ams-OSRAM AG (AMS) Q4 FY2025 Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Debt Investor Conference Call and Live Webcast on Fourth Quarter and Full Year 2025 results. I'm Serge the Chorus Call operator. [Operator Instructions] The conference is being recorded. The conference must not be recorded for publication or broadcast. [Operator Instructions] At this time, it's my pleasure to hand over to Juergen Rebel, Head of Investor Relations. Please go ahead.

Hello, good afternoon. This is Juergen speaking. Welcome to today's call on our Fourth Quarter and Full Fiscal '25 results for credit investors. Rainer, our CFO, will walk you through the Q4 earnings call presentation that you can find on our website as well. Rainer, stage is yours.

Thank you, Juergen, and good afternoon, everyone, from my side. Let's start on Slide 3. '25 was another year of disciplined execution. We built a stable foundation for further expansion as a leader in Digital Photonics. Our core semi portfolio grew 7% year-on-year underlining the strength of our focused positioning. And importantly, for the first time ever, ams-OSRAM holds the #1 position in the global LED market, a significant strategic milestone. . Design win traction remained excellent with more than EUR 5 billion in new lifetime value added to the pipeline. Profitability improved again. Adjusted EBITDA margin up 1.5 percentage points year-on-year. driven by accelerated execution of the reestablished base program despite significant cost headwinds 1 year ahead of plan. We also delivered EUR 144 million free cash flow, including interest paid. On top of that, our deleveraging plan progressed strongly. Two portfolio transactions announced as of last week with proceeds of EUR 670 million and pro forma leverage at 2.5x. On to Slide 4. Q4 was a strong quarter. Revenues and adjusted EBITDA came in, in the upper end of our guidance, a clear beat, thanks to the super strong aftermarket lamps business. Revenue stayed almost compared to last year flat at first glance, but bear in mind, the weaker dollar cost us around EUR 55 million top line versus last year. Adjusted EBITDA increased 7% year-on-year despite FX headwinds driven by the continued cost savings of Re-establish the Base. Let's move to Slide 5. Looking at the segments. OS held up okay in a seasonally weaker quarter. Revenue dipped a bit more than what you would normally expect. I will comment on auto on the next slide. Margin dropped broadly in line with fall-through but is still 5 percentage points higher than a year ago. CSA showed resilience after the typical peak in the third quarter, driven by good demand for custom sensor products for consumer handhelds and better industry medical revenues compared to a year ago. Revenues were broadly stable quarter-on-quarter and slightly up compared to a year ago. However, adjusted EBITDA margins were down both sequentially and compared to a year ago. An unfortunate product mix, coupled with a strong impact from the weaker U.S. dollar and some inventory cleanup effects were the reason for this. Lamps & Systems saw an exceptionally strong seasonal upswing. Aftermarket demand went through the roof as customers flooded us with short notice orders after our closest competitor fell into financial troubles, we are trying to turn some of this into long-term business for sure. Specialty Lamps contributed for the last time for a full quarter before closing the transaction with Ushio later in this quarter. In line with fall-through, profitability was up more than 80% compared to Q3. Overall, a good quarter across the portfolio. Let's now take a closer look at the semiconductor business. I am Slide 6. If you look through the weaker dollar and the noncore portfolio contribution, the clean core portfolio grew exactly in line with our semi target operating model, 8% year-on-year. The noncore portfolio was expected to be fully phased out latest by Q1 last year. However, customers kept ordering and ordering for this, it still contributed a high double-digit million Euro revenue last year. This page highlights the underlying resilience of our semiconductor business. In automotive, we saw a sequential decline mostly seasonal. The automotive supply chain continues to operate with extremely lean inventories and the competitive environment driven by the kind of war amongst the OEMs is unchanged. Although difficult to quantify the so-called Nexperia chip crisis, at the beginning of last quarter, certainly had some negative impact on order intake as well. Year-over-year softness is basically due to FX, the order pattern I just mentioned, and that no real restocking in the supply chain happens. Industrial & Medical, this vertical is gradually improving. We are not out of the woods yet, but indicators are trending in the right direction. Orders in Industrial Automation and Medical came in a bit stronger, balancing the seasonal decline in horticulture, for example. And finally, consumer typical Q4 seasonal decline plus U.S. dollar effect and the exit of the noncore portfolio. And now let's have a look on Slide 7. We delivered EUR 144 million free cash flow. Adjusted for the onetime cash in from changing the employee pension fund setup. Free cash flow above EUR 100 million as we had promised. That includes a high double-digit million euro inflow from the Austrian chip sector. The same is true for the full year number, EUR 144 million free cash flow when adjusting for the pension financing, as just described. CapEx remained disciplined, well below the 8% target. With that, let us take a look at liquidity and the maturity profile on the next slide. With a strong cash flow in Q4 and the inflow from the change in the pension fund set up, our cash on hand was close to EUR 1.5 billion and the available liquidity position rose to around EUR 2.2 billion, backed by a diversified mix of instruments, cash revolver and bilateral lines. In December, we also rolled EUR 100 million bank loan to '27. In January, we completed a EUR 200 million buyback of the outstanding '27 convertible, including the expected proceeds from the two announced transactions, we have already today sufficient funds to repay both the convertible bond due in '27 and the OSRAM minorities. This sets the stage for refinancing our high-yield maturities at improved terms. Slide 9 shows how the company has been progressing despite major headwinds from currency. Automotive supply chain pattern changes, precious metal and raw material price increases, et cetera. Our IFRS top line declined by 3% year-on-year, but it's worth looking deeper. EUR 100 million FX impact and the more than EUR 100 million noncore portfolio needs to be considered. With that in mind, the underlying core portfolio would have been up 4%. That is especially true when we look at our semiconductor segment. The core portfolio for grew by 7% year-on-year at constant currencies, in line with our midterm growth ambition. The year-on-year decline in Lamps & Systems stems mostly from two topics. The decline in the OEM business in line with the lower number of factor in new cars with traditional lamps and the Q2 supply chain adjustment after Liberation Day. On top, the weaker U.S. dollar also weighed a bit on top line. Adjusted EBITDA margin improved meaningfully, thanks to the implementation of the Re-establish the Base run rate savings 1 year ahead of plan. Cost headwinds have been heavy, gold, silver, rare earth and the top line impact from the weaker dollar. Let's move to Slide 10. A key highlight. One that has also been a personal ambition for Aldo for more decades, ams-OSRAM is now ranked #1 packaged LED supplier globally by value. We now clearly surpassed our long-term rival to the crown each year. Helped by a weaker yen, but primarily by better relative performance in the marketplace last year. This further strengthens our position with automotive OEMs, professionally lighting customers and in emerging markets such as micro emitters. On to Slide 11, Design win performance. Last year was again a great year for winning new business, underpinning our semiconductor growth model. Lately reached more than EUR 5 billion. Again, the third year in a row with EUR 5 billion. After strong Q3, we also booked more than EUR 1 billion design wins in the last quarter. On the slide, we show outstanding design wins with triple-digit million euro lifetime value. In consumer projects in display management and camera enhancement accumulated hundreds of millions. In automotive, EVIYOS, an intelligent RGB ambient lighting projects stood out and professional lighting and medical imaging design wins contributed exceptionally. The example shown demonstrates the strong structure and momentum in our business. Design wins today are the revenues of tomorrow. And our pipeline is very healthy, underpinning our growth ambitions in the semiconductor core business and along the avenues of our key emerging Digital Photonics applications. Slide 12 shows the next wave of structure improvements. thanks to great execution of our teams, reservice base delivered its savings 1 year early, EUR 220 million. This is a huge success, but we have to get more ambitious in view of the persisting headwinds. We're sharpening our profile towards the clear leader in Digital Photonics, we also want to transform the way we work and thereby saving additional EUR 200 million of annual cost. Cost, speed, agility are our guiding principle as we reshape our operating model. We want to further reduce overhead, which includes addressing stranded costs of the divestment. We want to improve our manufacturing cost by transferring production of established products to Asia and the productivity push through automation. We are developing cost-optimized product platform. Also product development shall become cheaper and more efficient by developing maturing product families in Asia. The expensive European resources are focusing on advanced Digital Photonics topics. In total, around 2,000 colleagues will be affected, half of them in Europe. Certainly, we also want to get our share of productivity improvement by rolling out AI. Now let us turn to Slide 13. Last April, we communicated our accelerated deleveraging plan. Since then, we have made strong progress. First, improving the structural profitability. As I just explained, we implemented Re-establish the Base savings 1 year ahead of plan that launching the new program, Simplify. Second, generating proceeds well above EUR 500 million from divestments. We delivered. We'll get EUR 670 million in cash from the two transactions that we have announced. The sale of the specialty lamps business to Ushio and the sale of the non-optical sensor business to Infineon. The transaction will also result in a onetime profit of about EUR 450 million to EUR 500 million. But the solution for the Kulim-2 is on leaseback, we continue working hard on that. There's always been interest discussions intensified recently but it is really too early to call when exactly we will see a deal. But we are fully convinced that it will be a solution. We have always delivered so far and have no intention to change that. On a pro forma basis, the leverage has significantly improved and will show you -- as I will show you in a minute, but the solution for the sale leaseback and fixing some of the stranded costs of that factory might be needed to really get below 2. Nevertheless, I'm convinced that we will be able to refinance the senior notes much cheaper to bring interest costs down, the key impediment for strong free cash flow performance. After refinancing the high-yield bond, it is now likely that we land at below EUR 150 million annual interest cost. On Slide 15, you see the impact of the transactions and our leverage. We discussed the update of our balance sheet as of December 25 early in the presentation. With that, on a pro forma basis, including the divestment proceeds, the leverage drops from 3.3x to 2.5x. Excluding the OSRAM put options, net debt would stand at around EUR 850 million, implying a 1.6x leverage. This is a major step forward and the prerequisite to refinancing our 29 maturities at lower costs. And on the next slide, summarizing our transformation journey, as Aldo outlined last week in detail when we announced the sale of our non-optical sensor business to Infineon. The path consists of three phases. From '23 to '25, we stabilized and refocused the company, divestments, portfolio sharpening, reestablished the base refinancing. '26 will be a transition year. Reflecting the deconsolidation of all businesses and temporary stranded costs. We'll have a temporary drop in adjusted EBITDA due to several one-off effects. For this and for making the company over more efficient and more agile, we launched a new program, Simplify. Also financing costs remained high in' '26, approximately EUR 250 million to EUR 300 million until the refinancing of the senior notes, which we have on the radar for '27. And then from 27 onwards, we enter the growth in value creation piece. We want to see growth in the core business and growth along the lines of the existing and new Digital Photonics applications. Highly pixelated forward lighting, micro emitter projection areas and spectral bio and distance sensing. Based on the Simplify program and growth, we will see margin expansion. With growing profitability and a solution for the Kulim-2 sale and leaseback. We will have a fully healthy balance sheet with a leverage below 2. And we want to see our financing cost below EUR 150 million and the low run rate of restructuring cost, that is the basis to deliver strong free cash flow well above EUR 200 million. Before on Slide 16, I believe -- that before we move on to the exciting growth avenues of some of our Digital Photonics projects, we have to look a bit deeper in one aspect of the transition phase. Precious metal prices namely gold. Gold is an important material in the production of LEDs. You need it for -- I mean, if you want to put it simply for corrosion-free mirrors to get the light out of the [ AP ] layers. In normal years, this added to the COGS bill a double -- high double-digit million euro figure. But the unprecedented gold rally that accelerates in '25, that costs an additional EUR 35 million in '25, but 2% margin for OS. The price curve has taken an exponential shape, as you can see on the left. The peak has come down the last 10 days, but when assuming an average price around USD 5,000 per ounce, we have another EUR 60 million cost add-on compared to '25. That would be a 4% margin impact for us and around 2% for the group. Now we are mitigating that as best as we can. So first of all, we have now good hedging position. So the remaining risk is relatively low, even it would further go up. And we are reducing the consumption of precious metal usage by redesigning our product. Now that doesn't go overnight. That takes a few days, but that will reduce our consumption significantly. And we are launching the Simplify program. I hate to say that on top of the divestments and the strain across the gold price and precious metal prices overall will weigh further on margins and adjusted EBITDA in '26. With that, some words on the Digital Photonics growth vectors that will kick in step by step and that we presented in detail last week. And we are on Slide 17. Digital Photonics is opening multiple highly attractive growth avenues across both emitters and sensors. On the emitter side, micro emitter arrays are transforming three key markets. Advanced automotive lighting is a bias, where we already ship the volume and hold the clear design when lead. Ultracompact RGB micro emitter arrays enabling bright power-efficient AR displays, for the next-generation smart glasses. And finally, the multichannel micrometer based optical links for AI data center, that's called wide and slow, that interconnected offer superior energy efficiency and unlock future chip-to-chip optical architectures. For each of these, we see additional revenue potential and triple-digit million euro territory, over a staggered period of time. On the sensor side, we are equally well positioned. Spectral sensing is already today a triple-digit million business, and we see it growing further. Anchored in premium smartphones and expanding further with new product generations and the rise of foldables. Biosensing continues to scale as variables at more optical measurable biomarkers, creating incremental double-digit million opportunities. And finally, multi-zone direct time-of-flight centers brings high-precision 3D awareness to smart devices, robotics and emerging humanoid platforms with adoption curve that could drive significant revenues by 2030 and beyond. Also on the center side, we see additional revenue potential of double-digit million euros, in some cases, triple digit long term. Together, these fixed vectors demonstrate how our unique portfolio of emitter and sensor technologies positions us at the center of major global megatrends. Automotive safety, AR, AI compute personal health and intelligent robotics, each offering meaningful, scalable and compounding growth potential. Now let's quickly revisit our financial target for 2030 that we published last week. In Slide 18. This slide sets out our over-the-cycle 2030 target operating model once divestments, including cooling to deleveraging corporate simplification and debt refinancing are complete and with the new applications contributing to growth. With semiconductors, we target mid- to high single-digit revenue growth starting in '27 based on a variety of growth vectors that I just talked about and an adjusted EBITDA margin of more than 25%. Traditional auto lamps contributing to the group as illustrated on the right-hand side are expected to be flat, acting as a reliable cash source that helps fund the semiconductor transition and growth. We target consistently an adjusted EBITDA margin between 13% and 15%. With that, we target for the group a CapEx ratio of up to 8% of sales, which should end up typically lower than that. A group free cash flow of well above EUR 200 million post refinancing and a net debt to adjusted EBITDA ratio below 2. These are over the cycle targets. They reflect our operating model once the portfolio transition is complete. Now let me summarize the key takeaways for Q4 and thereafter on Slide 19. In Q4, we bet revenue and profitability guidance. The core semiconductor business grew 8% year-on-year on a like-for-like basis. Free cash flow was strong at EUR 144 million. rest the base run rate savings were achieved 1 year ahead of plan. We also progressed well in deleveraging our balance sheet. Last week, we announced the sale of our non-optical sensor business to Infineon. Together with the sale of the specialty lamps, we will get EUR 670 million in cash, exactly the more than EUR 500 million that we announced last year. We have ample liquidity of EUR 2.2 billion available, we bought back EUR 200 million of convertible notes in January. And most importantly, we have clearly defined the future direction of the company. We have laid out the strategic direction by creating the leader in Digital Photonics where we want to benefit from upcoming inflection points in this field. And we launched the new transformation and savings program, Simplify, for saving further costs and transforming the way we work. Now the outlook for the first quarter. We expect revenues to come in between EUR 710 million and EUR 810 million, with adjusted EBITDA around 15% plus minus 1.5 percentage points. That is based on the Euro, U.S. dollar exchange rate of 1.19. Lamps & Systems, we show the usual seasonal reduction, minus 1 month of deconsolidation of specialty labs. So we're assuming it stays 2 months in and 1 month out. Semiconductors will experience a typical seasonal decline. Given the upcoming changes now portfolio and the associated challenges for you in building a financial model, you want to give you some hints on the full year '26 million. Group revenues might end up slightly softer than in '25, given the divestments and the weaker U.S. dollar. Please remember that when equals roughly EUR 20 million more or less revenue per year. And the move from [ 1.13 ] we had last year to [ 1.19 ] where we are today would cost us EUR 120 million revenue. Adjusted EBITDA will be negatively impacted by several one-offs. The divestments where we effectively sell EBITDA to the buyer. Stranded costs from overhead, we are not transferring to the buyers and higher precious metal prices and some other factors. So that concludes my presentation, and we are now ready for your questions.

[Operator Instructions] and the first question comes from Laura Monty from MFS.

As usual, I've got a few, if I may. One, if you could just provide maybe some more details on this pension benefit change that resulted in a cash inflow of around EUR 400 million. And more importantly, whether there's any chance that this could reverse at some point in the future. Then in terms of your guidance for FY 2026, maybe asking it a different way, should we expect leverage to then move up from the pro forma 2.5% that you're showing? And for free cash flow, do you expect this to be negative, considering there are obviously the impact from the -- on the working capital from the previous grants that you received. Then thirdly, regarding the convertible notes, you said you now have the cash to redeem them in full what would be your expectation in terms of timing on that? Would you look to do this year completely or potentially some part in 2027 up on the final maturity? And then last question is on the Kulim factory. I read that there was an interview that it was mentioned, you are in talks potentially with multiple interested parties. Just wanted to see what the progress is there, what your sort of view is on timing, whether you think it's likely that it could be sort of completed this year or whether there's still sort of a lot of uncertainty around that process.

All right. Laura, I noted five questions. So the first one was on the pension benefit. So maybe we simply cleaned up what we had, right? And the way it was set up was not very effective. So there was -- in several cases, there was underlined multiple times or at least 2x with assets, and we cleaned it out. We found a way to clean it up, and now we can say that the pensions that our employees in Germany will get just secured exactly one time. and that freed up quite a bit of cash, which is now available cash. It is not restricted and it cannot reverse. So that money is available for general company purposes and we will use it to reduce our debt. So the second question was there could be a move up in the leverage. It depends is probably the right answer. It could move up a little. That's true. Yes. And then the free cash flow, the free cash flow will be negative. If you exclude the divestments. Obviously, we will receive EUR 670 million from the divestments, which is part of the free cash flow. So free cash flow will be very positive. But if you exclude that for a moment, you first have the effect that we will be repaying the customer prepayment, that is $100 million, EUR 80 million or so this year is a negative. And then the funding, the government funding will be only half of what it was last year. And then we also expect more significant restructuring expenses with the new program. But that is all kind of a temporary thing, right? So that will improve once it is over. And then you certainly also see a bit of -- on the positive side, the improvement of the retained business. You asked on the timing of the convertible bond, yes, we have the money and we have to make under the moment we made to the convertible bond, we have to make an offer for EUR 150 million -- EUR 130 million at par. The remainder, we would certainly try to get it back below par but we haven't determined the exact timing. We made an offer in January. We're trying to collect EUR 300 million at EUR 94 million to EUR 96 million. We bought EUR 200 million at EUR 96 million. Yes, and -- but no exact timing for the next offer. And then on Kulim-2, the last question, yes, we are talking to multiple parties. Now we've always been talking to parties, and there was already one or two times where we thought we were close to a deal, but then the parties did not get the funds approved. So we are a bit careful on what we say, but it's true that we are currently talking to a few parties and some of them have already looked at it and really like the facility we have in Malaysia. I hope I got...

You did get everything. Can I just have one follow-up, please. just on the significant restructuring expenses that you mentioned, could you quantify those for 2026 by chance?

No, I did not, but I can give some flavor.

That would be great. We are talking about EUR 200 million savings. And I would say that could cost us EUR 150 million. That is a combination of severance payments, but also kind of cost that you have to move equipment and prepare facilities. So it's also technical expense, as you would call it, it is not all of that in '26, but a pretty big thing, well above EUR 100 million of that will be in '26.

The next question comes from Marco Sang from [ Amova AM ].

I have a few questions, if I may, just for housekeeping purposes. So the leases, what was the leases as of the fourth quarter 2025 and then factoring. So if you could provide a number for the reverse factoring and for the normal factoring as well. And then just on pension. So like I still didn't understand. So do you expect the pension to reverse in 2026 because there was quite a big uptick in liabilities tied to that inflow. So just trying to understand whether the liability -- the pension liability on the balance sheet will reverse at some point in later 2026. And then in terms of the pro forma estimates for the two disposals, based on my numbers, it seems like the exposure to the auto sector has moved from roughly 50.5% as a percentage of total revenue to 55.8%. Is that correct? And then just one final one with regards to the new opportunities in Digital Photonics, like this data center AI opportunity like the silicon photonics, the first wave. How realistic is it for you guys to penetrate the market and to start collaborating and selling to the hyperscalers? I believe there's already a U.S. player that is pretty dominant in that space. So I'm just trying to understand like how realistic would it be for you guys to break into the market and start capturing some market share?

Yes, that was very good. So the leasing, I'm not sure if you were talking about the leasing expenses in Q4, the status of the sale leaseback that was EUR 440 million end of December. Factoring, we reduced both reverse and normal factoring. We reduced by EUR 70 million. So basically, we hadn't done that, the cash flow would have been much higher. So the pension will not reverse short term. It is, in a way, you're extending the balance sheet, right? I mean you have a higher liability, a higher pension reserve on the liability side, and you have more cash and that is then something you pay over the next 20 to 30 years. It will not reverse short term. It is money that is available for general company purposes. The question about higher auto exposure, I cannot tell you 50 to 55 is exactly right, but it doesn't sound wrong certainly. And yes, the data center thing -- so I mean, data centers consume an enormous amount of energy, right? And one larger consumer is just the transportation of the information between the recs and -- but also between processors and memory and so on. And they're trying to resolve that by using photons instead of electrons. So the first wave that we currently see is based on indium phosphide, which people call kind of fast and narrow. And the second wave is called wide and slow, and that will be built either with micro LED or with [ micropixel ], those technologies where we believe we are clearly leading. Now we are talking to all of the guys, right, all of the big companies that are somewhere around data centers providing or data centers, providing components. We talk to all of them, and we are in a lot of discussions with them, and we have already showed them a prototype, and we are pretty convinced that we have an excellent product for the second wave of that photonics in data centers.

Just one follow-up. So do you already -- are you already partnering with someone with regards to this digital -- this AI data center stuff did you have a partner?

We are currently talking to a lot of parties, and if they will be partnering, we will certainly plan to issue a press release. So please stay tuned.

Okay. Sorry, just one last follow-up question. So just in terms of the precious metal exposure, is it just gold? Or it's actually silver as well and other rare earths. So I just want to understand. And then my understanding is already partially hedged. So is it 50% hedged or is it bit more than 50% for 2026. Any color would be helpful.

Yes. So it is more than gold, but gold is certainly the largest, right? I mean our consumption of gold is pretty big. And -- but we also consume silver, particularly on the filter side. Rare earth is much smaller, but it is also gallium, germanium, and kind of other metals that you use all prices are certainly moving up. But the gold impact is the biggest. And the EUR 60 million includes also a bit of the impact of the other metals. Now we always hedge position. We recently increased that somewhere below 5,000 or so. We increased it well into '27. So I would say we are now hedged what, 60%, 70% into Q3 '27 or so.

The next question comes from Connor Ford from Bank of America.

Firstly, could you remind us what the ratio for your maintenance covenant on your RCF was at Q4 versus the threshold of 4x. Secondly, with regards to the refinancing of the 2029 bonds, would you look to that second call date of the 30th of March 2027 as your ideal refinancing window? And then finally, have you received any update on the OSRAM minority decision, do you expect to cover that with cash now.

Okay, the maintenance covenant, [ 2.5 ]. Now yes, March '27 for the high-yield band. I mean, high yield bond, I agree that, that would be a good window, right, when it goes down from a half a coupon to quarter coupon. But there, we have certainly have not taken a final decision on what exactly we will do. But it is an attractive window, certainly. The OSRAM minorities, there's really no news. And kind of a -- we will maybe call the court later this quarter to ask again, but they made very clear that it is not high on their agenda.

The next question comes from [ Luke Rasmus ] from PPM America.

I just wanted to ask what the 2026 outlook looks like on a kind of an end market basis. Autos, I think you mentioned some pricing pressure from Chinese OEMs. I want to make sure if that's trying to pass on their own pricing pressures or potential competitive pressures more broadly I also want to ask what's causing the specific strength in Industrial and Medical, why that's improving? And then lastly, on consumer. I don't think you mentioned -- I think you mentioned you didn't think there are any indirect impacts from DRAM shortages, but I'm wondering if some of your OEMs are being a bit more cautious on the order side with those DRAM shortages.

The '26 outlook along the various verticals. I mean, we are seeing -- I mean we certainly saw automotive to be a bit cautious in Q4. We now see a much improving book-to-bill. The old rule that I learned over 20 years in semiconductor was always that you shouldn't look at book-to-bill prior to Chinese New Year. Because I mean, you typically see a nice uptick prior to Chinese New Year and then that 1 week is very, very slow. But yes, auto, you certainly see some signals from China that are pointing towards a bit high inventory there. Overall, I would say automotive is will be a few percentage points up year-over-year. Industrial, Medical was actually quite strong at the end of the year. that was probably more on the emitter side, even than on the sensor side. Overall, it is still particularly on the andesite still rather muted compared to years ago where we kind of -- where there is still a lot of inventory around. And then on consumer, the revenue might be down a little this year as a high double-digit noncore portfolio will go out. But yes, I think it consumer should be okay. And we also see that our new products have a good start and had a lot of design wins. So it should be pretty good. And please be reminded that, that kind of depending on the closing point, we will be selling our non-optical sensor to Infineon and that is a lot of Industrial, Medical business.

If I could get one more follow-up from a previous question. On the Kulim facility, I think we've seen generally, there's a bit of acute shortage in terms of clean room space. Has that made some of the conversations around disposal of the facility a little stronger in the last quarter?

Yes. It is kind of -- I mean, look, it's -- the facility has a certain size, right? So unfortunately, it's too small for memory. Otherwise, it would be -- we've long sold. It's also too small for a high-performance computing TSMC kind of factory, but certainly good for a small 300-millimeter or a large 200-millimeter factory. And yes, recently, there's been a bit of a shortage, and that's why a few companies is not at our doors and I mean, have been looking at it. So kind of I mean we don't want to be too sound too positive here because it's really not completely in our hands. But it's a great facility. And I'm pretty optimistic that we'll be able to sell it sooner later.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Juergen Rebel for any closing remarks.

Thank you, everyone, for joining today's call and the questions. If there are any questions beyond, please do not hesitate to reach out. And with that, I'd like to close the call and looking forward to speaking to you during the quarter or latest in a quarter from now. Thanks very much, and goodbye.

Ladies and gentlemen, the conference is now over. Thank you for participating in the conference. You may now disconnect your lines. Goodbye.