u-blox Achieves Strong 2015 Results

u-blox Achieves Strong 2015 Results

u-blox, a global leader in wireless and positioning modules and chips, today announces its financial results for 2015.

Financial highlights

u-blox achieved solid top- and bottom-line growth:

  • Consolidated revenue of u-blox was CHF 338.3 million in 2015, a growth of 25.3% as compared to 2014.
  • Gross profit improved from CHF 122.7 million to CHF 155.0 million, with a continued strong gross profit margin of 45.8% in 2015.
  • Operating profit (EBIT) increased from CHF 39.1 million to CHF 51.3 million, a growth of 31.3% as compared to 2014.
  • EBITDA margin of 23.3%, EBIT margin of 15.2%.
  • Net profit increased by 7.9% from CHF 34.4 million to CHF 37.1 million, representing a 11.0% net profit margin for 2015.
  • Strong net cash generated from operating activities was CHF 74.7 million, representing 22.1% of revenue.
  • Healthy balance sheet with a high equity ratio of 64.2%.
  • The payout of a dividend of CHF 1.90 per share from capital reserves is to be proposed at the Annual General Meeting.

Ongoing rise in revenue and profit

In 2015, consolidated Group revenues rose to CHF 338.3 m, equal to a 25.3% increase over 2014, with progress across all regions. EBIT climbed even more strongly and CHF 51.3 m was at the upper end of our predicted range for the year, showing a 31.3% increase over the previous year.

Growth in the Americas remained strong, and revenues were up by 32.6%. Apart from macroeconomic factors, it was fueled mainly by the rise in demand for our range of sophisticated products for tracking applications and the exponential increase in the importance of Internet of Things solutions. There was great interest in our new LTE products, while expansion into new areas, with the emphasis on telematics, led to a gratifying rise in market share and a significant increase in new customers. Overall, the keen interest in our products and technologies bodes well for future operations.

Markets in Europe, the Middle East and Africa (EMEA) reported a growth of 15.3% with expansion in all geographical regions and application areas, especially asset tracking and automation. We are pleased to report strong expansion in new business opportunities driven by lively demand for in-vehicle telematics and the trend towards increased Internet connectivity in cars.

With their economies still buoyant and an ongoing positive climate, the Asian markets reported a more-than-satisfactory 26.3% growth. There was continued high demand for wearables and portable devices, as well as automotive applications.

Firmly on course for intermediate goal

Last year marked another significant step towards our strategic medium-term goal of half-billion-dollar annual revenues. Having established the third pillar in our product offering, short range radio connectivity, with acquisitions made in 2014, we finalized a third acquisition in the short range sector in early 2015, with Lesswire, a German-based leading developer of automotive-grade short range radio system technology that supports Bluetooth and Wi-Fi. The technology enables superior-performance wireless applications and enhances in-vehicle connectivity between the telematics box and portable devices.

As in the past, we have taken steps to fully integrate the employees and assets of any companies acquired, significantly increasing our R&D capacity and widening our product offer for single-radio and multi-radio devices. Today, we offer a full selection of short range connectivity products that link devices to the Internet.

In the course of 2015, we expanded the R&D team and set up new offices in Berlin, Germany and Tampere, Finland to accommodate them. As part of a move to improve contacts with our customers and make it easier for them to connect with us when necessary, we also opened new sales offices in Chongqing, China, and Osaka in Japan.

Product highlights

Over the years, we have developed an extensive portfolio of easy-to-use products designed to adapt to any requirement. They include three core technologies – cellular, short range and positioning – that have made a significant contribution to the Internet of Things. In 2015 we launched significant additions to all three areas:

  • Cellular : Four cellular modules were released, all featuring high-speed data transfer and wider geographical coverage.
  • Short range : Of the four products launched last year, two are automotive grade for multi-radio standards and compatible with Wi-Fi, Bluetooth and NFC. The third and fourth were designed specifically for IoT applications needing advanced multi-radio capability.
  • Positioning : In 2015, we unveiled a small, low-profile GNSS plug-and-play positioning module with an integrated wideband chip antenna for reception across the entire L1 band. We also ramped up production of u-blox M8.

Our gateway to the future

A relatively new phenomenon, that we call “the Internet of Things that Really Matter,” has established itself as the de facto driving force of our business. An increasing number of customers are confronted with new business models and the need to connect more and more devices – using both high- and low-data rates – to the Internet in order to streamline the management of a virtually infinite range of applications. With our extensive product range, we are positioned to meet this need. We are further consolidating our leading role in the industry by contributing toward the definition of standards for next generation short range and cellular applications and to this end have teamed up with some of the industry’s big names, such as Intel, Huawei and Vodafone. Positioning also plays an increasingly important role and there are synergies from which all involved parties can benefit.

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 338.0 million for 2015 as compared to CHF 269.8 million in 2014.
  • Wireless services : u-blox also offers Wireless communication technology services in terms of reference designs and software. In 2015, revenue for Wireless services was CHF 26.1 million compared to CHF 24.1 million in 2014 (including intra-group revenue).
  • In 2015 based on billing location, Asia-Pacific generated 48.3%, EMEA 22.9% and Americas 28.8% of total revenue. u-blox was able to grow revenues in all areas. Revenue for Asia Pacific grew by 26.3% to CHF 163.5 million, EMEA grew by 15.3% to CHF 77.4 million and America increased its revenue by 32.6% to CHF 97.4 million.

    In 2015, the company made about 80% of its total revenue from 65 customers. u-blox’s largest customer accounted for less than 7% of revenue. u-blox served over 5,200 customers and achieved global expansion into new regions and markets.

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