Osram unveils further details of its three-pillar strategy

2016/01/21

At an analyst day, Osram unveiled further details of its three-pillar strategy presented in November last year and of the innovation and growth initiative. In all its three pillars, the lighting company wants to benefit even more from the potential of semiconductor-based technologies and will make appropriate investments in the coming years. In the Specialty Lighting (SP) business, Osram is increasing the focus of its automotive business on LED-based products and the system business as well as investments in new technologies such as laser and OLED. In the Lighting Solutions & Systems (LSS) segment, Osram will expand its product portfolio for Smart Cities and Smart Buildings applications in the years to come, thus taking account of rising urbanization. In the LED components business (Opto Semiconductors, OS), Osram aims to become the cost leader thanks to its lead in technology, economies of scale, and factor cost benefits from the planned 6-inch LED chip plant in Kulim, Malaysia. The plant will be the largest of its kind. “We are well on our way to becoming a high-tech company. With our innovation and growth initiative we are shifting the focus to sustainable growth,” said Olaf Berlien, Chief Executive Officer of OSRAM Licht AG.

Megatrends such as digitalization, mobility, or urbanization are shaping the lighting industry. With several leading positions already, Osram is well prepared to benefit from such trends. Following the carve-out of its general lighting lamps business, Osram will be based on three strategic pillars in the future: Specialty Lighting (SP); luminaires, solutions and electronic components (LSS); LED components (OS).

Specialty Lighting: expanding leading market positions

As the global leader in automotive lighting, Specialty Lighting is planning additional investments in semiconductor-based technologies and in the system business with light engines and light modules to realize further growth potential. Osram is currently the only manufacturer worldwide to deliver laser modules for headlamps ready for series production, and the company intends to further strengthen development activities for innovative light modules. Another cutting-edge technology within automotive lighting is organic light-emitting diodes (OLEDs), which will be rolled out for broad-based use in rear lights of vehicles in the near future. The other SP businesses, such as entertainment lighting applications, will continue to be expanded.

Lighting Solutions & Systems: catching up in a growing market

In the Lighting Solutions & Systems segment, Osram will roll out many different measures in the coming years to implement intelligent, technologically advanced lighting solutions. In particular the continuing urbanization trend, where connectivity and data integration will be key factors, offers high potential. Against this backdrop, the luminaires and solutions business will expand its offering of complete solutions, among other things. The increasing importance of complex lighting solutions also puts the expansion of electronics and software expertise in the spotlight. In this respect, Osram will build on its existing know-how, also in the field of sensor technology, to make buildings and cities even smarter in the future.

Opto Semiconductors: balanced growth

The highly profitable Opto Semiconductors business has been in a strong global number 2 position in the LED component market for many years. Especially in the field of specialty applications, the business has a leading position. In the meantime, Opto Semiconductors has also secured a top spot in the industry when it comes to the efficiency of chips in the field of so-called volume emitters. The new plant in Kulim is taking account of this achievement and will primarily address the LED general lighting market. In this market segment, which will see average annual growth rates of 9.5 percent until 2020, Osram is planning to expand its market position significantly in the coming years. At the same time, Opto Semiconductors expects further growth in the specialty markets, which include its automotive and industry businesses. In addition to economies of scale, the new manufacturing plant in Malaysia will provide factor cost benefits for Osram as compared with its competitors and thus make it the cost leader.

ABOUT OSRAM

OSRAM, based in Munich, is a globally leading lighting manufacturer with a history dating back more than 100 years. The portfolio ranges from high-tech applications based on semiconductor technology, such as infrared or laser lighting, to smart and connected lighting solutions in buildings and cities. OSRAM had around 33,000 employees worldwide at the end of fiscal 2015 (September 30) and generated revenue of almost €5.6 billion in that fiscal year. The company is listed on the stock exchanges in Frankfurt and Munich (ISIN: DE000LED4000; WKN: LED 400; trading symbol: OSR). Additional information can be found at www.osram-group.com.

DISCLAIMER

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 Risks and Opportunities” in the Annual Report of OSRAM Licht Group. 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.