OSRAM Announces Innovation and Technology Initiative

At this year’s Osram AGM, more than 45 percent of the share capital was represented in the morning. The company’s shareholders will vote on a dividend payment for the first time since the stock market listing in July 2013. The company plans to pay out €0.90 per share, meaning Osram would distribute around half of its net income. At the AGM, Chief Financial Officer Klaus Patzak reiterated the intention to pay a dividend of €0.90 for the current fiscal year as well. “This is a strong sign of trust in the future performance of our company,” said Patzak.

With more than half a million shareholders, Osram’s shareholder structure was still broadly based at the end of fiscal 2014. The majority of shares was held by institutional investors that primarily pursue a growth- or value-driven investment strategy. Retail investors held more than 16 percent of shares.

Below is an excerpt from the speech made by Olaf Berlien at the AGM. The full text can be found here.

“Throughout my whole career, the issues of ‘restructuring’ and especially ‘technological change’ have been constant companions. I know the clean room and the shipyard as well as the industrial and automotive business and the semiconductor industry.
To those of you wondering what brought me to OSRAM, I can give a clear and concise answer: I am fascinated and convinced by the company, its brand and its products.

The company is a renowned technological leader regarding many products and solutions and is excellently positioned in selected businesses. OSRAM is the global market leader in automotive lighting and has held a strong position as the second-largest player in the highly competitive opto-semiconductor components market for many years.
Our task is to use this position and to create business opportunities.

When I met customers, investors and employees it was also clear to me that the company faces challenges. And as I said earlier, these challenges are tremendous:

• The global lighting market is in the middle of a historic transformation due to the move towards LED technology. Almost no other industry is changing as rapidly as ours: dramatically shorter innovation cycles, new competition from Asia and a constant price decline are putting the entire lighting industry under pressure and established business models into question.
• Our business in classic lamps and ballasts alone has shrunk by about 15 percent in the last fiscal year. And, if I may remind you, this part of our business still stood for almost 40 percent of our revenue in fiscal 2014.
  While we have succeeded in slowing the decline by stabilizing prices and are earning very good money here – the question is, for how much longer? The trend towards LEDs is irreversible.

We need to master these challenges. This certainly won’t be easy. And, for that reason, I have great understanding for all the uncertainty inside and outside the company. HOWEVER: Where there are challenges, there are also opportunities. And these are good opportunities if we approach them in the right way.

We have to strengthen and expand our technology leadership. And we must also become faster – much faster!
That means:

• We will work with a bigger focus on sales and customers. I personally believe in the entrepreneur within the company. I believe in pioneering spirit, the courage to take risks, and responsibility.
• We must structure the organization in a way that we manage the company flexibly and effectively. Our principle should be: “As much decentralization as possible, and as much centralization as necessary.”
• And we will need to have the will and courage to change. The many discussions I’ve had give me great optimism. Readiness and willingness to change were tangible everywhere, despite all the uncertainty

The management team and I will define the pillars for a new strategy for OSRAM as quickly as possible. We will let you know in spring what this will look like. My goal is a sustainable company that creates value – value for its employees, for its customers, and of course for you, my dear shareholders.”