Thalwil, Switzerland – 11 March 2022 – u-blox (SIX:UBXN), a global leader in wireless and positioning technologies, today announced its financial results for the full year 2021 (FY 2021). The company reported a strong year in revenues and gross margin, reflecting the continued expansion of demand across all end market sectors, only limited by supply constraints. For FY 2022, management expects revenue growth of between 21% and 32% and adjusted EBITDA margin of between 16% and 18%.
Financial highlights for FY 2021
(All comparisons versus the prior year period unless otherwise noted)
- Revenue of CHF 414.1 million compared to revenues of CHF 333.5 million, an increase of 24.2% (at constant exchange rates: 26.9%)
- Gross profit (adjusted) of CHF 193.9 million compared to CHF 150.9 million, an increase of 28.5%, and equivalent to an adjusted gross margin of 46.8% versus 45.3%, plus 150 bps
- EBITDA (adjusted) of CHF 72.1 million, compared to CHF 42.2 million
- EBIT (adjusted) of CHF 35.1 million, compared to CHF 18.0 million
- Net profit (adjusted) before minority interests of CHF 22.9 million, compared to CHF 2.9 million
- Cash flow from operating activities of CHF 97.7 million, compared to CHF 39.5 million
- Free cash flow of CHF 56.0 million (CHF 54.9 million before acquisitions), compared to CHF - 16.5 million
- CHF 83.7 million of cash and cash equivalents at 31 December 2021, compared to
- CHF 93.8 million at 31 December 2020
- Repaid the 1.625% CHF 60 million bond (maturing date 27 April 2021) in its entirety using existing cash
In 2021, u-blox achieved record revenues and generated unprecedent levels of cash-flow. Since August 2020 the acceleration in market demand created an extremely strong order intake resulting in an orderbook 8x higher than at the end of 2020. Demand was robust in all regions and across all applications sectors. Favorable product mix changes and price increases resulted in an improved gross margin for the year. During the year, u-blox acquired full ownership in the Sapcorda Joint Venture. Sapcorda is a leading provider of advanced GNSS augmentation services serving the high precision GNSS mass market. The acquisition of Sapcorda reinforced u-blox’s position as a leader in this market, driving innovation in the most advanced areas of GNSS positioning technology and fits well with its strategy of delivering value to customers by means of a comprehensive “silicon-to-cloud” set of solutions and offerings.
In 2021, the company announced numerous product launches, which strongly enhanced its solution capabilities across the entire platform:
- NEO-M9V global navigation satellite system (GNSS) receiver: u‑blox’s first positioning receiver to offer both untethered dead reckoning (UDR) and automotive dead reckoning (ADR).
- NEO-D9S and NEO-D9C: these GNSS correction data receivers offer customers unprecedented flexibility in providing high precision solutions thanks to correction data received from communication satellites.
- L1/L5 timing modules and antenna: The new L1/L5 timing modules and antenna supplement the company’s existing L1/L2 product portfolio, offering increased robustness and accessibility.
- ALEX-R5: a unique miniature Cat M cellular module that integrates low power wide area (LPWA) connectivity and GNSS technology into an ultra-small system-in-package (SiP) form factor, making it a perfect fit for size constrained applications.
- LARA- R6 and LENA-R8: kickstarted the product design for the creation and launch of these LTE Cat 1 cellular modules’ series.
- MAYA-W1 module: a Wi-Fi module tailored to a wide range of fast-growing, future-oriented professional applications, such as power management, electric vehicle charging, professional appliances, tracking, telematics, and fleet management.
- M.2 cards: these card form factor bring u‑blox wireless connectivity enables i.MX users to try out Wi-Fi 6, Bluetooth 5.1 capabilities of NXP wireless chipsets.
- Bluetooth AoA explorer kits: these leverage Bluetooth direction by finding technology for precision indoor positioning, demonstrating sub-meter level position accuracy for a variety of industrial and consumer applications.
- Bluetooth 5.1 module enables mesh networking: these Bluetooth modules use mesh networking for large-scale network deployments.
- PointPerfect GNSS correction service: brings centimeter-level positioning correction date to the mass market. This service is based on the IP acquired with Sapcorda.
- CloudLocate: a service that offloads the position calculation from IoT devices into the cloud, now available through the u blox Thingstream IoT service delivery platform.
- IoT certificate manager: a new security service that continuously renews device credentials in a fully automated mode.
For the full-year 2021 u-blox generated revenues of CHF 414.1 million, EBIT (adjusted) of CHF 35.1 million and EBITDA (adjusted) of CHF 72.1 million. Revenues in all regions were higher in FY 2021 compared to the previous year, reflecting strong and broad-based expansion of overall demand. In particular, the automotive and consumer end markets exhibited robust year-over-year growth. The weakened USD/CHF exchange rate had a negative impact of ‑2.7%.
Bookings recovered solidly in all regions, and the growth pace of the orderbook has exceeded by far the current revenue growth rate.
Revenues by region:
- AMEC: FY 2021 revenues increased to CHF 136.9 million from CHF 99.5 million in FY 2020 (+38%). Strong revenue growth was mainly due to particularly higher demand for industrial automation, automotive navigation and infotainment applications.
- EMEA: FY 2021 revenues increased to CHF 124.9 million from CHF 95.9 million in FY 2020 (+30%) primarily due to a higher demand in industrial automation and consumer telematics, and strong rebound in the automotive sector.
- APAC: FY 2021 revenues increased to CHF 153.9 million from CHF 137.7 million in FY 2020 (+12%) driven by strong growth in Japan and Korea for applications in industrial automation, navigation, infotainment and automated driving. Growth in APAC was tempered by relatively flat results in China due to supply constraints and by continued COVID impacts in certain countries.
Revenues by segment:
- Positioning and wireless products: FY 2021 revenue for chips and modules for positioning and wireless connectivity that are used in automotive, industrial and consumer applications was CHF 413.5 million compared to CHF 333.2 million in FY 2020.
- Wireless services: FY 2021 revenues for wireless communication technology services in terms of data services, reference designs and software were CHF 35.8 million compared to CHF 31.5 million in FY 2020 (including intra group revenue).
In 2021, u-blox continued to expand its customer base and ended the year with more than 12’200 customers worldwide. This number compares to 9’000 at the end of 2020 and 7’200 at the end of 2019. For 2021, u-blox generated approximately 80% of its total revenues from 74 customers, with its largest customer accounting for less than 4.6% of revenues. Adjusted gross profit increased by 28.5% to CHF 193.9 million in FY 2021 from CHF 150.9 million in FY 2020, resulting in an adjusted gross profit margin of 46.8% (FY 2020: 45.3%). The gross margin benefitted from the scale impact of increased demand, pricing power and a favorable product mix.
Adjusted operating expenses, which include R&D, distribution and marketing and G&A expenses, totaled CHF 164.0 million for FY 2021, compared to CHF 134.6 million in FY 2020. As a percentage of revenue, operating expenses were 39.6% of total revenue compared to 40.4% the year before.
R&D expenses (adjusted) increased to CHF 102.2 million in FY 2021 compared to CHF 82.4 million during the same period in 2020, while as a percentage of revenue remained stable at 24.7% (FY 2020: 24.7%). The increase in R&D expenses was due to lower capitalization and higher amortization expense. Particularly in the first half of the year, the company increased R&D efforts in developing more agile processes and in re-designing modules to components with better accessibility, all recorded as expensed.
Distribution and marketing expenses (adjusted) in FY 2021 increased to CHF 38.9 million due to higher revenues which resulted in higher personnel bonus accruals, as compared to CHF 31.9 million in the previous year, while as a percentage of revenue, distribution and marketing expenses (adjusted) decreased to 9.4% in FY 2021, as compared to 9.6% in FY 2020.
Share based payment expenses recognized according to IFRS in 2021 were CHF 3.3 million compared to CHF 4.8 million in 2020.
Financing costs of CHF 6.9 million (FY 2020: CHF 10.3 million) consisted primarily of interest payments for the two bonds of which one was repaid on 27 April 2021, and unrealized foreign currency losses. Share of loss of equity-accounted investees net of tax was CHF 1.8 million in FY 2021 (FY 2020: CHF 4.2 million).
Net profit (adjusted) before minority interests increased to CHF 22.9 million, compared to CHF 2.9 million in the previous year. Diluted EPS (adjusted) in FY 2021 increased to CHF 3.30 per share compared to CHF 0.42 per share in FY 2020.
Net cash generated from operating activities
Cash from operating activities substantially increased to CHF 97.7 million in FY 2021, compared to CHF 39.5 million generated in the previous year, due to higher contribution, positive cashflow from net working capital and lower tax payments.
Investments in property, plant and equipment and intangible assets totaled CHF 43.1 million for FY 2021, compared to CHF 42.8 million in FY 2020. Free cash flow (before acquisitions) was CHF 54.9 million, compared to CHF - 2.9 million in FY 2020.
At 31 December 2021, u-blox had a solid balance sheet with an equity ratio of 59.9%. Cash and cash equivalents totaled CHF 83.7 million as of 31 December 2021, compared to CHF 93.9 million as of 31 December 2020. The decrease in the cash balance reflects the repayment of the 1.625% CHF 60 million bond during 2021.
On the basis of this strong financial position and the positive outlook, the Board of Directors is proposing at the Annual General Meeting scheduled to be held on April 20, 2022 a dividend payment of CHF 1.30 per share. Pending shareholder approval, this dividend will represent a payout ratio of 60% of consolidated net profit, attributable to the shareholders of the parent.
Thomas Seiler, u-blox’s Chief Executive Officer, commented, “We have realized our best year ever, with 2021 closing with record numbers in terms of revenues and bookings, despite the global supply chain shortage. Bookings continued to increase strongly, and we ended the year with a record orderbook approximately eight times the amount recorded a year before. The robust business growth resulted in strong positive free cash-flow of CHF 56 million.”
“During the year, global supply-chain disruptions continued to affect our ability to source components, but we were able to manage supply quite well. Despite oversold component markets, increased delivery lead times and limited quantities due to supply constraints, our team was able to successfully navigate this complex situation, gain access to key electronic components and fulfill customers’ demands as optimum as possible. In order to address customers’ low inventory issues, we quickly changed our operating model from an inventory-based system to an availability-driven system. We also introduced many new products, re-designed and re-modeled other products to work around specific shortages and negotiated with multiple suppliers and sub-contractors, which enabled us to achieve acceptable delivery schedules and prices with our customers. Our automotive segment has recovered due to a surge in demand for automotive applications, especially for electric vehicles, across all regions. We expect this segment to be in growth mode for the next 2-3 years. Our industrial segment compares to a relatively strong FY 2020 and, overall, generated stable growth due to increased demand for making devices smart and connected. We expect this segment to continue generating solid revenue growth from existing applications, but also new applications in micro mobility, medical, automation and networks. The consumer segment also generated strong revenues, with telematics and wearables experiencing increased demand.”
Mr. Seiler concluded, “We are confident for 2022 and beyond. We are well positioned to take advantage of multiple opportunities arising from the widespread IoT adoption and the desire for connectivity throughout the world. For FY 2022, we expect to see continued strong demand across regions and products. During the year, we intend to accelerate product development and continue to add again more innovative capabilities to our solution offerings. As a result, we expect R&D capitalization rates to normalize in the order of magnitude of 40%. Thus, for FY 2022, we expect our revenue to continue to grow by 21 to 32% as compared to FY 2021, and our profitability to improve. Thanks to our record high order book, we have very solid business visibility.
The unsettling circumstances in the Ukraine and the turbulence across global financial markets which are impacting businesses worldwide, might also affect our supply chain and demand from our customers. While we have stopped all deliveries to Russia and Belarus and limited our customers from using our products in their exports to Russia, this is expected to have minimal impact to our top line. On the other hand, our components, supplies and products are not dependent on imports from these countries. In general, we do not expect to have any risk of bad debt from any business transactions conducted directly or indirectly with customers or suppliers operating in this region. We will remain both cautious and hopeful as we are incredibly sympathetic to the dire situation.
Guidance FY 2022 1
11 March 2022
1) The indications are made on the basis of the previous year average foreign exchange rates. Exchange rate assumptions for 2022: Average rate of 2021 (USD: 0.914, EUR: 1.081, GBP: 1.257)
2021 Full year report
Conference call and webcast details
Thomas Seiler, CEO, and Roland Jud, CFO, will host a conference call and webcast with analysts and investors Friday, 11 March, at 2:00 PM CET.
To participate, please dial the following number approximately 10 minutes prior to the start of the call:
|Switzerland / Europe:||+41 (0) 58 310 50 00|
|United Kingdom: ||+44 (0) 207 107 06 13|
|United States: ||+1 (1) 631 570 56 13|
Webcast Participants’ Links:
Pre-Registration Link: Registration
Download the presentation here.
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Depreciation and amortization
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, impairment and amortization of intangible assets acquired
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u blox (SIX:UBXN) is a global technology leader in positioning and wireless communication in automotive, industrial, and consumer markets. Their smart and reliable solutions, services and products 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 secure data services and connectivity, u blox is uniquely positioned to empower its customers to develop innovative and reliable 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
|Annual General Meeting: ||20 April, 2022|
|Half year results 2022: ||19 August, 2022|
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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.