ams OSRAM Reports Strong Q4 2024 Results, Achieves Cost Savings and Positive Free Cash Flow
ams OSRAM, a global leader in light and sensor solutions, reported solid financial results for the fourth quarter of 2024. The company exceeded revenue and profitability expectations while cutting costs. Its ongoing transformation program, Re-establish the Base (RtB), has improved operations and strengthened finances. The market reacted well. On Tuesday the stock gained 18%. Today it is up 11%.
Despite market challenges, ams OSRAM earned €882 million in revenue for Q4 2024. This was slightly lower than the previous year but above the company’s guidance. The firm achieved a 17.0% adjusted EBITDA margin, reflecting improved profitability. For the full year, revenue reached €3.43 billion, and the company returned to positive free cash flow of €12 million, a major improvement from negative €332 million in 2023.
CEO Aldo Kamper highlighted the company’s progress. “Our turnaround is well underway. By focusing on core semiconductors, we have strengthened our finances while improving margins. The efficiency measures we implemented are working, and we expect further margin growth and over €100 million in free cash flow for 2025.”
Cost Savings Drive Profitability
A key achievement in Q4 was accelerating cost reductions under the Re-establish the Base program. ams OSRAM saved €110 million annually, surpassing expectations. The company now targets total savings of €225 million by 2026, up from its original goal of €150 million. These cuts, along with improved pricing and product mix, have strengthened finances.
Gross margin, a key profitability measure, stood at 27.1% in Q4. Though slightly lower than the previous quarter, cost controls helped stabilize it. Operating expenses fell, leading to €3 million in net income for Q4. This marked a sharp turnaround from the €16 million loss in Q4 2023.
Business Segment Performance
The semiconductor division remains ams OSRAM’s backbone, making up 70% of total revenue. However, performance varied. Opto Semiconductors, which makes LED and laser components, earned €350 million in Q4 revenue, down 4% year-over-year due to weak industrial and medical demand. CMOS Sensors & ASICs recorded €258 million in revenue, a 2% decline year-over-year, though the division improved margins through better operations.
The Lamps & Systems division contributed €275 million in sales, a 1% year-over-year decline. However, it saw sequential growth, helped by seasonal demand for automotive aftermarket products. The division’s 18.2% EBITDA margin showed resilience, especially in automotive lighting and specialty lamps.
2025 Outlook
ams OSRAM expects Q1 2025 revenue between €750 million and €850 million, with an adjusted EBITDA margin of 16% (±1.5%). The company predicts a stronger second half of 2025, driven by new product launches, inventory normalization, and continued efficiency improvements.
The company is also positioning itself for long-term growth, securing new semiconductor contracts worth approximately €5 billion in lifetime revenue. These deals span automotive, industrial, and consumer electronics markets, reinforcing ams OSRAM’s leadership.
Despite ongoing supply chain challenges and fluctuating demand, the company remains optimistic. ams OSRAM plans to reduce capital expenditures, keeping FY25 investments under 8% of sales, ensuring balanced growth and financial stability.
“We took decisive steps to streamline operations, improve efficiency, and focus on high-margin businesses,” Kamper added. “These efforts will help us maintain profitability and achieve sustainable growth.”
As the company moves into 2025, execution of cost reductions, semiconductor expertise, and new business opportunities will be critical. With a strong cash position, positive free cash flow, and leaner operations, ams OSRAM is on track for a more profitable future.
Go Deeper: In November, ams OSRAM Reports EUR 881M Revenue