* To cut 7,800 jobs as technology shifts to LED lights
* Says will result in annual savings of 260 mln eur
* Q3 profit better than expected at 104 mln eur
(Adds more details from statement on earnings targets,
BERLIN, July 29 German lighting maker Osram
Licht AG announced late on Tuesday plans for a new
savings programme that will include almost 8,000 job cuts, or
around 23 percent of its staff, as it seeks to keep up with a
shift in technology.
It said the job cuts - of which 1,700 would be in Germany
and 6,100 internationally - would allow it to achieve cost
savings of around 260 million euros ($348.6 million) a year by
the end of the fiscal year 2017.
It said that the extra measures would cost around 450
million euros and could result in it missing its long-term
target for a reported operating profit margin of more than 8
percent in the fiscal year to the end of September, 2015.
Osram also announced third quarter results a day earlier
than planned, with sales of 1.2 billion euros ($1.61 billion)
and better than expected adjusted earnings before tax and
interest of 104 million euros.
"While earnings continue to develop nicely, the growing
market acceptance of LED technology is, as already announced,
causing a significantly faster decline of the traditional
business," said Chief Executive Officer Wolfgang Dehen.
The new savings drive extends its current "Push" programme,
which runs out at the end of this year and has involved cutting
8,700 jobs, or 21 percent of its workforce, and closing a
quarter of its 43 factories to generate gross savings of 1.2
Osram, spun off from engineering group Siemens
last year, has been scrambling to adjust to a shift from
traditional light bulbs to newer technologies such as
light-emitting diodes (LEDs) and said on Tuesday LED sales made
up 38 percent of group revenue in the third quarter.
Top rival Philips announced plans last month to
spin off its lighting components businesses as it refocuses its
business on healthcare and high-end lighting systems.
Shares in Osram have lost a quarter of their value over the
past six months, suggesting there is concern over how much more
restructuring may be needed at the company.
Osram Chief Executive Wolfgang Dehen said last month that
more cuts in the traditional lighting business would follow,
though he did not say at the time how many jobs could go.
Osram trades at 12.6 times its estimated 12-month forward
earnings, at a discount to Zumtobel and Philips, which
trade at multiples of 13.9 and 14.6, respectively.
Osram confirmed its outlook for the current year for sales
to remain flat or increase only moderately and said it still
expected to post a sharp rise in annual net profit this year
from last year's 34 million euros, which would enable it to pay
its first dividend to shareholders.
It had cut its sales outlook in May.
($1 = 0.7458 Euros)
(Reporting by Victoria Bryan and Maria Sheahan, editing by