AMS Osram - comment

AMS Osram released their Q4 and FY23 numbers today in line with their guidance and our model. More importantly, the guidance for FY24 is consistent with the message given during the refinancing in Autumn last year - a weak H1 impacted by inventory corrections in the industrial and medical segments followed by a more upbeat H2 outlook, driven by recent design wins and the normalisation of industrial and medical demand. Inflation is impacting the ramp-up costs of its new Malaysian facility but expectation remains for some modest revenue in FY25 from this new technology. Management reiterated the opportunity set surrounding this new technology. 

AMS Osram finished the year at 4.0x leverage (including the equity put, 3.0x ex) with over €1bn of cash on the balance sheet and is likely to remain at that level for FY24. We will update our model subsequently.