Osram Board Prepares to Split Off Legacy and LED Lamps in Separate Business Image courtesy of Osram

Osram Board Prepares to Split Off Legacy and LED Lamps in Separate Business

For insight on just how big an impact the shift to solid-state lighting technology is making on the lighting industry, the continuing repositioning by manufacturers of legacy lighting technologies should give an inescapable clue.

The choice by Siemens in 2013 to split off its Osram/Sylvania lighting business into an independent company was a huge indicator that a large industrial technology conglomerate didn’t see lighting’s prospects as a good fit for its growth plans. Royal Philips, after more than a century in lighting, followed suit last year, spinning off its Lumileds LED components and automotive lighting businesses as a separate unit (bought earlier this month by Chinese investment fund GO Scale Capital), while its Lighting Solutions business prepares for a potential initial public offering as a stand-alone company later this spring.

This week, Osram itself signaled that its management believes the future lies outside its legacy lighting business. The group announced that its managing board will recommend to the company’s supervisory board that it set up its lamps business as a separate company.  This would place Osram’s focus squarely on solid-state lighting components and the automotive lighting sector.

“Based on its discussions held on April 15, 2015, the Managing Board of OSRAM Licht AG intends to transfer the general lighting lamps business into an independent structure. This business includes the traditional as well as the LED-based lamps of the current business units CLB and LLS. The measure is to be submitted to the Supervisory Board at its next regular meeting on April 28, 2015. In fiscal 2013/14 this business generated worldwide sales of about €2 billion. The independent legal structure is to provide the basis for the further development of the business, while also considering partnerships,” said the Osram statement.

The transfer will include most of Osram’s traditional light bulb and LED general lighting business, which account for about 40% of Osram’s revenues at €2 billion ($2.5 billion). Those revenues have been on a slide of late, with the company’s general lighting business dropping 15% and returning an EBITDA margin of 4.6%, compared with 6% for the group overall.

TAGS: Lighting
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