July 27, 2017 / 8:38 AM / 24 days ago

Osram seeks further acquisitions after high-tech drives up profit

FRANKFURT, July 27 (Reuters) - German lighting group Osram reported stronger sales and core profit for its third quarter, driven by automotive and infrared semiconductors, and bought a stake in Canada's LeddarTech to strengthen its position in autonomous driving.

The Munich-based firm is a top supplier to the car industry and is transforming itself into a high-tech group, shedding its traditional lamps business this year and investing a billion euros ($1.17 billion) in a new chip factory in Malaysia.

Osram said it was investing a sum in the mid-double-digit millions of euros to acquire a 25 percent stake in privately held LeddarTech, which makes LiDAR (light detection and ranging) systems that use infrared light to monitor the area around them.

LiDAR technology bounces light pulses off objects so that self-driving cars can "see" the road. It is more sophisticated and more expensive than regular camera and sensors on their own.

"We are sharpening our profile as a high-tech company," Osram Chief Executive Olaf Berlien told reporters on a conference call, adding the Osram was scouting for further small technology acquisitions and would likely do more this year.

Osram shares, which have risen 40 percent this year so far, outperforming the German mid-cap index by 43 percent, gained another 0.7 percent to trade at 69.51 euros by 0835 GMT, despite in-line quarterly results and an unchanged outlook.

Third-quarter sales and core profit (adjusted EBITDA) both rose 3 percent in the quarter to the end of June, Osram said on Thursday, broadly in line with the expectations of analysts polled by Reuters.

The company stuck to its full-year forecasts for revenue growth of 7 to 9 percent, an adjusted EBITDA margin of 16.5 to 17.5 percent, earnings per share of 2.70 to 2.90 euros and free cash flow around breakeven.

"With results just in line, no change to guidance, a share buyback that ended in 400 million euros spend and IHS Auto Production estimate having been slightly reduced in July 2017... we see limited scope for upgrades," wrote Morgan Stanley, which rates Osram "underweight".

$1 = 0.8532 euros Reporting by Georgina Prodhan; Editing by Keith Weir

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