u-blox investor presentation · goods tracking market to swell to $5.6 billion in 2021 number of...

u-blox Investor PresentationSeptember 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

3 © u-blox Holding AG


Our vision

We deliver leading wireless technology to reliably locate and connect people and devices.

We are convinced that the Internet of Things will change every aspect of our societies, our businesses, and our everyday lives.

That’s why we develop reliable and innovative positioning and wireless communication solutions that securely connect vehicles, industries, things, and millions of people around the world.

Expanding the global reach

5

5900CUSTOMERSWORLDWIDE

15SALES OFFICES

66COUNTRIES

WORLDWIDE

• Broad customer base with more than 5900 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

@ u-blox Holding AG

Billions of things waiting to be connected

6

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

@ u-blox Holding AG

7

u-blox plays in high growth markets

• IoT markets predicted to strongly grow

• Various wireless technologies allow for IoT

connected devices

• All these wireless technologies are our heartland

Source: Ericsson Mobility Report 2018

Connected devices [billion]

Wide area IoT -

Cellular

Wide area IoT -

othersShort Range IoT

2017 0.8 0.7 6.2

2023 4.1 3.5 15.7

CAGR 30% 30% 17%

30% 30%

17%

0%

5%

10%

15%

20%

25%

30%

35%

0

2

4

6

8

10

12

14

16

18

CA

GR

m u

nit

s

IoT connected devices

@ u-blox Holding AG

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

• Combining technologies provides for solutions that deliver extra value not available otherwise

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

8

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 Joint Venture with industry partners

@ u-blox Holding AG

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

• Long-term sustained competitive position

• Strong synergies between the technologies

9

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 Joint Venture with industry partners

@ u-blox Holding AG

Wireless technologies connect things to the cloud


802.11p5G NR V2X GNSS

5G NR Positioning

5G LTE(Cat-M, NB-IoT)

Sensor Networks Industrial IoT

5G NR IoT

WiFi

Bluetooth

Our Focus


Four IoT focus areas for u-blox

12

Connected vehicle Connected city Connected industry

Adaptive cruise control shipments to reach 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 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

Number of connected industrial controllers to triple from 2014 to 2020, 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 billion connected consumers in 2016 will grow to 6.8 billion 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 )

@ u-blox Holding AG

IoT and Industry 4.0

13

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 to leverage smart, connected devices to build, distribute, and manage 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

@ u-blox Holding AG

Enabling the Internet of Things (IoT)

14

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.

We distinguish three applications sectors:• Automotive• Industrial• Consumer

@ u-blox Holding AG


Automotive marketHigh quality and robustness

Typical applications

• Vehicle telematics

• Emergency call systems

• Insurance boxes

• Autonomous vehicles

u-blox advantages

• Automotive quality

• Dead reckoning solutions

• Seamless integration of positioning and wireless

• Robust performance

• Long product lifetime


Industrial marketVersatile and reliable technology


• Asset tracking

• Automation

• Precision timing

• Smart metering

• POS terminals

u-blox advantages

• Excellence in product features

• High reliability

• Form factor roadmap

• Seamless integration of positioning and wireless

• Short time to market


Consumer marketMass market solutions


• Wearables

• Drones

• People and animal tracking

• Car accessories

• Mobile hotspots and routers

u-blox advantages

• High performance solutions

• Small size chip and module solutions

• Very low power consumption

• Cost effectiveness

• Short time to market

Innovation for the IoT

LTE Cat NB1V2X

Wi-Fi

Precise positioning (GNSS) Bluetooth BR / EDR

LTE Cat M1

LTE Cat 1

Bluetooth low energy

18.5% OF SALES

INVESTED IN R&D


uRLLC

mMTC

Wireless standards offer an ever increasing capability


u-blox cellular product evolution toward 5G

4G LTE-Advanced Pro 5G

Rel-13 Rel-14 Rel-15 Rel-16

Massive Machine-Type Communication

High device density

Low bandwidth

Low cost

Low power

Enhanced Mobile Broadband

High bandwidth

High cost

High mobility

Ultra Reliable Low Latency Communication

Ultra low latency

Highly reliable

Highly secure

2017 2018 2019 2020

2G – 3G - 4G

eMBB

What is 5G for?


Enhanced Mobile Broadband• 20/10 Gbps DL/UL• 4ms user plane latency • Mobility up to 500 km/h

Ultra Reliable Low Latency Communication• 1ms user plane latency• Highly secure / resilient• 0ms mobile

interruption time / always available

Massive Machine-Type Communication• 1M devices per km2• 10+ years battery life• 20 dB coverage

u-blox AG20

uRLLC

mMTC

eMBB

Connected Health

Sensor Networks

Video Monitoring

Mobile Cloud Computing

Virtual Reality

Fixed Wireless

UHD Video

Wearables

Industrial Automation

V2X

Public Safety

Smart Home

Smart City

Unmanned Vehicles

3D Gaming

General

purpose

V2X



Wi-Fi evolution toward multiple use cases

802.11g

Dual band

High reliability

High bandwidth

High frequencies

Various bandwidths

Timing

Positioning

2010 2014 2018 2022

802.11n

802.11ac

802.11ad

802.11ay

802.11ax

802.11az

802.11p

802.11p xx802.11ah

802.11ba Low Power

High

Through-

put

Low bandwidth

Mesh



Bluetooth progression toward more capabilities

Mesh networks

High bandwidth

Long range

Low energy

Long rangeBT1.2

2010 2014 2018 2022

BT2.0 BT2.1

BT4.0 BT4.1

BT5.0BT5.1

BT4.2Mesh 1.0

Mesh 1.x

Mesh 1.x

High data

rate

Low data

rateBT 3.0

High

Precision



Expanding satellite constellations

Time or frequency synchronization

Meter-level accuracy

High tracking sensitivity

Low power consumption

Centimeter- to decimeter-level accuracy

2010 2014 2018 2022

GPS

Dead

Reckoning

Standard

Precision

100% positioning coverage incl. tunnels and urban canyons

Time &

Frequency

GLONASS

GalileoBeidou


Product launch highlights in H1 2018

UBX-P3The industry’s smallest V2X communication chip takes u-blox’s commitment to shaping the future of active safety and autonomous driving technologies to the next level.

ANNA-B1Ultra-compact Bluetooth 5 module designed for tough environments, ANNA-B1 is fully tailored to applications for the Industrial Internet of Things (IoT).

u-blox F9 platform High precision positioning solutions for mass market industrial and automotive applications.

ZED-F9PFirst high precision GNSS module based on u-blox F9 technology delivering centimeter-level accuracy in seconds.

SARA-R410MThe world’s smallest multi-modeLTE Cat M1, NB-IoT module, ideal for diverse IoT and M2M applications including smart cities, connected healthcare, and more.

Cellular Communication

Short Range RadioCommunication

Positioning

NINA-B2Ultra-compact NINA-B2 dual mode Bluetooth stand-alone module featuring strong security for the Industrial IoT.

SARA-R412MThe world’s smallest multi-modeLTE Cat M1 module with 2G fallback , ideal for diverse IoT and M2M applications in EMEA.

Financial Perspectives


26

Continuous revenue growth

Revenue and EBITDA H1 2018 Revenue split per market H1 2018

55.1%

10.5%

28.9%

5.5%

Industrial Consumer Automotive Not assigned

338.3

360.2

403.7

179.7193.9 199.0

78.7 81.8 87.4

39.1 40.3 40.1

0

50

100

150

200

250

300

350

400

450

2015 2016 2017 H1/16 H1/17 H1/18

Revenue EBITDA

(million CHF)

CAGR 5.2%

CAGR 9.2%

@ u-blox Holding AG

27

Continuous strong profitability

Gross profit/ Gross profit margin H1 2018 EBITDA trend

Maintained EBITDA margin of 21...23%

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

10

20

30

40

50

60

70

80

90

100

2013 2014 2015 2016 2017

EBITDA EBITDA-Margin

(million CHF) (in % of revenue)

CAGR 17.3%

155.0167.1

184.0

82.5 87.4 93.6

50.3%

46.4%

45.6%

50.3%

45.1%

47.0%

42%

43%

44%

45%

46%

47%

48%

49%

50%

51%

0

20

40

60

80

100

120

140

160

180

200

2015 2016 2017 H1/16 H1/17 H1/18

Gross Profit % of revenue

(million CHF) (in % of revenue)

@ u-blox Holding AG

28

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

0

100

200

300

400

500

600

2014 2015 2016 2017 H1/2018

Fixed Assets

Inventory

Accounts Receivable

Other current assets

Cash (incl. marketable

securities)

(mil

lio

n C

HF

)

0

100

200

300

400

500

600

2014 2015 2016 2017 H1/2018

Short Term Debt

Long Term Debt

Shareholder's Equity

(mil

lio

n C

HF

)

Comments

• Strong financial position with a liquidity (incl. marketable securities) of CHF 150.2m (Dec. 2017: CHF 172.4m)

• Inventory CHF 56.7m (Dec. 2017: CHF 44.2m) increased due to tight supply chain

• Trade receivables CHF 58.6m (Dec. 2017: CHF 50.4m) increased with accelerated business at end of H1.2018

• Increased intangible assets due to capitalization of R&D expenses

• Non-current liabilities contain bonds of CHF 119.0m, Deferred tax liabilities (CHF 7.5m), Employee benefits (IAS-19) (CHF 15.7m) , Provisions (CHF 6.8m)

• Share capital increase due to exercise of options

@ u-blox Holding AG

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 AG


Financial performance and guidance 2018

• Guidance amended reflecting H1.2018

• Stronger H2 but cannot fully compensate slow first half year 2018

• R&D efforts maintained for supporting new platforms

• Impact by product mix on gross margin

• Natural hedging protects gross margin against foreign exchange variations

+10% of USD EUR GBP

Revenue + 9% + 1% 0%

EBITDA + 16% 0% -1%

EBIT + 22% - 1% - 2%

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

Updated Guidance 2018*)

(IFRS)

Revenue 360.2m 403.7m 435m…445m

EBITDA 81.8m 87.4m 90m…100m

EBIT 59.0m 65.1m 60m… 65m

CHF CHF CHF

31

Our promise

Competent technical support worldwide

Low risk through all phases of the design cycle

Quick time to market

High quality Outstanding performance Security

@ u-blox Holding AG

Corporate Information


Legal structure u-blox group

33

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%

@ u-blox Holding AG

34

Board of directors

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

André MüllerChairman

Member AC

Prof. Gerhard TrösterChairman NCC

Gina DomanigMember NCC

Dr. Paul van IseghemVice-chairmanChairman AC

Thomas SeilerCEO

Jean-Pierre WyssCOO

Ulrich Looser

@ u-blox Holding AG

https://www.u-blox.com/sites/default/files/documents/Corporate_Governance_2017_FINAL.pdf

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

@ u-blox Holding AG

https://www.u-blox.com/sites/default/files/documents/Corporate_Governance_2017_FINAL.pdf

Shares

Stock Exchange SIX Swiss Exchange

Swiss Security Number / ISIN 3336167 / CH0033361673

Ticker UBXN

Nominal value CHF 0.90

Shares issued 7’081’689 (June 30, 2018)

Market cap 1’394 Mio (June 30, 2018)

High / Low, 01.01.2018 – 30.06.2018 CHF 220.00 / CHF 162.50 (June 30, 2018)

36 @ u-blox Holding AG

37

Analyst Coverage & Market making

Please note that any opinions, estimates, or forecasts regarding u-blox‘s 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

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

@ u-blox Holding AG

• Investor and Analyst Day November 21, 2018

• 2018 Annual Results March 15, 2019

• Annual General Meeting April 25, 2019

38

Upcoming events

@ u-blox Holding AG

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]

@ u-blox Holding AG

Thank youfor your attention


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