ams Osram (AMS) Q2 2024 Fixed Income earnings summary

Executive summary

• Q2 2024 revenues reached €819 million, at the midpoint of guidance, with adjusted EBITDA of €135 million (16.5%), and profitability improved due to cost savings from the Re-establish the Base program.

• H1 2024 revenues totaled €1,665 million and adjusted EBITDA €259 million (15.5%).

• Major restructuring of microLED activities after project cancellation, with significant one-time costs and strategic refocus on automotive LEDs.

• Free cash flow was negative at -€119 million, impacted by timing of interest payments, elevated CapEx, and bonus/dividend payouts.

• Design-win momentum continued, with €2.5 billion in new business (lifetime value) secured in H1 2024.

Financial highlights

• Q2 group revenues: €819 million, down sequentially and year-over-year; gross margin improved to 29.7% (adj.).

• Adjusted EBITDA: €135 million (16.5%), up from €124 million (Q1); adjusted EBIT margin: 6.8% (Q2) vs. 5.2% (Q1).

• Operating cash flow: €55 million; CapEx: -€176 million, elevated due to carryover invoices and construction services.

• Free cash flow: -€119 million, expected to improve in H2 with lower CapEx and divestment proceeds.

• Cash and cash equivalents: €900 million at June 30, 2024.

Outlook and guidance

• Q3 revenues expected between €830–930 million; adjusted EBITDA margin guided at 17–20%.

• Full-year CapEx guidance at €450 million, may rise to €550 million if government grants are delayed.

• Targeting positive free cash flow (pre-interest) for 2024, with intent for all-in positive free cash flow in 2025.

• H2 2024 revenues anticipated to improve over H1, but industrial and medical segment rebound now expected only in 2025.

• Re-establish the Base program on track for €75 million run-rate savings by year-end.