Lighting Industry, News

Huge boost in earnings at Osram

Osram’s earnings before interest, tax or amortisation (EBITA) hit $554 million (€410 million) for the year ending September 2013; an increase of $130 million (€96 million) compared to 2012. This means Osram has exceeded its 2013 targets.

Sales of LED lighting products now account for almost a third of all Osram sales, rising from 25 to 29 per cent.

‘Fiscal 2013 was in a number of ways a positive year for Osram,’ said Wolfgang Dehen, Osram boss. ‘Following our successful listing, we also saw a strong finish in our business. We have made significant progress in our company reorganisation and execution continues to be ahead of schedule. We are confident that we will stay on our profitable growth path in the current fiscal year as well. As we are still ahead of our savings target, we aim to reach an adjusted EBITA margin of more than eight per cent already in the current fiscal year – earlier than expected. We also assume that Osram will surpass its earlier announced 2013 to 2015 cumulative savings target, further improving our long-term competitiveness.’

These are the company’s first annual results since it began trading on the stock exchange earlier this year.

Osram previously announced plans to achieve savings of $1.3 billion (€1 billion) by 2014. This was to include a 12 per cent reduction of its workforce as part of a wider industry move away from incandescent sources towards LED.

By September 2013, Osram had cut 10 per cent of its workforce. It is now down to around 35,000 employees. These job losses and reorganisations in production have led to the company realising 36 per cent of the cost savings planned up until 2015.

The figures come as the company prepares to open its second LED assembly plant in Wuxi, China. It is expected to be fully operational by the next summer.

The components division has continued to grow, with revenue up 13 per cent year-on-year, and the automotive segment has experienced strong demand for halogen lamps.

Despite sales in outdoor luminaires driving growth in Luminaires & Solutions, the segment suffered an overall loss due to the cost-saving measures implemented throughout the year.

A two per cent increase in the components segment has meant the LED business has offset declines in the traditional business.