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    JEN   DE000A2NB601


Delayed Xetra  -  05/27 11:35:11 am EDT
25.70 EUR   +2.31%
05/26JENOPTIK AG : Deutsche Bank reiterates its Neutral rating
05/24JENOPTIK AG : Berenberg maintains a Buy rating
05/20JENOPTIK AG : Receives a Buy rating from Berenberg
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Jenoptik AG : A matter of momentum

12/13/2018 | 05:08am EDT

Jenoptik is a German integrated photonics group that divides its activities into three segments: Optics & Life Science, Mobility and Defense & Civil Systems.

Jenoptik is a Germany-based global leader in optical and photonics technologies with a presence in eighty countries; two-thirds of the company’s turnover is also generated abroad.




During this last quarter, the acquisition of the Canadian company Prodomax Automation and the German company Otto Vision Technology have enabled Jenoptik to strengthen its position in the industry - mainly automobile - where its optical technologies are already integrated with cutting-edge robotic solutions on assembly chains.

This segment represents, however, a reduced part (27 billion euros) of the global photonics market which is estimated at 600 billion: the main markets are the sub-contracting to semiconductor manufacturers (120-140 billion), display and lightening technologies (152 billion), and consumer electronics (72 billion).

For Jenoptik, 2019 will be the year where there will be a clear focus on growing in North America as well as the launch of a new business activity in mechatronics. Or, to cite Wikipedia, ’ a multidisciplinary branch of engineering that focuses on the engineering of both electrical and mechanical systems, and also includes a combination of robotics, electronics, computer, telecommunications, systems, control, and product engineering.'

According to Jenoptik’s management, this positioning should allow an annualized future turnover growth of between 5 and 10%, several points above the market, and to keep the EBITDA margin around 15%.

On a financial level, Jenoptik - selected based on its fundamentals by MarketScreener’s Stock Screener - distinguishes itself by a robust financial position and a modest but stable growth. 

The leverage is reduced to a minimum, with a net debt of only 36 million euros, or exactly one-third of the EBITDA of 105 million euros generated last year. In parallel, the cash continues to accumulate on the balance sheet.

As there aren’t any shares issues either, all the company’s acquisitions - for a total amount of 110 million euros since 2013 - have been auto financed with the cash flow.

At this point though, it’s difficult to say something about the profitability of these external growth investments, unlike for example a case like Accenture. For that we’d need to have more information and - even if we don’t wish for it to happen - some of those reversed cycles the semiconductor industry is so used to. 

The turnover grows with an annualized average of 3.5% since 2008, but the operating profit grows at a faster pace (9%), while the net result (71%) benefits from the decreasing debt and the financial cost that comes with this.




In any case, we see that the growth ambitions of the management are higher than the historical performance of the group. The future financial years will show us whether or not these objectives are realistic, or if they turn out to be just a financial announcement that was a tad too enthusiastic.

In 2017, the group generated a net result of 72 million euros. The cash profit (free cash flow) was 63 million euros before acquisitions, against 72 million last year.

In 2018, all of the profit - and even a little more, but the difference was made up by a tiny issue of debt - has been reinvested in acquisitions: the future value creation will largely depend on the pertinence of this strategic choice, which was without a doubt necessary to get a foot in the door in new business activities.

At 26 euros per share, the market capitalization (1.5 billion euros) represents thus a multiple of around 20 times the cash profit. In the current interest rate context, the valuation is therefore well deserved if the growth targets are met, or exceeded. This is the analyst consensus, which has just been revised upwards - a momentum that lay behind the investment on behalf of MarketScreener’s European Portfolio.




Difficulties when it comes to making the recent acquisitions profitable, a heavy recession and/or a reversal of the cycle in the semi-semiconductor industry would without a doubt lead to an immediate compression of the multiple.

We observe that Jenoptik’s valuation has remained more or less unchanged during fourteen years, as a result of a modest growth and stable operating results. The share price tripled in 2006 following an activity spike among manufacturers and OEMs (original equipment manufacturers) of semiconductors, the company’s biggest clients.

We’ve also commented on these exceptional market conditions - after almost a decade of drought - in several articles, among which were features on Applied Materials, and KLA-Tencor.

In Jenoptik’s case, the good performance of the share price will be directly linked to the continuation of this prosperous phase. The more skeptical ones out there, however, have pointed out the clear slowdown of the last months, illustrated by the deflation of ‘inflated’ valuations last year. 

The position will be quickly arbitrated if this reversing trend is confirmed.

(The author is not a shareholder.)

© MarketScreener.com 2018
All news about JENOPTIK AG
05/26JENOPTIK AG : Deutsche Bank reiterates its Neutral rating
05/24JENOPTIK AG : Berenberg maintains a Buy rating
05/20JENOPTIK AG : Receives a Buy rating from Berenberg
05/12JENOPTIK AG : Deutsche Bank remains Neutral
05/12JENOPTIK AG : Receives a Buy rating from Warburg Research
05/11JENOPTIK AG : Warburg Research gives a Buy rating
05/11TRANSCRIPT : Jenoptik AG, Q1 2022 Earnings Call, May 11, 2022
05/10Jenoptik AG Reports Earnings Results for the First Quarter Ended March 31, 2022
04/22JENOPTIK AG : Hauck & Aufhauser reiterates its Buy rating
04/12JENOPTIK : presents versatile photonic solutions at LASER World of PHOTONICS
More news
Analyst Recommendations on JENOPTIK AG
More recommendations
Sales 2022 927 M 993 M 993 M
Net income 2022 74,9 M 80,2 M 80,2 M
Net Debt 2022 450 M 482 M 482 M
P/E ratio 2022 19,2x
Yield 2022 1,24%
Capitalization 1 439 M 1 542 M 1 542 M
EV / Sales 2022 2,04x
EV / Sales 2023 1,82x
Nbr of Employees 4 949
Free-Float 89,0%
Upcoming event on JENOPTIK AG
Income Statement Evolution
Mean consensus BUY
Number of Analysts 7
Last Close Price 25,14 €
Average target price 34,43 €
Spread / Average Target 36,9%
EPS Revisions
Managers and Directors
Stefan Traeger Chairman-Executive Board, President & CEO
Hans-Dieter Schumacher Chief Financial Officer
Matthias Wierlacher Chairman-Supervisory Board
Heinrich Reimitz Member-Supervisory Board
Andreas Tünnermann Member-Supervisory Board
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