Growing faster than the market with high-tech products

Financial statement press conference for the 2007 fiscal year (01.10.2006 to 30.09.2007)

(PresseBox) ( Regensburg, )
At the press conference to present the financial statement, OSRAM CEO Martin Goetzeler reported on a successful year. "In 2007, we increased both our sales and our earnings and grew faster than the market. We have carried out restructuring and invested in products and projects of the future", was how the CEO of OSRAM summed it up. With additional production capacity in India, China, Malaysia and Germany, OSRAM will strengthen its position in the growth markets of Asia and opto semiconductors (LEDs). Energy-efficient products already account for 60% of OSRAM’s total sales. Over the next ten years this is set to rise to 80%. Energysaving products and LEDs are the most important growth drivers for OSRAM.

Goetzeler: "As a high-tech company in the lighting industry we are in an excellent position here, and this has been officially recognized by the award of the German Future Prize to a team of LED researchers".

The lighting manufacturer has increased its world sales year on year by 7% to EUR 4,690 million after exchange rate adjustment (last year 4,563; nominal increase +3%).

Double-digit increases in volume were achieved in various sectors including energysaving lighting solutions, electronic driven products (such as electronic control gear and opto semiconductors) and the Display/Optic division.

OSRAM achieved increased sales in all regions. "We achieved particularly good growth in the BRIC states", said Martin Goetzeler. In Germany, Europe’s largest lighting market, sales rose by only 1% for structural reasons to EUR 547 million (previous year EUR 543 million); the share in world sales is still 12%.

Group earnings rose to EUR 492 million (previous year 456*). Profit on sales for the lighting company is now 10.5% (previous year 10.0%*) and therefore within the target corridor prescribed by the parent company Siemens. Strength in innovative and energyefficient products and the strict cost management were the main reasons for this high earnings level. "Among other things, the startup costs for innovative products, expansion in sales and marketing activities in Europe and Asia and the weakness of the US dollar and Japanese Yen have been offset here", said the OSRAM CEO.

The number of employees rose during the period under review by 2% to 41,222 worldwide (previous year 40,307). In Germany the number of employees also rose by 2%

to 9,025 (previous year 8,817); this was due to increase in the workforce in Berlin and Regensburg.

OSRAM increased its expenditure on research and development by 2% to EUR 242 million (previous year 239). From the high figure of last year our investment in property, plant and equipment decreased by 4% to EUR 284 million. Germany accounted for 60%

of this figure (EUR 171 million). "In the past five years we have invested more than EUR 700 million in property, plant and equipment in Germany, with the focus on production facilities for our innovative products", said Goetzeler.

OSRAM is also looking to achieve above-average growth in the 2008 fiscal year in particular in innovative and energy-saving products, combined with continued high earnings. "We expect to benefit again from a healthy economic situation and from a continuing trend toward energy-efficient products and want to continue growing faster than the market", said Goetzeler. He announced that the company had set the appropriate course.

A stronger presence in growth regions: OSRAM is greatly expanding its production capacity in the growth market of Asia with a new LED chip factory in Malaysia, a second factory in India and a new joint venture for manufacturing energy-saving lamps near Shanghai. Expansion in sales and production will also be continued in Eastern Europe. In addition to opening a sales office in Georgia, OSRAM is proud that the factory in Smolensk in Russia has now achieved export quality.

Innovations continue to be the driving force behind OSRAM’s success. This is why over the last two years OSRAM has taken on about 300 more people in research and development. OSRAM’s powers of innovation were recognized with the award of the German Future Prize sponsored by the Federal President to a team of researchers for the invention of highly efficient thin-film LEDs. In addition to LEDs, research and development teams at OSRAM are focusing on high-intensity discharge lamps and energy-efficient lighting solutions.

For Goetzeler, applications and solutions are the third pillar in OSRAM’s corporate strategy alongside regional and technological strengths. The lighting manufacturer therefore offers successful complete solutions in the form of LED modules and is expanding its product portfolio with LED luminaires in particular. OSRAM will also be reorganizing its largest division, General Lighting, to give it even more punching power.

* Assessment of current and previous year’s values based on IFRS (previous year based on US-GAAP: EUR 481 million; 10.5% of sales).


This press release contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words as "expects", "anticipates", "intends",
"plans", "believes", "seeks", "estimates", "will" or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond OSRAM’s control, affect its operations, performance, business strategy and results and could cause the actual results, performance or achievements of OSRAM worldwide to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For us, particular uncertainties arise, among others, from changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products or technologies by other companies, lack of acceptance of new products or services by customers targeted by OSRAM worldwide, changes in business strategy and various other factors. More detailed information about certain of these factors is contained in Siemens’ filings with the SEC, which are available on the Siemens web site, and on the SEC’s web site, Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as anticipated, believed, estimated, expected, intended, planned or projected. OSRAM does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.
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