DJ u-blox AG: u-blox reports first half 2022 financial results
u-blox AG / Key word(s): Half Year Results u-blox AG: u-blox reports first half 2022 financial results 2022-08-19 / 07:00 CET/CEST
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Ad hoc announcement pursuant to article 53 LR u-blox reports first half 2022 financial results Reports first half 2022 revenue growth of 52.7%, adjusted EBITDA growth of 166.5%, strong bookings and expanded customer base. Increase FY 2022 guidance; Expects strong revenue growth of between 46% and 54% and an adjusted EBITDA margin of between 22-25%. Thalwil, Switzerland - 19 August 2022 - u-blox (SIX: UBXN), a global leader in wireless and positioning technologies, today announced its financial results for the first half of 2022 (1H 2022). The company's results for the 1H 2022 increased significantly as compared to the same period of last year, with record revenues, substantially improved gross profits and solid cash-flow. The acceleration in market demand across all regions and application sectors, together with the strong ramp-up of many new customer projects, resulted in continued strong bookings. Such progress is the result of novel product introductions over the past several years, and our enhanced solution capabilities. Thanks to well-managed supply-chain challenges, u-blox was able to improve deliveries to customers, thus recording strong billings of CHF 294.4 million, a 52.7% increase from 1H 2021. Furthermore, favorable product mix changes and realized price increases resulted in an improved adjusted gross margin of 48.9% (plus 220 bps) for the period. Free cash flow reached CHF 6.6 million, including a net working capital increase of CHF 51.0 million. Financial highlights for 1H 2022 (All comparisons versus the same period of last year, unless otherwise noted) . Revenues of CHF 294.4 million compared to revenues of CHF 192.7 million, an increase of 52.7% (atconstant exchange rates: +49.9%). . Gross profit (adjusted) of CHF 143.8 million compared to CHF 89.9 million, an increase of 59.9%, andequivalent to an adjusted gross margin of 48.9% versus 46.7%, plus 220 bps. . EBITDA (adjusted) of CHF 76.6 million, compared to CHF 28.7 million, corresponding to an adjusted EBITDAmargin of 26.0%. . EBIT (adjusted) of CHF 57.4 million, compared to CHF 10.5 million, equivalent to an adjusted EBIT marginof 19.5%. . Net profit (adjusted) of CHF 48.7 million, compared to CHF 6.3 million. . Cash flow from operating activities of CHF 30.4 million, compared to CHF 43.0 million. . Free cash flow of CHF 6.6 million, compared to CHF 27.7 million. . CHF 89.3 million of cash and cash equivalents as of 30 June 2022, compared to CHF 83.7 million as of 31December 2021. Since the beginning of 2022, the company has announced numerous product launches and partnerships which strongly enhanced its solution capabilities across the entire platform. Product Launches: . IoT certificate manager: a new security service that continuously renews device credentials in a fullyautomated mode. Together with u-blox's existing zero touch provisioning service, it provides out-of-the-boxon-boarding to IoT cloud platforms with total control of the device certificate lifecycle. Certificate lifecyclecontrol target IoT devices that integrate with leading IoT cloud platforms including the AWS IoT Core, Azure IoTHub, and DPS services. . u-blox ANT-B10 antenna board for Bluetooth: designed for integration into commercial end-products, theboard enables low power, high precision indoor positioning and speeds up evaluation, testing and commercializationof Bluetooth direction finding and indoor positioning solutions. . MAYA-W2 tri-radio module: supporting Wi-Fi 6, Bluetooth® low energy (LE) 5.2 and IEEE 802.15.4 (Threadand Zigbee) on a compact form factor, the module brings Wi-Fi 6 technology to industrial and consumer mass-marketapplications in industrial automation, smart building & energy management, healthcare, smart home and many otherapplications. . MIA-M10: the smallest GNSS (Global Navigation Satellite System) module series to date. Built on theultra-low-power u-blox M10 GNSS platform, MIA-M10 offers the most power-efficient solution for size-constrainedbattery-powered asset tracking devices. The module targets an expanding market for people, pets and livestocktrackers, as well as industrial sensors and consumer goods. . Two cellular LTE Cat 1 modules: the u-blox LARA-R6, the smallest LTE Cat 1 module with global coverage onthe market, and the u-blox LENA-R8 which includes a global navigation satellite system (GNSS) receiver based on theu-blox M10 platform. Together, the modules comprise five certified global, multi-regional and regional productvariants, simplifying logistics for product developers and increasing design flexibility. Partnerships with: . Universal Douglas Lighting Americas, a leading manufacturer of scalable lighting solutions: partnershipto develop a new open standard Bluetooth Mesh platform. The resulting SIGMesh platform will be based on the u-bloxNINA-B406 Bluetooth low energy module and will serve building automation use cases, including smart lighting,access control and energy management. . Exsurgo, a company developing technology-based neurological treatments: partnership to offer Exsurgo'sAxon headset for chronic pain treatment which will run on a u-blox ANNA-B112 Bluetooth 5 system-in-package (SIP)also used for wireless communication. The headset is part of a 116-person clinical trial to prove safety andefficacy. Exsurgo plans to take the device into high-volume production before 2022-year end to serve the USA, theUK and the European Union markets. . Fitogether, a South Korea-based developer of the OHCOACH wearable sports tracking solution: partnershipoffers more than 350 football clubs in 44 countries, the highest positioning accuracy among GNSS (Global NavigationSatellite System) products in the Electronic Performance and Tracking Systems (EPTS) industry quality test reporton these products has been already conducted by FIFA, the international football organization. . Geespace, the world's leading provider of AICT (aerospace information and communications) infrastructureand application solutions: MoU for the expansion of respective augmentation services for high precisionapplications to the US, European, and Chinese markets, primarily in the automotive sector. Financial Overview During 1H 2022, u-blox generated revenues of CHF 294.4 million, EBIT (adjusted) of CHF 57.4 million and EBITDA (adjusted) of CHF 76.6 million. Revenues in all regions were higher in 1H 2022 compared to the same period of the previous year, reflecting strong and broad-based expansion of overall demand. The stronger USD/CHF exchange rate had a 2.8% positive impact on revenue growth. For the 1H 2022 period, revenues in all regions and business segments substantially increased as compared to the same period of last year, despite supply chain constraints. Specifically: Revenues by region . AMEC: 1H 2022 revenues rose to CHF 96.3 million from CHF 59.9 million recorded during 1H 2021 (+60.8%)due to higher demand in healthcare and industrial automation. Also, demand for automotive applications expandedstrongly. . EMEA: 1H 2022 revenues increased to CHF 83.6 million (+41.8%) from CHF 59.0 million reported for 1H 2021primarily thanks to increased demand in industrial automation solutions and buoyant demand in automotive. . APAC: 1H 2022 revenues were CHF 114.5 million (+54.9%), compared to CHF 73.9 million generated during 1H2021 driven by strong growth in healthcare, networks and in automotive applications. Business in China remainedflat due to supply constraints and COVID impacts. Revenues by segment . Positioning and wireless products: 1H 2022 revenues for chips and modules for positioning and wirelessconnectivity that are used in industrial, automotive and consumer applications amounted to CHF 293.9 millioncompared to CHF 192.7 million during 1H 2021. . Wireless services: 1H 2022 revenues for wireless communication technology services including dataservices, reference designs, and software increased to CHF 21.5 million compared to CHF 17.5 million in 1H 2021(including intra group revenue). During 1H 2022, u-blox continued to expand its customer base and as of 30 June 2022, its customer base increased to over 14'500 customers worldwide (12'200 at the end of 2021). During 1H 2022, u-blox generated approximately 80% of its total revenues from 65 customers, with its largest customer accounting for less than 4.0% of total revenues. Adjusted gross profit increased by 59.9% to CHF 143.8 million in 1H 2022, from CHF 89.9 million, resulting in an increased adjusted gross profit margin of 48.9% (1H 2021: 46.7%). The gross margin benefitted from favorable product mix changes and realized price increases. Adjusted operating expenses, which include R&D, distribution, marketing and G&A expenses, totaled CHF 87.1 million in 1H 2022, compared to CHF 80.5 million. As a percentage of revenue, operating expenses were 29.6% of total revenue compared to 41.8% in the same period of last year. R&D expenses (adjusted) remained stable at CHF 52.6 million during 1H 2022, compared to CHF 52.3 million. Despite an increase in headcount, the R&D expense ratio benefitted from a weak EUR/CHF exchange rate. As percentage of revenue, R& D expenses decreased to 17.9% (1H 2021: 27.1%). Distribution and marketing expenses (adjusted) in 1H 2022 increased to CHF 21.6 million, compared to CHF 18.1 million, due to better margin which resulted in higher personnel bonus accruals, and an enlarged workforce. Regardless, as percentage of revenue, distribution and marketing expenses (adjusted) decreased to 7.3% in 1H 2022, from 9.4%. Financing costs of CHF 0.8 million (1H 2021: CHF 6.6 million) consisted primarily of interest payments for the outstanding bond. Unrealized foreign currency gains from the USD resulted in finance income of CHF 3.1 million (1H 2021: CHF 5.1 million). After acquisition of 100% of the shares of Sapcorda GmbH, the share of loss of equity-accounted investees net of tax reduced to CHF 0.1 million (1H 2022: CHF
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