Osram Records Good Start into Fiscal 2015

Osram recorded a strong operating performance in the first quarter of the current fiscal year that started in October 2014. With growth of 0.5%, revenue was slightly above the year-earlier period on a comparable basis, i.e. excluding portfolio and currency effects. In nominal terms, the company even recorded a revenue increase of 5% to almost €1.4 billion, resulting from the weakness of the euro against key currencies and the acquisition of Clay Paky.
 
EBITA excluding special items rose 23% to €151 million in the first quarter, translating into a margin of 10.8%. This development was once again supported by positive effects from the transformation program, productivity improvements as well as the ongoing good performance of the Opto Semiconductors and Specialty Lighting segments.
 
On reported basis, Osram in contrast recorded an EBITA loss of €41 million. The figure includes transformation costs of €184 million, which are in particular related to the already communicated headcount adjustments in Germany. The quarterly loss after tax was €39 million. In view of the development in the first quarter, Osram confirms the outlook for fiscal 2015.
 
“The first quarter marks a successful start into the new fiscal year. But we cannot rest on the already achieved. We will continue with our transformation and will announce in spring what that means in strategic terms,” said Olaf Berlien, CEO of OSRAM Licht AG.
 
“The quarter was also strong due to seasonal effects and was characterized by an exceptionally good operating result. At the same time, our LED-based business showed substantial growth again and reached 39% of total revenue. The traditional business performed well despite a still very challenging environment. We also made a major step forward regarding our transformation program,” added CFO Klaus Patzak.
 
In the first quarter, Osram’s opto-semiconductor components reporting segment (Opto Semiconductors, or OS) posted a comparable revenue increase of 4% from an exceptionally strong year-earlier period. The development was in particular supported by the industry business. Overall, all reporting regions contributed to the segment’s growth in the quarter. At 16.2%, the EBITA margin again reached a very good level and benefited from a favorable product mix, among other things.
 
Specialty Lighting (SP), with its Automotive Lighting and Display/Optics units, continued to benefit from robust demand and recorded revenue growth of 6% on a comparable basis in the quarter. Nominal growth was higher, at 15%, due to the weaker euro and the first-time consolidation of Italian entertainment lighting company Clay Paky. Excluding special items, the adjusted EBITA margin reached 16.0%.
 
The reporting segment LED Lamps & Systems (LLS) covers Osram’s business with LED lamps, light engines as well as LED drivers. In light of the continuously growing market acceptance of LED-based products, the segment’s revenue rose 65% on a comparable basis in the first quarter. The adjusted EBITA margin improved by more than 20%age points year on year to minus 4.4% due to economies of scale, among other things.
 
The market trend toward LEDs continued to have a negative impact on the Classic Lamps & Ballasts (CLB) reporting segment in the first quarter. Still, the comparable revenue decrease of ten% was not as strong as in the previous quarters. The adjusted EBITA margin was 11.4% and benefited from cost savings.
 
The Luminaires & Solutions (LS) reporting segment comprises luminaires for professional customers, products for consumers as well as service and solutions business. The segment’s revenue fell 19% in the first quarter on a comparable basis, mainly as a result of the reorganization of the service business in North America and the regional focus strategy of the luminaire business. The segment’s adjusted EBITA margin was minus 7.0%.
 
Osram confirms the outlook given at the beginning of fiscal 2015. For fiscal 2015, the Managing Board thus expects revenues to be on the level of fiscal 2014 on a comparable basis. The adjusted EBITA margin is also expected to be at the prior-year level. Free cash flow is expected to come in with a positive triple-digit million euro amount in fiscal 2015 but to stay below the prior-year level.