OSRAM Licht AG reported earnings results for the fourth quarter and year of 2018. For the year, the company's sales by 2% to EUR 4.1 billion, profitability remained at the level of 14.7%, and adjusted EBITDA reached EUR 605 million. As predicted, free cash flow was negative with EUR 183 million. This reflects the CapEx for capacity expansion mainly in OS. And earnings per share were EUR 1.44. And if take out the additional foreign exchange burdens of more than EUR 80 million, adjusted EBITDA would have reached EUR 690 million. And this would be the level of prior year. For the full fiscal year 2018, CapEx ended up to be EUR 467 million. For the full fiscal year 2018, reported diluted EPS was EUR 1.44 compared to EUR 2.78 in fiscal year 2017. Foreign exchange, higher depreciation and restructuring measures were the major reasons driving the year-over-year decline. Adjusted EPS was EUR 2.51 compared to EUR 3.38 in fiscal 2017. Earnings after taxes were EUR 142 million for the period.

For the quarter, the company reported comparable growth for the company was positive with 1.1% in the quarter, with all segments showing growth. Adjusted EBITDA came in with EUR 147 million or 13.9% of revenue. Free cash flow was positive with EUR 40 million in the fourth quarter. Operational cash flow was at EUR 109 million. CapEx was EUR 70 million. Reported diluted EPS in was at a negative EUR 0.06 restructuring charges taken during the quarter as well as acquisition and integration-related expenses. Revenue was EUR 1,060 million compared to EUR 1,029 million a year ago. Loss after tax was EUR 5 million compared to profit of EUR 40 million a year ago.

First quarter of fiscal year 2019 is expected to be substantially impacted by the implementation of the new revenue recognition standard IFRS 15. The company expects revenue to be lower by up to EUR 40 million when compared to the old standards. The annual impact is expected to be largely realized in the first quarter of fiscal year 2019, including the corresponding negative impact on profitability of up to EUR 17 million in adjusted EBITDA.

Capital expenditure level is expected to come down substantially in fiscal year 2019 when compared to fiscal year 2018 for reasons outlined earlier. It is likely to be around EUR 300 million in fiscal year 2019. The impact of tariffs already in place levied on the trade between the United States and China and additional ones likely to be implemented in January 2019 are expected to burden the company financials negatively with up to EUR 30 million unmitigated. Gross savings from performance programs are expected to amount to between EUR 40 million to EUR 60 million in fiscal 2019, also helping to offset some of the inflationary pressures the company see increasing in fiscal year 2019. The company expects comparable revenue growth to be flat to moderate for fiscal year 2019. The adjusted EBITDA margin is expected to be in a range of 12% to 14%. This range is largely driven by the possible variance in revenue growth trajectory in fiscal year 2019 and the corresponding operating leverage effects. Free cash flow is expected to be positive, targeted at a middle double-digit level, including significant cash outflows resulting from the ongoing performance programs.