EQS Group-News: u-blox AG
/ Key word(s): Half Year Results
u-blox reports H1 2020 financial results
Thalwil, Switzerland - 20 August 2020 - u-blox (SIX:UBXN,OTC:UBLXF), a global leader in wireless and positioning technologies, today announced its financial results for the six months ended 30 June 2020.
- Revenue of CHF 174.0 million compared to revenues of CHF 190.6 million H1 2019, a decline of -8.7% (-5.6% at constant exchange rates)
- Gross profit (adjusted) of CHF 79.4 million compared to CHF 86.1 million in H1 2019, a decline of -7.8%, and equivalent to an adjusted gross margin of 45.6% versus 45.2% in the prior year period
- EBITDA (adjusted) of CHF 24.1 million, compared to CHF 32.7 million in the prior year period
- EBIT (adjusted) of CHF 13.2 million, compared to CHF 19.7 million in the prior year period
- Net profit (adjusted) before minority interests of CHF 4.7 million, compared to CHF 13.6 million in the prior year period
- Cash flow from operating activities of CHF 13.9 million in H1 2020, compared to CHF 33.1 million in the prior year period
- Free cash flow of CHF -21.9 million (CHF -8.4 million before acquisitions) in H1 2020, compared to CHF 0.5 million in the prior year period
- CHF 100.1 million of cash and cash equivalents at 30 June 2020, compared to CHF 127.4 million at year-end 2019 and CHF 121.0 million at 30 June 2019
- u-blox initiated cost improvement measures that are expected to generate annual savings of approximately CHF 15 million. As part of these measures, one large non-revenue generating program was discontinued, and measures will be taken to redeploy these and other resources efficiently and in a cost effective manner to core business areas.
- During the first half of 2020, u-blox recognized an impairment charge of
- Successfully acquired IoT Communication-as-a-Service Provider Thingstream in April 2020, consistent with the company's strategy to expand its services portfolio by providing customers with a complete and comprehensive IoT connectivity solution.
- Launched the company's latest contribution to vehicle-to-everything (V2X) technology, the short range VERA-P3 V2X module.
- Debuted the global LPWA cellular module SARA-R422 with increased security and positioning features.
- The M9 positioning platform was expanded with additional features. This ultra-robust M9 technology platform will serve demanding automotive and high-end telematics applications.
Revenues in EMEA decreased to CHF 51.7 million in H1 2020 from CHF 61.6 million in H1 2019 (-16%) due to declines in the broader automotive and mobility end markets. Automotive OEMs experienced prolonged shutdowns due to the pandemic, and the mobility markets, where applications are especially used in shared services such as scooters and e-bikes, were particularly impacted by COVID-19. Areas of revenue growth in EMEA included IoT applications for smart cities which was mostly driven by demand from local governments. Additionally, there was solid demand for driver assistance and point-of-sale device applications.
AMEC revenues decreased to CHF 48.9 million in H1 2020 from CHF 56.6 million in
u-blox operates in two segments:
- Positioning and wireless products
u-blox develops and sells chips and modules for positioning and wireless connectivity that are used in automotive, industrial and consumer applications. For H1 2020, revenue was CHF 173.8 million compared to CHF 190.4 million in H1 2019.
- Wireless services
u-blox also offers wireless communication technology services in terms of reference designs and software. For H1 2020, revenue for wireless services was CHF 16.7 million compared to CHF 16.0 million in H1 2019 (including intra group revenue).
Adjusted gross profit decreased by -7.8% to CHF 79.4 million in H1 2020 from CHF 86.1 million in H1 2019, resulting in an adjusted gross profit margin of 45.6%
Adjusted operating expenses, which include R&D, distribution and marketing and G&A expenses, totaled CHF 66.7 million for H1 2020, compared to CHF 67.8 million in H1 2019. The higher R&D and G&A expenses were offset by lower distribution and marketing expenses. As a percentage of revenue, operating expenses were 38.3% of revenue compared to 35.6% last year.
R&D expenses (adjusted) remained stable at CHF 39.5 million in H1 2020 compared to CHF 39.8 million during the same period in 2019. As a percentage of revenue, adjusted R&D expenses in H1 2020 were 22.7% of revenue compared to 20.9% in H1 2019.
Distribution and marketing expenses (adjusted) in H1 2020 were CHF 15.8 million compared to CHF 17.8 million in the previous year period. As a percentage of revenue, distribution and marketing expenses (adjusted) were 9.1% in H1 2020 compared to 9.3% in H1 2019. Distribution and marketing expenses declined as expositions, conferences and other large-scale events were cancelled or moved to a virtual setting due to the pandemic.
During the first half of 2020, u-blox recognized an impairment charge of CHF 74.1 million due to current market conditions mainly in automotive, changes in business plan expectations and refocusing of various programs. The company's existing lines of product offerings remain unaffected.
Net profit (adjusted) before minority interests was CHF 4.7 million, compared to CHF 13.6 million last year. Diluted EPS (adjusted) in H1 2020 was CHF 0.67 per share compared to CHF 1.96 per share in H1 2019.
At 30 June, 2020, u-blox had a strong balance sheet with an equity ratio of 54.2%. Cash, cash equivalents, and marketable securities totaled CHF 100.1 million as of 30 June, 2020, compared with CHF 127.4 million at the end of 2019 and CHF 121.0 million at 30 June, 2019. u-blox generated cash from operating activities of CHF 13.9 million through H1 2020, a decline of 58.2% compared to the previous year (H1 2019: CHF 33.1 million), due to lower business levels and an increase in net working capital. This increase in net working capital was driven by lower demand which increased inventory levels. Investments in property, plant and equipment and intangible assets totaled CHF 22.2 million for H1 2020, compared to CHF 29.2 million in H1 2019. Free cash flow (before acquisitions) was CHF -8.4 million, compared to
Acquisition of Thingstream
Mr. Seiler continued, "Our supply chain remained fully operational and we have experienced no significant issues or interruptions with respect to product availability and delivery. For the safety of our employees, customers and business partners, we instituted company-wide measures for employees to work remotely beginning in mid-March. Our existing infrastructure was key in facilitating efficient online collaboration, and therefore this transition has not impacted our productivity in sales and marketing, R&D and other operational areas of the business. In fact, we implemented new measures for conducting R&D while operating remotely, and we have been maintaining full R&D capacity to keep our innovation pipeline continually flowing. However, we also defined measures to reduce our operational expense significantly. Throughout the pandemic, no employee was subject to reduced working schemes."
Mr. Seiler said, "The core fundamentals and underlying drivers of our business remain solid and we are pleased with our ability to service customers and improve the business despite these challenging times. We experienced interesting ramp-ups of new applications that should accelerate our business once economic conditions improve and stabilize. These new applications include a variety of classical applications like infotainment, as well as new applications in the areas of automated vehicles, building automation and smart cities. We also benefited from the strong build-out of network capacity, both cellular and point-to-point."
To participate, please dial the following number approximately 10 minutes prior to the start of the call:
Switzerland / Europe: +41 (0) 58 310 50 00
Entire press release with tables: https://www.u-blox.com/en/investor-press-releases/u-blox-reports-first-half-2020-financial-results
u‑blox investor releations contacts:
Switzerland and Europe:
Doris Rudischhauser, c/o Dynamics Group AG
Jeehae Linford, c/o The Equity Group Inc.
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