www.osram-licht.ag Performing while pushing transformation g p g Q2 FY14 Management Presentation Q2 FY14 Management Presentation (preliminary figures) OSRAM Licht AG April 30 2014 April 30, 2014
Safe Harbor Statement Safe Harbor Statement This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial financial performance performance, plans plans, strategies strategies, expectations expectations, prospects, prospects competitive competitive environment environment, regulation and supply and demand. OSRAM Licht AG has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates forecasts and projections and financial performance due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and OSRAM Licht AG does not undertake any duty to update the forward- looking statements and the estimates and assumptions associated with them except to the extent looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations. 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 to the totals provided and percentages may not precisely reflect the absolute figures. 2 2 Management presentation Q2 FY14 (preliminary figures) | April 30, 2014
G Group highlights Q2 FY14 hi hli ht Q2 FY14 Comparable top line growth driven by SSL Forward OS and SP Comparable top line growth driven by SSL Forward, OS and SP €1,278m revenue (+1% comp.) 9.1% Adj. EBITA margin 1) (+160bps y-o-y) OSRAM P OSRAM Push continuously delivers on plan h ti l d li l €106m benefits in Q2 Remaining plant closures in implementation Next wave OSRAM Push started Dedicated Segments to drive transformation towards SSL and to harvest „Golden Tail“ 34% SSL revenue share (vs 27% in Q2 FY13) 34% SSL revenue share (vs. 27% in Q2 FY13) New Segments Classic Lamps & Ballasts (CLB) and LED Lamps & Systems (LLS) to effectively address different business dynamics Outlook FY14 confirmed Outlook FY14 confirmed Growth targets more challenging New products expected to kick in for next lighting season after Light + Building 2014 1) Adjusted for “Special items” - "Special items” in this context include certain items, e.g. (personnel) restructuring costs, that will also occur in future periods 3 Management presentation Q2 FY14 (preliminary figures) | April 30, 2014
S Segment highlights Q2 FY14 t hi hli ht Q2 FY14 Lamps & Components (LC) Lamps & Components (LC) Continued decline in sales: -8% (comp. y-o-y) in Traditional Strong focus on pricing discipline in Classic Lamps & Ballasts Revenue growth (comp. y-o-y) in SSL Forward: +40% Luminaires & Solutions (LS) Significant decline in sales due to portfolio adjustments and customer driven project delays Well progressed restructuring in Services shows negative impact on revenue Trough of sales decline reached Trough of sales decline reached Specialty Lighting (SP) Growth in automotive outperforms growth of global car production (light vehicles) since 17 quarters p g g p ( g ) q Display/Optics back to growth after seven quarters of decline Frontlight design win for volume model Ford F150 Pickup O t Opto Semiconductors (OS) S i d t (OS) Six quarters in a row with double-digit revenue growth Sharp increase in the margin compared to previous year quarter Opening ceremony of back-end facility Wuxi in Q3 (May) 4 Management presentation Q2 FY14 (preliminary figures) | April 30, 2014
OSRAM Push continues to deliver on plan OSRAM Push continues to deliver on plan OSRAM Push: Overall, comprehensive, continuous performance improvement program OSRAM Push execution track record Structure Growth As of Q1 Q2 FY 13 FY14 FY14 Progress Target Transformation costs (€m) 498 10 34 ~ 600 90% (FY12 – 14) (FY12 14) Plant reductions 7 0 0 11 64% (FY12 – 14) Headcount reduction Operation Culture (‘000) c.8.7 90% 6.6 2) 0.6 0.6 EBITA Margin: (FY12 – 14) OSRAM Push gross OSRAM Push gross >8% as average >8% as average 54% savings, cum. (€m) 433 105 106 c.1,200 over the cycle (FY13 – 15) OSRAM Push: Next wave to come OSRAM Push targets: OSRAM Push targets: Cum. gross savings of €1.2bn by FY15 unchanged Headcount reduction of 8,700 by FY14 unchanged Reduction of manufacturing sites unchanged OPEX targets unchanged: SG&A 1) : Reduce by ~8-10% by FY14 vs. FY12 R&D: Keep absolute terms flat until FY14 vs. FY12 1) w/o logistics costs 2) Including impact of Tangerang (closure of production) Cum. Q4 FY13 Q1 FY14 Q2 FY14 5 Management presentation Q2 FY14 (preliminary figures) | April 30, 2014
Strong growth in SSL lamps – accelerated decline in traditional lamps business burdens overall growth in traditional lamps business burdens overall growth • Disappointing performance in top line of traditional LC SSL growth lamps lamps Comparable y-o-y Comparable y o y • Cautious outlook given in Q1 FY14 communication. 48% 40% Traditional lamps declines faster than anticipated 36% • First two months in recent quarter indicate a 14% continuation of the decline • We prepare for that trend, therefore following actions Q1 Q2 Q1 Q2 have been decided: FY13 FY13 FY14 FY14 Split reporting segment LC into LC Traditional growth LC Comparable y-o-y “Traditional” and “SSL” Delayer GI Sales organization / LC / GI dematrix LC Traditional dematrix LC Traditional Global Shared Services initiative -4% OSRAM Group -5% HQ processes / structures -8% -8% OSRAM Group to better serve business needs Q1 Q1 Q2 Q2 Q1 Q1 Q2 Q2 FY13 FY13 FY14 FY14 Concentrate “Traditional” on profitable ramp-down, concentrate “SSL” on profitable growth Target Clear responsibility and affordable structures for “Traditional” and “SSL” Efficient & effective HQ and shared service processes Efficient & effective HQ and shared service processes 1) Capital Market Day 6 Management presentation Q2 FY14 (preliminary figures) | April 30, 2014
Pipeline for new products well on track Pi li f d t ll t k Pipeline for new products Pipeline for new products % of total sales generated from products % of total sales generated from products launched after 06/13 • Q2 results show - as planned - increased proportion of new products compared ~90% of which to Q1 to Q1 will be SSL- will be SSL- • More new products will be launched in based Q3 and Q4 • Pipeline for new SSL products well on track in FY14 (examples) track in FY14 (examples) PrevaLED Flex Elements DURIS S8 14% 11% 9% OSLON Black Flat VEGA SSL ORBEOS 3. Gen. Q1 H1 FY14 Target FY14 act FY14 act Note: Values w/o OLED, Services and pre-materials 7 Management presentation Q2 FY14 (preliminary figures) | April 30, 2014
OSRAM @ Light and Building 2014 Excellent feedback from our customers Excellent feedback from our customers Pre aLED Fle PrevaLED Flex Linear voted Linear oted „10 hottest new products“ at L+B by Lux Review High efficiency LED tube voted „10 hottest new products“ at L+B by Lux Review „Everyone is presenting connected light, but no one offers such a thoughtful system as Osram.“ Conrad Elektronik, Lead Purchase Manager FY LIGHTIF „Can we get that exclusively?“ Bauhaus, Top Management with regard to Lightify „We have been for five days at l+b, and what Osram is showing is clearly the highlight. Very innovative product and marketing concepts.“ Hagebau, Top Management „Very impressive and of course we are working on a project together on the Gaze for Milan Expo 2015 and I think we have seen so many of these applications that are really relevant for the 21. Century. Not only affordable and accessible lighting, also something that is truly beautiful.” thi th t i t l b tif l ” Daniel Libeskind – Architect and city planner 8 Management presentation Q2 FY14 (preliminary figures) | April 30, 2014
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