OSRAM trench 3 billion euros investment strategy analysis

OSRAM event

- plans to invest about 2 billion euros for research and development by 2020

- another 1 billion euros to be used to build a new LED chip factory by 2020

- "diamond" program to promote growth and sustainable enterprise value

It is estimated that by 2020, the average annual growth rate will reach 8%, EBITDA annual average growth rate of up to 9%

OSRAM invested about 3 billion euros to open up new prospects for growth

Changes in the direction of the lighting market to the semiconductor based technology spawned a number of new growth opportunities, and OSRAM will firmly seize these opportunities. To this end, OSRAM lighting company will invest about 3 billion euros before the new technology and application in the area of 2020. About 2 billion euros will be used for research and development to further enhance OSRAM's technology leadership and open up new markets. In addition, OSRAM also plans to invest 1 billion euros in Malaysia to build a new LED chip factory. This will be able to release more growth potential, whether it is for the dynamic technology driven general lighting market or niche markets that OSRAM has achieved a good position.

"We focus on profitability, flexibility and entrepreneurial spirit, and after the strategic adjustment phase, we launched the 'diamond' innovation and growth plan. This means that our focus is shifting to sustainable growth, which can benefit from the potential of semiconductor based technology. OSRAM CEO Olaf Mr. Berlien said.

"Diamond" plan includes a number of strategic measures. First of all, OSRAM will photoelectric semiconductor (OS) sector investment of about 370 million euros, for the construction of a new LED chip factory in Malaysia opened. Further expansion of the measures have been in the planning, the company expects total investment in 2020 will reach about 1 billion euros. The new plant will become the world's largest and newest 6 inch LED chip production base. The plant's new production capacity and its technological leadership will help OSRAM dramatically increase its market share in the rapidly growing market for general lighting. The market is the largest segment of the optoelectronic semiconductor market, the current total of about 5 billion 700 million euros.

The market average annual growth rate of 7.5%, by 2020, will bring the greatest potential for the company. Thanks to economies of scale and synergies, OSRAM can also reduce its cost in automotive lighting and other market activities and mobile devices and other applications, while OSRAM has strong performance in these areas.

As a technology leader, OSRAM also plans to invest in the special lighting (SP) sector to promote new technologies in the market to promote and further develop the growth potential. OSRAM has been a global leader in automotive lighting industry for many years. The company plans to strengthen the activities of innovative lighting modules. For example, OSRAM is currently the only company in the world to provide a large number of laser modules for headlight. Another frontier technology in automotive lighting is organic light-emitting diodes (OLED). This technology is also about to be widely used in vehicle taillight. According to OSRAM's expectations, the total automotive applications of lasers and OLED in 2025 will reach about 1 billion 100 million euros.

In the recently established lighting solutions and systems (LSS) sector, OSRAM will launch a variety of measures in the next few years to achieve intelligent and high technical requirements for lighting solutions. Following the announcement of the review of lighting equipment and solutions business unit (LS), OSRAM adjusted the sector to achieve profitable growth. In this area, in particular, market access and the scope of the integrated solution will be improved. Given the growing importance of integrated lighting solutions, OSRAM has shifted its focus to the development of electronic and software technology. For this reason, OSRAM in the next two years will develop new features of electronic ballasts and optical management systems.

Substantial increase in research quotas to secure technology leadership

In conjunction with the announcement of innovation and growth plans, OSRAM will significantly increase R & D budget. Through this initiative, the company hopes to promote the development of smart city applications, wireless lighting control and laser and OLED technology. Despite the integration and key measures, OSRAM's past research quota has remained high, reaching more than 6% of revenue. After the initial start-up phase of the ordinary lighting business, the increase in spending will account for about 2016 of revenue in fiscal year 9%.

"In the past has been the return of R & D investment company, to help the company sit tight in the top spot in the automotive field, and explore the application of breakthrough for photoelectric semiconductor. OSRAM hopes that through the increase in investment in research, to further consolidate the semiconductor based professional technology and expand its market position. Chief executive officer Mr. Olaf Berlien mentioned.

"Diamond" program to promote growth and sustainable enterprise value

Diamond innovation and growth plans will be increasingly concerned about the balanced growth of employees, customers and shareholders and added value. In addition to maintaining high growth potential in high-income areas, OSRAM has been in the dominant position of the niche market will continue to make a valuable contribution to the overall return. In this context, the company set up the following goals, hoping to reach fiscal year 2020:

OSRAM aims to achieve 5 billion to 5 billion 500 million euros in revenue. This means that after the end of the lamp business start-up phase, the average annual growth rate of 8%.

Interest, taxes, depreciation and