ams Grows strongly Now it's Time for the Osram Integration

Ein Blick in die Produktion von ams.
A look into the production of ams.

The second quarter of 2020 brought ams record sales despite the crisis, the third quarter is expected to bring a 20 percent increase over the previous year. Now the focus is on integrating Osram.

Group sales of ams reached USD 460.3 million in the second quarter of 2020, 8 percent lower than in the previous quarter but 13 percent higher than the USD 407.3 million in the second quarter of 2019. The consumer business in particular contributed to the growth - despite the ongoing Covid 19 pandemic and its impact on the economy and end markets. By contrast, demand in the automotive and industrial markets was subdued.

Regardless of these factors, ams expects a very good third quarter with sales between USD 530-570 million and continued high profitability with an adjusted operating (EBIT) margin between 21-24 percent.

On July 9, 2020, ams had successfully completed the acquisition of Osram and held 69 percent of Osram shares (excluding treasury shares held) with a transaction value of around EUR 2.7 billion. To date, ams has further increased its stake to around 71 percent of OSRAM shares. Prior to the closing and shortly afterwards, ams placed a multi-tranche issue with a value of 1.25 billion euros in the form of 5-year senior notes with international investors. It had a total volume of 850 million euros and 450 million dollars. The bond issue served to secure the long-term financing structure for the takeover. In addition, ams plans to use future surplus cash from operating activities to further increase its stake in Osram.

The Plan for the Osram Integration

Sensor technology, illumination and visualization - these are the areas on which ams is concentrating in order to build up a technology platform on which strong profitability and growth is promised.  
Initially, ams is seeking a domination and profit transfer agreement (BGV) for Osram and intends to conclude it in the near future. The necessary preparations are underway, and the implementation of the BGV should be completed by the end of 2020. Under the BGV, ams will drive and accelerate the integration and merger of the business areas of ams and Osram.
 
Independent of the BGV process, ams will work more closely with Osram on the basis of its majority shareholding: Preparations are being made for the future organizational and business structure, for joint financial management and reporting. At the same time, ams intends to take up four seats on the Osram Supervisory Board. Osram will remain an independent, listed subsidiary under majority ownership of ams until further steps such as a BGV are completed and implemented.

ams will continue to maintain its high level of R&D investment in order to remain at the forefront of technology. An example of this: In spring, ams already introduced a technology for automatic white balance (AWB) of photographic cameras, in which the high-precision spectral sensor from ams opens up a new way to improve the performance of cameras in mobile devices. The precise spectral analysis of ambient light by sophisticated optical sensor technology enables an unprecedented accuracy of white balance for smartphone cameras. This leads to a significantly increased image quality and natural color reproduction, which leads to measurable benchmark improvements. For a first flagship platform, ams is already delivering high volumes and expects the technology to become increasingly widespread in the future. Further developments are taking place in the field of dToF-3D technology, the front-side 3D sensor technology for face authentication behind the display, which removes visible elements from the front of the device. The technology will be demonstrated at the turn of the year.

Industry restrained - medicine very good

The business development of the automotive, industrial and medical technology business of ams was generally restrained in the second quarter and first half of the year. ams considers itself well positioned in the markets of automotive sensor technology for safety, driver assistance/autonomous driving, position measurement and chassis control and continues to invest in R&D and project-related development activities.

The industrial business of ams also continued to show cautious results in the second quarter, reflecting continued weak demand in the industrial market due to the global impact of Covid-19.

In contrast to the other AIM markets, the medical technology business of ams continued to develop well in the second quarter. ams is a leading provider of medical imaging solutions for computed tomography (CT), digital X-ray and mammography as well as endoscopy with miniature cameras. In view of the Covid 19 pandemic, ams met the demand for a broader use of CT systems