GuruFocus - Release Date: December 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Carl Zeiss Meditec AG (CZMWF) has launched new innovative products like the Kinevo 900 S and VisoMax 800, which are expected to enhance their market position.
- The company has shown resilience by implementing cost control measures, resulting in a slight decrease in OPEX despite revenue softness.
- There is a strong market position in China, with a market share of over 50% in refractive procedures.
- The integration of DORC is progressing well, with synergies already being realized in sales and R&D.
- Recurring revenue has expanded to 47% of total revenue, indicating a stable income stream.
- The fiscal year 2024 was challenging with a decline in both revenue and profit, primarily due to a restrictive investment climate and weaker consumer sentiment.
- Reported EBIT dropped significantly by 44% year-on-year, with an EBIT margin falling from 16.7% to 9.4%.
- There are ongoing pressures in the Chinese market, with a decline in consumer confidence and a shift towards more price-sensitive procedures.
- The company faces headwinds from currency fluctuations, particularly from RMB, USD, and JPY.
- Despite cost control measures, the OPEX ratios remain elevated due to revenue weakness.
A: Unidentified_2 explained that the company is being cautious due to the current headwinds and uncertainties, particularly in the Chinese market. They need the introduction of Smile Pro to help with pricing. Unidentified_3 added that they are being prudent after a heavy profit warning earlier in the year and are waiting for more clarity around the Chinese New Year and potential impacts from the Trump administration's policies.
Q: Can you quantify the saving impact for this year and why not be more aggressive on savings?
A: Unidentified_2 emphasized the importance of balancing long-term R&D and sales and marketing activities, which are crucial for maintaining market leadership. They are optimizing structures and processes for efficiency gains but are cautious about aggressive cost-cutting to avoid jeopardizing future growth.
Q: What are your expectations for the impact of volume-based procurement (VBP) on your business?
A: Unidentified_2 stated that their strategy focuses on premium lenses and maintaining a higher price point. They have seen volume growth and expect this trend to continue, despite the price pressures from VBP.
Q: How do you plan to protect your market share in China against upcoming competition?
A: Unidentified_2 highlighted the unique aspects of their refractive laser technology, which is based on extensive patient data and proprietary algorithms, making it difficult for competitors to replicate. They also emphasized their strong market position and local production capabilities in China.
Q: Can you provide more details on the commercial opportunity of the new Kinevo and VisuMax products?
A: Unidentified_3 indicated that these products have the potential to contribute a significant double-digit million EBITA upside, particularly in the second half of the fiscal year, as they go through the book-building phase and begin deliveries.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.