AMS Osram - comment

We will write a fuller email later in the day, but we don’t regret our decision to exit the name on the back of the euphoria of the refinancing plan in late September.  

The refinancing is not going to be easy, albeit the larger than expected sale and leaseback yesterday will aid the effort.  In addition the Company has reached its put option liability by acquiring an additional 3% of the shares (reduced to €616m from €748m), which is fully covered by an undrawn RCF of €800m expected to September 2026, subject to the rights issue.  

Q3 results were above our expectation and guidance, and with the Company reiterating their guidance for Q4, the stage is set for the refinancing.  Despite the solid numbers, the underlying market trends are challenging.  There is continuous weakness in the automotive and industrial markets and only slightly better market conditions in the Consumer market.  The outlook for 2024 is a tale of two halves, with sustained weakness in H1 including some inventory corrections, with the hope of stronger performance in H2 driven by new business wins and market recovery.