u-blox investor presentation · this presentation contains certain forward-looking statements. such...

u-blox Investor PresentationApril 2018

This presentation contains certain forward-looking statements. Such forward looking statements reflect the current views of management and are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance or achievements of the Group to differ materially from those expressed or implied herein.

Should such risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation.

u-blox is providing the information in this presentation 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.

Disclaimer

© u-blox Holding AG2

Enabling the Internet of Things (IoT) – u-blox at the core

3 © u-blox Holding AG

Our vision

4

To be the leading supplier for innovative high-quality communications and positioning components and solutions for the internet of things that really matter

© u-blox Holding AG

u-blox AG, Holding AG5

Innovation is our lifeblood

• We have been first to market with many technology solutions.

Strong innovations lead to the future

GPS receiver chip

Expanding the global reach


6100CUSTOMERSWORLDWIDE

15SALES OFFICES

66COUNTRIES

WORLDWIDE

• Broad customer base with more than 6100 customers and significant market share • Expanding customer base: customers in more than 66 countries worldwide • Customer diversity: Top 60 customers in 25 countries• No single customer responsible for more than 6% of total sales• 15 sales offices; 14 R&D locations

Billions of things waiting to be connected


Drones ~5 million

Pets ~0.5 billion

Cars ~0.5 billion

Laptops ~0.9 billion

Bicycles ~1.3 billion

Kids ~2.2 billion

Parking spaces ~1.2 billion

Hospital beds ~14 million

Power tools ~1.3 billion

Street lights 1 billion

Source: Geeny.io

• The mobile phone market has plateaued• The future growth lies in both, wide-area and short-range IoT applications

• They are u-blox heartland

u-blox plays in the high growth markets

Source: Ericsson Mobility Report 2017

Connected devices (billions)2017 2023 CAGR

Wide-area IoT 0.6 2.4 26%

Short-range IoT 6.4 17.4 18%

PC/Laptop/Tablet 1.6 1.7 0%

Mobile Phones 7.5 8.8 3%

Fixed phones 1.4 1.3 0%

Total17.5

billion31.6

billion

u-blox target markets

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2015 2016 2017 2018 2019 2020 2021 2022 2023


9

Mobility and the Cloud economics drive our markets for IoT


0

50

100

150

200

250

2000 2005 2010 2015 2020 2025

Ever expanding Mobility index

Source: The Economics Of The Cloud, Microsoft

Strong scale economies in the Cloud

• The mobility of people continues to increase year on year• Cost of data processing in the cloud decreases exponential with volume

These forces work hand in hand giving a multiplier effect for IoT

80% reduction of total cost of ownership

TC

O/S

erv

er

(at

av

era

ge

u

tili

za

tio

n)

# of Servers in Public Cloud

Source: Transport Outlook 2011, OECD

10

The Internet of Things that Really Matter IoT market will become large


Source: ABI research 2016Cellular M2M

0

100

200

300

400

500

600

700

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Cellular M2M

LTE Cat-1 LTE Cat-M

• M2M deployments to grow strongly

• Price points to decline

• Strong integration into chipset feasible for cellular M2M modems

This is the opportunity for u-blox in-house silicon

• u-blox wireless and positioning technologies are available in a unique combination of chips and modules

• The combination of technologies provides for solutions that deliver extra value not available otherwise

• This strategic core delivers the inimitable market placement and drives our profitability

11

u-blox:Unique technology and product line-up


PositioningCellular Communication

Short RangeCommunication

Integrated Circuits

Modules

Services and Solutions

CellLocate® (modem based positioning)AssistNowTM (world wide GNSS assistance service)GNSS Correction Data (for high precision)*FOTA (Firmware over the air)Lifetime Security

*through Sapcorda, a JV with industry partners

• Important strategic benefits from the unique u-blox line-up

• Long-term sustained competitive position

• Strong synergies between the technologies

12

Strong competitive advantage


PositioningCellular Communication

Short RangeCommunication

Integrated Circuits

Modules

Services and Solutions

CellLocate® (modem based positioning)AssistNowTM (world wide GNSS assistance service)GNSS Correction Data (for high precision)*FOTA (Firmware over the air)Lifetime Security

*through Sapcorda, a JV with industry partners

13

Our Focus

Four IoT focus areas for u-blox


Connected vehicle Connected city Connected industry

Adaptive cruise control shipments to be 80 million by 2025

7.7 million truck platoon systems to ship by 2025

Over 246 million connected auto infotainment systems to ship between 2015-2020

(Source: ABI research, 2016)

600 million Smart home device shipments by 2021

Home care robotics to revenue to quadruple to $6 Billion by 2025

46 million Connected street lights by 2021

Smart meter connections to exceed 789 million by 2021

(Source: ABI research, 2016)

Goods tracking market to swell to $5.6 Billion in 2021

From 2014 to 2020, the number of connected industrial controllers will triple; growing at an average rate of 20%

Global wireless sensor network market expected to grow to $1 Billion by 2020

Source: (Technavio 2016)

Connected consumer

Massive use of smart phones: 3.9 Billions in 2016 will grow to 6.8 Billions inconnected consumers in 2022 with many regions having more subscriptions than people

100 million BT connected sports and wellness devices and 250 million Wi-Fi connected flat screen TVs and set top boxes by 2020

Global wearable market expected to grow to $5.8 Billion by 2018

Source: (Ericsson Mobility Report November 2016, ABI Wireless IoT and Cellular 2016 & Statista 2016 )

IoT and Industry 4.0


Internet of

ThingsIndustry

4.0

Industry 4.0 represents the opportunity for manufacturing businesses to reinvent their processes by using new technologies in the process of building their products

Internet of Things represents the opportunity available to companies in leveraging smart, connected, devices in building, distributing, and managing their products and services for customers

Industrial Automation ”Industrial Internet”/ Industry 4.0

”Internet of Things” Smart Devices, Personal Area Networks

Connected City

Connected Consumer

Connected Car

Connected industry

Enabling the Internet of Things (IoT)

16

u-blox at the core


Our three technologies –Positioning, Cellular, and Short Range – transform a wide range of products and devices into the Things of the IoT.

Typical applications

• In car navigation

• Vehicle telematics

• Emergency call systems

• Insurance boxes

• Autonomous vehicles

u-blox applications

• Automotive quality

• Dead reckoning solutions

• Seamless integration of positioning and wireless

• Robust performance

• Long product lifetime

17

Automotive marketHigh quality and robustness



• Asset tracking

• Automation

• Precision timing

• Smart metering

• POS terminals

u-blox applications

• Excellence in product features

• High reliability

• Form factor roadmap

• Seamless integration of positioning and wireless

• Short time to market

18

Industrial marketVersatile and reliable technology



• Wearables

• Drones

• People and animal tracking

• Car accessories

• Mobile hotspots and routers

u-blox applications

• High performance solutions

• Small size, chip and module solutions

• Very low power consumption

• Cost effectiveness

• Short time to market

19

Consumer marketMass market solutions


Highly automated drivingcalls for

dead reckoning and high integrity

Inspection dronescall for

decimetre accuracy

Cellular infrastructurecalls for

precision timing

Personal trackingcall for

ubiquitous positioning

In car infotainmentcalls for

high-bandwidth cellular

Water, waste, lighting, etccall for

low whole-life cost: NB-IoT

Asset tracking, fleet management,

call forglobal coverage

Consumer devicescall for

low and high bandwidth connectivity

Highly automated drivingcalls for

vehicle to vehicle comms

Point of sale, smart homecall for

multi-standard solutions

Sensor networkscall for

intelligent gateways

The quantified selfcall for

low power connectivity

Leading u-blox IP for the IoT focus markets


Innovation for competitive advantage


Autonomous vehicles

LTE connectivity

Smart modems

Security

Robustness

Size and cost reduction

16% OF SALES INVESTED IN R&D

Cellular product offer


High bandwidth

High cost

High power

Low latency

Low bandwidth

Low cost

Low power

Higher latency

Time

Broadband

Narrowband

2G

3G

4G LTECat 3/4

Cat 6

Cat 9

Cat 1

Cat M1

Cat NB1

RPMA

Cat 12Cat 16

5G

Evolution to high speed cellular (licensed spectrums)

Evolution to cellular LPWA (licensed spectrums)

Unlicensed spectrum technologies

5G / Cat 19

Cat M2 / NB2

Connected Industry Focus

TOBY-R2LARA-R2

SARA-G3

SARA-R4

SARA-N2

SARA-S2

SARA-U2

LARA-R3UBX-R3

Today

• The products provide connectivity solutions for

• High-performance systems in automotive and industrial markets

• Embedded systems mainly for industrial markets

• Car-to-car interaction

23

Short range radio product offer


24

Positioning product offer

• Standard precision products• Meter level accuracy• Suitable for most applications• High tracking sensitivity• Low power consumption

• High precision products• Centimeter to decimeter level accuracy• Suitable for a range of new applications

• Dead Reckoning products• 100% positioning coverage incl. tunnels

and urban canyons• For road-vehicle applications

• Timing & Frequency products• For stationary and time, or frequency

synchronization


Modules –

Easy access to GNSS

u-blox GNSS – de-facto industry standard

High precision GNSS for the mass market

Communication link

BaseNEO-M8P-2

RoverNEO-M8P-0

Chips -

Core platforms

Financial Perspectives

25

26

Continuous revenue growth


Revenue and EBIT Revenue split per market for 2017

219.8

270.0

338.3 360.2

403.7

30.1 39.1 51.3 59.0 65.1

0

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100

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400

450

2013 2014 2015 2016 2017

Revenue EBIT

(million CHF)

CAGR 16.4%

Industrie Konsumgüter Automobil

27

Continuous strong profitability


Gross Profit/ Gross profit margin EBITDA trend

Maintained EBITDA margin of 21...23%Maintained gross margin of 45...46%

101.2122.7

155.0167.1

184.0

34.5%

47.2% 50.3%

46.4%

45.6%

0%

10%

20%

30%

40%

50%

60%

0

20

40

60

80

100

120

140

160

180

200

2013 2014 2015 2016 2017

Gross Profit % of revenue

(million CHF) (in % of revenue)

46.2 58.6

78.7 81.8 87.4

21.0%

21.7%23.3%

22.7%21.6%

10%

12%

14%

16%

18%

20%

22%

24%

0

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20

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100

2013 2014 2015 2016 2017

EBITDA EBITDA-Margin

(million CHF) (in % of revenue)

CAGR 17.3%

28

Solid balance sheet –A result of continued strong profitability and tight OPEX management

• Tight control of OPEX

• Well balanced OPEX allocation between R&D, Marketing/Sales and Administration

• R&D financed from available free cash flow

• R&D capitalization follows IFRS


0

100

200

300

400

500

600

2013 2014 2015 2016 2017

Cash (incl. marketable

securities)

Inventory

Other current assets

Accounts Receivable

Fixed Assets

(mil

lio

nC

HF

)

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100

200

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400

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600

2013 2014 2015 2016 2017

Shareholder's Equity

Short Term Debt

Long Term Debt

(mil

lio

nC

HF

)

Strategic Goals

29

• Grow business with new products

• Continued focus on strategic development

• Strengthening of the global presence

• Operational excellence for higher efficiency


© u-blox Holding AG30

Financial performance outlook 2018

• Continued strong business growth in 2018

• Impact by product mix on relative gross margin

• Natural hedging protects gross margin against foreign exchange variations

• Accelerated revenue growth rates expected for second half of the year 2018

• Exchange rate assumptions for 2018:• EUR/CHF: 1.11 ¦ USD/CHF: 0.98 ¦ GBP/CHF: 1.27• FX-sensitivity against CHF on Guidance 2018

*) This guidance is based on the absence of unforeseen economic adversity and exchange rates assumed at budget level

ActualFY 2016

ActualFY 2017

Guidance 2018*)

(IFRS)

Revenue 360.2m 403.7m 460m…475m

EBITDA 81.8m 87.4m 95m…105m

EBIT 59.0m 65.1m 65m… 70m

CHF CHF CHF

+10% change of USD EUR GBP

Revenue + 9% + 1% 0%

EBITDA + 16% 0% - 1%

EBIT + 22% - 1% - 2%

31

Our promise

Competent technical support worldwide

Low risk through all phases of your design cycle

Quick time to market

High quality Outstanding performance Security


Corporate Information

32

Legal structure u-blox group


u-blox Holding AGThalwil, Switzerland

u-blox AG (Headquarter)Thalwil, Switzerland

u-blox Singapore Pte. Ltd.Singapore

u-blox Japan K.K.Japan

u-blox Asia Pacific Ltd.Hong Kong

100% 100% 100% 100%

u-blox Italia S.p.A.Italy

100%

u-blox Espoo OyFinland

100%

u-blox America, Inc.USA

u-blox AG Beijing representative officeBeijing

Representative office of u-blox Singapore Pte. Ltd.Taipei

u-blox Singapore Pte. Ltd. (Branch office)Seoul

Sales organization R&D entities

u-blox AG Shenzenrepresentative officeShenzen

Representative office of u-blox Singapore Pte. Ltd.Bangalore

Representative office of u-blox Singapore Pte. Ltd.Sydney

u-blox AG Shanghai representative officeShanghai

100% u-blox UK Ltd.UK

u-blox San Diego Inc.USA

100%

u-blox Luton Ltd.UK

100%

u-blox Melbourn Ltd.UK

100%

u-blox Lahore(Private) Pty.Pakistan

100%u-blox Melbourn Ltd.Leuven BranchBelgium

100% u-blox CorkIreland

u-blox MalmöSweden

100%

u-blox AthensGreece

100%

u-blox BerlinGermany

100%

u-blox AG Chongqing representative officeChongqing

u-blox Electronics LtdShanghai

u-blox WirelessTechnology Ltd.Shanghai100%

Sapcorda GmbHBerlin

43%

34

Board of directors

Additional information –see Corporate Governance and Financial Report 2017 p. 8 - 13


Fritz FahrniChairman

Member NCC

André MüllerMember AC

Prof. Gerhard TrösterChairman NCC

Gina Domanig Dr. Paul van IseghemChairman AC

Thomas SeilerCEO

Jean-Pierre WyssCOO

35

Executive Committee

Additional information –see Corporate Governance and Financial Report 2017 p. 14 - 16


Thomas SeilerCEO

Head of Marketing and Sales

Jean-Pierre WyssExecutive Vice President

Head of Production and LogisticsCo-founder u-blox AG

Daniel AmmannExecutive Vice President

Positioning ProductsCo-founder u-blox AG

Andreas ThielExecutive Vice President

Wireless ProductsCo-founder u-blox AG

Roland JudCFO

Shares

Stock Exchange SIX Swiss Exchange

Swiss Security Number / ISIN 3336167 / CH0033361673

Ticker UBXN

Nominal value CHF 0.90

Shares issued 6‘957‘170 (December 31, 2017)

Market cap CHF 1.3 billion (December 31, 2017)

High / Low 52 weeks CHF 224.70 / CHF 160.70 (December 31, 2017)

Latest market price CHF 191.80 (December 29, 2017)


37

Analyst Coverage & Market making

Please note that any opinions, estimates or forecasts regarding u-blox' performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of u-blox or its management.

Analysts

Zürcher Kantonalbank Andreas Müller

Credit Suisse Michael Inauen

Vontobel Michael Foeth

MainFirst Schweiz Jürgen Wagner

Bank am Bellevue Mischa Roelli

Kepler Chevreux Torsten Sauter

Baader/Helvea Günther Hollfelder

Julius Bär Bruno Winiger

Mirabeau Mark Diethelm

BRYAN, GARNIER & CO Dorian Terral

UBS François-Xavier Bouvignies

Market making Zürcher Kantonalbank


• Annual General Meeting: April 24, 2018

• Half-year results 2018: August 24, 2018

• Analyst Day: November 21, 2018

38

Upcoming events


Investor relations contact

39

Thomas SeilerChief Executive Officer

u-blox Holding AGZürcherstrasse 688800 Thalwil, Switzerland

Phone: +41 44 722 74 44Fax: +41 44 722 74 99E-mail: [email protected]

Roland JudChief Financial Officer

u-blox Holding AGZürcherstrasse 688800 Thalwil, Switzerland

Phone: +41 44 722 74 44Fax: +41 44 722 74 99E-mail: [email protected]


40

Thank youfor your attention


u-blox investor presentation · this presentation contains certain forward-looking statements. such...

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