www.osram-licht.ag
Interim Combined Report for the Third Quarter and the Nine Months of Fiscal 2013 for OSRAM Licht Group
Interim Report
June 30, 2013
Light is OSRAM
OSRAM
Overview
OSRAM Licht Group
For the three and nine months
ended June 30, 2013 and 2012 Three months ended June 30,
Change
Nine months ended June 30,
Change
2013 2012 2013 2012
Revenue in € million 1,278.4 1,297.9 (1.5) % 3,956.7 4,028.6 (1.8) % Revenue growth (comparable) 1) 2) in % 2.2 % 0.6 %
EBITA 2) in € million 22.1 5.9 > 200 % 123.7 43.9 181.7 %
as % of revenue (EBITA margin) 1.7 % 0.5 % 3.1 % 1.1 %
therein special items 2) in € million (72.5) (69.1) 4.9 % (178.1) (257.0) (30.7) %
Transformation costs in € million (63.5) (43.2) 47.0 % (189.8) (183.2) 3.6 % Costs associated with the separation/
for going public (net) in € million (9.0) (17.3) (48.0) % 11.7 (43.1) n/a Legal and regulatory matters in € million – (8.6) n/a – (30.7) n/a EBITDA 2) in € million 111.8 68.0 64.5 % 358.9 315.5 13.8 %
Income (loss) before income taxes in € million 41.8 (24.6) n/a 94.3 (169.9) n/a Net income (loss) in € million 13.7 54.9 (75.0) % 62.2 (272.1) n/a Return on capital employed (ROCE) 2) in % 2.3 % 7.0 % 3.6 % (9.3) %
Free cash flow 2) in € million 108.1 94.5 14.4 % 199.4 (315.5) n/a June 30,
2013 September 30, 2012 Change
Cash and cash equivalents in € million 297.8 31.2 > 200 % Total equity in € million 2,202.4 1,949.6 13.0 % Total assets in € million 4,879.7 5,066.9 (3.7) % Equity ratio (total equity in % of total assets) in % 45.1 % 38.5 %
Net debt/net liquidity 2) in € million 107.9 (595.3) n/a
as % of EBITDA 3) 0.2 (1.5)
Adjusted net debt 2) in € million (315.9) (1,094.5) (71.1) %
as % of EBITDA 3) (0.7) (2.8)
Employees FTE 35,494 39,194 (9.4) %
of which in Germany FTE 9,745 10,027 (2.8) % of which outside Germany FTE 25,749 29,167 (11.7) %
1) Adjusted for currency and portfolio effects. 2) See glossary.
3) EBITDA for the nine months ended June 30, 2013 was annualized for calculation purposes only; that is not necessarily indicative for management’s expectation of future results.
The OSRAM Licht Group’s fiscal year began on October 1, 2012, and ends on September 30, 2013.
Quartalsübersicht Umsatz Geschäftsjahr in Mio. € 2012 2013 Vergleich bares Wachstum 1) 3,3 % 1,8 % 0,6 % – 3,0 % – 0,7 % 0,3 % 1.374,6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1.356,1 1.297,9 1.371,2 1.356,8 1.321,5 1.278,4 2,2 % Revenue by Quarters Fiscal in € million 2012 2013 Comparable growth 1) 3.3 % 1.8 % 0.6 % (3.0) % (0.7) % 0.3 % 1,374.6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1,356.1 1,297.9 1,371.2 1,356.8 1,321.5 1,278.4 2.2 % Quartalsübersicht EBITA Geschäftsjahr in Mio. € 2012 2013 EBITA-Marge 2) 8,7 % – 6,0 % 0,5 % 0,5 % 7,4 % 0,1 % 119,9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 – 81,9 5,9 6,9 100,4 1,2 22,1 1,7 % EBITA by Quarters Fiscal in € million 2012 2013 EBITA margin 2) 8.7 % (6.0) % 0.5 % 0.5 % 7.4 % 0.1 % 119.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 – 81.9 5.9 6.9 100.4 1.2 22.1 1.7 %
1) Adjusted for currency and portfolio effects (see glossary), and compared with the respective prior-year quarter. 2) Special items (see glossary) of Q3 2013: 570 bps (Q3 2012: 530 bps).
With its mission statement “Light is
OSRAM
,”
OSRAM
delivers lighting
solutions for every facet of life. As an integrated lighting expert, we are
the number two among the global companies in the lighting market.
We offer vertically integrated products and solutions along the entire
lighting value chain, from light sources—including lamps, components,
and optical semiconductors—through ballasts and other light
compo-nents, to complete luminaires, light management systems and lighting
solutions as well as value-added services.
Lamps & Components (
LC
)
The LC segment comprises the product business with lamps, light engines, and ballasts. This segment therefore includes both traditional lamps and SSL-based lamps for private and professional use as well as electronic ballasts, components for LED systems, and light management systems. The products thus cover a number of application areas, such as resi dential, office, industrial, gastronomy, outdoor, and architectural.
Opto Semiconductors (
OS
)
OS offers a broad portfolio of optoelectronic semiconductors for external customers and for other OSRAM businesses. The products offered include LED components for visible light, infrared components, laser diodes, and sensors. The application spectrum extends from the automotive industry, industry electronics, general lighting, and con- sumer and communication electronics to medical technology, materials processing, and measurement and printing technology.
Luminaires & Solutions (
LS
)
The LS segment comprises OSRAM’s project and solutions business. The portfolio comprises luminaires for professional applications such as street lighting and architectural lighting as well as solutions for private end users. In addition, LS offers lighting solutions and associated light management systems that are used in internal and external lighting. Installation and maintenance services for the LS product portfolio are covered by the Service business.
Specialty Lighting (
SP
)
The SP segment offers light sources and systems for the automotive sector as well as special applications in the display/optic area. In the auto-motive sector, the spectrum ranges from interior and exterior lighting all the way to sensing. Display/optic covers the areas of projection and enter-tainment/architainment as well as medical and industrial applications. The products are sold via the wholesale trade and OEM channels as well as directly to commercial customers.
Umsatz nach Segmenten 1)
Drei Monate bis 30. Juni
in Mio. € 2012 2013 Wachstum vergleichbar 2) nominal 649,0 140,1 348,5 238,9 LC LS SP OS 603,7 130,8 358,7 279,2 – 0,9 % – 7,0 % – 5,6 %– 6,6 % 4,8 % 2,9 % 17,5 % 16,8 % Revenue by Segments 1)
Three months ended June 30,
in € million 2012 2013 Growth comparable 2) nominal 649.0 140.1 348.5 238.9 LC LS SP OS 603.7 130.8 358.7 279.2 (0.9) % (7.0) % (5.6) %(6.6) % 4.8 % 2.9 % 17.5 % 16.8 %
EBITA nach Segmenten 1)
Drei Monate bis 30. Juni
in Mio. € 2012 2013 EBITA-Marge 3) – 25,5 – 25,2 53,6 32,2 LC LS SP OS – 7,7 – 23,5 44,5 37,6 – 3,9 % – 18,0 % 15,4 % 13,5 % – 1,3 % – 18,0 % 12,4 % 13,5 % EBITA by Segments 1) EBITA margin 3) – 25.5 – 25.2 53.6 32.2 LC LS SP OS – 7.7 – 23.5 44.5 37.6 (3.9) % (18.0) % 15.4 % 13.5 % (1.3) % (18.0) % 12.4 % 13.5 %
Three months ended June 30,
in € million 2012 2013
1) In addition to the four reporting segments, the reconciliation to interim combined financial statements is part of the OSRAM reporting structure. Therein included are corporate items and pensions, which management does not consider to be indicative for the segments’ performance, and the consolidation of transactions between the segments, certain reconciliation and reclassification items, and the operations of corporate treasury. Including the reconciliation items, OSRAM revenue amounts to € 1,278.4 million (2012: € 1,297.9 million), and OSRAM EBITA amounts to € 22.1 million (2012: € 5.9 million).
2) Adjusted for currency and portfolio effects (see glossary).
OSRAM’s Condensed Interim Combined Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and its inter pretations issued by the International Accounting Standards Board (IASB), as adopted by the European Union (EU). This Interim Combined Report should be read in conjunc tion with our Combined Financial Statements for the fiscal years ended September 30, 2012, 2011 and 2010 as well as the Condensed Interim Combined Financial Statements for the six months ended March 31, 2013. Additional Information and a detailed analysis of our operations and activities is included in our Listing Prospectus.
Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
The number of employees is determined at the reporting date and measured in full time equivalents (FTE).
For a definition of typical technical terms used in the lighting industry and a short description of significant financial terms, please refer to the glossary in the chapter “Further Information” of this Interim Report.
Contents
04 Current Highlights 06 To our Shareholders
07 Letter to the Shareholders
10 OSRAM Licht Shares and Investor Relations 12 Light is OSRAM
20 Interim Combined Management Report
21 Overview of the Third Quarter of Fiscal 2013
24 Development in the Nine Months ended June 30, 2013 39 Report on Opportunities and Risks
43 Report on Expected Developments
44 Report on Events after the Balance Sheet Date
45 Notes, Forwardlooking Statements and Reconciliations
48 Condensed Interim Combined Financial Statements for the three and nine months ended June 30, 2013 in accordance with IFRSs
49 Combined Statement of Income
50 Combined Statement of Comprehensive Income 51 Combined Statement of Financial Position 52 Combined Statement of Cash Flows 53 Combined Statement of Changes in Equity
54 Notes to the Condensed Interim Combined Financial Statements
88 Review Report 90 Further Information
91 Glossary
94 Financial Calendar 95 Imprint
April 2013 May 2013
LED Star Classic A40
Highperformance
LED Lamps Available for Under
€10 for the First Time
Osram presents the first LED lamps—equivalent to 40 and 60 watt incandescent lamps—costing less than € 10 in Germany. The recommended retail price (RRP) of the LED Star Classic A40 has been € 9.95 since June 1, while the A60 is available at the same price thanks to a special offer. LED is the future of lighting. Until now, the cost has prevented the technology from being used on a widespread basis. Compared with conventional in can des cent lamps, LEDs save more than € 100 and 200 kilograms of CO2 over their 15year life.
Lenbachhaus
OSRAM Creates Unique
Lighting Solution for
Lenbachhaus Art Gallery
Munich’s Städtische Galerie im Lenbachhaus was reopened on May 6, 2013, following extensive renovation. The aim was to use a range of lighting moods to showcase the artworks to the best possible effect. To implement this at a technological level, OSRAM and its partners developed a solution that cannot be found in any other museum in the world—over 170,000 diodes and an intelligent lighting control system create almost 100 different shades to present the works of Kandinsky and Beuys in the best light.
July 2013 July 2013 July 2013
05
Supplier of the Year
OSRAM Opto Semiconductors
is Continental’s
“Supplier of the Year 2012”
Continental named OSRAM Opto Semiconductors its “Supplier of the Year” in July. Every year, the Continental Automotive Group recognizes its best partners out of over 900 strategic suppliers, presenting a total of 13 performance awards across five categories—
electronics, electromechanics, mechanics, investment and engineering services, as well as division specific solutions. OSRAM Opto Semiconductors took first place in the electronics category. The award honors the hightech company as a longterm, reliable technology partner that stands for high quality and delivery standards.
TaunusTurm Frankfurt am Main
Osram Lights up the
TaunusTurm Tower in Frankfurt
OSRAM installs over 12,000 interior lights at the new “TaunusTurm” tower in Germany’s financial capital, Frankfurt. OSRAM is providing a range of LED lighting on behalf of the construction company, Ed. Züblin AG. These are an extremely homogeneous light source and feature a very flat design, and are also more energy efficient than conventional fluorescent lamps. The 170meter office building is currently under construction at the heart of the city and will offer around 60,000 square meters of office space over 40 floors. The first occupants are expected to move in before the end of the year.OSRAM Licht AG’s listing
World’s Largest
Pureplay Lighting Company
goes Public
OSRAM Licht AG has officially been independent since July 5, when the spinoff from Siemens took effect. The world’s largest pureplay lighting company went public on July 8. Since then, all shares of OSRAM Licht AG have been admitted to trading, in particular on the Regulated Markets of the Frankfurt Stock Exchange and the Munich Stock Exchange. OSRAM Licht AG’s capital stock is composed of over 100 million shares in total. A good 80 % of them were transferred to Siemens shareholders at a ratio of 10:1 on the first day of trading.
To our Shareholders
07
Letter to the Shareholders
10
OSRAM
Licht Shares and
Investor Relations
07
To our Shareholders
Letter to the Shareholders
Dear Shareholders,
we are pleased and also very proud that OSRAM Licht AG has been listed on the stock exchange as an independent entity since July 8, 2013. This is a significant milestone in our Company’s history, which stretches back more than one hundred years. On behalf of the Managing Board, I would therefore like to extend a warm welcome to all our new shareholders. Communicating with our shareholders is one of the most important new tasks for OSRAM’s Managing Board and we very much look forward to engaging in this dialog with you.
The story of OSRAM Licht AG’s listing is a very exciting one—a view also shared by the financial market, as the first highly successful days of trading have shown. The global lighting market is currently undergoing fundamental change. The market volume for traditional products will continue to shrink in the future. Regulatory changes are driving forward the development and introduction of semiconductorbased products (solid state lighting—SSL). The price of LED components is also falling, particularly in the general lighting segment, which is now making more widespread use in a large number of market segments a more attractive proposition. Overall, we expect market volumes to increase.
Transformation Bears First Fruits
This technology shift necessitated a strategic realignment. In order to imple ment this systematically, we launched a comprehensive, global transformation program named “OSRAM Push” in the first quarter of fiscal 2012. This pro gram is intended to ensure a sustained improvement in OSRAM’s performance by reshaping processes, structures, and the corporate culture. By fiscal 2015, we aim to achieve cumulative gross savings of € 1 billion, mainly through success ful purchasing strategies and greater productivity, as well as the necessary restructuring. The results obtained from the measures taken so far show that we are currently ahead of our targets.
At the same time, the technology shift offers us significant opportunities for growth. We are already an integrated lighting expert. We have an established, strong global brand. We have excellent market access around the world. And we are number two among the global players in the lighting market. We intend to capitalize on this excellent starting position. We firmly believe that our consider able capacity to innovate enables us to launch the right products and solutions along the value chain successfully on the relevant markets.
OSRAM
Licht
AG
’s
listing–a milestone
Letter to the
Shareholders
Technological change
and transformation
08
In order to better respond to technological change, we modified our organiza tional structure from the start of the current fiscal year and split our former General Lighting Business Unit into two reporting segments: Lamps & Compo nents, which primarily serves product business, and Luminaires & Solutions, which mainly covers the project business. In this report, OSRAM is publishing its quarterly results using this new segment structure now that it has gone public.
Revenue Growth in Difficult Environment
In the third quarter of fiscal 2013, OSRAM fared well in a difficult economic environment. Yearonyear, we were able to lift revenue by around 2 % on a comparable basis. This means that we have returned to a profitable growth path.
The fact that we increased the percentage of Group revenue generated from the highgrowth, innovationdriven SSL business from 26 % a year ago to 31 % in the third quarter shows that we have successfully moving into line with the technological changes I mentioned before. We will continue to systematically pursue this trend toward semiconductorbased lighting going forward and will extend our leading role in the transition to LEDs. The restruc turing activities I mentioned have likewise already had an extremely positive impact on the adjusted return on sales, which we increased from 5.8 % to 7.4 % based on adjusted EBITA.
Earnings Forecast Raised Modestly
For the current fiscal year, we anticipate a rise in EBITA adjusted for special items by around 20 % to approximately 30 %. And we expect the OSRAM Licht Group to return to profit in the current fiscal year ending September 30. This has allowed us to raise our earnings targets modestly.
At a general level, our goal is to grow profitably and to generate a return on capital in excess of our cost of capital.
On behalf of the entire Managing Board, which since January 1, 2013, has also included Dr. Peter Laier in addition to my colleague Dr. Klaus Patzak and myself, I would like to extend my sincere thanks to all employees for their considerable commitment, without which our successes to date and our transition to being a listed company would not have been possible.
Growing share of
SSL
business
Our goal—profitable
growth
We are conscious of our responsibility to our employees and shareholders and will use the business freedom we have gained to cement and expand our leading position in the lighting market. We also intend to clearly position our selves on the capital markets. We aim to join one of Deutsche Börse’s bench mark indices soon and will raise OSRAM’s public profile and awareness by means of regular, transparent, and indepth reporting, as well as active investor relations work. Our objective is to justify the trust you have placed in our Company. We hope that you will accompany us longterm as our Company moves forward.
Yours sincerely,
Wolfgang Dehen CEO
OSRAM Licht AG
Management Board of OSRAM Licht AG, from left: Dr. Peter Laier Chief Technology Officer (CTO) Wolfgang Dehen Chief Executive Officer (CEO) Dr. Klaus Patzak Chief Financial Officer (CFO)
10
OSRAM Licht AG has been listed since July 8, 2013. The conditions for this were established over the last two years. On March 28, 2011, Siemens had announced its plan to list OSRAM by means of an initial public offering (IPO). In view of difficult market conditions, Siemens decided in June 2012 to prepare, in parallel and alternatively to the plan for an IPO, a spin-off by issuing OSRAM shares to the shareholders of Siemens AG and subsequently listing these shares. Siemens then decided on the spin-off option in November 2012.
The publication of the Joint Spin-off Report of the Managing Boards of Siemens AG and OSRAM Licht AG on Decem- ber 7, 2012, marked the first milestone on the way to the spin-off. The large majority (98.21 %) of Siemens’ sharehold-ers voted in favor of the spin-off at the General Meeting on January 23, 2013.
However, an action for avoidance of this resolution of the General Meeting was brought before the Regional Court in Munich in February. This initially prevented registration. Finally, in April 2013, the Higher Regional Court in Munich ruled in favor of the application for clearance filed by Siemens—clearing the way for the listing.
The final entry in connection with the spin-off was made in the Commercial Register on July 5, 2013. One OSRAM Licht share was credited to the securities accounts of Siemens AG shareholders for every ten Siemens shares on the first day of trading, July 8, 2013. A total of 104,689,400 shares. Siemens AG will retain an interest of 19.5 % in OSRAM Licht AG following the spin-off, 2.5 % of which was contributed to the Siemens Pension Trust. 83 % of the shares are there-fore allocated to the free float. Institutional investors in Germany and abroad hold the majority of the OSRAM shares. OSRAM has a solid private investor base with over half a million investors.
The Shares in the First Few Weeks of Trading
OSRAM Licht AG’s initial listing on the Frankfurt Stock Exchange took place on July 8, 2013, in the Prime Standard segment. OSRAM is also listed on the Munich Stock Exchange. OSRAM Licht AG shares started trading at € 24.00. The first day of trading was dominated by high trading volumes (20.75 million shares on XETRA), with the shares closing at € 23.80.
Driven by positive analyst reports, share prices already rose on the second trading day as well as in the course of the first week of trading and recorded a high of € 28.74. Trading was dominated by high volumes because numerous insti-tutional investors whose funds track indices such as the DAX were forced to sell their shares, especially since OSRAM is not included in these indices. However, the resulting pres-sure to sell was cushioned by new investors targeted as part of the extensive international investor presentations held by the Managing Board in advance of the listing.
Group talks and one-on-one discussions with investors were held during a roadshow held from June 24 to July 5. Meetings were held over 400 potential institutional investors in total.
In the course of the listing, eleven analysts from prominent banks initiated coverage of OSRAM (providing analysis and valuation). The majority of the experts have currently issued a “buy” recommendation for OSRAM.
The share price reached a high of € 29.80 in July and closed at € 29.30 (XETRA) on July 31, 2013. 130 % 120 % 110 % 100 % 90 % OSRAM Licht-Aktie MDAX® 8. Juli 2013 31. Juli 2013
Entwicklung der OSRAM Licht-Aktie im Juli 2013
130 %
120 %
110 %
100 %
90 %
OSRAM Licht Share
MDAX®
July 8, 2013 July 31, 2013
Performance of OSRAM Licht Shares in July 2013
OSRAM
Licht Shares and
11
To our Shareholders
OSRAM Licht Shares and Investor Relations
Investor Relations
An Investor Relations department was established at OSRAM as part of the preparations for the listing. Its primary objective is to hold open and transparent dialog with all of OSRAM’s shareholders.
OSRAM’s first Capital Market Day was held in Munich in May 2013. Thirty-eight analysts and investors from six countries used the opportunity to learn at first hand about the lighting market and OSRAM’s strategy.
OSRAM Investor Relations launched its Internet presence at www.osram.com/ir on June 21, 2013, after the securities prospectus was published. In addition to documents pub-lished by OSRAM Licht AG, the website also provides inves-tors with the financial calendar as well as other information, for example share and corporate governance infor mation. As a company listed on the Frankfurt Stock Exchange’s Prime Standard, OSRAM Licht AG aims to be admitted to one of Deutsche Börse’s benchmark indices. Provided it fulfills the relevant criteria, OSRAM Licht AG can be admitted to one of Deutsche Börse’s benchmark indices at the next chaining date (expected to be as from the end of September). Currently, OSRAM is listed in the CDA Prime All Share index as well as in a number of EURO STOXX (e.g. EURO STOXX® TMI Industrials) and STOXX
indices, such as STOXX® Europe 600.
Dividend Policies
As communicated at the Capital Market Day and in its secu-rities prospectus, going forward, OSRAM Licht AG aims to distribute between 30 % and 50 % of the Group’s net income in accordance with the IFRSs to the extent that such divi-dend payments can be reconciled with long-term and sus-tainable business performance and taking into account any extraordinary non-cash effects. However, in light of the ongoing restructuring in the general lighting area, it has been communicated that no dividend should be expected for fiscal 2013.
Employee Participation Program and Share Buyback
Employees at the German companies in the OSRAM Licht Group were given the opportunity to purchase shares in OSRAM Licht AG in connection with the spin-off. Share purchases were subsidized by OSRAM within certain limits, depending on the amount invested. In order to settle the employee tranche, OSRAM Licht AG used a man- dated bank to repurchase OSRAM Licht shares via the stock exchange in the period from July 8 to August 2, 2013, once trading had commenced. The total buyback volume amounted to € 3.541.603,32.
In the period between July 11, 2013, and August 2, 2013, an initial further share volume of € 5.586.228,61 was repur-chased for a transaction bonus approved by Siemens for the Managing Board and other management staff of OSRAM Licht AG. Depending on the degree of goal achievement to be determined by Siemens in August, any shares addition-ally necessary will be repurchased.
OSRAM Licht Shares in the Market
Number of shares 104,689,400 of which free float 84,274,967
High 1) in € 29.38
Low 1) in € 23.80
Market cap as of July 31, 2013 in € 3,067,399,420
1) XETRA closing price
Key Data of OSRAM Licht Shares
International Securities Identification
Number (ISIN) DE000LED4000 German Securities Identification
Number (WKN) LED 400
Currency EUR
Trading venues Frankfurt (XETRA), Munich Exchange symbol OSR
Share class No-par value registered shares Trading segment Official Market
Market segment Prime Standard Initial listing July 8, 2013 Number of shares (after listing) 104,689,400
Better Light—
Faster Logistics
Energy efficiency is particularly important to industrial
building and warehouse operators when it comes to lighting.
In logistics centers, for example, lighting is responsible for
up to
80
% of electricity consumption—good light is essential
for packing and dispatching items quickly and securely.
At the same time, growth in e-commerce means that
signifi cantly more goods are being sent today than ten years
ago. As a result, cost-effective lighting solutions like those
offered by
OSRAM
are more important than ever before for
mail-order and logistics companies.
7.7 %
faster production processes at
1,200
rather
Luminaires & Solutions
60 %
cost savings compared to a conventional
solution with Zalando’s new lighting system.
Healing
with Light
The quality of health care is increasing in many countries—
prevention is becoming more and more important, medical
technology is evolving, and new treatment and diagnostic
methods are gaining acceptance. Demand is also growing
for light sources for medical devices and applications—and
OSRAM
is the global market leader in this area.
No. 1
Specialty Lighting
100%
more light at the end of an endoscope
than conventional
LED
solutions in this area
Sustainable
Comfort
It is difficult to imagine life in the comfort of our own home
without artificial lighting. Light not only helps us to find
our way around when it’s dark outside—good lighting also
makes us feel comfortable and secure, and allows us to
relax.
OSRAM
LED
retrofit lamps provide warm, cozy light
while also delivering considerable energy and cost savings.
80%
energy savings with
LED
retrofit lamps compared
Lamps & Components
2015
The first year
LED
retrofit lamps will have
a higher market share than conventional
energy-saving lamps.
Invisible and
Indispensable
Everyone knows what they are and almost everyone has
one—smartphones are more than just a telephone.
They combine innovative hardware functions with a fast
operating system and useful programs. A large number
of devices use infrared technology from
OSRAM
.
And the smartphone market is booming and growing
continuously.
0.9 mm
The height of the powerful and economical Mini Midled
proximity sensor for smartphones.
Opto Semiconductors
900 million
smartphones are expected to be sold
Interim Combined
Management Report
21
Overview of the Third Quarter
of Fiscal
2013
24
Development in the Nine Months
ended June
30
,
2013
39
Report on Opportunities and Risks
43
Report on Expected
Developments
44
Report on Events after the
Balance Sheet Date
45
Notes, Forward-looking State-
21
Interim Combined Management Report
Overview of the Third Quarter of Fiscal 2013
Overview of
the Third Quarter
of Fiscal
2013
“We can look back on a successful listing and a good third quarter.
We succeeded in increasing adjusted
EBITA
substantially while returning
to comparable revenue growth. Our transformation effort continues to
make rapid progress; we are ahead of schedule regarding the planned
savings. For the current fiscal year, we are raising our earnings outlook
slightly and now expect a positive net income.”
Wolfgang Dehen, Chairman of the Managing Board of OSRAM Licht AG
OSRAM Licht Group—Back to profitable growth OSRAM turned in a good performance in a challenging macroeco-nomic environment in the third quarter of fiscal 2013. Revenue rose 2.2 % year-on-year on a comparable basis—excluding portfolio and currency effects—to almost € 1.3 billion. In nomi-nal terms, revenue declined by 1.5 %.
EBITA reached € 22.1 million in the third quarter of 2013, result-ing in an EBITA margin (EBITA in % of revenue) of 1.7 %, compared with € 5.9 million and 0.5 %, respectively, in the prior-year quarter. This figure includes special items of € 72.5 million (Q3 2012: € 69.1 million), particularly transforma-tion costs. The special items lowered the EBITA margin by 570 basis points in the three months ended June 30, 2013 (Q3 2012: 530 basis points). These positive figures reflect the effects of the Group’s transformation, which has been on- going since 2012 and is well on schedule. The financial result benefited from a book gain of € 35.1 million on the intended sale of our share in the Valeo Sylvania LLC, Seymour, Indiana, U.S.A. (“Valeo Sylvania”) joint venture, leading to net income of € 13.7 million (Q3 2012: € 54.9 million).
EBITA-Entwicklung nach Quartalen
Geschäftsjahr in Mio. € 2012 2013 EBITA-Marge 8,7 % – 6,0 % 0,5 % 0,5 % 7,4% 0,1% 119,9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 – 81,9 5,9 6,9 100,4 1,2 22,1 1,7%
EBITA Development by Quarters
EBITA margin 8.7 % (6.0) % 0.5 % 0.5 % 7.4% 0.1% 119.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (81.9) 5.9 6.9 100.4 1.2 22.1 1.7% Fiscal in € million 2012 2013
Umsatzentwicklung nach Quartalen
Geschäftsjahr in Mio. € 2012 2013 Wachstum vergleich bar 1) 3,3 % 1,8 % 0,6 % – 3,0 % – 0,7% 0,3% 1.374,6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1.356,1 1.297,9 1.371,2 1.356,8 1.321,5 1.278,4 2,2%
Revenue Development by Quarters
Fiscal in € million 2012 2013 Growth comparable 1) 3.3 % 1.8 % 0.6 % (3.0) % (0.7)% 0.3% 1,374.6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1,356.1 1,297.9 1,371.2 1,356.8 1,321.5 1,278.4 2,2%
1) Adjusted for currency and portfolio effects, and compared with the respective prior-year quarter.
22
Umsatz nach Segmenten 3)
Wachstum vergleichbar 2) nominal 649,0 140,1 348,5 238,9 LC LS SP OS 603,7 130,8 358,7 279,2 – 0,9 % – 7,0 % – 5,6 %– 6,6 % 4,8 % 2,9 % 17,5 % 16,9 %
Drei Monate bis 30. Juni
in Mio. € 2012 2013 Revenue by Segments 3) Growth comparable 2) nominal 649.0 140.1 348.5 238.9 LC LS SP OS 603.7 130.8 358.7 279.2 (0.9) % (7.0) % (5.6) %(6.6) % 4.8 % 2.9 % 17.5 % 16.9 %
Three months ended June 30,
in € million 2012 2013
Umsatz nach Regionen 1) (nach Sitz des Kunden)
Wachstum vergleichbar 2) nominal 503,0 339,1 455,8
EMEA APAC Americas
519,5 324,6 434,2 4,3 % 3,3 % 5,3 % – 4,3 % – 2,3 % – 4,7 %
Drei Monate bis 30. Juni
in Mio. € 2012 2013
Revenue by Regions 1) (by customer location)
Growth comparable 2) nominal 503.0 339.1 455.8
EMEA APAC Americas
519.5 324.6 434.2 4.3 % 3.3 % 5.3 % (4.5) % (2.3) % (4.7) %
Three months ended June 30,
in € million 2012 2013
Wachstum vergleichbar 2)
nominal
Umsatz nach Technologie
342,3
955,7
SSL-Produkte Traditionelle Produkte
394,0 884,4 16,9 % 15,1 % – 3,0 % – 7,5 %
Drei Monate bis 30. Juni
in Mio. € 2012 2013 Growth comparable 2) nominal Revenue by Technology 342.3 955.7
SSL products Traditional products
394.0 884.4 16.9 % 15.1 % (3.0) % (7.5) %
Three months ended June 30,
in € million 2012 2013
In regional terms, the highest revenue growth on a compara-ble basis was recorded in the APAC reporting region, thanks in particular to strong demand for opto semiconductor com-ponents. OSRAM’s business in the EMEA region made moderate gains in the reporting period despite continuing economic uncertainty in the eurozone. In the Americas region, by contrast, declines were registered. The share of semiconductor-based products (“Solid State Lighting” or SSL) in total revenue increased to 30.8 % in the third quarter compared with 26.4 % in the prior-year quarter, thus under-scoring OSRAM’s leading role in the transition to LED. –APAC with comparable growth of 5.3 % year-on-year, which
was driven by a significant revenue increase for OS. –Comparable revenue growth of 4.3 % in EMEA despite the
decline in southern Europe.
–Revenue trend in the Americas suffered from declining service business.
Lamps & Components (LC)—Positive effects of OSRAM Push on the margin The largest segment LC, which covers the product business with lamps, light engines, and ballasts, is benefiting from the ongoing transformation, which is also reflected in an improved EBITA margin. The sales decline on a comparable basis slowed as the share of semiconductor-based products again increased.
–Revenue growth in EMEA outweighed by declines in APAC and the Americas.
–Another rise in the revenue share of SSL products.
Luminaires & Solutions (LS)—Segment trend indicates need to restructure The LS segment comprises luminaires for professional customers, products for consumers, as well as the service and solution business. LS again posted a considerable loss in the third quarter due to structural challenges combined with declining revenues. Measures to improve the segment’s performance are currently under review.
–Lower comparable revenue compared with the prior year due to weaker service business in the U.S.A., which was only partially compensated by significant growth in SSL outdoor luminaires.
–Revenue growth in EMEA and APAC outweighed by declines in the Americas.
–EBITA margin benefited from positive trend in the lumi-naires business in the reporting quarter, but was negatively impacted by the service business.
–Profitability in the third quarter at prior-year level; transfor-mation costs expected in the coming quarters.
1) See glossary.
2) Adjusted for currency and portfolio effects.
3) The revenues disclosed comprise external and intersegment revenue (total revenue). Including the reconciliation to interim combined financial statements of
€ – 94.0 million (2012: € – 78.6 million), OSRAM revenue amounts to € 1,278.4 million (2012: € 1,297.9 million).
23
Interim Combined Management Report
Overview of the Third Quarter of Fiscal 2013
Free Cash Flow nach Quartalen
Geschäftsjahr in Mio. € 2012 2013 – 505,8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 95,8 94,5 92,9 89,9 1,4 108,1
Free Cash Flow by Quarters
(505.8) Q1 Q2 Q3 Q4 Q1 Q2 Q3 95.8 94.5 92.9 89.9 1.4 108.1 Fiscal in € million 2012 2013
EBITA nach Segmenten
Drei Monate bis 30. Juni
in Mio. € 2012 2013 EBITA-Marge – 25,5 – 25,2 53,6 32,2 LC LS SP OS – 7,7 – 23,5 44,5 37,6 – 3,9 % – 18,0 % 15,4 % 13,5 % – 1,3% – 18,0% 12,4% 13,5% EBITA by Segments EBITA margin (25.5) (25.2) 53.6 32.2 LC LS SP OS (7.7) (23.5) 44.5 37.6 (3.9) % (18.0) % 15.4 % 13.5 % (1.3)% (18.0)% 12.4% 13.5%
Three months ended June 30,
in € million 2012 2013
Specialty Lighting (SP)—Continuous revenue growth, special items lead to margin decline of over 300 basis points
The SP segment, which addresses the automotive lighting and display/optics markets, sustained its growth trend and was able to increase revenue by 4.8 % on a comparable basis, particularly through gains in the Americas and EMEA regions. Growth stemmed from the business with LED-based products, especially. The EBITA margin was 12.4 %, reflecting special items that lowered the margin by 340 basis points.
–Revenue growth again driven by LED-based products and gas-discharge lamps for the automotive sector.
–Clear growth in the Americas, improvement in EMEA (despite the still soft European automotive market), but decreasing revenue due to declining projection lamp business.
–EBITA of SP impacted by impairment loss on non-current assets for the production of pre-materials in connection with the trends expected in the traditional general lighting business in particular.
Opto Semiconducturs (OS)—Exceptional revenue growth and high profitability With an exceptional 17.5 % increase in revenue on a comparable basis, the business with opto-semiconductor components posted the highest growth of the four reporting segments in the third quarter, thanks to strong demand across all regions and almost all businesses. The EBITA margin reached a high level of 13.5 %. In view of the strong quarter, total revenue in the OS business is expected to pass the billion-euro mark in the current fiscal year for the first time ever.
–Revenue growth driven by the LED component business for general lighting applications and for communications markets.
–Growth in all regions, especially in APAC.
–Third-quarter EBITA driven by economies of scale, pro-ductivity, and a favorable product mix; prior-year quarter had benefited from licensing revenues.
Free Cash Flow—Strong quarter The sharp increase in EBITDA saw free cash flow rise by 14.4 % as against the prior-year quarter, despite the slight increase in capital expenditures. The year-on-year increase is attributable to funds released from net working capital, compared with funds tied up in the second quarter of fiscal 2013.
24
Development in the Nine Months
ended June
30
,
2013
Results of Operations
Revenue development
In the first nine months of fiscal 2013, our revenue trend was shaped by an economic climate that showed only slow stabi lization. Uncertain prospects for the global economy led to regionally different trends. Revenue declined by 1.8 %, dropping from € 4,028.6 million in the first nine months of fiscal 2012 to € 3,956.7 million in the first nine months of fiscal 2013. The decrease was affected by negative portfolio effects of 2.1 % resulting from the disposal of our shares in the joint
ventures with Mitsubishi and Toshiba in Japan. Excluding portfolio and currency translation effects, revenue was cautiously positive on a level with the previous year. The fun-damental structural trend toward SSL business continued. At segment level, the revenue growth at OS and SP was unable to fully offset the decreases in the LC and LS segments. The performance of the individual segments is described in more detail in Segment Information.
Revenue by Segments
Nine months ended June 30, Change thereof
in € million 2013 2012 nominal comparable Currency Portfolio
Lamps & Components 1,966.6 2,099.3 (6.3) % (1.8) % (0.5) % (4.0) % Luminaires & Solutions 406.5 448.1 (9.3) % (9.4) % 0.2 % (0.1) % Specialty Lighting 1,086.7 1,043.1 4.2 % 4.5 % (0.3) % – Opto Semiconductors 749.6 654.8 14.5 % 14.1 % 0.4 % – Reconciliation to interim combined financial statements (252.7) (216.7) 16.6 % 16.4 % 0.5 % (0.2) %
OSRAM 3,956.7 4,028.6 (1.8) % 0.6 % (0.3) % (2.1) %
While the EMEA region achieved modest revenue growth in the nine months of fiscal 2013 compared with the prior-year period—particularly due to the positive trend at OS—revenue declined year-on-year in the APAC and Americas regions. However, APAC did generate growth of 6.5 % on a comparable basis.
The EMEA region saw a modest increase in revenue of 1.4 % in nominal terms, with a rise from € 1,679.0 million in the relevant prior-year period to € 1,702.0 million in the first nine months of fiscal 2013. Growth in EMEA was driven by the trend in northern Europe, while south- ern Europe and the Middle East lagged well behind
northern Europe due to the impact of financial and politi- cal crises.
In the APAC region, revenue decreased by 2.3 % to € 946.3 million in the first nine months of fiscal 2013, down from € 968.6 million in the previous year. The decline was attributable to clear portfolio effects of – 8.8 % resulting from the disposal of our shares in the joint ventures with Mitsu-bishi and Toshiba in Japan. However, these effects were off-set to a significant extent by growth in other countries, particularly China, for which the OS and SP businesses were primarily responsible. On a comparable basis, revenue registered clear growth of 6.5 %.
Revenue by Regions 1)
Nine months ended June 30, Change thereof
in € million 2013 2012 nominal comparable Currency Portfolio
EMEA 1,702.0 1,679.0 1.4 % 1.4 % 0.0 % – thereof Germany 559.7 531.1 5.4 % 5.4 % – – APAC 946.3 968.6 (2.3) % 6.5 % 0.0 % (8.8) % thereof China 225.7 203.8 10.7 % 9.5 % 1.3 % – Americas 1,308.3 1,381.0 (5.3) % (4.5) % (0.8) % – thereof U.S.A. 920.0 981.5 (6.3) % (6.9) % 0.6 % – OSRAM 3,956.7 4,028.6 (1.8) % 0.6 % (0.3) % (2.1) %
25
Interim Combined Management Report
Development in the Nine Months ended June 30, 2013
Revenue generated from SSL products rose by 10.9 % in the nine months of fiscal 2013 just ended, thus contributing 28.1 % to revenue. The upward trend was supported by the positive course of business at OS and, to a lesser extent, by the growth in forward-integrated SSL products.
Revenue by Technology
Nine months ended June 30, Change thereof
in € million 2013 2012 nominal comparable Currency Portfolio
SSL products 1,111.7 1,002.0 10.9 % 12.2 % 0.1 % (1.4) % Share of SSL products of revenue 28.1 % 24.9 %
Traditional products 2,845.0 3,026.6 (6.0) % (3.3) % (0.4) % (2.4) % Share of traditional products of revenue 71.9 % 75.1 %
OSRAM 3,956.7 4,028.6 (1.8) % 0.6 % (0.3) % (2.1) %
Revenue in the Americas region decreased by 5.3 %, declining from € 1,381.0 million in the first nine months of fiscal 2012 to € 1,308.3 million in the first nine months of fiscal 2013. The decline was mainly the result of lower demand in the U.S.A. This was due among other things
to the comparatively strong first nine months of fiscal 2012, which had benefited from major projects in the service business in the Luminaires & Solutions segment. The positive business trend in South America was offset by negative currency effects.
26
Development of major items of the combined statement of income Gross Profit
Nine months ended June 30, Change
in € million 2013 2012 nominal
Revenue 3,956.7 4,028.6 (1.8) %
Cost of goods sold and services rendered (2,827.1) (2,961.4) (4.5) %
Gross profit 1,129.6 1,067.2 5.8 %
in % of revenue 28.5 % 26.5 %
Gross profit increased by 5.8 %, rising from € 1,067.2 million in the first nine months of fiscal 2012 to € 1,129.6 million in the same period of fiscal 2013. The gross profit margin (gross profit as a percentage of revenue) rose from 26.5 % in the first nine months of fiscal 2012 to 28.5 % in the first nine months of fiscal 2013. The increase was due to the rise in gross profit in all four segments, with LC in particular also benefiting from lower transformation costs compared with the previous year (in particular expenses for person - nel-related restructuring measures related to the “Future Industrial Footprint” project and expenses for more efficient structures in the production, and expenses for impairment losses on production facilities). The SSL business contributed
to the improvement in the gross profit margin, in particular Opto Semiconductors as well as the improved gross profit margin for forward-integrated SSL products, although it was still significantly lower than in the traditional busi- ness. Additionally, costs of € 30.7 million in connection with a license and trademark litigation burdened previous year’s earnings. Furthermore, in connection with contract changes, certain allowances to purchasing associations were presented in Marketing, selling, and general adminis-trative expenses in the first nine months of fiscal 2013 that had been reported within gross profit in the prior-year period. These expenses amounted to € 16.3 million in the nine months of the prior year.
Other Functional Costs and Other Operating Result
Nine months ended June 30, Change
in € million 2013 2012 nominal
Research and development expenses (255.0) (246.5) 3.4 %
in % of revenue (6.4) % (6.1) %
Marketing, selling and general administrative expenses (787.5) (754.4) 4.4 %
in % of revenue (19.9) % (18.7) %
Other operating income 57.0 8.8 > 200 %
Other operating expense (37.2) (154.7) (76.0) %
Research and development expenses registered a moderate increase, particularly at Opto Semiconductors. Transfor-mation costs burdening this reporting period could be com-pensated especially in the segment LC.
The rise in Marketing, selling, and general administrative expenses compared with the prior-year period is attributable to higher transformation costs, especially for personnel-related restructuring measures as well as higher costs asso-ciated with the separation and for going public. Further- more, in connection with contract changes, certain allow-ances to purchasing associations were presented in Marketing, selling, and general administrative expenses in the first nine months of fiscal 2013 that had been reported within gross profit in the prior-year period.
Other operating result, which is made up of other operating income and other operating expenses, increased sharply in the first nine months of fiscal 2013 compared to the corre-sponding prior-year period. This is attributable in particular to goodwill impairment of € 101.1 million on the cash-generat-ing unit Professional Luminaires (PLUM) in the first nine months of fiscal 2012. Furthermore, in the current fiscal year, income was recognized for the settlement of patent infringe-ment disputes, which escalated following the announceinfringe-ment that the OSRAM Licht Group was to go public, including the reversal of the corresponding and further provisions. OSRAM considers this income as special item.
27
Interim Combined Management Report
Development in the Nine Months ended June 30, 2013
Financial Result
Nine months ended June 30, Change
in € million 2013 2012 nominal
Income (loss) from investments accounted for using the equity method, net 13.2 (48.0) n/a
Interest income 4.8 2.3 108.7 %
Interest expense (23.3) (38.9) (40.1) %
Other financial income (expense), net (7.3) (5.7) 28.1 %
In the nine months of fiscal 2013 just ended, we noted a net income of € 13.2 million from investments accounted for using the equity method, compared to a net loss of € 48.0 million in the first nine months of fiscal 2012. This was primarily attributable to a call and put option agreement with the joint venture partner relating to the sale of OSRAM’s
shares in Valeo Sylvania and the loans extended to the joint venture, which led to reversals of impairment losses in the amount of € 35.1 million. By contrast, an impair- ment loss of € 27.6 million had been recognized on the net investment in Valeo Sylvania in the first nine months of fiscal 2012.
Net Income (Loss) and EBITA
Nine months ended June 30, Change
in € million 2013 2012 nominal
Income (loss) before income taxes 94.3 (169.9) n/a
Income taxes (32.1) (102.2) (68.6) %
Net income (loss) 62.2 (272.1) n/a
EBITA 123.7 43.9 181.7 %
in % of revenue (EBITA margin) 3.1 % 1.1 % therein Special items 1):
– Transformation costs (189.8) (183.2) 3.6 % – Costs associated with the separation/for going public (net) 11.7 (43.1) n/a
– Legal an regulatory matters – (30.7) n/a
Total (178.1) (257.0) (30.7) %
1) For detailed information about special items see glossary and Note 14 | Segment information to condensed interim combined financial statements for the three and nine months ended June 30, 2013 for OSRAM Licht Group.
Despite declining revenue, net income of € 62.2 million was noted in the first nine months of fiscal 2013 compared to a loss of € 272.1 million in the first nine months of fiscal 2012. This progress resulted primarily from the increase in gross profit, the fact that no impairment losses had to be recognized on goodwill, the significant income from the settlement of patent infringement disputes, and the increase of net income from investments accounted for using the equity method compared to the prior-year period. The income tax expense declined clearly to € 32.1 million in the first nine months of fiscal 2013, down from € 102.2 million in the same period of fiscal 2012 and is calculated on the basis of the expected effective tax rate for the entire fiscal year.
28
EBITA rose by 181.7 %, increasing from € 43.9 million in the first nine months of fiscal 2012 to € 123.7 million in the same period of fiscal 2013, reflecting the initial successes from OSRAM Push. The corresponding EBITA margin increased from 1.1 % in the prior-year period to 3.1 % for the reporting period. The rise was primarily due to net income associated with the separation and for going public com-pared to expenses in the first nine months of fiscal 2012, as well as to the adverse impact of expenses in the prior-year period in connection with a license and trademark litigation recognized under Corporate items. In addition, EBITA at Opto Semiconductors rose sharply. An offsetting effect
resulted from an impairment loss of € 28.0 million on produc-tion facilities for pre-materials following the reassessment of their strategic business prospects, in particular because of the trends expected in the traditional general lighting business. This is a component of transformation costs and impacted the LC and SP segments and corporate items by € 9.6 million, € 8.2 million, and € 10.2 million, respectively. Overall, special items burdened the EBITA margin of the reporting period with 450 basis points (prior-year period: 640 basis points). The EBITA contribution from forward- integrated SSL products was negative in both the reporting period and the prior-year period.
Umsatz
Veränderung der Gewinn- und Verlustrechnung gegenüber dem Vorjahreszeitraum
Neun Monate bis 30. Juni 2013 in Mio. €
Umsatzkosten
Bruttoergebnis vom Umsatz
Forschungs- und Entwicklungskosten Sonstiges betriebliches Ergebnis Finanzergebnis
Gewinn/(Verlust) vor Ertragsteuern
Ertragsteuern
Gewinn/(Verlust) nach Steuern
– 71,9 134,3 62,4 – 8,5 165,7 – 33,1 77,7 264,2 70,1 334,3
Vertriebs- und allgemeine Verwaltungskosten
Revenue
Statement of Income: Change Compared to Prior-Year Period
Nine months ended June 30, 2013 in € million
Cost of goods sold and services rendered
Gross profi t
Research and development expenses Other operating result
Financial result
Income (loss) before income taxes
Income taxes
Net income (loss)
(71.9) 134.3 62.4 (8.5) 165.7 (33.1) 77.7 264.2 70.1 334.3
Marketing, selling and general administrative expenses
Return on capital employed (ROCE)
The return on capital employed (ROCE) grew to 3.6 % in the first nine months compared with – 9.3 % in the prior-year period. The improvement was mainly due to the higher income before interest and after taxes compared to the first nine months of fiscal 2012, in combination with a lower average capital employed.
Kapitalrendite (ROCE)
Kapitalkosten
– 9,3 %
3,6 %
Neun Monate bis 30. Juni 2012 2013
Return on Capital Employed (ROCE)
Cost of capital
(9.3) %
3.6 %
Nine months ended June 30, 2012 2013
29
Interim Combined Management Report
Development in the Nine Months ended June 30, 2013
Segment Information
In order to better respond to the technological transforma-tion, we modified our segment structure with effect from October 1, 2012. Our general illumination business was split along the lighting value chain into four new business units (Lamps, Light Engines & Controls, Luminaires, and Solutions) and the units Services and OLED. Two new segments have
been established for external reporting purposes in accor-dance with IFRSs: Lamps and Light Engines & Controls make up the Lamps & Components segment, and Luminaires, Solutions, and Services make up the Luminaires & Solutions segment. The OLED research and development project is reported under corporate items.
Lamps & Components Segment Data LC
Nine months ended June 30, Change 2013 2012 nominal comparable1)
Total revenue in € million 1,966.6 2,099.3 (6.3) % (1.8) %
EBITA in € million (22.3) (35.0) (36.3) %
EBITA margin in % (1.1) % (1.7) %
Employees 2) FTE 17,967 23,320 (23.0) % 1) Adjusted for currency translation and portfolio effects.
2) As of June 30, 2013 and 2012.
Total revenue generated by the LC segment decreased by € 132.7 million, or 6.3 %, declining from € 2,099.3 million in the first nine months of fiscal 2012 to € 1,966.6 million in the nine months ended June 30, 2013. Portfolio effects from the disposal of the joint ventures in Japan were the main factor contributing to the decrease. Revenue decreased modestly on a comparable basis. Although the segment’s business with forward-integrated SSL products increased significantly compared with the prior-year period, this was outweighed by declining demand in the traditional busi- ness, particularly for pressure discharge lamps and elec-tronic ballasts. In regional terms, the revenue of Lamps & Components decreased in particular—mainly in connection with the portfolio effects described—in the APAC region and due to the business downturn in the Americas region. The decrease could not be compensated by the modest increase in sales revenues in the EMEA region. Adjusted for the negative effects of portfolio changes of 4.0 % and negative currency translation effects of 0.5 %, total segment revenue fell by 1.8 %.
Despite the declining revenues, EBITA rose by € 12.7 million to € – 22.3 million in the nine months ended June 30, 2013, up from € – 35.0 million in the nine months ended June 30, 2012. The increase was due to productivity improvements in parts of our traditional business, reflecting the positive impact of our OSRAM Push program. Margin improvements in our loss-making business with forward-integrated SSL products and slightly more modest transformation costs also contributed to the earnings improvement.
30
Luminaires & Solutions Segment Data LS
Nine months ended June 30, Change 2013 2012 nominal comparable1)
Total revenue in € million 406.5 448.1 (9.3) % (9.4) %
EBITA in € million (63.8) (64.1) (0.5) %
EBITA margin (15.7) % (14.3) %
Employees 2) FTE 3,429 3,192 7.4 %
1) Adjusted for currency translation and portfolio effects. 2) As of June 30, 2013 and 2012.
Total revenue of the LS segment declined by € 41.6 million, or 9.3 %, decreasing from € 448.1 million in the first nine months of fiscal 2012 to € 406.5 million in the first nine months of fiscal 2013. While lighting business revenues increased in all regions driven by growth in SSL products, this was out-weighed by decreases in the service business in the Ameri-cas. This was due on the one hand to postponements of large-scale capital spending among customers due to the U.S. “fiscal cliff”. In addition, the revenue for the first nine months of fiscal 2012 had included two major SSL installa-tion projects in the U.S.A. Adjusted for currency translainstalla-tion
effects of 0.2 % and negative portfolio effects of 0.1 %, total segment revenue fell by 9.4 % overall.
At € – 63.8 million, EBITA reported by the LS segment was nearly unchanged in the first nine months of fiscal 2013 (previous year: € – 64.1 million). The EBITA margin deteriorated from – 14.3 % in the first nine months of fiscal 2012 to – 15.7 % in the first nine months of fiscal 2013. This was primarily attributable to lower revenue in the service business and the fact that function costs could not be reduced to the same extent. Transformation costs are expected to be incurred in the coming quarters.
Specialty Lighting Segment Data SP
Nine months ended June 30, Change 2013 2012 nominal comparable1)
Total revenue in € million 1,086.7 1,043.1 4.2 % 4.5 %
EBITA in € million 170.9 177.2 (3.6) %
EBITA margin 15.7 % 17.0 %
Employees 2) FTE 5,991 6,314 (5.1) %
1) Adjusted for currency translation and portfolio effects. 2) As of June 30, 2013 and 2012.
SP noted a € 43.6 million, or 4.2 %, rise in total revenue, from € 1,043.1 million in the first nine months of fiscal 2012 to € 1,086.7 million in the first nine months of fiscal 2013. The increase was mainly attributable to a clear comparable growth in the APAC region. The Americas region recorded moderate business growth, whereas business was weaker in the EMEA region, due primarily to the persistently muted economic situation in southern Europe. Comparable revenue growth was based above all on demand for high pressure discharge lamps as well as LED components for the automotive sector. Growth in the automotive area more than offset a decline in the display/optic area. Excluding currency translation effects of – 0.3 %, total revenue of SP rose by 4.5 % in the first nine months of fiscal 2013.
EBITA at SP fell by € 6.3 million, or 3.6 %, decreasing from € 177.2 million in the first nine months of fiscal 2012 to € 170.9 million in the first nine months of fiscal 2013. This was primarily due to an impairment loss of € 8.2 million on production facilities for pre-materials. As a result, the EBITA margin decreased from 17.0 % to 15.7 % compared with the first nine months of fiscal 2012.
31
Interim Combined Management Report
Development in the Nine Months ended June 30, 2013
Opto Semiconductors Segment Data OS
Nine months ended June 30, Change 2013 2012 nominal comparable1)
Total revenue 2) in € million 749.6 654.8 14.5 % 14.1 %
External revenue in € million 483.5 420.8 14.9 %
EBITA in € million 84.7 55.9 51.5 %
EBITA margin 11.3 % 8.5 %
Employees 3) FTE 7,362 6,372 15.5 %
1) Adjusted for currency translation and portfolio effects.
2) Including intersegment revenue of € 266.1 million (prior year: € 234.0 million). 3) As of June 30, 2013 and 2012.
Total revenue recorded by Opto Semiconductors increased by € 94.8 million, or 14.5 %, rising from € 654.8 million in the nine months ended June 30, 2012, to € 749.6 million in the nine months ended June 30, 2013. This growth was achieved worldwide, and in particular in the APAC region as well as in all businesses. Revenue increased most notably in infrared components and LEDs for general lighting as well as for con-sumer and communication electronics. Excluding currency translation effects of 0.4 %, total revenue of Opto Semicon-ductors grew by 14.1 % in the first nine months of fiscal 2013 compared with the prior-year period.
EBITA reported by Opto Semiconductors rose by € 28.8 mil-lion, or 51.5 %, increasing from € 55.9 million in the first nine months of fiscal 2012 to € 84.7 million in the first nine months of fiscal 2013. The rise in revenue, improved capacity utili-zation, and further productivity gains contributed to the increase. The product mix was also more favorable in a year-on-year comparison, including the lower share of third- party products in the total business volume. EBITA in both reporting periods benefited from licensing revenues. Com-pared with the prior-year reporting period, the EBITA margin of Opto Semiconductors improved from 8.5 % to 11.3 %.
Reconciliation to interim combined financial statements The reconciliation to interim combined financial statements of the OSRAM Licht Group contains the items “Corporate items and pensions” and “Eliminations, corporate treasury and other reconciling items”.
The Corporate items include certain business activities and special topics that are not directly attributed to the segments because the Managing Board of OSRAM Licht AG (CODM— chief operating decision maker) does not consider them to be indicative for the segments’ performance. Among other things, these include parts of the activities in connection with specific pre-materials (e.g., the production of fluorescent materials) and specific legal issues. In addition, certain costs associated with the separation as well as the planned IPO/ spin-off and patent infringement disputes are reported under Corporate items. Since the beginning of fiscal 2013, the OLED research and development project is also reported under Corporate items. The Pensions item includes OSRAM’s pension-related income and expenses that are not allocated to the segments, while primarily current service cost are included in the segments’ EBITA.
Eliminations, corporate treasury and other reconciling items comprise the consolidation of transactions between the segments, certain reconciliation and reclassification items, and the operations of corporate treasury.
