Sensirion Reports Challenging 1H 2019

Sensirion experienced a challenging first half of 2019 as a result of the current crisis in the automotive industry, the significantly lower than expected global industrial production, and the ongoing global trade disputes. Consolidated sales amounted to CHF 83.9 million ($85.6 million), down 7% year-on-year, while the gross margin was stable at 53.2%, and the EBITDA margin adjusted for one-time effects amounted to 10%. 
 
Despite the currently difficult market environment, the long-term market trends, the technology, and the product pipeline remain strong. Important project wins in the automotive and industrial markets achieved in the past half year, as well as newly launched products in the environmental sector (including CO2 and PM2.5 sensors), will support sales growth in the coming years. Sensirion therefore confirms its medium and long-term growth perspectives.
 
There are still no signs from customers of the recovery originally expected at the beginning of the year in the second half of 2019. As a result, the outlook for the full year 2019 was lowered at the beginning of July. 
 
Adjusted for one-time effects, the operating result was CHF 1.6 million and net income CHF 1.7 million. Taking into account the one-time costs, mainly in connection with the IPO, an operating loss of CHF 2 million and a net loss CHF 1.9 million for the period resulted. Resulting operating cash flow was CHF 11.1 million, free cash flow CHF 1 million.
 
Revenue in the automotive end market amounted to CHF 24.9 million, down 14.1% compared with the same period last year. The sharp percentage decline year-on-year is the result of a pronounced weakness in demand in the automotive industry coupled with inventory optimization throughout the supply chain. Despite the current market situation, new customer projects are proceeding as planned. 
 
In the new area of automotive modules important nominations were received that will generate revenue in approximately three years’ time. A revenue of CHF 17.3 million were generated in the medical market, -3.3% compared with the same period last year. The medical area is dominated by the sleep apnea therapy device (CPAP) business, which had a strong prior year and was again in line with the usual long-term trend in the six months under review.
 
With CHF 35 million, consolidated revenue in the diversified industrial market was lower than in the first half of 2018, -4.3% year-on-year. New business with Sensirion’s differential pressure sensors in heating, ventilation and air-conditioning applications and for process automation, as well as growing sales of gas meters, partially compensated for the decline in demand in ongoing business. In the hard drives market, there was a sharp cyclical downturn.
 
With CHF 6.7 million, the consumer market recorded a stable result, -0.8% year-on-year. In this market, too, new projects were only just able to offset the reduction in current business due to the on-going trade disputes.
 
The new carbon dioxide (CO2) and particulate matter (PM2.5) product lines, both launched in 2018, remain on track. Very good market feedback and other important nominations lay the foundation for continuous and sustainable sales growth in the coming years. As usual in the markets, it typically takes two to three years from project win to start of series production.
 
To further strengthen our environmental sensor portfolio, Sensirion recently announced a second generation carbon dioxide sensor. Innovative measurement and packaging technologies make the sensor significantly smaller while maintaining the same performance. This size, together with a very attractive cost structure, opens up new applications and thus further long-term growth opportunities. Production is scheduled to start in the first half of 2020.