Full Year 2024 ams-OSRAM AG Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Sebastien Sztabowicz - Kepler Cheuvreux - Analyst : Hello, everyone, and thank you for taking my question. First of all, could you please make an update on the inventory situation in your main markets, notably automotive industry? Where are you standing from normal inventory levels? And second question is on the OpEx modeling, given that you have accelerated cost cutting and you are ahead of schedule. How should we model OpEx for 2025? And attached to that what was the amount of non-refundable engineering payments in Q4 and what should we expect for the full year '25? Thank you.

Question: Sebastien Sztabowicz - Kepler Cheuvreux - Analyst : Okay. Thank you.

Question: Janardan Menon - Jefferies International Ltd. - Analyst : Hi. Good morning. Thanks for taking my question. You referenced automotive sensor design when it seemed material in Q4. Can you give a little bit more elaboration on what exactly that sensor is and how you see automotive sensors contributing to your growth in coming years, '25 and beyond? Thanks.

Question: Janardan Menon - Jefferies International Ltd. - Analyst : And in your Q1 guidance, you're guiding overall at the midpoint around minus 9% quarter-on-quarter growth. Could you break that down just in terms of, say, what is above 9% and what is below 9% across automotive, industrial, and consumer?

Question: Janardan Menon - Jefferies International Ltd. - Analyst : And if I can just squeeze one last one. You referenced a number of design wins in the second half for your strong second half, including mobile sensors. Can you confirm that you will be gaining further content because you already gained some content in the second half of 2024. Are you gaining further content broadly in mobile phones, including flagship phones in the second half of 2025?

Question: Janardan Menon - Jefferies International Ltd. - Analyst : Understood. Thanks.

Question: Harry Blaiklock - UBS Limited - Analyst : Good morning. Thanks for taking my question. First is just around the comments on the H2 recovery. I mean, most of your peers and in your commentary, it seems like visibility in both auto and industrial is pretty limited beyond Q1 and this half. So I am wondering what gives you confidence in that recovery? Appreciate you have the design wins, but do you see any risk that those get pushed at all?

Question: Harry Blaiklock - UBS Limited - Analyst : Got it. And the second question is just on utilization rates. I know it's kind of difficult for you guys to comment on group level utilization levels given the diverse manufacturing base, but can you give any color on current levels and kind of how you expect that to trend through the year?

Question: Harry Blaiklock - UBS Limited - Analyst : Got it. Thank you.

Question: Didier Scemama - BofA Global Research - Analyst : Good morning, gentlemen. Thank you for taking my questions. Congratulations on the execution on the cost cutting and the design wins broadening of the strengths. I just had a couple of questions. First, on the free cash flow, I know your definition of free cash flow includes disposal. On the north of EUR100 million free cash flow for '25, can you just clarify what's your expectation of disposals in that number? And I've got a quick follow-up. Thank you.

Question: Didier Scemama - BofA Global Research - Analyst : Low double-digit, thank you. And on the calendar year '25 guide, you've been explicit on the H1 versus H2, but what's your gut feel at this point? Are we looking at mid-single-digit growth or low-double-digit growth? Because I'm also thinking about the disposal of non-core revenues in there. So if you can maybe just help us understand the mechanics there, that would be helpful. Thank you.

Question: Didier Scemama - BofA Global Research - Analyst : Yeah.

Question: Didier Scemama - BofA Global Research - Analyst : Perfect. And maybe just a quick one on the minority, the OSRAM minorities. Any update there? I saw that your stake increased a little bit, or at least the float has decreased a little bit. Any update on what you might do with that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Didier Scemama - BofA Global Research - Analyst : Okay, brilliant. Thank you so much.

Question: Jurgen Wagner - Stifel Financial Corp. - Analyst : Good morning. Thank you. And you mentioned improving order dynamics. Was it broad-based or is it a bit different amongst the automotive industrial? And then, OSRAM, you had quite significant exposure to China in automotive. How do you see the business there Q4 and going forward? Thank you.

Question: Jurgen Wagner - Stifel Financial Corp. - Analyst : You would confirm pricing or price pressure is more pronounced in China than in other regions?

Question: Jurgen Wagner - Stifel Financial Corp. - Analyst : Okay, understood. Thank you.

Question: Sandeep Deshpande - J.P. Morgan Securities plc - Analyst : Yeah, hi. A couple of questions from me. Thanks for letting me on. Firstly, on R&D grants, what was the amount of R&D grants you got in the fourth quarter? And as another follow-up on China, where do you see your market share in the opto semiconductor business in China at this point? Has there been any change in your market share? Or have the Chinese competitors -- I mean, the local competitors become any stronger or still the same? Thank you.

Question: Sandeep Deshpande - J.P. Morgan Securities plc - Analyst : And just one quick follow-up on your new design wins in the second half of the year. How much of that new design win activity that you are expecting to grow your revenues in the second half comes from smartphones and how much from the automotive side? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Sandeep Deshpande - J.P. Morgan Securities plc - Analyst : Thank you.

Question: Robert Sanders - Deutsche Bank - Analyst : Yeah, hi. I just have two questions. One is, could you just talk about the maximum content you can gain per smartphone in a perfect world? I think clearly, you've got some sockets on the front side, but there's some opportunities on the back. So I just interested to know whether you can do theoretically more than $2 per device or is that not realistic? And the second one would just be on the new wins in auto LED. Are you now integrating the driver, which used to be done by people like Melexis and Elmos? Or are you still leaving that to them to do as a third party when you do these integrated, more complex modules? Thank you.

Question: Robert Sanders - Deutsche Bank - Analyst : Thanks a lot.

Question: Robert Sanders - Deutsche Bank - Analyst : Thanks.