u-blox Posts Strong First Half for 2015

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u-blox Posts Strong First Half for 2015

u-blox, a global leader in wireless and positioning modules and chips, announces its financial results for the first semester.

u-blox reports ongoing solid top- and bottom-line growth:

  • Consolidated revenues amounted to CHF 161.9 million during the first half of 2015, an increase of 33.1% compared with the same period last year.
  • Gross profit rose from CHF 57.6 million to CHF 72.8 million, with gross profit margin remaining high at 44.9%. Operating profit (EBIT) was up from CHF 18.8 million to CHF 24.8 million, an improvement of 31.9% over the same period last year.
  • The EBITDA margin stood at 22.6%, EBIT margin at 15.3%.
  • Net profit was CHF 15.0 million compared to CHF 14.4 million for the same period last year. It was influenced by the EUR/CHF exchange rate.
  • Strong net cash generated from operating activities was CHF 20.5 million, representing 12.7% of revenue.
  • u-blox issued in April a bond for CHF 60 million (6 years, interest 1.625%) to improve financial flexibility.
  • Healthy balance sheet with a high equity ratio of 64.0%.

Sales and profit continue to rise

During the first half of 2015, worldwide sales showed a 33.1% rise over the same period last year, and encouraging progress was reported in all regions.

In the Americas, growth continued positively, resulting in 48.1% expansion compared to the same period last year. Continuing improvement in the macro-economic climate pushed up demand for our customers’ products and hence our own. u-blox posted a pleasing increase in market share and higher volumes, thanks to a number of new customers. Interest in our new products and technologies is keen and provides a solid foundation for future operations.

In Europe, the Middle East and Africa (EMEA), growth remained static in some countries. Expansion was reported in countries with healthy export markets, resulting in a 24.3% increase in revenues for automotive and industrial applications and a significant rise in new accounts and business opportunities.

Growth in Asia-Pacific (APAC) reflected the region’s vibrant economies and was a major factor in consolidating our market share. While sales to existing customers continued to rise, u-blox also acquired some significant new accounts primarily in China. Our reputation for ongoing innovation and the delivery of new technologies continues to attract new customers and has seen us involved in several major ramp-ups with our products. Revenues grew strongly in all application areas, and the overall increase stood at 29.9%.

The company’s product and service business segments both generated positive EBIT in the first semester. Consolidated revenues increased by CHF 40.3 million to CHF 161.9 million while EBIT rose from CHF 18.8 million to CHF 24.8 million, a 31.9% increase over the same period in 2014. Net profit rose to CHF 15.0 million.

Strategic course confirmed

In the first half of 2015, u-blox’s expansion, acquisition, manufacturing and product strategies moved it closer to its target of half-billion-dollar annual revenues in the foreseeable future.

The major news on the acquisition front was u-blox’s takeover of Berlin-based lesswire’s automotive short-range modules operations. This strengthened our automotive-grade Bluetooth and Wi-Fi module products, our position in the automotive market and gave us a team of key engineers. Both staff and products have been smoothly and seamlessly integrated into u-blox’s operations. The team is located in Berlin.

During the first half of 2015, u-blox opened up an office in Osaka, Japan, to provide local support for M2M (machine-to-machine) customers in the south of Japan. u-blox also set up another office in Chongqing to demonstrate interest to further invest in the fast growing market of Western China and getting closer to local automotive and industrial customers.

The company also became a member of the M2M Alliance, a platform for providers and users designed to promote M2M technologies and solutions. A second strategically motivated move was u-blox’s decision to become a member of the CAR 2 CAR Communication Consortium, which is dedicated to the development and deployment of Cooperative Intelligent Transport Systems (C-ITS). Both memberships position u-blox firmly within the community of movers in the “Internet of Things” (IoT) wireless communication industry.

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 161.8 million for the first half of 2015 compared with CHF 121.5 million during the same period last year.
  • Wireless services: u-blox also offers wireless communication technology services in the form of reference designs and software. In the first semester, revenue for wireless services was CHF 12.8 million compared with CHF 9.5 million in the first half of 2014 (including intra-group revenue).

During this period, Asia-Pacific accounted for 46.6%, EMEA 24.6% and the Americas 28.8% of total revenue based on billing location. u-blox reported increased revenues in all regions. Revenue for Asia Pacific grew by 29.9% to CHF 75.5 million, for EMEA by 24.3% to CHF 39.8 million and for Americas by 48.1% to CHF 46.6 million.

In the first half of 2015, the company made about 80% of its total revenue from 63 customers. u-blox’s largest customer accounted for 9% of revenue. u-blox served over 5,000 customers and achieved global expansion into new regions and markets.

Increased gross profit

Gross profit increased by 26.3% to CHF 72.8 million during the first half of 2015, up from CHF 57.6 million in the same period last year. Gross profit margin was 44.9%, declining from 47.4% in first half year 2014 because of the changes in product mix.

Outlook

For 2015, u-blox keeps its already announced guidance with an EBIT between CHF 48 million and CHF 53 million, based on revenues of between CHF 335 million and CHF 345 million. These expectations exclude unforeseen economic adversity and foresee budgeted exchange rates (USD/CHF: 0.974; EUR/CHF: 1.065, GBP/CHF: 1.500).

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