ams Osram (AMS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues increased to €881–€904 million, up 8% sequentially but down 2–3% year-over-year, driven by strong consumer semiconductors and NRE payments, offsetting automotive and industrial weakness.

• Adjusted EBITDA margin rose to 18.8–19%, above guidance midpoint, supported by higher revenues, improved factory loading, cost savings, and NREs.

• Free cash flow was strong at €188 million, aided by customer prepayments and NREs, with a cash position exceeding €1 billion.

• The "Re-establish the Base" efficiency program achieved €85 million in run-rate savings by Q3, upsized to target €225 million by end of 2026, impacting over 500 non-production roles.

• Design-win momentum continued, with €3.5 billion lifetime value year-to-date.

Financial highlights

• Q3 group revenue: €881–€904 million, up 8% sequentially, down 2–3% year-over-year.

• Adjusted EBITDA: €166 million (19% margin) or 18.8% margin, up from Q2.

• Adjusted net result: €37 million; IFRS net result: €24 million; adjusted EPS: €0.37; IFRS EPS: €0.24.

• Operating cash flow: €246 million; CapEx: €202 million; cash on hand: €1.1 billion at Q3 end.

• Gross margin: 29.7–30%, up 70 bps year-over-year.

Outlook and guidance

• Q4 2024 revenues expected between €810–€910 million; adjusted EBITDA margin between 15%–18%.

• FY 2024 CapEx expected at €500–€550 million; positive free cash flow (before/including net interest) targeted for 2025.

• 2025: Q1 expected to be the trough, with core semiconductor portfolio targeted to grow 6%–10% for the full year.

• 2027 EBITDA margin guidance set at 20%–24% with CapEx to sales ratio targeted at 8%.