The developer of sensor solutions, ams, was able to increase sales and profit in the second quarter – despite the pandemic – due to the strong consumer business compared to the same period last year. Group sales in the second quarter were $ 460.3 million, 13% higher than in the same quarter last year. Sales in the first half of 2020 were $ 960.9 million, up 22 percent from $ 785.8 million in the same period last year. Adjusted gross profit margin in the second quarter was 40 percent (before acquisition-related and share-based compensation expense), an increase from 37 percent in the year-ago quarter. Adjusted gross profit margin in the first half of 2020 was 40% (before acquisition-related expense and share-based compensation expense), up from 35% in the first half of 2019 (37% including acquisition-related expense and share-based compensation expense was 32% in the first half of 2019) .
Adjusted operating income (EBIT) for the second quarter was $ 90.1 million, or 20% of sales (before acquisition-related and share-based compensation expense), up from $ 49.0 million in the previous year period ($ 39, 2 million, or 9% of sales, including acquisition-related expense and share-based compensation expense, up $ 21.5 million in the second quarter of 2019). Adjusted EBIT for the first half of 2020 was $ 191.0 million (before acquisition-related expense and expense for share-based compensation), up from $ 71.8 million in the prior-year period ($ 99.0 million including acquisition-related expense and expense) for share-based compensation, an increase from $ 17.1 million in the prior year period).
Adjusted net income for the second quarter was $ 56.8 million (adjusted for acquisition-related expense and share-based compensation expense) compared to $ 52.2 million in the year-ago quarter (Q2 2020: $ 5.9 million including acquisition-related expense and Share-based payment expenses). Adjusted net income for the first half of 2020 was $ 82.2 million (adjusted for acquisition-related expense and share-based compensation expense) compared to $ 70.2 million in the year-ago period (first half of 2020: -9.8 million without adjustment).
Against the backdrop of the ams and Osram merger, ams has defined a vision for the future company: to create the undisputed leading provider of optical solutions. For this purpose, ams is concentrating on the three areas of sensor technology, illumination and visualization and will offer new solutions for innovative applications. The aim of ams is to build an outstanding technology platform that combines strong profitability and growth. ams relies on ambitious technology investments for real innovation and an ongoing intelligent transformation of the company in line with its vision.
On the way to the merger, profitability, profit growth and cash flow are the primary focus of ams for all business areas and the combined company. Accordingly, ams is driving its strategic positioning and portfolio development in close coordination with these targets.
Looking ahead, ams sees a number of new sales opportunities and potential applications for optical sensors that ams is pursuing with the leading smartphone OEMs. These are based on the strong customer relationships and the intensive level of cooperation with all of these customers. ams is working to offer its customers new and better solutions that ams’ focus on high-quality innovation and differentiating technology makes possible.
For the third quarter of 2020, ams expects the ams business to grow very well on a sequential basis, despite the ongoing Covid 19 pandemic that is affecting the global economy and end markets of ams. This growth is based on ramp-ups of sensor solutions for smartphones, while ams’ non-consumer business in the automotive and industrial markets continues to experience limited demand and makes a limited contribution to the results. ams will fully consolidate Osram from the beginning of the third quarter of 2020 and intends to include Osram as a separate reporting segment. ams plans to continue its previous practice and to provide a financial outlook for the current quarter. However, due to the current structure of Osram’s financial outlook, the following financial outlook for the third quarter of 2020 only includes the ams business. For example, ams expects revenue for the ams business of $ 530-570 million in the third quarter, which is an increase of 20% compared to the previous quarter in relation to the middle of the expected range. This positive outlook is based on a strong consumer business, which compensates for the continuing weak demand in most of ams’ non-consumer business. Regardless of this situation, ams expects robust profitability in the third quarter with an expected adjusted operating (EBIT) margin of 21-24%.
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