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EQS-Ad-hoc: ams-OSRAM AG / Key word(s): Quarter Results
ams-OSRAM AG: delivers solid Q1 revenues of EUR 847m, adj. EBIT margin of 5.2%, restructures microLED development,
works on exiting 8-inch fab SLB, on track for positive FCF (after interest) in 2025
26-Apr-2024 / 07:20 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.
Ad hoc announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange
ams OSRAM delivers like-for-like structural growth with solid Q1, restructures microLED development and works on
exiting 8-inch-wafer factory SLB, accelerating path to positive free cash flow

. Q1/24: revenues EUR 847 m, adj. EBIT EUR 44m (5.2%), adj. EBITDA EUR 124m (14.6%)
. Q1/24: available liquidity of EUR 2.1bn (therein EUR 1.1bn in cash, EUR 800m RCF, EUR 206m bilateral
facilities)
. Q2/24: expected second quarter revenues of EUR 770 to 870m and adj. EBITDA margin of 14 to 17%
. Free cash flow (before net interest) 2024: reconfirmed to be positive
. Revision of microLED strategy:
? Around EUR 700m one-off cost, of that EUR 513m impairment and EUR 119m transformation costs in Q1

? Substantial restructuring of microLED development initiated (more than 500 employees affected),
remaining activities focus on microLED technology for own automotive applications
? Significant cash flow improvement of more than a EUR 100m and adj. EBIT improvement of around EUR
100m in 2025 compared to continuation of the cornerstone project
? Kulim 8-inch-wafer factory to be transferred to new lessee with high priority
? Reduction of debt by around EUR 400m targeted (SLB value)

. 'Re-establish the Base (R-t-B)' program:
? Restructuring of CMOS Imaging Sensors business with significant overhead reduction, turning business
profitable

Premstaetten, Austria, and Munich, Germany (26 April 2024) -- ams OSRAM delivers solid Q1 revenues of EUR 847m, adj.
EBIT margin of 5.2%, restructures microLED development, works on exiting 8-inch factory SLB, on track for positive FCF
(after interest) in 2025.
"The industry dynamics in our LED markets have changed with cancellation of the microLED cornerstone project. We adjust
our strategy accordingly and continue to strengthen investments in the soon biggest LED market segment - automotive -
which is to grow structurally for years to come. We intend to step out of the 8-inch factory and focus our microLED
development on automotive needs for accelerating our path towards delivering truly positive free cash flow in 2025. We
showed year-on-year growth in Q1 on a like-for-like basis in a difficult environment driven by structural growth in
automotive and some cyclical recovery. The promising mid-term growth prospects of all our core businesses that we are
focusing on in automotive, industrial, medical, as well as selected consumer applications, are intact." said Aldo
Kamper, CEO of ams OSRAM.
Q1/24 financial update
ams OSRAM announces revenues of EUR 847 million for the first quarter 2024, at the midpoint of the guided range of EUR
800 - 900 million, a EUR 61 million - seasonal - decrease compared to the previous quarter. On a like for like basis
(without portfolio or currency effects), revenues improved by around 5% year-on-year compared to the clean base of EUR
817 million in Q1/23. The main drivers for this year-on-year increase are the automotive and consumer semiconductor
businesses, whilst industrial business remains weaker than a year ago.
The adjusted EBIT (adjusted earnings before interest and taxes, i.e. operating margin adjusted for special,
non-operational effects) margin came in slightly below the midpoint of the guided range of 4% - 7%, namely at 5.2%.
This is a consequence of the stop of the cornerstone microLED project, as less related research & development
expenditures could be capitalized. The adjusted EBIT amounted to EUR 44 million. Without the capitalization effect,
adjusted EBIT would have come in EUR 11 million higher - above the mid-point of the guided range.
The adjusted EBITDA came in at EUR 124 million, i.e. at a 14.6% adj. EBITDA margin. Adjusted depreciation &
amortization of EUR 77 million does not include microLED related charges and amortization of intangible assets arisen
from purchase price allocations (PPA), but are related to previous, ordinary investments into PPE and capitalized R&D.
Adjusted EBITDA is considered a key metric, representative of the cash flow performance of the underlying businesses.

Restructuring of microLED development and exit of Kulim 8-inch-wafer factory
On February 28^th, 2024, ams OSRAM announced that a lead-customer had stopped the cornerstone microLED development
project. The company initiated restructuring its microLED related development activities in both Malaysia and Germany
to a remaining minimum core development for mainly proprietary use in future automotive products, such as advanced,
high-pixelated forward lighting solutions. In total, more than 500 employees at the respective sites combined are
affected. Some freed-up resources are reallocated to further strengthen the company's market leadership position in the
automotive LED market, which is poised to soon become the single largest segment in the LED market according to latest
market research. This new view of the market also suggests that the superior features of advanced, high-performance
microLED based displays will primarily play a role in several smaller applications that also will scale slower and
later than expected previously.
In case a new lead customer commits in a timely manner to fund dedicated developments for specific applications, the
company may continue a more substantial microLED development in an essentially cash flow and EBIT neutral manner.
The stop of the cornerstone project will incur one-time cost of around EUR 700 million, at the lower end of the
previously indicated range of EUR 600 to 900 million. The company booked EUR 513 million of non-cash impairment for
equipment and capitalized project-specific research & development expenses and EUR 119 million of transformation costs
for adjusting its microLED strategy, such as cancellation fees and deinstallation cost in Q1/24. For the remainder of
the year, potentially up to EUR 70 million of further transformation costs may come due when adjusting the development
set-up for microLED, which includes restructuring measures.
With the cancellation of a significant share of equipment orders and related charges, outstanding CAPEX for the project
will be reduced by around EUR 120 million in 2024/25. This leads to reduction of CAPEX for PPE (property, plant, and
equipment) to around EUR 450 million (including capitalized R&D and some carried over PPE accounts payable from 2023)
and underpins the target for 2025 to reach the target CAPEX to sales ratio of around 10%.
The company is also pursuing to exit the Sale-and-Lease-Back (SLB) contract for its state-of-the-art Kulim-8-inch
factory to a new lessee with high priority. The intended exit is being pursued in close alignment with the SLB
investors. With this step the company intends to reduce its long-term debt by around EUR 400 million (booked under
'other liabilities'), significantly reduce its net-debt position and eliminate the lease payments.
For 2025, the company expects upon implementation of these decisions significant improvements of cash flow of more than
EUR 100 million and adjusted EBIT of around EUR 100 million, respectively, which is to be seen in comparison to a
continuation of the cornerstone project according to the previous plan.
Re-establish-the-Base - non-core semiconductor portfolio
The company announces the following steps when it comes to the exit of the non-core semiconductor portfolio (with 2023
run-rate of around EUR 300 to 400 million) that was announced in Q2/23.
CMOS Imaging Sensors
ams OSRAM decided to optimize and focus its CMOS Imaging Sensor business on medical and industrial applications for
growth and profitability. Development activities that had been targeting future consumer applications will be
restructured. One affected site will be restructured and one development site closed. One-time transformation costs are
estimated around EUR 4 million. Therefore, revenues in the order of EUR 50 million to EUR 100 million per annum will
remain part of the group and its long-term planning.
The company is also making good progress in divesting the Passive Optical Components assets.
Furthermore, the optimization of other structural costs is progressing as planned according to the
'Re-establish-the-Base' program.
Semiconductor business update
With strengthening the end-to-end responsibility of ams OSRAM's Business Units beginning Q4/23, the business is being
steered along relevant KPIs for those Business Units. Consequently, and in line with our efforts to increase
transparency, the company will report revenues and adjusted profitability KPI for EBITDA along these lines. With that,
the semiconductor business is now being reported in the segments OS ('Optical Semiconductors') and CSA ('CMOS Sensors
and ASICs').
Optical Semiconductors segment (OS)
Revenues for optical semiconductors stood at EUR 345 million in Q1/24. Adjusted EBITDA stood at EUR 67 million,
representing an adjusted EBITDA Margin of 19.3%.
The profitability is still impacted by underutilization charges, high research & development expenses before adjusting
the microLED development structures, and significantly less capitalization of research and development charges due to
the cancellation of the cornerstone microLED project.
CMOS Sensors and ASICs segment (CSA)
Revenues for CMOS sensors and ASICs came in at EUR 233 million in Q1/24. Adjusted EBITDA stood at EUR 5 million,
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