Ams-OSRAM AG Reports Solid Q1 2024 Financial Results and Restructures Operations

ams-OSRAM AG, a leading provider of sensor solutions and semiconductor manufacturing, announced robust first-quarter revenues of EUR 847 million for Q1 2024, consistent with the company's expectations of EUR 800 to 900 million. This revenue, while exhibiting a seasonal decline from Q4 2023, represents approximately a 5% increase year-over-year from EUR 817 million in Q1 2023.

The company reported an adjusted EBIT (Earnings Before Interest and Taxes) margin of 5.2%, reflecting structured reductions in operational costs despite the challenges brought by the termination of a significant microLED project. This termination led to a strategic overhaul where ams-OSRAM is refocusing its microLED development primarily for automotive applications, deemed essential for future growth.

In response to the changing market demands and the microLED project cancellation, ams-OSRAM is also adjusting its operational focus, which includes exiting the 8-inch-wafer factory SLB and cutting down on the associated long-term debt by approximately EUR 400 million. This move aligns with its strategy to shore up financials and redirect focus towards more profitable and sustainable segments.

Financially, ams-OSRAM is gearing up for a significant improvement expected in 2025, with plans firmly set on achieving a positive free cash flow. The adjustments in microLED strategy and the operational restructuring are anticipated to enhance cash flow by more than EUR 100 million and boost the EBIT margin by a similar amount in 2025 compared to continuing the existing project trajectory.

Overall, despite the discontinuation of a key project, ams-OSRAM maintains a positive outlook, backed by robust demands in its core automotive sector and planned strategic shifts intended to solidify its market position and financial health moving forward.