Ad hoc announcements
19 Aug 2022
Ad hoc announcement pursuant to article 53 LR
Reports first half 2022 revenue growth of 52.7%, adjusted EBITDA growth of 166.5%, strong bookings and expanded customer base.
Increase FY 2022 guidance; Expects strong revenue growth of between 46% and 54% and an adjusted EBITDA margin of between 22-25%.
Thalwil, Switzerland – 19 August 2022 – u-blox (SIX: UBXN), a global leader in wireless and positioning technologies, today announced its financial results for the first half of 2022 (1H 2022).
The company’s results for the 1H 2022 increased significantly as compared to the same period of last year, with record revenues, substantially improved gross profits and solid cash-flow. The acceleration in market demand across all regions and application sectors, together with the strong ramp-up of many new customer projects, resulted in continued strong bookings. Such progress is the result of novel product introductions over the past several years, and our enhanced solution capabilities. Thanks to well-managed supply-chain challenges, u-blox was able to improve deliveries to customers, thus recording strong billings of CHF 294.4 million, a 52.7% increase from 1H 2021. Furthermore, favorable product mix changes and realized price increases resulted in an improved adjusted gross margin of 48.9% (plus 220 bps) for the period. Free cash flow reached CHF 6.6 million, including a net working capital increase of CHF 51.0 million.
Financial highlights for 1H 2022
(All comparisons versus the same period of last year, unless otherwise noted)
Since the beginning of 2022, the company has announced numerous product launches and partnerships which strongly enhanced its solution capabilities across the entire platform.
During 1H 2022, u-blox generated revenues of CHF 294.4 million, EBIT (adjusted) of CHF 57.4 million and EBITDA (adjusted) of CHF 76.6 million. Revenues in all regions were higher in 1H 2022 compared to the same period of the previous year, reflecting strong and broad-based expansion of overall demand. The stronger USD/CHF exchange rate had a 2.8% positive impact on revenue growth.
For the 1H 2022 period, revenues in all regions and business segments substantially increased as compared to the same period of last year, despite supply chain constraints. Specifically:
Revenues by region
Revenues by segment
During 1H 2022, u-blox continued to expand its customer base and as of 30 June 2022, its customer base increased to over 14'500 customers worldwide (12'200 at the end of 2021). During 1H 2022, u-blox generated approximately 80% of its total revenues from 65 customers, with its largest customer accounting for less than 4.0% of total revenues.
Adjusted gross profit increased by 59.9% to CHF 143.8 million in 1H 2022, from CHF 89.9 million, resulting in an increased adjusted gross profit margin of 48.9% (1H 2021: 46.7%). The gross margin benefitted from favorable product mix changes and realized price increases.
Adjusted operating expenses, which include R&D, distribution, marketing and G&A expenses, totaled CHF 87.1 million in 1H 2022, compared to CHF 80.5 million. As a percentage of revenue, operating expenses were 29.6% of total revenue compared to 41.8% in the same period of last year.
R&D expenses (adjusted) remained stable at CHF 52.6 million during 1H 2022, compared to CHF 52.3 million. Despite an increase in headcount, the R&D expense ratio benefitted from a weak EUR/CHF exchange rate. As percentage of revenue, R&D expenses decreased to 17.9% (1H 2021: 27.1%).
Distribution and marketing expenses (adjusted) in 1H 2022 increased to CHF 21.6 million, compared to CHF 18.1 million, due to better margin which resulted in higher personnel bonus accruals, and an enlarged workforce. Regardless, as percentage of revenue, distribution and marketing expenses (adjusted) decreased to 7.3% in 1H 2022, from 9.4%.
Financing costs of CHF 0.8 million (1H 2021: CHF 6.6 million) consisted primarily of interest payments for the outstanding bond. Unrealized foreign currency gains from the USD resulted in finance income of CHF 3.1 million (1H 2021: CHF 5.1 million). After acquisition of 100% of the shares of Sapcorda GmbH, the share of loss of equity-accounted investees net of tax reduced to CHF 0.1 million (1H 2022: CHF 1.5 million).
Net profit (adjusted) before minority interests substantially increased to CHF 48.7 million, compared to CHF 6.3 million. Diluted EPS (adjusted) increased accordingly to CHF 7.00 per share during 1H 2022, compared to CHF 0.89 per share in 1H 2021.
Net cash generated from operating activities
Cash from operating activities amounted to CHF 30.4 million during 1H 2022, compared to CHF 43.0 million generated in the same period of the previous year. This was largely thanks to higher investments into net working capital to support the fast-growing business and inventory build-up.
Investments in property, plant and equipment and intangible assets totaled CHF 24.4 million during 1H 2022, compared to CHF 17.4 million. Free cash flow (before acquisitions) amounted to CHF 6.6 million, compared to CHF 25.8 million in 1H 2021.
As of 30 June 2022, u-blox had a solid balance sheet with an increased equity ratio of 63.1% (31 December 2021: 59.9%). Cash and cash equivalents totaled CHF 89.3 million as of 30 June 2022, compared to CHF 83.2 million as of 31 December 2021.
Thomas Seiler, Chief Executive Officer of u-blox, commented: “Despite the ongoing challenging environment, demand for and interest in our products has remained strong across all markets and business segments. Thus, we were able to substantially increase our top and bottom lines as compared to the first and second halves of 2021, with record numbers in terms of revenues and profitability.
During the first half of 2022, we saw strong demand and higher bookings across all markets: Industrial (especially for connectivity), Automotive and Consumer. Order fulfilment is still somewhat affected by supply limitations, but we managed to improve the situation. The introduction of re-designed products, coupled with re-modelling of other products, provided us with multiple solutions to manage specific shortages. We also focused our efforts on negotiating with multiple suppliers and sub-contractors to achieve acceptable delivery schedules for our clients. As a result, billings have been exceptionally strong. Order book as of end of June 2022 almost doubled as compared to a year ago. Furthermore, due to the steps we took to implement sales price adjustments, our operating leverage improved, we are now seeing gross margin improvements. Adjusted EPS increased to CHF 7.00 per share for the period.”
“We have well managed the supply-chain challenges we faced since the start of the pandemic thanks to our highly diversified supplier base. Demand remains robust thanks to our large geographic customer footprint, strong interest in our new and existing products and solutions which results in continued strong order intake. Although, for the foreseeable future, we expect global supply-chain disruptions to continue to affect all businesses across the globe and our ability to source components from our suppliers, we have been quite successful in managing and balancing component supply with product demand from our customers and fulfill their orders as quickly as possible. This was largely due to several game-changing actions we took to address customers’ low inventory levels, including changing our operating model from an inventory-based system to an availability-driven system.”
Mr. Seiler concluded: “We continue to provide our customers with value-adding innovative products and solutions which will generate higher revenues. Our visibility for the remainder of the year remains solid due to our record high order book. Thus, for FY 2022, we expect an acceleration of revenue growth to 46% to 54% as compared to FY 2021 and our profitability to improve further.
While we believe u-blox is well positioned to continue to grow revenues and improve profitability, the global market volatility that continues to affect businesses worldwide, coupled with reverberations from the COVID-19 epidemic might affect our supply-chain and the market demand. However, we expect this effect to be mild due to the multiple proactive steps we have taken. Our business model is designed to maintain solid long-term customer relationships despite supply constraints.
Looking beyond 2022, we see multiple new opportunities arising from the widespread IoT adoption and the desire for connectivity throughout the world. Thus, we expect demand for our products to remain strong across all regions.”
|(in CHF millions)||
Actual FY 2021
Guidance 2022 (1) (2) (adjusted)
As of 11 March 2022
Updated guidance 2022 (1) (2)
As of 30 May 2022
Updated guidance 2022 (2) (3)
As of 19 August 2022
1) Exchange rate assumptions for 2022: Average rate of 2021 (USD: 0.914, EUR: 1.081, GBP: 1.257)
2) Changes as compared to FY 2021
3) Exchange rate assumptions for H2 2022: Average rate of H1 2022 (USD: 0.944, EUR: 1.032, GBP: 1.226)
Conference call and webcast details
Thomas Seiler, CEO, and Roland Jud, CFO, will host a conference call and webcast with analysts and investors Friday, 19 August 2022, 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
Pre-registration link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=ouhw5ZjH
Consolidated income statement (IFRS and adjusted)
|(in CHF 000s)||Jan. -|
|Adjust- ments2||Jan. -|
|Cost of sales||-150’649||-51.2||95||-150’554||-51.1||-102’801||-53.3|
|Distribution and marketing expenses||-22’316||-7.6||733||-21’583||-7.3||-18’066||-9.4|
|Research and development expenses||-54’400||-18.5||1’815||-52’585||-17.9||-52’278||-27.1|
|General and administrative expenses||-13’879||-4.7||924||-12’955||-4.4||-10’198||-5.3|
|Operating profit (EBIT)||53’851||18.3||3’567||57’418||19.5||10’528||5.5|
|Finance costs||-744||-0.3||- 744||-0.3||-6’594||-3.4|
|Share of profit of equity-accounted investees, net of taxes||-134||0.0||- 134||0.0||-1’456||-0.8|
|Profit before income tax (EBT)||56’122||19.1||3’567||59’689||20.3||7’568||3.9|
|Income tax expense||-10’314||-3.5||-647||-10’961||-3.7||-1’277||-0.7|
|Net profit, attributable to owners of the parent||45’808||15.6||2’920||48’728||16.6||6’270||3.3|
|Earnings per share in CHF||6.60||7.02||0.89|
|Diluted earnings per share in CHF||6.58||7.00||0.89|
|Operating profit (EBIT)||53’851||18.3||3’567||57’418||19.5||10’528||5.5|
|Depreciation and amortization||20’494||7.0||-1’355||19’139||6.5||18’196||9.4|
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 and amortization of intangible assets acquired.
Condensed consolidated statement of financial position
|(in CHF 000s)||At June 30, 2022 (unaudited)||in %||At December 31, 2021 (audited)||in %|
|ASSETS Current assets|
|Cash and cash equivalents||89’266||15.8||83’245||16.5|
|Trade accounts receivable||76’641||13.6||51’063||10.1|
|Total current assets||264’144||46.7||201’487||39.9|
|Property, plant and equipment||11’903||2.1||11’328||2.2|
|Financial assets (incl. equity accounted investees)||2’293||0.4||1’851||0.4|
|Deferred tax assets||3’392||0.6||9’188||1.8|
|Total non-current assets||301’442||53.3||302’985||60.1|
|LIABILITIES AND EQUITY|
|Total equity, attributable to owners of the parent||357’155||63.1||302’008||59.9|
|Total liabilities and equity||565’586||100.0||504’472||100.0|
Consolidated cash flow statement
|(in CHF 000s)||For the period ended June 30, 2022||For the period ended June 30, 2021|
|Depreciation & Amortization||20’494||19’813|
|Other non-cash transactions||2’689||2’942|
|Financial income & Financial expense||-2’271||2’960|
|Income tax expense||10’314||383|
|Changes in Net Working Capital and provisions||-51’049||8’901|
|Income tax paid||4’430||5’711|
|Net cash generated from operating activities||30’415||42’965|
|Net investment into property, plant and equipment||-3’794||-1’893|
|Net investment into intangibles||-20’567||-15’541|
|Net investment into financial assets||504||315’|
|Acquisition of subsidiaries, net of cash acquired & participations||0||1’831|
|Net cash used in investing activities||-23’857||-15’288|
|Free Cash Flow (before acquisition & participations in capital increase)||6’558||25’846|
|Free Cash Flow||6’558||27’677|
|Proceeds from issuance of ordinary shares||0||0|
|Proceeds from exercise of options||1’843||0|
|Net proceeds from borrowings||0||-34’962|
|Payment of lease liabilities||-2’592||-2’563|
|Purchase of treasury shares||0||0|
|Net cash provided by / used in financial activities||-1’857||-39’766|
|Net decrease in cash and cash equivalents||4’701||-12’089|
|Cash and cash equivalents at beginning of year||83’245||93’874|
|Exchange gains/(losses) on cash and cash equivalents||1’320||3’314|
|Cash and cash equivalents at the end of the period||89’266||85’099|
|Capital Markets’ Day:||22 November 2022|
|Full year results 2022:||10 March 2023|
|Annual General Meeting:||19 April 2023|
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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. (www.u‑blox.com)
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.