EQS-Ad-hoc: ams-OSRAM AG / Key word(s): Change in Forecast
ams-OSRAM AG: to re-assess its microLED strategy, to record non-cash
impairment charges, to adjust its mid-term structural revenue growth
target to 6% to 8%, and to improve cash flow profile
28-Feb-2024 / 21:24 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 to re-assess its microLED strategy, to record non-cash
impairment charges, to adjust its mid-term structural revenue growth
target to 6% to 8%, and to improve cash flow profile
• A cornerstone project underpinning its microLED strategy got
unexpectedly cancelled today, triggering the company to re-assess its
microLED strategy.
• Non-cash impairment charges of EUR 600 to 900 million are expected
based on a preliminary first estimate.
• FY/24: As a first estimate, the company expects around EUR 30 to 50
million lower adjusted EBIT for FY2024 due to lower capitalization of
R&D expenses and lower subsidies from government funding schemes. The
company will consider additional cost improvements on top of its known
Re-Establish-the-Base program to lessen the impact.
• Q1/24: No change to first quarter 2024 revenue (EUR 800 to 900
million) guidance
• Q1/24: No change to the adj. EBIT margin range of 4% to 7% expected,
but profitability will be impacted by lower capitalization of R&D
expenses and lower subsidies within this range.
• The cash flow profile of the company is expected to be positively
impacted in the next 24 months (lower CAPEX amongst other effects).
• Mid-term structural growth model slightly adjusted to 6% to 8% revenue
CAGR from its new 2023 base excluding the non-core semiconductor
portfolio and the Lamps & Systems related divestiture in Q1/2023.
Premstaetten, Austria, and Munich, Germany (28 February 2024) – ams OSRAM
revises its microLED strategy with unexpected cancellation of cornerstone
project. A non-cash impairment charge of EUR 600-900m, a slightly revised
mid-term revenue CAGR of 6-8% on a like-for-like basis, and a positive
impact to its cash-flow profile within the next 24 months is expected.
The Management Board of ams OSRAM AG has decided to re-assess the microLED
strategy of the company after having been informed of the unexpected
cancellation of a cornerstone project for its microLED program.
Discussions with the related customer are ongoing.
Following the cancellation of the cornerstone microLED project, the
company will revisit the future use of its assets related to its microLED
strategy, particularly the new 8-inch LED facility in Kulim (Malaysia).
Based on a first, preliminary estimation, ams OSRAM expects to record
non-cash impairment charges on microLED related assets and goodwill of EUR
600 to 900 million in the first quarter of fiscal year 2024.
Changes to the capitalization of R&D investments into microLED and reduced
subsidies from public funding schemes will impact the operational
profitability (adjusted EBIT) for FY2024 by around EUR 30 to 50 million.
The company considers additional cost improvements on top of its known
‘Re-Establish-the-Base’ program to further balance this negative impact on
Fiscal Year profitability.
The underlying business performance is on track and the company continues
to expect first quarter revenues to improve year-over-year on a comparable
basis to a level of EUR 800 – 900 million. The adj. EBIT is expected to
still come in between 4% to 7% of revenues but will be burdened by the
aforementioned changes to capitalization of R&D and reduced subsidies
within that range.
The cancellation of the cornerstone project is expected to improve the
cash flow profile of the company in the next 24 months, among others due
to reduced CAPEX.
Implications for mid-term target financial model
The company now assumes on a like-for-like basis (without the non-core
portfolio in semiconductors of EUR 300 to 400 million in 2023 and the
divestments in the L&S segment in Q1/2023), to grow revenues now with a 6%
to 8% CAGR mid-term, as volume sales from its 8-inch LED facility in Kulim
can no longer be assumed in that time frame. The company continues to
expect that the largest growth contribution will be coming from the strong
momentum in its target automotive semiconductor applications, where it is
clear market leader, followed by mobile light sensors on the back of the
large design-wins that the company secured earlier besides the other
growth drivers in industrial, medical, and selected consumer applications.
The company sees unchanged momentum in design-wins in its core businesses
of automotive, industrial and medical.
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 (1) 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: (2)>Twitter (3)>LinkedIn
(4)>Facebook (5)>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
(6)investor@ams-osram.com (7)press@ams-osram.com
End of Inside Information
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28-Feb-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: 1847809
End of Announcement EQS News Service
1847809 28-Feb-2024 CET/CEST
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