JENA, 11 December 2024

Carl Zeiss Meditec generated revenue of €2,066.1m in fiscal year 2023/24 (prior year: €2,089.3m), corresponding to a decline of -1.1% (adjusted for currency and acquisition effects: -4.8%). Adjusted earnings before interest and taxes (EBIT) fell to €245.9m (prior year: €362.9m) and were therefore comfortably within the guidance after 9M 2023/24 of €225 – 275m. The adjusted EBIT margin, based on revenue excluding the contribution from the DORC acquisition, amounted to 12.5% (prior year: 17.4%).

In the 2023/24 fiscal year, the Ophthalmology Strategic Business Unit (SBU) recorded slight growth of +0.8% (adjusted for currency effects: +1.8%, adjusted for currency and acquisition effects: -4.5%) with revenue of €1,589.2m (prior year: €1,576.5m). The initial contribution from the acquisition of the company DORC, specialized in retinal surgery, amounted to €99.9m.

In the reporting period, weaker sales of consumables, particularly in connection with the reduction in inventories of surgical consumables in the Chinese distribution channel which was completed in the first half of the year, the volume-based procurement of intraocular lenses in China, and the decline in demand in the equipment business had a dampening effect. The factors behind this reduced demand included high interest rates, increased financing costs and health policy uncertainties in some core markets such as North America, Germany and Japan. By contrast, the consolidation of DORC had a positive impact in the second half of the year.

The Microsurgery strategic business unit generated revenue of €477.0m (prior year: €512.8m), corresponding to a decline of -7.0% (adjusted for currency effects: -5.6%). This was mainly due to the weak neurosurgery business, which was also affected by the reluctance of various markets to invest, particularly in North America, in light of higher financing costs.

Double-digit percentage growth in revenue in EMEA

Revenue in the EMEA region increased by +12.9% in the reporting period (adjusted for currency effects: +14.3%) to €584.3m (prior year: €517.3m). Positive contributions to growth came from France, Italy and Spain, among others.

Revenue in the Americas region decreased significantly by -6.6% (adjusted for currency effects: -5.4%) from €570.7m to €532.9m. Revenue declined in both the USA and Latin America.

The APAC region similarly recorded a decline in revenue. Revenue decreased by -5.2% (adjusted for currency effects: ‑4.3%) to €949.0m (prior year: €1,001.2m). South East Asia and Australia, in particular, contributed to growth. China saw a decline due to a subdued peak season for refractive laser surgery in the summer months of 2024 compared to the previous year, following the normalization of refractive consumables inventories.

EBIT and EBIT margin significantly below prior year

Carl Zeiss Meditec AG recorded an operating result (earnings before interest and taxes, EBIT) of €194.5m (prior year: €348.1m) in fiscal year 2023/24. The decline is mainly due to the weak revenue performance and a significantly less favorable product mix compared to the previous year, primarily as a result of the reduction in inventories of surgical consumables in the Chinese distribution channel and the weaker than expected demand for refractive treatments in China in the peak season summer months. Adjusted for the effects associated with the DORC acquisition, operating costs were down slightly by around 1% for the year as a whole. This was contributed by more stringent resilience measures over the course of the fiscal year, particularly in the areas of research & development and sales & marketing.

The EBIT margin was 9.4% (prior year: 16.7%) in fiscal year 2023/24. This includes planned negative special effects related to the acquisition of DORC. There was first-time amortization from purchase price allocation in Q4 2023/24. A further significant impact resulted from the revaluation of inventories in connection with the first-time consolidation of DORC and integration costs. Furthermore, intangible assets from a previous acquisition (CZM Cataract Technologies Inc., Reno, formerly "IanTECH Inc.") were adjusted in the fourth quarter of 2023/24 in response to new, more conservative planning assumptions. This was offset by proceeds already recognized in Q2 2023/24 from a payment received in settlement of a legal dispute with competitor Topcon Ltd. in the USA.

Adjusted for special effects and the initial earnings contribution from the DORC acquisition, the EBIT margin was 12.5% (prior year: 17.4%). EBITA, which only includes amortization from purchase price allocation (including the valuation allowances on the assets of CZM Cataract Technologies Inc.), amounted to €248.9m (prior year: €358.6m), while the EBITA margin was 12.0% (prior year: 17.2%). Earnings per share also declined to €2.01 (prior year: €3.25). Taking into account the lower profit and the first-time net financial debt of €-327.4m (prior year: net liquidity of €863.8m) resulting from the DORC acquisition and the share buyback, a dividend of €0.60 (prior year: €1.10) is proposed.

Forecast for new fiscal year 2024/25

For fiscal year 2024/25, the Company continues to expect a challenging global macroeconomic environment and does not anticipate a rapid recovery in the investment climate for equipment or any decrease in the pressure on consumer spending for elective procedures – although the underlying long-term development trends for the market already described remain fundamentally positive. Moderate growth in revenue, which includes the additional contribution from the full-year consolidation of DORC, is expected for the 2024/25 fiscal year.

In the 2024/25 fiscal year, EBITA and the EBITA margin are expected stable to slightly higher (FY 2023/24: EBITA €248.9m, EBITA margin: 12.0%).

To ensure targets are met, the cost containment measures ("Resilience" program) remain in place in order to keep the cost trend before consolidation of DORC roughly stable.

New product launches such as the 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 the approvals. Additional opportunities also lie in public measures aimed at boosting the economy and healthcare investment, particularly in the Chinese market.

In the following years, a gradual increase in the EBITA margin is targeted. In the long term, the company expects to achieve an EBITA margin in the range of around 16-20% (2023/24: 12.0%). This will be supported by the increasing share of recurring revenue from consumables, implants and services etc. Recurring revenue amounted to 47% in the 2023/24 fiscal year (prior year: 43%), with the DORC acquisition making a significant contribution.

Dr. Markus Weber, President and CEO of Carl Zeiss Meditec AG commented on the results for the fiscal year: "2023/24 was a challenging fiscal year for us – we had to contend with significant cooling of the global economy and the consumer climate as well as a marked reluctance to invest in the equipment business in several core markets – particularly in North America. However, the tighter resilience measures that were imposed over the course of the fiscal year proved effective, ensuring that the lowered forecast for adjusted EBIT in June could be securely achieved. The general conditions are not expected to improve in 2024/25 – the current weakness of the Chinese market in particular has prompted us to take a cautious view. Nevertheless, we are confident that we will be able to return to growth and achieve at least stable or slightly positive EBITA development in the coming fiscal year. In the following years, we will gradually return to higher profitability, supported by the growth of our recurring revenue."

Revenue by strategic business unit

Revenue by region

Further information on our publication and the Analyst Conference Call on the results for fiscal year 2023/24 can be found at

 
Contact for investors and press

Sebastian Frericks
Head of Group Finance & Investor Relations, Carl Zeiss Meditec AG
Phone: +49 (0)3641 220-116
Email:

D.O.R.C. (Dutch Ophthalmic Research Center) Topco BV = DORC

Europe/Middle East/Africa

Asia/Pacific