Zeiss Braces for Hard Times Ahead
Economic struggles burden Zeiss
dpa-afx Oberkochen
German technology powerhouse, Zeiss, anticipates a continued downturn in its business due to geopolitical strife and a sluggish consumer market. In a bold statement, CEO Karl Lamprecht expressed concern over the increasing complexity of the business landscape. However, he remains hopeful, affirming Zeiss' solid footing in the industry. The Zeiss Group, responsible for developing, manufacturing, and distributing measurement and medical technology, along with microscope solutions, boasts a workforce of approximately 46,500 individuals. Their medical technology subsidiary, Carl Zeiss Meditec, is publicly traded.
Zeiss Wrestles with Economic Hurdles
The recent fiscal year, concluding in September, proved challenging for the conglomerate. Revenue soared by 8% to nearly 11 billion euros. In terms of operating profit before interest and taxes (EBIT), the company recorded 13%, or about 1.4 billion euros, but this figure represented a 14% decrease compared to the preceding year. The consolidated net income plummeted from nearly 1.3 billion euros to 1 billion euros.
For the ongoing fiscal year, Zeiss projects revenue growth in the low single-digit percentage range. The company aims to maintain 11% of sales as EBIT.
Cash Outflows Planned Despite Challenging Conditions
Despite the grim forecast, Zeiss remains committed to significant investments, with projected outflows in the mid-three-digit million range. CEO Lamprecht emphasizes Zeiss' innovative prowess as the driving force behind its success, disclosing that the company invests 15% of its revenue in research and development.
Last year, Zeiss surpassed the 10 billion euro revenue mark and announced plans to invest 3.5 billion euros in infrastructure over the next five years. Most of this capital will be channeled into projects within Germany, including the expansion of the Oberkochen site and the establishment of a new site in Aalen-Ebnat in the Ostalb district.
Enrichment Insights:
- Carl Zeiss Meditec's FY2025 Revenue Projection: Carl Zeiss Meditec is targeting revenue of €2.19 billion for FY2025, representing a 6% growth compared to the previous fiscal year[2].
- Carl Zeiss Meditec's EBITA Target for FY2025: The company aims for an EBITA of €276.2 million in FY2025, suggesting a stable to slightly higher margin compared to the previous year's €246 million[2]. While the full-year EBITA margin target is not explicitly detailed, the Q2 EBITA margin was reported at 13.9%[2].
- Despite the challenging economic conditions, Zeiss, a German technology powerhouse, plans to invest heavily in research and development, with projected outflows in the mid-three-digit million range.
- The medical technology subsidiary of Zeiss, Carl Zeiss Meditec, is publicly traded and has a solid footing in the industry.
- In the upcoming fiscal year, Zeiss anticipates a low single-digit percentage increase in revenue and aims to maintain 11% of sales as EBIT.
- In addition to the current expansion of the Oberkochen site and the establishment of a new site in Aalen-Ebnat, Zeiss plans to invest 3.5 billion euros in infrastructure over the next five years, most of which will be allocated within Germany.
