Press Release
Stäfa, Switzerland, 10 March 2020
Sensirion: Challenging 2019, Mid-Term Growth Perspectives Confirmed
Sensirion experienced a challenging 2019 as a result of the reduced demand and increased volatility in all markets, especially in the first half of the year. In the second half of the year, the start of new business put Sensirion back on a moderate growth path, which made up for part of the decline in sales during the first six months. At CHF 171.0 million, consolidated revenue was slightly higher than expected in summer 2019 (-2.2 % year-on-year), the gross margin was stable at 53.7 %, and the EBITDA margin adjusted for one-time effects amounted to 12.0 %. Sensirion confirms its medium and long-term growth prospects based on the long-term trends in the markets as well as its full product and project pipeline.
Key Figures
| Consolidated, in millions of CHF |
1 January - 31 December 2019 |
1 January - 31 December 2018 |
| Revenue |
171.0 |
174.8 |
| Gross profit |
91.8 |
93.0 |
| - as % of revenue |
53.7% |
53.2% |
| Adjusted EBITDA |
20.4 |
27.8 |
| - as % of revenue |
12.0% |
15.9% |
| Adjustments |
8.1 |
18.6 |
| Cash flow from operating activities |
25.7 |
26.4 |
| Capital expenditures |
(17.2) |
(13.5) |
| Free cash flow |
8.6 |
12.4 |
| |
As of 31 December 2019 |
As of 31 December 2018 |
| Net cash |
48.0 |
42.6 |
| Number of employees (FTE) |
796 |
783 |
A challenging and mixed 2019 lies behind Sensirion Holding AG, a pure-play sensor company offering environmental and flow sensor solutions. In all markets, reduced demand and increased volatility was experienced as a result of the numerous geopolitical uncertainties and the crisis in the automotive industry. Nevertheless, the start of new business in the second half of the year put the company back on a moderate growth path. This made up for part of the decline in sales in the first half of the year. Despite the persistently difficult market environment, the long-term market trends as well as the technology and product pipeline remain strong. A number of important milestones in the company's strategic development were achieved last year: firstly, by winning important projects and secondly, by further expanding the portfolio of environmental sensors. These strategic advances will support growth in the coming years. Sensirion therefore continues to confirm its medium and long-term growth prospects.
Consolidated annual revenue reached CHF 171.0 million, -2.2% compared to the previous year (of which -1.8% organic, -0.4% foreign currency effects). Revenue was thus slightly above the upper end of the guidance that had been lowered in summer 2019 in the wake of the overall economic slowdown. This was achieved because of a stronger second half of the year, in which moderate growth of just under 4% compared with the first six months was achieved by means of new business. The gross margin of 53.7% remained stable and within the communicated expectations. The EBITDA margin adjusted for one-time effects reached 12.0% and, thanks to intensified cost management, was at the upper end of the guidance revised in the summer. Due to high R&D expenses (24% of revenue) and low variable product costs, adjusted EBITDA of CHF 20.4 million suffered disproportionately from the decline in sales. In view of the continuing strong medium- and long-term outlook, the high R&D intensity was deliberately maintained. Taking into account one-time costs of CHF 6.5 million in connection with the last tranche of the IPO Loyalty Share Program, an operating loss of CHF 2.0 million and a net loss for the period of CHF 2.7 million resulted. The operating cash flow amounted to CHF 25.7 million and the free cash flow to CHF 8.6 million.
Slight growth in industrial market, weaker automotive market, special effect in medical market
The automotive market generated sales of CHF 51.3 million (-4.8% compared to the previous year). The very weak first half of the year was characterized by a significant weakness in demand coupled with inventory optimization throughout the supply chain. Demand stabilized noticeably in the second half of the year, so that, thanks to new business, growth compared with the same period last year was achieved.
At CHF 35.1 million, sales in the medical market were 8.9% below the previous year's sales. This decline is primarily the result of a base effect: in the second half of 2018, temporarily strongly increased volumes in the dominant sleep apnea therapy (CPAP) devices application were recorded as two major customers were about to launch important new products and were heavily building up their inventories. In 2019, demand in the CPAP area was back in line with the long-term trend.
In the broadly diversified industrial market, moderate growth of 2.5% in 2019 compared to the previous year was achieved with revenue of CHF 70.3 million. Important new business in the household appliance applications, especially due to the new CO2 sensors as well as higher sales in the gas meter business offset the lower sales in some areas in the traditional products business and in the sharply declining hard disk sector.
At CHF 14.1 million, the consumer market achieved a slight increase in revenue of 3.1% compared to the previous year thanks to new projects with gas and humidity sensors.
Strategic expansion of our environmental sensor portfolio
In 2019, good progress in implementing the strategic goal of achieving market leadership in the entire field of environmental sensor technology was made: the CO2 sensor launched at the beginning of 2018 substantially contributed to consolidated sales for the first time thanks to product launches with lead customers in the industrial sector. In mid-2019 the second generation of CO2 sensors was also announced: through Sensirion's expertise in sensor technology, MEMS and chip design, the size of the sensor could be reduced to one-fifth without compromising performance, which brings further advantages in the cost structure of this product. Initial market feedback on the new CO2 sensor is very positive. Production start is scheduled for summer 2020.
The particulate matter sensor (PM2.5) launched later in 2018 is also developing positively on the market. As a result of further important nominations in the industrial and automotive markets, continuous and sustainable sales growth will also be achieved with this product family in the coming years.
To further strengthen its environmental portfolio, Sensirion acquired a very promising electrochemical sensor technology in mid-2019. In the meantime, the technology transfer has been successfully completed and a larger internal development team has started to develop a first gas sensor based on this novel technology.
Medium and long-term prospects remain strong
Despite the current difficult market environment, the medium and long-term growth prospects continue to be viewed as positive. The fundamental growth drivers for sensor technology, such as energy efficiency, safety, health, and increased living comfort, will continue to drive the growing demand for sensor technology in all markets in the future. Sensirion's strategic orientation, supported by the newly launched product families, the entry into the automotive module business, and a full innovation pipeline, open up numerous growth opportunities and a continuous increase in the value share in important existing and new customer applications. Therefore, a high R&D intensity is being maintained, also in comparison to competitors.
Renewal of authorized share capital
The Board of Directors will propose to the Annual General Meeting on 11 May 2020 that the authorized capital of CHF 145,581.70 be renewed for another two years.
Outlook
Given the current rapidly changing situation, it is difficult to provide an outlook for 2020: the global economic situation remains fragile and challenging in view of the continuing tense geopolitical environment and the unresolved coronavirus epidemic. Future effects of the epidemic on current business and the supply chain are currently difficult to assess. Assuming that the market environment and exchange rates do not deteriorate significantly, we anticipate sales growth of 4-10% to CHF 178-188 million for full-year 2020, with a consistently strong gross margin of 52-54%. For the adjusted EBITDA margin, we expect an improvement to 14-16%. Based on the progress in important R&D projects, we also confirm our medium-term annual sales growth target of 10-15%.
Analyst and media conference on the full-year 2019 results
Today, Tuesday, 10 March 2020, at 10:00 CST / 09:00 GMT / 06:00 EDT, an analyst and media conference on the full-year 2019 results will be held. The conference will take place at the Savoy Hotel Baur en Ville in Zurich and will also be audio-webcast with synchronized presentation slides. The presentation will be held in English. You will have the opportunity to ask questions following the presentation. If you would like to attend through web access, we kindly ask you to register for the audio-webcast via the following link: https://conferencing.swisscom.ch/conference/x/jXQBjyezGngc
Documentation
All documents will be available at www.sensirion.com/financial-reports on 10 March 2020 from around 06:30 CET / 05:30 GMT / 01:30 EDT onwards.
Condensed Consolidated Financial Statements
| Condensed Consolidated Income Statement |
2019 |
2018 |
| In millions of CHF, for the twelve months ended 31 December |
|
|
| Revenue |
171.0 |
174.8 |
| Cost of sales |
(79.2) |
(81.8) |
| Gross profit |
91.8 |
93.0 |
| Other income |
0.0 |
1.1 |
| Research and development expenses |
(41.5) |
(36.3) |
| Selling, distribution, and administrative expenses |
(52.3) |
(62.2) |
| Operating profit (loss) |
(2.0) |
(4.4) |
| Net finance costs |
(2.0) |
(2.3) |
| Profit (loss) before tax |
(4.0) |
(6.7) |
| Income taxes |
1.3 |
0.3 |
| Profit (loss) for the period |
(2.7) |
(6.4) |
| Earnings per share (in CHF) |
(0.18) |
(0.45) |
| Diluted earnings per share (in CHF) |
(0.18) |
(0.45) |
| EBITDA |
12.3 |
9.2 |
| Adjusted EBITDA |
20.4 |
27.8 |
| Revenue by End Markets |
2019 |
2018 |
| In millions of CHF, for the twelve months ended 31 December |
|
|
| Automotive |
51.4 |
53.9 |
| Medical |
35.1 |
38.6 |
| Industrial |
70.4 |
68.6 |
| Consumer |
14.1 |
13.7 |
| Total |
171.0 |
174.8 |
| Condensed Consolidated Statement of Financial Position |
as of 31 December 2019 |
as of 31 December 2018 |
| In millions of CHF |
|
|
| Current assets |
108.8 |
112.3 |
| Non-current assets |
106.7 |
102.6 |
| Total assets |
215.5 |
214.9 |
| Current liabilities |
17.9 |
21.1 |
| Non-current liabilities |
41.4 |
33.4 |
| Total liabilities |
59.3 |
54.5 |
| Total equity |
156.2 |
160.4 |
| Total liabilities and equity |
215.5 |
214.9 |
| |
|
|
| Condensed Consolidated Statement of Cash Flows |
2019 |
2018 |
| In millions of CHF, for the twelve months ended 31 December |
|
|
| Cash flows from operating activities |
25.7 |
26.4 |
| Cash flows from investing activities |
(17.2) |
(3.6) |
| Cash flows from financing activities |
(1.8) |
21.9 |
| Net change in cash and cash equivalents |
6.7 |
44.7 |
| Cash and cash equivalents at 1 January |
53.9 |
9.4 |
| Cash and cash equivalents at 31 December |
60.3 |
53.9 |
| Capital expenditures |
(17.2) |
(13.5) |
| Free cash flow |
8.6 |
12.4 |
Financial Calendar
10 March 2020: 2019 full-year results and annual report
11 May 2020: Annual general meeting
19 August 2020: 2020 half-year results and interim report
Contact
Investor Relations
Andrea Wüest
Director Investor Relations and M&A
Tel: +41 44 927 11 40
E-Mail: andrea.wueest@sensirion.com
About Sensirion Holding AG
Sensirion Holding AG (SIX Swiss Exchange: SENS), headquartered in Stäfa, Switzerland, is a leading manufacturer of digital microsensors and systems. The product range includes gas and liquid flow sensors, differential pressure sensors, and environmental sensors for the measurement of humidity and temperature, volatile organic compounds (VOC), carbon dioxide (CO2), and particulate matter (PM2.5). An international network with sales offices in China, Europe, Japan, South Korea, Taiwan, and the US supplies international customers with standard and custom sensor system solutions for a vast range of applications. Sensirion sensors can commonly be found in the automotive, medical, industrial, and consumer end markets. For further information, visit www.sensirion.com.
Disclaimer
Certain statements in this document are forward-looking statements, including, but not limited to, those using words such as "believe", "assume", "expect", and other similar expressions. Such forward-looking statements are based on assumptions and expectations and, by their nature, involve known and unknown risks, uncertainties, and other factors that could cause actual results, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements. Such factors include, but are not limited to, future global economic conditions, changed market conditions, competition from other companies, effects and risks of new technologies, costs of compliance with applicable laws, regulations, and standards, diverse political, legal, economic and other conditions affecting markets in which Sensirion operates, and other factors beyond the control of Sensirion. In view of these uncertainties, you should not place undue reliance on forward-looking statements. Sensirion disclaims any intention or obligation to update any forward-looking statements, or to adapt them to future events or developments.
Certain financial data included in this document consists of "non-IFRS financial measures". These non-IFRS financial measures may not be comparable to similarly titled measures presented by other companies, nor should they be construed as an alternative to other financial measures determined in accordance with IFRS. As a result, you are cautioned not to place undue reliance on any non-IFRS financial measures and ratios included herein.
This document is not an offer to sell, or a solicitation of offers to purchase, any securities.
