Sensirion ends activities in condition monitoring
09/07/2024
As part of a critical review of all innovation projects and to increase the strategic focus of the business, the Board of Directors of Sensirion Holding has decided, at the request of the management, to give up the activities in condition monitoring of the previously acquired start-up AiSight. This will lead to the closure of Sensirion’s Berlin site.
Sensirion acquired the Berlin-based start-up AiSight in September 2021 with the aim of becoming a leading provider of complete solutions in the field of condition monitoring. In the meantime, however, it has become clear that the market for condition monitoring is developing much more slowly and is more fragmented than originally assumed. There is a large number of competitors from whom it will be difficult to differentiate technically. This market structure does not strategically fit Sensirion’s goal of becoming the leading provider in its respective area through innovations. This reassessment, after a thorough examination of various options, has now led to the decision to abandon this area of development. The strategic goal of building a data-based service business alongside the important original equipment manufacturer (OEM) business remains unchanged. Sensirion will continue to focus on detecting climate-damaging methane leaks in the oil & gas industry. This internal, data-based innovation project is developing very promisingly and is also being positively supported by new environmental regulations in the USA and Europe.
“Innovation is always associated with opportunities, but also with risks. For an innovation-driven company like Sensirion, it is therefore essential to closely monitor innovation projects and make clear decisions when a project no longer meets expectations. Looking back, many innovation projects in recent years have been very successful, such as the entire environmental sensor initiative or the A2L campaign, which is about to be ramped up. Unfortunately, this was not the case with condition monitoring. We regret this very much, but it is also part of an innovation-oriented company,” said Marc von Waldkirch, CEO of Sensirion.
The decision to stop activities in condition monitoring entails the closure of the Berlin site. Sensirion deeply regrets the loss of jobs there but will provide the very well-trained employees who are affected with the best possible support in their search for new, interesting work.
Financially, the decision leads to an extraordinary, non-cash impairment of around CHF 25 million (approximately £22 million) and the elimination of tax loss carryforwards of around CHF 5 million (approximately £4.4 million). The impairment is due to the ‘goodwill recycling’ required by Swiss Accounting and Reporting Recommendations (GAAP FER), according to which the value, at the time of acquisition, of goodwill offset against equity must be recycled and written off. The company expects to incur restructuring costs and provisions related to the termination of activities of around CHF 3-5 million (approximately £2.7 million to £4.4 million) in 2024. Adjusted for these one-off special effects resulting from the closure, Sensirion confirms its forecast for the full year published on 12 March 2024. As a result of this decision, Sensirion expects an improvement in operating cash flow in the low single-digit million CHF range from 2025 onwards.
The decision will also have no significant impact on Sensirion’s medium- and long-term growth potential.
