Business figures for fiscal 2005 (Oct. 1, 2004, to Sept. 30, 2005)

Osram increases sales and profits

Martin Goetzeler, the new President of Osram, had some fine figures to show at his first Annual Report Press Conference: "2005 was a successful business year. We further increased sales and profits, carried out key restructuring measures and invested in future products," summed up the President and CEO.

The concept for the Asia Organization and the new LED Systems division will pave the way for profitable future growth.
 
Despite negative currency effects of 2 percent attributable primarily to the U.S. dollar, Osram succeeded in boosting its world sales slightly from the previous year’s level by a nominal amount of 1 percent to EUR4.3 billion. After adjustment for currency effects, OSRAM’s growth came to 3 percent. Volume growth came to 5 percent. Good volume growth was achieved in automotive lighting - for example in the U.S. after-market - and in electronic control systems, primary products and particularly in high-performance LEDs. The flagging market in video projection lamps had a dampening effect. Regionally, increased sales were reported in the Americas and Asia; in Europe sales remained virtually unchanged. In Germany, Europe’s biggest lighting market, Osram’s sales dropped 5 percent to EUR495 million as a result of economic trends (share of world sales: 12 percent), whilst Eastern Europe showed two-digit growth rates.
 
The Group profit rose in fiscal 2005 from EUR445 to EUR465 million, corresponding to a Group profit margin for the lighting group of 10.8 percent. "We achieved this improvement in spite of keener competition, higher energy and metal prices, continuous restructuring, and unremitting high levels of development input expenses and startup costs for new products, especially in the Opto Semiconductors division," elucidated Goetzeler. "We owe this good profit situation to our strengths in innovative products and stringent cost management."
 
The global workforce grew by over 1,700 to 38,383 employees during the period under review, primarily as a result of the consolidation of the Russian subsidiary SVET. In Germany the payroll dipped slightly by 2 percent to 8,756. This is attributable in particular to employees whose temporary contracts could not be renewed owing to the flagging market in video projection lamps.
 
We stepped up capital expenditures on tangible assets by 27 percent and research and development spending by 6 percent. We invested EUR160 million, or 56 percent of all capi-tal spending in this area, in Germany this past fiscal year. "Over the past five years we have invested a total of nearly EUR700 million in property, plant and equipment in Germany, where the greater part of our innovative products are produced," added Goetzeler.
 
"In fiscal 2006 we want to score with innovations and achieve solid volume growth. We expect earnings to remain at a high level." For the future Osram will adhere to its long-term strategy of forging ahead with innovations, striving for cost leadership and globalizing its business. In the business years 2006 and 2007 Osram will focus especially on the growth regions of Asia and Eastern Europe as well as the LED system business.
 
 
Building up a regional Asia Organization
With its new regional Asia Organization Osram will be stepping up its presence in a vital growth market from the beginning of 2006. "In the future some managers will run their divisions from Asia. That brings us even closer to the market, where we can react even more swiftly to short-term customer desires - an aspect that is of the essence for display manufacturers, for example," explains Goetzeler.
 
This presence in growth regions safeguards jobs in Germany, Goetzeler emphasizes: "Today exports of our German factories to Asia and Eastern Europe are 80 percent higher than 5 years ago".
 
 
Global LED Systems division
Furthermore, Osram is starting up a new global division as of December for the vital future market in LED systems. "We’re already quite successful in system business using traditional light sources. With the new division we aim to use this know-how even more intensively for LED systems business," explains Goetzeler. LED systems consist of LEDs along with opti-cal devices, electronic control systems and other control components. The Opto Semicon-ductors Division will continue to be responsible for the development, production and marketing of individual LEDs.
 
 
About the company
Osram is one of the two largest lighting manufacturers in the world. Sales for the Os-ram group of companies worldwide in the year ending September 30, 2005 totalled 4.3billion euros, 88 percent of which came from outside Germany. Osram has devel-oped from a classic light bulb manufacturer into a high-tech company in the lighting industry. Around 40 percent of sales comes from innovative products. This global player employs more than 38,000 people worldwide, supplies customers in some 150 countries and has 49 production facilities in 19 countries.
 
 
Osram Management***:
Martin Goetzeler (43), President & CEO (since May 1, 2005)
Kurt Gerl (59), CSO (since May 1, 2005) and Executive Vice President Human Resources (from January 1, 2006)
Thomas Seeberg (63), CFO and Executive Vice President Finance and Human Resources (to December 31, 2005)
Johannes Närger (45), CFO (from January 1, 2006)
Jörg Schaefer (64), CTO (to March 31, 2006)
Claus Regitz (48), CTO (from April 1, 2006)
*** see also Nov. 24, 2005 announcement of personnel changes.
 
 
This press release Annual Report contains forward-looking statements and information - that is, statements related to future, not past, events. These statements may be identified by words as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will" or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Osrams’ control, affect its operations, performance, business strategy and results and could cause the actual results, performance or achievements of Osram worldwide to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.
For us, particular uncertainties arise, among others, from changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products or technologies by other companies, lack of acceptance of new products or services by customers targeted by Osram worldwide, changes in business strategy and various other factors.More detailed information about certain of these factors is contained in Siemens’ filings with the SEC, which are available on the Siemens website, www.siemens.com and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as anticipated, believed, estimated, expected, intended, planned or projected. Osram does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

Press contact:

OSRAM

Reglindis Pfeiffer
Tel: +49-89-6213-2305
Fax: +49-89-6213-3457
Email: reglindis.pfeiffer@osram.de