Revenue remained stable, OSRAM announced third quarter 2018 fiscal year results

* third quarter revenue remained stable, reaching 1 billion 20 million euros * adjusted interest rate depreciation and amortization profit margin (EBITDA) remained at 13.1%* 13.1%* startup lighting sales plan * to be cut by 130 million to 140 million euros in 2020.

Olaf Berlien, chief executive of OSRAM group, said: "despite the fact that the market environment is not optimistic, we are still making good profits in important business areas. We actively respond to the temporary slowdown in the automotive industry customer demand, and further save money. To ensure success, we are accelerating the pace of corporate restructuring. In the long run, OSRAM will continue to grow. "

In the third quarter of fiscal year 2018, OSRAM maintained its performance in a tough market environment. The third quarter revenue was unchanged from the same period last year, reaching 1 billion 20 million euros. Interest rate depreciation and amortization profit (EBITDA) after the adjustment of the special project is lower than the same period last year, which is 133 million euros. Adjusted EBITDA profit margin reached 13.1%. The change in exchange rate, as well as the cost increase for R & D and upgrading of production capacity, will affect more than forty million euros after the adjustment of the third quarter EBITDA. In the first three quarters of fiscal year 2018, these factors accumulated more than 130 million euros, of which 75 million euros came from the exchange rate effect. Recently, influenced by the existing and imminent trade restrictions and other factors, customers and distributors in the world have changed their buying behavior, which also aggravated the group's revenue pressure. A combination of these factors will have an impact on the company's operations in the coming months, prompting the board to adjust its annual forecast by the end of June. Against this background, the board has decided to streamline the product line in the future, and the first step will be to sell the lighting business.

Management is seeking a variety of measures to adjust the current market situation. First of all, we will streamline global administration and management, which will reduce operating costs by about 20%. In addition, the group has implemented several structural and operational optimization projects, including improvements in R & D, supply chain, and efficiency in German factories. These optimization projects can achieve cost savings of 130 million to 140 million euros in 2020.

In the third quarter of this fiscal year, the overall economic slowdown and the reduction of demand in the automotive industry have become the primary factors affecting the performance of OS and SP. Trade tariffs from the United States, tighter emission tests in Europe and lower expectations for the production of high-end products will lead to more uncertainties. In addition, we are also facing delays in mobile devices and plant lighting projects, as well as a sustained slowdown in the general lighting market.

At the beginning of the year, the strategic adjustment plan of the professional lighting system solution (LS) division is now being implemented. In addition to the ongoing sale of us services, the board is planning to sell the lighting business. In the financial report, the lighting business of the lighting system solution (LSS) plate has been stabilized due to many favorable improvement measures.

2018 fiscal year expectations

At the end of June, OSRAM adjusted its financial expectations for the 2018 fiscal year. Based on these changes, the board of directors anticipate comparable revenue growth of 1 to 3% in the 2018 fiscal year (previously: 3 to 5%). The adjusted EBITDA is expected to be 5.7 to 600 million euros (previously: about 640 million euros). Diluted earnings per share is expected to be 1 to 1.2 euros (previously: 1.9 to 2.1 euros). This includes the unconventional costs associated with the "OSRAM future concept". Cash flow is expected to be negative 1.5 to 200 million euros (previously: cash flow is negative 50 million to 150 million euros).

As announced before, the board is adjusting its development strategy. The results will be announced at the Capital Markets Conference in November 7th.

OSRAM's long-term growth prospects remain optimistic. LED and laser technology are in line with the global trend and will continue to serve the high-tech growth market. The group is actively engaged in technological innovation and has expanded the product line in the field of innovative technology in the near future. This includes the acquisition of Vixar and Vixar, a company with expertise in the field of compact 3D identification technology. The takeover of the two companies will be completed in the early fourth quarter of the fiscal year, and the takeover of Trilux subsidiary BAG Electronics will also be completed in the same period. The joint venture with the continental group in the field of intelligent automotive lighting has also started operation in early July.

(* OSRAM group financial year is calculated from October 1st to September 30th next year, the third quarter is 4-6 months).

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