EANS-Adhoc: ams AG / ams reports first quarter revenues and adjusted operating (EBIT) margin in upper half of guidance range; Covid-19 effects within expectations, resilient profitability, strong cash flow ... EAE

Wednesday, 29. April 2020 07:13
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Selected financial information for the first quarter 2020

Annual Reports/Annual Report/Quarterly Report

Premstaetten - (PR title cont'd) ... generation; limited impact from Covid-19
expected in second quarter with expected revenues of USD 440-480 million and
adjusted operating (EBIT) margin of 17-20%; OSRAM acquisition on track supported
by successful equity raise; Annual Report 2019 published

Premstaetten, Austria (29 April 2020) -- ams (SIX: AMS), a leading worldwide
supplier of high performance sensor solutions, reports first quarter results
with revenues and adjusted operating (EBIT) margin in the upper half of the
guidance range. Driven by ams' consumer solutions, these positive results
demonstrate the strength of ams' business and its robust profitability in light
of the demanding Covid-19 situation. For the second quarter, ams expects a very
solid business performance with expected revenues of USD 440-480 million and an
adjusted operating (EBIT) margin in the range of 17-20%, reflecting a limited
impact from the Covid-19 outbreak.

First quarter group revenues were USD 501.2 million, above the mid-point of the
expectation range, which is an increase of 32% from USD 379.0 million in the
first quarter 2019 and a decrease of 23% sequentially compared to the fourth
quarter 2019. Adjusted gross margin for the first quarter was 39% (excluding
acquisition-related and share-based compensation costs) with IFRS reported gross
margin at 37% (including acquisition-related and share-based compensation
costs), up from 32% and 29% respectively in the same quarter 2019.

The adjusted result from operations (EBIT) for the first quarter was USD 101.0
million or 20% of revenues (excluding acquisition-related and share-based
compensation costs), fully in line with expectations, while increasing strongly
from USD 22.8 million in the same quarter 2019 (USD 59.8 million or 12% of
revenues including acquisition-related and share-based compensation costs, up
from USD -4.3 million in the same period 2019).

Adjusted net result for the first quarter was USD -17.0 million (excluding
valuation effect of the option element of the foreign currency convertible bond)
reflecting one-time expenses related to the recent capital increase and the
acquisition of OSRAM Licht AG (OSRAM), compared to USD -9.2 million for the same
period 2019 (first quarter 2020 including valuation effect: USD -16.4 million).
Adjusted basic/diluted earnings per share for the first quarter were CHF -0.20/-
0.05 or USD -0.21/-0.05 based on 82,689,261/89,625,077 shares (weighted average;
first quarter 2020 including valuation effect: CHF -0.19/-0.04 or USD -0.20/-
0.04; first quarter 2019: CHF -0.12/-0.12 or USD -0.11/-0.11 based on
80,235,377/81,864,338 shares, weighted average).

The operating cash flow for the first quarter reached USD 234.6 million,
significantly up from USD 93.3 million in the same quarter last year. Total
backlog on 31 March 2020 (excluding consignment stock agreements) stood at USD
255.5 million compared to USD 264.2 million at the end of 2019 and USD 280.1
million on 31 March 2019.

ams' business showed a very positive performance in the first quarter of 2020
with results fully in line with the guidance expectations. ams was able to
achieve this in spite of the different challenges posed by the evolving Covid-19
situation through the quarter, which ams has been able to manage well. The
safety and well-being of ams' staff is its key priority while ams works closely
with suppliers, customers and partners to mitigate the effects of Covid-19 on
its business. Importantly, ams would like to thank its employees worldwide for
their exemplary commitment and flexibility in this demanding situation. ams'
positive first quarter results were driven by demand and shipments of consumer
solutions that developed along expectations whereas the expected subdued demand
prevailed in ams' non-consumer markets.

ams' consumer business again contributed the largest share to its overall
revenues and results. ams' industry-leading portfolio in optical sensing
comprises high performance solutions for 3D sensing including VCSEL (Vertical
Cavity Surface-Emitting Laser)-based illumination, high quality display
management including behind-OLED sensing, micro-scale proximity sensing, bio-
and spectral sensing, and other optical applications. As the leading provider of
optical sensing solutions, ams' broad 3D sensing portfolio and system know-how
covers all architectures, structured light (SL), time-of-flight (ToF), and
active stereo vision (ASV), which enables ams to fully support customers'
technology choices and roadmaps.

Based on ams' advanced VCSEL portfolio and optics capabilities ams serves the
leading smartphone OEMs with a current main focus on 3D illumination for SL, ToF
and ASV in front-side and world-facing systems. Expanding its position in the
Android market, ams is shipping significant volumes of 3D sensing into a range
of high-end device platforms. Adoption of world-facing iToF 3D sensing continues
as the camera enhancement features these systems enable allow OEMs to offer
strongly improved picture quality. Driven by their market success, ams supplies
different VCSEL 3D illumination solutions into a range of platforms. At the same
time, ams is successfully extending its system capabilities and widening the
scope of its 3D offering through the integration of high quality NIR image
sensing via the SmartSens partnership. ams pursues NIR sensing solutions to
support several 3D architectures and front-facing use cases as its technology
can drive excellent application performance on multiple aspects including high
quantum efficiency (QE).

In display management, ams is seeing further adoption of its behind-OLED (BOLED)
light sensing solutions in high volume Android smartphone and mobile device
platforms including latest releases. This unmatched technology moves light and
proximity sensing invisibly behind the OLED display allowing vendors to remove
bezel-placed elements from the device front for maximized screen-to-body ratio.
ams' strong market success continues to be driven by leading Android OEMs while
ams moves along a multi-generation roadmap for this technology. All in all, ams
is shipping significant volumes of its wide range of advanced display management
solutions across the leading consumer OEMs.

ams has also started shipping its innovative sensor for highly accurate camera
automatic white balancing (AWB) into a newly launched high-end smartphone
platform as a first design-win. Based on its spectral sensing technology, the
solution performs detailed spectrum analysis of the light environment for
precise smartphone camera white balancing that was previously impossible.
Correct white balancing is a key photographic parameter driving picture quality
and color expression and ams enables significantly higher picture quality and
vivid natural colors for mobile devices. Given outstanding camera performance
with AWB sensing, ams is already engaged in additional customer designs. Taken
together, recent Android platform launches underline ams' strong market position
in new optical sensing applications such as BOLED light sensing, world-facing 3D
camera enhancement and novel AWB sensing for compelling photography.

ams remains focused on strong R&D investments for further innovation in optical
sensing. Leveraging its unmatched BOLED capabilities for 3D sensing, ams is
progressing with its development efforts to move front-facing 3D sensing for
face authentication invisibly behind the display. Based on ASV technology, ams
continues to expect to demonstrate a BOLED 3D solution in the second half of the
year. Here ams works to combine ams' VCSEL illumination, NIR sensing, software
and algorithms from its unmatched portfolio to create a high performance 3D
offering. As ams addresses the key trend to reduce visible components on the
device front ams expects significant market interest for 3D BOLED technology in
mobile devices. Generally, ams sees both ASV and SL technology able to support
BOLED 3D sensing and expects to explore all paths for innovation in this area.
In addition, ams views dToF technology as an important upcoming element in 3D
sensing that offers significant performance advantages for longer distances. As
3D applications continue to evolve and new use cases are being evaluated ams
sees widening market interest for the demanding technology. On the basis of its
illumination and sensing portfolio ams is advancing roadmap-based developments
in this attractive area to drive high quality dToF solutions for world-facing
applications. In audio sensing ams sees attractive traction for its high
performance noise cancelling technologies and solutions where ams has built a
strong market position. These include an innovative digital noise cancelling
capability for loose-fitting wireless earbuds. Together with its other consumer
product lines ams continues to ship substantial volumes following the disposal
of its microphone-related business at the end of 2019.

ams' automotive, industrial and medical businesses recorded a subdued
performance in the first quarter. In its automotive business ams is experiencing
negative order trends reflecting the current challenges to production in the
automotive industry. Despite this current development, ams is well positioned
with its automotive sensing solutions focused on attractive markets in safety,
driver assistance/autonomous driving, position sensing, and chassis control.
Significant R&D activities and development efforts continue unchanged across
these focus areas. This includes the previously announced LIDAR programs with
different Tier 1 system suppliers where ams offers leading VCSEL illumination
for advanced LIDAR architectures such as addressable high power VCSEL arrays.
The full automotive qualification of ams' internal VCSEL production line, where
ams is continuing a ramp-up through this year, provides a further competitive
advantage in this area. ams' developments and market traction for in-cabin
optical monitoring applications continue against the backdrop of increasing OEM
and Tier 1 supplier interest and first secured projects. This emerging market
offers attractive future opportunities for ams' system capabilities as shown by
its ASV-based full 3D system solution including NIR sensing and software which
ams showcased recently.

ams' industrial business showed a muted performance in the first quarter given
the challenges in industrial end markets worldwide. Nevertheless, ams' broad
product and application spectrum and leadership in high performance solutions
remain helpful in the current situation as ams serves a wide range of customers
in industrial and factory automation, HABA, imaging and other industrial
sensing. Industrial imaging and machine vision developed in line with end market
trends supported by ams' strong technology position in high quality global
shutter technologies. Leveraging its technology base, ams is strongly focusing
on the development of NIR image sensing solutions for 3D sensing markets.

ams' medical business performed well in the first quarter. As a result of the
Covid-19 crisis, ams is fulfilling additional demand to support the accelerated
deployment of computed tomography (CT) scanners worldwide which play a key role
in clinical Covid-19 diagnostics. This development will also help further ams'
market penetration across regions. Overall, ams' medical business benefits from
its leading position in medical imaging for CT, digital X-ray, and mammography
as well as miniature camera endoscopy. ams' medical product lines including
NanEye endoscopy therefore continued their attractive contributions. A further
innovative use of ams' unmatched spectral sensing technology is analyzing the
results of medical lateral flow testing (LFT) at very high accuracy via an
optical readout. In light of the current pandemic, ams is keen to exploit this
medical sensing expertise to help support Covid-19 control efforts. Based on
ams' current evaluation ams sees possibilities to accelerate advances in fast
point-of-care diagnostics for Covid-19 and will continue to pursue this path.
ams has started early co-operation activities with industry partners in medical
testing but remains highly interested and open for additional partnerships with
medical testing suppliers.

In operations, ams is taking all required and necessary measures to safeguard
the health of its employees as well as its ability to manufacture in all
locations. These measures have enabled ams to stay aligned with customer
requirements and to support customer demand in its end markets. Running volume
production in all manufacturing locations, ams works very closely with suppliers
and authorities to maximize availability for its customers. ams has also
implemented a risk mitigation regime for employees worldwide and is confident
these combined actions will allow ams to continue to navigate this situation
successfully. In parallel, ams is taking a prudent approach to short-term
capital expenditures and other costs without forfeiting its ability to support
rebounding demand later.

The acquisition of OSRAM remains fully on track and ams successfully completed
the related equity raise at the beginning of April. ams expects to use the gross
proceeds of around EUR 1.65 billion to finance a major share of the tender offer
consideration for OSRAM shareholders. ams is in the process of attaining
remaining required merger control clearances for the transaction and currently
expects the transaction to close by the end of the quarter subject to receipt of
these clearances. Including the shares ams anticipates to receive at closing ams
expects to hold around 68.2% of shares in OSRAM at that point in time.
Preparation activities for the expected integration of ams and OSRAM continue
and ams expects to start implementing the integration immediately following the

For the second quarter 2020, ams anticipates its business to show a very solid
performance in spite of the demanding Covid-19 situation and typical first half
seasonality. Consumer solutions and programs remain drivers of demand with
ongoing high volume shipments to a wide spectrum of OEMs and platforms including
recent launches. ams' non-consumer end markets are expected to be more strongly
impacted by the current situation while certain areas such as medical imaging
continue to provide positive effects.

On the basis of available information, ams expects second quarter revenues of
USD 440-480 million reflecting a limited impact from the Covid-19 situation and
a significant year-on-year increase compared to last year's second quarter of
11% at the midpoint. The adjusted operating (EBIT) margin for the second quarter
is expected at 17-20% despite anticipated Covid-19 effects on ams' business.

The expectations above assume no further unforeseen negative consequences of the
Covid-19 outbreak having a meaningful negative impact on ams' business for the
second quarter 2020. For reference, the revenue expectation above excludes
deconsolidated revenues of around USD 20-25 million per quarter which have been
deconsolidated as of year-end 2019.

The quarterly report for the first quarter 2020 including additional financial
information is available on the company website at https://ams.com/financial-
reports [https://ams.com/financial-reports]. Concurrently, ams has published the
Annual Report 2019 which is also available on the company website at https://
ams.com/financial-reports [https://ams.com/financial-reports].

About ams
ams is a global leader in the design and manufacture of advanced sensor
solutions. Our mission is to shape the world with sensor solutions by providing
a seamless interface between humans and technology.
ams' high-performance sensor solutions drive applications requiring small form
factor, low power, highest sensitivity and multi-sensor integration. Products
include sensor solutions, sensor ICs, interfaces and related software for
consumer, communications, industrial, medical, and automotive markets.
With headquarters in Austria, ams employs around 8,500 people globally and
serves more than 8,000 customers worldwide. ams is listed on the SIX Swiss stock
exchange (ticker symbol: AMS). More information about ams can be found at https:
//ams.com [https://ams.com/]
Join ams social media channels:
>Twitter [https://twitter.com/amsAnalog] >LinkedIn [https://www.linkedin.com/
company/ams-ag] >Facebook [https://www.facebook.com/amsAnalog] >YouTube [https:/

ams is a registered trademark of ams AG. In addition many of our products and
services are registered or filed trademarks of ams Group. All other company or
product names mentioned herein may be trademarks or registered trademarks of
their respective owners. Information provided in this press release is accurate
at time of publication and is subject to change without advance notice.

Further inquiry note:
Moritz M. Gmeiner
Vice President Investor Relations
Tel: +43 3136 500-31211
Fax: +43 3136 500-931211
Email: investor@ams.com

end of announcement                         euro adhoc

issuer:       ams AG
              Tobelbader Strasse   30
              A-8141 Premstaetten
phone:        +43 3136 500-0
FAX:          +43 3136 500-931211
mail:         investor@ams.com
WWW:          www.ams.com
ISIN:         AT0000A18XM4
stockmarkets: SIX Swiss Exchange
language:     English

EAX0004    2020-04-29/07:13

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