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u-blox AG: u-blox (SIX:UBXN), a global leader in wireless and positioning technologies, today announced its financial results for 2018 Freitag, 15. März 2019 - 07:00
u-blox AG / Key word(s): Financing
u-blox AG: u-blox (SIX:UBXN), a global leader in wireless and positioning
technologies, today announced its financial results for 2018
15.03.2019 / 07:00
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Press Release
Thalwil, Switzerland - March 15, 2019 - u-blox (SIX:UBXN), a global leader
in wireless and positioning technologies, today announced its financial
results for 2018.
Financial highlights
The fiscal year 2018 demonstrated the resilience of our business model:
- Financial performance reflects a difficult environment in 2018
- Market outlook remains favorable
o EMEA on continued expansion with 21% growth in 2018
o Americas declined slightly by 6% as some customers were delaying the
migration to LTE based connectivity
o APAC grew except in China: Temporary decline of 13%
- Important product launched in 2018
- R&D efforts continued at high pace - significant product launches ahead
- EBITDA and EBIT at guided level: CHF 71.6m resp. CHF 48.3m
- 2.6% revenue decline as compared to 2017
- Gross profit (adjusted) down by 3.7%
- Positive Free Cash Flow (before changes in NWC) of CHF 5.2m
- Reduced cash flow from operating activities
o Temporary increase in working capital to assure delivery reliability
- Outlook 2019
o Business growth expected in all regions
Video summary: https://www.u-blox.com/en/annual-report-2018
Annual report: https://www.u-blox.com/en/annual-report-2018
Presentation:
https://www.u-blox.com/sites/default/files/documents/Presentation_Full_Year_2018.pdf
Entire press release:
https://www.u-blox.com/en/investor-press-releases/financial-results-2018
In 2018 our revenues were broadly in line with our latest guidance at CHF
393.3 million, with EBIT of CHF 48.3 million, and EBITDA of CHF 71.6
million. We saw growth in all countries we operate in throughout Europe, the
Middle East and Africa (EMEA), and throughout the Asia Pacific region,
except China.
In EMEA business was very strong in 2018, with 21% revenue growth. This was
driven by the need for connected devices destined for the Internet of Things
(IoT) in infrastructure and telematics, as well as an increasing demand from
the automotive sector, stimulated by the need for in-vehicle connectivity.
Revenues in the Americas declined slightly by 6% as some customers were
delaying the migration to LTE based connectivity due to changing
specifications and due to carriers not equipping their infrastructure in a
timely manner. However, in the last quarter we saw a good increase of sales
in LTE-M and NB-IoT modems and we expect this trend to continue. Although
tracking applications declined, other industrial markets continue to grow
strongly and the automotive sector maintains attractive growth, thus giving
us confidence for overall revenue growth in 2019.
We saw a short-term decline in revenue in APAC (13%), largely due to market
regulation influencing some consumer applications in China and the impact of
the China-US trade tensions. While these factors impacted the first half of
the year sales, business rebounded in the second half with growth in the
infrastructure, in-car navigation, and after-market car electronics sectors.
Looking into 2019, we see several indications of renewed growth in the APAC
region, namely: 1) strong technology momentum in China, boosted by increased
investment in technology, 2) increased demand for consumer applications, and
3) growth in industrial IoT, with China accounting for about one quarter of
the IoT market globally, and Japan, Korea, and Taiwan already showing
increasing demand for industrial IOT and automotive solutions.
Revenue breakdown
u-blox operates in two segments:
- Positioning and wireless products
u-blox develops and sells chips and modules for positioning and wireless
connectivity that are used in automotive, industrial and consumer
applications. Revenue was CHF 393.3 million for 2018 as compared to CHF
403.5 million in 2017.
- Wireless services
u-blox also offers wireless communication technology services in terms of
reference designs and software. In 2018, revenue for wireless services was
CHF 31.5 million compared to CHF 32.8 million in 2017 (including intra-group
revenue).
Geographic breakdown of 2018 revenues were 35.4%, 32.4% and 32.2% for
Asia-Pacific, EMEA and Americas respectively. u-blox was able to grow
revenues in EMEA by 20.5% to CHF 126.2 million. In APAC revenue decreased by
13.3% to CHF 139.1 million and in the Americas revenue declined by 6.3% to
CHF 126.6 million.
In 2018, the company generated about 80% of its total revenue from 104
customers. u-blox's largest customer accounted for less than 4% of revenue
and u-blox served over 6'900 customers achieving global expansion into new
regions and markets.
Gross profit
Gross profit (adjusted) decreased by 3.7% to CHF 177.9 million in 2018 from
CHF 184.8 million in 2017. Adjusted gross profit margin was 45.2% for 2018
compared to 45.8% in 2018 due to changes in product mix.
Distribution and marketing activities
Distribution and marketing expenses (adjusted) remain stable in 2018 with
CHF 34.8 million as compared to CHF 34.0 million in the previous year. As a
percentage of revenue, distribution and marketing expenses (adjusted) were
8.8% in 2018 compared to 8.4% in 2017.
Research and product development
R&D expenses (adjusted) in 2018 were CHF 67.8 million as compared to CHF
58.3 million in 2017. As a percentage of revenue, R&D expenses (adjusted) in
2018 were 17.2% as compared to 14.5% in 2017. The percentage of revenue
increased due to both expanded R&D activity. Including capitalized efforts,
we have again invested considerable amounts into R&D to add new platforms to
our product offering.
Share based payment
Share based payment expenses recognized according to IFRS in 2018 were CHF
8.4 million as compared to CHF 8.1 million in 2017.
Operating profit (EBIT)
Operating profit (EBIT) (adjusted) was CHF 60.4 million in 2018 as compared
to CHF 78.0 million in the previous year. Operating profit (EBIT) (adjusted)
declined from 2017 to 2018 by 22.6%. Operating profit (EBIT) margin
(adjusted) decreased to 15.4% and EBITDA margin (adjusted) was 20.7% in
2018.
Finance income and costs
Finance income was CHF 5.3 million mainly generated by foreign exchange
effects. Finance costs were CHF 2.2 million consisting mainly of interest
payments for the two outstanding bonds. The share of profit of
equity-accounted investee Sapcorda GmbH was CHF -3.3 million net of tax.
Net cash generated from operating activities
In 2018, u-blox generated cash from operating activities in the amount of
CHF 36.3 million as compared to CHF 60.5 million in 2017, a decline of 39.9%
compared to previous year, due to an increase of net working capital due to
higher inventories. Excluding this working capital effect, u-blox generated
cash from operating activities of CHF 68.6 million.
Main investing activities
Investments in property, plant and equipment, and intangible assets amounted
to CHF 61.4 million in 2018 (2017: CHF 65.1 million). As a percentage of
sales, the investment ratio decreased slightly to 15.6% in 2018 (2017:
16.1%).
Despite the continued expansion of the R&D pipeline and the increased number
of development projects across all product categories, capitalized
development costs were stable at CHF 53.8 million (2017: CHF 53.8 million).
There were no investments into intellectual property rights in 2018 (2017:
CHF 0.2 million). Investments into software amounted to CHF 0.3 million
(2017: CHF 0.5 million). In 2018, investments into property, plant and
equipment reached CHF 7.3 million (2017: CHF 10.6 million).
u-blox invested 87.6% of total investments (2017: 82.9%) into the
development of new products. No investment went into capacity expansion in
2018 (2017: 2.0%).
Financing activities
In 2018 u-blox paid dividends of CHF 15.4 million and received proceeds from
the issuance of ordinary shares related to the employee share option plan of
CHF 15.3 million. In the context of the employee share option program,
u-blox invested CHF 7.6 million for the purchase of 53'000 treasury shares
(2017: CHF 24.4 million) to be used in the future for the employee option
program.
Solid financial position
u-blox has a strong balance sheet with an equity ratio of 63.1%. Cash and
cash equivalents and marketable securities amounted to CHF 137.7 million on
December 31, 2018, compared to CHF 172.4 million on December 31, 2017.
Goodwill decreased due to changes in EUR/CHF exchange rate from CHF 57.6
million in 2017 to CHF 55.2 million or 9.9% of total assets in 2018.
On the basis of this strong financial position and the positive outlook, the
Board of Directors is proposing at the Annual General Meeting to pay out
dividends. For this year a dividend of CHF 1.60 per share is proposed, which
represents a payout ratio of 29.5% of consolidated net profit, attributable
to owners of the parent in line with previous years' payout ratios.
Future outlook
We are convinced that the Internet of Things will change every aspect of our
societies, our businesses, and our everyday lives. A quarter of a billion
connected cars will be delivered between 2019 - 2023. Industry 4.0 is
happening and it is expected that there will be more than 2 billion
connected devices in 2023 [1]. Infrastructure is becoming smarter. There
will be approximately 1 billion smart meters installed between 2019 - 2023
[2]. Over half a billion sports and wellness trackers will be sold in the
next 5 years (2019 -2023) [3].
These strong market growth drivers substantiate our strategy to develop
reliable and innovative positioning and wireless communication solutions
that securely connect vehicles, industries, things, and millions of people
around the world.
To do so, we continue to invest in innovation. In 2018 we invested over CHF
100 million in R&D, with 703 engineers in 14 research and development
centers globally. Currently 6 new chip platforms are in the development
pipeline to drive profitable business growth.
More technological capabilities open new application possibilities and
innovation at our IP core will assure continued margin expansion. Our
targeted investments in future technologies ensure growth and certainty.
New standards will expand application possibilities. For example, 5G defines
higher performance requirements. Bluetooth and Wi-Fi standards expansion
will allow the capillary Industry Internet of Things, bridging the cellular
and short range radio worlds. New GNSS satellite signals will offer higher
availability and precision.
Our product initiatives are at the forefront of these important industrial
megatrends. We continue to convince leading customers with our technology
and innovation leadership, and our technology platform provides the basis to
deliver resilient value-added services. Further, our product diversification
by applications and geography assure stability in growth.
We are confident our innovation will deliver results. Revenue target for
2019 is CHF 460 to 490 million, with an EBITDA of CHF 70 to 90 million and
EBIT of CHF 30 to 45 million.
Board of Directors
2019 will see some changes in the Board of Directors. Prof. Dr. Gerhard
Tröster and Dr. Paul Van Iseghem will retire and therefore not stand for
re-election at the upcoming Annual General Assembly on April 25, 2019. Both
have been instrumental over many years in the development of the company:
Prof. Dr. Gerhard Tröster as founding professor since u-blox was spun off
from the ETH, and Dr. Paul van Iseghem as Vice-Chairman since 2011.
The board will propose the election of the following candidates as
non-executive director on the Board of Directors of u-blox Holding AG: Dr.
Annette Rinck and Markus Borchert.
As previously announced, Daniel Ammann, member of the Executive Committee
and responsible for the Positioning and Short-Range Radio product centers,
will leave u-blox at the end of March 2019 and the Executive Committee was
reorganized to combine all product centers in one group, which will be
headed by Andreas Thiel. Mr. Thiel is member of the Executive Committee, as
well as being a co-founder of u-blox, and is currently responsible for the
Cellular product center and the center for integrated circuits.
Financial highlights (adjusted)
(CHF in million) 2018 2017 2016
Revenue 393.3 403.7 360.2
Growth rate over previous year -2.60- 12.10- 6.50%
% %
Gross Profit adjusted2) 177.9 184.8 167.8
Growth rate over previous year -3.70- 10.10- 7.90%
% %
Gross Profit adjusted2) in % of revenue 45.20- 45.80- 46.60-
% % %
EBITDA1) adjusted2) 81.2 97.8 90
Growth rate over previous year -16.9- 8.70% 6.50%
0%
EBITDA adjusted in % of revenue 20.70- 24.20- 25.00-
% % %
Operating profit (EBIT) adjusted2) 60.4 78 69.8
Growth rate over previous year -22.6- 11.80- 16.50-
0% % %
Operating profit (EBIT) adjusted2) in % of revenue 15.40- 19.30- 19.40-
% % %
Net Profit adjusted2) 48.2 61.5 54.3
Growth rate over previous year -21.7- 13.30- 23.80-
0% % %
Net Profit adjusted2) in % of revenue 12.20- 15.20- 15.10-
% % %
Cash generated from operating activities 36.3 60.5 93.6
Growth rate over previous year -39.9- -35.3- 25.30-
0% 0% %
in % of revenue 9.20% 15.00- 26.00-
% %
Equity 348.9 318.5 284.7
in % of total assets 63.10- 60.70- 67.00-
% % %
Dividend per share3) 1.6 2.25 2.1
1) EBITDA (earnings before interest, taxes,
depreciation and amortization) calculated by adding
depreciation and amortization to profit from
operations (EBIT), in each case determined in
accordance with IFRS.
2) excl. share based payments, impacts based on
IAS-19, amortization of intangible assets acquired
and non-recurring expenses
3) proposal of the Board of Directors to the AGM
Financial highlights (IFRS)
(CHF in million) 2018 2017 2016
Revenue 393.3 403.7 360.2
Growth rate over previous year -2.60- 12.10- 6.50%
% %
Gross Profit 177.1 184 167.1
Growth rate over previous year -3.70- 10.10- 7.80%
% %
Gross Profit in % of revenue 45.00- 45.60- 46.40-
% % %
EBITDA1) 71.6 87.4 81.8
Growth rate over previous year -18.0- 6.90% 3.90%
0%
EBITDA in % of revenue 18.20- 21.60- 22.70-
% % %
Operating profit (EBIT) 48.3 65.1 59
Growth rate over previous year -25.8- 10.30- 15.00-
0% % %
Operating profit (EBIT) in % of revenue 12.30- 16.10- 16.40-
% % %
Net Profit 38.5 51.3 46.2
Growth rate over previous year -24.9- 11.00- 24.50-
0% % %
Net Profit in % of revenue 9.80% 12.70- 12.80-
% %
Cash generated from operating activities 36.3 60.5 93.6
Growth rate over previous year -39.9- -35.3- 25.30-
0% 0% %
in % of revenue 9.20% 15.00- 26.00-
% %
Equity 348.9 318.5 284.7
in % of total assets 63.10- 60.70- 67.00-
% % %
Dividend per share2) 1.6 2.25 2.1
1) EBITDA (earnings before interest, taxes,
depreciation and amortization) calculated by adding
depreciation and amortization to profit from
operations (EBIT), in each case determined in
accordance with IFRS.
2) proposal of the Board of Directors to the AGM
Consolidated Income statement (IFRS and adjusted)
Jan-De- Adj- Jan-Dec Jan-Dec
c 2018 ust- 2018 2017
men-
ts
2)
(in CHF 000s) (IFRS) % (adjusted) % (adjusted) %
reve- reve- reve-
nue nue nue
Revenue 393'26- 100 393'269 100 403'712 100
9
Cost of sales -216'1- -55 809 -215'342 -54.- -218'901 -54.-
51 8 2
Gross Profit 177'11- 45 809 177'927 45.2 184'811 45.8
8
Distribution -36'96- -9.4 2'1- -34'782 -8.8 -34'049 -8.4
and marketing 6 84
expenses
Research and -74'92- -19.- 7'1- -67'818 -17.- -58'345 -14.-
development 5 1 07 2 5
expenses
General and -20'75- -5.3 2'0- -18'744 -4.8 -16'295 -4
administrative 5 11
expenses
Other income 3'818 1 3'818 1 1'921 0.5
Operating 48'290 12.3 12'- 60'401 15.4 78'043 19.3
Profit (EBIT) 111
Finance income 5'305 1.3 5'305 1.3 5'668 1.4
Finance costs -2'158 -0.5 -2'158 -0.5 -5'652 -1.4
Share of -3'339 -0.8 -3'339 -0.8 -400 -0.1
profit of
equity-account-
ed
investees, net
of taxes
Profit before 48'098 12.2 12'- 60'209 15.3 77'659 19.2
income tax 111
(EBT)
Income tax -9'617 -2.4 -2'- -12'039 -3.1 -16'134 -4
expense 422
Net profit, 38'481 9.8 9'6- 48'170 12.2 61'525 15.2
attributable 89
to owners of
the parent
Earnings per 48'290 12.3 12'- 60'401 15.4 78'043 19.3
share in CHF 111
Diluted 5.58 6.99 8.91
earnings per
share in CHF
Operating 5.56 6.96 8.81
Profit (EBIT)
Depreciation 23'356 5.9 -2'- 20'844 5.3 19'780 4.9
and 512
amortization
EBITDA1) 71'646 18.2 9'5- 81'245 20.7 97'823 24.2
99
1)Management
calculates
EBITDA
(earnings
before
interest,
taxes,
depreciation
and
amortization)
by adding back
depreciation
and
amortization
to operating
profit (EBIT),
in each case
determined in
accordance
with IFRS.
2)Adjustments
are impacts of
Share based
payments,
Pension
calculation
according to
IAS-19,
Non-recurring
expenses and
amortization
of intangible
assets
Consolidated statement of financial position
(in CHF 000s) At December 31, At December 31,
2018 (audited) 2017 (audited)
Assets
Current assets
Cash and cash equivalents 136'296 169'624
Marketable securities 1'401 2'813
Trade accounts receivables 60'802 50'401
Other current assets 78'415 60'476
Total current assets 276'914 283'314
Non-current assets
Property, plant and equipment 14'829 17'494
Goodwill 55'231 57'628
Intangible assets 193'445 153'986
Financial assets (incl. 9'041 8'351
equity accounted investees)
Deferred tax assets 3'570 3'739
Total non-current assets 276'116 241'198
Total assets 553'030 524'512
Liabilities and equity
Current liabilities 55'476 58'946
Non-current liabilities 148'677 147'054
Total liabilities 204'153 206'000
Shareholders' equity
Share capital 6'390 6'261
Share premium 66'296 66'579
Retained earnings (incl. 276'191 245'672
treasury shares)
Total equity, attributable to 348'877 318'512
owners of the parent
Total liabilities and equity 553'030 524'512
Consolidated Cash flow statement
(in CHF 000s) For the period For the period
ended December 31, ended December 31,
2018 2017
Net Profit 38'481 51'260
Depreciation & amortization 23'356 22'290
Other non-cash transactions 9'814 12'538
Financial income & 192 384
financial expense
Income tax expense 9'617 13'442
Change in networking -32'235 -19'977
capital and provision
Income tax paid -12'883 -19'433
Net cash generated from 36'342 60'504
operating activities
Net investment into -7'312 -10'548
property, plant and
equipment
Net investment into -54'075 -54'371
intangibles
Net investements into 2'103 4'968
financial assets
Participation in capital -4'107 -3'560
increase
Net cash used in investing -63'391 -63'511
activities
Free Cash Flow (before -22'942 553
participation in capital
increase)
Free Cash Flow -27'049 -3'007
Proceeeds from issuance of 15'286 6'827
ordinary shares
Dividens paid to owners of -15'441 -14'526
the parent
Net proceeds from 0 59'284
borrowings
Purchase of treasury shares -7'609 -24'422
Interest paid -1'917 -1'151
Net cash provided by / used -9'681 26'012
in financing activities
Net increase in cash and -36'730 23'005
cash equivalents
Cash and cash equivalents 169'624 149'545
at beginning of year
Exchange gains/(losses) on 3'402 -2'926
cash and cash equivalents
Cash and cash equivalents 136'296 169'624
at end of the period
About u-blox
u-blox (SIX:UBXN) is a global provider of leading positioning and wireless
communication technologies for the automotive, industrial, and consumer
markets. Their solutions let people, vehicles, and machines determine their
precise position and communicate wirelessly over cellular and short range
networks. With a broad portfolio of chips, modules, and a growing ecosystem
of product supporting data services, u-blox is uniquely positioned to
empower its customers to develop innovative solutions for the Internet of
Things, quickly and cost-effectively. With headquarters in Thalwil,
Switzerland, the company is globally present with offices in Europe, Asia,
and the USA.
Find us on www.u-blox.com, Facebook, LinkedIn, Twitter @ublox and YouTube
u‑blox contact:
Thomas Seiler, Chief Executive Officer
Phone: +41 44 722 74 22
E-mail: thomas.seiler@u-blox.com
Roland Jud, Chief Financial Officer
Phone: +41 44 722 74 25
E-mail: roland.jud@u-blox.com
Financial calendar
Annual general meeting: April 25, 2019
Half year results 2019: August 23, 2019
Analyst day 2019: November 20, 2019
Disclaimer
This release contains certain forward-looking statements. Such
forward-looking statements reflect the current views of management and are
subject to known and unknown risks, uncertainties and other factors that may
cause actual results, performance or achievements of the u-blox Group to
differ materially from those expressed or implied. These include risks
related to the success of and demand for the Group's products, the potential
for the Group's products to become obsolete, the Group's ability to defend
its intellectual property, the Group's ability to develop and commercialize
new products in a timely manner, the dynamic and competitive environment in
which the Group operates, the regulatory environment, changes in currency
exchange rates, the Group's ability to generate revenues and profitability,
and the Group's ability to realize its expansion projects in a timely
manner. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described in this report. u-blox is providing the
information in this release as of this date and does not undertake any
obligation to update any forward-looking statements contained in it as a
result of new information, future events or otherwise.
This press release is published in German and English. Should the German
translation differ from the English original, the English version is
binding.
u‑blox AG
Zürcherstrasse 68
8800 Thalwil
Switzerland
Phone +41 44 722 74 44
Fax +41 44 722 74 47
info@u-blox.com
www.u‑blox.com[1] BI Intelligence 2018
[2] ABI research 2018
[3] TSR 2018
