Austrian lighting and sensor supplier AMS Osram sees increased revenue from advanced LED technology as a pillar of its financial turnaround, as the company sheds nonessential businesses and looks to reduce elevated debt levels.
"We've realized that we need to get even more focused," CEO Aldo Kamper said on the Automotive News Daily Drive podcast. "Our strengths are clearly in the automotive space."
Kamper, who took over as AMS Osram's CEO in April, said the company's "renewed focus" on automotive is a key to its "Reestablish the Base" turnaround plan, which it implemented in July.
The company also supplies products for medical, industrial and consumer electronics industries. But next year, it intends to divest "noncore semiconductor businesses" worth between $329 million and $439 million annually.
Right-sizing
The turnaround plan comes about three years after Austrian sensor maker AMS acquired longtime German lights maker Osram Licht AG for 4.6 billion euros ($5 billion). But that acquisition came at a cost, as the new company piled up extensive debt that has become harder to address given higher interest rates.
AMS Osram said it had 2.3 billion euros ($2.5 billion) in net debt in the third quarter of this year, up from about 1.6 billion euros ($1.8 billion) a year earlier. The company said it lost about 55 million euros ($60.4 million) in the quarter, an improvement from the 370 million euros ($406 million) it lost in the third quarter of 2022, despite a 25 percent reduction in quarterly revenue.
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"We need to resize, to be sized appropriately for this new task at hand," Kamper said.
By addressing the company's debt issue, Kamper said, AMS Osram will be able to focus on executing its turnaround plan in the coming months, with growth in its automotive business driving much of that turnaround.
"There's a lot of exciting technology that's being put into the market," he said. "I think that can really show the true value that this company has."
Advanced tech
Automotive LED and sensor technologies figure to be a major growth area for the company moving forward, Kamper said. He noted that LED headlamps, once a high-end feature on luxury vehicles, have become an industry standard on about 75 percent of vehicles produced today, he said.
The number of LEDs and the sensors controlling them in any given new vehicle is expected to rise, particularly as new technologies are adopted. Kamper pointed to adaptive driving beams, which allow for high beams to be on at all times without blinding oncoming traffic by switching off pixels that would cause glare for the other driver.
In July, the company debuted a new multipixel LED, the EVIYOS 2.0, which can provide fully adaptive driving beam capabilities, as well as project images and safety warnings on the road ahead of the driver.
"It has the ability to highlight certain things," he said. "If the camera detects that there's a deer on the side of the road, you can light a deer with a bit more light."
Kamper said AMS Osram anticipates such innovative products will appeal to customers and automakers, helping to boost the supplier's bottom line.
"It makes people feel more safe," he said. "It adds tremendous value to the end customer, and it's an attractive proposition to sell."
