Ladies and gentlemen, welcome to the ams OSRAM Investor Conference Call and Live Webcast on fourth quarter and full year 2025 results. I'm Jürgen, the call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will follow by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jürgen Rebel, Head of Investor Relations. Please go ahead.
Hello, good afternoon. This is Jürgen speaking. Welcome to today's call on our 4th quarter and full fiscal 2025 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, Jürgen. Good afternoon, everyone, from my side. Let's start on slide 3. 2025 was another year of disciplined execution. We built a stable foundation for further expansion as a leader in digital photonics. Our core semiconductor portfolio grew 7% year-over-year, underlining the strength of our focused positioning. Importantly, for the first time ever, ams OSRAM holds the number one 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-over-year, driven by accelerated execution of the Re-establish the Base program despite significant cost headwinds one 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 2.5 times. Onto slide 4. Q4 was a strong quarter. Revenues and adjusted EBITDA came in in the upper band of our guidance, a clear beat thanks to the super strong aftermarket lamps business. Revenues stayed almost compared to last year flat at first glance, but bear in mind the weaker US 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. Revenues dipped a bit more than what you would normally expect. I will comment on Automotive 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 Industrial & 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 US 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 flow-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'm on slide 6. If you look through the weaker US dollar and the non-core portfolio contribution, the clean core portfolio grew exactly in line with our semiconductor target operating model, 8% year-on-year. The non-core 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 EUR revenue last year. This page highlights the underlying resilience of our semiconductor business.
In automotive, we saw a sequential decline, mostly seasonal, but the automotive supply chain continues to operate with extremely lean inventories and a 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 US dollar effects and the exit of the non-core portfolio.
Now let's have a look on slide 7. We delivered EUR 144 million free cash flow, adjusted for the one-time 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 EUR 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 setup, 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 a EUR 100 million bank loan to 2027. In January, we completed a EUR 200 million buyback of the outstanding 2027 convertible, including the expected proceeds from the two announced transactions. We have already today sufficient funds to repay both the convertible bond due in 2027 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, etc. Our IFRS top line declined by 3% year-on-year, but it's worth looking deeper. A EUR 100 million FX impact and the more than EUR 100 million non-core 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 grew about 7% year-on-year at constant currencies, in line with our mid-term growth ambition. The year-on-year decline in lamps and systems stems mostly from two topics: the decline in the OEM business in line with a lower number of factory new cars with traditional lamps and the Q2 supply chain adjustment after Labor 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 one year ahead of plan. Cost headwinds had been heavy: gold, silver, rare earths, 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 number one package LED supplier globally by value.
We now clearly surpassed our long-term rival to the crown, Nichia, helped by a weaker yen, but primarily by better relative performance in the marketplace last year. This further strengthens our position with automotive OEMs, professional lighting customers, and an emerging market such as micro-emitters. Onto slide 11, design win performance. Last year was again a great year for winning new business underpinning our semiconductor growth model. The tally reached more than EUR 5 billion again, the third year in a row with million euro lifetime value. In consumer projects, in display management, and camera enhancement, accumulated hundreds of millions EUR. In automotive, EVIYOS and intelligent RGB ambient lighting projects stood out, and professional lighting and medical imaging design wins contributed exceptionally. The examples shown demonstrate the strong structure momentum in our business. Design wins today are the revenues of tomorrow.
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, Re-establish the Base delivered its savings one year early, EUR 220 million. This is a huge success, but we have to get more ambitious in view of the persisting headwinds. With 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 divestments. We want to improve our manufacturing costs by transferring production of established products to Asia and the productivity push through automation.
We are developing cost-optimized product platforms. 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 structure of profitability. As I just explained, we implemented Re-establish the Base savings one year ahead of plan. They're 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 one-time profit of about EUR 450 million-EUR 500 million. Third, a solution for the Kulim II sale and leaseback. We continue working hard on it. There has 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 there 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 as I will show you in a minute.
But a solution for the sale and 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'll be able to refinance, as 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 costs. Now, slide 15, you see the impact of the transactions on our leverage. We discussed the update of our balance sheet as of December 25 earlier 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 a prerequisite to refinancing our 29 maturities at lower costs. 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 2023 to 2025, we stabilized and refocused the company: divestments, portfolio sharpening, Re-establish the Base, refinancing. 2026 will be a transition year, reflecting the deconsolidation of sold businesses and temporary stranded costs. We'll have to bear a temporary drop in adjusted EBITDA due to several one-off effects. For this and for making the company overall more efficient and more agile, we launched the new program, Simplify. Also, financing costs remain high in 2026, approximately €250-€300 million under the refinancing of the senior notes, which we have on the radar for 2027.
Then from 2027 onwards, we enter the growth and value creation phase. 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 II sale and leaseback, we will have a fully healthy balance sheet with a leverage below 2. We want to see our financing costs 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.
we go to slide 16 now, I believe, 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 or maybe you want to put it simply for corrosion-free mirrors to get the light out of the epi layers. And normally, as this added to the cost bill, a high double-digit million EUR figure. But the unprecedented gold rally that accelerated in 2025 that causes an additional EUR 35 million in 2025, that's 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 $5,000 per ounce, we have another EUR 60 million cost add-on compared to 2025. 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 a 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 products. 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 it, but on top of the divestments and the stranded costs, the gold price and precious metal prices overall will weigh further on margins and adjusted EBITDA in 2026.
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. We are on slide 17. Digital photonics is opening multiple, highly attractive growth avenues across both emitters and sensors for us. On the emitter side, micro-emitter arrays are transforming three key markets: advanced automotive lighting with EVIYOS, where we already ship the volume and hold the clear design-win lead. Ultra-compact RGB micro-emitter arrays enabling bright, power-efficient AR displays for the next-generation smart glasses. And finally, the multi-channel micro-emitter-based optical links for AI data centers. That's called wide and slow. That interconnects it, offers superior energy efficiency, and unlocks future chip-to-chip optical architectures.
For each of these, we see it as already today a triple-digit million EUR 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 wearables add more optical measurable biomarkers, creating incremental double-digit million EUR opportunities. And finally, multi-zone direct-time-of-flight sensors bring high-precision 3D awareness to smart devices, robotics, and emerging humanoid platforms with adoption curves that could drive significant revenues by 2030 and beyond. Also, on the sensor side, we see additional revenue potential of double-digit million EUR, in some cases, triple-digit long term. Together, these six 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. Now, I'm slide 18. This slide sets out our over-the-cycle 2030 target operating model: once divestments, including Kulim II, deleveraging, corporate simplification, and debt refinancing are complete, and with the new applications contributing to growth. For semiconductors, we target mid to high single-digit revenue growth starting in 2027 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. I expect it 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%-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 cost 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 beat 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. Re-establish 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% ±1.5 percentage points. That is based on a euro/US dollar exchange rate of 1.19.
Lamps & Systems will show the usual seasonal reduction, minus 1 month of deconsolidation of specialty lamps. So we're assuming it stays 2 months in and 1 month out. Semiconductors will experience a typical seasonal decline. Given the upcoming changes in our portfolio and the associated challenges for you in building a financial model, I want to give you some hints on the full year 2026. Group revenues might end up slightly softer than in 2025 given the divestments and the weaker US dollar. Please remember that 1 US dollar cent 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.
Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on the telephone. You'll hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to stay with loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. One second.
The first question comes from Laura Homsy from MFS. Please go ahead.
Hi there. Thanks so much for taking my questions. 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 in 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 impacts 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 this year completely or potentially some part in 2027 upon the final maturity? And then last question is on the Kulim factory. I read that there was an interview where 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. Thank you so much.
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 two times with assets. And we cleaned it up. We found a way to clean it up. And now we can say that the pensions that our employees in Germany will get are 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.
Great. Thank you.
So the second question was if there could be a move up in the leverage. It depends. It's 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 as a negative. And then 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 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 amendment we made to the convertible bond, we have to make an offer for 150, no, is it 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 94-96. We got EUR 200 million at 96. Yeah. But no exact timing for the next offer. And then on Kulim II, the last questions, yes, we are talking to multiple parties. Now, we have 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 in what we say, but it's true that we are currently talking to a few parties. And yeah, some of them have already looked at it and really like the facility we have in Malaysia.
I hope I got everything, Laura.
Great. Thank you so much. 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 2026 but a pretty big thing. Well above EUR 100 million of that will be in 2026.
Very clear. Thank you so much.
I'll go ahead. The next question comes from Mark Sun from Amundi AM. Please go ahead.
Hi. Congrats on the disposal. I have a few questions, if I may, just for housekeeping purposes. So 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 I still didn't quite 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 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. This data center AI opportunity, this 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 how realistic would it be for you guys to break into the market and start capturing some market share? Thanks.
Yeah. 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 and leaseback. That was EUR 440 million end of December. Factoring, we reduced. Both reverse and normal factoring, we reduced by EUR 70 million Q4. So basically, if 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 or 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 if 50-55 is exactly right, but it doesn't sound wrong so only. 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 racks but also between the 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 microLED or with micro-VCSELs, both 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 are currently talking to a lot of parties. And if there will be a partnering, we will certainly then issue a press release. So please stay tuned.
Okay. Thanks. Sorry, just one last follow-up question. So just in terms of the precious metal exposure, is it just to gold, or is it actually silver as well and other rare earths? So just to understand. And then my understanding is all of it partially hedged. So is it 50% hedged or is it a bit more than 50% for 2026?
Any color would be helpful. Thanks.
Yeah. So it is more than gold, but gold is certainly the largest, right? I mean, our consumption of gold is pretty big. But we also consume silver, particularly on the filter side. Rare earths 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 hedged a position. We recently increased that somewhere below 5,000 or so. We increased it well into 2027. So I would say we are now hedged, what, 60%-70% into Q3 2027 or so.
The next question comes from Conor Forde from Bank of America. Please go ahead.
Good afternoon, all, and thank you for taking my questions.
Firstly, could you remind us what the ratio for your maintenance covenant on your RCF was at Q4 versus the threshold of 4 times? 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, and do you expect to cover that with cash now? Thanks very much.
Okay. The maintenance covenant, 2.5? 2.5. Now, yeah, March 2027 for the high-yield bond. I mean, high-yield bonds, I agree that that would be a good window, right, when it goes down from half a coupon to a quarter of a coupon. But there we 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 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.
Thank you.
The next question comes from Luke Rasmussen from PPM America. Please go ahead.
Hi. Thank you so much for taking the question, and congrats on surpassing Nichia. Just wanted to ask what the 2026 outlook looks like on a kind of end-market basis. Autos, I think you mentioned some pricing pressure from Chinese OEMs. Want to make sure if that's them trying to pass on their own pricing pressures or potential competitive pressures more broadly. 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 were 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.
Yeah. The 2026 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. Now, 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 one week is very, very slow. But yeah. Auto, you certainly see some signals from China that are pointing towards a bit high inventory there.
Overall, I would say automotive will be a few percentage points up year-over-year. Industrial and 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 sensor side, still rather muted compared to years ago where there's still a lot of inventory around. And then on consumer, the revenue might be down a little this year as a high double-digit non-core portfolio will go out. But yeah, I think consumer should be okay. And we also see that our new products have a good start and had a lot of design wins, so should be pretty good. And please be reminded that kind of depending on the closing point, we will be selling our non-optical sensor business to Infineon.
That is a lot of industrial and medical business.
Thank you. 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 a chip shortage in terms of clean room space. Has that made some of the conversations around disposal of the facility a little stronger in maybe the last quarter?
Yeah. It is kind of I mean, look, the facility has a certain size, right? So unfortunately, it's too small for memory. Otherwise, it would be 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 knocked at our doors and, I mean, have been looking at it.
So kind of I mean, we don't want to 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 or later. Thank you.
That's it for me, and congrats again.
Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Jürgen Rebel for any closing remarks.
Thank you, everyone, for joining today's call. And 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 the lines. Goodbye.