In fiscal year 2008/09 (ended 30 September) the Carl Zeiss Group clearly felt the impact of the global economic crisis, particularly in its industrial business. In contrast, a positive trend was reported by the Medical Systems, Microscopy and Consumer Optics/Optronics Groups. The company presented the figures for fiscal year 2008/09 during its Annual Press Conference in Stuttgart.

Revenues and earnings below last year’s level

In fiscal year 2008/09 the Carl Zeiss Group generated revenues totaling EUR 2.1 billion, 23 percent less than the previous year (EUR 2.7 billion). Although the global recession had a negative effect on the exports of German industry, Carl Zeiss continued to generate over 80 percent of its revenues outside Germany. This reflects the international footprint of the company.

Due to the slump in demand in industrial business, EbIT (Earnings before Interest and Taxes) has dropped to minus EUR 67 million1) (last year: EUR 343 million).

“The industrial business particularly suffered from the global recession. We took consistent action at an early stage and implemented the appropriate measures to secure the future economic viability of the company and safeguard as many jobs as possible,” said Dr. Dieter Kurz, President and CEO of Carl Zeiss AG. “Due to the considerable reduction in business volume, a negative result could not be avoided despite consistent cost-saving measures.”

Guarantee of employment until 30 September 2010

In fiscal year 2008/09 Carl Zeiss took consistent measures to counteract the repercussions of the global recession. Together with employee representatives, an agreement was reached on an “overall package to overcome the economic situation,” including a guarantee of employment for the German sites of the company until the end of September 2010.

This package enabled Carl Zeiss to reduce its manpower costs. A major part of the savings was achieved by the willingness of employees to forgo most of their vacation and Christmas bonuses and by the postponement of a scheduled increase in pay rates. Another part involved the use of flexible HR tools such as the working of shorter hours, the expiry of temporary employment contracts and various early retirement models. In return, Carl Zeiss has agreed not to lay off any personnel before 30 September 2010.

Financial highlights of fiscal year 2008/09

The strong balance sheet and the broad business portfolio laid a solid foundation for overcoming the challenges of fiscal year 2008/09: on the balance sheet date, equity totaled more than one billion euros, equating to a ratio of 29 percent (last year: 33 percent). This underscores the financial stability and economic independence of the company.

Cash flow before income taxes is positive and totaled EUR 76 million, the equivalent of three percent of revenues (last year: EUR 496 million; 18 percent of revenues). “Our targeted cost management, inventory reductions, corporate-wide cost-cutting measures, the review of all investments and consistent receivables management have all played their part in stabilizing cash flow during the fiscal year and achieving a positive overall value. In view of the general economic framework, we see this as a success,” emphasized Dr. Michael Kaschke, Member of the Executive Board and CFO of Carl Zeiss AG.

On the balance sheet date, the company had cash and cash equivalents totaling EUR 977 million (last year: EUR 950 million).

Carl Zeiss started fiscal year 2008/09 with net liquid assets of EUR 615 million. After the end of the reporting period this figure amounted to EUR 478 million. “We continue to have a healthy liquidity situation. During the past fiscal year we were once again able to place promissory note loans with a total volume of EUR 160 million. This shows that, in addition to good internal financing from the operating cash flow, we are in a position to acquire further funds on the financial market at any time,” Kaschke continued.

In fiscal year 2008/09 Carl Zeiss invested EUR 81 million in property, plant and equipment (last year: EUR 118 million) – primarily in leading edge production facilities. In addition, the company implemented modernizations and improved the infrastructure at company headquarters in Oberkochen. This investment figure compared to depreciations totaling EUR 95 million (last year: EUR 99 million).

Investments in future-oriented projects remain at high level

Carl Zeiss maintained its investments in research and development at a high level in fiscal year 2008/09. “We have invested, and will continue to invest, in promising future-oriented projects in all divisions of the company,” Kurz stated. The company invested EUR 284 million in its research and development activities during the reporting year. This corresponds to 14 percent of revenues (last year: EUR 321 million; 12 percent of revenues). The company’s innovation rate shows that these investments are worthwhile: Carl Zeiss generates around 60 percent of its revenues with products not older than five years.

During the reporting year the company applied for 346 new patents. Overall, Carl Zeiss holds approximately 3,600 patents around the globe.

Headcount almost unchanged

On the balance sheet date, Carl Zeiss had 12,872 employees (last year: 13,060) across the globe, of whom 8,310 (last year: 8,440) worked in Germany. This slight decrease is attributable to attrition and minor manpower adjustments outside Germany. During the reporting year the company trained about two percent more young people than in the previous year. A total of 451 young persons completed training in technical or commercial occupations (last year: 441).

Development of the business groups

The Semiconductor Technology Group was particularly badly hit by the continuing downturn in the semiconductor industry and the general recession: compared to last year, revenues dropped 62 percent to EUR 386 million (last year: EUR 1,018 million).

The Medical Systems Group, most of which is made up of the publicly listed company Carl Zeiss Meditec AG, reported a stable, positive trend. The business group generated revenues of EUR 706 million, an increase of seven percent over last year (EUR 661 million).

Revenues of the Microscopy Group rose eight percent to EUR 365million (last year: EUR 339 million).

The Industrial Metrology Group ended fiscal year 2008/09 with revenues totaling EUR 304 million, corresponding to a decrease of 19 percent (last year: EUR 374 million).

During the reporting year the Consumer Optics/Optronics Group, which combines the company’s business with binoculars, planetariums, camera and cine lenses and optronic products, showed a stable development: revenues remained at virtually the same level as last year (minus one percent) and reached EUR 304 million (last year: EUR 309 million).

The eyeglass lens manufacturer Carl Zeiss Vision, in which Carl Zeiss and the EQT private equity group have equal shares, closed the fiscal year with revenues totaling EUR 879 million (last year: EUR 892 million). On the balance sheet date, 11,659 employees (FTEs) worked for the company across the globe (last year: 12,830); 1,138 of them (last year: 1,187) in Germany. The Carl Zeiss Vision Group is valued at equity in the financial statements of the Carl Zeiss Group.

Outlook

Carl Zeiss will continue to feel the impact of the global economic crisis for some time to come. As an enterprise of the Carl Zeiss Foundation, Carl Zeiss acts with a long-term perspective and in a responsible manner.

Initial positive signs are evident in the first few weeks of the current fiscal year. “In recent weeks the market covered by the Semiconductor Technology Group, which was particularly badly hit by the global economic crisis, has shown a very positive development. We are seeing a high level of demand from the major chip manufacturers, to which – thanks, above all, to our flexible employees – we have successfully responded at short notice,” said Kurz.

The markets for the solutions offered by the Industrial Metrology Group are still subdued. The Medical Systems, Microscopy and Consumer Optics/Optronics Groups continue to show a stable, positive trend. Overall, Carl Zeiss predicts a clear turnaround and a positive development of the company for fiscal year 2009/10.

Overview: Development of the business groups in fiscal year 2008/09

*The values deviate from the published figures of Carl Zeiss Meditec AG as a result of different consolidation models.
** The Carl Zeiss Vision Group, in which Carl Zeiss and the EQT private equity group have equal shares, is valued at equity in the financial statements of the Carl Zeiss Group

1) Data corrected

Source: Carl Zeiss AG