OSRAM Licht : Earnings Release Q2/20 (preliminary and unaudited)

www.osram.com

OSRAM improves operating profitability - early COVID-19 response implemented

Q2 FY20 Earnings Release(preliminary, unaudited figures)

OSRAM Licht AG | May 7, 2020

Light is OSRAM

Disclaimer

This presentation as well as other reports, presentations, materials delivered to shareholders and press releases 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. In addition, our representatives may from time to time make oral forward-looking statements. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. OSRAM Licht AG has based these forward-looking statements on its current views and expectations and on certain assumptions of which many are beyond OSRAM Licht AG's control. These are subject to a number of risks, uncertainties and factors, including, but not limited to those described in disclosures, in particular in the sub-chapter Risks in the Annual Report. 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 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 required by applicable laws and regulations.

This presentation includes references to non-IFRS financial measures, including, but not limited to: FCF, EBITDA, EBITDA margin, capital expenditure, capital expenditure as percentage of revenue, net financial debt and net working capital. We have provided these measures and other information in this presentation because we believe they provide investors with additional useful information to assess our performance. Our use of these supplemental financial measures may vary from others in our industry and should not be considered in isolation or as an alternative to our results as reported under IFRS.

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.

2OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Good second quarter earnings - OSRAM braces for challenges ahead

Statement from the CEO

Q2 FY20 summary:

• Revenue of€821m
• Adjusted EBITDA margin of11.7%
• Positive free cash flow
• Decisive action taken to mitigate coronavirus impact

"After a robust start into the fiscal year, our second quarter results continued to show year-on-year improvements in operating profitability and free cash flow. Sales performance was impacted by COVID-19-related supply chain and demand disruptions especially towards the end of March.

OSRAM has reacted to the unfolding crisis with speed and determination. While we are confronted with low macroeconomic visibility and demanding day-to-day operations, the organization is pulling together to mitigate the financial impact.

At the same time, it is all the more important to continue on our strategic path towards long-term profitable growth. I am convinced that OSRAM will emerge strongly from this year's challenges."

3OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Good year-on-year improvement in profitability and cash flow despite COVID-19 impact on sales performance

Revenue (€m) / comp. growth

							YoY decline due to
			-7.9%			supply chain
							disruptions in
	862		821
			China and lower
							demand in the
							early stages of the
							pandemic
	Q2/19	Q2/20

Free cash flow (€m)

			+140			Sharp swing in
					free cash flow
			64
				driven by higher
						EBITDA and
						reduction of
						working capital
	-76
	Q2/19		Q2/20

EBITDA adj. (€m) / margin

			+26			Profitability
			96		continued to
	70		benefit from
				performance
	8.1%		11.7%		measures
	Q2/19		Q2/20

Comments:

• Slight comparable revenue decline at OS due to temporary closure of production in Wuxi, China
• DI sales hit hardest and earliest especially given exposure to entertainment and cinema markets
• Sharp profit improvement at OS overcompensatesvolume-driven decline at AM

4OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

COVID-19 pandemic and resulting measures are leading to severe drop in economic climate - shape of recovery will be key

	OECD Leading Indicator1)
Global	101			OECD Composite Leading Indicator
Economics
						Calendar months
	100
	99
	98
	01/18	04/18	07/18	10/18	01/19	04/19	07/19	10/19	01/20	04/20

Global Manufacturing PMI2)

55			J.P. Morgan Purchasing Manager Index
54						Calendar months
53
52
51
50
49
48
47
01/18	04/18	07/18	10/18	01/19	04/19	07/19	10/19	01/20	04/20

Sources: 1) OECD Composite Leading Indicator (CLI) as published on data.oecd.org

2) JP Morgan Purchasing Manager Index, J.P. Morgan and IHS Markit in cooperation with ISM und IFPSM

5OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Car production disruptions and recession-induced demand drop will have a noticeable near-term impact

Global light vehicle production by quarter		Light vehicle production by region (YoY, %)

Automotive

Market

Units (million)	Y/Y
30		FY20	10%
90m		71m	5%
	-4%		0%
25		-9%	-5%
		-10%
	22.8
		-15%
		-23%	-20%
20		19.2	-25%
		17.6	-30%
			-35%
15		-47%	-40%
	-45%
		11.6	-50%
		-55%
10			-60%

Oct-	Jan-	Apr-	Jul-	Oct-	Jan-	Apr-	Jul-
Dec'18 Mar'19 Jun'19 Sep'19 Dec'19 Mar'20	Jun'20 Sep'20

World

-5.9

-20.7

FY19FY20

NAFTA

-1.3

-24.8

FY19FY20

Europe

-4.0

-23.4

FY19FY20

China

-13.3-12.4

FY19FY20

Source: Light vehicle production forecast based on monthly IHS Data, fiscal year based. As of: April 27, 2020

6OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

COVID-19 countermeasures: Early and decisive with top-down leadership

Clear action fields		Detailed work packages

Short-term	Cash & cost		Customers		Performance

Long-term	Strategy		Structure		Innovation

Web-based performance measurement tool		Communication & motivation

Measures

Maturity / phasing

Reports

The OSRAM team is responding to this crisis with professionality and resilience

7OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Within weeks, SHIELD has led to gross savings and financing

activities worth more than €200m until end of FY20

(€m)	EBITDA	Free Cash Flow	Total liquidity
	measures	measures	measures

	85-95
40-50	Capex
	etc.
	EBITDA
	effect
FY20	FY20

200-225

Financing

FCF

FY20

▪	Personnel-related measures (vacation	Includes majority of EBITDA measures	Includes FCF measures and further
	and flex time reduction, short-time	and further working capital & capex	financing activities:
	work, furlough, shifted/cancelled	related activities:	▪Close communication with banks
	hiring)	▪	Investment reduction or postponement	▪Optimized use and extension of credit
▪	Operations-related measures	▪Accounts receivable management /	facilities
▪	Discretionary spending		factoring	▪Weekly liquidity steering
		▪	Inventory optimization	▪Further measures ready if needed

Impact measured against pre-crisis baseline/planning. EBITDA effect includes ~30m vs. prior year.

Total liquidity impact includes both permanent and one-off savings, as well as postponed cash-out (subject to re-assessment at the end of deferral period), and financing activities.

8OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Existing performance programs are moving ahead with €300m total gross

savings until FY22

Gross savings Q2 FY201)

Overhead

productivity€17mglobal

Transformation	€9m
of plants

Comments

• Q2 FY20 performance program savings met expectations and contributed to profitability
• Major contributors were Opto Semiconductors and Corporate Overheads
• Further plant transformation and structural measures kicked off in April
• Total gross savings target until FY22 raised to €300m2)

Total€26m

1)Gross savings compared to FY19 baseline

2)For period between Q1 FY18 and Q4 FY22

9OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Q2 FY20 revenue initially on track but COVID-19 starts to show effects

Revenue (€m) / Comp. growth (%)1)

OSRAM Group: Revenue bridge Q2 FY20 YoY

	862		1.1%	2.1%	-7.9%		821

Revenue	FX	Portfolio	Comparable	Revenue
Q2/19			growth	Q2/20

OSRAM Group: Revenue by Region Q2 FY20

OS Revenue Development (comp. growth)

-1.8%

					1.2%
	363	363	385	359		362
	Q2/19	Q3/19	Q4/19	Q1/20		Q2/20

AM Revenue Development (comp. growth)

-8.7%

					-9.7%
	447	432	457	480		431

				Comp. growth	Q2/19	Q3/19	Q4/19	Q1/20	Q2/20
				DI Revenue Development (comp. growth)
	30%		EMEA	-7.2%
	37%
					-12.3%
			-9.4%
			APAC
			AMERICAS	-7.2%				-7.0%
						268
					227	232
	33%				217	200
1)	On October 1, 2019, OSRAM made minor organizational changes involving reclassification between the reportable segments (OS, AM, DI, CIE)	Q2/19	Q3/19	Q4/19	Q1/20	Q2/20

10OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

OS and DI with improved profitability; AM below prior year level

Adjusted EBITDA (€m) / Adjusted EBITDA Margin (%)1)

Adjusted EBITDA2)Q2 FY20 YoY

96

										6
	70						13
			7									11.7%
	8.1%
	Adj. EBITDA	Price & Inflation	IFRS16		OPEX, Mix,	Adj. EBITDA
	Q2 19	vs. Productivity3)	Volume / Digr., Other	Q2 20

Comments

• Adj. EBITDA above prior year driven by OS as well as by savings from performance programs; application of IFRS16 with positive EBITDA effect of €+13m
• Adj. EBITDA in Corporate Items:€-12m
• EBITDA Special Items:€-46m (incl. €-45m personnel restructuring)
• Net Income:€-39m from continuing operations
• OS:Increased EBITDA vs. PY driven by functional cost savings and product portfolio measures to improve profitability
• AM:Profitability impacted by lower volume and higher OPEX vs. PY; productivity savings overcompensate negative price and inflation effects
• DI:adj. EBITDA improvement despite lower volume driven by higher gross margin (mainly productivity savings) and reduced functional costs at DS

OS adjusted EBITDA

					18.9%	24.5%	21.0%
				16.6%
14.3%
				60	73	88		76
	52
	Q2/19	Q3/19	Q4/19	Q1/20	Q2/20
AM adjusted EBITDA
9.6%			9.7%
				5.1%	5.8%				6.9%
	43		27	47		30
		22
	Q2/19	Q3/19	Q4/19	Q1/20	Q2/20
DI adjusted EBITDA
					4.3%
					11				0.8%
										2
							-1
		-3		-7

-1.5%	-0.3%
-2.9%

	1)	On October 1, 2019, OSRAM made minor organizational changes involving reclassification between the reportable segments (OS, AM, DI, CIE)	Q2/19	Q3/19	Q4/19	Q1/20	Q2/20
	2)	Adjustment for special items (S.I.) includes a.o. transformation costs, substantial legal and regulatory matters, and costs related to mergers and acquisitions activities including the sale of subsidiaries, investments and other businesses.	3)Related to COGS.

11OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Positive Free Cash Flow

Free Cash Flow / Net Debt / Liquidity (€m)

Free Cash Flow1)bridge Q2 FY20

Net debt bridge Q2 FY20

EBITDA
50
Trade Receivables
67
Inventories	-25
Trade Payables	-7
Income taxes paid	-14
Capex	-22
Other	16
FCF 1)
64

1. Defined as net cash provided by (used in) operating activities less capital expenditures

2.30		Leverage Ratio (Net Debt / EBITDA as reported)2)	1.93
																				-532
									-2
		-585			64								-10
		Net Debt,		FCF		Purchases of	Other investing		Net Debt,
	Dec 31, 2019				Investments	and financing	Mar 31, 2020
													activities
	Cash and cash equivalents plus unused lines of credit
800				788					783
490										200						Undrawn Part of
			590											Syndicated Credit Facility
																		(committed)
310										583						Cash & Cash Equivalents
			198
		Q4/19			Q1/20	Q2/20

1. PY EBITDA adjusted by IFRS16 lease effect

12OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Appendix

Financial calendar and IR contact information

Upcoming events

• May 11, 2020
  Interim Report for the first half of fiscal year 2020, Munich, Germany
• May 13, 2020Virtual Roadshow
• July 29, 2020
  Earnings release for the 3rd quarter of fiscal year 2020, Munich, Germany

Investor Relations contact

Telephone	+ 49 89 6213 4259
Internet	http://www.osram-group.de/en/investors
Email	[e-mail]

14OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Key financial metrics (continuing operations)1)(preliminary, unaudited)

Group (€m)	Q2 FY20	Q2 FY19	Change (y-o-y)
			nom.	-4.7	%
Revenue	821	862	comp.	-7.9	%
Gross margin	25.3%	23.8%		150	bps
R&D	-104	-119		-12.0	%
SG&A	-159	-156		1.8	%
EBITDA	50	11		350.1	%
EBITDA margin	6.1%	1.3%		480	bps
Adj. EBITDA	96	70		36.8	%
Adj. EBITDA margin	11.7%	8.1%		350	bps
Financial result, including at-equity result (continuing operations)	-6	-7		-12.6	%
Income (loss) before income taxes (continuing operations)	-42	-110		-62.0	%
Taxes	3	19		87.0	%
Net income (loss) (continuing operations)	-39	-91		-56.7	%
Diluted EPS in € (continuing operations)	-0.32	-0.86		-62.8	%
Free cash flow (continuing operations)	64	-76		n.a.
CAPEX	-22	-61		-63.3	%
Net debt	-532	-350		52.1	%
Equity ratio	44.9%	53.2%		-830	bps
Employees (in thousands)	22.3	25.0		-11.1	%

1. There was a change in presentation affecting the consolidated statement of income at the start of fiscal year 2020, because the application engineering function in the OS Segment has been assigned to sales since that date, having previously been classified as research and development. FY19 was restated accordingly

15OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Segment overview (continuing operations)1)(preliminary, unaudited)

Q2 FY20 (€m)	OS	AM	DI	CIE	OSRAM
Licht Group
Revenue	362	431	200	-173	821
Change % vs. PY reported	-0.3%	-3.6%	-11.5%		-4.7%
Change % vs. PY comparable	-1.8%	-8.7%	-12.3%		-7.9%
EBITDA	76	10	-1	-35	50
EBITDA margin	21.0%	2.4%	-0.6%		6.1%
Special items EBITDA	0	-20	-3	-23	-46
therein transformations costs	-3	-18	-8	-20	-48
EBITDA before special items	76	30	2	-12	96
EBITDA margin before special items	21.0%	6.9%	0.8%		11.7%
Assets2)	1,294	684	407	2,154	4,540
Free cash flow	60	37	-18	-15	64
Additions to intangible assets and property, plant and equipment	9	12	1	0	22
Amortization	2	6	3	1	12
Depreciation PP&E	47	9	5	1	62
Depreciation right of use assets	4	3	2	2	11

1. On October 1, 2019, OSRAM made minor organizational changes involving reclassification between the reportable segments (OS, AM, DI, CIE)
2. Net assets on segment level; total assets on group level; CIE includes reconciling items.

16OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Consolidated statement of income (continuing operations)1)(preliminary, unaudited)

	Three months ended	Three months ended
	Mar 31	Mar 31
in (€m)	2020	2019
Revenue	821	862
Cost of goods sold and services rendered	-614	-657
Gross profit	207	205
Research and development expenses	-104	-119
Marketing, selling and general administrative expenses	-159	-156
Other operating income	21	8
Other operating expense	-1	-41
Income (loss) from investments accounted for using the equity method, net	-3	-2
Interest income	1	0
Interest expense	-6	-4
Other financial income (expense), net	1	-1
Income (loss) before income taxes OSRAM (continuing operations)	-42	-110
Income taxes	3	19
Income (loss) OSRAM (continuing operations)	-39	-91
Income (loss) from discontinued operation, net of tax	-2	-6
Net income (loss)	-42	-97
Attributable to:
Non-controlling interests	-9	-7
Shareholders of OSRAM Licht AG	-32	-90
Basic earnings per share (in €)	-0.34	-0.93
Diluted earning per share (in €)	-0.34	-0.92
Basic earnings per share (in €) OSRAM (continuing operations)	-0.32	-0.86
Diluted earning per share (in €) OSRAM (continuing operations)	-0.32	-0.86

1. There was a change in presentation affecting the consolidated statement of income at the start of fiscal year 2020, because the application engineering function in the OS Segment has been assigned to sales since that date, having previously been classified as research and development. FY19 was restated accordingly.

17OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Consolidated Statement of Comprehensive Income (continuing operations) (preliminary, unaudited)

	Three months ended	Three months ended
	Mar 31	Mar 31
in (€m)	2020	2019
Net income (loss)	-42	-97
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans	7	3
thereof: income tax	-3	0
Measurements of equity instruments at fair value	0	0
thereof: income tax	0	0
Items that may be reclassified subsequently to profit or loss
Currency translation differences	-12	47
Derivative financial instruments	-2	-1
thereof: income tax	1	0
	-15	46
Other comprehensive income (loss), net of tax	-8	49
Total comprehensive income (loss)	-49	-48
Attributable to:
Non-controlling interests	-11	-7
Shareholders of OSRAM Licht AG	-39	-41

18OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Consolidated statement of financial position (continuing operations) (preliminary, unaudited)

	As of	As of
	Mar 31	Sep 30
in (€m)	2020	2019
Assets
Current Assets
Cash and cash equivalents	583	310
Trade receivables	470	558
Other current financial assets	39	29
Contract assets	9	9
Inventories	737	692
Income tax receivables	20	21
Other current assets	95	113
Assets held for sale	-	93
Total current assets	1,951	1,824
Goodwill	185	186
Other intangible assets	252	273
Property, plant and equipment	1,387	1,493
Right of use assets	213	-
Investments accounted for using the equity method	55	56
Other financial assets	35	25
Deferred tax assets	412	410
Other assets	49	70
Total assets	4,540	4,335

1) As of March 31, 2020 OSRAM held 2,664,388 treasury shares (September 30, 2019: 2,796,275 shares).

	As of	As of
	Mar 31	Sep 30
in (€m)	2020	2019
Liabilities and equity
Current liabilities
Short-term debt and current maturities of long-term debt	841	539
Trade payables	495	548
Other current financial liabilities	109	113
Current contract liabilities	15	14
Current provisions	67	69
Income tax payables	59	65
Other current liabilities	350	347
Liabilities associated with assets held for sale	-	90
Total current liabilities	1,937	1,786
Long-term debt	274	120
Pension plans and similar commitments	140	167
Deferred tax liabilities	15	17
Provisions	32	33
Other financial liabilities	16	27
Contract liabilities	1	1
Other liabilities	84	102
Total liabilities	2,500	2,252
Equity
Common stock, no par value	97	97
Additional paid-in capital	1,669	1,672
Retained earnings	263	255
Other components of equity	49	79
Treasury shares, at cost1)	-94	-99
Total equity attributable to shareholders of OSRAM Licht AG	1,984	2,004
Non-controlling interests	56	79
Total equity	2,039	2,083
Total liabilities and equity	4,540	4,335

19OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020

Consolidated statement of cash flows (continuing operations) (preliminary, unaudited)

	Three months Three months			Three months	Three months
	ended	ended			ended	ended
	Mar 31	Mar 31			Mar 31	Mar 31
in (€m)	2020	2019		in (€m)	2020	2019

Cash flows from operating activities
Net income (loss)	-42	-97
Adjustments to reconcile net income (loss) to cash provided
Income (loss) from discontinued operation, net of tax	2	6
Amortization, depreciation, and impairments	85	114
Income taxes	-3	-19

Cash flows from investing activities

Additions to intangible assets and property, plant and equipment Acquisitions, net of cash and cash equivalents acquired Purchases of investments

Proceeds and payments from sales of investments, intangible assets, and property, plant and equipment

Proceeds and payments from the sale of business activities, net cash disposed of

-22-61

• -2

-2-5

20

• 22

Interest (income) expense, net	5	4
(Gains) losses on sales and disposals of businesses, intangible	0	1
assets, and property, plant and equipment, net
(Income) loss from investments	3	2
Other non-cash (income) expenses	1	2
Change in current assets and liabilities
(Increase) decrease in inventories	-25	28
(Increase) decrease in trade receivables	67	13
(Increase) decrease in other current assets	-3	13
Increase (decrease) in trade payables	-7	-57
Increase (decrease) in current provisions	-4	-3
Increase (decrease) in other current liabilities	28	-8
Change in other assets and liabilities	-7	2
Income taxes paid	-14	-16
Interest received	1	0
Net cash provided by (used in) operating activities - OSRAM	86	-16
(continuing operations)
Net cash provided by (used in) operating activities discontinued	-	-7
operation
Net cash provided by (used in) - OSRAM Licht Group (total)	86	-22

Net cash provided by (used in) investing activities - OSRAM (continuing operations)	-23	-45
Net cash provided by (used in) investing activities discontinued operation	-	-1
Net cash provided by (used in) investing activities - OSRAM Licht Group (total)	-23	-46
Cash flows from financing activities
Purchase of treasury stocks	-	-7
Proceeds from capital increases at subsidiaries with minority interests	-	3
Repayment of long-term debt	-8	-8
Change in short-term debt and other financing activities	337	198
Interest paid	-7	-2
Dividends paid to shareholders of OSRAM Licht AG	-	-107
Net cash provided by (used in) financing activities - OSRAM (continuing operations)	322	76
Net cash provided by (used in) financing activities discontinued operation	-	-
Net cash provided by (used in) financing activities - OSRAM Licht Group (total)	322	76
Effect of exchange rates on cash and cash equivalents	-1	4
Net increase (decrease) in cash and cash equivalents	384	12
Cash and cash equivalents at beginning of period	198	243
Cash and cash equivalents at the end of period	583	255
Less: Cash and cash equivalents of discontinued operation at end of the reporting period	-	0
Cash and cash equivalents at end of period (consolidated statement of financial	583	255
position)

20OSRAM Licht AG

Q2 FY20 Earnings Release (preliminary, unaudited figures) | May 7, 2020