Osram Holds Its Ground in a Difficult Market Environment

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%.
 
Recently the worldwide changes in ordering behavior of our customers and distributors in part due to existing and imminent trade restrictions have weighed on the company’s revenue. The change in market dynamics due to the transition from allocation to normalization for some semiconductor products have also taken a toll on revenue.
 
“Despite a difficult market environment, we continue to generate good returns in our most important business areas. We are actively addressing the temporary weakness in demand of our customers in the automotive industry and improving our cost base. To ensure success, we are accelerating the current reorganization process and have laid an excellent foundation with the recently achieved reconciliation of interests,” said Olaf Berlien, CEO of OSRAM Licht AG. “Nothing has changed in terms of long-term growth opportunities.”
 
In the third quarter of the fiscal year, the general economic slowdown and weak demand in the automotive industry was primarily reflected in Osram’s semiconductor segments Opto Semiconductors (OS) and in the Specialty Lighting (SP) segment. The trade tariffs in the US, more stringent emission tests in Europe and lower production expectations from premium manufacturers have also caused uncertainty.
 
The strategic revision of the business unit Lighting Solutions (LS) unit announced at the beginning of the year has now been completed. In addition to the ongoing sale of the US service business, the Managing Board is now planning to divest the business with luminaires. The luminaires business as part of the reporting segment Lighting Solutions and Systems (LSS) is now on the right track due to numerous efficiency improvements.
 
Osram adjusted its outlook for the current fiscal year at the end of June. Based on these changes, the Managing Board now expects a comparable revenue increase of 1% to 3% (previously: 3% to 5%) and adjusted EBITDA of €570 million to €600 million (previously: approximately €640 million) for fiscal year 2018.