Thalwil, Switzerland – 12 March 2021 – u-blox (SIX:UBXN), a global leader in wireless and positioning technologies, today announced its financial results for the full year 2020.
u-blox’s full-year 2020 results were considerably impacted by the COVID-19 pandemic. As demand began to accelerate in the second half of the year, u-blox ended 2020 with a record orderbook driven by strong levels of demand across all regions and end markets.
(All comparisons versus the prior-year period unless otherwise noted)
- Revenue of CHF 333.5 million compared to revenues of CHF 385.1 million, a decline of ‑13.4% (-9.3% at constant exchange rates)
- Gross profit (adjusted) of CHF 150.9 million compared to CHF 175.1 million, a decline of -13.8%, and equivalent to a gross margin of 45.3% versus 45.5%
- EBITDA (adjusted) of CHF 42.2 million, compared to CHF 71.7 million
- EBIT (adjusted) of CHF 18.0 million, compared to CHF 43.1 million
- Net profit (adjusted) before minority interests of CHF 2.9 million, compared to CHF 32.0 million
- Cash flow from operating activities of CHF 39.5 million, compared to CHF 77.3 million
- Free cash flow of CHF -16.5 million (CHF -3.0 million before acquisitions), compared to CHF 10.5 million
- CHF 93.9 million of cash and cash equivalents at year-end 2020, compared to CHF 127.4 million at year-end 2019
- Ended 2020 with record bookings driven by a broad-based resurgence in demand across all end markets and regions, which continued to accelerate into 2021
- Acquired IoT Communication-as-a-Service Provider, Thingstream, in April 2020. Thingstream provides customers with a comprehensive, end-to-end solution for global IoT connectivity. The acquisition aligns with u-blox’s strategy to grow its recurring service component and to achieve a unique silicon-to-cloud differentiation.
- Published our first Sustainability Report detailing u-blox’s commitment to important issues in the following areas: business ethics, employees, environmental responsibility, supply chain responsibility and communities.
Our product launches in 2020 represented a broad expansion of solution capabilities across our entire platform:
- u-blox M10 is a leading edge GNSS platform for wearables and asset trackers, with small size and very low power consumption.
- We also expanded the u-blox M9 position platform with additional features to serve the demanding automotive and high-end telematics sectors.
- The UBX-R5 LTE-M/NB-IoT chipset and modules offer unprecedented wireless technology integration with built in end-to-end security, making it ideal for mission critical or long life cycle IoT applications.
- The JODY-W3 is designed for the increasing number of wireless high-speed connections that will be required in vehicles.
- The global LPWA cellular module, SARA-R422, provides increased security and positioning features compared to other available products ideal for a wide range of robust IoT solutions.
- In Services, we acquired Thingstream and quickly built out the acquired services platform with existing and newly created data services.
For the full-year 2020, u-blox generated revenues of CHF 333.5 million, EBIT (adjusted) of CHF 18.0 million and EBITDA (adjusted) of CHF 42.2 million. The pandemic and its effect on the global economy negatively impacted our business for much of the year. AMEC and EMEA were especially affected by prolonged automotive and business shutdowns and companies adopting a delayed approach through much of 2020. APAC, where the initial outbreak occurred and, accordingly, where the economy reopened earlier, showed signs of a recovery earlier. Across all regions, demand in the automotive and certain industrial sectors were substantially impacted. The weakened USD/CHF exchange rate impacted the topline by ‑4.1%, resulting in a currency adjusted revenue decline of -9.3%.
In APAC, full-year 2020 revenues amounted to CHF 137.7 million compared to CHF 145.6 million in 2019 (-5.4%). While revenues in China benefitted from the steady development and deployment of 5G networks during the first half of 2020, this development became more subdued during the second half due to the U.S. government placing bans on certain manufacturing technologies. From an end-market perspective, revenues increased from a rebound in automotive, particularly Japan and Korea, but were offset by decreased demand in telematics and in some consumer product markets in the second half of 2020.
Revenues in EMEA decreased to CHF 95.9 million in 2020 from CHF 119.3 million in 2019
(-19.6%). Revenues were substantially impacted by automotive markets and mobility end markets as a direct result of COVID-19. Automotive OEMs enacted prolonged shutdowns due to the pandemic and the mobility markets, where applications used in shared services such as scooters and e-bikes were particularly impacted by reduced localized travel and transit. We began to see signs of a rebound in automotive beginning in the second half of 2020, accelerating toward the end of the year. Other areas of revenue growth in EMEA included industrial automation in general.
AMEC revenues decreased to CHF 99.5 million in 2020 from CHF 119.2 million in 2019 (‑16.5%). AMEC revenues declined due primarily to decreased demand in general consumer and fleet management applications. The pandemic caused many businesses in AMEC to push out decisions from the first half of the year to the second half of 2020 and into 2021. Partially offsetting this decline was increased year-on-year demand from industrial automation applications, such as metering, as well as fitness applications and health-care.
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. For 2020, revenue was CHF 333.2 million compared to CHF 385.0 million in 2019.
- Wireless services
u-blox also offers wireless communication technology services in terms of reference designs and software. For 2020, revenue for wireless services was CHF 31.5 million compared to CHF 32.1 million in 2019 (including intra group revenue).
In 2020, u-blox generated approximately 80% of total revenues from 93 customers. u-blox’s largest customer accounted for only 7.4% of revenues and at year-end, u-blox served over 9’000 customers worldwide.
Adjusted gross profit decreased by 13.8% to CHF 150.9 million in 2020 from CHF 175.1 million in 2019, resulting in an adjusted gross profit margin of 45.3% (2019: 45.5%).
Adjusted operating expenses, which include R&D, distribution and marketing and G&A expenses, totaled CHF 134.6 million for 2020, compared to CHF 135.7 million in 2019. Higher R&D expenses were offset by lower distribution and marketing and G&A expenses. R&D activity was fully maintained during the COVID crisis. As a percentage of revenue, operating expenses were 40.4% of revenue compared to 35.2% last year.
R&D expenses (adjusted) increased to CHF 82.4 million in 2020 compared to CHF 78.9 million in 2019 due to lower capitalization rates and higher amortization than in 2019. As a percentage of revenue, adjusted R&D expenses in 2020 were 24.7% of revenue compared to 20.5% in 2019. During the first half of 2020, u-blox recognized an impairment charge of CHF 74.1 million due to the COVID-19 induced market conditions mainly in automotive, changes in business plan expectations and refocusing of various programs. The company’s existing lines of product offerings remain unaffected and no further impairment is expected.
Distribution and marketing expenses (adjusted) in 2020 were CHF 31.9 million compared to CHF 35.2 million in 2019. As a percentage of revenue, distribution and marketing expenses (adjusted) were 9.6% in 2020 compared to 9.1% in 2019. Distribution and marketing expenses declined as expositions, conferences and other large-scale events were cancelled or moved to a virtual setting and business travel was reduced due to government-imposed travel restrictions in the Americas and EMEA for the majority of 2020. u-blox initiated a CHF 15 million cost savings program driven in large part by the discontinuation of one large non-revenue generating program. As of year-end 2020, the company had completed this savings program.
Share based payment expenses recognized according to IFRS in 2020 were CHF 4.8 million compared to CHF 5.3 million in 2019.
Finance costs of CHF 10.3 million (CHF 4.1 million in 2019) consisted primarily of interest payments for the two outstanding bonds and realized and unrealized foreign currency losses. Share of loss of equity-accounted investees net of tax was CHF 4.2 million in 2020, which was flat compared to 2019.
Net profit (adjusted) before minority interests was CHF 2.9 million, compared to CHF 32.0 million last year. Diluted EPS (adjusted) in 2020 was CHF 0.42 per share compared to CHF 4.69 per share in 2019.
Net cash generated from operating activities
u-blox generated cash from operating activities of CHF 39.5 million in 2020, a decline of 48.9% compared to the previous year (2019: CHF 77.3 million), due to lower business levels. Net working capital improved with inventory levels adjusted to the declined revenues.
Investments in property, plant and equipment and intangible assets totaled CHF 42.8 million for 2020 compared to CHF 56.9 million in 2019. Free cash flow (before acquisitions) was CHF ‑3.0 million compared to CHF 21.3 million last year.
Due to differing maturities of projects in the R&D pipeline and the refocusing of some development projects across all product categories, capitalization of development costs decreased to CHF 36.8 million from CHF 50.0 million in 2019.
In 2020, 88.3% of total investments went into the development of new products compared to 87.9% in 2019. No investments were made into production capacity expansion in 2020 and also none in 2019.
In 2020, u-blox paid total dividends of CHF 4.3 million by means of a par value reduction of CHF 0.60 to CHF 14.80 per share.
At 31 December 2020, u-blox had a solid balance sheet with an equity ratio of 54.6%. Cash, cash equivalents, and marketable securities totaled CHF 94.4 million as of 31 December 2020, compared with CHF 128.3 million as of 31 December 2019.
Goodwill increased due to the acquisition of Thingstream from CHF 56.0 million in 2019 to CHF 60.0 million, or 11.6% of total assets, in 2020.
Based on the challenges faced and the Company’s financial results in 2020, the Board of Directors will not propose any form of dividend payment at the Annual General Meeting this year.
Thomas Seiler, CEO of u-blox, commented, “We ended 2020 with a record orderbook, driven by the long-term growth drivers of our business combined with resurgent demand that began to materialize in the second half of 2020 and continued to accelerate through the end of the year. We are experiencing this significant increase in demand across all of our regions and throughout our end markets. The restart in business activity has been particularly strong in automotive, and geographically, in the Americas and EMEA, where production and business shutdowns were substantial during 2020 due to the COVID-19 pandemic. Currently, our orderbook is approximately four times the amount we held in summer 2020 and we are very optimistic about the level of opportunities that we see available to u-blox in 2021.”
“The global semiconductor industry is contending with a tight supply chain situation as the pandemic drove greater than expected demand for electronic devices and digital products. This circumstance is particularly acute in the automotive supply chain. We have been managing our situation carefully, and we are working closely with our customers to offer multiple alternatives to mitigate.”
“We are solidly positioned in EMEA and AMEC to grow as their economies continue to fully reopen. In the Americas, issues with full adoption of CATM1 networks have been resolved and we plan to capture this and other opportunities with targeted go-to-market plans, especially with key accounts. EMEA is expected to benefit from a strong swing in automotive and we will also focus on expanding share in several fast-growing accounts in both automotive and industrial. We are also expecting solid growth in APAC in 2021, with automotive being a key factor in Japan and Korea. China will continue to be the largest part of our business in APAC and we expect continued growth evidenced by recent design wins and strong momentum across end markets. We see no abatement of the secular trends driving the ubiquitous growth of positioning and wireless technology for the industrial IoT, and moreover we believe the pandemic has accelerated the digital and electronic transformation shaping in our world.”
For 2021, u-blox is providing the following high-level guidance: While we are currently experiencing a strong level of business activity across our regions and end markets, the situation remains challenging due to the continued uncertainty caused by the ongoing impact of the COVID-19 pandemic on the global economy as well as the present tight supply situation within the global semiconductor industry. The indications are made on the basis of the previous year average foreign exchange rates.
- Revenue growth in the range 5% to15%
- EBITDA margin (adjusted) in the range of 16% to 22%
- EBIT margin (adjusted) in the range of 9% to 15%
Conference call and webcast details
Thomas Seiler, CEO and Roland Jud, CFO, will host a conference call and webcast with analysts and investors Friday, 12 March, at 2:30 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|
|Other numbers:||See list|
The webcast will be available at the u-blox website after the event.
Consolidated income statement (adjusted)
| ||Jan-Dec 2020||Adjust-|
|Jan-Dec 2020|| ||Jan-Dec 2019|| |
|(in CHF 000s)||(IFRS)||% revenue|| ||(adjusted)||% revenue||(adjusted)||% revenue|
|Cost of sales||-183'080||-54.9||516||-182'564||-54.7||-210'022||-54.5|
|Distribution and marketing expenses||-33'602||-10.1||1'712||-31'890||-9.6||-35'192||-9.1|
|Research and development expenses||-160'333||-48.1||77'963||-82'370||-24.7||-78'905||-20.5|
|General and administrative expenses||-22'976||-6.9||2'598||-20'378||-6.1||-21'622||-5.6|
|Other income||1'665||0.5|| ||1'665||0.5||3'732||1.0%|
|Operating Profit (EBIT)||-64'813||-19.4||82'789||17'976||5.4||43'090||11.2|
|Finance income||226||0.1|| ||226||0.1||547||0.1|
|Finance costs||-10'299||-3.1|| ||-10'299||-3.1||-4'133||-1.1|
|Share of profit of equity-accounted|
investees, net of taxes
|Profit before income tax (EBT)||-79'050||-23.7||82'789||3'739||1.1||35'255||9.2|
|Income tax expense||14'187||4.3||-15'010||-823||-0.2||-3'238||-0.8|
|Minority interests||-238||-0.1|| ||-238||-0.1||-149||0.0|
|Net profit, attributable to equity holders of the parent||-64'625||-19.4|| ||3'154||0.9||32'166||8.4|
|Earnings per share in CHF||-9.32|| || ||0.42|| ||4.69|| |
|Diluted earnings per share in CHF||-9.32|| || ||0.42|| ||4.69|| |
|Operating Profit (EBIT)||-64'813||-19.4||82'789||17'976||5.4||43'090||11.2%|
|Depreciation and amortization||100'250||30.1||-76'075||24'175||7.2||28'600||7.4|
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
Consolidated cash flow statement
|(in CHF 000s)||For the period ended December 31, 2020||For the period ended December 31, 2019|
|Depreciation & Amortization||100'250||43'189|
|Other non-cash transactions||7'606||5'263|
|Financial income & financial expense||14'237||7'835|
|Income tax expense||-14'187||1'306|
|Change in networking capital and provision||3'370||16'186|
|Income tax paid||-6'894||-9'401|
|Net cash generated from operating activities||39'519||77'291|
| || || |
|Net investment into property, plant and equipment||-4'278||-6'454|
|Net investment into intangibles||-38'441||-50'446|
|Net investments into financial assets||241||874|
|Acquisition of subsidiaries, net of cash acquired and participations||-13'517||-10'734|
|Net cash used in investing activities||-55'995||-66'760|
|Free Cash Flow (before acquisitions and participations in capital increase)||-2'959||21'265|
|Free Cash Flow||-16'476||10'531|
| || || |
|Proceeds from issuance of ordinary shares (par value reduction)||0||876|
|Par value reduction / Dividends paid to owners of the parent||-4'269||-11'077|
|Net proceeds from borrowings||1'046||0|
|Payment of lease liabilities||-5'726||-4'996|
|Purchase of treasury shares||107||0|
|Net cash used in financing activities||-11'277||-17'656|
|Net decrease in cash and cash equivalents||-27'753||-7'125|
| || || |
|Cash and cash equivalents at beginning of year||127'424||136'296|
|Exchange gains/(losses) on cash and cash equivalents||-5'797||-1'747|
|Cash and cash equivalents at end of the period||93'874||127'424|
Condensed consolidated statement of financial position
|(in CHF 000s)||At December 31, 2020 (audited)||At December 31, 2019 (audited)|
| || || |
|ASSETS|| || |
|Current assets|| || |
|Cash and cash equivalents||93'874||127'424|
|Trade accounts receivables||33'959||48'469|
|Total current assets||217'958||260'461|
|Non-current assets|| || |
|Property, plant and equipment||10'024||12'707|
|Financial assets (incl. equity accounted investees)||9'011||8'844|
|Deferred tax assets||11'671||6'886|
|Total non-current assets||299'944||325'482|
| || || |
|LIABILITIES AND EQUITY|| || |
|Shareholders’ equity|| || |
|Total equity, attributable to owners of the parent||282'545||351'464|
|Total liabilities and equity||517'902||585'943|
2020 Full year report
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
|Annual General Meeting: ||22 April, 2021|
|Half year results 2021: ||20 August, 2021|
|Analyst day:||23 November, 2021|
u‑blox investor relations contacts:
Switzerland and Europe:
Doris Rudischhauser, c/o Dynamics Group AG
Phone: +41 79 410 81 88
Jeehae Linford, c/o The Equity Group Inc.
Phone: +1 (404) 840-3122
Phone +41 44 722 74 44
Fax +41 44 722 74 47
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.