Another 500 jobs at AMS-Osram hit by uncertain outlook
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Despite posting a profitable 3Q24 AMS-Osram (Premstaetten, Austria) has said it plans to “upsize” its ‘Re-establish the Base’ cost-cutting program, affecting more than 500 employees.
As part of reporting its 3Q24 financial results AMS-Osram said that the execution of the ‘Re-establish the Base’ had progressed well, with €85 million of annual savings realized to date and ahead of schedule. It said it had decided to seek a further €75 million in annual savings and achieve €225 million in annual cost savings by the end of 2026.
AMS-Osram, which has about 20,000 employees worldwide, said that more than 500 non-production employees will be affected and added that approximately one-third of the posts will be retained but relocated to “best-cost” countries. AMS said it expects about €40 million of additional charges for the planned “transformation” that would mostly be taken in 2025.
The continued restructuring was necessary to “safeguard profitability improvements in an uncertain environment,” the company asserted, adding that uncertainty is proving persistent into 2025, especially in the automotive sector. A view shared by several European companies.
Infineon piles on European gloom with weak outlook for 2025
Nonetheless AMS swung to profit in the 3Q24. The company achieved revenues of €881 million – in line with previous guidance – up 8 percent sequentially, but down 3 percent year-on-year. The company made an adjusted EBITDA of €166 million and a net profit of €24 million.
The difference between EBITDA and net profit is largely due to charges related to the repositioning of the firm’s microLED strategy and the Re-establish the Base cost-savings program.
The company’s net cash position improved from €900 million at the end of 2Q24 to €1,097 million at the end of 3Q24.
Look out, outlook
The company said its sees flat demand across automotive, industrial and medical markets in 4Q24 while the consumer market will show a seasonal slowdown. It expects revenue between €810 million and €910 million and for EBITDA and net profit to fall.
Capital expenditure for the full year 2024 is expected to be maintained at the level of previous guidance of €500 million to €550 million.
With regard to 2025 AMS-Osram says it expects a weak starter than seasonal and product mix effects with cyclical weakness in automotive to become “fully visible” in 1Q25, but with improvement during the year.
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