Jenoptik : reports good earnings and full order books at the end of first nine months 2016

• Revenue slightly up, as expected, to 492.6 million euros
• EBIT improved by 6.2 percent to 47.1 million euros
• Free cash flow increased more than 50 percent to 43.1 million euros
• 2016 EBIT margin expected at upper end of target range

The Jenoptik Group ended the first nine months of 2016 as well as expected, with order figures, earnings and cash flow all seeing very good growth.

'Despite underlying conditions that have not always been favorable, Jenoptik's business has shown very good development in the last nine months. In both the Optics & Life Science as well as Defense & Civil Systems segments, revenue and earnings continued to grow compared to the prior year. The market environment proved to be more difficult for our Mobility segment, with traffic safety technology in particular affected by a lack of investment by oil-exporting countries. Nevertheless, the major orders we have received will give a significant boost to our business operations in the new year,' said Jenoptik President & CEO Michael Mertin. 'With our know how and the combination of our technology, software and data expertise we serve megatrends and open up new markets, as demonstrated with the latest orders as systems supplier and partner for the German truck toll on federal highways as well as for the business model of traffic service provision in Australia,' Mertin added.

EBIT margin improved to 9.6 percent, sharp increase in order backlog and frame contracts

In the first nine months of 2016, group revenue grew to 492.6 million euros and, as expected, was 1.0 percent up on the prior-year figure (prior year 487.7 million euros). A major contributor to growth was the increased demand seen in the defense technology as well as the information and communications technology industries. Revenue was significantly boosted in Germany and Asia/Pacific.

EBIT improved by 6.2 percent to 47.1 million euros (prior year 44.3 million euros), thus reaching its highest value to date in a nine-month period. This was in part due to a rise in the gross margin. At 9.6 percent in the nine-month period, the EBIT margin significantly exceeded the prior-year figure (prior year 9.1 percent). In the third quarter, Jenoptik generated EBIT of 19.8 million euros (prior year 17.7 million euros), thereby achieving an operating margin of 11.9 percent (prior year 10.3 percent). For the cumulative reporting period, earnings before interest, taxes, depreciation and amortization (EBITDA) rose 5.8 percent to 67.5 million euros (prior year 63.8 million euros). The financial result improved to minus 1.4 million euros (prior year minus 3.0 million euros). Overall, at 45.6 million euros, the Group reported higher earnings before tax (EBT) compared with the prior year (prior year 41.3 million euros). After taxes, this resulted in earnings per share (EPS) improving a significant 15.7 percent to 0.69 euros (prior year 0.59 euros).

In the first nine months 2016, the order intake reached a new record high of 547.7 million euros, exceeding the prior-year figure of 479.0 million euros by 14.3 percent. The Group received several major orders in the third quarter. The book-to-bill ratio, that of order intake to revenue, thus came to 1.11 (prior year 0.98). At 415.0 million euros, the order backlog was 11.1 percent up on the comparative figure (31/12/2015: 373.4 million euros). The Group also received frame contracts worth 144.0 million euros (31/12/2015: 59.2 million euros). Frame contracts are agreements or framework arrangements for which the exact amount and probability of occurrence cannot yet be determined.

As of September 30, 2016, the number of employees in the Jenoptik Group increased slightly to 3,545 (31/12/2015: 3,512 employees). This increase is solely due to an expansion of international business. At the end of the reporting period, a total of 679 people were employed at the foreign locations (31/12/2015: 629 employees).

Strong cash flow significantly reduced net debt, equity continued to rise

As of September 30, 2016, cash flows from operating activities came to 56.3 million euros, up on the prior-year figure of 33.5 million euros. Free cash flow increased more than 50 percent to 43.1 million euros (prior year 28.6 million euros), a positive development mainly influenced by a smaller build-up of working capital.

A considerably improved cash flow helped to increase cash and cash equivalents to 120.2 million euros at the end of the reporting period (31/12/2015: 83.8 million euros). With slightly higher financial liabilities, net debt fell to 14.9 million euros as of September 30, 2016 (31/12/2015: 43.9 million euros).

At 58.0 percent, the equity ratio rose to a new record (31/12/2015: 56.6 percent). 'We are extremely satisfied with the course our business has taken to date. We remain on a path of growth with very good profitability and strong cash generation,' said CFO Hans-Dieter Schumacher.

Optics & Life Science as well as Defense & Civil Systems driving growth, good order backlog in Mobility

In the first nine months of 2016, the Optics & Life Science segment generated revenue of 164.5 million euros, an increase of 4.5 percent (prior year 157.4 million euros). The driver of this growth was mainly the business with solutions for the information and communications industry and, in part, for the semiconductor equipment industry. Sales in the medical technology and life sciences markets remained stable. The segment EBIT improved by 71.6 percent to 24.5 million euros (prior year 14.3 million euros). In the first nine months of 2016, the segment thus achieved an EBIT margin of 14.9 percent (prior year 9.1 percent), in the third quarter of 19.9 percent (prior year 7.6 percent). Order intake rose by 18.7 percent to 172.2 million euros (prior year 145.1 million euros). Set against revenue, this results in a book-to-bill ratio of 1.05 (prior year 0.92). At the end of September 2016, the order backlog was worth 75.6 million euros (31/12/2015: 73.7 million euros). The segment also has frame contracts worth 14.6 million euros (31/12/2015: 5.5 million euros).

The Mobility segment generated revenue of 169.0 million euros in the first nine months of 2016, thereby falling short of the prior year (prior year 176.2 million euros). There was good demand from the automotive industry, particularly in the field of laser machines. Traffic safety revenue, however, remained below the prior-year figure, as expected, due to a lack of investment by oil-exporting countries. Due to the fall in revenue, the changed product mix and upfront investment for new projects the segment EBIT contracted 20.1 percent to 12.7 million euros (prior year 15.9 million euros), with the EBIT margin accordingly coming to 7.5 percent (prior year 9.0 percent). The order intake was worth 196.9 million euros, slightly up on the prior year (prior year 195.7 million euros). Compared to the figure at year-end 2015, the order backlog improved by 26.8 percent to 117.5 million euros (31/12/2015: 92.7 million euros). In addition, frame contracts accounted for 78.3 million euros (31/12/2015: 11.5 million euros), a figure largely attributable to the traffic technology projects in Australia and Canada received in the third quarter and the order for the delivery of monitoring systems for truck toll payment on German federal highways.

In the first nine months of 2016, revenue in the Defense & Civil Systems segment grew 4.9 percent, to 162.2 million euros (prior year 154.7 million euros). This was mainly due to good development in the fields of energy and aviation systems, and in the service business. The segment EBIT improved by 6.5 percent to 13.2 million euros (prior year 12.4 million euros), primarily the result of good revenue growth and a changed product mix. In the first nine months, the EBIT margin came to 8.2 percent (prior year 8.0 percent). The Defense & Civil Systems segment was also awarded contracts for several major international projects in the third quarter. The order intake consequently improved by 30.6 percent to 181.1 million euros (prior year 138.7 million euros), while the order backlog increased to 223.9 million euros (31/12/2015: 209.7 million euros). The segment also had frame contracts worth 51.1 million euros (31/12/2015: 42.1 million euros).

2016 EBIT margin expected at upper end of target range

Following a good development of business in the first nine months of 2016, as scheduled, the Executive Board is now expecting the group EBIT margin for the full year to come in at the upper end of the previously forecast range of between 9.0 and 9.5 percent (prior year 9.2 percent). It is still anticipating group revenue of between 680 and 700 million euros for 2016 (prior year 668.6 million euros). This forecast presupposes that political and economic conditions do not worsen.

The quarterly report is available at www.jenoptik.com/investors/reports-and-presentations and on the Jenoptik app for corporate publications (iOS and Android). Visuals can be retrieved from the image database in the Current Events/Financial Reports gallery.

This announcement can contain forward-looking statements that are based on current expectations and certain assumptions of the management of the Jenoptik Group. A variety of known and unknown risks, uncertainties and other factors can cause the actual results, the financial situation, the development or the performance of the company to be materially different from the announced forward-looking statements. Such factors can be, among others, changes in currency exchange rates and interest rates, the introduction of competing products or the change of the business strategy. The company does not assume any obligation to update such forward-looking statements in the light of future developments.

About Jenoptik

As an integrated photonics group, Jenoptik divides its activities into five divisions: Optical Systems, Healthcare & Industry, Automotive, Traffic Solutions as well as Defense & Civil Systems. Its customers around the world mainly include companies in the semiconductor equipment industry, automotive and automotive supplier industry, medical technology, security and defense technology as well as the aviation industry. Jenoptik has about 3,500 employees and generated revenue of approximately 670 million euros in 2015.