AMS Osram - comment

Following last week’s divestment announcement, the Q&A was largely forward-looking, with analysts focused on understanding the shape and profitability of the remaining business. FY26 guidance points to a decline in reported revenue and EBITDA versus FY25, driven mainly by the impact of disposals. Management also highlighted that the Group will retain stranded costs post-divestment, which will act as a margin drag in FY26.

Management reiterated its view that the 2029 bonds will not be refinanced until FY27. 

Cost pressures were a key theme, with sharp increases in precious-metal prices, particularly gold, significantly impacting LED cost of goods sold. Gold price inflation impacted COGS by approximately €35m in FY25, with a further €60m headwind expected in FY26, assuming gold prices of around $5,000/oz. As a result, FY26 is framed as a transitional year, characterised by weaker reported profitability despite a leaner portfolio and an improved balance sheet, ahead of the full benefit of cost-saving initiatives in later years.

Turning to FY25, results were ahead of our expectations, with the Company continuing to outperform on cost savings. Revenue also exceeded our forecasts, as the weaker USD had a smaller-than-anticipated impact. However, the investment focus has shifted to the smaller, post-divestment business, and we will revisit our model to better assess the effects of FX movements and gold price inflation on our projections.