Ams Osram Ag Unsp/Adr

Welcome to the AMS Osram conference call on first quarter 2025 results and live webcast. I'm Moritz, the chorus 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 question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. 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, sir.

Good morning. This is Jürgen speaking. We welcome all of you to our financial and business update on the first quarter fiscal year 2025. Aldo, our CEO, will comment on business and strategy. Rainer, our CFO, will focus on the financials then. During the call, we are referring to the earnings call presentation that you can find on our website. Please be aware, we also always provide a second full IR presentation with further background material on our website. Aldo, please walk us through the latest results.

Let's do so, and also welcome to everybody from my side. We are staying on course in uncertain times. Our turnaround continues, reestablished the basis ahead of plan, more savings realized in the last quarter. It's a key driver for noticeably higher profitability in a difficult quarter compared to a year ago. Let us look at the financial performance of the group on slide two. Revenues came in at 820 million euro, above the midpoint of the guidance, a sequential decline of 7%, pretty much in line with the usual seasonality across the board despite the underlying cyclical weakness. It was the clear drive in the auto lamps aftermarket business, whereas in semis we saw more complex dynamics. Year over year, we're only down 3%, which is primarily due to the cyclical inventory correction in the auto semis and the cyclical bottom in industrial metal. Also, the non-refundable engineering payments for the development of novel LED technologies contributed positively. At constant currencies and excluding the divested passive optical components business, the decline would have been 4%. Profitability. Adjusted EBITDA margin improved year over year by almost 2 percentage points to 60.4%. 2% more EBITDA with 3% lower revenue. This shows the improvement in our earnings profile due to the reestablished base program and non-refundable engineering payments we keep receiving. Why only down 50 million euro quarter over quarter? Less than a typical fall through. Remember, in Q4 we reduced inventories, which lowered EBITDA year over year. We see a 9% improvement coming in 11 million euro higher at 135 million euro, and this on a lower revenue base. Now quickly on the segments. Page three, a look at additional halogen land business. Revenues came down 9% quarter over quarter. The aftermarket continues to be good and is going through its usual seasonal pattern with lower revenues coming in Q2 and Q3. A bit of a decline year over year as we still have some legacy OEM module business running a year ago and more OEM lamp business that is transitioning towards LED. We continue to win share at the top OEMs as is visible in our annual VPA negotiations with them. Together with our strong performance in the aftermarket channel, it continues to show the strength of our last man standing play. Within the 249 million euro, Again, around €45 million of specialty lamps for industrial and entertainment applications. These were pretty much flat sequentially. A very favorable product mix, a one-time effect, and good plant utilization boosts adjusted EBITDA margins to almost 25%, a real strong performance. €61 million compared to €50 million in the December quarter. Now it's time to look at the semiconductor business on slide 4, OS first. AutoSemis came down 4% quarter over quarter. Revenues stood at €336 million after €350 million last quarter. Actually, a bit better than expected. In short, non-refundable engineering payments for our novel LED technology and support from the Euro-USD exchange rate helped balancing the negative effect of the typical January 1st VPA price down in AutoSemis and the revenue tailwind in Q4 from delivering on-order backlog. When it comes to this novel energy technology, I'm very pleased that we continue to be on track in terms of engineering milestones for this technology-truly demanding project. Adjusted EBDA stayed almost flat at €49 million, coming in at 15%. Remember, in Q4 last year, we reduced waiver stats to bring down inventories, which impacted EBDA, hence kind of an artificially lowered baseline to compare accounts. Now, sensors and ASICs on slide 5. Majority of the business is in consumer, which saw only a very small seasonality due to the strength in old and new products. Most of the quarter-over-quarter decline was due to an end-of-life of a custom product in industrial. Revenues down 9% to €236 million. If we back out the sold business of passive optical components that still contributed a year ago, revenues actually grew more than 6% year-over-year. Adjusted EVDA dropped stronger than a typical fall-through, which suggests down to €32 million at 14% of just the EBITDA margin. However, more than five times higher than a year ago, showing the structural improvement in profitability thanks to reestablished base. Why down so much stronger fall through than quarter over quarter? Q4 was elevated above the normal trend line due to a one-off accrual effect and strong US dollar. Q1, however, saw a typical seasonal factory underutilization and some negative mixed effects as customer kept ordering an already phased out low margin end of life product. We move on to slide six on end market dynamics. Semis in total came in essentially flat with minus 1% year over year. The 6% quarter over quarter decline is rather typical. This can be explained by looking at the main verticals. First automotive, our biggest exposure. Revenues came in 6% down compared to the previous quarter. Currency held. but also our new sensor projects ran well. The inventory correction cycle developed a playbook during the quarter. The month was still a bit depressed, but as we saw a book-to-bill of around 0.5 at the beginning of the quarter, it improved steeply to slightly above one in the course of the three-month period and has continued to develop positively since. There's certainly a lot of uncertainty persisting in the supply chain. You can see this at the short-term ordering behavior, which is regularly below normal lead times. Our customers just don't know themselves exactly what to build. Year over year, you see clearly the LD inventory correction cycle taking its toll, with 11% down in auto revenues. This is particularly at the very short-term ordering of the OEMs, as fulfillment inventories and channel partners are in a normal range. Second, industrial and medical. Horticulture revenues are at a seasonal low. The green shoots in terms of demand improvement at our bigger direct industrial customers are just noticeable in revenues. Street lighting is an important, normally very stable application within professional lighting. However, last quarter, we saw the first projects push out in the U.S. due to federal budget cuts. The distribution channel did a bit better in Europe than the U.S. China was weak. It still feels the cyclical low is reached with another quarter over quarter and year over year decline of around 10% each. But we must await any impact of the new tariff regime ahead of us. As mentioned before, the key driver for the reduction in Q1 was the end of life of a specific product in industrial. Third, consumer, where we are mainly supplying sensors to smartphones and wearables. Typical quarter-over-quarter demand reduction. Year-over-year, we could even compensate the exit of the non-core portfolio by new products and ended up with a significant growth of 21%. The new products clearly kicked in, but we also enjoyed some more orders for legacy products. For this, the typical seasonal reduction compared to December quarter was hardly visible. Now let's talk about our products. I'm on slide 7. We are very proud that further car models featuring our pricey Vios headlamp product are hitting the streets. The new Opel Grandland from Stellantis, a midsize SUV, comes with a 25,000 pixel forward lighting solution. It shows again the attractiveness of this solution, not only for the high end of the market. One of the leading innovative Chinese EV makers has decided to launch the 25,000 pixel forward lighting in its latest flagship model. I will tell you more about it in the next quarter. And this is just the beginning. Further models from various car makers will launch with the Vios on board in the quarters to come, gradually turning the significant design win basis of around 500 million euros into revenues. Q1 saw not only Vios making it more and more to the market, but also other great developments. Let us take a look at slide 8. Continuing with automotive, we are proud of the design win for hands-on detection with a major Chinese EV maker. It was chosen by the EV maker as a key element for its intelligent driving system. Next, I mentioned a couple of quarters ago that we see opportunities in leveraging AC capabilities into our automotive customer base. Now, we are making first inroads. We are providing open system protocol LED driver chips to a customer that O has been working with for many years. Switching gears to INM, we could land a big design win in the X-ray sensor space for computer tomography at an Asian customer. And lastly, to consumer, we developed a unique optical heart rate sensor that features in a wearable device that allows for unprecedented precision, especially when you're performing sports. Unfortunately, we cannot go into more detail for confidentiality reasons, but we're extremely proud of this achievement. Moving on from top line to bottom line. The reestablished base program has been pivotal in improving and structurally stabilizing our bottom line. On slide nine here. End of December, I realized run rate savings stood about 110 million euro. Implementation is pushed forward without a pause. As such, we can report about 135 million euro implemented run rate savings at the end of the first quarter. You will see the effect when we come to the guidance for the next quarter in a bit. Just for completeness, we upsized the program, as you remember, to 225 million euro run rate savings by the end of 26 in Q3 last year. All necessary measures and actions are in detail identified and specified and are now in execution. With that, it's time for the financials, and Rainer, please tell us what happens during the first quarter.