Tuesday , March 9 2021

Osram: Split under pressure after falling profit

Osram: Profit fell by just under 50 percent in the previous fiscal year - now restructuring of the company has led to a turnaround

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Osram: Profit fell by just under 50 percent in the previous fiscal year – now restructuring of the company has led to a turnaround

Group Eight won significantly less in the past financial year. This is partly due to the weakening of the car market, as the company announced on Tuesday night in Munich. However, Osram has already achieved already reduced annual targets.

The fiscal year passed stagnated sales of the Group reached 4.1 billion euros. The customized effects currency, as well as the purchase and sale, Osram achieved a plus of 2 percent. margin dropped from 16.8 to 14.7 percent. Correct business result (EBITDA) was down by 13 percent to EUR 605 million. Bottom line The group has earned nearly half less than EUR 142 million. In the last quarter, there was a loss of EUR 5 million.

Despite the decline in profits, Dividend of EUR 1.11 per share stay stable. As a reaction to the weaker development, CEO Olaf Berlien announced on Wednesday at an annual press conference that he wants to align business units.

Harmonization with three divisions

From the new financial year 2018/19, there will be three departments with a different look than before: Business with the company Car industry It also compiles as an area like that with digitalization, LED semiconductor division Opto semiconductors remains. The lighting company and the US service should continue to sell.

Osram wants to move to be a lighting manufacturer to become a "solution provider," Berlien said. Photonics offers new applications beyond classical lighting. As an example he called sensors or visualization. This opens new areas of growth, for example in the industry or consumer electronics. Addiction to car business should be reduced. At present, business accounts account for about half of sales. In the mid-term, Osram targets one third of its revenues in the automotive, industry, mobile and construction infrastructure sectors.

As a result of the reorganization, the Group intends to grow again in the medium term. In addition, the company will become more independent than the currently dominant automotive business over the next five years. This is currently weakening and is partially responsible for the fall in profits in the previous financial year.

By the end of June, Osram had already lowered the forecast due to limited demand from the automotive industry, poor lighting sector and project lags in the smartphone sector. That was the second time in the financial year. The company then announced further savings, as it did in the management. Osram also wants to increase efficiency in procurement and research.

Low key goals for the new fiscal year

For that new year Osram has set cautious targets – it is expected that the adjusted operating margin will fall to 12 to 14 percent. Comparative sales should remain stable or moderately up to 3 percent. Forecasts still refer to the old structure.

in 2022/23 The Group aims to increase its annual sales in the middleweight, double-digit category. The adjusted operating margin (Ebitda) should again exceed 15 percent. Osram expects stable courses.

Odds for 2018/19 share The map market displays in the morning, dropped by more than 3 percent. The forecast is below the average market estimate, analyst Commerzbank Sebatian Growe said, which reduced stocks from "buy" to "hold." In addition, the company's lighting technology conversion will take longer than expected. Also, Metzler's expert Guido Hoymann rated the annual outlook in the first estimate as "rather weak".

Osram CEO Berlien refrained from the previous mid-term goals of reaching sales of five billion euros by 2020, for example. Although this tag is still required, but it is postponed to "later". Berlien justifies, on the one hand, a new organization, on the other hand with changed market conditions, primarily in the currently weak automotive industry.

For divisions the company was also new goals, The auto-section is expected to grow by an average of 3 to 7 percent in the period from 2020 to 2023, with adjusted EBITDA margin of 9 to 11 percent. Digital business is expected to grow by 3 to 8 percent, with a margin of 5 to 10 percent. In the long run, Berlinen sees a significant growth potential here, with an expected increase in sales of more than 10 percent and returning more than 10 percent. Opto Semi is expected to achieve sales growth of around 10 percent and adjusted EBITDA margin of 23 to 29 percent during the cycle.

mg / AFX

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