Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Carl Zeiss Meditec AG (CZMWF, Financial) reported a 3.2% increase in revenue for Q1 2025 compared to the same period last year.
- The company saw a significant recovery in order entry, reaching €522 million, a 34.4% increase at constant currency.
- The approval of the Visa Max 800 in China was achieved earlier than expected, potentially boosting future sales.
- Recurring revenue now accounts for 47.3% of total revenue, indicating a stable income stream.
- The company has implemented strict cost control measures, leading to a reduction in R&D expenses and underlying operating expenses.
Negative Points
- When adjusted for FX and acquisitions, revenue actually declined by 7.3% due to strong prior year comparisons and a weaker investment climate, particularly in China.
- EBITA declined by 23.5% compared to the prior year, resulting in a margin drop from 9.7% to 7.2%.
- The gross margin decreased to 51.4% due to an unfavorable product mix and price cuts in IOLs.
- Net income dropped significantly from €37 million to €160 million, with earnings per share declining by 57.1%.
- The company faces ongoing challenges in China, with a decline in sales due to product cycle transitions and restrictive investment climates.
Q & A Highlights
Q: Can you provide an update on the Chinese New Year season, particularly regarding volume trends and pricing pressures? Also, how is the demand for the VisuMax 800 following its earlier-than-expected approval in China?
A: We observed stabilization in the Chinese market, especially in refractive laser surgery, despite the dynamic environment. The VisuMax 800 has been well-received, with customers excited about its new features. We are maintaining a high pace of innovation to support market share growth, particularly with Smile Pro and other advanced procedures. (Respondent: CEO)
Q: Why hasn't the guidance been clarified with more granularity as previously implied? Has visibility improved at all?
A: We are confirming the guidance given earlier, and uncertainties remain high. We haven't gained much more visibility, especially regarding the spring peak in China for our refractive business. Major influences like tariff escalations are still uncertain. (Respondent: CFO)
Q: Can you quantify what you mean by "moderate growth" and provide more clarity on the top-line guidance?
A: We aim to grow at least as fast as the market, targeting low single-digit growth. The growth depends heavily on market composition and conditions, particularly in China, where we see stabilization and opportunities due to new innovations. (Respondent: CEO)
Q: How has the volume of IOLs developed, and what are your expectations for market share and volume growth?
A: We have seen a strong increase in units and volume, indicating a market share increase. Our strategy focuses on premium lenses and higher price realization in private sector clinics, which is working well. We expect volume growth to contribute positively to gross profit. (Respondent: CFO)
Q: Regarding the VisuMax 800, how do you expect it to stimulate demand given the current underutilization of the installed base?
A: The VisuMax 800, with its advanced features and new applications like presbyopia treatment, is expected to create significant value for customers. We anticipate strong demand for replacements and new installations, particularly in China, where the market is poised for growth. (Respondent: CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
