Adhoc: u-blox AG: u-blox unveils its "Focus - Innovate - Execute" strategy at its 2023 Capital Markets Day

u-blox AG / Key word(s): Strategic Company Decision
u-blox unveils its "Focus - Innovate - Execute" strategy at its 2023 Capital Markets Day

21-Nov-2023 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.

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• "Focus - Innovate - Execute" strategy, designed to drive long-term profitable growth and sustainable value creation
• Increase focus on highly differentiated Positioning business by substantially shifting R&D teams to Positioning innovations
• Stop future cellular chipset development leading to a non-cash impairment of
  CHF 65 to 70 million
• Turn-around the Connectivity business by gaining scale, leveraging our trustworthiness as Swiss supplier in a multi-polar world
• Improve execution performance, by agile development and increased bottom-line focus
• New financial model (over the cycle) includes revenue CAGR of >10%,
  adj. EBIT margin ~14% and Free Cash Flow margin ~8%
• After outperforming the semiconductor market in 2023, partly due to customers' overstocking, 2024 will be a transition year. Double-digit million cost savings already initiated to protect the bottom-line in 2024

Thalwil, Switzerland - 21 November 2023 - u-blox (SIX: UBXN), a global leader in Positioning and Connectivity technologies, holds today its 2023 Capital Markets Day. Chairman André Müller and CEO Stephan Zizala, together with members of the Executive Committee, will discuss the company's new "Focus - Innovate - Execute" strategy, designed to drive long-term profitable growth and sustainable value creation.

Strategy: Focus - Innovate - Execute
Focus on Positioning; stop cellular chipset development
u-blox will further strengthen its market leading Positioning business by allocating more resources and focusing on its highest-value business segment. By continuing development in fast growing segments and expanding into new applications, u-blox will secure continued profitable growth.

u-blox has decided to discontinue future cellular chipset development, leading to an expected non-cash impairment of CHF 65-70 million in December 2023. Renewed focus on our cellular module business aims to gain market share via leveraging our sales and distribution channels and leveraging our trustworthiness as Swiss supplier in a multi-polar world.

Innovate
u-blox has a full pipeline of innovations to address secular growth drivers such as autonomous driving, remote healthcare, asset tracking and industrial digitalization. We will intensify the implementation of an agile R&D approach, bringing those innovations to the market faster. The more iterative development process will deliver functional products after each iteration, enabling early customer feedback, therefore enhancing development potential and optimizing resource-allocation.

Execute
u-blox is targeting the improvement of its procurement activities (CHF >300 million sourcing volume in 2022) through process-reorganization. We expect this initiative to generate an improvement in efficiency and product costs, especially within cellular, by establishing a design-to-cost toolset. These changes, in addition to maximizing our global site footprint, are also intended to improve working capital management and optimize costs.

New mid/long-term financial model
u-blox announces its new over-the-cycle Target Financial Model^[1]. Revenue is expected to grow by a CAGR of over 10%, ahead of the 7% CAGR expected for the semiconductor industry. Adj. EBIT margin is expected to be at around 14% and Free Cash Flow margin around 8%.

New reporting structure enhances transparency
Going forward, u-blox will provide a trading update with revenue and adj. EBIT in the first and third quarter, in addition to the established full- and half-year results publications. Additionally and in line with common market practice in the semiconductor industry, u-blox will replace its annual guidance with a quarterly guidance.

2024 to be a transition year before growth resumes
The existing revenue guidance for FY 2023 of CHF 585-625 million, implies a strong sequential growth in Q4 versus Q3. While not providing a guidance for FY 2024 in-line with our new reporting framework, the likely development of revenues in 2024 needs to be seen in light of significant overstocking by our customers which benefitted our 2023 revenues resulting in superior performance vis-à-vis the overall semiconductor markets. In order to mitigate the effects on profitability from a lower revenue, u-blox initiated measures targeting double digit million cost savings to be effective in 2024.

u-blox's Chairman André Müller commented: "I am very pleased to announce of our focused strategy today, aiming to capitalize on the strength of our business model and better align it with end-markets demand. The strategy, focused on long-term sustainable growth, is designed to drive u-blox's value for years to come and deliver strong returns to our shareholders".

u-blox's CEO Stephan Zizala added: "Our refined strategy "Focus - Innovate - Execute" is designed to unleash the full potential of the incredible u-blox team. After almost one year as CEO, I'm convinced more than ever that we are well positioned to significantly contribute and benefit from secular growth drivers such as autonomous driving, remote healthcare, asset tracking and industrial digitalization."

Conference call and webcast details

For participating in today's event, please click here.

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[1] 2023 as base of new cycle. For EBIT / FCF margin, targets as average over the cycle

For further information, please contact:

Rafael Duarte

Head of Investor Relations

Phone: [phone]

[e-mail]

Lena Cati

The Equity Group Inc.

Phone: [phone]

[e-mail]

About u-blox

u-blox (SIX: UBXN) is a global technology leader in positioning and wireless communication in automotive, industrial and consumer markets. Its smart and reliable solutions, services and products let people, vehicles and machines determine their precise position and communicate wirelessly over cellular and short-range networks. With a broad portfolio of chips, modules and secure data services and connectivity, u-blox is uniquely positioned to empower its customers to develop innovative and reliable solutions for the Internet of Things, quickly and cost-effectively. With headquarters in Thalwil, Switzerland, the company is globally present with offices in Europe, Asia and the USA.

(www.ublox.com)

Find us on Facebook, LinkedIn, Twitter @ublox and YouTube

Disclaimer
This release contains certain forward-looking statements. Such forward-looking statements reflect the current views of management and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the u-blox Group to differ materially from those expressed or implied. These include risks related to the success of and demand for the Group's products, the potential for the Group's products to become obsolete, the Group's ability to defend its intellectual property, the Group's ability to develop and commercialize new products in a timely manner, the dynamic and competitive environment in which the Group operates, the regulatory environment, changes in currency exchange rates, the Group's ability to generate revenues and profitability, and the Group's ability to realize its expansion projects in a timely manner. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report. u-blox is providing the information in this release 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.

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End of Inside Information

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Language:	English
Company:	u-blox AG
	Zürcherstrasse 68
	8800 Thalwil
	Switzerland
Phone:	[phone]
Fax:	[phone]
E-mail:	[e-mail]
Internet:	www.u-blox.com
ISIN:	CH0033361673
Listed:	SIX Swiss Exchange
EQS News ID:	1777625

End of Announcement	EQS News Service

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1777625 21-Nov-2023 CET/CEST