Carl Zeiss Meditec AG Q3 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Graham Doyle - UBS Investment Bank, Research Division - Analyst : A couple for me. Just on the 20% margin target, it's like sort of Oliver's question, it looks like the issue in terms of your uncertainty for you guys is investments or, I suppose, expenses, the big lever being R&D. So there's kind of 2 parts is, how long is this going to go on for to the point where you're spending such a high portion of sales and R&D to almost in sort of like a pharma-like scenario? And do you -- can you give us a better sense REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 04, 2023 / 7:30AM, AFXG.DE - Q3 2023 Carl Zeiss Meditec AG Earnings Call of what that's going on because we kind of get an idea anecdotally from you in terms of where it's going. But ultimately, when we're trying to assess what the return can be, if we kind of need to know where those products are, what the potential value of that is and what the innovation. So it'd be good to get a sense of that. And then maybe just second to that is I mean that's a slightly difficult question to phrase and answer, but how much do you care about the 20% margin? When you think of the priorities that you have, obviously, return on capital, but that's a key function of that. So where does that sit in your priorities? And for how long would you be happy missing that margin target, but still believing that it's viable?

Question: Graham Doyle - UBS Investment Bank, Research Division - Analyst : Okay. That's really helpful. I really appreciate the answer. Maybe just one quick last one . Just obviously, as you've kind of got an unusual structure given your parent company shareholding in your business. And as a business, you take a very long-term focus, which arguably a lot of listed companies aren't able to do in the same way. So I suppose the key part of the question is what benefits do you see from being listed rather than being maybe a private company where you could make these investments and not have the pressure from sort of the markets to hit that 20% margin a bit earlier. So like would there be a benefit from being private?

Question: Sven Olaf Kuerten - DZ Bank AG, Research Division - Analyst : First 3 questions. Given the current circumstances, do you think your 2024 margin can be significantly above the quite a weak 2023 level, it's question one. And secondly, why exactly was the Microsurgery margins strong in Q3 and can also see a similar level in Q4 and also for entire 2024? And certainly, I think in the past, you were quite conservative, which is back to your guiding policy. But in the recent times, you're cutting down expectation steps by step, which is quite unusual for Carl Zeiss. So my question is what has changed with respect to a planning process? Or what surprised the most in recent months? The planning appears more aggressive than it was in past. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 04, 2023 / 7:30AM, AFXG.DE - Q3 2023 Carl Zeiss Meditec AG Earnings Call

Question: Sven Olaf Kuerten - DZ Bank AG, Research Division - Analyst : Okay. So but to follow up on the Microsurgery, it's fair to assume a quite good margin level also, we say in the next month in that business unit in the next quarter.