ams OSRAM Delivers Solid Revenues in Q2 2024

ams OSRAM delivered solid Q2 2024 revenues of €819 million on the back of structural growth in automotive semis, and continued turn-around with adjusted EBITDA margin of 16.5% at the upper end of the guided range

“A year ago, we announced our strategic efficiency program ‘Re-establish-the-Base’ which aims at focusing the company on its profitable and structurally growing core,” said Aldo Kamper, CEO of ams OSRAM. “We are fully on track in terms of implementing the anticipated profitability improvements, while economic headwinds are increasing. Our long-term structural growth prospects are underpinned by the unabated momentum in winning new future business.”

ams OSRAM announces revenues of €819 million for the second quarter 2024, at the midpoint of the guided range of €770 – €870 million. The typical annual seasonality of the automotive lamps business drives the €28 million decrease compared to the previous quarter.

The semiconductor business was resilient, with year-over-year structural growth in automotive, a stabilization of the industrial business on the back of horticulture and professional lighting, and a decline in the consumer business due to a gradual ramp-down of legacy projects.

Year-over-year, revenues declined slightly by 4%, on a like-for-like and constant currency basis a decline of around 3%. Reasons for this are mainly a weaker industrial & entertainment lamps business and lower revenues from the auto OEM lamps business, while the auto lamp replacement business remained strong.

The semiconductor business with €596 million stayed essentially flat year-over-year with a -1% decline. The average EUR/USD exchange rate stood at 1.08.

The adjusted EBITDA (adjusted earnings before interest, taxes, depreciation, and amortization, i.e. operating margin adjusted for special, non-operational effects) came in at €135 million, i.e. at a 16.5% adjusted EBITDA margin, at the upper end of the guided range of 14% – 17%.

A year ago, on July 27, 2023, the company announced its strategic efficiency program ‘Re-establish-the-Base’, which was aimed at focusing the company on its profitable, structurally growing core. It targets €75 million run-rate savings by end of FY2024 and €150 million run-rate savings by end of FY2025 compared to 2023 actuals.

To date, the company has realized around €60 million savings, fully on track to reach the €75 million run-rate savings end of FY24. Recent implementation successes are especially evident when looking at the profitability improvement of the segment CSA.

Besides substantial cost optimization, significant progress has been made in addressing the company’s non-core semiconductor portfolio which had 2023 revenues of around €300 to €400 million. The sale of assets of the passive optical components business to Focuslight Inc. was announced on May 27, 2024 (closing expected in Q3), and the restructuring and optimization of the CMOS image sensor business shortly before that. Preparations to exit the remainder of the non-core portfolio are ongoing.

Operating cash flow, which includes net interest paid, came in again at €55 million in Q2/24. Cash flow from investments into PPE and intangibles, or CAPEX, stood at €-176 million compared to €-120 million in the previous quarter – negatively impacted by microLED equipment that could not be canceled. Nevertheless, cash flow from CAPEX was substantially lower than a year ago.

Free cash flow – defined as operating cash flow including net interest paid minus cash flow from CAPEX plus proceeds from divestments – came in at €-119 million in Q2/24.