Thalwil, Switzerland - March 21, 2012 - u-blox (SIX: UBXN), a leading provider of embedded positioning and wireless communication solutions, today announces its financial results for 2011.
Financial highlights
u-blox achieved strong top- and bottom line growth:
- Consolidated revenue of u-blox was CHF 124.7 million in 2011, a growth of 10.6% as compared to 2010 (29% in local currency)
- Despite unfavorable exchange rates, gross profit improved from CHF 58.9 million to CHF 62.8 million, with a good gross profit margin of 50.3% in 2011
- Profit from operations (EBIT) increased from CHF 19.1 million to CHF 21.2 million, a growth of 11.2% as compared to 2010
- EBITDA margin of 23.4%, EBIT margin of 17.0%
- Net profit increased by 27.8% from CHF 12.9 million to CHF 16.5 million, representing a 13.2% net profit margin for 2011
- Strong net cash flow from operations was CHF 18.6 million
- Healthy balance sheet with a high equity ratio of 83.7%
- Unfavorable exchange rates negatively influenced financial results
- The payout of a dividend of CHF 0.90 per share is to be proposed at the Annual General Meeting
A year of consolidation and growth
In 2011 the company recorded revenue growth in APAC
(+3.3%), the EMEA (+5.8%) and Americas (+29.9%) resulting
in overall growth of 10.6% over 2010. Measured in local
currencies the revenue increased by 29%. Growth was
experienced in most target market sectors. Both product and
service business segments generated positive EBIT during
2011. Consolidated revenue was up by CHF 11.9 million to
CHF 124.7 million with increased volumes, while EBIT
increased from CHF 19.1 million to CHF 21.2 million, an
11.2% increase over the previous year. Net profit was CHF
16.5 million, representing a 13.2% net profit margin for
2011. These positive figures are especially significant in
light of the negative exchange rate development of the
Swiss Franc against both US dollar and Euro during the
year.
Long term value creation based on solid strategy
u-blox strives to create long-term value for all its
stakeholders. To achieve this, the company continued to
adhere to a 4-pillar strategy, consistently focusing on
innovation, market expansion, operational excellence and
strategic partnerships.
Acquisitions
During 2011, u-blox entered the North American CDMA market
through the acquisition of San Diego based Fusion Wireless.
The acquisition immediately gave the company a new,
cutting-edge wireless module products plus access to the
CDMA market in North America for both consumer and M2M
applications. It also expands the company's wireless module
technology roadmap to cover all popular standards used
worldwide.
A second acquisition of all intellectual property of Australia based SigNav, a leader and 15-year veteran in precision-timing and reference frequency technologies, enhanced u-blox' market position in the global mobile basestation and femtocell markets which rely on this technology. Both companies where successfully integrated. With healthy liquidity of CHF 81.1 million, u-blox continues to assess additional acquisitions in order to strengthen its product portfolio and global presence.
Positioning products highlights
u-blox experienced a strong year of innovation in
positioning. Six new products were launched during the year
targeting the in-dash automotive navigation sector,
precision timing, and handheld consumer markets. A new
application sector, Precise Point Positioning (PPP), was
entered with a new product that addresses high-accuracy
mapping and agriculture applications. Of special
significance was the development and verification of new
technologies and products that address additional satellite
positioning technologies in addition to GPS such as the
Russian GLONASS and Japanese QZSS systems. u-blox is now
well positioned with products that serve the majority of
deployed global positioning technologies and augmentation
systems.
Wireless products highlights
The wireless product line experienced both market
acceptance and enhancement in terms of five new products
addressing new markets. 4 new products supporting CDMA were
launched during the year. Additionally, important
certifications with major carriers such as AT&T, Verizon
and Sprint Nextel were achieved. u-blox' CellLocate hybrid
GPS/Wireless positioning technology, announced in 2010, was
also integrated into both LEON and LISA wireless module
families.
Innovations
Innovation is the most important success factor for u-blox.
During 2011 efforts were maintained in research and
development with CHF 22.1 million. Innovation was achieved
in these distinct areas:
- Expansion of satellite positioning well beyond GPS: at the end of 2011, u-blox now has commercially available products that support not only GPS, but also Russia's GLONASS, Europe's Galileo, and Japan's QZSS satellite positioning standards.
- The SigNav acquisition strengthened u-blox' market position in precision timing. SigNav's know-how, software and equipment reinforced u-blox' position in GPS precision timing, a market where u-blox already has strong presence.
- High-precision GPS: introduction of the first product supporting high-precision GPS for applications such as mapping and agriculture. The technology is unique as it is based on a low-cost single frequency GPS receiver which can replace much more expensive techniques.
Expansion of production capacities and new facilities
In addition to revenue growth and two acquisitions,
production capacity was increased in all manufacturing
places and efficiency increased with additional automation
and test equipment. The company-wide culture of program and
project management was expanded with new tools, allowing
quicker reaction to market demands.
To address the growing market in Southern China, u-blox opened a new office in Shenzhen, the second office in China, and an office in India. Despite the extreme situation in Japan and Thailand due to the tsunami and catastrophic flooding, no significant impact on the ability to deliver to customers was experienced. This was in part due to a broad network of suppliers and subcontractors, most of who were not affected by these natural disasters.
Revenue breakdown
u-blox operates in two segments:
- GPS and Wireless products u-blox develops and sells GPS chips and modules, and wireless modules which are used in automotive, industrial and consumer applications. Revenue was CHF 123.0 million for 2011 as compared to CHF 110.3 million in 2010.
- Wireless services u-blox also offers wireless communication technology services in terms of reference designs and software, an activity which was enforced by the acquisition of Fusion Wireless Inc. In 2011, revenue for Wireless services was CHF 9.2 million compared to CHF 7.0 million in 2010 (including intra-group revenue).
In 2011, Asia Pacific generated 45%, EMEA 26% and Americas 29% of total revenue. Revenue for the region Asia Pacific was CHF 55.6 million, an increase of 3.3% compared to 2010. In the Americas revenue grew by 29.9% to CHF 36.3 million as compared to 2010. EMEA grew by 5.8% to CHF 32.7 million.
In 2011, the company made about 80% of its total revenue from 65 customers. u-blox' biggest customer accounted for less than 7% of revenue. u-blox was able to increase its total number of customers to over 3'500, as well as achieve global expansion into new regions and markets.
Increased gross profit
Gross profit increased by 6.6% to CHF 62.8 million in 2011
from CHF 58.9 million in 2010. Gross profit margin was
50.3% for 2011, declining slightly from 52.2% in 2010.
Distribution and marketing activities
Distribution and marketing expenses remained stable in
2011. Expenses were CHF 14.2 million as compared to CHF
14.6 million in the previous year. As a percentage of
revenue distribution and marketing expenses were 11.4% in
2011 compared to 12.9% in 2010.
Research and product development
R&D expenses in 2011 were CHF 22.1 million as compared to
CHF 21.3 million in 2010. As a percentage of revenue, R&D
expenses in 2011 were 17.7% as compared to 18.9% in 2010.
Stock option expenses
The stock option expenses recognized in 2011 was CHF 1.6
million as compared to CHF 1.0 million in 2010.
Growth of profit from operations (EBIT)
EBIT was CHF 21.2 million in 2011 as compared to CHF 19.1
million in the previous year. Growth rate from 2010 to 2011
was 11.2%. EBIT margin was 17.0% and EBITDA margin was
23.4% in 2011.
Financial income and costs
In 2011, financial income was CHF 1.0 million. Financial
expenses were CHF 1.3 million, mainly due to negative
foreign exchange results.
Table 1: Consolidated income statement
Positive cash flow from operating activities
In 2011, u-blox generated cash from operating activities in
the amount of CHF 18.6 million as compared to CHF 20.7
million in 2010. Inventory level was increased in the
amount of CHF 4.8 million.
Table 2: Condensed consolidated statement of financial position
Main investing activities
In 2011, investments in capitalized development costs were
CHF 4.0 million as compared to CHF 3.4 million in 2010. CHF
3.3 million was invested in furniture, equipment, tools and
test infrastructure for the further expansion of capacity
and approximately CHF 2.6 million in intellectual property
rights and acquired technology.
With the acquisition of the intellectual property of Australia based SigNav u-blox could enhance its market position in precision timing.
Through the acquisition in September 2011 of San Diego based Fusion Wireless Inc., u-blox strengthened its wireless module product offering and gained access to the embedded CDMA market in North America.
Financing activities
In 2011, there was a repayment of CHF 2.4 million of a
financial liability out of acquisitions.
u-blox has a very strong balance sheet with an equity ratio of 83.7%. Cash and cash equivalents and marketable securities were CHF 81.1 million at December 31, 2011 compared to CHF 75.1 million at December 31, 2010.
At the end of 2011, goodwill was at CHF 17.1 million and no impairment losses were recognized on the goodwill.
Dividend
Due to this strong position and positive outlook, the Board
of Directors will propose at the annual shareholders
meeting to pay-out dividends. For this year a dividend of
CHF 0.90 per share is suggested.
Table 3: Condensed consolidated statement of financial position
New Board and Management members
Two seasoned industry experts strengthened the top
management teams; Dr. Paul Van Iseghem was elected as a
Member of the Board, and Roland Jud was appointed CFO.
Outlook
u-blox' remains well positioned to serve the global markets
for both positioning and wireless communications in the
consumer, industrial and automotive markets. Thanks to
in-house expertise in both the wireless and positioning
sectors, the company is well prepared to address promising
markets, including GSM, WCDMA and CDMA wireless modems for
M2M markets on a global scale, as well as receivers for new
satellite positioning systems in Europe, Russia and Japan.
u-blox will continue to follow a dual-track strategy and
foresee continued growth in 2012.
Growth drivers will be:
- The adoption of positioning features in virtually all types of consumer products
- The continuing trend of embedded wireless connectivity used in a vast range of industrial M2M applications
- Increasing demand for asset and personal trackers to provide accountability and security
- Continued global domination of positioning products in automotive navigation systems
- The strong growth of automotive emergency call and anti-theft systems
With over 3'500 global customers and a very strong business model and brand, u-blox expects continued revenue growth in 2012.
For the year 2012, the company maintains an EBIT guidance at approximately CHF 20 million, and its revenue guidance at CHF 155 million. This outlook is based on the absence of unforeseen economic adversity and exchange rates assumed at budget level (USD/CHF: 0.90; EUR/CHF: 1.22).
For more information, please view the Annual Report 2011
and presentation slides online at:
http://www.u-blox.com/en/reports-and-presentations.html
About u-blox
u-blox is a leading fabless semiconductor provider of
embedded positioning and wireless communication solutions
for the consumer, industrial and automotive markets. Our
solutions enable people, devices, vehicles and machines to
locate their exact position and wirelessly communicate via
voice, text or video. With a broad portfolio of GPS
modules, chips, and software solutions together with
wireless modules and solutions, u-blox is uniquely
positioned to enable OEMs to develop innovative solutions
quickly and cost-effectively. Headquartered in Switzerland
and with global presence in Europe, Asia and the Americas,
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