ams OSRAM Announces Q3 2023 Profitability at Upper End of Guidance

ams OSRAM announces revenues of €904 million above the midpoint of the guided range of €840 – 940 million, a 6% increase compared to Q2. The adjusted EBIT margin came in at 7.9% at the upper end of the guided range of 5-8% due to a positive impact from tight cost control measures and some positive one-time effects with respect to funding. The company is seeing a strong design-win traction in structurally growing markets, especially in automotive.

“We delivered a very solid quarter in a difficult market environment especially driven by our strong core business in automotive. Our ‘Re-establish the Base’ strategy & efficiency program is on track. The execution of our financing plan is also progressing well, and we expect to be able to execute the new rights issue and the new bond placement before year end – of course subject to market conditions,” said Aldo Kamper, CEO of ams OSRAM.

The Semiconductor segment represented 72% of Q3 revenues, or correspondingly €648 million. End-markets showed a diverse pattern. The automotive semiconductor business performed well during Q3, growing revenues 9% quarter-on-quarter and 2% year-on-year.

Significant design-win momentum can also be reported. More than €100 million of life-time value (LTV) of design-wins for the high-pixelated LED forward-lighting (EVIYOS) were added and the total number now stands at more than €250 million. ams OSRAM’s recently launched intelligent RGB products for next generation dynamic interior lighting have also landed more than €100 million LTV design-wins already.

While semiconductor revenues from I&M end-markets grew by 8% quarter-on-quarter, they are still relatively weak compared to a year ago. Nevertheless, the company did achieve a significant design-win at one of its Computer Tomography (CT) equipment customers with a life-time value of more than €50 million.

Semiconductor revenues from the consumer end-market, primarily portable consumer device applications, mainly smartphones, improved quarter-on-quarter by around 6%, mainly in line with typical seasonality. Overall, the sales in this end market remain below previous years partially due to a weak macro-economic environment.

The adjusted EBIT of the semiconductor segment improved significantly, quarter-on-quarter, specifically from 2% in Q2 to 6% in Q3, or €36 million. The sequential revenue increase contributed positively to the adjusted EBIT.

The Lamps & Systems segment represented 28% of Q3 revenues, or correspondingly €256 million. In both automotive and industrial & entertainment markets, business performed as expected. The automotive lamps revenues came in as predicted with aftermarket sales contributing significantly. Quarter-on-quarter revenues grew by 6%. The sales in industrial & entertainment applications performed in-line with weak end markets and declined by 15% compared to Q2. The Lamps & Systems segment recorded an adjusted EBIT margin of 14%.

Operating cash flow came in at €199 million in Q3 2023 compared to €232 million in Q2.

The company expects to divest or exit certain non-core semiconductor businesses with €300 to €400 million of 2023 revenues during FY2024.