Risks
|
Risk Mitigation
|
Markets and customers
Economic and market-trend uncertainties could impact our business and customer demand. This may lead to lower volumes and decreased profitability.
|
- Customer diversification: No single customer accounts for less than 6% of u-blox's turnover.
- Continual expansion of the customer base.
- Continuous monitoring and assessment of market developments and needs
|
Competition
Our markets are highly competitive in terms of pricing, product features and service quality. In many sectors we face price pressures that could negatively impact our results.
|
- Review and replan R&D activities every 6 months.
- Foster a high level of innovation.
- Maintain high technical support capabilities globally.
- Product range well structured to provide customers with solutions tailored to their needs.
|
Intellectual property
Competitors or other parties in our industry may seek to yield benefits from our technical innovations by duplicating our products.
|
- Maintain a high level of trade secrecy.
- Protect our current business and IP from being copied or used by others. by appropriate use of patents, copyrights and trade secrets on a global basis.
- Accelerate the innovation rate.
- Manage third party licenses.
|
Product quality
Poor product quality may result in reputational and brand damage, resulting in lower volumes and financial claims.
|
- Continual expansion of the quality management system and laboratory capabilities.
- Thorough testing and qualification at our own laboratory facilities.
- Maintain high technical support level globally.
- Excellent long-term manufacturing partners.
|
Innovation
u-blox's competitive position, sales and earnings depend significantly on the development of new products and technologies. Failure to achieve our aggressive R&D and innovation goals could negatively impact our ability to grow.
|
- Continual stream of new products launched yearly with targeted features to several markets.
- Invested 16.2% of revenues in R&D in 2017.
- Expand range in key technologies, acquired short range radio know-how.
|
Personnel
Skilled and dedicated employees are essential for the success of our growth- oriented corporate strategy. The loss of these individuals could disrupt the company’s operations.
|
- Globally positioning the company as an attractive employer.
- Develop and increase management talent pipeline.
- Regular employee satisfaction survey.
- Maintain attractive employment conditions and compensation packages plus a stock option plan.
- Offer career path opportunities group wide.
|
Suppliers
u-blox outsources its capital-intensive production to leading production suppliers around the world. Rising raw material prices, capacity constraints or business interruption could lead to a shortage of supply with negative consequences for our business.
|
- Lean supply base with few key suppliers.
- Long-term relationships with suppliers and close interaction to plan and manage capacity.
- Inventory buffers to respond to unplanned demand fluctuations.
|
Compliance
Non-compliant or unethical behavior could lead to reputational damage, fines and liability claims.
|
- Active fostering of high ethical standards and membership in the UN Global Compact.
- u-blox Code of Conduct.
- Anti-bribery policy.
- Speak-up culture, formal compliance process and sanctions.
- Sustainable supplier program containing regular risk assessments and inspections of production suppliers’ operations
|
Currency fluctuations
The majority of u-blox's revenue material costs and R&D expenses are in US dollar currency.
|
- Foster natural hedging by matching revenue currency amounts with expense currency amounts.
|
Credit
Credit risks arising from financial institutions and from customers could have a negative impact on u-blox's financial performance.
|
- Individual risk assessment of customers and definition of appropriate credit lines.
- Insurance for all customer credit lines.
- Frequent and thorough follow-up on late payments.
- Cash flow program to optimize liquidity and cash flow management.
|
Liquidity
Failure in liquidity management may have a negative effect on u-blox's financial performance.
|
- Monitor our liquidity on a quarterly basis.
- In 2017 successfully raised CH 60.0 million fixed rate bond to increase u-blox's financial flexibility.
- Cash flow program to optimize liquidity and cash flow management.
- Efficient use of available cash through cash pooling.
|