Weak automotive industry continues to cause osram problems

The continuing weakness of the automotive industry and of smartphones and general lighting continues to impact the osram lighting group.

Sales in the second quarter of the current fiscal year fell by 8 percent compared with the previous year to 862 million euros, the mdax-listed company announced in munich.

Earnings before interest, taxes, depreciation and amortization (ebitda) adjusted for special items fell by 56 percent to 70 million euros. However, both ratios turned out better than experts had expected after the forecast, which was capped at the end of march.

At the end of the day, however, the loss increased: osram remained in the red at 90 million euros. The main reason for this was the cost of restructuring measures, said group ceo olaf berlien when presenting the figures: osram plans to save around 200 million euros by 2022. 85 to 95 million euros have already been budgeted for the current fiscal year.

After two profit warnings last year, osram spooked shareholders with another one at the end of march. The share price then plummeted to its lowest level since the fall of 2014. According to the new forecast, sales are expected to fall significantly by 11 to 14 percent in the current fiscal year and less of the loss will remain as profit.

Osram is sticking to the group’s new focus on optical technologies, berlien said. In addition to the automotive division, the digital and optical semiconductors divisions. The automotive industry is osram’s most important customer. Around half of the company’s sales currently come from this sector.

Meanwhile, sales declined significantly in all three divisions: automotive by 10.6 percent, digital by 8.5 percent and optical semiconductors by almost 19 percent. "In addition to the economic effects, this also reflects the weakness of the automotive industry and general lighting," berlien said. Especially in china, car production continues to decline. High inventories burdened the business.

Osram is in in-depth takeover talks with the investment companies bain capital and carlyle. "The due diligence process is ongoing", osram announced. Interested parties will gain a deeper insight into the books. It is still completely open whether an agreement will be reached, said berlien. He had repeatedly indicated that the entry of a coarse shareholder would be quite welcome. Since siemens, as the former parent company, sold its remaining shares, osram no longer has one that could serve as a stability anchor.