After a slight decline of 2 percent in revenues last year, ZEISS reported a significant recovery for the first half of its current fiscal year, with total H1 sales increasing 6 percent year-on-year to €3.4 billion, or by 9 percent in constant currencies. With roughly stable revenues in the Semiconductor Manufacturing Technology and the Industrial Quality & Research segments, the group’s growth was largely driven by double digit increases in sales of its Medical Technology and Consumer Markets’ units.
In particular, Consumer Markets revenues, which consist for the most part of eyeglass lenses’ sales, jumped by 18 percent as compared to fiscal year 2019, reaching €681 million for the semester. On a comparable currency basis, the segment’s revenues increased by 24 percent. In the previous fiscal year ended Sept. 30, the segment had reported a 9 percent drop in annual revenues due to the impact of the Covid-19 outbreak and related lockdowns.
However, after a very difficult spring, the company had already announced that sales had started to pick-up again in the summer, a recovery largely confirmed by the H1 figures announced this week. The group commented that the increase in sales in the Consumer Markets’ segment came with market share gains, and that the unit’s outlook for the second half of the year remained positive in spite of ongoing lockdown restrictions in some regions. However, conditions for logistics and delivery reliability are expected to remain challenging.
A few weeks ago, Matthias Metz, CEO of ZEISS Consumer Markets, told us that the company had focused on three main priorities during the Covid-19 crisis: guaranteeing the health and safety of its employees, strengthening its partnership with its opticians through the continuation and the extension of its customer support, introducing new services such as hygiene support, virtual products’ presentations or remote training sessions, and studying new market opportunities.
Metz also said that the whole eyecare sector is trending to becoming more and more integrated regarding eye and vision care as well as more and more digitally oriented with for instance remote consultations gaining ground. In this context, ZEISS launched its ZEISS Visu 360 tele-optometry service at the end of last year, a new digital platform connecting the different ECPs with their patients via remote access and allowing for remote eye exams. The system is progressively launched internationally in accordance with regional and national regulations.
Sustained and significant investments in Research & Development have also been highlighted as a pillar of ZEISS strategy. Commenting on the latest results, Karl Lamprecht, CEO of the group, said that R&D investments from the past years were now starting to pay off and that the company would pursue with this strategy. R&D investments for the semester totaled €425 million, or €27 million more than in the same semester in the previous year, resulting in a stable ratio of 12 percent of total revenues. This includes the recently opened ZEISS Innovation Center in California, as previously reported.
The company also reaffirmed its commitment to its two major sustainability goals: the switch to green power by 2022 and a larger objective of carbon-neutrality for its own activities by 2025. In its sustainability report published earlier this year, the company said that, compared to its fiscal year 2009/10, it has achieved significant reductions in its annual relative consumption of energy and water, respectively down by 51 percent and 48 percent. Annual relative waste volumes and CO2 emissions also dropped by 31 percent and 50 percent in the same period.
At group level, roughly 90 percent of H1 revenues were generated outside Germany. ZEISS said that the Americas and Asia-Pacific regions grew strongly, on a constant currency basis, while the EMEA markets reported a slight growth in the period.
The ZEISS group reported earnings before interest and tax of €591 million for the semester, resulting in a 17 percent margin, an increase of 2.8 percentage points as compared to H1 2019/20.
The company, which is celebrating its 175th anniversary this year, said that it expected an increase in revenues for the current fiscal year, in spite of a still challenging Covid-19 situation.