- 27.09.2023, 18:51:25
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- EQS0003
EQS-Adhoc: ams-OSRAM AG: ams OSRAM to secure long-term stable financial base for structural growth
EQS-Ad-hoc: ams-OSRAM AG / Key word(s): Financing
ams-OSRAM AG: ams OSRAM to secure long-term stable financial base for
structural growth
27-Sep-2023 / 18:50 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the
Regulation (EU) No 596/2014, transmitted by EQS News - a service of EQS
Group AG.
The issuer is solely responsible for the content of this announcement.
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Ad hoc Announcement pursuant to Art. 53 Listing Rules of SIX Swiss
Exchange
-------------------------------------------------------
Not for distribution or release, directly or indirectly, in or into the
United States, Australia, Canada or Japan or any other jurisdiction in
which such distribution or release would be unlawful
ams OSRAM to secure long-term stable financial base for structural growth
• Combination of a rights issue, senior unsecured notes and other
financial instruments, in total EUR 2.25bn, covering all expected
financing needs until 2025/26.
• Financing of around EUR 1.9bn (out of total EUR 2.25bn) in fall/winter
2023/24:
• a rights issue of EUR 800m, for approval at Extraordinary General
Meeting (EGM) on 20-Oct-2023,
• a new issuance of senior unsecured notes of around EUR 800m, and
• asset-level financings of around EUR 300m.
• Additional debt instruments of around EUR 350m will complete the
package in 2024 in a mix subject to market conditions.
• Comprehensive financing plan to increase equity ratio to approx. 30%
and to reduce debt, with the aim of achieving investment grade profile
by 2026.
• Q3 profitability expected to reach the upper end of the guided range
of 5% - 8% adjusted EBIT, Q3 guidance for revenues of EUR 840m to 940m
reconfirmed.
Premstaetten, Austria, and Munich, Germany (27 September 2023) -- ams
OSRAM (SIX: AMS) plans to strengthen its balance sheet for structural
growth targeting investment grade profile.
The company plans to secure a total of EUR 2.25 billion through the
combination of a capital increase, new corporate bonds, and other
financing instruments.
“Step by step we deliver what we have outlined. Firstly, we have sharpened
our strategy towards structural growth. Secondly, we are cleaning-up our
semiconductor portfolio by exiting non-performing businesses. Thirdly, we
are making our organization efficient and accountable. The foundation for
‘re-establishing the base’ of ams OSRAM is having a solid and sustainable
capital structure. With the holistic financing plan we present today, we
aim to put our balance sheet on a solid footing, such that we can fully
concentrate on executing our strategy for growth, higher profitability and
monetizing innovation”, says Aldo Kamper, CEO of ams OSRAM.
The comprehensive financing follows a multi-stage plan: A proposed rights
issue in the amount of EUR 800 million will be combined with an issuance
of senior unsecured notes in EUR and USD, which are expected to raise a
total of around EUR 800 million. The volume of the capital increase, which
is scheduled for approval at an Extraordinary Shareholders meeting on
October 20^th, 2023, is underwritten by the banks HSBC, Morgan Stanley and
UBS. In addition, ams OSRAM expects to execute certain asset transactions,
such as sale and lease backs of corporate assets to keep overall borrowing
cost lower in a high interest environment, in winter 2023/24. The total
financing package is expected to be completed next year with an additional
EUR 350 million in a mix of debt instruments, such as unsecured notes,
bi-lateral debt facilities, or other instruments – the mix will be subject
to market conditions.
“The multi-element financing plan is designed to strengthen the balance
sheet of ams OSRAM. Our comprehensive plan consists of new equity to
reduce gross and net debt as well as new senior notes to refinance
additional outstanding debt with a well-balanced maturity profile. We will
also use additional financing instruments, such as sale & lease back
transactions, with the aim of bringing the company on track to reach a
healthy investment grade leverage.”, said Rainer Irle, CFO of ams OSRAM.
The financing plan creates a solid base for the strategic realignment of
ams OSRAM. The company is focusing its semiconductor portfolio on its
profitable core business with intelligent sensor and emitter components.
In doing so, the company aims to expand its leading position in the
relevant automotive, industrial, and medical sectors. This will be
complemented by selected, highly innovative offerings for the consumer
electronics markets, such as micro-LED. The Automotive & Specialty Lamps
segment continues to be an important part of the Group after its portfolio
was cleaned up and is delivering sustainable double-digit adj. EBIT
margins.
The new strategy and the associated efficiency program ‘Re-establish the
Base’ aim to align the Group with the focused semi-conductor portfolio and
to strengthen profitability with expected run-rate savings of around EUR
150 million by end of 2025. ams OSRAM is well on the track for achieving
this. The organizational adjustments to strengthen accountability and to
make the set-up leaner (e.g. reducing from 4 to 3 business units) are
close to being fully implemented. Preparations are progressing for the
exit of the passive optical components business, which is no longer part
of the core business. Initial talks with interested parties are promising.
Potential proceeds from a sale of the non-core semiconductor portfolio
could also be used to reduce leverage.
Details of the financing plan fall/winter 2023/24 - Extraordinary General
Meeting for Rights Issue
ams OSRAM invites its shareholders to an Extraordinary General Meeting in
Premstaetten, Austria, on October 20, 2023, to ask its shareholders for
approval to increase the capital ([1]link to EGM details). By issuing
subscription rights, shareholders will have the opportunity to buy
additional shares at a discount, preserving their value share in ams
OSRAM, or sell their respective rights. The proceeds from the Rights Issue
are designated primarily for reduction of gross debt.
Placement and later repurchase of treasury shares
ams OSRAM intends to sell its entire self-held 12.86 million of treasury
shares prior to the start of the rights issue. Under Austrian corporate
law, the company’s treasury shares are not entitled to subscription rights
in the event of a capital increase. Essentially, the sale is a technical
measure to avoid automatic dilution. Consequently, ams OSRAM intends to
repurchase treasury shares in the market after successful execution of the
rights issue to cover outstanding obligations under its long-term
incentive programs. Details of this public share buyback program will be
determined by the Management and the Supervisory Board and communicated in
due time.
Senior unsecured notes
The company plans to issue senior unsecured notes (mix of EUR, USD and
potentially staggered maturities) with a total volume of around EUR 800
million in 2023. The new issuance is interlinked with the Rights Issue.
Any new bond issuance could also be combined with a tender offer for the
outstanding senior notes to optimize the debt structure and interest costs
and allow existing bondholders to roll over their risk exposure.
Assets transactions to optimize borrowing cost
In view of the increased interest rate level compared to 2020, the company
plans asset transactions, including, for example selling certain company
assets and subsequently leasing them back. The implicit borrowing costs of
such transactions are typically lower compared to straight debt financing
and thus be designed to optimize overall borrowing costs under the planned
financing package. These transactions are planned to be of the order of
EUR 300 million and further details will be published once contracts have
been signed.
Extension of the Revolving Credit Facility (RCF) and OSRAM Licht AG
minority share holdings
ams OSRAM’s core relationship banks are expected to extend the currently
undrawn EUR 800 million RCF by one year to September 2026. The RCF mainly
serves as a backstop for the outstanding put options of the OSRAM Licht AG
minority shareholders. The put options (including compounded interest)
stood at EUR 748 million as of 30 June 2023, representing around 17% of
total shares outstanding.
State funding or grants
The company has received confirmation for grants and support by state
entities showing confidence in its innovation and industrialization power
(e.g. IPCEI [2]link and MIDA [3]link) and will continue to apply under
eligible schemes globally. All governmental grants combined, the company
expects a high triple digit million EUR amount of support until 2033. Such
support is typically tied to certain milestones that need to be achieved
per scheme. These fundings allow the company to accelerate the related
technology developments as they typically support research & development
expenditures or partially cover investments in property, plant & equipment
and are reflected in the company’s business plans.
Pro-forma Equity Ratio at approx. 30% after implementing complete
financing plan
Upon completion of all financing measures, ams OSRAM will have
strengthened the balance sheet, with an expected pro-forma equity ratio of
approximately 30% (compared to 18 percent in June 2023) and a smoother
debt maturity profile. The equity ratio is defined as equity to total
assets ratio. The financing would result in a pro-forma group leverage
ratio as of Q2 2023 below 2x, defined as net debt / adjusted EBITDA. The
company will work towards fulfilling all requirements for achieving
investment grade over time.
Change in Supervisory Board
The EGM will also be asked to elect Arunjai Mittal to the Supervisory
Board of the company in a by-election after Dr Wolfgang Leitner resigned
from the board in early September 2023 due to personal reasons. Arunjai
has over 30 years of experience in the industry ([4]link to CV). He will
further strengthen the technology and industry expertise of the
Supervisory Board.
Conference calls for Investors, Analysts and Press
ams OSRAM will host a conference call for analysts and investors as well
as a press call on the announced holistic financing plan on Thursday, 28
September 2023. The conference call for analysts and investors will start
at 9.00am CEST and can be joined via [5]webcast. The press call will take
place at 10.15am CEST, journalists who would like to join the press call
can register [6]here.
Disclaimer
This announcement constitutes neither an offer to sell nor a solicitation
to buy securities. Any offer regarding any publicly offered securities of
ams-OSRAM AG (“ams-OSRAM AG” or the “Company,” and together with its
subsidiaries, the “Group”) in Austria will be made solely by means of, and
on the basis of, a securities prospectus (including any supplements
thereto, if any) to be approved by the Austrian Financial Market Authority
(Finanzmarktaufsichtsbehörde, the “FMA”) and to be published in accordance
with the Regulation (EU) 2017/1129 (the “Prospectus Regulation”) on the
website of the Company (www.ams-osram.com). An investment decision
regarding any publicly offered securities of ams-OSRAM AG should only be
made on the basis of a prospectus. Any orders relating to securities of
ams-OSRAM AG received prior to the commencement of a public offering will
be rejected. If a public offering is to be made in Austria, a securities
prospectus will be published promptly upon approval by FMA in accordance
with the Prospectus Regulation and will be available free of charge from
ams-OSRAM AG during usual business hours, or on the ams-OSRAM AG website.
This announcement is not a prospectus according to Articles 35 et seqq. of
the Swiss Financial Services Act (the “FinSA”) and as such does not
constitute an offer to sell nor a solicitation to buy securities of
ams-OSRAM AG or any other company. This announcement is made for
information purposes only and shall not constitute investment advice. Any
offer regarding any publicly offered securities of ams-OSRAM AG in
Switzerland will be solely made by means of, and on the basis of, a
prospectus (including any supplements thereto, if any) that is deemed
approved in Switzerland without additional approval procedure in
accordance with the FinSA, which will be made available free of charge
from ams-OSRAM AG and UBS AG during regular business hours, or on the
ams-OSRAM AG website prior to the public offering. An investment decision
regarding any publicly offered securities of ams-OSRAM AG should only be
made on the basis of the prospectus published for such purpose.
This announcement is not for distribution or release, directly or
indirectly, in or into the United States (including its territories and
possessions, any State of the United States and the District of Columbia),
Australia, Canada, Japan or any other jurisdiction in which such
distribution or release would be unlawful. This announcement does not
constitute or form a part of any offer or solicitation to purchase or
subscribe for securities in the United States, Australia, Canada or Japan,
or any other jurisdiction in which such offer or solicitation may be
unlawful. Any failure to comply with these restrictions may constitute a
violation of United States, Canadian, Australian, Japanese or other
applicable securities laws. The securities mentioned herein have not been,
and will not be, registered under the US Securities Act of 1933, as
amended (the “Securities Act”). The securities may not be offered or sold
in the United States, absent registration or an exemption from the
registration requirements of the Securities Act. There will be no public
offer of the securities in the United States.
This announcement is not a prospectus for the purposes of Prospectus
Regulation or Regulation (EU) 2017/1129 as it forms part of domestic law
in the United Kingdom by virtue of the European Union (Withdrawal) Act
2018 (the “UK Prospectus Regulation”) but an advertisement for the
purposes of the Prospectus Regulation and the UK Prospectus Regulation,
and as such does not constitute an offer to sell or the solicitation of an
offer to purchase securities of ams-OSRAM AG. Investors should not
subscribe for any securities referred to in this document except on the
basis of the information contained in any prospectus relating to the
securities, the former of which may be published by the Company in final
form on its website (www.ams-osram.com). Any such prospectus would include
a description of risk factors in relation to an investment in the Group.
You should conduct your own independent analysis of all relevant data
provided in any prospectus and you are advised to obtain independent
expert advice as to the legal, tax, accounting, financial, credit and
other related aspects before making any investment decision.
The information set forth in this announcement is only addressed to and
directed at persons in member states of the European Economic Area (each a
“Relevant State”) who are “qualified investors” within the meaning of
Article 2(e) of the Prospectus Regulation (“Qualified Investors”). In the
case of the United Kingdom, such information is only addressed to and
directed at and is only being distributed to "qualified investors" within
the meaning of the UK Prospectus Regulation who are (i) ”investment
professionals” within the meaning of Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the
“Order”); (ii) high net worth companies, and other persons to whom it may
otherwise lawfully be communicated falling within Article 49(2)(a) to (d)
of the Order, or (iii) persons to whom it may otherwise lawfully be
communicated (all such persons together being referred to as “Relevant
Persons”). The information in this announcement must not be acted on or
relied on (i) in the United Kingdom, by persons who are not Relevant
Persons, and (ii) in any Relevant State, by persons who are not Qualified
Investors. Any investment or investment activity to which the information
in this announcement relates is available only to or will be engaged in
only with, (i) Relevant Persons in the United Kingdom, and (ii) Qualified
Investors in any Relevant State.
No representation, warranty or undertaking, express or implied, is made by
the Group, its shareholders, HSBC, Morgan Stanley or UBS (the “Banks”) or
any of the Group’s, its shareholders’ or the Bank’s respective affiliates
or any of its or their respective directors, officers, employees or agents
(the “Representatives”) or any other person as to, and no reliance should
be placed on, the fairness, accuracy, completeness or correctness of the
information set forth in this announcement or the opinions contained
therein or any other statement made or purported to be made in connection
with the Company or the Group, for any purpose whatsoever. No
responsibility, obligation or liability whatsoever, whether arising in
tort, contract or otherwise, is or will be accepted by the Group, the
Company, its shareholders or the Banks or any of their respective
Representatives or any other person for any loss, cost or damage howsoever
arising from any use of the information contained in this announcement, or
for information or opinions or for any errors, omissions or misstatements
contained therein or otherwise arising in connection therewith.
The information in this announcement is of an abbreviated nature and is
subject to updating, revision, amendment, verification, correction,
completion and change without notice. None of the Group, the Company, its
shareholders, the Banks or any of their respective Representatives or any
other person undertakes any obligation to provide the attendee or
recipient with access to any additional information or to update the
information in this announcement or to correct any inaccuracies in any
such information, including any financial data or forward-looking
statements. Such information should be considered in the context of the
circumstances prevailing at the time and has not been, and will not be,
updated to reflect material developments which may occur after the date
thereof. None of the Group, the Company, its shareholders, the Banks or
any of their respective Representatives have independently verified any of
the information in this announcement.
This announcement may contain statements about ams-OSRAM AG or the Group
that are or may constitute or include forward-looking statements.
Forward-looking statements are statements that are not historical facts
and may be identified by words such as “plans”, “targets”, “aims”,
“believes”, “expects”, “anticipates”, “intends”, “estimates”, “will”,
“may”, “continues”, “should” and similar expressions. These
forward-looking statements reflect, at the time made, the Group’s beliefs,
intentions and current targets/aims concerning, among other things, the
Company’s or the Group’s results of operations, financial condition,
liquidity, prospects, growth and strategies. Forward-looking statements
include statements regarding: objectives, goals, strategies, outlook and
growth prospects; future plans, events or performance and potential for
future growth; economic outlook and industry trends; developments of the
Company’s or the Group’s markets; and the strength of the Company’s or any
other member of the Group’s competitors. Forward-looking statements
involve risks and uncertainties because they relate to events and depend
on circumstances that may or may not occur in the future. The
forward-looking statements in this announcement are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management’s examination of historical
operating trends, data contained in the Group’s records and other data
available from third parties. Although the Group believes that these
assumptions were reasonable when made, these assumptions are inherently
subject to significant known and unknown risks, uncertainties,
contingencies and other important factors which are difficult or
impossible to predict and are beyond its control. Forward-looking
statements are not guarantees of future performance and such risks,
uncertainties, contingencies and other important factors could cause the
actual outcomes and the results of operations, financial condition and
liquidity of the Company and other members of the Group or the industry to
differ materially from those results expressed or implied in this
announcement by such forward-looking statements. No assurances can be
given that the forward-looking statements will be realized. The
forward-looking statements speak only as of the date of this announcement.
The Group expressly disclaims any obligation or undertaking to release any
updates or revisions to any forward-looking statements to reflect any
change in the Group’s expectations with regard thereto or any changes in
events, conditions or circumstances on which any forward-looking
statements are based. No representation or warranty is made that any of
these forward-looking statements or forecasts will come to pass or that
any forecast result will be achieved. Undue influence should not be given
to, and no reliance should be placed on, any forward-looking statement.
The Banks are acting only for the Company and no one else, will not regard
any person (whether or not a recipient of this announcement) other than
the Company as a client, and will not be responsible to anyone other than
the Company for providing the protections afforded to their respective
clients, and will not be responsible for providing advice to anyone in
relation to the transactions described herein, or other matter or
arrangement referred to in this document.
About ams OSRAM
The ams OSRAM Group (SIX: AMS) is a global leader in intelligent sensors
and emitters. By adding intelligence to light and passion to innovation,
we enrich people’s lives.
With over 110 years of combined history, our core is defined by
imagination, deep engineering expertise and the ability to provide global
industrial capacity in sensor and light technologies. We create exciting
innovations that enable our customers in the automotive, industrial,
medical and consumer markets maintain their competitive edge and drive
innovation that meaningfully improves the quality of life in terms of
health, safety and convenience, while reducing impact on the environment.
Our around 21,000 employees worldwide focus on innovation across sensing,
illumination and visualization to make journeys safer, medical diagnosis
more accurate and daily moments in communication a richer experience. Our
work creates technology for breakthrough applications, which is reflected
in over 15,000 patents granted and applied. Headquartered in
Premstaetten/Graz (Austria) with a co-headquarters in Munich (Germany),
the group achieved over EUR 4.8 billion revenues in 2022 and is listed as
ams-OSRAM AG on the SIX Swiss Exchange (ISIN: AT0000A18XM4).
Find out more about us on [7]https://ams-osram.com
ams is a registered trademark of ams-OSRAM AG. In addition many of our
products and services are registered or filed trademarks of ams OSRAM
Group. All other company or product names mentioned herein may be
trademarks or registered trademarks of their respective owners.
Join ams OSRAM social media channels: [8]>Twitter [9]>LinkedIn
[10]>Facebook [11]>YouTube
End of Inside Information
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27-Sep-2023 CET/CEST News transmitted by EQS Group AG. www.eqs.com
══════════════════════════════════════════════════════════════════════════
Language: English
Company: ams-OSRAM AG
Tobelbader Straße 30
8141 Premstaetten
Austria
Phone: +43 3136 500-0
E-mail: investor@ams-osram.com
Internet: https://ams-osram.com/
ISIN: AT0000A18XM4
WKN: A118Z8
Listed: Regulated Unofficial Market in Berlin, Dusseldorf, Frankfurt,
Munich, Stuttgart, Tradegate Exchange; BX, SIX, Vienna Stock
Exchange (Vienna MTF)
EQS News ID: 1736079
End of Announcement EQS News Service
1736079 27-Sep-2023 CET/CEST
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