Financial Overview

(in million EUR)

	FY ended Sep. 30, 2014	FY ended Sep. 30, 2013	Rate of Change (%)	Factors
Overall
Sales	5,142.1	5,288.7	(2.8)	1)
EBITDA	556.2	413.6	34.5	-
Sales by Segment
Specialty Lighting	1,551.0	1,455.8	6.5	2)
Opto Semiconductors	1,124.5	1,018.0	10.5	3)

Factors
1) Overall
-The Company's net sales in the FY ended September 30, 2014 decreased by 2.8% from the previous year to EUR 5,142.1 million. The main factor which contributed to the decrease in sales was the negative impact caused by currency translation effects. The strength of the euro more than offset the fact that comparable revenue for the Company had increased by 0.8% year-over-year.

2) Specialty Lighting
-In the FY ended September 30, 2014, sales for the Specialty Lighting segment grew 6.5% year-over-year to EUR 1,551.0 million. Growth in the segment was primarily due to the automotive business, which had increased demand for LED-based products and traditional lighting products.

3) Opto Semiconductors
-Sales for the Opto Semiconductor's segment in the FY ended September 30, 2014 were EUR 1,124.5 million, an increase of 10.5% over the previous year. LEDs for general lighting recorded the highest growth within the segment, followed by LEDs for automotive and industrial applications.

Recent Development

-Since the introduction of xenon technology in high-intensity discharge lamps in the 1970s, 100 million xenon lamps have been produced at the Company's plant in Berlin, Germany. (From a press release on August 29, 2014)

-The Company is switching its fabrication of red, orange, and yellow LEDs from 4-inch wafers to 6-inch wafers. This extends the fabrication of all of the Company's large-wafer LEDs to the indium-gallium-aluminum-phosphide (InGaAlP) material system, thus expanding its production capacity. Red and yellow LEDs are used in the automotive industry as turn indicators, brake lights, and interior vehicle lighting. (From a press release on January 30, 2014)

Restructuring

Divestiture of Valeo Sylvania
-The Company completed the sale of its ownership stake in the joint venture, Valeo Sylvania, to its joint venture partner, Valeo, for USD 104 million. Through this transaction, Valeo Sylvania became a wholly owned subsidiary of Valeo. (From a press release on January 22, 2014)

Contracts

-The Company announced that its LEDriving Xenarc Headlight, a full headlight which utilizes a combination of xenon and LED technologies, is fitted to the Audi A4. (From a press release on September 16, 2014)

-The Company announced that the 2015 Ford F-150 will be the world's first pickup with a complete forward LED lighting solution developed by the Company. The lighting system consists of dipped beam and high beam headlights, turn indicators, parking lights, and a control module. The Company worked closely with Flex-N-Gate to develop the lighting solution in such a fashion to give the 2015 F-150 a unique appearance. The LED lighting solution for the F-150 is assembled at the Company's Hillsboro plant in New Hampshire, US. (From a press release on April 16, 2014)

-The Company announced that it has developed the laser headlights for the BMW i8, which will be launched during the second half of 2014. The laser diodes are made by the Company's Opto Semiconductors segment, while the laser module was designed by the Company's Special Lighting segment. (From a press release on February 21, 2014)

R&D Expenditure

(in million EUR)

	FY ended Sep. 30, 2014	FY ended Sep. 30, 2013	FY ended Sep. 30, 2012
Overall	331.4	341.2	339.5
R&D Intensity (% of R&D expenditure to sales)	6.4	6.5	6.3

-In the previous fiscal year, LED products accounted for approximately 62% of the Company's R&D expenses. In the FY ended September 30, 2014, the Company spent approximately 75% of its R&D expenditures on LED products.

-As of September 30, 2014, the Company had approximately 2,400 employees working in research and development.

Product Development

Low-profile LED
-The Company's Opto Semiconductors segment has developed a new LED called the Synios E4014, which features a low-profile rectangular shape that enables the light from the LED to be injected into light guides for a variety of lighting solutions. With dimensions of 4.0 mm x 1.4 mm x 0.57 mm, the Synios E4014 will be used primarily for visually enhancing "white goods" such as ovens and refrigerators, and for lighting systems in vehicles and displays. (From a press release on May 6, 2014)

Turn indicator LED
-The Company has developed the yellow Oslon Compact LED for turn indicators in vehicle forward lighting. By using indium gallium nitride (InGaN), the Oslon Compact is able to produce large amounts of light despite its small size. The Oslon Compact has dimensions of 1.5 mm x 1.9 mm x 0.7 mm, and can produce more than 120 lumens at high currents and application temperatures of 100 degrees Celsius. (From a press release on February 18, 2014)

Capital Expenditure

(in million EUR)

	FY ended Sep. 30, 2014	FY ended Sep. 30, 2013	FY ended Sep. 30, 2012
Overall	243.2	207.4	187.2
-Specialty Lighting	39.6	37.8	43.0
-Opto Semiconductors	97.7	62.8	62.4

Investment Outside Germany

<China>
-The Company opened its new LED assembly plant in Wuxi, Jiangsu Province, China. Having invested a low three-digit-million euro amount into the facility, the 100,000-square-meter plant is expected to have up to 2,100 employees by 2017. The new facility is the Company's second backend site whose primary activity is assembling LED chips into housings. At full capacity, the new plant will be capable of producing several billion LEDs per year. (From a press release on May 21, 2014)