Osram Records Solid Start into Fiscal Year

In a still challenging environment, Osram recorded a solid start into the fiscal year 2014 which started last October. While revenue in the first quarter fell slightly year over year due to currency movements, it rose 2% on a comparable basis – meaning excluding portfolio and currency effects – to more than €1.3 billion. The revenue share of LED-based products and solutions (Solid State Lighting, or SSL) increased by about 7 percentage points to now 33%.

EBITA rose12% to €112 million, translating into a margin of 8.5%. Excluding special items, EBITA was €123 million, or 9.3% of revenue. Income before taxes rose 26% to €97 million. In view of the development in the first three months, Osram confirms the outlook for the current fiscal year.

“We are satisfied with the start into fiscal 2014. The positive effects of our comprehensive improvement program OSRAM Push are becoming increasingly visible and broad-based. We have continued our focus on profitable growth. For the first time since two years, we have reached a reported EBITA margin of more than eight% again. At the same time, our LED business continues to develop dynamically and already accounts for one third of our revenue worldwide. This shows that we drive the transformation towards the digital era of light,” said Wolfgang Dehen, CEO of OSRAM Licht AG.

The cumulated gross savings realized in the context of OSRAM Push are expected to total €1.2 billion by the end of fiscal 2015. At the end of the first quarter, they totaled almost €540 million. The increase of the adjusted EBITA margin in the first quarter was not only a result of improvements and savings associated with OSRAM Push but also of higher capacity utilization primarily at Opto Semiconductors. (OS)

Osram’s opto-semiconductor components reporting segment Opto Semiconductors recorded an extraordinary revenue increase of 20% year over year on a comparable basis, again supported by all regions. The OS segments for general lighting and for infrared components recorded particularly strong gains. The EBITA margin was more than 13% despite expenses related to ending a legal dispute that could only be compensated in part by gains from a license agreement. OS installed the first equipment in its new LED assembly plant in the Chinese city of Wuxi during the first quarter and is therefore well on track to put the factory into operation in the third quarter of the current fiscal year. OS will also start to switch production of red- and yellow-emitting LED chips from 4-inch- to 6-inch wafers to meet continuously growing demand. The same move was already made regarding blue LED chips in 2011.

Specialty Lighting (SP), with its Automotive Lighting and Display/Optics units, also continued its positive development thanks to continuing growth from LED-based light sources and recorded a clear gain in revenues of nine% on a comparable basis. Automotive Lighting posted a double-digit increase, once again growing faster than the global car production. Overall, SP achieved a high EBITA margin of 16%.

The largest reporting segment, Lamps & Components (LC), which covers the product business with lamps, light engines and electronic control gears, posted a comparable revenue decrease of 2% due to declines in the traditional lamps business. Those can in part be attributed to a relatively strong fiscal fourth quarter 2013. At the same time, sales of LED lamps rose significantly because of the successful expansion of the company’s LED lamp portfolio. The adjusted EBITA margin rose more than 2 percentage points to almost seven%, also due to improvements resulting from OSRAM Push.

The Luminaires & Solutions (LS) reporting segment comprises luminaires for professional customers, products for consumers, as well as the service and solutions business. On a comparable basis, LS recorded a revenue decline of 6% in the first quarter. As expected, the ongoing reorganization of the North American service business as well as adjustments in the luminaires product portfolio impacted revenues. The adjusted EBITA margin improved to minus 8%. The realignment is making progress especially in the luminaires business, where already above 40% of revenues are generated with LED-based products and solutions.

The company confirms the outlook for fiscal 2014. The Managing Board still expects revenue growth on a comparable basis to exceed the global real GDP growth, which is currently forecast at approximately 3% (source: IHS Global Insight).