OSRAM's Third Quarter Revenue Remained Stable, Reaching 1 Billion 20 Million Euros.

- Aug 02, 2018-

Revenue in the third quarter remained stable, up to 1 billion 20 million euros

After adjustment, the profit margin (EBITDA) of tax depreciation and amortization remained at 13.1%

By 2020, it will reduce the cost of 130 million to 140 million euros.

In August 1st, Olaf Berlien, chief executive of OSRAM group, said: "although the market environment is not optimistic, we are still creating good returns in important business areas. We actively respond to the temporary slowdown in the automotive industry customer demand, and further save money. To ensure success, we are accelerating the pace of corporate restructuring. In the long run, OSRAM will continue to grow. "——LED Growth lamp

In the third quarter of fiscal year 2018, OSRAM maintained its performance in a tough market environment. The third quarter revenue was unchanged from the same period last year, reaching 1 billion 20 million euros. Interest rate depreciation and amortization profit (EBITDA) after the adjustment of the special project is lower than the same period last year, which is 133 million euros. After the adjustment, the profit rate of EBITDA reached 13.1%. Exchange rate changes, as well as increased costs for R&D and capacity upgrades, affected EBITDA by more than 40 million euros in the third quarter. In the first three quarters of fiscal year 2018, these factors accumulated more than 130 million euros, of which 75 million euros came from the exchange rate effect. Recently, affected by existing and imminent trade restrictions, customers and dealers worldwide have changed their buying behavior, which also aggravates the group's revenue pressure. Taken together, these factors will have an impact on the company's operations in the coming months, prompting the board to adjust its annual forecasts by the end of June. Against this background, the board has decided to streamline the product line in the future, and the first step will be to sell the lighting business.——LED Growth lamp

Management is seeking a variety of measures to adjust the current market situation. First of all, we will streamline global administration and management, which will reduce operating costs by about 20%. In addition, the group has implemented a number of structural and operational optimization projects, including improvements in research and development, supply chains, and efficiency at German plants. These optimization projects can achieve cost savings of 130 million to 140 million euros in 2020.——LED Growth lamp

In the third quarter of this fiscal year, the overall economic slowdown and reduced demand in the automotive industry became the primary factors affecting the performance of photoelectric semiconductors (OS) and special lighting (SP). Trade tariffs from the United States, tighter emissions testing in Europe and lower production expectations for high-end products will all create more uncertainty. In addition, we are facing delays in mobile and plant lighting projects and a sustained slowdown in the general lighting market.——LED Growth lamp

At the beginning of the year, the strategic adjustment plan of the professional lighting system solution (LS) division is now being implemented. In addition to the ongoing sale of us services, the board is planning to sell the lighting business. The lighting business, which is included in the Lighting System Solutions (LSS) section of the financial report, has stabilized due to a number of favorable improvements.——LED Growth lamp

2018 fiscal year expectation

At the end of June, OSRAM adjusted its financial expectations for the 2018 fiscal year. Based on these changes, the board of directors is expected to increase from 1 to 3% (3 to 5%) in fiscal year 2018 (3 to 5%), and the adjusted EBITDA is expected to be 5.7 to 600 million euros (earlier: about 640 million euros). Diluted earnings per share is expected to be 1 to 1.2 euros (previously: 1.9 to 2.1 euros). This includes the unconventional costs associated with the "OSRAM future concept". Cash flow is expected to be negative 1.5 to 200 million euros (previously: cash flow is negative 50 million to 150 million euros).——LED Growth lamp

As announced before, the board is adjusting its development strategy. The results will be announced at the Capital Markets Conference in November 7th.

The long-term growth prospects of OSRAM are still optimistic. LED and laser technology are in line with the global trend and will continue to serve the high-tech growth market. The group is actively engaged in technological innovation and has expanded the product line in the field of innovative technology in the near future. This includes the acquisition of Vixar and Vixar, a company with expertise in the field of compact 3D identification technology. The acquisitions of the two companies will be completed by the beginning of the fourth quarter of the fiscal year and the takeover of BAG Electronics, a Trilux subsidiary, will be completed by the same period. The joint venture with the continental group in the field of intelligent automotive lighting has also started operation in early July.——LED Growth lamp

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