EQS-Ad-hoc: ams-OSRAM AG / Key word(s): Quarter Results/Half Year Results ams-OSRAM AG: ams OSRAM delivers solid revenues in Q2 and continues turn-around with profitability at the upper end of the guided range 26-Jul-2024 / 07:15 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. ══════════════════════════════════════════════════════════════════════════ Ad hoc Announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange ------------------------------ ams OSRAM delivers solid revenues in Q2 and continues turn-around with profitability at the upper end of the guided range • Q2/24: revenues EUR 819m, adj. EBIT EUR 56m (6.8%), adj. EBITDA EUR 135m (16.5%) • Q3/24: expected third quarter revenues of EUR 830 to 930m and adj. EBITDA margin of 17% to 20% • H2/24: significantly improved free cash flow due to lower capex and higher profitability • Implementation of Re-establish-the-Base program progressing well, approx. EUR 60m savings realized to date • Design-win momentum for long-term structural growth continuing, around EUR 2.5bn (life-time-value) design-wins in H1/2024 Premstaetten, Austria, and Munich, Germany (26 July 2024) -- ams OSRAM delivers solid Q2 revenues of EUR 819m on the back of structural growth in automotive semis, continues turn-around with adj. 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. 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.” said Aldo Kamper, CEO of ams OSRAM. Q2/24 financial update ams OSRAM announces revenues of EUR 819 million for the second quarter 2024, at the midpoint of the guided range of EUR 770 – 870 million. The typical annual seasonality of the automotive lamps business drives the EUR 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 EUR 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 EUR 135 million, i.e. at a 16.5% adj. EBITDA margin, at the upper end of the guided range of 14% - 17%. Higher factory loading and savings from the ‘Re-establish-the-Base’ program are key contributors, which is especially evident from the improved performance of the CSA segment. In OS, a catch-up impact from the IPCEI funding scheme also supported the profitability increase. The adjusted EBIT (adjusted earnings before interest and taxes, i.e. operating margin adjusted for special, non-operational effects) margin came in at 6.8%. The adjusted EBIT amounted to EUR 56 million. Re-establish-the-Base program implementation status A year ago, on 27 July 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 EUR 75 million run-rate savings by end of FY2024 and EUR 150 million run-rate savings by end of FY2025 compared to 2023 actuals. To date, the company has realized around EUR 60 million savings, fully on track to reach the EUR 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 EUR 300 to 400 million. The sale of assets of the passive optical components business to Focuslight Inc. was announced on 7 May 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. Semiconductor business update Opto Semiconductors segment (OS) Revenues for opto-electronic semiconductors increased by EUR 27 million to EUR 372 million in Q2/24 compared to EUR 345 million in Q1/24. Adjusted EBITDA stood at EUR 84 million, representing an adjusted EBITDA Margin of 23%. The profitability is still impacted by factory underutilization, higher research & development expenses and significantly less capitalization of research and development costs after the cancellation of the cornerstone microLED project. CMOS sensors and ASICs segment (CSA) Revenues for CMOS sensors and ASICs came in at EUR 224 million in Q2/24, down from EUR 233 million in Q1/24. The EUR 9 million decline is mainly due to a consumer legacy business ramping down. Adjusted EBITDA stood at EUR 21 million, representing an adjusted EBITDA Margin of 9%, which is a significant improvement from EUR 5 million and 2% EBITDA Margin in Q1/24. The steep increase is directly related to implementing the ‘Re-establish-the-Base’ program. The industrial and medical businesses are still suffering from an inventory correction in the supply chain, resulting in high underutilization cost. Semiconductors industry dynamics Revenues from the two semiconductor business units represent 73% of Q2/24 revenues, or correspondingly EUR 596 million. This compares to EUR 600 million a year ago, a slight minus 1% decline. As expected, end-markets continued to show different dynamics. Automotive: The automotive business continued to perform well with a 6% year-over-year increase despite the anticipated normalization of sales in China. Especially the emitters for automotive applications were in high demand in both new and existing platforms. Industrial & Medical (I&M): The business showed a mixed performance and landed on a comparable level as a year ago. Whilst medical technology and industrial capital goods businesses are still very muted due to inventory corrections, professional lighting applications demand rebounded. Business in horticulture applications increased year-over-year based on our design-wins thanks to having the most efficient product in the market. Also, individual new products, such as blue lasers, were in high demand. Consumer: While Android consumer business showed strong growth, the ramp down of legacy customer-specific projects caused a net decrease year-over-year. New business wins – Design-wins: The company continues to win significant new future business with unabated momentum across all product categories of the core portfolio. Year-to-date, around EUR 2.5 billion of new future business was recorded, measured in estimated life-time-value of each individual design won. Lamps & Systems segment (L&S) The Lamps & Systems segment represented 27% of Q2/24 revenues, equaling EUR 223 million. Adjusted EBITDA in Q2 came in at EUR 39 million or 18% adjusted EBITDA margin fully in line with fall-through from the revenue dynamics including the positive inventory revaluation effect in the first quarter. In terms of industry dynamics, automotive performed as expected in terms of its seasonal pattern. Industrial & entertainment markets also performed as expected. Automotive: The automotive aftermarket business went into its seasonal downswing whilst the OEM business was stable – fully in line with expectations. The company typically sees its strongest demand in Q4 and Q1 of a year when high halogen bulb replacement rates can be seen in the European and North American aftermarket. Specialty Lamps: Industrial and professional entertainment markets continued to show weak demand in light of a persistent inventory correction. Comments on additional key financial figures The adjusted gross margin improved by 130 basis points quarter over quarter, and 190 basis points year-over-year due to improved factory loading and contributions from the ‘Re-establish-the-Base’ program. The adjusted net result came in at EUR -1 million in Q2/24 down from EUR 31 million a year ago and up from EUR -35 million in the first quarter, primarily driven by the gross profit improvements mentioned above. Consequently, second quarter adjusted diluted earnings per share came in at EUR 0.0, higher than the EUR -0.04 in the previous quarter. The IFRS net result was EUR -41 million in Q2/24 after EUR -710 million in the first quarter, which included transformation expenses of EUR -632 million (of those EUR 513 million impairments) related to the cancellation of the microLED cornerstone project. For this, the diluted IFRS earnings per share came in at EUR -0.04 in Q2/24, after EUR -0.71 in Q1/24. Operating cash flow, which includes net interest paid, came in again at EUR 55 million in Q2/24. Cash flow from investments into PPE and intangibles, or CAPEX, stood at EUR -176 million compared to EUR -120 million in the previous quarter – negatively impacted by microLED equipment that could not be cancelled. 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 EUR -119 million in Q2/24. Key financial figures EUR millions Q2 2024 Q1 2024 QoQ Q2 2023 YoY (except per share data) Revenues 819 847 -3% 851 -4% Gross Margin adj. 29.7% 28.4% +130 bps 27.8% +190 bps Operating income (EBIT) adj.^1) 56 44 +27% 50 +12% Operating margin (EBIT) adj.^1) 6.8% 5.2% +160 bps 5.9% +90 bps EBITDA adj. 135 124 +9% 143 -6% EBITDA margin adj. 16.5% 14.6% +190 bps 16.8% -30 bps Net result adj. -1 -35 -97% 31 -103% Diluted EPS adj. (in EUR)^1)2) 0.0 -0.04 n/a 0.12 n/a Net result (IFRS) -41 -710 -94% -1,342 -97% Diluted EPS (IFRS, in EUR) ^ 2) -0.04 -0.71 n/a -5.14 n/a Operating cash flow ^3) 55 55 0% 202 -73% Cash flow from CAPEX ^4) -176 -120 +47% -202 -33% FCF (incl. net interest paid) -119 -60 +98% 22 -641% Net debt 1,576 1,399 +13% 2,034 -23% Net debt (incl. SLB) 5^) 1,977 1,793 +10% 2,034 -3% ^1)^ ^ Adjusted for M&A-related, transformation and share-based compensation costs, results from investments in associates and sale of businesses ^2) Earnings per share are not comparable between the years due to the capital increase on December 7, 2023 whereby additional 724,154,662 shares were issued ^3) From Q1 2024, operating CF includes net interest paid; 2023 figures reclassified for comparison ^4) Cash flow from investments in property, plant, and equipment and intangibles (such as capitalized R&D) ^5) Incl. EUR 401m equivalent from SLB Malaysia transaction closed in December 2023 Quarter-over-quarter, the net debt position increased to EUR 1,576 million in Q2/24 after EUR 1,399 million in Q1/24 due to a lower gross cash driven by still elevated CAPEX and the annual payment of the guaranteed dividend for the OSRAM minority shares. When including EUR 401 million equivalent from the Sale-and-Lease Back Malaysia transaction (booked under other financial liabilities), the net debt position increased accordingly to EUR 1,977 million in Q2/24 compared to EUR 1,793 in Q1/24. Update of transformation costs The company excludes transformation costs from its operational performance measures, i.e. adj. EBITDA and adj. EBIT. Transformation costs in 2024 are mainly driven by the adjustment of its microLED strategy and its ‘Re-establish-the-Base’ program. Adjusting the microLED strategy led to impairment charges of EUR 513 million and transformation costs of EUR 119 million in Q1/24, including non-cash accruals. In Q2/24, the company recorded a EUR 7 million gain due to a reversal of provisions. In summary, the company now expects in total around EUR 680 million of transformation cost related to adjusting the microLED strategy including impairments (from previously EUR 700 million). Transformation costs related to ‘Re-establish-the-Base’ were EUR 6 million in Q2/24, approximately the same in Q1/24. For FY 2024, the company expects an estimated EUR 25 million. Moreover, additional details on the bridge from EBITDA according to IFRS to adj. EBITDA can be found in the investor presentation on the company’s website. Status of outstanding OSRAM minority shares On 30 June 2024, the Group held around 86% of OSRAM Licht AG shares. The total liability for minority shareholders’ put options stood at EUR 605 million at the end of Q2/24 compared to EUR 610 million at the end of Q1/24. The company has an undrawn Revolving Credit Facility (RCF) of EUR 800 million in place. The RCF is primarily in place to cover any further significant exercises under the 'domination and profit and loss transfer agreement (DPLTA)’ put option but could also be drawn for general corporate and working capital purposes. Third quarter 2024 Outlook Looking at the semiconductor segments, the company sees weakening demand for its automotive semiconductor products in view of the recently reduced global light vehicle production forecast for H2/24. Our increasing content per vehicle balances a softer car production to a certain extent. The demand from industrial and medical markets remains very muted in some segments. The outlook for shipments into consumer device applications continues to be robust given the ramp of some new products. Looking at the L&S segment, automotive aftermarket for halogen lamps will see the beginning of its typical seasonal rebound towards the end of the summer. As a result, the group expects third quarter revenues to increase driven by the ramp of new products and seasonality effects despite persistent weakness in industrial & medical businesses and land in a range of EUR 830 – 930 million. The adj. EBITDA is expected to increase to 17% - 20% driven by revenue fall-through and further contributions from the ‘Re-establish-the-Base’ program. The EUR/USD exchange rate is assumed to be 1.10. Comments on second half of 2024 The company continues to expect second half 2024 revenues to improve compared to the first half, primarily driven by the ramp of design wins in the semiconductor segment secured earlier. The rebound of the industrial and medical business segments undergoing an inventory correction is no longer expected in 2024. Demand for its automotive semiconductor products is weakening in view of the downward revised global light vehicle production forecast for the second half of 2024. In case certain capital grants expected in 2024 shift out to 2025, the CAPEX for FY2024 would be around EUR 500 to 550 million (including capitalized R&D and rolled-over accounts payable related to PPE from 2023), instead of the previously expected range below EUR 450 million. The company expects free cash flow to improve significantly in the second half of 2024 due to lower CAPEX and higher profitability. It continues to target a positive free cash flow before net interest paid for the full year 2024. Half-year report and additional Information Additional financial information for the second quarter 2024 as well as the half year report for the first half of 2024 is available on the company (1)website. The second quarter 2024 investor presentation incl. detailed information is also available on the company (2)website. ams OSRAM will host a press call as well as a conference call for analysts and investors on the second quarter results on Friday, 26 July 2024. The conference call for analysts and investors will start at 10.00am CEST and can be joined via (3)webcast. The conference call for journalists will take place at 11.15am CEST. About ams OSRAM: The ams OSRAM Group (SIX: AMS) is a global leader in intelligent sensors and emitters. By adding intelligence to light and passion to innovation, we enrich people’s lives. 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, industrial, medical and consumer markets to 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 20,000 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 EUR 3.6 billion revenues in 2023 and is listed as ams-OSRAM AG on the SIX Swiss Exchange (ISIN: AT0000A18XM4). Find out more about us on (4)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: (5)>Twitter (6)>LinkedIn (7)>Facebook (8)>YouTube For further information Investor Relations Media Relations ams-OSRAM AG ams-OSRAM AG Dr Juergen Rebel Bernd Hops Senior Vice President Senior Vice President Investor Relation Corporate Communications T: +43 3136 500-0 T: +43 3136 500-0 (9)investor@ams-osram.com (10)press@ams-osram.com End of Inside Information ══════════════════════════════════════════════════════════════════════════ 26-Jul-2024 CET/CEST News transmitted by EQS Group AG. www.eqs.com ══════════════════════════════════════════════════════════════════════════ 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 Berlin, Dusseldorf, Frankfurt, Munich, Stuttgart, Tradegate Exchange; BX, SIX, Vienna Stock Exchange (Vienna MTF) EQS News ID: 1954633 End of Announcement EQS News Service 1954633 26-Jul-2024 CET/CEST References Visible links 1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=1e659132d413fd32968bb37e6aca1d7a&application_id=1954633&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news 2. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=ec81f3bee84ae95adf2bae3e0941d994&application_id=1954633&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news 3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=f5e218f8b5845c5c5daefb9c6852e4ad&application_id=1954633&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news 4. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=8292dd00d17478c63e156302a1a5ac6c&application_id=1954633&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news 5. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=abc52aadd1b09e752093ca366793ed46&application_id=1954633&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news 6. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=2e38dcb34f79060ddc9490cdb693d91b&application_id=1954633&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news 7. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=fee19590191b3da17836d1a1e69e8177&application_id=1954633&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news 8. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=928a9cd78ac8af8e0181c5f67885e5fb&application_id=1954633&site_id=apa_ots_austria~~~18b544d0-9c71-4160-bd95-cc8b9aff9fbf&application_name=news 9. mailto:investor@ams-osram.com 10. mailto:press@ams-osram.com