ams-OSRAM AG

Q2 revenue was EUR 805 million, up 4% year over year and 9% like-for-like at constant currencies. Adjusted EBITDA was close to 17%, slightly lower year over year due mainly to deconsolidation of the specialty lamps business, higher raw material prices, and FX headwinds. Segment-wise, OS revenue rose 6% year over year, CSA revenue rose 7%, and Lamps and Systems revenue declined modestly year over year due to deconsolidation effects. For Q3, management guided to revenue of EUR 770 million-EUR 870 million and adjusted EBITDA around 16% ±1.5 percentage points, assuming EUR/USD at 1.15. Full-year 2026 outlook was broadly unchanged: revenue modestly lower due to divestments and FX, adjusted EBITDA somewhat lower than last year, and net result expected to be positive in the high double-digit million euro range. Excluding divestment proceeds, management said full-year 2026 free cash flow should be a bit more than EUR -300 million, while still expecting a clear path to positive free cash flow in 2027. After the Infineon deal closed, cash rose to about EUR 1.6 billion and total liquidity to about EUR 2.1 billion.

Aldo Kamper struck an upbeat but execution-focused tone, saying the company delivered another strong quarter and is progressing from technology development toward commercialization in Digital Photonics. He highlighted three strategic pillars: share gains and profitable growth in the semiconductor core, momentum in smart-glass and AI photonics opportunities, and portfolio simplification through divestments and organizational changes. He also emphasized that the recent contract extension gives continuity as the company enters the next phase of strategy execution.

Rainer Irle focused on the financial bridge between a strong operating quarter and heavy transition cash use. He cited free cash flow of minus EUR 19 million in Q2 and operating cash flow of minus EUR 77 million, with working-capital buildup ahead of seasonality, a EUR 40 million reduction in factoring, bonus payouts, and net interest payments of close to EUR 40 million as key drivers. He also detailed the capital-structure moves: EUR 1 billion of 2032 senior notes at a 7.25% coupon, full redemption of the 12.25% 2029 U.S. dollar notes, partial redemption of the 10.5% 2029 notes, and EUR 127 million of 2027 converts repurchased, bringing annual interest savings to EUR 40 million and lifting liquidity to about EUR 2.1 billion after the divestment.

Analysts pressed on how close smart-glass microLED is to commercial production, and management said work remains on both its side and the customer side, though progress is good. On AI photonics, management said the newly added photodiode work is not as valuable as the emitter side by itself, but it meaningfully expands system integration and stickiness; Aldo described the overall optical-engine opportunity as a triple-digit million euro opportunity by the end of the decade. Questions on Q2 cash burn and full-year free cash flow drew the response that 2026 FCF, excluding divestment proceeds, should be a bit more than EUR -300 million because the company is intentionally absorbing factoring reduction, customer prepayment repayment, and restructuring costs this year.