July 8 (Bloomberg) -- Osram Licht AG, which today dropped as much as 4 percent from its opening price on the first day of trading, said it needs to complete a restructuring before considering acquisitions.
“The priority is the completion of Osram Push and to bring earlier purchases back on track with the plan we had when we bought them,” Chief Financial Officer Klaus Patzak said in an interview at the Frankfurt Stock Exchange. “We are working hard to approach break-even and are well under way with our planning to get there.”
The company, which was spun off by Munich-based Siemens AG, declined to as low as 23 euros after opening at 24 euros and was trading at 23.55 euros at 12:23 a.m. in Frankfurt, valuing the company at 2.47 billion euros ($3.17 billion).
Siemens has separated from Osram, which it had valued at 3.23 billion euros, as it seeks to divest units with low profitability or growth prospects. Europe’s biggest engineering company scrapped a planned initial public offering of the business last year and instead decided investors will receive one Osram share for every 10 Siemens shares they own.
Osram acquired lighting fixtures specialist Siteco for 254 million euros in 2011, and posted 192 million euros in charges at the unit last year alone. Patzak declined to comment when asked about a potential interest in Vienna-based lighting systems company Zumtobel AG.
Profit at Osram in the three months through March more than doubled to 57 million euros from 25 million euros a year earlier, Siemens said in May. Osram will shut or sell six plants for a total of 11 divested by the end of 2014 as it targets 1 billion euros in savings by 2015.
After 2014, the 107-year-old company will focus on cost cuts at its luminaires and solutions businesses, with the restructuring costing around 1 percent of its revenue in the traditional general lighting business, Patzak said. None of the further plant shutterings will affect sites in Germany “in the near future,” he added.
Osram, which had been a wholly owned subsidiary of Siemens since the latter bought out General Electric Co.’s 21 percent stake in 1978, is meanwhile targeting revenue growth at its opto semiconductor business, which makes LEDs, and specialty lighting units.
Investors are not concerned about Osram’s ability to fund research and development costs as the importance of LEDs grows, Patzak said, citing feedback from investor presentations. He declined to rule out the possibility of a capital increase.
To contact the reporter on this story: Tom Lavell in Frankfurt at firstname.lastname@example.org