Osram Q3 sales show 'continued profit performance'

29 Jul 2015

Earnings margin up to 9.5%; revenue up 12%; carve-out of lamps business set for spring 2016.

Diversified lighting and LED manufacturer Osram, in its third quarter 2015 financial statement, announced today, said it is continuing to show a good profit performance. Earnings rose 24% from one year earlier to €129 million, equating into a margin of 9.5%.

The company said its development “was driven by cost savings as well as positive currency effects”. Q3 revenue increased 12% to almost €1.4 billion due to a combination of the weakness of the euro against key currencies and the acquisition of Clay Paky, completed in October 2014.

On a comparable basis, i.e. adjusted for portfolio and currency effects, revenue actually declined by around 1%, which the company described as: “remaining almost stable”. The revenue share of LED-based products and solutions was 44 percent in the third quarter. Net income rose to €64 million. In its statement of today, Osram confirmed the outlook for fiscal 2015 as updated in April. The previously-agreed carve-out of the company’s general lighting lamps business is now set to be completed by the spring of 2016.

“Overall, we can look back on a good quarter,” said Olaf Berlien, Chief Executive Officer of Osram Licht AG. “Our current priority is the realignment of the company, which we are pursuing at full speed. The carve-out of our lamps business is in this respect just the beginning of the path toward a new Osram, which will focus on connected and smart lighting.”

Segment performances

• In the third quarter, comparable revenue in the Opto Semiconductors segment rose 4% from a year earlier. Main drivers of this development were the automotive and industrial businesses. At 18.5%, the earnings margin “continued to be on a high level”, company stated.
• Specialty Lighting, with its Automotive Lighting and Display/Optics units, also recorded a comparable revenue increase of 4% in Q3 despite weakening automotive markets, particularly in Asia, the company said; growth was driven by rising demand for LED-based products.
• LED Lamps Systems, which includes light engines and LED drivers, recorded comparable revenue growth of 36% from a year earlier in Q3. Adjusted earnings margin improved by almost 14% to minus 6.6%.
• Revenue in the Classic Lamps Ballasts segment declined 13% in Q3 “as expected”, while its adjusted EBITA margin improved to 8.3% due to cost savings.
• The Luminaires & Solutions segment’s revenue fell 14% and its earnings margin was minus 11.5%.

Outlook

Osram confirmed the outlook for 2015 that it announced in April 2015. The managing board stated that it expects this year’s revenue to be “on the level of fiscal 2014 on a comparable basis”. The company’s statement of today said, “adjusted EBITA margin for 2015 is expected to be above 9.0%. The company expects both net income and return on capital employed will decrease sharply in 2015, stating: "due to an increase in transformation costs; free cash flow is expected with a positive triple-digit million euro figure in fiscal 2015 but it will stay below the 2014 level.”

About the Author

Matthew Peach is a contributing editor to optics.org.