Osram Records Profitable Growth in 3Q

Osram showed a good performance in a challenging macroeconomic environment in the third quarter of fiscal 2013. Revenue rose 2% year over year on a comparable basis – excluding portfolio and currency effects – to almost €1.3 billion. Earnings before interest, taxes and amortization (EBITA) amounted to €22 million. The figure includes expenses from special items of €72 million, particularly transformation costs.

The adjusted EBITA margin was 7.4% versus 5.8% in the prior-year period, reflecting positive effects of the company reorganization that has been underway since 2012 and which is well on track. The reported margin, including special items such as transformation costs, was 1.7% . The financial result benefited from a book gain from the planned sale of a stake in the Valeo Sylvania joint venture, resulting in net income of €14 million. In view of the developments in the third quarter, Osram is slightly raising its earnings outlook for the current fiscal year.

“We can look back on a successful listing and a good third quarter. We succeeded in increasing adjusted EBITA substantially while returning to comparable revenue growth. Our transformation effort continues to make rapid progress; we are ahead of schedule regarding the planned savings. For the current fiscal year, we are raising our earnings outlook slightly and now expect a positive net income,” said Wolfgang Dehen, CEO of OSRAM Licht AG.

The share of semiconductor-based products (Solid State Lighting, or SSL) rose to 31% of total revenue in the third quarter. “This underscores our leading role in the transition to LED,” said Dehen.

With an exceptional 18% increase in revenue, the business with opto-semiconductor components (Opto Semiconductors, or OS) posted the highest growth of the four reporting segments in the third quarter, thanks to strong demand across all regions and almost all lines of business. The EBITA margin reached a high level of more than 13%. In view of the strong quarter, Opto Semiconductors is expected to pass the billion-euro revenue mark in the current fiscal year for the first time ever.

The Specialty Lighting (SP) segment, which addresses the Automotive Lighting and Display/Optics markets, sustained its growth trend and was able to increase revenue by 5%, particularly through gains in the Americas and EMEA regions. Growth stemmed from the business with LED-based products, especially. The EBITA margin adjusted for special items came to just under 16% and was above 12% including special effects.

The largest segment Lamps & Components (L&C), which covers the product business with Lamps, Light Engines and Controls, is benefitting from the ongoing transformation, which is also reflected in an improved EBITA margin. The sales decline on a comparable basis slowed as the share of semiconductor-based products increased.

The Luminaires & Solutions (L&S) segment comprises luminaires for professional customers, products for consumers, as well as the service and solution business. L&S again posted a considerable loss in the third quarter due to structural challenges combined with declining revenues.

From a regional perspective, the highest comparable revenue growth in% age terms was recorded in the APAC region with 5%, much of which is attributable to the strong demand for opto-semiconductor components. Despite persistent economic uncertainties in the euro zone, Osram achieved a 4% gain in its EMEA business in the period under review. The Americas region, on the other hand, posted a modest decline of 2%.

For the fiscal year ending September, the Managing Board confirms its outlook that revenue will remain stable on a comparable basis, with a modest increase in the second half of the year. The Managing Board expects EBITA adjusted for special items to rise about 20 to around 30% after previously forecasting a low double-digit% age increase.

Osram is expanding its portfolio of LED lamps with many new products, including a powerful LED lamp available since June for under €10. In the course of the year, Osram will have its broadest offering of LED lamps to date with about 60 different lamp types.