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OSRAM Systematically Tackling its Realignment

Osram is systematically tackling its realignment. At yesterday’s meeting, the supervisory board of OSRAM Licht AG gave the green light for a mandate to examine the carve-out of the general lighting lamps business. As an independent entity, the business could operate more freely on the market and realize strategic options, such as partnerships, more easily. The businesses with opto semiconductors, automotive and specialty lighting as well as luminaires, lighting systems and solutions would, as a result, form the future core business of Osram. With this move, the company will increase its focus on growth, innovation and technology leadership and addresses the different dynamics and requirements in the changing lighting market.

The upheaval in the industry also had an impact on Osram’s performance in the second quarter of fiscal 2015. Revenue on a comparable basis, i.e. adjusted by portfolio and currency effects, fell about two percent from the year-earlier period, in particular due to significant declines in the traditional lamps and components business. In contrast, revenue increased more than nine percent on a nominal basis to almost €1.4 billon due to the weakness of the euro against key currencies and the acquisition of Clay Paky. EBITA1 excluding special items rose about 30 percent to €151 million, translating into a margin of 10.8 percent. The earnings development was driven by a strong operating performance as well as cost savings from the ongoing transformation program and positive currency effects. Against this background, Osram confirms the recently updated outlook for fiscal 2015.

“While we performed well again in the second quarter, we have to face the realities of the market,” said Olaf Berlien, Chief Executive Officer of OSRAM Licht AG. “The lighting market is basically characterized by two business models with different dynamics and requirements. On the one hand, you have the volume markets in which consistently high quality and cost efficiency are crucial competitive factors. On the other hand, there are the technology markets. These are characterized by innovation, tailor-made solutions and sustainable growth. These technology markets are intended to be Osram’s future core business.”

The revenue share of LED-based products and solutions reached 41 percent in the second quarter. EBITA on a reported basis rose 54 percent to €125 million, or 8.9 percent of revenue. With €78 million, net income was 13 percent above the year-earlier figure.

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