ams Osram (AMS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues ranged from EUR 819 million to EUR 890 million, with adjusted EBITDA of EUR 135 million (16.5% margin), at the upper end of guidance, supported by the 'Re-establish-the-Base' program delivering EUR 60 million in savings to date.

• Strong design-win momentum continued, with EUR 2.5 billion in new business (lifetime value) secured in H1 2024, especially in automotive, industrial, and consumer segments.

• Major restructuring of the microLED business followed the cancellation of a cornerstone project, with significant one-time costs and a strategic shift to automotive applications; process to divest the Kulim-2 factory is underway.

• Automotive semiconductors showed year-over-year growth, offsetting declines in legacy consumer business.

• The turnaround is supported by ongoing cost savings and portfolio optimization.

Financial highlights

• Q2 2024 revenues were between EUR 819 million and EUR 890 million, down 3–4% year-over-year and 3% quarter-over-quarter, mainly due to seasonality and weaker industrial & entertainment lamps.

• Adjusted EBITDA was EUR 135 million (16.5% margin), up 9% sequentially; adjusted EBIT was EUR 56 million (6.8% margin), up 27–28% from Q1.

• Adjusted net result was EUR -1 million; IFRS net result was EUR -41 million, reflecting microLED-related impairments.

• Free cash flow in Q2 2024 was between EUR -119 million and EUR -190 million, impacted by high CAPEX and interest/dividend payments.

• Net debt increased to EUR 1,576 million, or EUR 1,977 million including the Malaysia SLB transaction; available liquidity was EUR 1.8 billion.

Outlook and guidance

• Q3 2024 revenues expected between EUR 830–930 million, with adjusted EBITDA margin guidance of 17–20%.

• Free cash flow expected to improve in H2 2024 due to lower CAPEX and higher profitability; full-year 2024 free cash flow before net interest paid targeted to be positive.

• Full-year 2024 CAPEX may reach EUR 500–550 million if certain grants are delayed.

• Second half revenue growth to be driven by new product ramps and design wins, though industrial and medical rebound is not expected in 2024.

• 'Re-establish-the-Base' program on track for EUR 75 million run-rate savings in 2024 and EUR 150 million by end of 2025.