On November 7, ams Osram announced its Q3 results. During the reporting period, ams Osram achieved revenue of €881 million (approximately RMB 6.608 billion), an increase of 8% quarter-on-quarter and a decrease of 3% year-on-year; adjusted EBITDA was €166 million; the adjusted EBITDA margin was 18.8%, higher than the midpoint of the expected range; and free cash flow was €188 million, showing a significant improvement.
Regarding the sequential revenue growth, ams Osram stated that this was primarily due to the mass production of new semiconductor products for consumer handheld (mobile phones, tablets) applications, the seasonal peak in demand for LED products for plant lighting, and increased commissioned design fees. Regarding the year-on-year revenue decline, ams Osram stated that it was mainly due to the performance of the Lighting and Systems division. The specific performance of each division is as follows:
Optoelectronics Semiconductors (OS): In Q3, the division's revenue from optoelectronics semiconductors increased by €9 million, bringing the division's total revenue to €381 million, a quarter-on-quarter increase.
Driven by commissioned design fees, the division achieved adjusted EBITDA of €88 million, with an adjusted EBITDA margin of 23%. On the other hand, automotive business declined compared to the previous quarter.
CMOS Sensors and ASICs (CSA): The CSA division's Q3 revenue grew 19% from the previous quarter to €266 million, driven by new sensor products for consumer devices. Adjusted EBITDA doubled to €48 million.
Lighting & Systems (L&S): In Q3, this division generated €233 million in revenue, accounting for 27% of total revenue. Revenue increased by 5% quarter-on-quarter but declined slightly year-on-year. This was due to the division ceasing production of some OEM products and a downturn in traditional business. However, the adjusted EBITDA margin remained at 16%.
In terms of automotive applications, the automotive aftermarket performed poorly in Q3, but Osram expects to see high replacement demand for halogen bulbs in the European and North American aftermarkets in Q4.
The industrial and professional entertainment markets continued to be affected by ongoing inventory adjustments and weak demand, but revenue remained at levels comparable to previous quarters.
It is worth noting that in July 2023, Osram announced a project called "Re-establish the Base," aimed at enabling the company to focus on its core businesses that generate profitability and structural growth. To date, the project has saved Osram €85 million, exceeding the previously set target of €75 million for fiscal year 2024.
Given the uncertainty of market demand in 2025, Osram will continue to implement the "Re-establish the Base" program and plans to save an additional €75 million, raising the total savings target to €225 million by 2026.
CEO Aldo Kamper emphasized that the company has accelerated the implementation of the "Re-establish the Base" project to address the impact of ongoing market volatility, which will help the company maintain profitability in its core semiconductor market.
ams Osram expects Q4 revenue to be between €810 million and €910 million, reflecting a seasonal slowdown in the market. The company anticipates weaker performance in early 2025, particularly in the automotive sector, but remains optimistic about growth in its core semiconductor portfolio.
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