Carl Zeiss Meditec AG Q3 2025 Earnings Call Transcript

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

Question: Jack Reynolds-Clark - RBC Capital Markets - Analyst : Thank you for taking the questions. A couple from me, please. First, how are you seeing refractive surgery volumes in China progressing so far in Q4? And then, following on from that, what are you hearing from customers about the outlook for procedures into next year? and your order book looking strong as well across the rest of the business. But if China refractive surgeries do remain challenged into next year, can you give an indication of how you expect sales across the rest of the business to develop? And then on the ex-China refractive opportunities, which markets do you see as the quickest wins? What do you need to do to drive growth in these markets? And what timeframes are you looking at there?

Question: Jack Reynolds-Clark - RBC Capital Markets - Analyst : Sorry, just to follow up on the ex-China refractive opportunities, what do you need to do from an organisational perspective to drive that growth and what timeframes would you expect those to come through? Thank you. 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 07, 2025 / 5:00AM, AFXG.DE - Q3 2025 Carl Zeiss Meditec AG Earnings Call

Question: Jack Reynolds-Clark - RBC Capital Markets - Analyst : Thanks very much.

Question: Oliver Reinberg - Kepler Cheuvreux - Analyst : Good morning. Oliver Reinberg from Kepler. Three questions, if I may. Firstly, just in China, can you just specify what volume you have seen just in the summer treatment period so far? and also given the kind of muted consumer sentiment, what do you actually see currently in terms of willingness to buy VISUMAX 800 given summer comes to an end, Chinese news is still sometimes out, so orders are still really coming in in China for this kind of product range. Question number two, just on currencies, can you specify current spot rates? Are they embedded in the guidance or will the guidance be at risk if spot rates do not change? and also if these current spot rates remain unchanged, can you just give us any kind of flavor what the earnings headwind will be for 2026, please? Thank you.

Question: Oliver Reinberg - Kepler Cheuvreux - Analyst : It does, but do you have any kind of flavor? I mean, it's obviously the US dollar, also the kind of Chinese currency at current spot rates. What is the headwind to EBITDA for next year from an analyzation perspective? Any idea?

Question: Oliver Reinberg - Kepler Cheuvreux - Analyst : Thanks very much indeed.

Question: Oliver Metzger - ODDO BHF - Analyst : Good morning. Thanks a lot for taking my questions. The first one is on microsurgery, so you reported a still weak neurosurgical volume. Just as an update for us, do you see still it's the clinic CapEx, it's the interest rates? Which factors do you regard as reasons for a major headwind? Second, also you highlighted in your market overview that some low-cost players competition has arised. Could you be more specific how the dynamics have changed over the last two years in your view? And finally, we saw a few days ago the takeover of Star Surgical by Alcon. So what's your view about competitive dynamics? 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 07, 2025 / 5:00AM, AFXG.DE - Q3 2025 Carl Zeiss Meditec AG Earnings Call

Question: Oliver Metzger - ODDO BHF - Analyst : Okay, great. Thanks for the answers. 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 07, 2025 / 5:00AM, AFXG.DE - Q3 2025 Carl Zeiss Meditec AG Earnings Call

Question: Julien Ouaddour - BofA Global Research - Analyst : Hi, good morning everyone. Thanks a lot for taking my questions. I have three. The first one is just a follow-up to Oliver's question on China competition. You don't seem to worry about the mid-term in terms of competition in the country, brand awareness, let's say higher technology on your end. Should we understand that you don't expect volume share loss from the current peak of 50% over the mid-term or any kind of pricing pressure? I mean, I'm just asking to understand what is included or not in your mid-term margin guidance on your side. The second question is, can you comment a little bit about the upcoming new run for VEP in IOL in terms of expectations for further price cuts? As you were also mentioning, a bit more competition from local manufacturers. I think you also mentioned they are coming premium IOL. So, your thoughts here would be super helpful. And the last question for me, can you give us a bit of color about the DORC momentum in the tracheotomy, especially just following the ALKON launch this quarter? Has your conversation with surgeons changed since then, or just do you feel the need to change your pricing policy just to secure some volume? So, yeah, any comment, again, super, super helpful. Thank you.

Question: Julien Ouaddour - BofA Global Research - Analyst : Yeah, thanks. Just maybe for the first one on China competition, I was more referring to refractive given the importance of refractive in your profit in China. I mean, all the new competition, especially like the fine vision, for example, could it put some price pressure on, let's say, on SMILE? And in terms of market share, given you reach a peak of 50%, any risk there to see a lower volume because there is more competition, more players in this market?

Question: Julien Ouaddour - BofA Global Research - Analyst : Perfect. Thank you very much.

Question: Falko Friedrichs - Deutsche Bank - Analyst : Thank you and good morning. Three questions for me, please. Firstly, what makes you confident that you can achieve even the lower end of the EBITDA margin guidance for this year? Second question, without obviously providing firm guidance, but are you confident that you can see more 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 07, 2025 / 5:00AM, AFXG.DE - Q3 2025 Carl Zeiss Meditec AG Earnings Call meaningful margin expansion again next year? And then thirdly, can you share your view on the latest IOL and equipment end-market developments by region? Thank you.

Question: Falko Friedrichs - Deutsche Bank - Analyst : Thank you, and just briefly on the equipment side, mainly focusing on the US market, what are the latest trends there? In cataract? Yes, just in general, cataract, but also on your diagnostic side, for instance.

Question: Falko Friedrichs - Deutsche Bank - Analyst : Okay. thank you.

Question: Susannah Ludwig - Bernstein - Analyst : Good morning and thanks for taking my questions. I have two, please. I guess just first on microsurgery and sort of the margin was quite low in the quarter. Could you just quantify a bit sort of the different impacts I think it was mainly product mix, but how much did either tariffs or FX play a role as well? And then how should we think about the evolution into next year? Can we expect this to return to the 20% plus margins we've seen historically? And then second, on VERACITY and sort of digitalization, you guys have been very successful as sort of a leading player in cataract digitalization. Can you talk a little bit about how you plan to monetize that and sort of what sort of avenues for monetization there are going forward? 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 07, 2025 / 5:00AM, AFXG.DE - Q3 2025 Carl Zeiss Meditec AG Earnings Call

Question: Susannah Ludwig - Bernstein - Analyst : Good. Thanks. That's very helpful.

Question: Graham Doyle - UBS - Analyst : Morning, guys. Thanks for taking questions. I've got three, but at least one of them should be quite quick. Could you just confirm, there's a few questions from investors this morning on that FX comment you made, just like absolutely confirm the guidance for 2025 is based on the rates that you're seeing today. You're only flagging that if rates were to get worse, that would be a risk, just to confirm that. The second question then is just, you talked about a real focus on improving equity performance, kind of hints at things like margins and how you approach the commercial reality of the business. Should we expect an update on that in Q4, and is that really about maybe streamlining what you're doing in terms of R&D, for example, and taking that percentage of sales down. And then lastly, just when I looked at the comments Eustace just made around coming in at the lower end, so say 250 million for this year at adjusted EBITDA, I've got consensus in my screen is like 315 for next year. I'm just thinking incrementally, you have tariffs, you've got FX, and in Chinese markets, based on what you're saying in terms of the growth outlook, It's unlikely to be double-digit or anything like that. Is it probably sensible to think about next year as a similar sort of guide to this year as at least flat to slight growth to start with given the risk there? Thank you.

Question: Graham Doyle - UBS - Analyst : Perfect. I really appreciate the carry. Thanks a lot guys.

Question: Dylan van Haaften - Stifel Nicolaus Europe Ltd - Analyst : Thanks, guys, for taking my question. So all of my questions are on Visanax, especially in China. So just going quickly through all of them. So how many of the 50 that you guys installed this quarter were replacements? And then my second question is, is it correct that around 20% of the China on the new VISUMAX 800 installs. Is it correct around 20% are small pro, and where should we think this number goes? And then thirdly, do you think the small pro premium versus normal Smilon VISUMAX 500 is sustainable given there are other lenticular extraction products being launched over the next 12 months? And do you see any negativity on pricing in that gap? Thank you.

Question: Dylan van Haaften - Stifel Nicolaus Europe Ltd - Analyst : Perfect. My other question was just on the small pro cases. It looks like there's actually a decent amount of small pro representation overall of the total, let's say. How should we be thinking about that number in the whole So it's roughly 1% of annualized cases, I think, right now, but maybe could it end up in double digits.

Question: Dylan van Haaften - Stifel Nicolaus Europe Ltd - Analyst : Understood. And just getting back to that, just a clarification on the competition. So if the competitors in lenticular come in, basically you're, let's say, less encumbered because a small pro would compete with them on normal SMILE on the VISUMAX 500.

Question: Dylan van Haaften - Stifel Nicolaus Europe Ltd - Analyst : Perfect thank you.

Question: Sam England - Berenberg - Analyst : Hi, guys. Thanks for taking the questions. The first one, you talked about offsetting US tariff impacts with price. I just wondered, are you confident you'll be able to keep stable or grow orders whilst also increasing price? in the US, and which areas of the portfolio do you see the most scope for pricing increases, given you tend to be at the premium end pricing-wise anyway in the US market? And are there any other tariff mitigations you can put in place other than price as well? And then just to follow up on the question on the Star acquisition, you said ICLs are complementary to refractive. I suppose, is the ICL market an area you'd ever want to get into yourselves, given your strength in refractive and other other M&A opportunities out there that you could look to do. Thanks.

Question: Sam England - Berenberg - Analyst : Great. Thanks very much.

Question: Davide Marchesin - Equita SIM - Analyst : Hi. Good morning, everybody. I have two questions. The first one regarding Americas. In the first half of the year, you reported very solid constant currency organic growth, probably in the region of around 10%. While in the last quarter, you reported a significant slowdown with growth down, I think, around 3.6% year-on-year. I will understand why such a such a weakness in the US market and what is the outlook for the rest of the year? And the second question is a follow-up on the very weak microsurgery margin. You reported around a 3% EBITDA margin, which is, I think, all-time low. I don't remember a margin of this division as low as in this quarter. It's difficult to understand just the product mix causing such a big negative impact because otherwise this would mean that part of your products are currently loss-making. I will understand what is the outlook for the last quarter of the year, also considering for the positive seasonality that typically you enjoy in the last part of the year. If we could assume around the 20% margin of microsurgery in the last quarter of the year. Thank you very much.

Question: Davide Marchesin - Equita SIM - Analyst : Thank you very much.

Question: Anchal Verma - JPMorgan - Analyst : Hi. Good morning. Welcome, Max. Good morning, Just building on a few questions from earlier. The first one is on this year's guidance. Can you please confirm what's now included? I mean, previously, new launches were supposed to add to the top side of the guidance. Now, is it fair to 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 07, 2025 / 5:00AM, AFXG.DE - Q3 2025 Carl Zeiss Meditec AG Earnings Call assume that potential upside will get to the guidance from new launches including VISUMAX and KINEVO is almost proportionally offset by the FX and tariff headwinds? And then on the tariff headwinds, how should we think of tariff headwinds going into 2026, given when your new pricing will kick in and what are the assumptions you've based in? And then the second one, and sorry to follow up on 2026, I appreciate you can't give us full guidance, but just so you understand, when we're building the bridge for next year, our understanding from your earlier comments was that there will be tailwinds from new product launchers and there's an element of expected market recovery. But then on the flip side, there could be headwinds from tariffs and macro going forward. Have we missed anything else in building that bridge?

Question: Anchal Verma - JPMorgan - Analyst : Thank you. And just to follow up on your question on 2026, it sounds like the tariff headwinds, you could manage them. So what would be making you a bit more nervous on, providing aid or expecting a decent margin recovery just on the back of new product launches. We're just trying to understand what the potential downside risk could be to next year's numbers given consensus is looking for around 140 bits of margin expansion for next year.

Question: Anchal Verma - JPMorgan - Analyst : That's totally understandable. It was worth a try. Thanks so much, guys.

Question: Richard Felton - Goldman Sachs - Analyst : Thanks, good morning. Maximilian, thank you very much for the high-level strategy update and I'm looking forward to hearing more in December. I just wanted to pick up on one of the comments you made which was highlighting your intention to strengthen investment in growth areas. And 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 07, 2025 / 5:00AM, AFXG.DE - Q3 2025 Carl Zeiss Meditec AG Earnings Call my question is how should we think about funding that incremental investment? Is it a case of moving costs around your P&L or should we think about 2026 as a year of outright investment to reignite the top-line growth? Thank you.

Question: Richard Felton - Goldman Sachs - Analyst : Very clear. Thank you.