted)
Ophthalmology 1,589.2 1,576.5 +0.8 +1.8
Microsurgery 477.0 512.8 -7.0 -5.6
Group as a whole 2,066.1 2,089.3 -1.1 0.0
Turnover by region
Figures in million euros 12 months
2023/24 12 months
2022/23 Change on previous year % Change
on previous year % (currency-adjusted)
EMEA 584.3 517.3 +12.9 +14.3
Americas 532.9 570.7 -6.6 -5.4
APAC 949.0 1,001.2 -5.2 -4.3
Group as a whole 2,066.1 2,089.3 -1.1 0.0
Further information on our publication and the analyst conference call on the results for the 2023/24 financial year can be found at
https://www.zeiss.de/meditec-ag/investor-relations/finanzkalender/telefonkonferenzen.html
Contact for investors and press
Sebastian Frericks
Head of Group Finance & Investor Relations, Carl Zeiss Meditec AG
Tel. 03641 220-116
E-mail: investors.med@zeiss.com
www.zeiss.de/presse
