ams-OSRAM AG
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
ams-OSRAM AG / Key word(s): Quarter Results Ad hoc Announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange ——————————————————- 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
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
Quarterly financial summary
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] 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 adjusted1 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 adjusted1 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 adjusted1 diluted earnings per share[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/adjusted1 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 website. The first quarter 2023 investor presentation is also available on the company 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 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.
Find out more about us on 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: >Twitter >LinkedIn >Facebook >YouTube
[1] Excluding M&A-related, transformation and share-based compensation costs as well as results from investments in associates and sale of businesses [2] Based on 261,353,874 basic / 261,353,874 diluted shares in Q1 2023 End of Inside Information
02-May-2023 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 Dusseldorf, Frankfurt, Munich, Stuttgart, Tradegate Exchange; BX, SIX, Vienna Stock Exchange (Vienna MTF) |
EQS News ID: | 1621315 |
End of Announcement | EQS News Service |