[PPT] - OSRAM delivers on profitability targets, OSRAM delivers on PowerPoint Presentation

SLIDE 1

www.osram-licht.ag

OSRAM delivers on profitability targets, OSRAM delivers on profitability targets, dividend proposed for the first time

Q4 FY14 Management Presentation (preliminary, unaudited figures)

OSRAM Licht AG November 05 2014 November 05, 2014

SLIDE 2

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 performance plans strategies expectations prospects competitive environment financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. OSRAM Licht AG has based these forward-looking statements

n 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.

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 2 2

SLIDE 3

G hi hli ht FY14 Group highlights FY14

OSRAM delivers on profitability targets

Successful finish of OSRAM Push Phase I Further increase of LED sales share Growth in more than half of the businesses

OSRAM strengthens technology leadership

Automotive business extends market leadership Successful shift from 4’’ to 6’’ wafer at OS Stable investments in R&D

OSRAM plans dividend for the first time OSRAM plans dividend for the first time

Board proposes dividend of €0.90 per share Dividend proposal corresponds to payout ratio of 50%1) OSRAM intends stable dividend for the fiscal year 2015

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 3

1)

f net income post minorities

SLIDE 4

Segment highlights FY14

Transformation pays off – majority of businesses are growing

Specialty Lighting (SP) Specialty Lighting (SP)

Strengthened cost and technology leadership in Automotive Exceeds global car production growth since 19 quarters Clay Paky acquisition strengthens growth area Display / Optics

Opto Semiconductors (OS)

OS back to double digit growth rate in the fourth quarter New factory in Wuxi builds basis for future growth Productivity improvements overcompensated price decreases

LED Lamps and Systems (LLS)

Continued strong growth Very good development of drivers and light engines Break-even target LEDr lamps Q1 FY15 on track Break-even target LEDr lamps Q1 FY15 on track

Classic Lamps and Ballasts (CLB)

Successful management of market change challenges Focus on pricing discipline p g p Strong growth of halogen in the US

Luminaires & Solutions (LS)

2015 break-even target confirmed Luminaires with strong growth in LED

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 4

Luminaires with strong growth in LED Leadership team strengthened

SLIDE 5

OSRAM Push on track: Targets of Phase I accomplished Phase II started Targets of Phase I accomplished – Phase II started

Successful finish of OSRAM Push Phase I

OSRAM Push Phase I execution track record

As of FY 14 Target Progress Transformation costs (€m) (FY12 – 14) 599 ~600 Plant reductions 11 11



100%



100%

(FY12 – 14) 11 11 Headcount reduction (‘000) (FY12 – 14) 8.7 8.7

 

100% 100%

OSRAM Push gross savings, cum. (€m) (FY13 – 15) 871 1,200



~400 €m in FY15

OSRAM Push Phase II started!

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 5

SLIDE 6

Modest revenue growth (comp.) LED continues to gain ground LED continues to gain ground

Comments Q4 y-o-y Revenue development1) Group (€m) Comments Q4 y-o-y Revenue development1)

Quarterly revenue

Revenue (in €m)

1,203 1,278 1,326 1,332 1,335

FY14 and Q4 FY14 revenue up by 1% comp.
LED share at 39% (31% in prior year quarter)

LLS b t (72% ) d li

Comp. growth (%) (in €m)

,

1 4 1 2

LLS boosts revenue (72% comp. y-o-y), decline
f CLB at -13% comp. y-o-y
OS and SP show continued strong performance,

both on new quarterly revenue highs

LS with industry-leading LED-share of 56%

Nom. Growth (%) (6) (2) (3) (3)

Q3 FY14 Q2 FY14 Q1 FY14 Q4 FY13 Q4 FY14

(1)

LS with industry-leading LED-share of 56%
APAC with clear growth driven by SP; Americas
nly down due to exit of traditional maintenance

business

Revenue by Region Q4 Revenue by Segment2) Q4

Americas

33%

EMEA

42%

nom. (4)%

Opto Semiconductors

comp. 11% nom. 11%

21%

Classic Lamps & Ballasts

comp. (13)% nom. (14)%

33%

APAC

25% 42%

nom. 1%
comp. 2%

( )

comp. (3)%
nom. 6%

5%

Specialty Lighting

comp. 10% nom. 9%

28%

Luminaires & Solutions

comp. (20)% nom. (20)%

9%

LED Lamps & Systems

comp. 72% nom. 72%

10%

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 6

comp. 5%

1)

nom. (nominal growth) / comp. (comparable growth), adjusted for FX and portfolio effects

2) based on sum of Segments' revenue, w/o considering corp. items & consolidation

SLIDE 7

Adjusted EBITA margin with 8% on prior year level Adjusted EBITA margin with 8% on prior year level

EBITA development Comments Q4 y-o-y Group (€m) EBITA development Comments Q4 y-o-y

Adj. EBITA

Margin1) (%)

Gross margin increased on lower transformation

costs P h d f ti l t t l tl

6.4 8.5 6.7 8.6 9.3 9.1 8.0 8.1

Push measures and functional cost control mostly

compensated negative mix effects and price decline

EBITA includes transformation costs of €66m, with

€29m attributable to OSRAM Push Phase II

6.4 2.7 EBITA Margin (%)

81 81 112

€29m attributable to OSRAM Push Phase II

FY14 net income €193m translates into basic EPS
f €1.80; dividend of €0.90 proposed

(1.8)

2013 2014 Q4 FY Q1 Q2 Q3 Q4 FY

Special items1)

EBITA

36

EBITA reported (24) 99 112 81 81 36 310 therein: OSRAM Push transformation costs

incl. personnel restructuring

(110) (300) (10) (34) (20) (66)(130) Total Special items (133) (310) (11) (35) (23) (70)(139)

(€m)

24

Q3 FY14 Q4 FY14 Q2 FY14 Q1 FY14 Q4 FY13

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 7

p ( ) ( ) ( ) ( ) ( ) ( )( )

FY14 FY14 FY14 FY14 FY13

1) Adjusted for special items / special items include e.g. transformation costs, spin-off- / stand-alone-related costs and substantial legal and regulatory matters

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LED Lamps & Systems (LLS): Continued y o y improvement

Revenue and EBITA margin development Comments Q4 y-o-y

Continued y-o-y improvement

Growth pace remains high (72% comp. y-o-y),

driven by LED lamps and drivers

Profitability improvements due to productivity and

(13.5) (16.0)

volume

Margin held back by supply chain inefficiencies
LED lamps spots reached break-even in Q4 FY14
EBITA includes €5m special items

EBITA Margin (%)

144

(20.3) (25.7) (28.4) (19.5)

Adj. EBITA

Margin1) (%)

EBITA includes €5m special items

Revenue (€m)

144 110 105 95 84

LLS Gross Margin LTM2) (adj )

(€m) Comp. growth (%) 68 38 48 40

LLS Gross Margin LTM2) (adj.)

72

+370bps

Nom. Growth (%)

Q4 FY14 Q3 FY14 Q2 FY14 Q1 FY14 Q4 FY13

21 42 60 35 72

Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 8

1) Adjusted for special items / special items include e.g. transformation costs, spin-off- / stand- alone-related costs and substantial legal and regulatory matters 2) Last twelve months

Q4 FY14 Q3 FY14 Q2 FY14 Q1 FY14 Q4 FY13 Q3 FY13 Q2 FY13 Q1 FY13

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Classic Lamps & Ballasts (CLB): Considerable cash generation

Revenue and EBITA margin development Comments Q4 y-o-y

Considerable cash generation

Adj. EBITA

Margin1) (%) 11.9 6.1 9.0 7.6 12.3

LED transition leads to revenue reduction

(-13% comp. y-o-y); CLB value initiative supported again stable prices

6.7 EBITA Margin (%)

548 549

3.5 3.6 (1.2)

Again strong growth of HAL Classic business

in Americas

OSRAM Push measures and value initiative

can mostly offset negative margin effects from l d li fit bilit l b fitt d

(1.8)

472 431 511 548 549

volume decline; profitability also benefitted from functional cost control

Free Cash Flow of €67m vs. €31m in prior

year quarter

Revenue (€m)

Special items1)

(2) (8) (8)

Comprehensive asset management program

started with focus on inventories

(€m) Comp. growth (%)

p

Q4 FY13 FY 13 Q4 FY14 FY 14 EBITA reported (7) 42 (8) 90 therein: Total Special items (48) (179) (40) (81)

(11) (13) (19)

Q3 FY14 Q4 FY14 Q2 FY14 Q1 FY14 Q4 FY13

(14) (13) (13) (14) Nom. Growth (%) Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 9

1) Adjusted for special items / special items include e.g. transformation costs, spin-off- / stand-alone-related costs and substantial legal and regulatory matters

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Luminaires & Solutions (LS): Restructuring well progressed Restructuring well progressed

Revenue and EBITA margin development Comments Q4 y-o-y

Adj. EBITA

Margin1) (%) (16.1) (11.2) (6.7) (8.0) (14.9)

Again sequential growth
LED share at 56%, up from 34% in PYQ
Significant revenue decline y-o-y (-20% comp )

(9.1) (6.7) EBITA Margin (%)

155

(41.7) (25.9) (24.7)

Significant revenue decline y o y ( 20% comp.) mainly due to exit of traditional maintenance business and luminaire portfolio adjustments

Continued profitability improvement with

restructuring showing effect

124 110 101 135 155

g g

LS businesses under common management to

drive further synergies, profitability and growth

Revenue (€m)

Special items1)

Q4 FY13 FY13 Q4 FY14 FY14

(13) 4 (6) (€m) Comp. growth (%)

EBITA reported (65) (128) (11) (70) therein: Total Special items (54) (64) (3) (10)

(9) (21) 1 (16)

Q4 FY14 Q3 FY14 Q2 FY14 Q1 FY14 Q4 FY13

(13) (19) (20) (20) Nom. Growth (%) Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 10

1) Adjusted for special items / special items include e.g. transformation costs, spin-off- / stand-alone-related costs and substantial legal and regulatory matters

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Specialty Lighting (SP): Top line growth and profitability remain on high level Top line growth and profitability remain on high level

Revenue and EBITA margin development Comments Q4 y-o-y

Automotive business once more driver of

revenue growth (10% nom. y-o-y) with growth in LED as well as traditional business

EBITA Margin (%)

Adj. EBITA

Margin1) (%) 15.5 15.8 14.5 13.0 16.4 16.0 15.2 16.3

Volume holds adjusted EBITA margin on prior

year level despite mix effects including significantly increasing LED components sourced from OS Cl P k t t th Di l / O ti

14.7 15.5 Margin (%)

404 378 393 376 369

Clay Paky to strengthen Display / Optics

business in FY15 (with ~€60m revenue and

perational margin on SP level)
OLED technology expected to enter

automotive market; OLED reported within SP

Revenue (€m)

Special items1)

automotive market; OLED reported within SP starting Q1 FY15

8 11 10 9 10 (€m) Comp. growth (%) 5 5 7 2

Q4 FY13 FY13 Q4 FY14 FY14 EBITA reported 48 219 60 237 therein: Total Special items (9) (27) (3) (10)

Q4 FY14 Q3 FY14 Q2 FY14 Q1 FY14 Q4 FY13

9 Nom. Growth (%) Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 11

1) Adjusted for special items / special items include e.g. transformation costs, spin-off- / stand-alone-related costs and substantial legal and regulatory matters

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Opto Semiconductors (OS): Back to double digit growth Back to double digit growth

Revenue and EBITA margin development Comments Q4 y-o-y

19.2 19.8

Quarterly revenues reach new peak level with

€299m benefitting from seasonality; again new revenue high

16 7 EBITA Margin (%)

299

14.6

Growth across all regions
EBITA margin y-o-y on high level based on

improved product mix and operational performance

13.2 16.7

299 286 270 270 268

Revenue (€m) 5 20 14 13 11 (€m) Comp. growth (%) 2 17 12 10

Q4 FY14 Q3 FY14 Q2 FY14 Q1 FY14 Q4 FY13

5 11 Nom. Growth (%) Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 12

SLIDE 13

Reported EBITA burdened by transformation costs, Push more than compensates pricing pressure and mix Push more than compensates pricing pressure and mix

Margin Margin 7.7% Margin 6.0% €438m Margin 8.7% Margin 1.9% EBITA FY14 adjusted1) EBITA FY14 as reported Cost Reduction Measures (OSRAM Push) Volume / Degression / Product Mix / Others Inflation Customer Price Change EBITA FY13 adjusted1) EBITA FY13 as reported

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 13

1) Adjusted for special items / special items include e.g. transformation costs, spin-off- / stand-alone-related costs and substantial legal and regulatory matters

SLIDE 14

OSRAM Push Phase II ambition: Cumulative gross savings of €1 3bn (2015 2017) Cumulative gross savings of €1.3bn (2015-2017)

Gross savings

in €m

Key characteristics Phase II

Key data until FY17:

in €m

200 260 Transformation

Key data until FY17: Total gross savings: €1.3bn Headcount1) reduction: ~7 800

Operational 1,040 1,000

Headcount1) reduction: ~7,800

Exp. transformation costs2):

~€0.45bn Transformation part includes

Push Phase II 2015-2017 Push Phase I 2012-2015

Transformation part includes…

increased restructuring in Germany
higher share of indirect functions
aspiration to delayer and de-matrix

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 14

1) Full-time equivalent 2) Including €29m already booked in FY14

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Our global SG&A program drives competitiveness through lean structures through lean structures

OSRAM SG&A Program

Secure future competitiveness for SSL

Lean HQs GSS & Process Excellence GI Sales Streamlining

Lean organization & efficient processes
Sustainable structural improvements

Lean HQs

Efficient HQ setup, increased

flexibility

Clear responsibilities BUs /

GSS & Process Excellence

Align business processes

globally

E2E-Process transformation

GI Sales Streamlining

Optimize Sales functions &

channels cross BUs and regions service providers to provide cost efficient & effective services for businesses

De-layer and de-matrix

+ additional €160m from footprint measures with an incremental profit upside in case of improved market outlook Sustainably margin-accretive savings: €100m

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 15

p p p

SLIDE 16

ROCE and FCF FY14 targets achieved ROCE and FCF FY14 targets achieved

Group (€m) Net Debt bridge Capital Expenditure

18 13 90

13

77 SP

Net Debt bridge

28 17 113

3
11

34 15 27 29 7 4 Q4 FY13 3 4 Q4 FY14 8 5 Other LS LLS CLB OS

Net

∆ non-

487

CAPEX Other

77

Other ∆ EBITDA

Net 420

Mainly

FCF €51m

Capex as % of revenue 5.8

Operating Working Capital

Q4 FY13 Q4 FY14 Other

Free Cash Flow

6.7

Liquidity Q4 FY14

current assets and liabilities Invest./ Fin. activities income / expense NWC

Liquidity Q3 FY14

taxes paid

ROCE

Group WC 216 284 857 853 968 Trade receivables +66 Inventories 1,211 1,152 1,145 1.9% 9.3% Turns1) FY14 FY13

677
799

857 853 Trade payables Q4 FY14 Q4 FY13 4.6 4.2 FY14 FY13 Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 16

1) Defined as revenue (last twelve months) divided by working capital

SLIDE 17

Key financial metrics Key financial metrics

Q4 FY13 Q4 FY14 Change (y-o-y) FY13 FY14 Change (y-o-y) Nom: 0% Nom: (3)%

Group (€m)

Revenue 1,332 1,335 Nom: 0% Comp: 1% 5,289 5,142 Nom: (3)% Comp: 1% Gross Margin 27.2% 28.9 % 170bps 28.2% 31.4% 320bps R&D (86) (85) 1 (341) (331) 10 SG&A (315) (265) 50 (1,103) (985) 118

(€m)

EBITDA 55 113 58 414 556 142 EBITA (24) 36 60 99 310 211 EBITA Margin (1.8)% 2.7% 450bps 1.9% 6.0% 410bps

Adj. EBITA

108 106 (2) 410 449 39

Adj. EBITA Margin

8.1% 8.0% (10)bps 7.7% 8.7% 100bps Financial result

(incl. at-equity results)

(10) (13) (3) (22) (5) 17 Income before Taxes (44) 17 61 50 279 229 Taxes 16 (5) (21) (17) (86) (69) ( ) ( ) ( ) ( ) ( ) Net Income (29) 12 41 34 193 159 Basic EPS (in €) (0.28)

1)

0.10 0.38 0.26 1.80 1.54 Free Cash Flow 85 51 (34) 284 216 (68) CAPEX (90) (77) 13 (207) (243) (36) CAPEX (90) (77) 13 (207) (243) (36) Employees (in thousands) 35 34 (1) 35 34 (1) Net Debt (Liquidity) (172) (487) (315) (172) (487) (315)

Adj. Net Debt (Liquidity) / EBITDA

0.5 (0.1) 0.5 (0.1) Equity Ratio 49% 51% 200bps 49% 51% 200bps

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 17

1) Pro forma

Equity Ratio 49% 51% 200bps 49% 51% 200bps

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Outlook 2015 Outlook 2015

For FY15 we expect revenue on FY14 level on a comparable basis 1 2 We expect the adjusted1) EBITA margin to be at FY14 level p j g 3 OSRAM Push Phase II in FY15 with gross savings of roughly €400m 4 Biggest yearly share of transformation costs in FY15 will lead to a sharp decrease in net income and ROCE Free Cash Flow for FY15 expected to come in with a positive triple- 5 Free Cash Flow for FY15 expected to come in with a positive triple- digit €m amount, but below FY14 level  Based on 2015 outlook and OSRAM’s midterm prospects we intend dividend continuity with €0.90 per share also for FY15

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 18

1) Adjusted for special items / special items include e.g. transformation costs, spin-off- / stand-alone-related costs and substantial legal and regulatory matters

SLIDE 19

Financial Calendar and Investor contacts Financial Calendar and Investor contacts

Upcoming events

November 10, 2014

Q4 Roadshow Frankfurt N b 11 12 2014

December 3, 2014

GS European Industrials Conference, London D b 4 2014

November 11-12, 2014

UBS European Conference London

November 13-14, 2014

Roadshow New York & Boston

December 4, 2014

Disclosure of annual report Berenberg European Conference London

December 10-11, 2014

Roadshow Hong Kong & Singapore

Investor Relations contact M B i T + 49 89 6213 4686

Mr. Boris Tramm

+ 49 89 6213 4686 Munich Office + 49 89 6213 4875 Internet http://www.osram.com/ir Email: ir@osram.com

Management presentation Q4 FY14 (preliminary, unaudited figures) | November 05, 2014 19