Company News | Business | Financial | Nov 14, 2018

Osram Sharpens Focus on Digital Future

Comparable revenue increased almost 2% to €4.1 billion in fiscal year 2018. Despite economic challenges and a difficult market environment, Osram held its ground in fiscal 2018 and increased its revenue slightly on a comparable basis.

“Despite considerable macroeconomic challenges, a difficult market environment in the automotive sector and project postponements by some customers, we were able to slightly increase revenue in fiscal 2018 by just under 2%, achieving a decent margin. As a financially solid technology leader, we are on the right track,” said Olaf Berlien, CEO of OSRAM Licht AG. “We continue to sharpen our profile and focus more strongly on high-growth markets within newly tailored business segments.”
 
In the future, the Group intends to focus even more strongly in the area of photonics and optical technologies beyond lighting. On a comparable basis, i.e. adjusted for portfolio and currency effects, revenue rose by just under 2Q to more than €4.1 billion. The adjusted operating margin reached 14.7 percent. EBITDA before special items was impacted by the economic slowdown, especially in the automotive industry, and amounted to €605 million. Earnings after taxes totaled €142 million.
 
Going forward, Osram will increase its emphasis on digitalization and future markets. As a result, the Managing Board realigned its business unit structure to reflect this strategy to center around optical semiconductors, automotive technologies and digital applications.
 
With the recent acquisitions of Vixar, the VCSEL specialist for optical identification technology, and Fluence Bioengineering, one of the world’s leading suppliers of smart horticultural lighting, the Group continues to focus on future markets with high-growth potential.

Effective as of FY2018/19, the Managing Board implemented the following revised business structure:

  • Automotive (AM): As a market leader, Osram equips the automotive industry with innovative LED, laser and traditional technologies both for new cars, as a well as the aftermarket. A subsidiary, Advanced Smart Lighting (Osram Continental GmbH), produces custom-made lighting systems and aligns its offering within digitalization. In the past fiscal year, pro forma sales in this segment amounted to €1.9 billion;
  • Digital (DI): A strong established customer base provides access for the future development of the business with intelligent digital lighting management systems, as well as cloud and IoT solutions. In addition, the businesses included will address growing future markets, including smart farming. In the past fiscal year, the segment’s pro forma revenue was €917 million.

Meanwhile, the sale of the luminaires business (Siteco) and negotiations for the sale of the US service business (Sylvania Lighting Solutions) are progressing.
 
Opto Semiconductors (OS): This segment remains Osram’s technological backbone. With a strong research and development ratio, OS has been the technology leader in optical semiconductors for years. Its technologies are the foundation for the AM and DI portfolio. In the past fiscal year, the segment’s revenue amounted to €1.7 billion;
 
Osram will increase its focus on digitalization and future markets in fiscal 2019. However, due to several uncertainties (particularly in the automotive market) such as existing and imminent trade barriers, visibility will remain limited for the foreseeable future. Positive free cash flow in the mid-double-digit million euro range is expected. 

ABOUT OSRAM
OSRAM, based in Munich, is a leading global high-tech company with a history dating back more than 110 years. Primarily focused on semiconductor-based technologies, our products are used in highly diverse applications ranging from virtual reality to autonomous driving and from smartphones to smart and connected lighting solutions in buildings and cities. OSRAM uses the endless possibilities of light to improve the quality of life for individuals and communities. OSRAM’s innovations enable people all over the world not only to see better, but also to communicate, travel, work and live better. OSRAM has approximately 26,400 employees worldwide as of end of fiscal 2017 (September 30) and generated revenue of more than €4.1 billion. The company is listed on the stock exchanges in Frankfurt and Munich (ISIN: DE000LED4000; WKN: LED 400; trading symbol: OSR). Further information can be found at www.osram.com.

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