Annual
Report

Dear shareholders and business partners,

What changes are we seeing in the business world in which our company operates? What innovations will be shaping the future? These are the questions that drive us every single day. And the answers? Our sensors and sensor solutions—the products that have enabled us to grow from a Berlin-based technology startup into one of the leading global sensor companies. Our success is based on pioneering ideas, a commitment to excellence and close collaboration with our customers. Thanks to our expertise in chip design and production as well as microelectronic layout and connection technology, we today develop and produce customized and standard sensor solutions in the fields of photonics, pressure and advanced electronics for the growing number of applications in our target markets Industrial, Medical and Mobility. And this is something we have done with sustained success.

With sales of €155.1 million, we ended the fiscal year within the guidance and achieved 5.2% more growth than the previous year. This growth was driven by the target markets Industrial and Medical as well as the sales regions of North America and Asia, where sales grew considerably. We want to—and will—continue this growth in 2019, too. After all, sensor technology is and will always be an innovation driver, and our products are the essential building blocks for the megatrends of digitalization and connectivity.

In Industry 4.0, for example, our solutions are essential for controlling interactions with robots or initiating maintenance measures before a problem occurs. In the world of medical technology, they help to improve diagnostics and support personalized care thanks to mobile e-health devices. And in the automotive industry, they are needed for green mobility—low consumption and low emissions—and for helping us to move into the age of autonomous vehicles. This is why volatile geopolitical developments and the impact of new standards and legislation, which are reflected in the sales in the target market of Mobility, represent only a snapshot of the current situation and why we can expect further growth here in 2019.

To achieve growth in all three target markets, we do not want to depend solely on a subsistence strategy and on market experts, who also expect economic growth and increasing demand for sensor technology in the coming years. Instead, we want to intensify our key account management to promote ongoing and comprehensive dialog with our key customers, invest in a new generation of our key products, upgrade our production facilities and expand both our production capacity and international presence. This will help us to further increase our market share in the DACH region and Europe as well as in Asia and North America. Our focus here will be on our key growth drivers: pressure, LiDAR and camera technology.

We will be continuously enhancing our L-series, H-series, transmitters and sensEdge products, which cover the measurement range from 1 millibar to 1,000 bar, and further expanding our production capacities—both internally and in collaboration with external partners.

To ensure that we play just as active a role in the introduction of advanced driver assistance systems and autonomous vehicles as we do in the increased use of industrial robotics, we are continuously enhancing and refining our avalanche photodiodes for LiDAR applications and are working on scalable LiDAR structures. We are expecting a sustained increase in the demand for such products, a position shared by industry experts and the recently published Global APD Report and one that is supported by the ever-increasing demand in the market.

We are also looking to significantly increase our camera sales over the course of this year. We laid the foundations for this back in early 2018 when our Blue Next camera entered series production. In addition, as part of our strategic target of forward integration, the end of last year saw the market launch of our embedded electronic control unit (ECU), a scalable hardware and software platform for sensor fusion in driver assistance systems. But we do not want to deploy our camera knowhow exclusively in the target market Mobility—instead, we have already started tapping into new, highly specific application fields for our camera solutions in the smart home segment.

Across all target markets, key customers, key products, sales regions and growth drivers, and provided that the geopolitical and economic situation remains stable, we are expecting sales of between €160 million and €170 million in this fiscal year. Over the medium term, we are aiming to achieve year-on-year growth of 10%. We will also be looking to improve our profitability.

After our EBIT margin has for a long time been significantly less than 5%, the measures we have introduced to improve operational excellence and our clear focus on generating and leveraging economies of scale are starting to bear fruit: With an EBIT margin of 6.7% in 2016 and 7.2% in 2017, we ended the last fiscal year on 7.9%, which corresponds to an EBIT of €12.2 million—or a 16% increase compared with the previous year. This means that we are within our guidance here, too. We are looking to further increase our profitability and, based on our sales guidance, are striving for an EBIT margin of 8.5% to 9.5% for fiscal year 2019. By 2020, we want to have an EBIT margin of 10%.

To achieve these targets, we need our team to stay every bit as committed as it always has done, every single day. We need a team to keep on working together on solutions for everyday challenges. A team to look beyond the horizon and to shape our future. I would like to thank every single one of our 972 employees for their service, their creativity and their passion and for their commitment to achieving profitable growth, even if this involves overcoming hurdles along the way.

Equally, I would like to thank our shareholders, who are also sharing in our success along this path of profitable growth. We are looking forward to embarking on the next stage together with you.

Your Executive Board