Ams Osram Ag Unsp/Adr

Welcome to the conference call on the fourth quarter 2023 results. I'm Moritz, the course call operator. I would like to remind you that all participants will be in the listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jürgen Rebbel, Head of Investor Relations. Please go ahead.

Good morning. This is Jürgen speaking. Welcome to our Q4 and fiscal year 2023 earnings call for investors and analysts. With me are Aldo, CEO, and Rainer, CFO. Aldo will comment on business update and strategy. Rainer will comment, as usual, on the financials. And after the introductory remarks, we are happy to answer your questions. Aldo and Rainer will refer to the earnings call presentation that you find on our website.

Aldo, please walk us through the Q4 business update. Thank you, Juergen, and good morning to everyone from ISAT as well. We delivered a solid business performance in the fourth quarter in spite of a mixed bag in terms of event markets. Let's take a look at slide number three here. Q4 group revenues increased a bit quarter on quarter and came in at €908 million, €4 million higher than in Q3. We landed slightly above the midpoint of our guidance range of 850 to 900 million. One year ago, we stood on a like-for-like basis, excluding divestments, in the lending system segment at 1 billion and 54 million euro. We had a negative currency impact of 41 million euro. Like-for-like and on a constant currency basis, our revenue declined 10% year over year. We'll see in a minute that the decline is primarily due to the well-known socket losses in consumer applications. The adjusted EBIT margin came in at 6.9% above the midpoint of the guided range. At first glance, the adjusted EBIT came in weaker with 62 million euro compared to the 71 million euro in Q3. However, if you remember our last earnings call, we said that we benefited from around a 10 million euro positive one-off effect related to the catch-up of government subsidies. On a like-for-like basis, our profitability remained essentially flat. Now let us take a look at the semiconductor segment on slide number four. Revenue has declined slightly by 3% from Q3 and came in at 629 million euro. In detail, the picture is diverse, which I will comment on in a moment. Adjusted EBIT of the semiconductor segment came in at 29 million euro, or 4.6% adjusted EBIT margin. Taking the 10 million euro of subsidies effect in the last quarter into account, The adjusted EBIT actually improved on a like-for-like basis by €3 million, or 10%, from Q3 to Q4. We see the effect of the improved factory loading, but also first structural improvements from executing a re-established base program. Let us switch to slide number 5, looking at the dynamics in the end markets in detail. We recorded a record demand for automotive semiconductor products, mainly driven by a year-end rally in China. Overall, we recorded 10% structural growth year-over-year in this segment. As you might have heard from our semiconductor peers, industrial markets are extraordinarily weak at the moment. We are no exception and see the same weakness with a 12% quarter-over-quarter decline. In professional lighting applications, no improvement was seen as the construction sector continues to deteriorate. Horticulture was still very muted as well. The green-out lighting Product tendering season in the first half of 2023 was particularly soft, if you remember. We believe that the tendering season this year will be stronger, especially on the back of our latest Hyper-Red LED product, which boasts market-leading efficiency and should convince even more customers. In capital goods market, we benefited in Q4 from non-containable orders. Unfortunately, this will contribute also to the inventory correction in H1 in this year. Overall, we see weak demand, both from industrial OEMs and the mass market. The medical business remains subdued as well. Coming to consumer, on the positive side, we continue to see an upswing in demand per sensor product for Android smartphones, where we boost leading positions. Negative, we still see a sequential decline as a consequence of the continuous ramp down in the wake of the socket losses of certain past higher-end products. Now, let us take a look at slide number six. I'm very pleased at excellent design win momentum that we have reported in Q3, continued in the December quarter. First, taking a look at ADAS applications. We claim that we are and will be the leading laser diode supplier for LiDAR module makers. We have more than 20 million lasers in the field already that generated accumulated revenues of a triple-digit million euro over the last decade. Looking forward, we count more than 100 million euro design wins and the only true level 3 cars on the road feature our products. On top, more than a dozen car models on China's streets also trust our lasers. Second, we are also constantly winning new business with established LED auto products. This quarter, we are very pleased to announce significant wins for classic low-pixelated forward lighting applications, like in the usual metrics themes. In total, we landed more than 100 million design wins, often in high-profile sockets. Third, for many years we have been providing high-performance laser diodes for material treatment industrial applications. Applications range from bottling equipment to copper welding in the production of EVs. 2023 was a good year in terms of winning new business in this profitable niche. Likewise, laser projection in industrial applications is another interesting application. In 2023, we could win significant business in this market as well. Finally, our time of flight sensors. are key elements of many home consumer or portable consumer devices. 2023 was a good design win year for those as well. For these examples, I want to give you an impression that we're also constantly winning new business beyond automotive, although the individual products are typically much smaller due to the market structure. Nevertheless, that's it. The three examples for medicinal and consumer, as I just mentioned, are representing a combined design win number in the order of 150 million euro. With this, let me switch to page seven. We are equally well represented in China in the automotive semi-sector as we are in our home region, Europe. We are supplying to almost all Tier 1s and OEMs. It makes us proud that our passion for innovation and the strong relationship we have with our customers is time and again formally recognized. We are very pleased that BYD has hailed us as one of their few suppliers of the year in 2023 during the last quarter. Let us now turn to Lampen Systems on the next slide. The lamps assistance segment performed again very well in line with what we expected. Driven by the automotive aftermarket business, we saw revenues of €279 million and 90% quarter-over-quarter seasonal improvement. As a general pattern, Q4 and Q1 are always the strong quarters in the year, as most lamp replacement happened during wintertime in the US and Europe. The sales, industrial and entertainment application, however, remained weak at around €44 million, a 12% decline compared to Q3. especially the semiconductor equipment applications were muted due to high inventories. Adjusted EBIT came in at 11.9% or 33 million euro in Q4. In absolute terms, flat compared to Q3. However, an adverse raw material effect weighed on the EBIT. We had secured too much of a critical raw material during peak allocation times in 2022, which we had to correct now. On slide nine, I wanted to give you a glimpse of why we are convinced that our last man standing strategy will allow us to consistently win share and keep revenues flat in a gradually declining market in the lamp and system segment. One important element is extending a portfolio. After being the first to market with so-called street-legal LED retrofits for a limited range of cars, we've extended our pioneering portfolio of LED replacement lamps significantly in 2023. With such a lamp, you can get LED performance in traditional cars as they fit the classical halogen lamp sockets. Sales of these products are growing rapidly year by year, and with a clear global market leader in this field as well. With this, let me hand over to Reiner for more details on the financials. Thank you, Aldo.