May 17, 2013 / 10:16 AM / in 5 years

UPDATE 1-Osram sees restructuring weighing on 2013 profit

* Sees 2013 net income approaching break-even

* Sees 2013 revenues flat from 2012’s 5.4 bln euros

* Restructuring costs so far total 325 mln euros (Adds details on restructuring costs, Q2 results)

FRANKFURT, May 17 (Reuters) - Osram, the lighting business being spun off by Germany’s Siemens, expects restructuring costs to continue to weigh on its financial results this year as it slashes jobs and sells factories in a bid to improve profitability.

Net income will approach break-even in the 12 months through the end of September following a 378 million-euro ($488 million) loss a year earlier, Osram said in a presentation published on Siemens’ website on Friday.

Osram, the world’s No. 2 player in the lighting industry after Philips, is in the midst of restructuring, having been slow to adjust to a shift in demand from traditional light bulbs to light-emitting diodes (LEDs).

Osram is cutting 8,000 jobs and reducing the number of factories it operates to 33 from 43 to save about 1 billion euros. So far, it has spent 325 million euros on the restructuring.

It aims to lift its margin of earnings before interest, tax and amortisation (EBITA) over sales to more than 8 percent from 2015 onwards. In its fiscal second quarter, it came to 7 percent, excluding one-off items, which was still behind the 8.4 percent margin at Philips Lighting.

Osram said on Friday it expects revenues to remain flat at about 5.4 billion euros this year as a pickup in sales in the second half of its fiscal year offsets a 1.9 percent decline in the first six months.

Siemens aims to spin off 80.5 percent of Osram, which it says is worth about 3.2 billion euros, as it seeks to focus on its most profitable businesses. The company’s shares are expected to start trading in early July.

It has already warned shareholders not to expect any dividend payment from Osram this year but said Osram aims to pay out between 30 percent and 50 percent of net profit in the longer term.

$1 = 0.7742 euros Reporting by Maria Sheahan; Editing by Mark Potter

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