ams OSRAM | Financial Report | Business | Jul 31, 2023

ams OSRAM Unveils Profit-Driven Strategy and Q2 2023 Financial Performance Amid Portfolio Restructuring

The released document is the financial report from ams OSRAM for the second quarter of 2023. The company has announced a strategic realignment towards profitability and structural growth. The future portfolio will focus on differentiated, intelligent sensors and emitters, with an increased commitment towards the Automotive, Industrial, and Medical markets. The company will exit non-core semiconductor businesses with a revenue run-rate of EUR 300 to 400 million.

The company will take non-cash impairment charges on goodwill of EUR 1.3 billion. An efficiency program called "Re-establish the Base" will be implemented, which includes organizational adjustments, yielding EUR 150 million adjusted EBIT run-rate improvements by the end of 2025. The Management Board will be reduced to CEO and CFO effective January 1st, 2024.

For Q2, the company reported revenues of EUR 851 million and an adjusted EBIT margin of 5.9%, which is at the upper end of the guided range. The expected Q3 revenues are EUR 840-940 million with an adjusted EBIT margin of 5-8%.

"Our innovation power helps simplify an increasingly complex world. As we rebuild around our core business, we will benefit from structural growth trends while making the company stronger in target markets with more differentiated offerings. It’s about being a reliable partner to all our stakeholders. Profitability and monetizing innovation is put at the center of our thinking, whilst keeping our passion for cutting-edge technology that helps make the world safer, simpler and more efficient. This is what I will stand for together with the management team." Aldo Kamper

The company expects revenues to decline in 2024 due to portfolio decisions. However, the core business is expected to outgrow its target markets assuming end-markets stabilize. The target financial model has been revised to a 6%-10% revenue CAGR based on the reduced base and adjusted EBIT of approximately 15% in 2026.

The company is also making good progress on refinancing considerations. The strategic realignment is expected to make the company stronger in target markets with more differentiated offerings. The focus will be on profitability and monetizing innovation, while maintaining a passion for cutting-edge technology that helps make the world safer, simpler, and more efficient.

Full Report:
https://ams-osram.com/documents/4390887/9965240/Ad-hoc_2023_eng+Strategy+update+and+financial+results+Q2+2023+f.pdf/4a37b4d1-f2a1-b7ac-9cbd-ccac55795006?t=1690485348797