EQS-Adhoc: ams OSRAM delivers solid Q4, with revenues and adj. EBIT above the mid-point of the guided range, and continues executing its turnaround plan to benefit from structural growth

On 9. Februar 2024

EQS-Ad-hoc: ams-OSRAM AG / Key word(s): Quarter Results/Annual Results
ams OSRAM delivers solid Q4, with revenues and adj. EBIT above the
mid-point of the guided range, and continues executing its turnaround plan
to benefit from structural growth

09-Feb-2024 / 07:16 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the
Regulation (EU) No 596/2014, transmitted by EQS News – a service of EQS
Group AG.
The issuer is solely responsible for the content of this announcement.

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Ad hoc announcement pursuant to Art. 53 Listing Rules of SIX Swiss
Exchange

ams OSRAM delivers solid Q4, with revenues and adj. EBIT above the
mid-point of the guided range, and continues executing its turnaround plan
to benefit from structural growth

• Q4/23: revenues of EUR 908 million, above midpoint of the guidance
range
• Q4/23: adj. EBIT margin of 6.9%, or EUR 62 million, above the midpoint
of the guided range
• Q1/24: expected first quarter 2024 revenues of EUR 800 to 900 million
with adj. EBIT margin of 4% – 7% driven by usual seasonality and weak
industrial & medical market
• FY/23: revenues of EUR 3.59 billion
• FY/23: adj. EBIT margin of 6.5%, or EUR 233 million
• Continued strong design-win traction for structural growth,
particularly in automotive

Premstaetten, Austria, and Munich, Germany (9 February 2024) — ams OSRAM
(SIX: AMS) delivers solid Q4 with revenues at EUR 908 million and adjusted
EBIT of 6.9%, above the midpoint of the guided range, revenues of EUR 3.59
billion and 6.5% adj EBIT for Fiscal Year 2023. ams OSRAM continues
executing its ‘Re-establish-the-Base’ efficiency and strategic realignment
program to benefit from structural growth. The plan is underpinned by a
strong design-win pipeline.

“We kept our promise and have achieved a lot in 2023: defined a new
strategy, implemented a new organization, secured the re-financing and
strengthened the balance sheet. We are now ready to deliver the turnaround
and benefit from structural growth in our core markets in automotive,
industrial, medical and dedicated consumer applications. On the back of a
very solid Q4 2023, we are confident to be able to execute our plans for
2024 and make ams OSRAM a more focused, leaner, and more efficient company
driven by relentless innovation and sustainable partnerships with our
customers.” said Aldo Kamper, CEO of ams OSRAM.

Q4/23 financial and business update

ams OSRAM announces revenues of EUR 908 million for the fourth quarter,
slightly above the midpoint of the guided range of EUR 850 – 950 million,
a 4 million EUR increase compared to the previous quarter. The adjusted
EBIT (adjusted earnings before interest and taxes, i.e. operating margin
adjusted for special, non-operational effects) margin came in above the
midpoint of the guided range of 5% – 8%, namely at 6.9%. The adjusted EBIT
amounted to EUR 62 million. The company continues to win new business
across the board underpinning its structural growth plans, especially in
automotive. The company progresses with preparing the exit of the non-core
semiconductor portfolio (with 2023 run-rate of around EUR 300 to 400
million) with focus on its passive optical components business.

Semiconductor segment update

The Semiconductor segment represented 69% of Q4 revenues, or
correspondingly EUR 629 million. End-markets continued to show a diverse
pattern.

Automotive:

Demand for products for automotive applications was particularly strong
from China, whilst the other regions showed normal seasonal demand.
Overall, the company recorded the highest ever revenue number from
automotive semiconductor products, namely EUR 278 million, a 10%
year-over-year increase. It underlines the strength of its underlying
market position in its markets. Quarter-over-quarter, revenues increased
by 7%.

Industrial & Medical (I&M):

Industrial and medical markets remained cyclically weak, with often
significantly lower run-rates compared to a year before. Revenues declined
both quarter-over-quarter and year-over-year. Demand from professional and
industrial lighting applications was particularly soft. Project activity
and thus demand for its Hyper Red LED products for horticulture continued
to be below normal seasonality. Mass-market revenues – representing a very
broad variety of applications – showed much lower traction than a year
ago. Consequently, channel inventories remained at a high level.

Consumer:

Revenues from products for personal consumer devices showed a mixed
picture. Shipments into Android based devices improved
quarter-over-quarter on the back of stronger shipments of mid-end to
premium Android smartphones during Q4, where ams OSRAM holds leading
positions in its product categories. Overall, the company saw lower sales
in consumer applications both, quarter-over-quarter and year-over-year.
This development is due to ramp down of lost design sockets that used to
be large revenue contributors in previous years.

The adjusted EBIT in the semiconductor segment landed at EUR 29 million,
representing a 4.6% adj. EBIT margin, compared to EUR 36 million, or 5.6%
adj. EBIT margin in the previous quarter. On a like-for-like basis, the
adj. EBIT improved quarter-over-quarter, considering the reported one-time
effect in Q3 (funding catch-up effect).

Lamps & Systems segment update

The Lamps & Systems segment represented 31% of Q4 revenues, or
correspondingly EUR 279 million. In both automotive and industrial &
entertainment markets, business performed as expected.

Automotive:

Aftermarket sales came in as strong as seasonally expected. The company
typically sees its strongest demand in Q4 and Q1 when high halogen bulb
replacement rates can be expected in Europe and North America.

Specialty Lamps:

Due to high inventories at customers, the demand for high-performance
lamps for semiconductor equipment remained weak. Other markets were muted,
too.

The adjusted EBIT in the Lamps & Systems segment stood at 33 million Euro
in Q4, or 11.9% adjusted EBIT margin, correspondingly. The
quarter-over-quarter decline was due to an adverse one-time raw material
effect, impacting profitability negatively by a mid single digit million
Euro figure. Excluding this effect, adj. EBIT margin would have come in
stronger than in the previous quarter.

Quarterly financial summary

Considering the reported positive one-time effects in the previous
quarter, adjusted Gross and Operating margins stayed essentially flat,
quarter-on-quarter. The average EUR/USD exchange rate stood at 1.09.

The adjusted net result came in at minus EUR 16 million due to a
significantly more negative net financing result in Q4 as a consequence of
the EUR 2.25 billion re-financing effective in Q4.

On December 7th, the company completed its EUR 808 million rights issue.
The number of shares increased from 274,289,280 to 998,443,942.
Consequently, the average share count in Q4 stood at 456,490,225, which is
the relevant reference for the earnings per share calculation in Q4.

Fourth quarter adjusted diluted earnings per share came in at minus EUR
0.03 compared to EUR 0.11 in the previous quarter.

Operating cash flow came in at EUR 80 million in Q4 2023 compared to EUR
199 million in Q3. A reduction of trade payables mostly relating to Capex
amongst other factors contributed to this development.

The balance sheet was strengthened as a result of the capital raise and
the associated repayment of outstanding long-term debt instruments that
were due in 2025. Consequently, the net debt position significantly
improved from EUR 2,269 million in Q3 to EUR 1,696 million in Q4 when
including EUR 384 million equivalent from the Sale-and-Lease Back Malaysia
transaction.

EUR millions Q4 2023 Q3 2023 QoQ Q4 2022 YoY
(except per share data)
Revenues 908 904 +0% 1,177 -23%
Gross margin adj.^1) 28.7% 29.0% -30bps 28.5% +20bps
Operating income adj.^1) 62 71 -12% 86 -28%
Operating margin adj.^1) 6.9% 7.9% -100bps 7.3% -40bps
Net result adj.^1) -16 29 -154% 29 -154%
Diluted EPS adj.^1) -0.03 0.11 -131% 0.11 -131%
Diluted EPS adj. (in CHF)^1)2) -0.03 0.10 -133% 0.11 -130%
Net result (IFRS) -82 -55 -49% -147 +44%
Diluted EPS (IFRS) -0.18 -0.21 -14% -0,56 +68%
Operating Cash Flow 80 199 -60% 201 -60%
Cash Flow from CAPEX ^3) -222 -262 -15% -233 -5%
Net debt 1,312 2,269 -42% 1,717 -24%
Net debt (incl. SLB) ^4) 1,696 2,269 -25% 1,717 -1%

^1)^ ^Excluding M&A-related, transformation and share-based compensation
costs, results from investments in associates and sale of businesses

^2) Earnings per share in CHF were converted using the average currency
exchange rate for the respective periods

^3) Cash flow from investments in property, plant, and equipment and
intangibles (such as capitalized R&D)

^4) Incl. EUR 384m equivalent from SLB Malaysia transaction closed in
December 2023

FY23 financial and business update

In Fiscal Year 2023, the new management team around Aldo Kamper (CEO) and
Rainer Irle (CFO) gave the company a new strategic direction, initiated
its ‘Re-establish the Base’ turnaround program targeted to focus the
portfolio, make the company leaner and more efficient in bringing
innovation to market. Furthermore, the midterm target operating model was
updated and the balance sheet strengthened. All these developments are
setting the base for structural growth from the core portfolio of
intelligent emitter and sensor components in automotive, industrial, and
medical markets. The company will continue to pursue dedicated
semiconductor business in consumer applications focusing on technologies
where it can differentiate on a sustainable basis. The Lamps & Systems
segment will remain a significant contributor to profit and cash
generation.

In Fiscal Year 2023, ams OSRAM recorded revenues of EUR 3.59 billion after
EUR 4.82 billion in fiscal year 2022. The decline of 25% was driven by
portfolio divestitures in the Lamps & System segment (around EUR 500
million) and a contraction in the Semiconductor segment. Within the
latter, the dominant factor was the ramp down of major programs with
components for smartphones after those design sockets had been lost,
besides the cyclical inventory correction in the automotive (in H1 2023)
segment and a severe market weakness in certain industrial segments, such
as horticulture or professional lighting.

Adjusted EBIT for fiscal year 2023, came in at EUR 233 million after EUR
407 million in the previous fiscal year. The key driver for this
development were underutilization cost in the semiconductor business for
consumer device applications that are no longer core and underutilization
cost for products in industrial and automotive applications in the wake of
the inventory corrections.

Full year adjusted diluted earnings per share were EUR 0.16 or CHF 0.15
and EUR -5.20 or CHF -5.06 unadjusted.

Operating cash flow stood at EUR 674 million in FY 2023, after EUR 599
million in FY2022. CAPEX was much higher year-over-year on an exceptional
basis, driven by the extraordinary investment in disruptive, 8-inch based
microLED technology for a new generation of brighter, more efficient,
self-illuminating displays.

EUR millions 2023 2022 YoY
(except per share data)
Revenues 3,590 4,819 -25%
Gross margin adj.^1) 28.7% 30.5% -180bps
Operating income adj.^1) 233 407 -43%
Operating margin adj.^1) 6.5% 8.4% -190bps
Net result adj.^1) 50 124 -59%
Diluted EPS adj.^1) 0.16 0.47 -66%
Diluted EPS adj. (in CHF)^1)2) 0.15 0.47 -68%
Net result (IFRS) -1,613 -444 -263%
Diluted EPS (IFRS) -5.20 -1.70 -206%
Operating Cash Flow 674 599 +13%
Cash Flow from CAPEX ^3) -1,049 -537 -95%
Net debt 1,312 1,717 -24%
Net debt (incl. SLB) ^4) 1,696 1,717 -1%

^1)^ ^Excluding M&A-related, transformation and share-based compensation
costs, results from investments in associates and sale of businesses

^2) Earnings per share in CHF were converted using the average currency
exchange rate for the respective periods

^3) Cash flow from investments in property, plant, and equipment and
intangibles (such as capitalized R&D)

^4) Incl. EUR 384m equivalent from SLB Malaysia transaction closed in
December 2023

FY23: re-financing completed ahead of schedule

On September 27th, 2023, the company announced its comprehensive financing
plan to address the then outstanding maturities in 2025 and to strengthen
the balance sheet. The company raised in total approximately EUR 2.25
billion, via the rights issue around EUR 800 million, the upscaled
issuance of new senior unsecured notes due to high market demand of around
EUR 1 billion and a sale & lease-back transaction besides divesting a
phased-out production facility which together yielded around EUR 450
million. Given the upscaled amounts in 2023, a final smaller tranche in
2024 is thus no longer needed and the company completed its re-financing
ahead of schedule.

FY23: mid-term target financial model

In 2023, the company also updated its mid-term target financial model. On
a like-for-like basis (without the non-core portfolio in semiconductors of
EUR 300 to 400 million in 2023), the company targets to grow 6% to 10%
CAGR, underpinned by a strong design-win base, and targets an adjusted
EBIT margin of around 15% by 2026.

The model is also underpinned by the company’s expectation of a
normalization of the CAPEX to sales ratio of around 10% by 2025, following
completion of the above average investment cycle of recent years tied to
the investments into the new 8-inch capabilities, thereby further
improving its free cash flow. The full implementation of the ‘Re-establish
the Base’ program, which is expected to deliver approximately EUR 150
million run-rate improvements of adjusted EBIT by the end of FY2025 will
contribute sustainably to the cash flow generation ability going forward.

FY23: Progress of Reestablish-the-Base Program

On July 27th, 2023, the company announced its ‘Re-establish the Base’
program, focusing on its profitable core as a new base for sustainable,
profitable growth.

In terms of portfolio measures aimed at exiting certain non-core
businesses in the semiconductor portfolio, the company has prioritized the
carve-out of the passive optical components business and a second product
line.

In terms of ‘monetizing innovation’, the company has completed the
consolidation in the semiconductor segment from 3 business units to 2 as
of October 1st, 2023, strengthening the accountability of the business
units for streamlined end-to-end business performance.

Effective, January 1st, 2024, the management board consists of 2 members
(CEO and CFO), compared to 4 members one year ago.

FY23: Strong Design-Win performance in Fiscal Year

The company could continue to win meaningfully new business during fiscal
year 2023. The combined figure came in above EUR 5 billion across all
segments of its core semiconductor portfolio. The largest contribution
came from automotive.



Status of outstanding OSRAM minority shares

On December 31st, 2023, the Group held around 86% of OSRAM Licht AG
shares, compared to 86% on September 30th, 2023. The total liability for
minority shareholders’ put options stood at EUR 611 million at the end of
Q4/2023 compared to EUR 616 million at the end of Q3/2023.

The company has an undrawn Revolving Credit Facility (RCF) of EUR 800
million in place, which was prolonged to September 2026 with the
successful execution of the rights issue in December 2023. The RCF is
primarily in place to cover any further significant exercises under the
‚domination and profit and loss transfer agreement (DPLTA)’ put option.

First Quarter 2024 Outlook

The company continues to see weak demand from industrial and medical
markets. Demand from consumer device application markets remains modest,
in spite of some recent uptick in smartphone related demand. As a result,
the Group expects first quarter revenues to decline in line with typical
seasonality, pronounced by weakness in industrial & medical markets in a
range of EUR 800 – 900 million. Demand from China for its automotive
semiconductor products is expected to normalize, as well. The adjusted
EBIT is expected to come in accordingly, in line with typical
fall-through, at 4% to 7%. The EUR/USD exchange rate is assumed at 1.08.

Comments on FY 2024

In terms of business dynamics, ams OSRAM expects sustained weakness –
partly driven by inventory corrections – in the industrial and medical
segments during the first half. The company expects some improvement in
the second half of the year, driven by new business wins and a potential
normalization in the industrial and medical segment.

Within the context of its ‘Re-establish-the-Base’ program, the company
expects to exit certain non-core semiconductor businesses with EUR 300 to
400 million of 2023 revenues. In 2024, the run-rate of these non-core
businesses will be lower as some of these businesses are phasing out
gradually. For FY2024, the company has prioritized the carve-out of the
passive optical components business and a second product line.

The ‘Re-establish-the-Base’ program is expected to deliver approximately
EUR 75 million run-rate improvements to adjusted EBIT at the end of
FY2024. In contrast to these improvements, the company expects back to
normal annual price declines and higher personnel cost in view of last
year’s high inflation rates besides significant ramp-up cost for its new
8-inch led facility in Kulim, Malaysia.

The company continues to expect positive free cash flow (including
divestment proceeds) in 2024.

Additional Information

Additional financial information for the fourth quarter as well as 2023 is
available on the company [1]website. The fourth quarter 2023 investor
presentation incl. detailed information is also available on the company
[2]website. ams OSRAM will host a press call as well as a conference call
for analysts and investors on the fourth quarter results on Friday, 09
February 2024. The conference call for analysts and investors will start
at 9.00am CET and can be joined via [3]webcast. The annual press
conference and call will take place at 10.30am CET. Journalists who would
like to join the press conference in person or the call can reach out to
[4]press@ams-osram.com or [5]investor@ams-osram.com for further
information.

About ams OSRAM:

The ams OSRAM Group (SIX: AMS) is a global leader in intelligent sensors
and emitters. By adding intelligence to light and passion to innovation,
we enrich people’s lives.

With over 110 years of combined history, our core is defined by
imagination, deep engineering expertise and the ability to provide global
industrial capacity in sensor and light technologies. We create exciting
innovations that enable our customers in the automotive, industrial,
medical and consumer markets to maintain their competitive edge and drive
innovation that meaningfully improves the quality of life in terms of
health, safety and convenience, while reducing impact on the environment.

Our around 20,000 employees worldwide focus on innovation across sensing,
illumination and visualization to make journeys safer, medical diagnosis
more accurate and daily moments in communication a richer experience. Our
work creates technology for breakthrough applications, which is reflected
in over 15,000 patents granted and applied. Headquartered in
Premstaetten/Graz (Austria) with a co-headquarters in Munich (Germany),
the group achieved EUR 3.6 billion revenues in 2023 and is listed as
ams-OSRAM AG on the SIX Swiss Exchange (ISIN: AT0000A18XM4).

Find out more about us on [6] https://ams-osram.com

Ams is a registered trademark of ams-OSRAM AG. In addition, many of our
products and services are registered or filed trademarks of ams OSRAM
Group. All other company or product names mentioned herein may be
trademarks or registered trademarks of their respective owners.

Join ams OSRAM social media channels: [7]>Twitter [8]>LinkedIn
[9]>Facebook [10]>YouTube

For further information

Investor Relations   Media Relations

ams-OSRAM AG   ams-OSRAM AG

Dr Juergen Rebel Bernd Hops

Senior Vice President Senior Vice President

Investor Relation Corporate Communications

T: +43 3136 500-0 T +43 3136 500-0

[11]investor@ams-osram.com   [12]press@ams-osram.com

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End of Inside Information

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09-Feb-2024 CET/CEST News transmitted by EQS Group AG. www.eqs.com

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Language: English
Company: ams-OSRAM AG
Tobelbader Straße 30
8141 Premstaetten
Austria
Phone: +43 3136 500-0
E-mail: investor@ams-osram.com
Internet: https://ams-osram.com/
ISIN: AT0000A18XM4
WKN: A118Z8
Listed: Regulated Unofficial Market in Berlin, Dusseldorf, Frankfurt,
Munich, Stuttgart, Tradegate Exchange; BX, SIX, Vienna Stock
Exchange (Vienna MTF)
EQS News ID: 1833905

End of Announcement EQS News Service

1833905  09-Feb-2024 CET/CEST

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