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Zeiss braces for Covid-19 impact

20 May 2020

Optics giant feels initial effects of pandemic, but says semiconductor business remains stable at the moment.

The top-tier optics and optoelectronics company Zeiss says it has begun to feel the impact of the Covid-19 pandemic across its various business units, but that the important semiconductor sector remains robust for now.

Releasing financial results for the six months ending March 31, recently promoted CEO Karl Lamprecht reported total revenues of €3.2 billion - up 6 per cent year-on-year.

Those figures were only slightly impacted by the coronavirus outbreak, and Zeiss even says that it began to see an upturn from China in March.

“Overall, we were successful during the first half of the fiscal year,” observed Lamprecht, who officially became CEO at the start of April. Previously, he headed up the company’s semiconductor manufacturing technology (SMT) division.

“However, the Covid-19 pandemic has had a major impact on the global economy - including on Zeiss’ lines of business," conceded the CEO. “[But] Zeiss’ resilience measures will help it combat the current challenges in the best possible way.”

Early response
The Germany-headquartered firm says it initiated its response to the pandemic threat as early as January, when it set up a dedicated task force to assess developments with government agencies and healthcare authorities, and coordinate measures across the company’s many locations.

Similar to other large companies in the photonics sector, those efforts have concentrated on employee safety, business continuity and resilience, and customer support.

Thus far, the firm’s consumer markets unit has felt the greatest impact from the global response to the pandemic, with a sharp decline in sales after lockdowns were imposed around the world. However, with revenues of €576 million - down 3 per cent on last year - this is now Zeiss’ smallest business unit by sales.

Also feeling the initial effects of Covid-19 was the company’s “industrial quality and research” business unit, something exacerbated by the existing challenges in the automotive sector.

Zeiss’ world-leading medical technology division was able to post a small rise in sales, although the growth rate here is being slowed by wider Covid-19 measures.

In contrast, Zeiss’ SMT division - which makes high-specification lenses and reflective optics used in state-of-the-art semiconductor lithography systems - posted nearly a 20 per cent increase in sales in the six months to March. At €904 million, that latest sales figure makes SMT the company’s largest division by revenues.

“While the SMT segment continues to see very stable developments, the other segments have certainly been affected by the global economic impact of the Covid-19 pandemic,” summed up Zeiss in its results release.

Stability and flexibility needed
Looking ahead, Lamprecht and his colleagues say that it is currently impossible to make any reliable predictions about how Zeiss’ financial figures will develop in the six months to September - other than to indicate that sequential declines in both revenue and earnings are to be expected.

“Many predict that the Covid-19 pandemic will result in considerable challenges for the global economy,” stated the Oberkochen-based firm. “Zeiss is now also feeling the impact of the Covid-19 crisis and a decline in its business – to differing extents at the regional and segment levels.”

However, the company is confident that its diversity, financial stability, and early response to the pandemic will enable it to navigate its way through the unfolding economic crisis.

“This is the time for stability,” Lamprecht emphasized. “Particularly with regard to providing our customers with the best possible service. The impact of the Covid-19 pandemic requires a high level of flexibility and a concerted effort from all employees.”

The new CEO adds that Zeiss is already thinking about life beyond the pandemic, hopeful that its renowned capability for innovation will see it emerge from the crisis in an even stronger position.

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