Sensirion (SENS) H2 2023 earnings summary

Executive summary

• FY 2023 revenue fell 27.5% YoY to CHF 233.2m after three booming years; organic decline was 15.5%, with one-off effects contributing 8.8% and FX 3.2%.

• Continued R&D and Sales investment weighed on near-term profitability, while the innovation pipeline and secular sensor-market trends underpin growth prospects.

• 2024 outlook calls for a return to growth, but profitability is expected to remain in transition; medium-term outlook is positive.

Financial highlights

• Gross profit was CHF 121.8m and gross margin 52.2%, down 7.0 percentage points YoY, reflecting lower capacity utilization and unfavorable product mix.

• EBITDA was CHF 10.1m, with a 4.3% margin, versus CHF 89.6m and 27.8% in FY 2022.

• EBIT was a loss of CHF 5.8m; net loss was CHF 6.6m, compared with FY 2022 EBIT of CHF 74.4m and net income of CHF 63.6m.

• Operating cash flow was negative CHF 10.9m and free cash flow negative CHF 46.5m; working capital growth reduced operating cash flow by CHF 23m.

Outlook and guidance

• FY 2024 revenue guidance is CHF 250m–280m, with organic growth of 7%–20%, assuming unchanged FX rates.

• FY 2024 gross margin guidance is 47%–49% and EBITDA margin 5%–10%; higher module mix and underutilized component production are expected to weigh on gross margin.

• New automotive module and US air-conditioning gas leakage projects are expected to support growth in H2 2024; 2024 is expected to be a transitional year for profitability.

• Inventory corrections are expected to dampen legacy demand until mid-2024, or through year-end in medical markets.