CEO Carl Zeiss Meditec

Justus Felix Wehmer

CFO Carl Zeiss Meditec

"The existential character is formative for this crisis ..."

… said Ludwin Monz, head of the Medical Technology Segment in conversation with ZOOM MED. Together with Justus Felix Wehmer, responsible for finances on the board of MED, he gave a glance into the crisis management of MED.

The interview was conducted on October 8th, 2020.

How has ZEISS Medical Technology managed the crisis so far?

Ludwin Monz: We started the resilience project some time ago, but we did not expect this type of crisis. The extent of the pandemic and the effects on our company were substantial. As management, we have first defined three priorities, which are valid today and until the end of the crisis. First, we protect the health of our employees. Second is the further supply and support of our customers. And third is preventing financial damages to the company. And also in this order. With these priorities, we then entered into the implementation of our measures. Health protection itself requires that we introduce fast and drastic measures, e.g. at the beginning the mobile work.

How was the crisis management by MED organized?

Ludwin Monz: We have bundled the activities in a so-called corona task force. There, the various measures are coordinated and concluded together with a steering group in which the board is represented. Thus, we always have the current state of information of the various locations. And, at the same time we ensure that the various measures are also coordinated at the locations. The task force focuses primarily on health protection, but also on financial measures and cost management.

How then did we get through the crisis from an economic perspective?

Justus Wehmer: Our businesses were or are affected by the crisis in different ways. The refractive area has already made it possible to achieve growth in comparison to the previous year, with a strong recovery in the fourth quarter. However, this is the exception. All other areas have experienced interruptions, which lay in the two-digit percentual area in incoming orders and sales. Not until in the first quarter of the business year 2019/20 did we also see a recovery even in these areas. But: We are still in the crisis.

How far has the product mix helped us?

Justus Wehmer: Our consumable materials business comprises almost a third of our sales. Here, the regional distribution has had a very advantageous effect for us. In particular in the refractive area, the Asian markets such as China or Korea have gotten out of the corona crisis very well and have begun to quickly again call up the consumable materials to a great degree. On the other side the device business, whereby we are represented in particular in the U.S., has been strongly affected. Because the pandemic is continuing to hold on longer in the U.S. The high presence in Asia with the consumption materials business has helped us a lot to catch up.

Are individual customer segments affected more strongly or more weakly by the crisis?

Ludwin Monz: Public hospitals that are set up in multidisciplinary fashion that also treat COVID-19 patients, are naturally more strongly affected by the crisis. But also the private and private special clinics are affected. The business of microsurgery, which is done to a high degree in hospitals, has suffered just as much as our diagnostics business, where we act more strongly in the private sector.

Thus, is the investment confidence in clinics gone?

Justus Wehmer: Yes, because budgets were frozen in order to first wait for what funds are required under certain conditions for the further procurement of emergency beds and breathing devices.

Was the digitalization accelerated by the pandemic?

Ludwin Monz: With MED we have already been working on digitalization for several years. The pandemic had the effect of accelerating the process of digitalization. We have in a relatively short amount of time out of need tested many things and learned what works in digitalization and what does not. This goes for company-internal matters as well as in exchanges with our customers. The pandemic has led to the demand for our current digital solutions to be greatly increased. And even with remote maintenance, we see a strongly growing preparedness of the customers to actually connect their devices to the network.

How long will the health care sector still be affected by coronavirus?

Justus Wehmer: It will be decisive how the health sector deals with COVID-19 and when clinics and hospitals really get back into a normal, stable operation that is no longer destroyed through political influence on fighting health crises. When that will be is difficult to predict.

Ludwin Monz: The crisis itself won't be over until there is a vaccine, and that will be at least one year. Because the vaccine must then also be available in substantial quantity and I fear that that will take a while.

Which aspects will we take with us into a new normality?

Ludwin Monz: There are many things we have learned. Digitalization is one of these. And the knowledge that you can do things in a different way. Even the type and manner of how we work in the company will sustainably change. But there is another aspect which I find important. Such a crisis is an enormous exceptional situation for a team. As an organization, we will be different and will have overall changed ourselves positively.

Justus Wehmer: We can take from that self-trust in the way in which we have managed this great economic crisis of recent history as an organization quickly, consistently, and globally. That requires a preparedness to change. But you see what you can reach with that.

At the end, a look back - how have you personally experienced the first stage of the pandemic?

Justus Wehmer: Said plainly: I found it at first very burdensome - in the professional as well as in the private environment. And that is what differentiates the corona crisis from other crises. Financial crises are general crises that encompass one in a professional environment. Of course, you also take this home with you. But what is different about the corona crisis is the care about one's own health, and about that of family and friends. Corona is all-encompassing and has affected us in the private as well as in the professional domain. This differentiates coronavirus from all others.

Ludwin Monz: Exactly the existential character is formative for this crisis. Looking back, I would like to add that we used to do several things without thinking about it: travel, shopping, leisure activities, conversing with one another. And suddenly we had to completely get used to new things. Certain things don't happen anymore. That is already a dramatic change. Even when I look at my personal work, how it has changed: no more trips outside Germany. This compels you to communicate in very different ways, to work with business partners in very different ways. That is already a dramatic change. That up to this day is not concluded.

Thank you for the interview.

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