Sensirion Holding AG (SENS) Earnings Call Transcript & Summary

Good morning, everyone. Welcome. I'm Lars Dünnhaupt, Director of Investor Relations for Sensirion, and I would like to welcome you to Sensirion's Full Year 2024 Results. Joining me today here in Zurich are Sensirion Chief Executive Officer, Marc von Waldkirch; and our CFO, Martin Wirz. Today, we will be referencing a slide presentation during the call. The PDF of this presentation can be downloaded from our web page, together with the press release and the annual report. As we begin the presentation, please note that this event will be recorded. During this presentation, we will be making forward-looking statements regarding future events and also regarding the financial performance of the company that contains certain risks and uncertainties. The company's actual results may differ materially from the projections described. So please take a moment to read this. As always, Marc will begin covering the highlights and business review for the full year 2024. Next, Martin will comment on the financial performance of Sensirion in 2024. Afterwards, Martin will hand over back to Marc, who will then discuss our financial guidance for 2025. At the end, we will take questions. We will begin with questions here from the audience in Zurich. If you are here, you just raise your hand. And for the remote participants, [Operator Instructions] I will then read out the questions and hand it over to Marc and Martin. Now I would like to turn the presentation over to Sensirion's Chief Executive Officer, Marc von Waldkirch. With that, Marc, over to you.

Thank you very much. Well, so a warm welcome also from my side, especially to all the local audience here, but also the one remotely attending this morning. Thank you for attending. Well, I think a short summary of 2024 can probably be done by 3 keywords: back to growth, thanks to new products and innovation; secondly, a cost optimization program supported the improved EBITDA profitability; and last but not least, a revised strategy we have presented last November in our Capital Market Day. In details, first of all, the return to growth. Growth was mainly driven by new products in automotive and industrial application. The automotive one with OEMs in Germany and the one in industrial mainly driven by the A2L leakage program for the U.S. market, I will come back to more detail later on. And on the other hand, we have a medical and consumer, they are still more or less flat. The established markets in all the markets are still challenging because there are a lot of geopolitical and macroeconomic headwinds. Total sales grew by 22% in local currency or 18% in Swiss francs. Profitability has improved due to 2 reasons. On the one hand side, thanks to the growth on the top line. As always, in our company, we do have a lot of fixed costs in R&D, in sales but also in the way how we manufacture our components, our semiconductor components, which come with a lot of fixed costs and in equipment in depreciation. On the other hand, also our cost optimization program, which was initiated more or less 12 months ago where we have focused on increasing our efficiency, on the one hand side, without jeopardizing all the products or projects we are running in order to drive growth either short term but also long term. I think all in all, the outcome of this cost-efficient program was more or less CHF 9 million of cost base we could reduce and we can also start now on a better cost level than before. Last but not least, the strategy. We have presented you an ambitious growth strategy last November with 3 foci, I will come back to this on one slide later in my presentation. To the outlook of 2025, we are somehow optimistic, especially also thanks to the new projects kicking in this year again on the -- in terms of the established markets. So all the running products, we are cautiously optimistic because there are a lot of turbulences in the markets, especially automotive markets show some weaknesses, but also there are a lot of Chinese uncertainties in the market. So therefore, new products we are very optimistic; with the existing business, we are somehow cautiously optimistic. But I will discuss that in more detail later on. Well, going shortly through all the markets, automotive first, we could increase the top line even in the second half of the year once again. I think this is more or less the sixth period of reporting with a growth in automotive despite all the headwinds in the existing business, mainly driven by these particular [ metro sensor ] projects with German OEMs, which kicked in, especially in the first half of the year, but also the second half support the top line. The existing business was more or less flat in some applications, even slightly decreasing because of all the problems, especially in the German automotive market. Medical markets, this was highly volatile, which is not that typical for medical market, which was driven mainly by destocking effects. So we came from a very extraordinary situation after the COVID, on one hand side, because of all the COVID stockings for medical regulations. On the other hand, you might remember the CPAP events with the quality issues with one of the larger CPAP manufacturers, which was not in connection with our sensor, it was another quality issue, but this was a one-off revenue we could generate back in 2022. Afterwards, in 2023 it turned out that this one-off was great, but at the end of the day this also resulted in a high inventory of sensors in the CPAP market. In the meantime, you'll see that there was a significant decrease in turnover due to destocking in CPAP, but also medical ventilator. Now it seems in the second half of 2024 that we have overcome this destocking effect. The customers are coming back placing more orders now, and we should actually be back more or less on normalization now in end of Q4 2024, but also now what's going on in Q1 this year. Industrial market in our company is a pretty highly diversified market comprising some markets like HVAC, but also clients' semiconductor hard disks, all this stuff. There, we see a very high growth dynamics after a sharp decline in 2023. The growth dynamics comes mainly from A2L business in U.S. For all those of you that are probably not that familiar with the A2L program, A2L is a new refrigerant, which is used for air-conditioners worldwide. Europe and Asia has mainly changed already and converted to this new kind of refrigerant, they are -- they come with a lower GWP, so global warming potential. This is not an extra business for us because typically A2L can be included or can be used in these HVAC systems without any leakage sensors. In U.S., the regulation is different. U.S. is now converting to this new type of refrigerant and the regulations in U.S. demand for a leakage sensor in order to prevent any higher risk of flammability of A2L refrigerants. This is a new -- completely newly emerging market because there was no leakage sensors installed in all these HVAC systems in the past. In the second half of 2024, these programs kicked in. This was the first ramp up, the ramp-up is still ongoing this year. So in the first half of the year, there was only minor and more sample-based revenue. In the second half of the year, partially -- the part of the growth dynamics comes from this A2L program, which also brings us an additional growth impact on -- in 2025. The other submarkets were different in terms of growth. On the one hand side, we see still gas metering growing significantly from year-to-year, but in a very unspectacular way. There are different countries, they are pushing their rollouts for smart meters we can benefit from. On the other hand, we have semiconductor industry, which is somehow slowing down, especially in 2024. Last but not least, consumer market. Consumer market is a highly fragmented market mainly driven also by distributions with a lot of small customers and mainly also in Asia. There, we have not yet seen strong recovery. Mainly our explanation for that is, on the one hand side, we do see still a lot of stock in these highly fragmented markets and distribution channels, especially in consumer that the people are highly concerned during the allocation of chips in 2022, 2023. So they placed a lot of orders at that time. They are still digesting this kind of too high inventories. But we do not see any kind of structural changes. Again, we do have and also remain all our customers in these areas are just somehow lower in orders. On the other hand, this market is highly sensitive on the consumer mood. Especially in China, we do see that the consumer mood, the demand from the end consumers is lower than the years before. This is more for your reference, as always, to see that the growth in the top line development, not just from one year to the other one, which can be influenced by many, many different effects, but also to zoom out to a kind of a more long-term growth picture. Before I hand over to Martin to discuss all the financial figures and details, I'd like to focus shortly on our strategy. These are the 3 revised strategic focus we have presented to you during our Capital Markets Day in November. To shortly recap it, all is anchored, the whole strategy, and this is no change compared to the old strategy from 2021. All is anchored on the foundation of our cultural spirit, our company culture of SensiSpirit as we call it. On top of that, we have defined that we have revised the 3 foci. One hand side, we have Focus 1, which is more or less all about environmental sensors and flow sensors. So this is the core of our markets, the core where we are generating the vast majority of our revenue. In this market still today, we do see a lot of growth potential for the next couple of years. On the one hand side, driven also by the innovation steps we have done in the last couple of years. That means we have miniaturized all our environmental sensors, either already in the third generation like the CO2 or in the second generation for particulate matter, but also formaldehyde. The smaller form factor, but also the lower cost levels compared to the first generation or the bulky modules enables a lot of new applications. This is not from one day to the other effect, this is more a midterm growth potential because now all the customers they have, first of all, to design with new sensors in. They have even to think about new replications. They are not that obvious because they are just now enabled by this new kind sensors. But this is the kind of a journey we have already experienced in humidity since 20 year that miniaturization enables a lot of new application can also drive volumes in their respective markets. This is the strategy for Focus 1. So we are already, by far, market-leading in humidity. We are among the top 2 suppliers for all the other environmental sensors, as we have explained in details you in the Capital Markets Day. And our ambition here is definitely to drive the markets even more and to generate a lot of additional growth opportunities in the next couple of years. But that's not all. We were -- we are more ambitious than just to focus on the core business that we have today. Focus 2 deals with all beyond the core of environmental and flow. There, what we like to do is actually to leverage either our technology portfolio or the customer base in order to grab additional opportunities beyond the core. That means, on the one hand side, we do see chances to make more in medical solutions as we have explained during the Capital Markets Day. There, we like actually to combine our strong position, commercial positions, in breath flow rate measurements that we are by far #1 for ventilators, but also for CPAP so home care, but also in the hospitals. This -- but this is all about flow today. Now we like to combine it with all the technologies we have in-house anyway for environmental. And the combination of both gives an additional information not just about the flow rate of the patient's breathing, but also about the composition of the air coming out of the patients. This information about CO2 level, about O2 level, about any kind of additional composition gives good indications for metabolism, but also about the general condition of patients. This is a program which was initiated already 2 years ago. We are still working on that. Also we deeply engage with customers. But this is one of the strategic focus. To give you another example is about leakage, we have already discussed shortly about A2L leakage, but that's just the starting point, which was an obvious opportunity provided by the fact of these regulations in the U.S. We do see a lot of other leakage sensor opportunities, for example, battery management. So batteries in cars, but also in stationary applications. They are somehow critical in terms of performance, but also in terms of thermal runaway, so kinds of malfunctions, subtle malfunctions. So there is a demand in the market to have a better monitoring systems in order to get a pre-alert in case of any malfunctions of batteries. And this can be done by, for example, monitoring potential hydrogen leakage. So hydrogen is a good indicator -- or pre-indicator for any kind of degradation of batteries. This is -- comes also -- this is more or less the same approach. That means H2 leakage or A2L leakage or all the other kinds of leakage we're talking about is more or less based on the technology we do have anyway in-house. So what we have to do is to modify the technology in a way and definitely to develop a new product. But the core technology is more or less the same as we used to have either for our medical sensors when it comes to optical technologies or we have already developed for flow technology. This might probably be somehow surprising for you that leakage is a linked technology from a technological base with flow. But at the end of the day, it's the same technologies we are applying. And even that is not enough for us. So therefore, we have the same Focus 3 as we have already defined in the Capital Market Day of 2021. So we have also the ambition to work today on technologies, on basic sensor technologies in order to direct in the next couple of years to grab additional opportunities where we have to, first, solve the technological foundation. Typically, if you like to be -- to drive innovation, you cannot do that overnight. It takes time. That means you have to develop technologies already pretty early in order to be ready to grab the opportunities when they pop up. For example, A2L, we are now harvest the potential. This was initiated already 7 years ago by looking into technologies how to make leakage monitoring feasible. And this additional work on Focus 3 was the foundation versus the precondition in order to harvest now these additional opportunities in the market. In this Focus 3, by nature, I cannot disclose what we are doing in details because you might be interested, there are even other people they are even more interested in that. That means our competitors, and therefore, we are somehow cautious to disclose too much on what we are working on in terms of technological foundation. That brings me to the end of my short business review. We can definitely dive into Q&A later on after the presentation. But before, I'd like to hand over to Martin and welcome you, especially today, because it's your first earnings presentation as our new CFO starting at the beginning of the year. So Martin, it's your stage.

Thank you, Marc. Good morning, everyone. Good morning also from my side and a very warm welcome to our earnings presentation. In addition to Marc's elaboration on the market, I will give you some more background on the key financial figures. As Marc -- or as in the previous years, we report our financial figures according to the Swiss GAAP FER standard and have been audited by KPMG. As Marc mentioned, we present adjusted figures, they are adjusted for our closure of the AiSight activities in Berlin, which consists of restructuring costs, write-off and recycling goodwill. I have to report that this is exactly the same as during the half year presentation. So there have been no additional costs or no changes compared to what we presented there. That includes the goodwill recycling of about CHF 26 million as well as a write-off that we will see later on. Marc has already highlighted the KPIs that we ended the financial year with both the top line and the gross -- or the EBITDA margin within or slightly exceeding our guidance. While this positive development, of course, is encouraging for us, we definitely strive towards bringing that to our midterm guidance of mid- to high teens on the EBITDA margin. Now if we look at the top line, our revenue development from 2023 to 2024 was driven by a broad-based return to organic growth, in particular, as we heard before, in the automotive and industrial segment. This brought us an increase by 22% if you look at local currencies. We faced FX headwind that resulted -- summed up to about CHF 8.2 million due to a lot of export on our side, and of course, then invoicing and billing in the foreign currencies. And that reduced the top line by 3.5% bringing it to 18.6% compared to the previous year. On this slide, we summarized the market development over the years, both on a regional perspective, but also on a market perspective and this reflects what Marc presented beforehand. We see definitely significant growth, and with that, a significant share in the industrial side, which is now close to 50%, which is, of course, driven by the A2L activities that Marc mentioned before. Automotive stands at 30%, medical at 16% and the consumer segment at 5%. Revenue by region shows a strengthening of the Americas. Also this is driven by the A2L activities because the majority of customers are in the Americas. If you look at gross profit and gross profit margin, for the full year, it was 49.2%, which is an improvement over the first half year results where we had 47.5%, but it was lower compared to 2023. And this is due to 2 main effects. In the first half year, we still suffered from an underutilization of our component production, which then negatively affected the gross margin due to a high portion of fixed cost on our side. In the second half of the year, we could gradually reduce the underutilization and that improved the gross margin. The second effect is a shift of our product mix from component to a more higher share of these low-margin modules, of course, namely, there the A2L business and that impacted the gross margin. But this is within what we expected and within plan. Regarding overhead cost development, we reduced both R&D and SG&A as a percentage of the revenue compared to the previous year. And in absolute terms, the SG&A is below the previous year. On the R&D side, we also have to say that we have a slightly lower portion of capitalized R&D. Two main aspect led to this improvement. On the one hand, the discontinuation on the AiSight business in the first half that then impacted positive with the second half. And on the other side, as Marc already mentioned, an active cost management throughout the year on -- throughout the whole organization also on these cost blocks here. If we move on towards the EBITDA, and let's have a look at the operating results. After a weak 2023, we improved the adjusted EBITDA margin to 10.5%. This increase was driven by the increase in gross profit, and of course, then also through the cost management in the other cost blocks. By having a look at the overall income statement here on adjusted level, but also on the reported one, we see the effect from the AiSight closure. The reported one is according to the Swiss GAAP FER standard, and as I mentioned before, we had there the effect on the closure on the recycling of the goodwill that we have to report above the EBITDA line, which is here represented as an R&D expenses. Again, the same as we reported in the half year reporting. In addition, we had effects on the taxes, which was due to the write-off of the tax benefits that we had there. And with that, we can see that on an adjusted basis, the profit for the period after taxes was CHF 4.5 million. And with that, I would like to continue with the net working capital. Net working capital in absolute terms increased. That was also due to the higher top line and the increase in the top line. So relatively, it decreased. The effect there is that on the inventory side, we could reduce the inventory by CHF 11 million whereas we had a receivable position -- strong receivable position. But for me, very important to mention there that we don't see a risk on that side. Regarding CapEx, we follow our plan to invest mainly in infrastructure in Switzerland and also our production site in Hungary. We further strengthened our position also on our presence in Stäfa. There we had an investment of CHF 8 million in land and buildings. In addition, we had a CHF 10 million in machinery also to support our growth that we expect also this year. About CHF 5 million is associated to the -- linked to the A2L business that we ramped up last year and continues this year. Now moving on to the cash flow statement. We had a positive cash flow from our operating activities. The investing activities included CHF 26 million cash out for PPE, CHF 7 million for activated R&D that we have seen before. And CHF 20 million is an investment in our equity accounted investee, Lumiphase, during their last financing round to maintain our share in the company. So if we look at that, excluding our investment in Lumiphase, the cash flow from operating activities could finance our investments. And therefore, also compared to last year, we are at a turning point towards normalization of the cash generation. Last point, I would like to focus on the balance sheet. Our cash position compared to the previous year reduced by about CHF 19 million. However, if you compare it to the half year, we could already build up and strengthen our cash position compared to the reporting in the summer. The equity rate is 84.1%, which remains at a very healthy level. And for me important is that this is a strong balance sheet that also gives us the sufficient freedom to follow our growth strategy. And with that, I would like to hand back to Marc for the outlook of 2025.

Well, thank you, Martin. To finalize this initial presentation, a short look at the full year guidance 2025. I have already discussed shortly before in the beginning that we are optimistic in terms of new business. New business should drive another year of growth this year, which is indicated to be between 12% and 27% mainly driven also by, well, in the U.S. HVAC market. With the existing business, we are somehow cautiously optimistic due to all these headwinds and the turbulences we are all well aware of. Uncertainties definitely are in our world today, on the one hand side, from a geopolitical situation, but also from a macroeconomic situation. But beyond that, more severe and specific whenever you are driven by a ramp-up, you never know what happens in detail so there can be some shifts there. Therefore, I'd like also to outline -- to point that out. There are some uncertainties linked to this A2L ramp-up. On the other hand, there is a completely unpredictable U.S. trading policy at the moment, you might also see that every day once again. In profitability, it's our clear ambition to come back to normal levels -- to normalized EBITDA levels this year. That means to be in line with our midterm guidance of being between mid and higher teens of percentage of sales. The short comment to our midterm guidance. The midterm guidance was revised in our Capital Markets Day of November, but I'd like also to take the opportunity once again now also to confirm this midterm guidance. We are still optimistic to fulfill this midterm guidance for the next growth cycle 3 to 5 years, as we have indicated during the Capital Markets Day. That brings me to the end of today's presentation. And I give back to Lars for the Q&A round.

Thank you, Marc. Thank you, Martin. And with that, as stated earlier, we would start with questions here from the audience in Zurich. I see a hand from [indiscernible].

Yes. I have 2 questions, one very short, the medical, I call it a bit the one-off in China. Can you quantify that a little bit, how much it is just so that we have an understanding of the normal medical business, I would say, which has nicely recovered. And on A2L, I tried to quickly make a calculation how much you probably had in the second half of the year, just checking. If I say that you make probably CHF 15 million to CHF 20 million in the full year, so in H2, is that a number that makes sense in A2L? And if yes, if you say then you expect even further growth in 2025 and the potential was CHF 30 million to CHF 50 million in my idea, has the potential changed for you in A2L that it can be actually more than maybe CHF 50 million? So just around this A2L to understand a little bit.

Well, the first question about the one-off in medical 2023, which was not an official one-off, to be precise, this was more a kind of -- this was driven to look back to the reason for that. In 2023, it's not longer than that, there was the exit of the Chinese government from all the COVID measures. This was 1 year after our end of the pandemic. And in this sudden change of their policy in corona measures, they -- a lot of our customers in Chinese, they were highly concerned about the next wave of people going into hospitals. Therefore, they asked for additional sensors for medical ventilators. This was this one-off, which ended up because the last wave even in China was not that strong. So that ended up with another destocking. To come to the level, this was a single-digit million of one-off in 2023. Coming back to your second question. So typically, we are not going...

Sorry, Marc. How much was the Chinese effect in medical in '24?

Single-digit one-off...

In the press release that you had...

This was just a good support at the end of the year. So not just completely neglectable, but it was low. But the other one was -- I referred to was more the one-off in 2023, which was the base year to compare with for 2024. To A2L, so typically, we're not going to disclose any revenues by product type. The reason for that is not to give you more insight, this was more is more our policy in order to not to disclose too much to our competitors. So especially our 2 competitors in A2L, Cubic and Sensata, they love to learn more about our business there. What I can disclose is definitely we are #1 in the A2L business. So about last year revenue, your calculations are completely wrong, but I don't like to give to details -- to the outlook for this year. The has not changed dramatically. There are some shifts. Typically, you are in a setup with the HVAC manufacturers that you are dual sourcing. So there might be some additional upside potential by getting a higher a portion of the -- in a dual situation. On the other hand, there is also a downside that you lose one part of your portion. So this can change, but it has not significantly changed since our last update in August. Last time I disclosed the revenue potential to be between CHF 10 million and CHF 100 million, also referring to my background as a physicist, which is typically just thinking in orders of magnitude. And therefore, I can indicate you CHF 10 million to CHF 100 million. So go more or less in the middle of that roughly and then you are not completely wrong.

The reason why I said it is I just quickly looked at your revenues in Americas that jumped from 11% to 15%. So I assumed part of it is A2L and just more or less everything.

We have also to keep in mind that A2L is not only America-based because definitely, at the end, the air-conditioner goes to U.S. because U.S. is the only country having these kind of regulations for leakage sensors. But some of the customers are located in any other parts of the world, assembling the air-conditioner in China or whatever and importing -- or exporting it off to U.S. this might also happen, yes. Michael?

Yes. Just 2 straightforward questions. The first one is related to tariffs, obviously any impact that you were seeing or expecting on that side. And the second one is just a clarification on your midterm outlook. You say you're in mid to -- low to mid-teens. I think in the past, we had 10% to 15% which is not exactly the same, but I don't want to play with words. So just clarify the percentage numbers that you have in mind.

Well, tariffs, first of all, the world -- the word of the year notably, at the moment, it's a very intransparent situation with tariffs coming in/going out within 24 hours. So more or less, most of our U.S. business, except for A2L, I would come back to A2L afterward, but all the other remaining part of the business with the U.S. is typically for U.S. customers, but not shipped to U.S. because most of our U.S. customers, they have production lines anywhere in the world, but definitely not in the U.S. This is, by the way, also one of the big challenges when it comes to tariffs because nobody actually in our industry assembles in U.S. because of cost situations. So that means most of our U.S. business is shipped to any other countries rather than U.S. In A2L, well, it's more or less a similar situation. Most of the A2L manufacturers are located in Mexico. We are going -- or we are doing production in Hungary and in Mexico. So our products are shipped either domestically in Mexico or from Hungary to Mexico. All our products are handed over to our customers if they are U.S.-based customers in Mexico and either our customers import them to U.S. as a sensor, or in a larger portion, they do the assembly in Mexico and they import the whole HVAC system. That means our exposure -- or I assess that our exposure to tariffs against Mexico to be more in -- from an indirect perspective rather than a direct one because we are not going to import these products to U.S. The indirect effect might be stronger. That means inflation in U.S., it might be reduced demand of air-conditioners in U.S. A short word about our competitors. Our competitors have more or less the same setup. That means they are either producing in Mexico or they are producing in Hungary or in China. So at the end of the day, we are all in the same boat. But the main risk there is lower demand due to the macroeconomic slowdown in the U.S. market -- or inflation. Second question, there is no change in the midterm guidance. We just changed -- in the Capital Market Day of November, we changed from figures in a mathematical way to more a kind of a prescription, but it's more or less the same. So low to mid-teens for top line growth.

So that's 13% to 16%?

No, it's roughly 10 -- low is 10%, 11%. Mid is 15%. So that means at the end of the day, we are on the same range as before. There is no change.

Can I ask a question on the cost side? You've reduced by CHF 9 million the cost basis. Is it mostly due to AiSight? Or have you really reduced your cost base, your OpEx? And is that sustainable going forward? If it's AiSight, it's obviously sustainable. But have you also made reduction in your core business that are sustainable going forward?

Yes. It's a combination of both. And that's -- there is a sustainable aspect in that one. But we could reduce that on -- throughout the whole organization. So from operations, R&D, SG&A and all that one, on top, it's also the AiSight connected.

In figures, probably to give you more guidance is AiSight affected more or less 44 employees. The FTE reduction from year-to-year is somehow slightly more than 100. So it's 1/3, especially if it comes to personal costs.

Good. Then let's maybe take a question from the online audience. I got a question from -- or 3 questions from Sandeep, I'll start with the last one. Is Sensirion intending to source any U.S. products or even do U.S. manufacturing given the new geopolitical environment?

Well, we are flexible when it comes to manufacturing. So if we see that there is, on the one hand side, longer-term tariffs, more than 24 hours; and secondly also, there is a cost benefit, including the tariffs to go to U.S., that means to -- also to provide an advantage to our end customers, then we definitely look into that. We are more or less flexible because we are not running our own production site in Mexico. We are working together with a partner there, that means we can also switch to U.S. partner in case of necessity. Time level probably 6 months. But at the moment, it does make sense because, on the one hand side, cost in U.S. is even higher, including tariffs, because of the lack of skilled people there but also the levels of salaries in the U.S. And on the other hand, at the moment, there is no clear transparency on the sustainability of all these tariffs. We can also move to Hungary in case of necessity. This can even be done quicker because there we are running around production side. So we have some kind of flexibility in terms of setup.

And especially at the moment, our customer base is outside the U.S. as well. So I would have to leave the U.S. and then be imported through our customer finalized products.

Sandeep's second question is, can you please elaborate on the gross margin trend for 2025?

So we have decided during the Capital Market Day or for the Capital Market Day not anymore to guide the gross margin because it can also be influenced by the product mix between modules and components. But as a kind of an informal guidance, we expect to be more or less in the same level as this year -- last year, sorry, to be precise. So we guided last year's 47% up to 49%. We ended up with 49.2%. It's the same -- on the same level.

And the last question from Sandeep is a growth question, sales growth question. The guidance implies a CHF 55 million of incremental new revenue in 2025. This would be the highest absolute growth at Sensirion except 2020. How much of this would be A2L? How much other new products like PM2.5? And how much is the rest of the historic business?

With the risk to disappoint Sandeep, sorry. But again, we cannot disclose product-based revenue splits. But definitely, as I have indicated, A2L is definitely one of the big drivers. It's not the only one, but it's a big driver for the growth of this year. There are some others, definitely, but A2L is #1 as growth contribution for this year.

Thank you. Are there any additional questions here in the room? No? I have no additional online questions, Chris? Now just a question came in. What is the building project? What is the situation currently in Stäfa? Is it approved? And then how are you going to -- how are we going to finance it?

Shortly to recap for all those, they are probably not familiar with this project. We are running our central clean room in Stäfa. This clean room in Stäfa there for is more or less full. So we have no flexibility, on the one hand side, to grow additionally in the next couple of years. On top of that, we like also, and this is a project we have already started 3, 4, 5 years ago, we like also to increase our resilience. That means to have a kind of a double sourcing situation for our central clean room where all the products on component levels goes through. And therefore, we have intensively looked around for an additional plot to build a second production center in Stäfa. This was a pretty long journey to come to a conclusion. Also with thanks to the support of the local community, local authorities, we could buy at the beginning of last year a plot, which is very close to our main building, which is ideal to build up a second production site. And this project at the moment, the current status is that we filed in all the plans to the local authority end of the last year. So we are waiting now for the approval from the authorities. Then, as always, in Switzerland, you have to hope that there are no neighbors, they like actually to delay the project. At the moment, we are in good terms with neighbors. We have also good discussions with them. So we're not that highly concerned, but at the end of the day, you never know it until the very moment, the period to oppose to this project has ended. Therefore, at the moment, we expect to get the approval by the local authorities in the next 2, 3 months. Providing that there is no opposition from neighbors, we might get the full approval in Q3 and then we like to start in Q4. This is the best scenario to start the production -- the building, the construction. The construction is expected to last for more or less 2 years. So then we would be ready to move in with the second clean room end of 2027. This is the rough schedule at the moment.

Can I have one question that has nothing exactly to do with the numbers that you reported today? You have invested CHF 20 million into Lumiphase to keep your shareholding there. This is quite an amount. I think the last one -- the last such a big investment was probably AiSight in that region. How far are we from seeing a commercial success of that investment? Is there anything on the timing horizon that you could share?

Yes. Definitely, whenever you are a start-up, especially with a completely new technology in a new field, it's always not that reliable already the schedules. But what I can disclose with you is that they make significant progress on development levels. So now all these different layers on these chips are put together. So at the beginning, just to give you more insights there, typically if you have somewhat complex project at chip level you have actually to develop all parts separately first, and then there is the proof of the pudding, to put all these steps together. This is exactly what happens today in these months, unfortunately, not in one day only. But in these months, all these steps are now put together in order to get the very first full blast chips in our hands -- or not in our, but in Lumiphase hands. They are also, commercial-wise, they are in very close contact with the leading customers, one of the leading manufacturers of this optical transmitter system. So commercial-wise but also technology-wise, there is good and very promising progress. Coming to your question about when should the first batch of the monetization starts, I expect to be there probably in 2 years from now, roughly spoken.

So one more time, are there any additional questions here in the room? No? I don't see any additional questions online either. Then with that, thank you very much in your interest in the Sensirion results 2024. With that, I would also like to thank Marc and Martin. And with that, we would, yes, close the call. Thank you very much.

Bye-bye.

Thank you. Bye-bye.