Austria's ams OSRAM Braces for Q4 Revenue Dip Amid Weakened Automotive Demand

Austria-based ams OSRAM, a global leader in optical solutions, has recently announced expectations for a lower revenue in the fourth quarter (Q4) of 2023, primarily due to weakened demand in the automotive market. This news comes as the company is in the midst of a strategic realignment and cost-cutting program, aiming to focus on its profitable and structurally growing core businesses.

ams OSRAM's Q4/23 revenues of EUR 908 million and an adjusted EBIT margin of 6.9% reflect the impact of weaker automotive demand and strategic portfolio decisions. The company's semiconductor segment, which accounted for 69% of Q4 revenues, was particularly affected by the slowdown in the automotive market, with revenues declining both quarter-over-quarter and year-over-year. Despite this, ams OSRAM continues to win new business across the board, underpinning its structural growth plans, especially in the automotive sector.

The expected decline in Q4 revenue is driven by usual seasonality and weak industrial & medical market, with revenues expected to be in the range of EUR 800 to 900 million and an adjusted EBIT margin of 4% to 7%. Despite the expected decline, ams OSRAM is confident in its ability to execute its plans for 2024 and make the company more focused, leaner, and more efficient.


The company's automotive semiconductor business recorded the highest ever revenue number in Q4/23, a 10% year-over-year increase, underlining the strength of its underlying market position. This growth is driven by a strong demand for products for automotive applications from China, while other regions showed normal seasonal demand. Additionally, the company's design-win pipeline is robust, with around EUR 2.5bn (life-time-value) design-wins in H1/2024, further supporting its long-term growth prospects.


ams OSRAM's revised target financial model and re-financing considerations may influence its Q4 and FY2024 performance. The company aims for a 6-10% revenue CAGR from 2023 to 2026, with an adjusted EBIT of approximately 15% in 2026. This suggests a focus on cost optimization and operational efficiency. Re-financing considerations are progressing well, indicating potential improvements in the company's financial health. However, lower Q4 revenue expectations due to weaker automotive demand may temporarily affect these targets.

In conclusion, Austria's ams OSRAM faces a challenging Q4 due to weakened automotive demand, but the company remains optimistic about its long-term prospects. With a strong design-win pipeline and a focus on cost optimization, ams OSRAM is well-positioned to navigate the current market conditions and achieve its strategic goals. Investors should closely monitor the company's progress and evaluate its potential in the context of the broader market trends and competitive landscape.