At the end of January, Osram significantly raised its outlook for the fiscal year thanks to extremely positive business developments and the rapid recovery of the automotive market in the first quarter. This success is due not only to the effective measures that the company took at an early stage to counter the corona crisis but also and above all to the positive earnings trends in all reporting segments. Semiconductor business in particular delivered excellent performance in the first quarter. Opto Semiconductors set a record in the past quarter with its highest adjusted EBITDA margin to date.
“Our strategy is working. In recent years, Osram has taken steps to make itself crisis-proof. That’s why even during this corona pandemic our products are very successful,” said Olaf Berlien, CEO of OSRAM Licht AG. “This is true for our automotive products, and especially for our semiconductors. Without the capacity of our plant in Kulim, we would not be able to meet demand at the moment. Within three years, Kulim has become an important pillar for Opto Semiconductors.”
All three business units performed well in their markets in the first quarter of the new fiscal year. Even during the corona crisis, Automotive (AM) has been strengthening its leading position in retrofit and replacement lamps. AM achieved sales of 474 million euros, a slight increase on a comparable basis; adjusted EBITDA increased considerably compared to the previous year at 65 million euros.
Opto Semiconductors (OS) in particular delivered glowing results in the first quarter of the year. With an adjusted EBITDA margin of over 31 percent, it posted an all-time record. This record margin clearly shows that the focus on high-tech in the automotive and general lighting sectors and the expansion of production capacity in Kulim and Regensburg were important decisions for the future. In the first quarter, OS also reported a comparable increase in sales of nearly five percent to 356 million euros.
The successful turnaround measures taken in the Digital (DI) business unit have further progressed. Despite the corona-related decline in sales in the past quarter, adjusted EBITDA was again more or less balanced and free cash flow was slightly positive. Compared to the previous quarter (Q4), adjusted EBITDA improved by six million euros. In recent months, various options for developing the business areas within DI have been closely examined. As Osram continues to focus on high-tech and photonics, the company has decided to seek a new best owner for the segment which handles electronics and electronic power supplies within the business unit DI. This segment, as one of the leading technological suppliers in the market, can then develop more purposefully outside Osram and improve its position even further.
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“OSRAM had a remarkable start to the fiscal year,” continued Berlien. “The quick rebound in automotive and other industries has led to full order books and we are doing our best to maximize production. These signals from major end markets, in conjunction with an overall stabilized macroeconomic forecast, encouraged us to revisit the outlook for fiscal year 2021.
I am especially pleased with the first quarter profit and cash performance. At a comparable revenue level to the prior year period, we made excellent progress in terms of gross profit improvement and simultaneous cost reduction. This is again a clear result from the long-term performance programs as well as the COVID-related SHIELD measures.
As part of our ongoing portfolio evaluation, we have decided to start the search process for a new best owner for the DI lighting components business. Meanwhile, OSRAM and ams are working together to complete the business combination, pending court procedures regarding DPLTA registration.”