Osram Reports Outstanding Quarter in 2Q 2016

Osram continued its very good performance in the second quarter of fiscal 2016. On a comparable basis, i.e. adjusted for portfolio and currency effects, revenue in the three months ending March 31 rose 3% compared with the prior-year period and reached almost €1.43 billion. EBITA excluding special items increased 15% to €174 million, translating into a margin of 12.2%.

The earnings development was, among other things, supported by a favorable product mix in the LED components business (Opto Semiconductors) and the Specialty Lighting segment. The reason for this was in particular a sound automotive business. The improved revenue trend can especially be attributed to the general lighting lamps business (Lamps) and the Lighting Solutions & Systems business. Net income was affected by extraordinary expenses related to the carve-out of the lamps business and rose moderately to €80 million. Osram confirms its recently updated outlook for fiscal 2016.

“The second quarter was outstanding,” said Olaf Berlien, CEO of OSRAM Licht AG. “We have achieved the best result in more than 20 quarters. And for the first time in 10 quarters, revenue showed a noticeable increase nominally as well as on a comparable basis. This shows that our innovation and growth strategy is taking us in the right direction. The foundation couldn’t be stronger.”
In the second quarter, Specialty Lighting (SP), with its Automotive Lighting and Professional Industrial Applications units, posted a comparable revenue increase of 7% from the year-earlier period. At 14.2%, the EBITA margin excluding special items reached a good level despite an increasing revenue share of LED-based products and higher research expenses for innovative products. The reporting segment benefited from a strong automotive aftermarket business in the U.S. as well as government incentives for vehicle purchases in China. Osram will give an impressive demonstration of its entertainment lighting expertise in May at the Eurovision Song Contest in Stockholm.

The Lighting Solutions & Systems (LSS) reporting segment comprises the business with luminaires and systems and recorded a revenue increase of 10% on a comparable basis in the second quarter, driven by demand for LED-based products. The adjusted EBITA margin improved by 2 percentage points to -1.9%.

Opto Semiconductors (OS) increased its second-quarter revenue on a comparable basis by 5%, especially due to continuing high growth in the automotive business. At 24.5%, OS recorded an outstanding EBITA margin, benefiting in particular from strong demand for high-margin products for special applications as well as currency effects.

The Lamps reporting segment comprises the general lighting lamps business. In view of the continuing decline in demand for traditional lamps, the segment recorded a comparable revenue decrease of 2%. This decline was lower than the company had originally expected, among other things due to a substantial rise in revenue in the LED lamp business and a still good demand for halogen lamps. The adjusted EBITA margin amounted to 7.5%. At the Light + Building trade show in Frankfurt in March, the segment presented itself for the first time under its new name Ledvance.

For fiscal 2016, the managing board expects revenue on a comparable basis to be above the prior-year level. The EBITA margin, excluding special items, is anticipated to reach more than 10%.