Shareholders to benefit as Osram achieves its targets


Managing Board proposes dividend for the first time and intends stable dividend for 2015
Company transformation proceeding
Company expects stable operating development in fiscal 2015

Osram has achieved its recently updated outlook for the fiscal year that ended in September 2014. Revenue rose one percent year over year on a comparable basis – meaning excluding portfolio and currency effects – and was more than €5.1 billion. The revenue share of LED-based products and solutions increased to 36 percent from 29 percent in fiscal 2013. In the fourth quarter, it reached already 39 percent. EBITA [1] excluding special items increased almost ten percent to €449 million in fiscal 2014, translating into an EBITA margin of 8.7 percent, in particular due to positive effects from the OSRAM Push transformation program. Reported EBITA more than tripled from the same period last year, when the figure was burdened by comparatively high transformation costs, to €310 million or 6.0 percent of revenue. This development was also one of the reasons that net income rose to €193 million. It is planned to propose to pay out around 50 percent of this amount, translating into a dividend of €0.90 per share. For fiscal 2015, it is intended to pay a stable dividend. In the fourth quarter of fiscal 2014, the first phase of OSRAM Push was successfully completed. For fiscal 2015, which started in October, the company expects comparable revenue to be on the level of fiscal 2014. The adjusted EBITA margin is also expected to be at the prior-year level. Reported earnings are expected to sharply decrease due to the accelerated implementation of the transformation program in fiscal 2015.

“We have managed the challenges of fiscal 2014 very well. The majority of our businesses are growing. We were able to further strengthen our technology leadership in many areas thanks to a strong focus on innovation. In the traditional Lamps & Components segment, we reacted promptly to a strong market decline and generated considerable cash. This shows that OSRAM Push is keeping its promise and has paved the way for an overall, comprehensive and continuous improvement in fiscal 2014,” said Wolfgang Dehen, Chief Executive Officer of OSRAM Licht AG. “We want our shareholders to benefit from this and plan to distribute a dividend for the first time for fiscal 2014. The planned dividend continuity for fiscal 2015 underlines our confidence in the positive development of Osram.”

Osram Group in the fourth quarter and current status of OSRAM Push

In the fourth quarter, Osram recorded a one percent comparable revenue increase from a year earlier. Growth was again driven by the reporting segments Opto Semiconductors, Specialty Lighting and LED Lamps & Systems. The adjusted EBITA margin remained stable at 8.0 percent. Compared with a year earlier, the revenue share of LED-based products and solutions rose from 31 to 39 percent in the fourth quarter.

The first phase of the OSRAM Push program has been successfully completed by the end of September. Among other things, the measures included the sale or the closure of eleven plants. At the end of the fourth quarter, the cumulated gross savings for the years 2013 and 2014 totaled €871 million, including €110 million from the recent quarter.

Osram reporting segments and regional developments in the fourth quarter

Osram’s opto-semiconductor components reporting segment (Opto Semiconductors, or OS) posted a comparable revenue increase of eleven percent in the fourth quarter compared with the year-earlier period. Growth was driven by business with automotive and industrial customers as well as demand for LED in general lighting. With almost 17 percent, the EBITA margin remained at a very good level. Profitability at OS benefited from an advantageous product mix, among other things.

Specialty Lighting (SP), with its Automotive Lighting and Display/Optics units, continued to benefit from healthy automotive demand and posted comparable revenue growth of ten percent in the quarter. Growth was supported by traditional as well as LED-based products. The segment’s EBITA margin was almost 15 percent. In fiscal 2015, SP will benefit from the consolidation of Clay Paky, a maker of luminaires for the entertainment industry. Since October 1, the OLED activities are also assigned to the reporting segment.

The reporting segment LED Lamps & Systems (LLS) covers Osram’s business with LED lamps, light engines as well as LED drivers. In the fourth quarter, LLS posted revenue growth of 72 percent on a comparable basis thanks to continued demand for LED products. The adjusted EBITA margin improved sharply to minus 16 percent.

The continuing rising market acceptance of LED-based products continued to have an impact on the Classic Lamps & Ballasts (CLB) reporting segment. Comparable fourth-quarter revenue fell 13 percent year over year, while the adjusted EBITA margin reached almost seven percent.

The Luminaires & Solutions (LS) reporting segment comprises luminaires for professional customers, products for consumers as well as service and solutions business. In the fourth quarter, LS recorded a revenue decline of 20 percent on a comparable basis, mainly due to the reorganization of the service business in North America and luminaire portfolio adjustments. Despite this development the segment’s adjusted EBITA margin remained stable at about minus seven percent.

From a regional perspective [2], Osram’s APAC reporting region recorded a comparable year-on-year increase in fourth-quarter revenues of five percent, while revenues in EMEA rose two percent on this basis. Comparable revenues in the Americas region declined three percent due to the exit of the traditional maintenance business in North America.

Outlook for fiscal 2015 and the ongoing company transformation

For fiscal 2015, the Managing Board expects revenues to be on the level of fiscal 2014 on a comparable basis. The adjusted EBITA margin is also expected to be at the prior-year level. In addition, the Managing Board expects both net income and return on capital employed (ROCE) to decrease sharply in the current fiscal year due to a sharp increase in transformation costs. Free cash flow should reach a positive triple-digit million-euro figure in fiscal 2015 but stay below the prior-year level. Based on the outlook for fiscal 2015 and Osram’s midterm prospects, the Managing Board intends dividend continuity with €0.90 per share also for fiscal 2015.

The ongoing company transformation should result in cumulative gross savings of around €1.3 billion in the fiscal years 2015 to 2017. Thereof, approximately €400 million are expected to become effective in the current fiscal year. In addition, the biggest share of costs associated with the ongoing transformation is also planned to be booked in fiscal 2015.

Business highlights of fiscal 2014 – technology leadership strengthened further

Osram continued to strengthen its technology leadership in fiscal 2014. To be prepared for expected market growth, Opto Semiconductors started to switch the production of red- and yellow-emitting LED chips from four-inch to six-inch wafers, making Osram the first manufacturer worldwide that expands production of all LED in the visible-light range to those larger wafers. And LED technology is becoming more and more popular, for example in the Ford F-150, which is one of the best-selling pickup trucks in the U.S. and came into the market in 2014 with a full LED front lighting from Osram. Still, the company’s technology leadership goes beyond LED chips: With the Audi R8 LMX and the BMW i8, there are now two vehicles available that are equipped with a unique laser module from Osram. Compared with previously used light sources, the module lights up the road significantly further and therefore increases safety on the road. But light can boost enjoyment as well. An impressive example is the new lighting solution in the Sistine Chapel, which was installed in the second half of the year under the supervision of Osram and with financial support of the European Union. About 500 years after they were created, Michelangelo’s masterpieces can now be seen in a so far unparalleled quality thanks to a total of 7,000 light-emitting diodes – which are not only energy-efficient but also particularly suited to preserve the artworks. But customers can also count on smart lighting by Osram at home or in the office. Thanks to Lightify, the lighting system Osram introduced in spring, users can control their lamps and luminaires via a smartphone and have the possibility to choose their favorites from millions of potential colors. The system can also be used to link and jointly control several different light sources. Lightify is another proof that new lighting technologies are opening up completely new dimensions for fascinating applications. At the same time, they consume substantially less energy than traditional lighting sources. As a logical consequence, Osram was included in the internationally renowned Dow Jones Sustainability Index World at the end of September. Sustainability is a key aspect of Osram’s business philosophy. This also became evident in March, when the first of five new solar-powered energy stations went into operation on the banks of Lake Victoria as part of an extension of the Kenya off-grid project initiated by Osram. Thanks to these energy stations, the area’s inhabitants get a cost-effective access to battery-powered lanterns.

OSRAM Licht AG’s annual report will be posted on the company’s Investor Relations homepage at on December 4, 2014.

[1] Earnings before interest, taxes and amortization.

[2] Osram divides its business into the three regions APAC (Asia-Pacific, Australia), EMEA (Europe, Russia, Middle East, Africa) and the Americas (U.S., Canada, Mexico, South America).

Key financial data of OSRAM Licht Group in the fourth quarter

4th quarter 2014 4th quarter 2013 Change nominal
Revenue 1,335 1,332 (0%)
EBITA 36 (24) 60
...Margin 2.7% (1.8%) 450 bps
EBITA, adjusted 106 108 (2)
…Margin 8.0% 8.1% (10 bps)
Income before taxes 17 (44) 61
Net income 12 (29) 41
Free cash flow 51 85 (34)
Employees (000) 34 35 (1)

(Preliminary, unaudited figures. In millions of euros, margins in percent, employees as of September 30.
Negative values in brackets.)

Reporting segment performance in the fourth quarter

4th quarter 2014 4th quarter 2013 Change nominal
Opto Semiconductors
…Total revenue 299 268 11%
…EBITA 50 39
…EBITA, adjusted 50 39
Specialty Lighting
…Total revenue 404 369 9%
…EBITA 60 48
…EBITA, adjusted 63 57
LED Lamps & Systems
…Total revenue 144 84 72%
…EBITA (28) (24)
…EBITA, adjusted (23) (24)
Classic Lamps & Ballasts
…Total revenue 472 549 (14%)
…EBITA (8) (7)
…EBITA, adjusted 32 41
Luminaires & Solutions
…Total revenue 124 155 (20%)
…EBITA (11) (65)
…EBITA, adjusted (8) (10)

(Preliminary, unaudited figures. In millions of euros. Negative values in brackets.)


Key financial data of OSRAM Licht Group in fiscal 2014

Fiscal 2014 Fiscal 2013 Change nominal
Revenue 5,142 5,289 (3%)
EBITA 310 99 211
...Margin 6.0% 1.9% 410 bps
EBITA, adjusted 449 410 39
…Margin 8.7% 7.7% 100 bps
Income before taxes 279 50 229
Net income 193 34 159
Free cash flow 216 284 (68)
Employees (000) 34 35 (1)

(Preliminary, unaudited figures. In millions of euros, margins in percent, employees as of September 30.
Negative values in brackets.)

Reporting segment performance in fiscal 2014

Fiscal 2014 Fiscal 2013 Change nominal
Opto Semiconductors
…Total revenue 1,125 1,018 10%
…EBITA 194 124
…EBITA, adjusted 194 125
Specialty Lighting
…Total revenue 1,551 1,456 7%
…EBITA 237 219
…EBITA, adjusted 246 246
LED Lamps & Systems
…Total revenue 454 298 53%
…EBITA (89) (95)
…EBITA, adjusted (84) (95)
Classic Lamps & Ballasts
…Total revenue 1,963 2,302 (15%)
…EBITA 90 42
…EBITA, adjusted 172 222
Luminaires & Solutions
…Total revenue 469 561 (16%)
…EBITA (70) (128)
…EBITA, adjusted (60) (65)

(Preliminary, unaudited figures. In millions of euros. Negative values in brackets.)


OSRAM of Munich, Germany is one of the two leading light manufacturers in the world. The company's portfolio covers the entire value chain from components – including lamps, electronic control gear and opto semiconductors such as light-emitting diodes (LED) – as well as luminaires, light management systems and lighting solutions. OSRAM has around 34,000 employees worldwide and generated revenue of more than €5.1 billion in fiscal 2014 (ended September 30). The company's business activities have been focusing on light – and hence on quality of life – for over 100 years. The company was listed on the stock exchanges in Frankfurt and Munich on July 8, 2013 (ISIN: DE000LED4000; WKN: LED 400; Trading symbol: OSR).
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This document contains statements and information pertaining to our future business and financial performance and future developments that may constitute forward-looking statements – i.e. statements about processes that take place in the future, not in the past. These statements pertaining to the future can be identified by expressions such as "anticipate", "expect", "want", "intend", "plan", "believe", "aspire", "estimate", "will”, "predict" or words of similar meaning. Such statements are based on current expectations and certain assumptions of OSRAM‟s management. They are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond OSRAM‟s control, affect OSRAM‟s operations, performance, business strategy and results and could cause the actual results, performance or achievements of OSRAM to be material different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or anticipated on the basis of historic trends. These factors include in particular, but are not limited to, the matters described in the chapter “Report on Opportunities and Risks” in the Annual Report of OSRAM Licht Group for fiscal 2013. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of OSRAM may vary materially from those described in the relevant forward-looking statement as being expected, anticipated, intended, planned, believed, sought, estimated or projected. OSRAM neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures they reference.