Osram looks back on extraordinarily successful fiscal year 11/09/ Business & Financial Press NOTE: Unless indicated otherwise, all figures relate to continuing operations (i.e. excluding lamps). Revenue rises about 6 percent on a comparable basis in Adjusted EBITA margin increases to 12.5 percent Proposed dividend of 1.00 per share Osram managing board expects growth pace to continue in 2017 "Our fiscal year was extraordinarily successful. We achieved another record year and met our forecasts while implementing the biggest reorganization in Osram's history. This was an outstanding achievement. Today, Osram is a high-tech company with almost 17,000 patents and leading positions in its markets. We want to expand this position and attack in areas where we are not yet number one," said Olaf Berlien, Chief Executive Officer of OSRAM Licht AG. In the fiscal year ended September 30, Osram benefited from continuing strong demand, particularly for its premium opto semiconductor products. On a comparable basis, i.e. adjusted for portfolio and currency effects, revenue from continuing operations rose about six percent year on year and reached 3.78 billion. All reporting segments contributed to this increase. On a basis, revenue grew by six percent. Adjusted for special items, EBITA 1 from continuing operations increased around ten percent to 471 million, translating into a margin of 12.5 percent. As a result of the book gain from the sale of the Felco shares, net income from continuing operations more than doubled to 532 million. A dividend of 1.00 per share is to be proposed to the Annual General Meeting. Going forward, Osram will use earnings before interest, taxes, depreciation and amortization (EBITDA) as the main measure of operating profit to reflect its new positioning as a technology company. For fiscal year 2017, the company expects comparable revenue growth of five to seven percent and an adjusted EBITDA margin of at least 16 percent. 1 Earnings before interest, taxes, and amortization. Osram Group in the fourth quarter As announced, the fourth quarter of fiscal was strongly influenced by the fact that deliveries had been brought forward in the preceding quarter in view of the separation of the IT systems of Osram and the general lighting lamps business. Against this background, revenue from continuing operations was 909 million, which is a decline of 0.6 percent on a comparable basis from a year earlier. On a basis, revenue was down around three percent. The adjusted EBITA margin decreased by more than three percentage points to 8.9 percent. A large part of the deliveries brought forward in the third quarter was related to high-margin products. Net income from continuing operations was 44 million in the fourth quarter. Osram reporting segments in the fourth quarter Opto Semiconductors (OS) continued to benefit from strong demand for its premium products in the fourth quarter, particularly in the area of infrared. Revenue rose around nine percent on a comparable basis. With 18.4 percent, the EBITA margin again reached a good level and included expenses relating to the signing of a license
agreement. Construction of the new LED chip factory in Kulim, Malaysia, is still progressing according to plan. In the fourth quarter, the above-mentioned pull-forward effects had an impact on the Specialty Lighting (SP) reporting segment, which includes the Automotive Lighting and Professional & Industrial Applications units. The segment's comparable revenue declined about two percent year on year, despite continued robust demand from the automotive industry. The adjusted EBITA margin reached 8.6 percent. Besides the reduction in volume due to the pull-forward effects, profitability was influenced by the rising revenue share of LED-based products, as had already been the case in the preceding quarters. SP s entertainment lighting products were recently used at events such as the opening ceremony of the Summer Olympics in Brazil. The Lighting Solutions & Systems (LSS) reporting segment, which comprises the luminaires and systems business, also felt the impact from the pull-forward effects in the fourth quarter, with comparable revenue falling around four percent. Apart from that, demand particularly for indoor lights and LED drivers remained favorable. The adjusted EBITA margin reached break-even. Osram is currently converting several BMW plants in Germany and Austria to modern and energy-saving LED technology. This is one of the biggest orders to date in the Lighting Solutions business unit. Discontinued operations in the fourth quarter In view of the agreed sale, the general lighting lamps business is now reported under discontinued operations. In this context, the fourth quarter figures were impacted by a fair value adjustment as well as expenses related to the carve-out and the disposal of the business. Together with the operating result of the general lighting lamps business, this led to a net loss from discontinued operations of 92 million. Outlook for fiscal year 2017 The following outlook relates to continuing operations and therefore does not include the general lighting lamps business, which in July Osram agreed to sell. For fiscal year 2017, the managing board expects comparable revenue growth of five to seven percent. The adjusted EBITDA margin is anticipated to be at least 16 percent and will be affected, among other factors, by rising investments on a group level for research and development in the context of the Diamond initiative. Diluted earnings per share are expected in the range of 2.35 to 2.65, provided the share buyback program that started in continues as planned. Free cash flow is targeted to be around zero. The managing board is confident about Osram's positive medium-term prospects and is therefore aiming for a dividend of at least 1.00 per share also for fiscal 2017. Starting at 9 a.m. CET today, the company will hold its annual press conference with the managing board of OSRAM Licht AG. The conference will also be broadcast via the internet at www.osram-group.de/en/media/download-center/media-kits/mk-. A recording will be made available there afterwards. Starting at 11 a.m. CET, you can follow the conference call for analysts at www.osram-group.com/en/investors/result-center. The annual report of OSRAM Licht AG will be published on December 5, on the Investor Relations website at www.osram-group.com/en/investors/publications/. Key financial data of OSRAM Licht Group (cont. operations) in the fourth quarter
Revenue 909 938 (3.1%) EBITDA 125 196 (36.5%) Margin 13.7% 20.9% (720 bps) EBITDA, adjusted 131 163 (19.8%) Margin 14.4% 17.4% (300 bps) EBITA 74 148 (50.0%) Margin 8.2% 15.8% (760 bps) EBITA, adjusted 81 116 (30.4%) Margin 8.9% 12.3% (350 bps) Net income 44 97 (54.8%) Free cash flow 30 25 19.4% Employees cont. operations ( 000) 24.6 23.7 4.1% (Preliminary, unaudited figures. Figures in millions of euros, margins in percent, employees as of September 30. Negative values in brackets.) Reporting segment performance in the fourth quarter 2 Opto Semiconductors Total revenue 374 344 8.8% EBITA 69 67 EBITA, adjusted 69 67
Specialty Lighting Total revenue 462 477 (3.2%) EBITA 37 51 EBITA, adjusted 40 57 Lighting Solutions & Systems Total revenue 258 258 0% EBITA (3) (3) EBITA, adjusted 0 2 (Preliminary, unaudited figures in millions of euros. Negative values in brackets.) 2 year figures are reconciled to reflect the new OSRAM cost allocation and segment structure. Key financial data of OSRAM Licht Group (cont. operations) in fiscal Revenue 3,785 3,572 6.0% EBITDA 621 543 14.5% Margin 16.4% 15.2% 120 bps EBITDA, adjusted 652 607 7.3% Margin 17.2% 17.0% 20 bps EBITA 440 363 21.3% Margin 11.6% 10.2% 150 bps
EBITA, adjusted 471 428 10.1% Margin 12.5% 12.0% 50 bps Net income 532 228 133.2% Free cash flow 24 144 (83.4%) Employees cont. operations ( 000) 24.6 23.7 4.1% (Preliminary, unaudited figures. Figures in millions of euros, margins in percent, employees as of September 30. Negative values in brackets.) Reporting segment performance in fiscal 3 Opto Semiconductors Total revenue 1,425 1,293 10.2% EBITA 310 235 EBITA, adjusted 310 235 Specialty Lighting Total revenue 2,006 1,861 7.8% EBITA 233 249 EBITA, adjusted 246 276 Lighting Solutions & Systems Total revenue 1,005 941 6.8% EBITA (17) (31)
EBITA, adjusted (7) (21) (Preliminary, unaudited figures in millions of euros. Negative values in brackets.) 3 year figures are reconciled to reflect the new OSRAM cost allocation and segment structure. ABOUT OSRAM OSRAM, based in Munich, is a globally leading lighting manufacturer with a history dating back about 100 years. The product portfolio includes high-tech applications based on semiconductor technology such as infrared or laser lighting. The products are used in highly diverse applications ranging from virtual reality, autonomous driving or mobile phones to smart and connected lighting solutions in buildings and cities. In automotive lighting, the company is the global market and technology leader. Based on continuing operations (excluding Ledvance), OSRAM had around 24,600 employees worldwide at the end of fiscal (September 30) and generated revenue of almost 3.8 billion in that fiscal year. The company is listed on the stock exchanges in Frankfurt and Munich (ISIN: DE000LED4000; WKN: LED400; trading symbol: OSR). Additional information can be found at www.osram.com. Disclaimer This document contains statements and information pertaining to our future business and financial performance and future developments that may constitute forwardlooking 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 materially different from any future results, performance or achievements that may be expressed or implied by such forwardlooking 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. Press Contact
Stefan Schmidt Head of Strategic Communication & Media Relations stefan.schmidt@osram.com T: +49 89 6213-4680 F: +49 89 6213-3629 Philipp Grontzki Business / Financial Media p.grontzki@osram.com T: +49 89 6213-2129 F: +49 89 6213-3629