Lighting Industry Osram's Business Remains Weak

Osram-Werk in Kulim/Malaysia
Osram built a modern chip production facility in Kulim, Malaysia, for around 1 billion euros. Demand from the automotive industry and major smartphone manufacturers is now faltering.

After the disappointing financial year 2018, there is still no improvement in sight for Osram. The annual forecast for 2019 is already shaky. In order to safeguard it, 300 jobs are now threatened.

The economic situation at Osram is tense. According to the annual report, the financial year 2018 was unsatisfactory for the Executive Board. That is no surprise: the forecast for 2018 had to be revised downwards twice. Of the originally forecast of 5.5 % to 7.5 %, growth only 1.9 % remained in the end.

Management Expects Weak Fiscal Year 2019

The start to the new financial year was also unsuccessful. €»I see dark clouds coming up on the horizon for 2019,€« company boss Olaf Berlien expressed his concern to the Augsburger Allgemeine at the beginning of January. "Demand for light-emitting diodes is declining noticeably. What worries me most about the new year, however, is the downturn in the automotive industry.

Osram is also being hit by the sluggish sales of Apple and Samsung, the threat of Brexit, and the trade conflict between South Korea and China.

300 Jobs in Regensburg Affected

Even before the official announcement of the quarterly figures on February 7th, the Group now issued an ad hoc announcement with a profit warning. According to preliminary figures, sales from continuing operations amounted to 828 million euros, around 15 percent down on the prior-year quarter. This no longer includes the sales of the sold Sylvania Lighting Solutions and the European lighting business, which is held for sale.

In order to secure the forecast for the year, the Management Board €»initiated a series of countermeasures, in particular to increase sales,€« according to the ad hoc announcement. The Opto Semiconductors business unit in Regensburg is particularly affected. This should also include the planned elimination of 300 jobs at the site, which the Regensburger Nachrichten already reported.

The forecast that is already modest from the investors' point of view is not secure either. To achieve this, incoming orders must pick up noticeably within the next few months.