On November 7, OSRAM released its fiscal year 2017 financial results, showcasing a strong performance driven by robust demand for its high-tech products, particularly in the optoelectronics sector. The company reported revenue surpassing 4 billion euros, reflecting an 8% increase compared to the previous year. Operating profit rose significantly by 43 million euros, reaching 695 million euros, with a profit margin of 16.8%. This growth highlights OSRAM’s successful transition toward a more technology-focused business model.
Within FY2017, the photoelectric semiconductor division generated over 1.6 billion euros in revenue, marking an 18.9% increase, while the adjusted EBITDA reached 470 million euros. The special lighting segment contributed 2.3 billion euros in revenue, up 8.3%, with an adjusted EBITDA of 340 million euros. Meanwhile, the lighting system solutions division exceeded 900 million euros in revenue, demonstrating continued strength across multiple business lines.
The fourth quarter of FY2017 saw impressive growth, with OSRAM reporting total revenue of 1.029 billion euros, a 13.2% increase year-on-year. Adjusted EBITDA for the quarter stood at 118 million euros. The photoelectric semiconductor business recorded 429 million euros in revenue, rising by 15.3%, and achieved an adjusted EBITDA of 121 million euros. Special lighting revenue reached 591 million euros, an 11.4% increase, with adjusted EBITDA of 71 million euros. The lighting system solutions segment generated 242 million euros in revenue during the quarter.
Olaf Berlien, CEO of OSRAM, emphasized that 2017 marked another milestone in the company’s journey toward becoming a high-tech leader. He highlighted the impact of continuous innovation and market expansion, which have placed OSRAM in a strong strategic position. With revenue performance on track, the company is optimistic about the future, and the proposed dividend of 1.10 euros per share reflects its solid financial health and growth momentum.
Looking ahead, OSRAM plans to accelerate its transformation into a high-tech company in FY2018. Optical semiconductor products already account for two-thirds of the company’s revenue, and global investments in facilities and technology are aimed at driving sustainable, high-profit growth. However, challenges such as currency fluctuations and increased costs at the Kulim plant will remain key factors affecting performance.
For FY2018, OSRAM expects revenue growth between 5.5% and 7.5%. Adjusted EBITDA and amortization profits from special projects are projected to reach 700 million euros, though this will be influenced by factors like currency movements, higher production costs at the Kulim plant, and ongoing R&D investments. These expenses are expected to reach hundreds of millions of euros. Currency exchange rate fluctuations alone could negatively impact results by 70 million euros. Diluted earnings per share are anticipated to range between 2.40 and 2.60 euros, while free cash flow is expected to fall between -50 million and -150 million euros. Despite these challenges, the board remains confident in the long-term outlook for OSRAM and has set a minimum dividend target of 1.10 euros for FY2018.
In terms of market trends, OSRAM Opto Semiconductors (OS) continues to show strong growth and operational capability. However, the cost of production and exchange rate trends at the Kulim plant will affect FY2018 profitability. The special lighting (SP) segment is expected to grow due to rising demand for LED applications in the automotive industry, with Asia leading the growth. On the other hand, the Lighting Systems Solutions (LSS) division remains less optimistic, prompting the board to take action and appoint a new management team to explore opportunities in the luminaire business (LS). Strategic decisions for this unit are expected to be announced in the upcoming financial year.
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