EQS-Adhoc: ams-OSRAM AG: ams OSRAM reports first quarter results in line with guidance reflecting difficult market environment; sees continued subdued demand trends and seasonal effects in second quarter
EQS-Ad-hoc: ams-OSRAM AG / Key word(s): Quarter Results
ams-OSRAM AG: ams OSRAM reports first quarter results in line with
guidance reflecting difficult market environment; sees continued subdued
demand trends and seasonal effects in second quarter
02-May-2023 / 07:00 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the
Regulation (EU) No 596/2014, transmitted by EQS News – a service of EQS
Group AG.
The issuer is solely responsible for the content of this announcement.
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Ad hoc Announcement pursuant to Art. 53 Listing Rules of SIX Swiss
Exchange
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ams OSRAM reports first quarter results in line with guidance reflecting
difficult market environment; sees continued subdued demand trends and
seasonal effects in second quarter
• First quarter revenues of EUR 927 million and adj. EBIT margin of 5.4%
in line with guidance range
• Continued difficult market environment with lower sequential and
year-on-year volumes in major product areas
• Last remaining disposals closed for full completion of planned
disposals and portfolio re-alignment following acquisition of OSRAM
• Meaningful sequential increase of capital expenditures driven by
investment into industry-first
8” LED front-end fab, in line with plans for 2023 as expected peak
level year
• Expected second quarter revenues of EUR 800-900 million incl.
sequential deconsolidation effects (EUR 880-980 million on comparable
portfolio basis) and expected adj. EBIT margin of 3-6% reflect subdued
demand in important markets, seasonal effects, continued reduced
production volumes, and meaningful deconsolidation effects
Premstaetten, Austria, and Munich, Germany (2 May 2023) — ams OSRAM (SIX:
AMS), a global leader in optical solutions, reports first quarter
financial results in line with the company’s expectation range.
Aldo Kamper, CEO of ams OSRAM, commented: “I am excited to return to the
optical world and am impressed with the progress of our combined company
over the last years. Our broad and deep technological competence combined
with a highly motivated team is an excellent basis for further innovation
and market penetration. We have now completed all communicated disposals
of businesses outside of our strategic focus areas and our synergy
creation remains on track. However, our markets continue to be demanding
and unfavorable demand trends are impacting our business which is
reflected in our first quarter results and our outlook. I will work
closely with the management team in the upcoming months to define the way
forward to address the currently unsatisfactory financial performance and
unlock the potential that our business inherently has.”
Key developments
• ams OSRAM delivered first quarter revenues and adj. operating margin
in line with its guidance and reflecting the continued difficult
market environment. The demand situation in important product areas
remained unfavorable, particularly due to macro-economic trends,
creating a negative impact on profitability. At the same time, ams
OSRAM benefitted from seasonal strength in the automotive aftermarket
and saw stabilizing trends in automotive inventory adjustments at the
end of the quarter. The consumer business showed a very muted
performance given both year-on-year and sequential volume weakness
while several industrial markets saw the expected lower sequential
demand.
• With the last closings in March and April, ams OSRAM has completed all
communicated disposals of businesses outside of its strategic focus
and concluded the planned portfolio re-alignment following the
acquisition of OSRAM. Including proceeds received in the first and
current quarter, ams OSRAM expects a cash inflow from disposal
proceeds of high double-digit EUR million in 2023. For all disposal
transactions since 2021, expected total proceeds amount to close to
EUR 600 million. As a result of the last closing, second quarter
revenues will reflect a final significant sequential deconsolidation
effect of around EUR 80 million
• At the end of March, ams OSRAM had achieved EUR 305 million of
synergies and savings from its integration programs, against one-time
integration costs of around EUR 190 million so far. The synergy
creation continues to progress as planned and ams OSRAM is confident
to realize the remaining expected synergies towards its target of EUR
350 million by the second quarter 2024
• ams OSRAM recorded a strong sequential increase in capital
expenditures in the quarter as it invests significantly into
manufacturing capabilities for the long-term. These expenditures were
in line with plans and particularly driven by its industry-first 8”
LED front-end facility under construction in Malaysia. Construction of
the facility continues to progress on schedule. The completion of the
building, build-out of the support infrastructure and equipment
deliveries over the course of the year will drive further substantial
expenditures in 2023. ams OSRAM currently expects total capital
expenditures for 2023 of slightly below EUR one billion, making 2023 a
significant peak level year for capital expenditures compared to the
last as well as next few years
• As communicated, Aldo Kamper became CEO of ams OSRAM on 1 April 2023
after Alexander Everke had stepped down as CEO as of 31 March 2023
Quarterly financial summary
EUR millions Q1 2023 Q4 2022 QoQ Q1 2022 YoY
(except per share data)
Revenues 927 1,177 -21% 1,246 -26%
Gross margin adj.^1) 29.3% 28.5% +80 bps 33.1% -380 bps
Operating income adj.^1) 50 86 -42% 126 -60%
Operating margin adj.^1) 5.4% 7.3% -190 bps 10.1% -470 bps
Net result adj.^1) 6 29 -81% 102 -95%
Diluted EPS adj.^1) 0.02 0.11 0.39
Diluted EPS adj. (in CHF)^1)2) 0.02 0.11 0.40
Operating Cash Flow 162 201 -19% 147 11%
Net debt 1,940 1,717 13% 1,853 5%
^1)^ Excluding M&A-related, transformation and share-based compensation
costs, results from investments in associates and sale of businesses
^2)^ Earnings per share in CHF were converted using the average currency
exchange rate for the respective periods
First quarter group revenues were EUR 927 million (EUR 940 million
excluding quarter-on-quarter disposal-related deconsolidation effects),
21% lower compared to the previous quarter and 26% lower compared to same
quarter 2022, influenced by deconsolidation effects. Adjusted[1]^[1]^group
gross margin for the first quarter was 29%, unchanged from the fourth
quarter and down from 33% for the same quarter 2022.
The first quarter adjusted^1 group result from operations (EBIT) was EUR
50 million or 5% of revenues compared to EUR 86 million or 7% for the
fourth quarter 2022 and EUR 126 million or 10% of revenues for the same
period 2022 (unadjusted: EUR -90 million or -10% of revenues for the first
quarter). First quarter adjusted^1 group net result was EUR 6 million
compared to EUR 29 million for the fourth quarter and EUR 102 million for
the same quarter 2022 (unadjusted: EUR -134 million for the first
quarter). First quarter adjusted^1 diluted earnings per share[2][2]^were
EUR 0.02 or CHF 0.02 (EUR -0.51 or CHF -0.51 unadjusted).
First quarter group operating cash flow amounted to EUR 162 million while
group free cash flow was EUR ‑139 million given sequentially higher
capital expenditures of EUR 302 million. Group net debt was EUR 1,940
million on 31 March 2023, translating into a group leverage of 2.5x net
debt/adjusted^1 EBITDA. Cash and cash equivalents reflected the mentioned
capital expenditures and stood at EUR 861 million on 31 March 2023.
Business overview
The Semiconductors segment provided 59% of group revenues and showed an
overall subdued performance in the first quarter. The semiconductor
business saw sequential and year-on-year reductions in volumes across
different markets which resulted in underutilization in manufacturing.
Together with product mix effects, these were the main drivers of a
meaningful impact on segment profitability. Mitigation and cost reduction
measures were able to partly compensate for this impact.
The semiconductor automotive business declined moderately on a sequential
basis in line with company expectations. Expected inventory adjustments in
the downstream automotive supply chain continued during the quarter but
stabilized at the end of the quarter. The segment’s consumer business saw
very muted results as shipment volumes for different consumer lines showed
a strongly negative sequential and year-on-year development. This
reflected lower year-on-year volume demand in the global smartphone and
mobile device markets, largely due to macro-economic trends and their
impact on consumer spending habits. The smartphone business across regions
saw sequential seasonal and product mix effects, the China and Android
markets remained subdued in the first quarter and the company’s wearables
business saw meaningfully weaker quarter-on-quarter volumes. The segment’s
industrial and medical business showed a mixed performance in the quarter.
This reflected sequentially reduced demand in certain industrial markets
including LED industrial and outdoor lighting and horticulture solutions
while other industrial and medical lines offered more supportive
contributions.
Significant development and industrialization efforts continue for ams
OSRAM’s leading smallest structure size microLED technology as planned.
These activities will remain a key area of R&D spending and investment as
ams OSRAM moves along its path to realize high volume manufacturing of
this next generation display technology in its new 8” LED front-end
facility.
The Lamps & Systems (L&S) segment contributed 41% of group revenues in the
quarter and showed a robust overall performance. Pro-forma first quarter
L&S segment revenues for the remaining business after completion of all
communicated disposals, i.e. deconsolidation of all disposals including
the last disposal closed in April, were 35% of same basis group revenues
or EUR 292 million. Segment profitability in the quarter benefitted
significantly from high shipment volumes and seasonal demand strength in
important product lines as well as from positive disposal-related margin
effects.
The L&S automotive business including legacy traditional lighting recorded
strong results which were particularly driven by the automotive
aftermarket business. The aftermarket business benefitted from seasonal
strength in the latter half of the winter semester, which spans the fourth
and first quarter of each year, despite macro-economic trends affecting
certain regions. The other businesses of the L&S segment offered
supportive contributions in light of mixed demand trends in certain
markets.
Outlook
For the second quarter, ams OSRAM sees a continued demanding situation in
major markets as global macro-economic trends are impacting market
dynamics on a broader basis.
In the company’s automotive markets, demand is expected to stabilize
further while meaningful positive momentum will need to solidify. Order
momentum still appears inconsistent whereas the aftermarket business will
be influenced by summer seasonality. The company’s consumer business
continues to be impacted by reduced levels of customer demand. This is due
to ongoing weaker year-on-year volumes for smartphones and certain
consumer devices given macro-economic impacts on consumer spending.
Historically, the smartphone market has also shown seasonal effects in the
second quarter which typically result in a seasonally stronger second half
compared to the first half of each year. The company’s industrial and
medical business is seeing a trend towards stabilization of order momentum
when compared to the beginning of the year. However, current quarter
demand for industrial and medical lines remains mixed. Given these
dynamics, ams OSRAM expects continued reduced production volumes in the
second quarter which continue to result in reduced utilization levels in
the company’s manufacturing and a negative impact on profitability.
ams OSRAM therefore expects second quarter group revenues of EUR 800-900
million including quarter-on-quarter disposal-related deconsolidation
effects (i.e. sequentially flat at the midpoint of EUR 880-980 million
revenues excluding deconsolidation effects) and an adj. operating (EBIT)
margin of 3-6%. These expectations are based on currently available
information and exchange rates and reflect revenue deconsolidation effects
for the second quarter, including from closing the Digital Systems
Europe/Asia disposal, which reduce expected second quarter revenues by
around EUR 80 million on a comparable portfolio basis. Furthermore, the
expectations include disposal-related deconsolidation effects on a
year-on-year basis with a second quarter revenue effect of around
EUR 150 million.
Taking into account current macro-economic and market trends, ams OSRAM
remains cautiously optimistic to benefit from an improving demand
environment in the second half of the year, based on current information
and exchange rates.
Additional selected financial information for the first quarter 2023 is
available on the company [3]website. The first quarter 2023 investor
presentation is also available on the company [4]website. ams OSRAM will
hold a conference call on the first quarter results on Tuesday, 2 May 2023
at 9.30am CEST. The conference call will be available via [5]webcast.
###
About ams OSRAM
The ams OSRAM Group (SIX: AMS) is a global leader in optical solutions. By
adding intelligence to light and passion to innovation, we enrich people’s
lives. This is what we mean by Sensing is Life.
With over 110 years of combined history, our core is defined by
imagination, deep engineering expertise and the ability to provide global
industrial capacity in sensor and light technologies. We create exciting
innovations that enable our customers in the automotive, consumer,
industrial and healthcare sectors maintain their competitive edge and
drive innovation that meaningfully improves the quality of life in terms
of health, safety and convenience, while reducing impact on the
environment.
Our around 22,000 employees worldwide focus on innovation across sensing,
illumination and visualization to make journeys safer, medical diagnosis
more accurate and daily moments in communication a richer experience. Our
work creates technology for breakthrough applications, which is reflected
in over 15,000 patents granted and applied. Headquartered in
Premstaetten/Graz (Austria) with a co-headquarters in Munich (Germany),
the group achieved over EUR 4.8 billion revenues in 2022 and is listed as
ams-OSRAM AG on the SIX Swiss Exchange (ISIN: AT0000A18XM4).
Find out more about us on [6] https://ams-osram.com
ams is a registered trademark of ams-OSRAM AG. In addition many of our
products and services are registered or filed trademarks of ams OSRAM
Group. All other company or product names mentioned herein may be
trademarks or registered trademarks of their respective owners.
Join ams OSRAM social media channels: [7]>Twitter [8]>LinkedIn
[9]>Facebook [10]>YouTube
[11]^[1] Excluding M&A-related, transformation and share-based
compensation costs as well as results from investments in associates and
sale of businesses
[12]^[2] Based on 261,353,874 basic / 261,353,874 diluted shares in Q1
2023
End of Inside Information
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02-May-2023 CET/CEST News transmitted by EQS Group AG. www.eqs.com
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Language: English
Company: ams-OSRAM AG
Tobelbader Straße 30
8141 Premstaetten
Austria
Phone: +43 3136 500-0
E-mail: investor@ams-osram.com
Internet: https://ams-osram.com/
ISIN: AT0000A18XM4
WKN: A118Z8
Listed: Regulated Unofficial Market in Dusseldorf, Frankfurt, Munich,
Stuttgart, Tradegate Exchange; BX, SIX, Vienna Stock Exchange
(Vienna MTF)
EQS News ID: 1621315
End of Announcement EQS News Service
1621315 02-May-2023 CET/CEST
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