ams Osram (AMS) Q4 2024 Fixed Income earnings summary

Executive summary

• Q4 2024 revenues were €882 million, flat quarter over quarter and above guidance midpoint; full-year revenues reached €3.43 billion, down 3% year over year due to weaker industrial, medical, and auto markets, L&S deconsolidation, and non-core exits.

• Adjusted EBITDA margin improved by 50 basis points year over year to 17% in Q4; full-year margin stable at 16.8%, supported by cost savings and non-refundable engineering payments.

• Positive free cash flow achieved in Q4 (€12 million) and for the full year, reversing a prior negative trend and supported by customer prepayments and divestments.

• Strategic focus on core semiconductor portfolio led to ~7% year-over-year growth, offsetting declines in non-core and lamps businesses; non-core portfolio mostly exited.

• Over €5 billion in new business design wins in 2024, with strong momentum in automotive and consumer segments; technology leadership reinforced with innovation awards.

Financial highlights

• Q4 revenues: €882 million, flat sequentially, above guidance midpoint; full-year revenues: €3.43 billion, down 3% year over year; core semis up ~7% year over year.

• Adjusted EBITDA margin: 17% in Q4, up 50 bps year over year; full-year margin at 16.8%; adjusted EBIT margin improved to 7.0% from 6.5% in FY23.

• Q4 operating cash flow: €79 million; Q4 CapEx: €104 million, with MicroLED equipment payments ending.

• Q4 free cash flow: €12 million, reversing from -€330 million a year ago; FY24 adjusted net result €3 million, IFRS net result -€52 million.

• Working capital increased 14% YoY to €833 million; inventories up 13% YoY.

Outlook and guidance

• Q1 2025 revenues expected between €750–€850 million, with seasonally lower auto lamps and consumer segments; adjusted EBITDA margin for Q1 2025 guided at 16% ±1.5%.

• H2 2025 expected to be stronger due to project ramps in automotive, industrial, and smartphones, and cyclical recovery; low double-digit % revenue increase anticipated for FY25.

• Full-year 2025 free cash flow expected to exceed €100 million, with CapEx below 8% of sales.

• Profitability expected to improve in FY25 as cost savings from 'Re-establish the Base' program take fuller effect.

• Target model for 2027: 6–10% semiconductor core revenue CAGR, 20–24% group adjusted EBITDA margin, and positive free cash flow.