Ams Osram Ag Unsp/Adr

Good morning. We welcome you to our latest business and financial update on fourth quarter and fiscal year 2024. Our CEO Aldo will comment on business and strategy. Our CFO Rainer will focus on financials. During the call, we are referring to the earnings call presentation on the web. First, we look at the fourth quarter. Second, we look at the full year. Please note, we always provide an extensive full IR presentation on our website for further details. Aldo, the stage is yours.

Thank you, Juergen, and good morning, everyone from my side as well. We're on track. We generate cash, our turnaround is in full swing. Re-establish the base is ahead of plan. The savings are showing effects more and more in our profitability, despite the heavy headwinds during the year and the quarter. Let us look at the financial performance of the group on slide two. Revenues came in flat quarter-over-quarter at €882 million above the midpoint of the guidance. Tailwind from the stronger US dollar helped a bit. In brief, the strong seasonal aftermarket auto lamps business compensated a small seasonal and cyclical quarter-over-quarter decline in semis. Year-over-year, we're only down 3% despite the weaker INM and auto semi markets and the phase-out of an OEM lamps module business. Now on profitability, adjusted EBITDA margin improved year-over-year by 50 basis points to 17% thanks to reestablish the base and the non-refundable engineering payments that we keep receiving. Why down 60 million quarter-over-quarter? Well, we reduced waiver starts in Q4 to reduce inventories. We had customer engineering payments in both quarters, but Q3 was higher due to some catch-up payments. But with 150 million euros, the same absolute number as a year ago on a lower revenue base. Now quickly on the segments. Page three, a look at the traditional hydrogen lamp business. Revenues were up 18% quarter over quarter. The seasonal hydrogen lamp aftermarket business came in strong at every year. You can almost set your watch by it. A year ago, we still had some legacy OEM module business running, which explains the slight year-over-year decrease. Within the 275 million euros, we had a 45 million euro of specialty lamp sales for industrial and entertainment applications. A bit up compared to last quarter, but no real change to the relatively low market dynamics. Though we're convinced that we are starting to see the bottom of the cycle in this area. The strong auto lamps after market season drove adjusted EBITDA up by 35%. We recorded 50 million euro or 18.2% after 37 million euro in the third quarter. Now it's time to look at the semiconductor business. I'm on slide four, OS first. Optosemits came down 8% quarter over quarter. A bit seasonal, a bit cyclical, we come to that. Revenues at 350 million euro after 381 million euro last quarter. Again, we booked non-refundable engineering payments for an LED technology project on which we cannot share any more details. But as I said in Q3, we even got more of those engineering payments. They will occur every quarter for the time being, and one day, if successful, this project will turn into a whole suite of new products. Adjusted EBITDA came down to 51 million euro. Three main reasons. First, in Q3 we had roughly double the normal quarterly non-refundable engineering payments due to a catch-up. Second, fall through in line with the lower revenues. And third, we reduced waiver starts to reduce inventories. Now on slide five, the results for our sensor and ASIC business. They did well in Q4, revenues down just 3% in line with seasonality in smartphones and wearables, coming in at €258 million. Adjusted EBITDA even went up by 15% to €55 million, compared to the third quarter, despite the lower revenue base. Re-establish the base brings an improved cost position, but we also benefited from a one-off accrual effect as well. On top, the stronger US dollar proved a bit helpful. We move on to slide 6 on end-market dynamics. Semis in total came in down 3% year-over-year and 6% quarter-over-quarter. This can be explained by looking at the main verticals. First, automotive, our biggest exposure. Revenues came in even a bit better than we thought, 3% up, where we had guided flattish quarter-over-quarter. Cyclical demand was indeed down, with ongoing uncertainty in the supply chain. However, we succeeded in reducing the order backlog for some scarce parts. In addition, new position sensor projects ramped up and revenues there grew noticeably. The 14% year-over-year decline, both due to the inventory correction as well as the high basis of comparison. You might remember Q4-23 has been a record quarter for the Audi Semi revenues so far. Second, industrial medical. This is still the weakest of all. Horticulture revenues declined as the peak installation months are during the third quarter of each year, and new greenhouse lighting fixtures are installed for the winter season. The professional lighting segment actually is still okay. Mass market and medical, no news, but it feels like we have reached the bottom. Third, consumer, where we are mainly supplying sensors to smartphones and wearables. A strong quarter with 210 million euros in sales. The seasonal decline of 9%. comes after typical peak Q3 quarter when large new mobile phone platforms ramp. Demand from the Android space remained very healthy. Some parts were even becoming a short supply. The next slide is for you, Rainer, as we're talking about your favorite subject, cash.

Thank you, Aldo, and hello everyone from my side as well. When we tapped into the Eurobond, we said that we wanted to use the proceeds to reduce supply chain financing, which we did. In Q3, we benefited from a $250 million customer prepayment that boosted operating cash flow. We did not get such a prepayment in Q4, but another tranche of a non-refundable engineering payment. As such, fourth quarter operating cash flow came in strong with 79 million euro, as you see in the table at the bottom of the slide. We actually reduced factoring in Q4 by around 100 million euro, and you can imagine how strong the cash flow would have been without that effect. You can also see the improvements from where you established the base kicking in. Inventories went down a bit in Q4 due to reduced wafer stocks. Just for the avoidance of doubt, net interest paid is always included in the definition of operating cash flow and free cash flow. Now on CapEx. Basically flat with 104 million in Q4. But almost half of that number, more than 45 million, were still payments from the micro-LED equipment overhangs. Q4 was the last quarter with such a significant burden for micro-LED. Without that, we would have already been below our 8% CapEx-to-Sell target. Looking at inflows from divestments at the bottom of the table, the 27 million are almost entirely from micro-LED equipment that we were able to resell. All in all, this led to positive free cash flow in the fourth quarter. Now, we are obviously proud of the chart on the right side. We turned the heavily negative free cash flow into positive one within one year, from minus 332 million euro to positive 12. We could reign in capex significantly. We implemented real service base faster. We could leverage our leading technology position to receive significant upfront payments by customers, which in the end made the success possible ahead of time. A clear indication that the company is back on track. And now, back to Aldo for the full fiscal 24 strategy and business summary.