17 Mar 2011
Thalwil, Switzerland – March 17, 2011 – u-blox (SIX: UBXN), a leading provider of embedded positioning and wireless communication solutions, today announces its financial results for 2010.
u-blox achieved strong top- and bottom line growth:
A year of strong growth
In 2010 u-blox experienced significant growth in Asia Pacific, EMEA and the Americas resulting in revenue growth of 53.4% over 2009. This across the board upswing was also experienced in all target market sectors. Both product and service businesses generated positive EBIT during 2010. Consolidated revenue was up by CHF 39.3 million to CHF 112.8 million with increased volumes, while EBIT increased from CHF 5.2 million to CHF 19.1 million, a 267.7% increase over the prior year. Net profit was CHF 12.9 million, representing an 11.5% net profit margin for 2010.
Throughout 2010 the company performed very well in all markets and regions. This positive development can be attributed to strategic steps taken before and during the global turndown. u-blox adhered to its 4-pillar strategy, consistently focusing on innovation, market expansion, operational excellence and strategic partnerships.
u-blox operates in two segments:
u-blox develops and sells GPS chips and modules, and with the acquisition of Neonseven, wireless modules which are used in automotive, industrial and consumer applications. Revenue was
CHF 110.3 million for 2010 as compared to CHF 70.1 million in 2009.
With the acquisition of Neonseven, u-blox also offers wireless communication technology services in terms of reference designs and software. In 2010, revenue for wireless services was CHF 7.0 million compared to CHF 4.8 million (effective as
of 1 April 2009, including intra-group revenue).
In 2010, Asia Pacific generated 48%, EMEA 27% and Americas 25% of total revenue. Revenue for the region Asia Pacific was CHF 53.9 million, an increase of 58% compared to 2009. In the Americas revenue grow by 52% to CHF 28.0 million as compared to 2009. EMEA grew by 47% to CHF 30.9 million.
In 2010, the company made about 80% of its total revenue from 68 customers. u-blox’ biggest customer accounted for less than 5% of revenue. u-blox was able to increase its total number of customers to over 3’000, as well as achieve global expansion into new regions and markets.
Increased gross profit
Gross profit increased by 51.4% to CHF 58.9 million in 2010 from CHF 38.9 million in 2009. Gross profit margin was 52.2% for 2010, nearly unchanged from 52.9% in 2009.
Expansion of distribution and marketing activities
Distribution and marketing expenses increased in 2010, mainly due to increased personnel costs incurred from further expansion in Asia Pacific, EMEA and the Americas. In 2010, distribution and marketing activities were CHF 14.6 million as compared to CHF 13.0 million in the previous year. As a percentage of revenue distribution and marketing expenses were 12.9% in 2010 compared to 17.7% in 2009.
Strong expansion of research and product development
Through the acquisitions in 2009, u-blox strengthened its team of highly specialized R&D engineers. The acquisition of Neonseven expanded R&D knowledge in the area of mobile communications technology, and the acquisition of Geotate further strengthened the company’s intellectual property and strategic focus on global positioning to maintain competiveness in the GPS markets in the future. R&D expenses in 2010 were CHF 21.3 million as compared to CHF 16.2 million in 2009. As a percentage of revenue R&D expenses in 2010 were 18.9% compared to 22.0% in 2009.
Stock option expenses
The stock option expenses recognized in 2010 was CHF 1.0 million as compared to CHF 0.7 million in 2009.
Strong growth of profit from operations (EBIT)
EBIT was CHF 19.1 million in 2010 as compared to CHF 5.2 million in the previous year. Growth rate from 2009 to 2010 was 267.7%. EBIT margin was 16.9% and EBITDA margin was 24.5% in 2010.
Financial income and costs
In 2010, financial income was only CHF 0.9 million. Financial expenses were CHF 3.5 million, mainly due to negative foreign exchange results.
Positive cash flow from operating activities
In 2010, u-blox generated cash from operating activities in the amount of CHF 20.7 million as compared to CHF 14.8 million in 2009. Inventory level was increased in the amount of CHF 8.2 million.
Main investing activities
In 2010, investments in capitalized development costs were CHF 3.4 million as compared to CHF 4.2 million in 2009. CHF 2.8 million was invested in tools and test infrastructure for the further expansion of capacity and approximately CHF 1.0 million in intellectual property rights and acquired technology.
In November 2009, CHF 40.0 million was invested into marketable securities (denominated CHF bonds with ratings of at least A+ from Standard & Poor’s and A1 from Moody’s) and an additional amount of approximately CHF 10.0 million was invested in 2010.
In 2010, there were no major financing activities.
Strong financial position
u-blox has a very strong balance sheet with an equity ratio of 84.2%. Cash and cash equivalents, short-term investments and marketable securities were CHF 75.1 million at December 31, 2010 compared to CHF 64.9 million at December 31, 2009. Inventory level was increased from CHF 7.6 million to CHF 15.5 million. At the end of 2010, goodwill was at CHF 14.9 million and no impairment losses were recognized on the goodwill.
u-blox is well positioned to serve the rapidly growing global demand for mobility, connectivity, and positioning. The company will continue to follow its four-pillar strategy and foresees continued growth in 2011.
The general trend in all these markets is the requirement for higher-performance, smaller size, lower-power, wireless connectivity, and lower price. With the company’s successful strategy, experienced employees and world-class manufacturing partners, u-blox is in a very strong position to meet these demands.
For the year 2011, u-blox increases its EBIT guidance to approximately CHF 25 million, and maintains its revenue guidance at CHF 140 million. This outlook is based on the absence of unforeseen economic adversity and exchange rates assumed at budget level (USD/CHF: 1.00; EUR/CHF: 1.30).
For more information, please view the presentation slides online at: https://content.u-blox.com/sites/default/files/documents/annual_results_2010_presentation.pdf