Osram says Q1 looking stronger, ups guidance for 2021

Jan. 26, 2021
A full quarterly report is due next month, but so far so good, it says, noting improvements in autos and LEDs.

On signs of a stronger than expected first quarter, Osram today raised its revenue and earnings forecast for fiscal year 2021 which runs through September, although it stopped short of predicting an after-tax profit.

Head of investor relations Julia Klostermann said that preliminary results for the first quarter ended Dec. 31 indicated revenues of €840 million ($1.02B), which she described as “comparable at the level of the prior-year quarter.” In the same quarter last year it was at €873M ($1.06B). In what the company called an “ad hoc” financial statement, Klostermann also said the preliminary EBITDA margin was 19.3%, up from 13% in Q1 2020.

Although she herself did not reveal the adjusted EBITDA, Osram stated in an accompanying press release that the amount spiked up 42% from a year earlier, to €162M ($197M). Osram is set to fully report its first quarter results on Feb. 9.

Cash flow, which last summer was looking tenuous, has also improved. “Whereas Osram had previously assumed free cash flow to be from balanced to a positive low double-digit million euro for the current fiscal year, it is now expected to be between 70 million and 130 million euro,” the company said in the press release.

On the strength of the improvement “the managing board of Osram Licht AG has decided to raise the guidance for the current fiscal year 2021,” Klostermann noted.

The company now expects 2021 revenue to grow between 10% and 14%, up from the 6‒10% range it had stated when it reported 2020 full year results in November. It has also brightened its “adjusted EBITDA margin” outlook, to between 12% and 15%, from what was 9‒11%.

In the press release, outgoing CEO Olaf Berlien said the improving outlook reflects measures the company has taken throughout the coronavirus pandemic to withstand the financial challenges of the health crisis. Berlien is set to leave Osram at the end of next month as new owner ams remakes the management team.

Klostermann also cited the crisis management and “efficiency programs,” while further noting that the company’s Automotive and Opto Semiconductors units have experienced “very strong business development.”

She cautioned that “this adjustment of the fiscal year guidance is based on the assumption that there will be no further COVID-19 lockdowns or considerable disturbances in the supply chain which would have a significant impact on the Osram business.”

For the full fiscal year 2020, Osram reported a pandemic-struck 12.3% decline in nominal sales (13.8% on a comparative basis) to €3.04B ($3.7B) from €3.46B ($4.21B) in 2019, registering an after-tax loss of €267M ($325M), which was an improvement over 2019’s staggering €407M ($495M) loss. Free cash flow for the year was down 17%, to €12M ($14.6M) from €17M ($20.7M).

Under ams, a sensor company, Osram is more than ever emphasizing its photonics, such as LED chips, over general lighting and even IoT lighting, which it could soon exit.

Editor’s note: Osram figures are reported in euros and converted to US dollars as current market value at the time of publication.

MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]m).

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About the Author

Mark Halper | Contributing Editor, LEDs Magazine, and Business/Energy/Technology Journalist

Mark Halper is a freelance business, technology, and science journalist who covers everything from media moguls to subatomic particles. Halper has written from locations around the world for TIME Magazine, Fortune, Forbes, the New York Times, the Financial Times, the Guardian, CBS, Wired, and many others. A US citizen living in Britain, he cut his journalism teeth cutting and pasting copy for an English-language daily newspaper in Mexico City. Halper has a BA in history from Cornell University.