AMS Osram - comment

At the Q4 results in February, AMS Osram guided that they were divesting of non-core semi-conductor businesses which generated c. €300-400m of revenue in FY23.  Yesterday the company announced the sale of relevant assets of its Passive Optical Components business to Focuslight Technologies, a listed Chinese manufacturer.  This isn’t major news and in line with Company’s guidance.  We had already included c. €100m of proceeds from the non-core divestments in our FY24 model, with this sale marginally ahead of our expectations.  

Sales proceeds are expected to be c. €45m by Q324. This price represents roughly a 1.0x revenue multiple, albeit, that the operating business associated with these assets, generating c.€50m revenues in 2023 and phasing out in 2024, is not part of the transaction and will be wound up.