On May 8th osram reported second-quarter results for fiscal 2019.During the reporting period, the company performed as expected, with earnings of 862 million euros (about 6.538 billion yuan) from January to the end of march, down 13.5 percent year-on-year.Adjusted EBITDA margin before interest, tax, depreciation and amortization was 8.1 per cent.At the end of march, when the preliminary key figures were released, osl had forecast that sales would fall by about 15 per cent in the second quarter and adjusted EBITDA margins would be in the mid to high single digits.The decline, as expected at the time, was driven in part by continued weakness in the auto, general electric lighting and mobile devices markets, as well as higher inventory levels around the world, particularly in China.In addition, the general trend of global economic slowdown has also brought some pressure to the development of enterprises.
Adjusted for special items, EBITDA (earnings before interest, tax, depreciation and amortisation) was 70m, down 56 per cent from the previous year, while net income was 91m, mainly due to transformation costs.As announced at the end of march, osram's management committee has been responding to developments in the market and plans to save more than 200 million euros by 2021.
Olaf Berlien, osram's chief executive, says: "we are 113 years old and we have had challenges, but every time there is a storm we are stronger than before."New applications in LED are our consistent long-term strategy, and optical semiconductors, automotive and digital will remain our focus.In the second quarter, sales at the optoelectronics division fell 18.8 per cent on a comparable basis.This reflects not only the weakness of the global economy, but also the weakness of the auto industry and the general lighting market.
In Asia, the revenue figures were further hit by high inventories.Sales at osram's automotive division fell 10.6 per cent on lower expectations from the global auto industry.In the digital business, sales fell 8.5 percent due to weakness in the general lighting and control business.As reported in March, the governing council expects earnings from continuing operations to fall to 11 to 14 percent, adjusted EBITDA margins to be around 8 to 10 percent, and free cash flow for fiscal 2019 to be around minus 50 million to minus 150 million euros.In mid-february, osram announced that management was in close talks with Bain Capital and The Carlyle Group about a possible takeover.Due diligence is ongoing and, as has been communicated to the public, it remains to be seen whether an agreement will be reached.The discussion of the management committee is in the interest of the company and other stakeholders such as shareholders, employees, business partners and customers.