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AMS AG

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ams : Half year report 2021

07/30/2021 | 01:09am EDT

Half Year Report 2021

Key figures

Q2 2021

Q2 2020

Q1 2021

1st Half 2021

1st Half 2020

USD millions

(except earnings per share)

Revenues

1,491

503

1,543

3,035

1,050

Gross margin in %

33%

40%

35%

34%

40%

(adjusted - see footnote 1)

Result from operations

131

99

172

303

209

(adjusted - see footnote 1)

EBIT margin in %

9%

20%

11%

10%

20%

(adjusted - see footnote 1)

Net result

84

63

89

174

91

(adjusted - see footnote 1)

Basic / diluted earnings per

0.29 / 0.29

0.21 / 0.20

0.34 / 0.34

0.63 / 0.63

0.47 / 0.50

share in CHF

2)

(adjusted - see footnote 1)

Basic / diluted earnings per

0.32 / 0.32

0.24 / 0.22

0.38 / 0.38

0.70 / 0.69

0.53 / 0.57

share in USD

(adjusted - see footnote 1)

Net debt

2,296

-61

2,015

2,296

-61

  1. Excluding M&A-related, transformation and share-based compensation costs as well as results from sale of business and equity investments
  2. Earnings per share in CHF were converted using the average currency exchange rate for the respective periods

Half Year Report

2021

Second quarter group results well above mid-point of guidance range with revenues of USD 1,491 million and adj. operating margin of 9%

Report to shareholders on the second quarter and first half of 2021

  • Portfolio re-alignment fully underway with disposal of Digital Systems North America closed and further announcements expected in the next months
  • Synergy creation and integration programs fully on track
  • Successful completion of delisting offer for OSRAM Licht AG share; ownership now at 80.4%

Ladies and Gentlemen

We are very pleased with our performance in the second quarter, with our metrics coming in well above the midpoint of our guidance, and again delivering strong operational cash flow. Demand for our automotive solutions continued to be strong, and we saw good results in our consumer business. The generation of synergies from the combination is fully on track after only one full quarter of operational control of OSRAM, and we are very confident in our synergy targets and savings. The successful delisting offer for OSRAM is another important step in driving the integration while closing the disposal of Digital Systems North America shows our commitment and momentum towards creating the future streamlined portfolio of ams OSRAM.

Looking forward, ongoing tightness in chip supply and imbalances in supply chains continue to limit the ability to fully deliver against what is ongoing strong demand, particularly in the automotive market. We expect these imbalances to extend well into the latter part of the second half year. Short-term revenue drivers continue to be automotive lighting and consumer optical sensing in areas like display management and camera enhancement. At the same time, we are moving on integrated product roadmaps that will drive our position in mid-term growth markets including UV-C LED, advanced LED front lighting systems, AR, 3D applications, and more. We look forward to updating investors on our strategy, our new aligned business portfolio and strong technology position at a Capital Markets Day envisaged for early 2022.

Financial results

Second quarter group revenues were USD 1,491 million, 3% lower sequentially compared to the first quarter 2021, in line with typical seasonality in the group's end markets. Comparable prior year figures are not available due to the acquisition of OSRAM. Adjusted1 group gross margin for the second quarter 2021 was 33%, down from 35% for the first quarter 2021 with comparable prior year figures not available. First half group revenues were USD 3,035 million with comparable prior year figures not available due to the acquisition of OSRAM. Adjusted1 group gross margin for the first half 2021 was 34% with comparable prior year figures not available.

The adjusted1 group result from operations (EBIT) was USD 131 million or 9% of revenues for the second quarter compared to USD 172 million or 11% for the first quarter (excluding adjustments: USD -144 million or -10% of revenues for the second quarter) with comparable prior year figures not

1 Excluding M&A-related, transformation and share-based compensation costs as well as results from sale of business and equity investments

ams-osram.com

page 2/43

Half Year Report

2021

available. The group result from operations excluding adjustments for the second quarter reflects an impairment charge related to certain manufacturing assets in Asia in our Semiconductors consumer business following a review of useful life. This is a one-time,non-cash effect of approximately USD 182 million which solely relates to tangible fixed assets. Adjusted1 group result from operations (EBIT) was USD 303 million or 10% of revenues for the first half 2021 with comparable prior year figures not available.

Adjusted1 group net income was USD 84 million for the second quarter compared to USD 89 million for the first quarter with comparable prior year figures not available (excluding adjustments:

USD -190 million for the second quarter). Adjusted1 basic/diluted earnings per share1 for the second quarter were USD 0.32/0.32 or CHF 0.29/0.29 and USD -0.73/-0.73 or CHF -0.67/-0.67 excluding adjustments. Adjusted1 group net income was USD 174 million for the first half with comparable prior year figures not available (excluding adjustments: USD -193 million). Adjusted1 basic/diluted earnings per share2 for the first half were USD 0.70/0.69 or CHF 0.63/0.63 and USD -0.70/-0.70 or

CHF -0.64/-0.64 excluding adjustments.

The group operating cash flow for the second quarter was robust at USD 229 million while group free cash flow reached USD 176 million. The group operating cash flow for the first half was healthy at USD 478 million with group free cash flow reaching USD 329 million. Group net debt stood at

USD 2,296 million on 30 June 2021, translating into a group leverage of 1.7x net debt/adjusted1 EBITDA. Cash and cash equivalents were USD 1,613 million on 30 June 2021, also reflecting the settlement of the delisting offer for OSRAM Licht AG at a total consideration of USD 436 million.

Business development

Our Semiconductors segment showed a very healthy development generating 64% of revenues in the second quarter of 2021, combined with a robust adjusted operating margin of 13%. In this segment, the automotive market area continued to show very strong demand, with total backlog further increasing. The consumer market area also recorded a healthy performance in line with seasonal effects, driven by the group's range of optical sensing solutions. We pursue development activities for new optical solutions in light sensing and 3D technologies including solutions for world-facing AR and 3D authentication as well as camera enhancement and display management. Other innovation areas encompass future near-to-eye visualization and sensing technologies for AR devices. The industrial and medical market areas showed very attractive results benefitting from increasing macroeconomic momentum. Demand for industrial lighting applications has seen a robust recovery while horticultural lighting demand is expanding. Medical and other imaging product lines also developed positively in the quarter.

The Lamps & Systems (L&S) segment recorded a very solid overall performance in the second quarter, providing 36% of revenues. The L&S automotive business including traditional markets performed strongly and contributed very positively to group results, driven by a sustained demand recovery and in line with typical seasonality. Other parts of the L&S business recorded a very attractive recovery in industrial demand including building-related end markets while certain industrial and medical markets still saw a mixed demand environment.

  1. Based on 261,165,151 basic / 261,469,132 diluted shares
  2. Based on 261,075,946 basic / 261,739,155 diluted shares

ams-osram.com

page 3/43

Half Year Report

2021

Outlook

For the third quarter 2021, ams OSRAM expects group revenues of USD 1,450-1,550 million which exclude the disposed revenues of the DS North America business, slightly up sequentially at the midpoint, with an expected adjusted operating (EBIT) margin of 8-11%, based on currently available information and exchange rates. This expectation reflects continuing strong demand in the automotive market where the supply situation remains constrained as well as a decreased revenue contribution year-on-year from the consumer market, in line with previous comments. As previously communicated, ams OSRAM expects group revenues for the second half year to be slightly higher compared to the first half year, using the comparable revenue basis.

Premstaetten, 30 July 2021

Alexander Everke, CEO

Ingo Bank, CFO

Thomas Stockmeier, CTO

Mark Hamersma, Chief Business Development Officer

ams-osram.com

page 4/43

Half Year Report

2021

Consolidated Income Statement

(unaudited)

USD millions

Q2 2021

1st Half 2021

Q2 2020

1st Half 2020

(except earnings per share)

Revenues

1,491

3,035

503

1,050

Cost of sales

-1,210

-2,255

-317

-661

Gross profit

282

779

187

390

Gross margin in %

19%

26%

37%

37%

Research and development

-215

-402

-75

-146

Selling, general and administrative

-240

-475

-71

-142

Other operating income

30

52

2

7

Other operating expense

4

-8

0

0

Result from equity investments

-4

-8

0

-1

Result from operations

-143

-63

43

108

Net financing result

-40

-108

-35

-114

Result before tax (contin. operations)

-183

-171

7

-6

Income tax result

-10

-20

-1

-4

Net result (continuing operations)

-193

-191

6

-11

Results from discontinued operations

2

0

-

-

Net result

-190

-191

6

-11

Thereof non-controlling interests

-1

-10

0

0

Thereof ams shareholders

-189

-184

6

-11

Basic earnings per share in CHF 1)

-0.66

-0.64

0.02

-0.06

Diluted earnings per share in CHF 1)

-0.66

-0.64

0.01

0.00

Basic earnings per share in USD

-0.73

-0.70

0.02

-0.06

Diluted earnings per share in USD

-0.72

-0.70

0.01

0.00

Basic earnings per share in CHF 1)

-0.67

-0.64

0.02

-0.06

(continuing operations)

Diluted earnings per share in CHF 1)

-0.67

-0.64

0.01

0.00

(continuing operations)

Basic earnings per share in USD

-0.73

-0.70

0.02

-0.06

(continuing operations)

Diluted earnings per share in USD

-0.73

-0.70

0.01

0.00

(continuing operations)

  1. Earnings per share in CHF were converted using the average currency exchange rate for the respective period.

ams-osram.com

page 5/43

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

ams AG published this content on 30 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2021 05:08:04 UTC.


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Sales 2021 5 159 M 6 035 M 6 035 M
Net income 2021 -178 M -209 M -209 M
Net Debt 2021 1 864 M 2 180 M 2 180 M
P/E ratio 2021 -23,8x
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Managers and Directors
Alexander Friedrich Everke Chief Executive Officer
Ingo Bank Chief Financial Officer
Hans J÷rg Kaltenbrunner Chairman-Supervisory Board
Thomas Stockmeier Chief Technology Officer
Michael Grimm Vice Chairman-Supervisory Board
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