half year report 2018 - u-bloxu-blox firmly on track for expanded market position in iot 2018...
TRANSCRIPT
HALF YEAR REPORT 2018
Foundation 1997
Business Fabless semiconductor provider of embedded wireless and positioning communication solutions
Headquarter Thalwil, Switzerland
Offices Australia,Belgium,China,Finland,Germany,Greece,India,Ireland,Italy,Japan, Korea, Pakistan, Singapore, Sweden, Taiwan, United Kingdom and USA
Listed SIXSwissExchange(UBXN)
Employees 1’010(June30,2018,FTEbased);947(December31,2017,FTEbased)
Revenue H1/2018:CHF199.0million;H1/2017:CHF193.9million
EBIT H1/2018:CHF28.5million;H1/2017:CHF29.5million
Netprofit H1/2018:CHF25.1million;H1/2017:CHF18.0million
Markets Industrial,AutomotiveandConsumer
Mission u-bloxaimstobetheleadingproviderofembeddedwirelesscommunicationandpositioning solutionstotheglobalelectronicsindustry
3 Financial highlights
4 HalfyearreportasofJune30,2018
8 Condensedconsolidatedinterimfinancialstatementsu-bloxHoldingAG,Thalwil
19 Consolidatedstatementoffinancialposition
10 Consolidatedincomestatement
11 Consolidatedstatementofcomprehensiveincome
12 Consolidatedstatementofchangesinequity
13 Condensedconsolidatedstatementofcashflows
14 Notestothecondensedconsolidatedinterimfinancialstatements
20 InformationforInvestors
21 Worldwide presence
Page2 | Halfyearreport2018
Contents
This is u-blox
Financial highlights | Page 3
199.0
62.0
28.5
25.1
47.0
RevenueinmCHF
Equityratio in %
OperatingprofitinmCHF
NetprofitinmCHF
Grossprofit in %
RevenueH1/2017:193.9–Growthrate:2.6%
13.7OperatingcashflowinmCHF
OperatingcashflowH1/2017:22.1–Growthrate:-37.7%
Equityratio2017:60.7%
OperatingprofitH1/2017:29.5–Growthrate:-3.3%
NetprofitH1/2017:18.0–Growthrate:39.3%
Grossprofitin%H1/2017:45.1
Financial highlights
TotalequityandequityratioinmCHF
Americas EMEAAPAC EBITDA
Revenuebygeography / EBITDAinmCHF
u-bloxrevenuesplitpermarket Employeebreakdownspreadover17countries75%ofemployeesbasedoutsideSwitzerland
Total:1’010
Logistics, admin 15%(148)
Sales, marketing,support 17%(172)
Research &development68%(690)
(H1/2018,FTEbased)
(%oftotalassets)
Equity
2015 2016 2017 H1/16
Equityratio
248
64.2% 67.0%
319
60.7%
H1/17 H1/18
275
346
62.0%
285
254
65.4% 58.1%
150%
125%
100%
75%
50%
25%
0%
55.1%
10.5%
28.9%
5.5%
2015
81.8 87.4
338.3360.2
403.7
23%
29%
48%
25%
25%
50%
26%
23%
51%
81.878.7
400
350
300
250
200
150
100
50
0
2016 2017
40.3
26%
37%
37%
27%
42%
36%
33%
H1/16 H1/17 H1/18
Industrial Consumer Automotive Notassigned
400
350
300
250
200
150
100
50
0
u-bloxfirmlyontrackforexpandedmarketpositioninIoT
2018half-yearhighlights
Thalwil,Switzerland–August24,2018–u-blox(SIX:UBXN),a global provider of leading positioning and wireless communicationtechnologies,todayannouncedresultsforthefirsthalfyear.
• ReflectingasoftChinabusiness,u-bloxposteda2.6%increaseinrevenuesfromCHF193.9milliontoCHF199.0million.
• GrossprofitincreasedcomparedtoH1/2017by7.1%toCHF93.6millioninH1/2018andgrossmarginincreasedcomparedtoH1/2017to47.0%inH1/2018duetofavorablechangesintheproductmix.
• EBITfellby3.3%toCHF28.5million,representingamarginof14.3%asguidedforthisfiscalyear.
• OperatingactivitiesgeneratedacashflowofCHF13.7million,6.9%ofrevenue.
• Netprofitsawa39.3%increasetoCHF25.1million, anetprofitmarginof12.6%(H1/2017:9.3%).
• A surge of new and prospective products consolidated u-blox’sleadingpositionintheindustry.
• Full-yearrevenue,EBITDAandEBITguidancehavebeenslightlyreduced.
Remark:AllnumbersinthisreportareIFRSbased.Adjusted numbers are provided in the last table to this report.
Formoreinformation,pleaserefertotheonlineversionsat:• Halfyearreport(PDF): https://www.u-blox.com/en/investor-relations/reports• Presentation: https://www.u-blox.com/en/investor-relations/presentations
Inthefirsthalfof2018,wehaveseenastronggrowthin our customer numbers and in the market for car connectivitydevices(TelematicControlUnits).Atthesametime,shrinkingbusinesswithkeyChinesecustomersaswellasthedelayingeffectonourcustomersof their long lead times for receiving other components resultedinoverallslowrevenuegrowthof2.6%comparedtothesameperiodin2017,withconsolidatedrevenuesstandingatCHF199.0millionduringthefirsthalfof2018.
u-bloxregisteredanotherincreaseingrossprofitfromCHF87.4milliontoCHF93.6million,withgrossprofitmarginremaininghighat47.0%.Operatingprofit(EBIT)wasdownfromCHF29.5toCHF28.5millionasthecompanycontinuedtoexpanditsR&Dcapacity,representinganEBITmarginof14.3%asguided,whiletheEBITDAmarginstoodat20.1%.Therewasa39.3%increaseinnetprofit,whichincreasedfromCHF18.0millionin2017toCHF25.1millionmainlyduetoforeignexchangeimpacts.NetcashflowfromoperationswasCHF13.7million,whichrepresented6.9%ofrevenue.Thebalancesheetremainedsolid,withahealthyequityratioof62.0%.
Thecompanyhasfocusedrelentlesslyonincreasingits
continued growth potential with the announcement of twonewcoreproductplatformsandseveralnewmodules.Executingitstime-testedstrategy,u-bloxisinastrongpositiontobenefitfromcontinuallygrowingmarkets,andafullpipelineofnewproductdevelopmentsremainsafirmindicationofpotentialfuturegrowth.
RevenuedevelopmentandbreakdownThefirsthalfof2018showedcontinuedgrowthinu-blox’spositioning&wirelessproductssegment.
Consolidatedrevenuesfromchipsandmodulesforpositioningandwirelessconnectivityroseby2.6%fromCHF193.8millioninthefirsthalfof2017toCHF198.9millionduringthefirsthalfof2018.Revenuegrowthwasslightlynegativelyimpactedby-0.5%foreignexchangedecay.Wirelessservices(includingintra-Groupsales)generatedCHF16.1millioninrevenuescomparedwith CHF12.3millionforthesameperiodlastyear.
Duringthefirsthalfof2018,u-bloxreportedanoverallincreaseofrevenuesof2.6%,withAsia-Pacificaccountingfor33.1%,EMEAfor35.1%,andtheAmericasfor30.7%,EMEAgrewrapidlyby35.4%toCHF69.8million,revenuesinAmericaswerestablewithCHF61.1millionandAsia-Pacificreporteda19.2%declineoverfirsthalfyear2017toCHF65.9million.Whencomparedtosecondhalfyear2017,thegrowthratesamountedto31.3%forEMEA,-17.6%forAmericasand-16.2%forAsia-Pacific.Thesesplitsarebasedonreportingarea.
InfluenceofChineseeconomyandnetworkreadinessInAsia,therehasbeenstrongprogressinwearables,in-car navigation, and after-market car electronics, and aslow-downintimingandshareddevices.However,theoverarchingthemeinourAsianmarketswassetbygenerallyweakerbusinessofmanyofourcustomersinChina,alsoaffectedbytradewarimplications,whichledtolowerrevenuesthananticipated.
IntheAmericas,businessactivitiesinmetering,medicaldevices,wearables,andpoint-of-saleswereparticularlystrong,whilefleetmanagementshowedaslowdowninthefirsthalfof2018duetodelaysintheadoptionofthenewCatM1andNB-IoTnetworks. Our business in the EMEA region continues to impress withstronggrowth,drivenbyaconstantflowofnewprojects in various markets going into mass production as wellasstrongprogressinsolarenergy,telematiccontrolunits(TCUs),automation,fleetmanagement,androadpricing.Europeinparticularbenefitedfromanotableupturn in demand for connected devices destined for the IoT,aswellasgooddemandfromtheautomotivesector,stimulatedbytheneedforin-vehicleconnectivity. Thecompanyhastakenthenecessaryactionstorespondstrategicallytothecurrentenvironment.Aboveall,itchangedthemanagementstructureinChina,andre-focused the sales team to cope with emerging application sectors.Inallregions,u-bloxpursuedarecordnumberofnewbusinessopportunities,drivenbygeneralinterestintheInternetofThings(IoT).
HalfyearreportasofJune30,2018
Page 4 | Letter to the shareholders
Increasedgrossprofit Grossprofitsawa7.1%improvementduringthefirstsixmonthsoftheyearof2018,takingitfromCHF87.4millioninthesameperiodlastyeartoCHF93.6million.Grossprofitmarginstoodat47.0%,anincreaseoverfirsthalfyear2017.
Researchandproductdevelopment Inthefirsthalfof2018,R&DexpensesstoodatCHF36.7million,or18.5%ofrevenue.ThesefigurescomparewithCHF32.0millionand16.5%,respectively,duringthesameperiodin2017.
Distributionandmarketingactivities Wide-rangingexpansioninouroperationsdrovedistribu-tionandmarketingexpensesupfromCHF17.2milliontoCHF18.8million.Thisfigureisequivalentto9.5%ofrevenue,comparedwith8.8%duringthesameperiodlastyear.
Operatingprofit u-bloxpostedEBITofCHF28.5million,or14.3%duringthefirsthalfof2018,whichcompareswiththeCHF29.5millionor15.2%inthesameperiodin2017.TheEBITDAmarginwas20.1%.
Financeincomeandcosts FinanceincometotaledCHF5.4millionduemainlytopositiveunrealizedforeigncurrencygains,whilefinancecostsamountedtoCHF1.0millionduetointerestonthebondsissuedin2015and2017.Thefinancialresultalsocontainstheresultfromtheequity-accountedinvesteeSapcordaGmbH.
Stablestrongfinancialposition u-bloxmaintainedastrongbalancesheetduringthefirsthalfof2018,theequityratioamountedto62.0%.Cash,
cash equivalents, and marketable securities totaled CHF150.2millionasofJune30,2018,comparedwithCHF172.4milliononDecember31,2017.Cashwasusedfor working capital needs because of the on-going tight supplychainsituation.u-bloxcarriestreasurysharesintheamountofCHF24.4million;sharesthatwillservetheemployeestockoptionsprogram.
StrategichighlightsandinitiativesDesignedtodeliversustainable,profitablegrowthacrossmarketcycles,u-blox’sstrategyisfoundedonfourdiscretepillars:ongoingstrengtheningofourleadingmarketposition;continuingtechnologicaldevelopmentandinnovation;outstandingoperationalperformance,andstrategicpartnerships.Despiteachallengingenvironmentinsomeofourcoremarketsduringthefirsthalfof2018,u-bloxmadeadvancesinallthreeofitskeystrategicareas.
Forinstance,strengtheningitsmarketandtechnologyleadership,u-bloxhaspartneredwiththeKudelskiGroup,theleaderindigitalsecurity,tobringpremiumsecuritytoIoTdevices.AstheIoTtakesholdacrossu-blox’skeymarkets,theimportanceofdependableconnectivityandlocationawarenessisatanall-timehigh.ThecollaborationwithKudelskiistakingadvantageofthisopportunityandwillresultinhigh-qualityproductsandservicesthatmeetbothcurrentandfutureneeds. Newproductrundownu-blox’sstrategyremainstoprovideacoherentrangeofproductsandservicesthataresecure,easytouse,andofhighquality.Itisalsoanongoingaimtocontinuallyincrease the number of products that are built on its own silicon.
(inCHF000s)
Jan.-June2018
(unaudited) % revenue
Jan.-June2017
(unaudited) % revenue
Jan.-Dec.2017
(audited) % revenue
Revenue 198’983 100.0% 193’908 100.0% 403’712 100.0%
Costofsales -105’395 -53.0% -106’518 -54.9% -219’695 -54.4%
Grossprofit 93’588 47.0% 87’390 45.1% 184’017 45.6%
Distributionandmarketingexpenses -18’829 -9.5% -17’157 -8.8% -36’173 -9.0%
Researchanddevelopmentexpenses -36’717 -18.5% -31’957 -16.5% -65’554 -16.2%
Generalandadministrativeexpenses -10’562 -5.3% -9’593 -4.9% -19’125 -4.7%
Other income 1’063 0.5% 845 0.4% 1’921 0.5%
Operatingprofit(EBIT) 28’543 14.3% 29’528 15.2% 65’086 16.1%
Financial income 5’364 2.7% 309 0.2% 5’668 1.4%
Finance costs -1’042 -0.5% -6’979 -3.6% -5’652 -1.4%
Shareofprofitofequity-accountedinvestees,netoftaxes -1’443 -0.7% 0 0.0% -400 -0.1%
Profitbeforeincometax(EBT) 31’422 15.8% 22’858 11.8% 64’702 16.0%
Incometaxexpense -6’339 -3.2% -4’846 -2.5% -13’442 -3.3%
Netprofit,attributabletoownersoftheparent 25’083 12.6% 18’012 9.3% 51’260 12.7%
Operatingprofit(EBIT) 28’543 14.3% 29’528 15.2% 65’086 16.1%
Depreciationandamortization 11’510 5.8% 10’730 5.5% 22’290 5.5%
EBITDA1) 40’053 20.1% 40’258 20.8% 87’376 21.6%
1)ManagementcalculatesEBITDA(earningsbeforeinterest,taxes,depreciationandamortization)byaddingback depreciationandamortizationtooperatingprofit(EBIT),ineachcasedeterminedinaccordancewithIFRS.
Table1:consolidatedincomestatement
Letter to the shareholders | Page5
Inoursolutionportfolio,wesawgoodgrowthintheareaofcellularandshortrangeproducts:LTEmodulesperformedverystronglyacrossthefirstsixmonthsof2018,andwehaveseencontinuedgrowthinsalesforWi-Fimodules.Bycontrast,salesofpositioningchipsetshaveslowed.
Inkeepingwithitsstrategy,u-bloxlaunchedavarietyofsignificantnewproductsin2018.Highlightsincludetheu-bloxF9technologyplatform,whichdelivershighprecision positioning solutions for mass market industrial andautomotiveapplications;theUBX-P3chipforvehicletoeverything(V2X)wirelesscommunication,andanewcellulartechnologycalledLTECatM1,specificallydesigned for the needs of applications targeting the InternetofThings(IoT)ormachine-to-machine(M2M)communications.
Revenuebyreportingsegmentsu-bloxoperatesintwosegments:
• Positioningandwirelessproducts u-bloxdevelopsandsellschipsandmodulesforpositioningandwirelessconnectivitythatareusedinautomotive,industrial,andconsumerapplications.RevenuewasCHF198.9millionforthefirsthalfof2018comparedwithCHF193.8millionduringthesameperiodlastyear.
• Wirelessservices u-bloxalsoofferswirelesscommunicationtechnologyservicesintheformofreferencedesignsandsoftware.Inthefirstsemester,revenueforwirelessserviceswasCHF16.1millioncomparedwithCHF12.3millioninthefirsthalfof2017(includingintra-grouprevenue).
(inCHF000s)Jan.-June2018
(unaudited)Jan.-June2017
(unaudited)Jan.-Dec.2017
(audited)
Netcashprovidedbyoperatingactivities 13’736 22‘061 60‘504
Netcashusedininvestingactivities -35’158 -27’914 -63’511
Netcashprovidedbyfinancingactivities -3’654 26’021 26’012
Netincrease/(decrease)incashandcashequivalents -25’076 20‘168 23‘005
Cashandcashequivalentsatbeginningofperiod 169’624 149’545 149’545
Effectofexchangeratefluctuationsoncashandcashequivalents 3’291 -5’928 -2’926
Cashandcashequivalentsatendofperiod 147‘839 163‘785 169‘624
Table3:consolidatedstatementoffinancialposition(condensed)
(inCHF000s)AtJune30,2018
(unaudited)AtDecember31,2017
(audited)
ASSETSCurrentassets
Cashandcashequivalents 147’839 169’624
Marketable securities 2’404 2’813
Other assets 141’859 110’877
Totalcurrentassets 292’102 283’314
Non-currentassets
Property,plantandequipment 17’013 17’494
Intangibleassets 230’942 211’614
Financial assets 11’010 8’351
Deferredtaxassets 7’116 3’739
Totalnon-currentassets 266’081 241’198
Total assets 558’183 524’512
LIABILITIESANDEQUITY
Currentliabilities 63’104 58’946
Non-currentliabilities 149’104 147’054
Total liabilities 212’208 206’000
Shareholders’equity
Share capital 6’375 6’261
Share premium 64’624 66’579
Retained earnings 274’976 245’672
Totalequity,attributabletoownersoftheparent 345’975 318’512
Totalliabilitiesandequity 558’183 524’512
Page 6 | Letter to the shareholders
Table2:consolidatedstatementofcashflows(condensed)
Letter to the shareholders | Page7
André Müller Thomas Seiler ChairmanoftheBoardofDirectors CEO
BoardandmanagementDuetohisage,Mr.FritzFahrni,ChairmanoftheBoard,chose not to stand for re-election as a Board Member at the AnnualGeneralAssemblyonApril24,2018.Inhisstead,Mr.AndréMüller,memberoftheAuditCommittee,waselectedasnewChairmanoftheBoard.AtthesameAnnualGeneralAssemblyMr.UlrichLooserwaselectedasnonexecutivedirectortojointheBoardofu-bloxHoldingAG.
Table4:ConsolidatedIncomeStatement(adjusted)
Adjustednumbersareprovidedbelowforallowingcomparisonwithindustrypeers.
1) ManagementcalculatesEBITDA(earningsbeforeinterest,taxes,depreciationandamortization)byaddingback depreciationandamortizationtooperatingprofit(EBIT),ineachcasedeterminedinaccordancewithIFRS.
Outlooku-bloxexpectstheremainingmonthsof2018toremainchallengingduetotheslowerdeploymentofCatM1andNB-IoTnetworksandthesituationontheChinesemarket.u-bloxisadoptingacautiousbutpositiveoutlookforthisperiodandremainsconfidentthatthefundamentalsofourcompanyareinplaceforhealthyfuturegrowthand bottom line results, and that we will meet the new guidance.
For2018,u-bloxanticipatesupdatedEBITDAofbetweenCHF90millionandCHF100millionandEBITofbetweenCHF60millionandCHF65million,basedonrevenuepredictionsofbetweenCHF435millionandCHF445million,withunchangedassumptionsforforeignexchangerates.Inthemediumtolong-term,u-bloxexpectscontinuedgrowth.
Jan.-June2018
(unaudited) AdjustmentsJan.-June2018
(unaudited)Jan.-June2017
(unaudited)
(inCHF000s) (IFRS) % revenue
Sharebasedpay-
ments
Pension impacts
based onIAS-19
Non- recurringexpenses
Amorti-zation
intangible assets
acquired (adjusted) % revenue (adjusted) % revenue
Revenue 198’983 100.0% 198’983 100.0% 193‘908 100.0%
Costofsales -105’395 -53.0% 382 -105‘013 -52.8% -106‘131 -54.7%
GrossProfit 93’588 47.0% 382 0 0 0 93‘970 47.2% 87‘777 45.3%
Distributionandmarketingexpenses -18’829 -9.5% 875 283 -17’671 -8.9% -16’376 -8.4%
Research and development expenses -36’717 -18.5% 2’647 998 -33’072 -16.6% -28’064 -14.5%
Generalandadministrativeexpenses -10’562 -5.3% 417 758 -9’387 -4.7% -7’886 -4.1%
Other income 1’063 0.5% 1’063 0.5% 845 0.4%
OperatingProfit(EBIT) 28’543 14.3% 4’321 758 0 1’281 34’903 17.5% 36’296 18.7%
Financial income 5’364 2.7% 5’364 2.7% 309 0.2%
Financial costs -1’042 -0.5% -1’042 -0.5% -6’979 -3.6%
Shareofprofitofequity-accounted investees, netoftaxes -1’443 -0.7% -1’443 -0.7% 0 0%
Profitbeforeincometax(EBT) 31’422 15.8% 4’321 758 0 1’281 37’782 19.0% 29’626 15.3%
Incometaxexpense -6’339 -3.2% -872 -153 -258 -7’622 -3.8% -5’925 -3.1%
Netprofit,attributabletoownersoftheparent 25’083 12.6% 3’449 605 0 1’023 30’160 15.2% 23’701 12.2%
DilutedearningspershareinCHF 3.59 4.32 3.44
EarningspershareinCHF 3.58 4.31 3.39
OperatingProfit(EBIT) 28’543 14.3% 4’321 758 0 1’281 34’903 17.5% 36’296 18.7%
Depreciationand amortization 11’510 5.8% -1’281 10’229 5.1% 9’512 4.9%
EBITDA1) 40’053 20.1% 4’321 758 0 0 45’132 22.7% 45’808 23.6%
u-bloxHoldingAG,ThalwilCondensedconsolidatedinterimfinancialstatements June30,2018
Page 8 | Financialsummary
Financialsummary | Page 9
(inCHF000s)June30,2018(unaudited) December31,2017
Assets
Currentassets
Cashandcashequivalents 147’839 169’624
Marketable securities 2’404 2’813
Trade accounts receivables 58’550 50’401
Other receivables 10’947 9’616
Currenttaxassets 11’803 3’328
Inventories 56’749 44'204
Prepaidexpensesandaccruedincome 3'795 3'176
Derivativefinancialassets 15 152
Totalcurrentassets 292’102 283’314
Non-currentassets
Property,plantandequipment 17’013 17’494
Goodwill 56’395 57'628
Intangibleassets 174’547 153'986
Financial assets 1’136 1’141
Equity-accountedinvestees 9’874 7’210
Deferredtaxassets 7’116 3’739
Totalnon-currentassets 266’081 241’198
Total assets 558’183 524’512
Liabilitiesandequity
Currentliabilities
Tradeaccountspayables 24’670 20’296
Otherpayables 15’652 6'625
Currenttaxliabilities 523 5’767
Provisions 152 150
Accruedexpenses 22’107 26’108
Totalcurrentliabilities 63’104 58’946
Non-currentliabilities
Financial liabilities 119’037 118’913
Otherpayables 70 534
Provisions 6’619 8'248
Pensionliability 15’672 15'851
Deferredtaxliabilites 7’510 3'149
Non-currenttaxliabilities 196 359
Totalnon-currentliabilities 149’104 147’054
Total liabilities 212’208 206’000
Shareholders’equity
Share capital 6’375 6’261
Share premium 64’624 66’579
Treasuryshares -24’422 -24’422
Cumulativetranslationdifferences -12’128 -10'204
Retained earnings 311’526 280'298
Totalequity,attributabletoownersoftheparent 345’975 318’512
Totalliabilitiesandequity 558’183 524’512
Thesecondensedinterimfinancialstatementsshouldbereadinconjunctionwiththeaccompanyingnotes.
Consolidatedstatementoffinancialposition
Thesecondensedinterimfinancialstatementsshouldbereadinconjunctionwiththeaccompanyingnotes.
Page10 | Financialsummary
Consolidatedincomestatement
(inCHF000s)Jan.–June30,2018
(unaudited)Jan.–June30,2017
(unaudited)
Revenue 198’983 193’908
Costofsales -105’395 -106’518
Grossprofit 93’588 87’390
Distributionandmarketingexpenses -18’829 -17’157
Researchanddevelopmentexpenses -36’717 -31’957
Generalandadministrativeexpenses -10’562 -9’593
Other income 1’063 845
Operatingprofit 28’543 29’528
Finance income 5’364 309
Finance costs -1’042 -6’979
Shareoflossofequity-accountedinvestees,netoftaxes -1’443 0
Profitbeforeincometax(EBT) 31’422 22’858
Incometaxexpense -6’339 -4’846
Netprofit 25’083 18’012
Basicearningspershare(inCHF) 3.59 2.61
Dilutedearningspershare(inCHF) 3.58 2.57
Thesecondensedinterimfinancialstatementsshouldbereadinconjunctionwiththeaccompanyingnotes.
Financialsummary | Page11
(inCHF000s)Jan.–June30,2018
(unaudited)Jan.–June30,2017
(unaudited)
Netprofitfortheperiod 25’083 18’012
OthercomprehensiveincomeRemeasurementsonpensionliability 927 1’566
Incometaxonremeasurementsonpensionliability -181 -305
Itemsthatwillnotbereclassifiedtoincomestatement 746 1’261
Currencytranslationdifferences -1’924 -112
Itemsthatareormaybereclassifiedsubsequentlytoincomestatement -1’924 -112
Othercomprehensiveincomefortheperiod,netoftaxes -1’178 1’149
Totalcomprehensiveincome,attributabletoownersoftheparent 23’905 19’161
Consolidatedstatementofcomprehensiveincome
Thesecondensedinterimfinancialstatementsshouldbereadinconjunctionwiththeaccompanyingnotes.
Page12 | Financialsummary
Consolidatedstatementofchangesinequity
(inCHF000s)Sharecapital
Share premium
Treasuryshares
Cumula-tive
transla-tion
differ-ences
Retainedearnings
Totalequity,
attribut-able to
ownersofthe
parent
BalanceatJanuary1,2017 6’152 74’387 0 -15’018 219’206 284’727
Netprofitfortheperiod 0 0 0 0 18’012 18’012
Othercomprehensiveincomefortheperiod,netoftaxes 0 0 0 -112 -1’261 -1’149
Total comprehensive income 0 0 0 -112 19’273 19’161
Share-basedpayments1) 0 0 0 0 4’431 4’431
Purchaseoftreasuryshares2) 0 0 -24’422 0 0 -24'422
Dividendoutofsharepremium 0 -14'526 0 0 0 -14'526
Optionsexercisedduringtheyear,netoftransactioncosts 86 5’319 0 0 0 5’405
Total transactions with owners of the parent 86 -9’207 -24’422 0 4’431 -29’112
BalanceatJune30,2017(unaudited) 6’238 65’180 -24’422 -15’130 242’910 274’776
BalanceatJanuary1,2018 6’261 66’579 -24’422 -10’204 280’298 318’512
Netprofitfortheperiod 0 0 0 0 25’083 25’083
Othercomprehensiveincomefortheperiod,netoftaxes 0 0 0 -1’924 746 -1’178
Total comprehensive income 0 0 0 -1’924 25’829 23’905
Share-basedpayments1) 0 0 0 0 5’399 5’399
Dividendoutofsharepremium 0 -15’441 0 0 0 -15’441
Optionsexercisedduringtheyear,netoftransactioncosts 114 13’486 0 0 0 13’600
Total transactions with owners of the parent 114 -1’955 0 0 5’399 3’558
BalanceatJune30,2018(unaudited) 6’375 64’624 -24'422 -12’128 311’526 345’975
1) RepresentstheamountofstockoptionexpenseofCHF4.3million(2017:CHF4.1million)includingrespectivetaxeffectsofCHF1.1million(2017:CHF0.3million)recognizedfor2018and2017respectively.
2) In2017u-bloxpurchased125’000treasurysharesatanaveragepurchasepriceofCHF195.38pershare.
Thesecondensedinterimfinancialstatementsshouldbereadinconjunctionwiththeaccompanyingnotes.
Financialsummary | Page13
Consolidatedstatementofcashflows
(inCHF000s)Jan.-June2018
(unaudited)Jan.-June2017
(unaudited)
Netcashgeneratedfromoperatingactivities 13’736 22’061
Netcashusedininvestingactivities -35’158 -27’914
Netcashgeneratedfrom/(usedin)financingactivities -3’654 26’021
Netincrease/(decrease)incashandcashequivalents -25’076 20’168
Cashandcashequivalentsatbeginningofperiod 169’624 149’545
Effectofexchangeratefluctuationsoncashandcashequivalents 3’291 -5’928
Cashandcashequivalentsatendofperiod 147’839 163’785
1) Netcashusedininvestingactivitiesconsistsofinvestmentsintoproperty,plantandequipmentofCHF4.3million(June30,2017CHF4.3million)andinvestmentsintointangibleassetsofCHF27.6million(June30,2017CHF26.7million)inthefirsthalfyear2018.
2) NetcashprovidedbyfinancingactivitiescontainstheexerciseofemployeestockoptionsofCHF13.6million(June30, 2017CHF5.4million),thedividendpaymentoutofreservesfromcapitalcontributionsofCHF15.4million(June30,2017CHF14.5million).In2017thefinancingactivitiesalsocontainedproceedsfromissuanceofabondofCHF59.3millionnetcashinflowandthepurchaseoftreasurysharesofCHF24.4millionfortheemployeeshareoptionprogram.
1)
2)
1)
2)
Notestothecondensedconsolidatedinterimfinancialstatements
Page14 | Financialsummary
1 Basisofpreparationofthecondensedconsolidated
interimfinancialstatements
Thecondensedconsolidatedinterimfinancialstatementsofu-bloxHoldingAG(‘u-blox’orthe‘Group’)werepreparedinaccordancewithIAS34“InterimFinancialReporting”.Thesecondensedconsolidatedinterimfinancialstatementsdonotincludeallthenotescontainedintheconsolidatedannualfinancialstatements,andforthatreasonshouldbereadinconjunctionwiththeconsolidatedannualfinancialstatementsfortheyearendedDecember31,2017.
ThecondensedconsolidatedinterimfinancialstatementshavebeenpreparedinSwissfrancs(CHF),roundedtothenearestthousand.
Thepreparationofthecondensedconsolidatedinterimfinancialstatementsrequiresmanagementjudgments,estimatesandassumptionsthataffecttheapplicationofpoliciesandreportedamountsofassetsandliabilities,incomeandexpensesaswellasdisclosureofcontingentassetsandliabilities.
Althoughthesejudgments,estimatesandassumptionsarebasedonmanagement’sbestknowledgeofcurrenteventsandactions,actualresultsmayultimatelydifferfromthoseestimates.
InthesecondensedconsolidatedinterimfinancialstatementssignificantestimatesandassumptionsmadebymanagementarenotdifferentfromthosedisclosedintheconsolidatedfinancialstatementsfortheyearendedDecember31,2017.
Incometaxesarerecognizedbasedonbestestimateoftheweightedaverageannualtaxratefor2018.
TheGroupoperatesinmarketswherenosignificantseasonalorcyclicalvariationsinrevenueareexperiencedduringthefinancialyear.
Forthecondensedconsolidatedinterimfinancialstatements,aEUR/CHFexchangerateof1.159andaUSD/CHFexchangerateof0.990wasappliedattheend-of-period(December31,2017EUR/CHF1.168,USD/CHF0.974).FortheperiodanaverageexchangerateofEUR/CHF1.170andUSD/CHF0.966wasapplied(previousperiod:EUR/CHF1.112,USD/CHF0.984).
ChangesinaccountingpoliciesExceptasdescribedbelow,theaccountingpoliciesappliedintheseinterimfinancialstatementsarethesameasthosedescribedintheGroup’sconsolidatedfinancialstatementsfortheyearendedDecember31,2017.ThechangesinaccountingpoliciesarealsoexpectedtobereflectedintheGroup’sconsolidatedfinancialstatementsfortheyearendedDecember31,2018.
TheGrouphasinitiallyadoptedIFRS15RevenuefromContractswithCustomersandIFRS9FinancialInstrumentsfromJanuary01,2018.AnumberofothernewstandardsareeffectivefromJanuary01,2018buttheydonothaveamaterialeffectontheGroup’sfinancialstatements.
IFRS15RevenuefromContractswithCustomers
IFRS15establishesacomprehensiveframeworkfordeterminingwhether,howmuchandwhenrevenueisrecognised. ItreplacedIAS18Revenue,IAS11ConstructionContractsandrelatedinterpretations.
TheGrouphasadoptedIFRS15usingthecumulativeeffectmethod,whichrequirestheGrouptorecognizeanyeffectresultingfrominitiallyapplyingthisstandardatthedateofinitialapplication,i.e.January01,2018.Theinformationpresentedfor2017hasnotbeenrestated–i.e.itispresentedaspreviouslyreportedunderIAS18,IAS11andrelatedinterpretations.
Sales of goodsRevenueismeasuredbasedontheconsiderationspecifiedinacontractwithacustomerandexcludesamountscollectedonbehalfofthirdparties.UnderIFRS15,theGrouprecognizesrevenuewhenittransferscontroloveragoodtoacustomer.Contractsincludeastandardwarrantyclausetoguaranteethattheproductscomplywithagreedspecifications.
Financialsummary | Page15
TheGroupsellsstandardizedpositioningandwirelessproductsgenerallyviapurchaseorderstocustomers(i.e.endcustomersanddistributors).Ingeneral,customersobtaincontrolofthegoodswhentheyaredispatchedfromtheGroup’swarehouse.Invoicesaregeneratedandrevenueisrecognizedatthatpointintime.Invoicesareusuallypayablewithin30days.Contractswithcustomersmaycontainvariableconsiderationsuchasvolumerebates.VariableconsiderationaregenerallynotconstrainedastheGrouphasexperiencewiththesetypeofcontractsanditisnotprobablethatasignificantreversalintheamountofrevenuerecognizedwilloccuroncetheuncertaintyassociatedwiththevariableconsiderationisresolved.
Theshiftfromtherisk-andrewardapproachunderIAS18tothetransfer-of-controlapproachunderIFRS15didnotresultinadifferenceinthetimingofrevenuerecognition.TheinitialapplicationofIFRS15didnotresultinamaterialimpact,whichiswhytheGrouphasnotadjustedretainedearningsasofJanuary01,2018.
IFRS9FinancialinstrumentsIFRS9FinancialInstrumentssetsoutrequirementsforrecognizingandmeasuringfinancialassets,financialliabilitiesandsomecontractstobuyorsellnon-financialitems.ThisstandardreplacesIAS39FinancialInstruments:RecognitionandMeasurement.TheGroupwilltakeadvantageoftheexemptionallowingitnottorestatecomparativeinformationforpriorperiodswithrespecttoclassificationandmeasurement(includingimpairment)changes.DifferencesinthecarryingamountsoffinancialassetsandfinancialliabilitiesresultingfromtheadoptionofIFRS9willgenerallyberecognizedinretainedearningsandreservesasatJanuary01,2018.
Classification–FinancialassetsIFRS9containsanewclassificationandmeasurementapproachforfinancialassetsthatreflectsthebusinessmodelinwhichassetsaremanagedandtheircashflowcharacteristics.IFRS9containsthreeprincipalclassificationcategoriesforfinancialassets:measuredatamortizedcost,FVOCIandFVTPL.ThestandardeliminatestheexistingIAS39categoriesofheldtomaturity,loansandreceivablesandavailableforsale.UnderIFRS9,derivativesembeddedincontractswherethehostisafinancialassetinthescopeofthestandardareneverbifurcated.Instead,thehybridfinancialinstrumentasawholeisassessedforclassification.
TheimplementationoftheIFRS9classificationrequirementsdidnothaveamaterialimpact.
Impairment–FinancialassetsandcontractassetsIFRS9replacesthe‘incurredloss’modelinIAS39withaforward-lookingexpectedcreditloss(ECL)model.ThiswillrequireconsiderablejudgementabouthowchangesineconomicfactorsaffectECLs,whichwillbedeterminedonaprobability-weightedbasis.
ThenewimpairmentmodelwillapplytofinancialassetsmeasuredatamortizedcostorFVOCI,exceptforinvestmentsinequityinstruments.UnderIFRS9,lossallowanceswillbemeasuredoneitherofthefollowingbases: – 12-monthECLs:theseareECLsthatresultfrompossibledefaulteventswithinthe12monthsafterthe
reportingdate;and – lifetimeECLs:theseareECLsthatresultfromallpossibledefaulteventsovertheexpectedlifeofafinancial
instrument.
LifetimeECLmeasurementappliesifthecreditriskofafinancialassetatthereportingdatehasincreasedsignificantlysinceinitialrecognitionand12-monthECLmeasurementappliesifithasnot.Anentitymaydeterminethatafinancialasset’screditriskhasnotincreasedsignificantlyiftheassethaslowcreditriskatthereportingdate.However,lifetimeECLmeasurementalwaysappliesfortradereceivableswithoutasignificantfinancingcomponent;theGrouphaschosentoapplythispolicyalsofortradereceivableswithasignificantfinancingcomponent.
ThegroupcalculatedECLsbasedonactualcreditlossexperienceoverthepastthreeyearsorbasedonexternalcounterpartycreditratings.TheGroupbelievesthatimpairmentlossesarelikelystaystableforassetsinthescopeoftheIFRS9impairmentmodel.Basedonthismethodology,theapplicationoftheimpairmentrequirementsofIFRS9asperJanuary01,2018didresultinnomaterialadditionalimpairmentlosses,whichiswhytheGrouphasnotadjustedretainedearningsasofJanuary01,2018.
Page16 | Financialsummary
2 Segment information
InaccordancewiththemanagementstructureandthereportingmadetotheBoardofDirectors(theGroup’sChiefOperatingDecisionMaker,whichistheBoardofDirectorsofu-bloxHoldingAG),thereportablesegmentsarethetwooperatingCorporateGroups’PositioningandWirelessproducts’and’Wirelessservices’.SegmentaccountingisprepareduptothelevelofOperatingProfit(EBIT)becausethisisthekeyfigureusedformanagementpurposes.AlloperatingassetsandliabilitiesthataredirectlyattributableorcanbeallocatedonareasonablebasisarereportedintherespectiveCorporateGroups.Nodistinctionismadebetweentheaccountingpoliciesofsegmentreportingandthoseoftheconsolidatedfinancialstatements.Nooperatingsegmentswereaggregated.
Thefollowingreportablesegmentswereidentified.
Positioning and Wireless productsTheGroupdevelopsanddistributesGPS/GNSSpositioningreceiversandwirelesscommunicationmoduleswhicharemainlyusedinautomotive,industrialandconsumerapplications.Productsaremarketedandsoldbytheu-bloxworldwidesalesorganization.Theproductsaremanufacturedbythirdparties.TheGroupcoordinatesthewholesupplychainandmanagestheworld-wideproductionanddistributionoftheproducts.
Wireless servicesSincetheacquisitionsofu-bloxItaliaS.p.A.andu-bloxSanDiego,Inc.,u-bloxoffersalsoservicesinthewirelesscommunicationtechnologywhichformsaseparatebusinesssegmentastheseproductsconsistofdeliveryofreferencedesignsandsoftware.
PositioningandWirelessproducts
Wireless services
Totalsegments
Non-allocated/Eliminations Group
January–June January–June January–June January–June January–June
(inCHF000s) 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
Revenue third 198’877 193’815 106 93 198’983 193’908 0 0 198’983 193’908
Revenue intragroup 0 0 16’043 12’172 16’043 12’172 -16’043 -12’172 0 0
Totalrevenue 198’877 193’815 16’149 12’265 215’026 206’080 -16’043 -12’172 198’983 193’908
EBITDA 39’623 39’728 430 367 40’053 40’095 0 163 40’053 40’258
Depreciation -3’392 -3’397 -1’252 -1’056 -4’644 -4’453 0 0 -4’644 -4’453
Amortization -6’851 -6’253 -15 -24 -6’866 -6’277 0 0 -6’866 -6’277
Operatingprofit 29’380 30’078 -837 -713 28’543 29’365 0 163 28’543 29’528
Financial income 5’364 309
Finance costs -1’042 -6’979
Share of loss of equity-accountedinvestees,netoftaxes -1’443 0
Profitbeforeincometax 31’422 22’858
Financialsummary | Page17
(inCHF000s)Jan.-June2018
(unaudited)Jan.-June2017
(unaudited)
Automotive 57’530 51’877
Consumer 20’797 23’999
Industrial 109’673 111’661
Others 10’983 6’371
Total 198’983 193’908
3 Revenuerecognition
Revenuebymarket
(inCHF000s)Jan.-June2018
(unaudited)Jan.-June2017
(unaudited)
Module 146’170 138’153
Chips 47’972 52’303
Others 4’841 3’452
Total 198’983 193’908
Revenuebyproducttype
4 Non-andderivativefinancialliabilities
Noadditionalnon-andderivativefinancialliabilitieswereissuedinthefirsthalfyear2018.
OnApril18,2017,u-bloxissuedabondforCHF60.0million(netcashinflowofCHF59.3million)withacouponof1.375%p.a.anda6yeartermtomaturity.Onthesamedate,u-bloxenteredintoaninterestswapcontractoverCHF30.0millionwithamaturityof6years.
5 Financeincomeandcost
Themainpartofthefinanceincomeconsistsofrealizedandunrealizedforeignexchangegainswhereasthefinancecostconsistsofinterestexpensesforthebonds.Inthepreviousyearthemainpartofthefinancecostsconsistsofrealizedandunrealizedforeignexchangelossesandinterestexpensesforthebonds.
(inCHF000s)Jan.-June2018
(unaudited)Jan.-June2017
(unaudited)
EMEA thereof:Switzerland
70’2371’033
49’874587
America thereof:UnitedStatesofAmerica
42’44936’536
40’57036’189
AsiaPacific thereof:China
86’29738’141
103’46451’618
Total 198’983 193’908
Revenuebyregion(basedonbillinglocation)
Page18 | Financialsummary
(inCHF000s)Carryingamount
June30,2018Carryingamount
Dec31,2017
Cashandcashequivalents 147’839 169’624
Trade accounts receivable 58’550 50’401
Other receivables 10’947 9’616
Accrued income 768 769
Financial assets 1’136 1’141
Financialassetsatamortizedcosts 219’240 231’551
Marketable securities 2’404 2’813
Derivativefinancialassets 15 152
Financialassetsatfairvaluethroughprofitorloss 2’419 2’965
Tradeaccountspayable 24’670 20’296
Otherpayables 12’601 5’894
Accruedexpenses 11’682 11’734
Non-derivativefinancialliabilities 119’037 118’913
Liabilitiesatamortizedcosts 167’990 156’837
Otherpayables-contingentconsideration 58 438
Liabilitiesatfairvaluethroughprofitandloss 58 438
6 Financialinstruments
Thefollowingtableshowsthecarryingamountofallfinancialinstrumentspercategory.Withtheexceptionoffinancialliabilities,theycorrespond,approximately,tothefairvaluesinaccordancewithIFRS.Thefairvalueoffinancialliabilitiesisdisclosedinthetable“Fairvaluehierarchy”.
Financialsummary | Page19
7 Dividend
OnApril24,2018theAnnualGeneralMeetingofu-bloxHoldingAGapprovedagrossdividendofCHF2.25pershare. AtotaldividendamountofCHF15.4millionwaspaidoutonMay2,2018.
8 Guarantees,pledgesinfavorofthirdpartiesand
other contingent liabilities
AtJune30,2018andDecember31,2017therewerenoguaranteesinfavourofthirdparties.Thegroupisnotexposedtoanysignificantothercontingentliabilites.Thereisnoknownthreatenedorpendinglitigationagainstanygroupcompany.
9 Subsequentevents
TherehavebeennoeventsbetweenJune30,2018andthedateofauthorizationofthesecondensedconsolidatedinterimfinancialstatementsthatwouldleadtoanadjustmentofthecarryingamountsofassetsandliabilitiespresentedasofJune30,2018orwouldotherwisehavetobedisclosed.
TheBoardofDirectorsauthorizedonAugust23,2018thesecondensedconsolidatedinterimfinancialstatementsforpublication.
FairvaluehierarchyThedifferentlevelsoffinancialinstrumentscarriedatfairvalueorforwhichthefairvalueisdisclosedhavebeendefinedasfollowsinthetablebelow:Level1: quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.Level2: inputsotherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetortheliability, eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices).Level3: inputsforassetsorliabilitiesthatarenotbasedonobservablemarketdata(unobservableinputs).
June30,2018(inCHF000s)
Carryingamounts Fairvalue
Total Level1 Level2 Level 3
Marketable securities 2’404 2’404 0 0
Derivativefinancialassets 15 0 15 0
Total assets 2’419 2’404 15 0
Otherpayables–contingentconsideration 58 0 0 58
Non-derivativefinancialliabilities 119’037 122’250 0 0
Total liabilities 119’095 122’250 0 58
December31,2017(inCHF000s) Total Level1 Level2 Level 3
Marketable securities 2’813 2’813 0 0
Derivativefinancialassets 152 0 152 0
Total assets 2’965 2’813 152 0
Otherpayables–contingentconsideration 438 0 0 438
Non-derivativefinancialliabilities 118’913 123’390 0 0
Total liabilities 119’351 123’390 0 438
Page20 | InformationforInvestors
u-bloxHoldingAG
Corporateaddress
Investorrelations
Website
Financial calendar
Tickerdetailsforu-bloxshares•Listing SIXSwissExchange•Tickersymbol UBXN•ISIN-No. CH0033361673•SwissSecurity-No. 3336167•Reuters UBXN.S•Bloomberg UBXN:SW
u-bloxHoldingAGZürcherstrasse688800 ThalwilSwitzerlandPhone+41447227444Fax +41447227447
Thomas SeilerChiefExecutiveOfficerE-mail:[email protected]
RolandJudChiefFinancialOfficerE-mail:[email protected]
www.u-blox.com
•Analystday November21,2018•Fullyearresults2018 March15,2019•AnnualGeneralMeeting April25,2019
InformationforInvestors
InformationforInvestors | Page21
Disclaimer
Thisreleasecontainscertainforwardlookingstatements.Suchforwardlookingstatementsreflectthecurrentviewsofmanagementandaresubject
toknownandunknownrisks,uncertaintiesandotherfactorsthatmaycauseactualresults,performanceorachievementsoftheu-bloxGroupto
differmateriallyfromthoseexpressedorimplied.TheseincluderisksrelatedtothesuccessofanddemandfortheGroup’sproducts,thepotential
fortheGroup’sproductstobecomeobsolete,theGroup’sabilitytodefenditsintellectualproperty,theGroup’sabilitytodevelopandcommercialize
newproductsinatimelymanner,thedynamicandcompetitiveenvironmentinwhichtheGroupoperates,theregulatoryenvironment,changesin
currencyexchangerates,theGroup’sabilitytogeneraterevenuesandprofitability,andtheGroup’sabilitytorealizeitsexpansionprojectsinatimely
manner.Shouldoneormoreoftheserisksoruncertaintiesmaterialize,orshouldunderlyingassumptionsproveincorrect,actualresultsmayvary
materiallyfromthosedescribedinthisreport.u-bloxisprovidingtheinformationinthisreleaseasofthisdateanddoesnotundertakeanyobligation
toupdateanyforwardlookingstatementscontainedinitasaresultofnewinformation,futureeventsorotherwise.
Imprint
Publisher/Copyright:August2018u-bloxHoldingAG,Thalwil,Switzerland.
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