German Handelsblatt: High technology: More profitable than Porsche: Carl Zeiss technology group remains on record course 003524

EUV technology from Zeiss

With the help of extreme ultraviolet light, the company and its partners have triggered a technological leap in global chip production.

(Photo: Carl Zeiss)

Stuttgart 175 years after it was founded, Carl Zeiss is continuing on its record course. The optics and technology group from Oberkochen is feeling the pandemic and global supply chain problems. But only a few companies are currently able to cope with the crisis so well and expand at the same time.
“For the 2021/22 financial year, which has been running since October, we are assuming a moderate increase in sales, with a return of well over ten percent,” said Karl Lamprecht, head of the foundation group, when presenting the balance sheet on Wednesday. The prognosis is likely to be rather conservative. Incoming orders alone rose by almost a third to EUR 8.9 billion.
The biggest driver of growth is the semiconductor business: Without Zeiss optics as a key component in the manufacture of iPhones and MacBooks, for example, the latest generation of chips in Apple devices would not exist.

In fact, apart from Zeiss – together with its partners ASML and the laser specialist Trumpf – no other company in the world has mastered the so-called EUV technology. With the help of extreme ultraviolet light, the companies have triggered a real technological leap in global chip production.

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The turnover of the semiconductor division rose in the past year by a quarter to 2.3 billion euros. Zeiss is already developing the next generation of the technology under the name High-NA-EUV. Lamprecht did not want to commit to a point in time when this would be finished.
The Zeiss boss must also take into account the listed partner ASML in his statements. Thanks to EUV, the Dutch mechanical engineering company has become the most valuable European company on the stock market. Lamprecht was nevertheless confident: “The interest of the major chip manufacturers is enormous. I’m sure we can do it. ”
At EUV, development took more than 20 years – it shouldn’t take that long, as the next generation is based on the existing technology. The capacities are already being massively expanded in Oberkochen.
Yield champion: 20 percent EBIT margin
In the year of its 175th anniversary, the company, which claims to keep pushing the boundaries of what is technically feasible, presented strong figures: Sales rose by 20 percent to 7.5 billion euros. More than 90 percent of this was in markets outside of Germany.

Earnings before interest and taxes (EBIT) also reached a new high of 1.5 billion euros. The EBIT margin was 20 percent. That is higher than that of Porsche, the king of returns, and an exceptional value for an industrial company.
In addition to semiconductors, the three other divisions – microscopy and quality assurance solutions, medical technology, and glasses and camera business – also saw double-digit growth. Microscopy is benefiting from the high demand for laboratory capacity in the pharmaceutical industry due to the search for vaccines and drugs against corona.
There is strong demand for measuring technology from Zeiss in new production facilities for electromobility, for example for quality assurance in battery production. And even the declining sales of camera and interchangeable lenses could be absorbed through strategic partnerships and the development of the lucrative business with night vision devices for hunters.
Research champion: 13 percent R&D quota
“The very good results for the financial year suggest that all Zeiss divisions can continue on the growth path they have embarked on,” emphasized Lamprecht. But no company in Baden-Württemberg invests proportionally more in research and development than Zeiss: 943 million euros or 13 percent of sales.

The equity ratio of over 50 percent is also impressive, as is the net liquidity of 2.1 billion euros and the free cash flow, which has doubled to 1.1 billion euros. The number of employees grew by ten percent to more than 35,000. The semiconductor workforce alone increased by 800 jobs; there are still a few hundred vacancies.
With full war chest, Zeiss is on a targeted shopping and cooperation tour: In December, a partnership was signed with the electronics manufacturer Vivo for smartphones, for which Zeiss supplies the optics and camera software. Zeiss also acquired a majority stake in Arivis in order to expand its microscopy business offering with innovative 3D and big data software solutions. Above all, Lamprecht purchases software expertise in order to make Zeiss products more and more intelligent.
To this end, Zeiss aims to be climate-neutral in its own activities worldwide by 2025. According to their own statements, the factories in Germany are already there today.
More: Head of the Zeiss Foundation: “We have ten or even 20 golden years ahead of us”

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