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Ledvance will close two factories in the United States and Canada

Jan 18, 2018

In the global market, traditional lighting products increasingly micro, LED lighting rapid development, which led to the market for the United States in Exeter, New Hampshire and Canada Quebec, Prov. Drummondville Plant in the demand for traditional lighting products significantly reduced. The traditional lighting business shifted from growth to recession.

As a result, Ledvance announced the closure of the factories in Exeter and Drummondville since January 11, 2018, scheduled to be completed no later than December 2018.

Among them, in Drummondville, the production of some T12 products and related ancillary equipment will be transferred to the Versailles and Kentucky factories. Some equipment and research and development departments in Exeter will be redeployed elsewhere.


About 135 employees will be affected.

Ledvanc said the decision to close the plants was a difficult but necessary step to centralize resources to develop a solid-state lighting portfolio that best meets market needs and helps ensure future development. The company prides itself on the contribution of these factories and their employees to the lighting industry and customers, and will make every effort to help the staff during the transition.

A few days ago, the German business newspaper reported that Ledvance was bought by Chinese investors only half a year, the company announced the layoff of about 1300 people, while stopping the production in Augsburg, as well as in Berlin's traditional business. In addition, in the past few years, Osram company has been laying off thousands of people, shutting down 14 factories.

China's Optical network noted that Osram stripped ledvance before it has begun to close the plant plan to reduce the traditional light source capacity. As the subject of the traditional general lighting business of Osram Company, Ledvance continued to shut down the factory after its establishment. Ledvance's latest plan is to retain 8 factories worldwide by 2025. It is learnt that, as at June 30, 2017, the first and second phase of the original closing plant scheme has already been charged at $803 million, and the second phase of the new shutdown scheme is 2.758 billion.

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Olaf Berlien, chief executive of Osram, said recently: "In the fierce competition, we find that the traditional lighting business has fallen by more than 25%." "In a shrinking market," people have to adjust to fit. ”

Mergers and acquisitions of ledvance companies are China led packaging leading Mulinsen (MLS), Mulinsen more interested in by ledvance sales channels, better sales of their products. The CEO of Osram said, "The scope of sales is expanding, which can also create jobs." ”

Guo Xin Securities Research said that, as the ledvance 2014-2016 years of continuous close the plant, the shutdown of factories and personnel severance costs (ledvance shutdown of the plant involved in the costs include severance pay and early retirement costs, fixed assets impairment losses, Outage costs and equipment transfer costs associated with reorganization activities, also included due to the reorganization of the surplus inventory related to the depreciation of the preparation, etc., so the recent fiscal year or a loss or only meager profit, and if the relevant close plant and personnel severance costs, the recurrent profitability is still good, EBITA profit margin of more than 5%.

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In the previous draft, the 2018 Ledvance net interest rate was measured only 1.6%, and the securities of China believed that the measure was conservative. Considering the ledvance business structure is not optimized, the recurrent business EBITA profit margin of more than 5%, superimposed 30% tax impact, the company 2018 net interest profit should be higher than 3%, and the 2018 company led revenue is expected to increase significantly to more than 60%, so the actual company net profit margin should be higher than 3 % is a big probability event. The securities firm judged that the company's revenue of about 14.5 billion yuan in 2018, the conservative estimate corresponding to the net interest rate of 3%, considering the impact of intangible asset amortization of 47 million yuan, reasonable net profit of about 388 million yuan. Complementarity, synergy between the two sides is obvious, 2018 Mulinsen +ledvance is expected to do 353.8 billion dollars.

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