Osram lowers revenue expectations, sells luminaire business
Osram held its ground in a difficult market environment in the third quarter of its 2018 fiscal year. On a comparable basis, revenue remained consistent with the prior year’s level of €1.02 billion. At €133 million, EBITDA adjusted for special items was significantly below the prior year’s level. The adjusted EBITDA margin reached 13.1 percent. Foreign exchange effects as well as higher expenses for R&D and ramp-up costs burdened the adj. EBITDA in Q3 with more than €40 million.
In the first nine months these effects summed up to more than €130 million – of which €75 million where lost to foreign exchange fluctuations alone. The company attribute these lower revenues to recent worldwide changes in customers and distributors ordering behaviour due to existing and imminent trade restrictions.
In the third quarter of the fiscal year, the general economic slowdown and weak demand in the automotive industry was primarily reflected in our semiconductor segments Opto Semiconductors (OS) and in the Specialty Lighting (SP) segment. The trade tariffs in the USA, more stringent emission tests in Europe and lower production expectations from premium manufacturers have also caused uncertainty. In addition, there were project delays in business with mobile devices and horticulture applications and a continued slowdown of the general lighting market. Osram Licht AG officially reported its decision to divest its luminaires business.
“Thanks to numerous measures, the earnings position of the Lighting Solutions business unit has stabilized significantly, therefore allowing us to initiate an organized sales process. This will result in a more strategic focus with regards to applications with high growth potential,” said Berlien.
LED- and laser-based technologies are oriented to global megatrends and continue to serve growing high-tech markets. The group is actively shaping the ongoing technological shift and has also recently expanded its portfolio with innovative future technologies. That includes the acquisition of US provider Vixar, which specializes in compact 3D identification technology, and the acquisition of the horticulture company Fluence. The closings of both acquisitions were completed in the beginning of FQ4, as was the takeover of the former Trilux subsidiary BAG electronics. The Osram Continental joint venture, which will shape the future of intelligent car lighting, went into operation at the beginning of July.
Other measures to rectify the current market situation will include the streamlining of the global administration, which could reduce cost by approximately 20 percent, together with several structural and operational programs. This includes the improvement of efficiency in R&D, in the supply chain, and in the German factory alliance. These operational programs should sum to €130 to €140 million in savings by 2020, the company anticipates.
Osram – www.osram.com
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