Nov 17, 2020
“We acted early and consistently. We have protected both our employees and our production. This has paid off. Our free cash flow was positive in the last fiscal year at twelve million euros. We are particularly proud of this,” said Olaf Berlien, CEO of OSRAM Licht AG. Despite a comparable revenue decline of almost 14 percent, the adjusted EBITDA margin remained stable at the previous year’s level of over eight percent. The measures taken have all progressed as planned. The net result has been impacted by the fall in revenue due to the crisis, the planned costs for the transformation and for depreciation relating to the Osram Continental joint venture. The Managing Board confirms the forecast for the new fiscal year issued at the end of September. The current trend in incoming orders for semiconductor business is positive.
The semiconductor business of the Opto Semiconductors (OS) unit contributed in particular to this development. The streamlining of the product portfolio is having a positive impact here. Because of corona, revenue fell by around nine percent to 1.34 billion euros, whereas the adjusted EBITDA margin climbed to more than 20 percent.
Automotive business (AM) was more affected by the economic effects of the pandemic. Revenue fell by 14 percent to 1.59 billion euros. Adjusted EBITDA was around 76 million euros. Adjusted EBITDA margin for the automotive segment as a whole was about five percent. This reflects dilution effects from Osram Continental. Its business is to be returned to the parent companies and is planned to be developed positively. This will also significantly improve the profitability of the automotive segment.
The Digital (DI) unit was even worse affected, with revenue falling by one fifth to 742 million euros. As a result, adjusted EBITDA was negative at minus 28 million euros.
Encouraging developments in the fourth quarter
The two major business segments, Opto Semiconductors and Automotive, indicate improvements in the fourth quarter of the fiscal year. Profitability increased accordingly in both segments. The Opto Semiconductors unit even achieved an adjusted EBITDA margin of roughly 22 percent.
There was a noticeable upturn in the automotive market, which is an important one for Osram. Overall, the situation has improved significantly in the core markets in recent months.
For the 2021 fiscal year, Osram expects comparable revenue growth of between six and ten percent, an adjusted EBITDA margin of nine to eleven percent, and free cash flow in the neutral to low positive double-digit million euro range. This forecast is based on the assumption that the effects of the COVID-19 pandemic will be overcome in the course of the fiscal year 2021. Any economic consequences of a worsening pandemic situation are therefore not reflected in the forecast values.
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Osram downsizes Management Board
At its meeting today, the Supervisory Board decided to downsize the Management Board of OSRAM Licht AG from three to two individuals. Following approval of the domination and profit and loss transfer agreement with ams by the Osram shareholders, it is foreseeable that the areas of responsibilities for technology will be reorganized within the combined company. At Osram, the integration of corporate innovation into the business units had already reduced major activities from the responsibilities of the Chief Technology Officer. The Osram Supervisory Board will therefore enter into negotiations with CTO Officer Stefan Kampmann (57) to terminate his contract prematurely.
“Due to his steadfast dedication, Stefan Kampmann had a decisive influence on the technological change at Osram in recent years,” said Olaf Berlien, CEO of OSRAM Licht AG. “With his outstanding technological expertise, Stefan Kampmann made clear decisions to successfully realign Osram, for which we thank him very much,” said Peter Bauer, Chairman of the Osram Supervisory Board. “He also initiated important efficiency programs in the Opto Semiconductors business unit and actively supported the transformation of the automotive business.”