Osram Licht AG officially reported that the company’s management board has chosen to divest its luminaires business.
“Thanks to numerous measures, the earnings position of the Lighting Solutions business unit has stabilized significantly, therefore allowing us to initiate an organized sales process. This will result in a more strategic focus with regards to applications with high growth potential,” said Olaf Berlien, CEO of Osram Licht AG.
The company says that it will hold talks with interested parties for the purchase of the luminaires business. The management board plans to deliver an update about the progress of strategic plans for the company at the Capital Markets Day in November.
During the third quarter of the fiscal year, the company says the general economic slowdown and weak demand in the automotive industry was primarily reflected in the company’s semiconductor segments Opto Semiconductors (OS) and in the Specialty Lighting (SP) segment. The company also cited the trade tariffs in the USA, more stringent emission tests in Europe, and lower production expectations from premium manufacturers that caused more uncertainty. Additionally, Osram pointed to project delays in business with mobile devices and horticulture applications and a continued slowdown of the general lighting market.
The company says that in addition to selling its Luminaires business its management is looking at measures to rectify the current market situation including streamlining the global administration and the implementation of several structural and operational programs. Also, along these lines, the company is looking to improve the efficiency in R&D, in the supply chain, and in the German factory alliance. Osram expects these operational programs should add up to €130 to €140 million in savings by 2020.
Osram Says Long-Term Growth Prospects Still Good
Despite these difficulties, Osram says that its long-term growth prospects remain good. The company further noted that LED- and laser-based technologies are oriented to global megatrends and continue to serve growing high-tech markets. The group also recently expanded its portfolio with what the company describes as innovative future technologies including the acquisition of US provider Vixar, which specializes in compact, 3D identification technology, the acquisition of the horticulture company Fluence Bioengineering, and the takeover of the former Trilux subsidiary BAG electronics. Moreover, the company noted that the Osram Continental joint venture, a developer of intelligent car lighting, went into operation at the beginning of July.