1.02 billion euros, OSRAM's third quarter revenue remained stable
Olaf Berlien, CEO of OSRAM Group, said: “Despite the market environment is not optimistic, we are still generating good returns in important business areas. We are actively responding to the temporary slowdown of customer demand in the automotive industry and further saving. To ensure success, we The pace of corporate restructuring is accelerating, and in the long run, OSRAM will continue to grow."
In the third quarter of FY 2018, OSRAM maintained its stable performance in a difficult market environment. Revenue in the third quarter was flat with the same period last year, reaching 1.02 billion euros. The adjusted EBITDA for special projects was lower than the same period of the previous year and was 133 million euros. The adjusted EBITDA margin was 13.1%. Exchange rate changes, as well as increased costs for R&D and capacity enhancement, have affected the adjusted EBITDA for the third quarter by more than 40 million Euros.
In the first three quarters of 2018, these influencing factors accumulated more than 130 million euros, of which 75 million euros came from exchange rate effects. Osram said that recently, due to factors such as existing and impending trade restrictions, customers and dealers around the world have changed their purchasing behavior, which has also increased the Group's revenue pressure. The combination of these factors will have an impact on the company's operations in the coming months, which also prompted the board to adjust its annual expectations at the end of June. In this context, the board of directors has decided to streamline the product line in the future, the first step the company will sell the lighting business. (Note: *Osram Group's fiscal year is calculated from October 1st to September 30th, and the third quarter is April-June data)
OSRAM said management is looking for a variety of measures to adjust the current market conditions. “First, we will streamline global administration and management, which can reduce operating costs by approximately 20%. In addition, the Group has implemented several structural and operational optimization projects, including in research and development, supply chain, and efficiency in German plants. Improvements. These optimization projects can achieve cost savings of 130 million to 140 million euros by 2020."
Osram said, "In the third quarter of this fiscal year, the overall economy slowed down, and the reduction in demand in the automotive industry became the primary factor affecting the performance of optoelectronic semiconductors (OS) and special lighting (SP). Trade tariff policy from the United States, Europe is more Strict emissions testing and lower production expectations for high-end products will bring more uncertainty. In addition, we are facing delays in mobile equipment and plant lighting projects, as well as a sustained slowdown in the general lighting market. ".
Osram said that "the strategic adjustment plan for the Professional Lighting System Solutions (LS) Division is now being implemented. At the outset of the ongoing sale of the US service business, the Board is planning to sell the lighting business. Lighting is included in the financial report. The lighting business of the System Solutions (LSS) segment has stabilized due to a number of favorable improvement measures.
Expected for 2018
Osram made adjustments to its financial expectations for FY 2018 at the end of June. Based on these changes, the Board of Directors expects comparable revenue growth of 1 to 3% in the 2018 fiscal year (previously: 3 to 5%), and the adjusted EBITDA is expected to be 5.7 to 600 million Euros (previously: approximately 640 million Euros). The diluted earnings per share is expected to be between 1 and 1.2 euros (previously: 1.9 to 2.1 euros). This includes unconventional costs associated with the “Osram Future Conceptâ€. Cash flow is expected to be minus 1.5 to 200 million euros (previously: cash flow is minus 50 million to 150 million euros).
As previously announced, the board is adjusting its development strategy. The results will be announced at the Capital Markets Conference on November 7.
Osram said that the Group's long-term growth prospects remain optimistic. LED and laser technologies are in line with global trends and will continue to serve the high-tech growth market. The Group is actively pursuing technological innovations and has recently expanded its product line in the field of innovative technologies. This includes the acquisition of Vixar and the plant lighting company Fluence, which have expertise in the field of compact 3D identification technology. The acquisition of the two companies will be completed in the fourth quarter of the fiscal year, and the takeover of the Trilux subsidiary BAG Electronics will also be completed during the same period. The joint venture with the Continental Group in the field of targeted smart car lighting has also started operations in early July.
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