Germany Feeling the Imact of Trum Economic Policies AsCompanies Lament Of Poor Sales - CALIPHATE MEDIA

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Thursday, 28 June 2018

Germany Feeling the Imact of Trum Economic Policies AsCompanies Lament Of Poor Sales

Osram Licht AG became the latest domino to fall in
President Donald Trump’s trade war, warning that
rising tensions are weakening the outlook for the
automotive industry the German company supplies
with headlights and components.

The announcement on Thursday, sending Osram
shares down as much as 16 percent, is part of an
almost-daily litany of companies warning of
fallout from the U.S. president’s push to upend the
global trade framework. With rising friction over
automotive tariffs high on the agenda of
European Union leaders meeting in Brussels, U.S.
Trade Representative Robert Lighthizer on
Wednesday blasted the bloc’s tit-for-tat response
to U.S. levies on steel and aluminum.

The casualties are starting to pile up, on both sides
of the Atlantic. German automaker Daimler AG last
week became the first major company to cut its
outlook because of escalating tension. U.S.
motorcycle manufacturer Harley-Davidson Inc.
followed, while Jack Daniel’s maker Brown
Forman said it would raise prices after the EU
placed a 25 percent surcharge on whisky imports.
On Thursday, Volvo Cars owner Li Shufu said
from Hong Kong that consumers will feel the pain
of higher costs along with his companies.
Osram cut its forecast for sales and profit for the

“Restrictions on trade and sales, as well as
planning risks affecting automotive
manufacturers, have created noticeable
uncertainty,” the Munich-based supplier of
lighting equipment to a variety of industries said
in a statement . “Business performance will
also be affected by the postponement of projects
in the areas of mobile devices and horticulture.”
Damage So Far

Osram has been under fire on multiple fronts ever
since Chief Executive Officer Olaf Berlien unveiled
a strategy nearly three years ago that triggered a
boardroom clash and public spat with Siemens
AG, which was its biggest shareholder.

In addition to selling off its traditional lamps
business, the manufacturer become increasingly
dependent on the automotive industry and lighting
for buildings and cities. The company was
criticized for investing heavily in a new plant in
Malaysia to make semiconductor chips for light-
emitting diodes.

Since the start of the year, the company has
warned about flattening car sales in China and
currency headwinds, and has put its U.S. Lighting
services business up for sale.

“It is difficult for us to understand how the
situation could have so fundamentally changed
less than three months after the previous profit
warning, which was already quite meaningful,”
Morgan Stanley analyst Lucie Carrier said in a
note. “We look for more transparency is in terms
of what is going on in the business and how much
control and visibility the company has on their

Osram now is forecasting revenue growth of 1
percent to 3 percent instead of 3 percent to 5
percent previously. Adjusted earnings before
interest, taxes, depreciation and amortization this
year will be 570 million euros ($660 million) to 600
million euros, compared with a previous forecast
of 640 million euros. It pledged to accelerate cost
cutting and a reorganization of its factory alliance.
The shares fell the most in two months, to their
lowest intraday since January 2016. Osram was
down 15 percent to 35.65 euros at 2:11 p.m. in
Frankfurt, giving the company a market value of
3.9 billion euros. Zumtobel Group AG, an Austrian
company that makes lighting systems for buildings,
cited a deterioration in the U.K. market in its
warning about lower earnings.
(Adds trade friction from second paragraph.)
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Before it's here, it's on the Bloomberg Terminal.
Headlight parts maker warns tariffs will lower
sales growth
Osram shares drop 16 percent on deteriorating
profit outlook

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