- Order Entry Growth: EUR 2.288 billion (+18.2% YoY) with 19.1% growth on constant currency.
- Revenue Performance: EUR 2.228 billion (+7.8% YoY), driven by 15.2% consumable sales growth.
- EBITA Margin: 11.6% (EUR 258 million, +3.5% YoY), with a target of 12.5% in FY '25-'26.
- Regional Contribution: APAC accounted for 45% of revenue, including 25% from China.
- Segment Focus: Ophthalmology dominated revenue (77%) with 8.5% YoY growth, while Microsurgery rose 5.7%.
Regional Performance
The company saw robust growth across all regions, with APAC contributing the largest share at 45% of revenue, including 25% from China. The Ophthalmology segment accounted for 77% of revenue, with revenue up 8.5% year-over-year, while Microsurgery revenue increased 5.7% year-over-year. The company is navigating challenges, including regulatory uncertainties and market dynamics, particularly in China, where the market is transitioning with stronger local competitors.
Guidance and Outlook
For FY '25/'26, the company expects organic revenue growth in the mid-single-digit percentage range, corresponding to reported revenue of approximately EUR 2.3 billion. EBITA margin is expected to increase to around 12.5%, driven by an improved product mix and growth in Microsurgery. The company's mid-term EBITA margin target of 16% to 20% is an aspiration to be inside this range in 3 to 5 years. Analysts estimate next year's revenue growth at 4.6%.
Valuation Metrics
With a P/E Ratio of 24.84, P/B Ratio of 1.66, and P/S Ratio of 1.26, the company's valuation appears to be relatively high. The EV/EBITDA ratio is 11.36, indicating a reasonable enterprise value relative to EBITDA. The ROE is 6.77%, and ROIC is 7.37%, suggesting a relatively stable return profile. The Dividend Yield is 1.5%, and Free Cash Flow Yield is 4.11%, indicating a decent return for shareholders.
Operational Focus
The company is focusing on three strategic vectors: customer centricity, focus, and speed and efficiency. The company will prioritize improving commercialization and unlocking the value in areas that have not yet delivered the expected commercial success. The R&D organization is working to regain productivity, and the company is reviewing its operations footprint to identify opportunities for consolidation and higher efficiency.
Challenges and Risks
The company faces challenges, including a slowdown in revenue and significant decline in margins due to macroeconomic headwinds, restricted hospital CapEx, low consumer confidence, and regulatory changes. There's also a potential scrapping risk for certain lenses, which could be a low double-digit million euro hit. The next VBP tender may bring uncertainty, and in a worst-case scenario, the company might not be able to participate with their new lens.