u-blox investor presentation · u-blox investor presentation january 2018. ... source: ericsson...

locate, communicate, accelerate

u-blox Investor Presentation

January 2018

Disclaimer

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.

© u-blox Holding AGSlide 2

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

© u-blox Holding AG

Slide 3

Our vision

Slide 4

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


Innovation is our life blood

Slide 5

We have been first to market with many technology solutions


Expanding the global reach

• 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


5900CUSTOMERSWORLDWIDE

15SALES

OFFICES

66COUNTRIES

WORLDWIDE

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

Billions of things waiting to be connected

Street lights 1 billion

Source: Geeny.io


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

billion

31.6

billion

u-blox plays in the high growth markets


Source: Ericsson Mobility Report 2017

• The mobile phone market has plateaued

• The future growth lies in both, wide-area and short-range IoT applications

They are u-blox heartland

Connected devices (billions)

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

0

50

100

150

200

250

2000 2005 2010 2015 2020 2025

Ever expanding Mobility index

Mobility and the Cloud economics drive our markets for IoT


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

avera

ge

uti

lizati

on

)

# of Servers in Public Cloud

Source: Transport Outlook 2011, OECD

The Internet of Things that Really Matter – IoT market will

become large

• 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


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 NB-IoT

millions of units

u-blox: Unique technology and product line-up

Slide 11

PositioningCellular

CommunicationShort Range

Communication

Integrated Circuits

Modules

Services

CellLocate® (modem based positioning)

AssistNowTM (world wide GNSS assistance service, on- and off-line)

Correction DataFOTA (Firmware update over the air)

Lifetime Security

• 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


PositioningCellular

CommunicationShort Range

Communication

Integrated Circuits

Modules

Services

CellLocate® (modem based positioning)

AssistNowTM (world wide GNSS assistance service, on- and off-line)

Correction DataFOTA (Firmware update over the air)

Lifetime Security

Strong competitive advantage

Slide 12

• Important strategic benefits from the unique u-blox line-up• Long-term sustained competitive position


Strong synergies between the technologies

High cross selling effectFu

ll o

wn

ers

hip

of

tech

no

log

y

Maxim

um

co

mp

ete

nce

Marg

in e

xp

an

sio

n

Cro

ss fu

nct

ion

al v

alu

e

Serv

ices

on

to

p o

f H

W

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 in connected 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 )

Internet of

Things

IoT and Industry 4.0

Slide 15

Industry

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) – u-blox at the core

Slide 16 © u-blox Holding AG

Automotive market – high quality and robustness

Slide 17

Typical applications

• In car navigation

• 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 market – versatile and reliable technology

Slide 18


• 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 market – mass market solutions

Slide 19


• 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


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

Slide 21

Autonomous vehicles

LTE connectivity

Smart modems

Security

Robustness

Size and cost reduction

18% OF SALES INVESTED IN R&D


Cellular product offer

Slide 22

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 6Cat 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


Short range radio product offer

• The products provide connectivity solutions for

• High-performance systems in automotive and industrial markets

• Embedded systems mainly for industrial markets

• Car-to-car interaction


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

Base

NEO-M8P-2

Rover

NEO-M8P-0

Chips -

Core platforms

Financial Perspectives

Continuous revenue growth

Slide 26

Revenue Growth Application revenue mix

IndustrialConsumer

AutomotiveCAGR 18.5%


Continuous strong profitability


Gross Profit trend EBITDA trend

122.7

155.0167.1

72.882.5 87.4

45.4% 45.8%46.4%

44.9%45.9% 45.1%

0%

10%

20%

30%

40%

50%

60%

0

20

40

60

80

100

120

140

160

180

2014 2015 2016 H1/15 H1/16 H1/17

Gross Profit % of revenue

5.9%

(million CHF)

270.0

338.3

360.2

161.9 179.7

193.9

58.6

78.7 81.8

36.5 39.1 40.3

0

50

100

150

200

250

300

350

400

2014 2015 2016 H1/15 H1/16 H1/17

Revenue EBITDA

(million CHF)(million CHF)

7.9%

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

Solid balance sheet – a result of continued strong

profitability and tight OPES 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


Strategic Goals


• Grow business with new products

• Continued focus on strategic development

• Strengthening of the global presence

• Operational excellence for higher efficiency

Financial performance and guidance 2017


• Maintained guidance for 2017

• Continued business growth in 2017

• Impact by product mix on relative gross margin

• Natural hedging protects relative gross margin against foreign exchange variations

+10% of USD EUR GBP

Revenue + 8.6% + 1.3% 0%

EBIT + 21.1% + 1.0% - 2.0%

• Exchange rate assumptions for 2017:EUR/CHF: 1.07 USD/CHF: 1.02 GBP/CHF: 1.23

• FX-sensitivity against CHF on Guidance 2017

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

Actual

FY 2015

Actual

FY 2016

Guidance 2017*)

Revenue 338.3m 360.2m 410m…425m

EBIT 51.3m 59.0m 60m… 65m

CHF CHF CHF

Our promise

Slide 31

Growing organization to

meet market demands

Consistent Execution:

First to market with new products tailored to various applications

u-blox positioned for

profitable growth

Focus and invest in key

markets with a sustainable future

Technology leadership

and control of the core technology


Corporate Information

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 office

Shenzen


Bangalore


Sydney

u-blox AG Shanghai

representative office

Shanghai

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 Cork

Ireland

u-blox Malmö

Sweden

100%

u-blox Athens

Greece

100%

u-blox BerlinGermany

100%


u-blox AG Chongqing

representative office

Chongqing

u-blox Electronics Ltd

Shanghai

u-blox Wireless

Technology Ltd.

Shanghai100%

Sapcorda GmbH

Berlin43%

Board of directors

Additional information – see Corporate Governance and Financial Report 2016 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

Executive Committee

Additional information – see Corporate Governance and Financial Report 2016 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)

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


Upcoming events

• Annual results 2017: March 15, 2018

• Annual General Meeting: April 24, 2018

Slide 38

Investor relations contact

Thomas Seiler

Chief Executive Officer

u-blox Holding AG

Zürcherstrasse 68

8800 Thalwil, Switzerland

Phone: +41 44 722 74 44

Fax: +41 44 722 74 99

E-mail: [email protected]

Roland Jud

Chief Financial Officer

u-blox Holding AG

Zürcherstrasse 68

8800 Thalwil, Switzerland

Phone: +41 44 722 74 44

Fax: +41 44 722 74 99

E-mail: [email protected]


Thank you!

locate, communicate, accelerate

u-blox investor presentation · u-blox investor presentation january 2018. ... source: ericsson...

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