Ams Ag ((CH:AMS)) has held its Q4 earnings call. Read on for the main highlights of the call.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
The recent earnings call for Ams Ag presented a mixed sentiment, highlighting both achievements and ongoing challenges. The company has made significant progress in its turnaround efforts and secured new business wins, yet it faces hurdles like the cancellation of the microLED project and persistent financial losses in certain segments.
Successful Turnaround and Cash Generation
Ams Ag reported a successful turnaround in its financial performance, achieving a positive free cash flow of EUR 12 million in 2024, a remarkable improvement from a negative EUR 332 million the previous year. This turnaround reflects the company’s effective financial management and strategic initiatives.
Reestablished Base Program Exceeds Targets
The company’s reestablished base strategic efficiency program exceeded its fiscal year ’24 targets, implementing run rate savings of EUR 110 million, surpassing the initial target of EUR 75 million. This success demonstrates the company’s commitment to operational efficiency and cost reduction.
Strong Performance in Traditional Halogen Lamp Business
The traditional halogen lamp business showed robust growth, with revenues increasing by 18% quarter-over-quarter, contributing to a 35% rise in adjusted EBITDA. This segment remains a strong performer for Ams Ag, driving profitability.
Positive Momentum in New Business Wins
Ams Ag secured close to EUR 5 billion in new business design wins, particularly in automotive and professional lighting sectors. These wins highlight the company’s growth potential and its ability to capture new market opportunities.
Technology Leadership Recognized
The company’s advancements in automotive lighting technology were recognized with the prestigious German Future Award. This accolade underscores Ams Ag’s leadership and innovation in the technology space.
Cancellation of MicroLED Project
The cancellation of the microLED cornerstone project was a significant setback for Ams Ag, posing a headwind to its technology development plans. This decision reflects the challenges the company faces in aligning its project portfolio with market demands.
Decline in Semiconductor Revenues
Semiconductor revenues declined by 6% quarter-over-quarter, with notable challenges in the automotive and industrial medical segments. This decline indicates ongoing market difficulties in these areas.
Negative IFRS Net Result
Despite improvements, Ams Ag’s IFRS net result remained negative at EUR 785 million, highlighting the financial challenges that persist for the company. This situation calls for continued focus on financial stabilization.
Weakness in Industrial Medical Market
The industrial medical segment continued to be a weak spot, with declines in horticulture and professional lighting segments. This ongoing weakness requires strategic adjustments to revitalize these areas.
Forward-Looking Guidance
For the fiscal year 2024, Ams Ag reported flat revenues quarter-over-quarter at EUR 882 million, exceeding the midpoint of their guidance. Despite a 3% year-over-year revenue decline, the company improved its adjusted EBITDA margin by 50 basis points to 17%. Looking forward to 2025, Ams Ag anticipates free cash flow exceeding EUR 100 million, with expectations of a stronger second-half recovery driven by advancements in automotive, industrial, and smartphone projects.
In conclusion, Ams Ag’s earnings call reflected a balanced view of its current landscape, celebrating significant achievements while acknowledging ongoing challenges. The company’s successful turnaround and strategic wins position it for potential growth, though it must navigate persistent financial and market hurdles.
