Research Update: ams-OSRAM AG Downgraded To 'B' On Higher-Than-Expected Leverage Due To Lower Profitability; Outlook Stable - S&P Global Ratings’ Credit Research

Research Update: ams-OSRAM AG Downgraded To 'B' On Higher-Than-Expected Leverage Due To Lower Profitability; Outlook Stable

Research Update: ams-OSRAM AG Downgraded To 'B' On Higher-Than-Expected Leverage Due To Lower Profitability; Outlook Stable - S&P Global Ratings’ Credit Research
Research Update: ams-OSRAM AG Downgraded To 'B' On Higher-Than-Expected Leverage Due To Lower Profitability; Outlook Stable
Published May 16, 2024
9 pages (3467 words) — Published May 16, 2024
Price US$ 225.00  |  Buy this Report Now

About This Report

  
Abstract:

We expect Austrian-based LED manufacturer ams-OSRAM AG's (ams's) S&P Global Ratings-adjusted EBITDA margins will decline to 13% in 2024, from 20% in 2020. The gradual weakening of margins follows a declining topline, unused capacity, and significant restructuring costs, related, in particular, to the revised microLED strategy. As a result, we expect leverage of 6.5x in 2024 and continued negative free operating cash flow (FOCF), compared with our previous forecast of 3.3x and slightly positive FOCF. We therefore lowered to 'B' from 'BB-' our long-term issuer credit rating on ams and our issue rating on the company's unsecured debt. The stable outlook reflects our expectation that leverage will remain at 5x-7x, coupled with improving, yet negative, FOCF of about €100 million

  
Brief Excerpt:

...- We expect Austrian-based LED manufacturer ams-OSRAM AG's (ams's) S&P Global Ratings-adjusted EBITDA margins will decline to 13% in 2024, from 20% in 2020. - The gradual weakening of margins follows a declining topline, unused capacity, and significant restructuring costs, related, in particular, to the revised microLED strategy. - As a result, we expect leverage of 6.5x in 2024 and continued negative free operating cash flow (FOCF), compared with our previous forecast of 3.3x and slightly positive FOCF. - We therefore lowered to 'B' from '##-' our long-term issuer credit rating on ams and our issue rating on the company's unsecured debt. - The stable outlook reflects our expectation that leverage will remain at 5x-7x, coupled with improving, yet negative, FOCF of about 100 million in 2024....

  
Report Type:

Research Update

Ticker
AMS@SW
Issuer
ams-OSRAM AG
Sector
Global Issuers
Country
Austria
Region
Europe, Middle East, Africa
Format:
PDF Adobe Acrobat
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Research Update: ams-OSRAM AG Downgraded To 'B' On Higher-Than-Expected Leverage Due To Lower Profitability; Outlook Stable" May 16, 2024. Alacra Store. May 19, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-ams-OSRAM-AG-Downgraded-To-B-On-Higher-Than-Expected-Leverage-Due-To-Lower-Profitability-Outlook-Stable-3174841>
  
APA:
S&P Global Ratings’ Credit Research. (). Research Update: ams-OSRAM AG Downgraded To 'B' On Higher-Than-Expected Leverage Due To Lower Profitability; Outlook Stable May 16, 2024. New York, NY: Alacra Store. Retrieved May 19, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-ams-OSRAM-AG-Downgraded-To-B-On-Higher-Than-Expected-Leverage-Due-To-Lower-Profitability-Outlook-Stable-3174841>
  
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