The acquisition of OSRAM by ams will soon mark its fifth anniversary. In early July 2020, the Austrian sensor specialist announced the closing of the approximately EUR 2.7 billion acquisition of the Munich-based lighting group. On the stock market, the transaction has been anything but “illuminating” so far. On the contrary: at CHF 7.20, ams-OSRAM is currently trading around 90% below the level at the time of closing. Half a decade after the spectacular takeover, the technology group is deep in the red and struggling under a heavy debt burden. In the past two financial years alone, the company recorded a total net loss of nearly EUR 2.4 billion. As of the end of March 2025, net debt stood at approximately EUR 1.9 billion. The situation worsened last year due to the decision to largely exit the MicroLED business. After the sole customer – reportedly Apple, according to industry sources – pulled out, the Austrians had to abandon a nearly completed factory in Malaysia.
Nevertheless, the company has recently made operational progress. Although revenue in the first quarter of 2025, at EUR 820 million, was down 3% year-on-year, it came in above the midpoint of management’s guidance range of EUR 750 million to EUR 850 million. Operating profit (adjusted EBITDA) even rose by 9% to EUR 135 million, raising the margin by 180 basis points to 16.4%. Analysts had expected an adjusted EBITDA of just under EUR 129 million for the first three months of the year. “Despite increasing economic uncertainties, our structural profitability is improving,” explained CEO Aldo Kamper. Thanks to its global presence and worldwide customer base, ams-OSRAM has so far been able to absorb the impact of new US tariff policies. Indeed, the company is broadly positioned. In 2024, just over half of revenue came from automotive solutions. ams-OSRAM components are used in vehicle displays, headlights, and battery management systems. About a quarter of revenue comes from each of the “Consumer” and “Industrial & Medical” (IM) segments. In addition to smartphone displays, this includes areas such as medical imaging and robotics.
For the current second quarter, the CEO expects slightly increasing demand in the industrial and medical markets. While demand for automotive semiconductors is also expected to improve, Kamper anticipates a typical seasonal low for mobile devices. Overall, the top executive is targeting revenue between EUR 725 million and EUR 825 million. By comparison, the group posted revenue of EUR 819 million in the second quarter of 2024. The adjusted operating margin is expected to land between 17.0% and 20.0%, which would in any case be higher than the 16.5% achieved from April to June 2024. Debt, on the other hand, is expected to decrease. “We plan to accelerate the deleveraging of our balance sheet,” said CFO Rainer Irle during the recent earnings release. To this end, management is reviewing strategic options for some business units. The goal is to raise more than EUR 500 million. The aim is clear: Irle wants to bring annual interest costs below the EUR 100 million mark. At the same time, the net debt-to-adjusted EBITDA ratio is to be reduced to below 2. In 2024, the leverage ratio was significantly above 3.
Following the recent news, ams-OSRAM continued its rollercoaster ride on the stock exchange. Initially, the mid-cap stock rose significantly before coming under pressure again. At least the long-standing bottoming-out in the CHF 5 range remains intact – a solid foundation for the new soft-callable barrier reverse convertible. This product offers a return opportunity of 19% p.a., resulting from a conditional coupon payment. Every three months, ams-OSRAM is reviewed: if the stock is trading above the coupon trigger level of 50% of the initial price, the payout is made. If the condition is not met, the payment is not necessarily lost – it is deferred thanks to an integrated memory function and paid out once the stock is again above the trigger on a future date. The barrier is set at a low 49% of the initial fixing. Provided the stock does not fall to or below this mark in the next 12 months, investors will receive the full nominal amount back. In the event of a barrier breach, partial protection expires and the BRC becomes fully exposed to ams-OSRAM’s share price risk. Please also note the soft-callable feature, which allows for early termination and repayment of the instrument.
By the way: the SMIM member is part of Leonteq’s latest push in the Swiss market for structured products. Among the broad range of these trading vehicles are mini-futures on ams-OSRAM, enabling both long and short positioning.
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