Financial Highlights * Consolidated sales of CHF 74.5 million in 2008, a decline of 4.9% compared to 2007. Adjusted for exchange rate effects, however, growth would have been plus 3.9% * Significant gross profit margin improvement from 36.4% in 2007 to 42.7% in 2008 * Profit from operations (EBIT) rose from CHF 5.5 million to CHF 8.4 million, up 52.3% from previous year * Solid EBIT margin of 11.3% * Positive financial results from conservative asset strategy (fixed-term deposits with best-rated bank) * CAPEX kept at a low level due to the fabless business model * Net profit increased by 60.9% from CHF 5.4 million to CHF 8.8 million, which represents a 11.8% net profit margin for 2008 * Cash flow from operations was impacted by increasing inventory level * Healthy balance sheet with a good equity ratio of 87.6% * Close monitoring of debtors, no significant bad debts despite the downward business cycle
THALWIL, Switzerland, March 19, 2009 (GLOBE NEWSWIRE) -- u-blox (SIX:UBXN), the leading provider of embedded positioning and wireless communication solutions, today announced that EBIT rose 52.3% in 2008 on the back of strong demand for its products.
Solid Sales
The number of invoiced GPS modules and chipsets grew by approximately 37% during 2008. By the end of 2008, u-blox 5-based products made up 44% of the total volume and ANTARIS 4-based products 53%, the rest coming from sales of accessory products. In 2008, the company made about 80% of its revenue from sales to 62 customers. u-blox' biggest customer accounted for less than 6% of the total sales turnover. u-blox was able to increase the total number of customers as compared to 2007 as well as achieve global expansion into new regions and markets.
Revenues for the regions Americas, Europe and Asia fell slightly compared to 2007, despite an increase in the total number of units shipped caused by the weak U.S. currency and continued price pressure. Americas revenues decreased to 25.3% of u-blox' total revenue compared to 27.5% in 2007. Revenues for the Europe, Middle East and Africa region made up 38.2% of u-blox total revenue compared to 37.9% in 2007. In Asia, revenue share increased slightly. In 2008, Asia generated 36.5% of the total revenue compared to 34.6% in 2007.
Increased Gross profit
Gross profit increased by 11.4% to CHF 31.8 million in 2008 from CHF 28.6 million in 2007. Gross margin was 42.7% for 2008 compared to 36.4% for 2007. The increase in relative margin in 2008 was primarily due to the migration to u-blox 5-based modules and u-blox 5 chipset sales which allowed to achieve better gross margin as compared to the ANTARIS generation.
Expansion of distribution and marketing activities
Distribution and marketing expenses increased in 2008, mainly due to increased personnel costs incurred from further expansion in Asia Pacific, Europe and the Americas.
Focus on research and product development
During 2008, u-blox hired additional Research and Development (R&D) staff, both in hardware and software, to strengthen its team of highly talented R&D engineers in Thalwil, Switzerland. The expansion of the R&D team further strengthened the company's commitment and strategic focus on R&D to ensure that its product portfolio, technology and IP platforms remain competitive in the market also in the future. R&D expenses in 2007 were influenced as a one-time expense from the exercise of stock-options prior to the completion of the Initial Public Offering (IPO) on the SIX Swiss Exchange.
Strong increase of profit from operations (EBIT)
EBIT increased by 52.3% to CHF 8.4 million in the year 2008 from CHF 5.5 million in the previous year. EBIT margin increased from 7.0% in 2007 to 11.3% in 2008. EBITDA margin increased to 17.3% in 2008. In 2007, EBIT and EBITDA were negatively influenced by one-time adjustments prior to the IPO.
Financial income / costs
In 2008, financial income of CHF 2.3 million was realized. Finance costs in 2008 were at a very low level.
The above comparisons are based on non-adjusted figures.
For the year ended
December 31,
(in CHF 000s) 2008 2007
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% sales % sales
Sales 74,506 100.0% 78,360 100.0%
Cost of sales -42,710 -57.3% -49,810 -63.6%
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Gross profit 31,796 42.7% 28,550 36.4%
Distribution and marketing expenses -11,434 -15.3% -10,821 -13.8%
Research and development expenses -9,277 -12.5% -9,653 -12.3%
General and administrative expenses -2,813 -3.8% -3,410 -4.4%
Other income 139 0.2% 855 1.1%
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Profit from operations (EBIT) 8,411 11.3% 5,521 7.0%
Financial income 2,268 3.0% 665 0.8%
Finance costs -7 0.0% -1,932 -2.5%
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Profit before income tax (EBT) 10,672 14.3% 4,254 5.4%
Income tax (expense)/benefit -1,911 -2.6% 1,190 1.5%
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Net profit 8,761 11.8% 5,444 6.9%
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Profit from operations (EBIT) 8,411 5,521
Depreciation and amortization 4,466 3,346
EBITDA (unaudited)(1) 12,877 17.3% 8,867 11.3%
Adjusted figures (all adjusted
figures are not audited)
Adjustments 272 0.4% 7,321 9.3%
Adjusted Gross profit(2) 31,812 42.7% 30,568 39.0%
Adjusted EBIT(3) 8,683 11.7% 12,027 15.3%
Adjusted EBITDA(4) 13,149 17.6% 15,373 19.6%
Adjusted Net profit(5) 9,033 12.1% 12,765 16.3%
(1) Management calculates EBITDA (earnings before interest, taxes,
depreciation and amortization) by adding back depreciation and
amortization to profit from operations (EBIT), in each case
determined in accordance with IFRS.
(2) Adjusted Gross profit is Gross profit adjusted by share-based
payments and related social security costs, one time IPO costs
and accruals for litigation expenses.
(3) Adjusted EBIT is EBIT adjusted by share-based payments and
related social security costs, one-time IPO costs and accruals
for litigation expenses.
(4) Adjusted EBITDA is EBITDA adjusted by share-based payments and
related social security costs, one-time IPO costs and accruals
for litigation expenses.
(5) Adjusted Net profit is Net profit adjusted by share-based
payments and related social security costs, one-time IPO costs
and accruals for litigation expenses.
Table 1: Consolidated Income Statement
Positive cash flow from operating activities
In 2008, u-blox generated cash from operating activities in the amount of CHF 2.6 million compared to CHF 16.7 million in 2007. This decrease was mainly due to the strong increase in inventories in the amount of CHF 10.4 million and one-time payments for outlays in the context of the IPO in 2007 and the settlement of the CEVA claim. Due to the new production setup for u-blox 5 with an extended value-creation chain for the benefit of enlarged gross margins, our inventory level increased by work-in-progress material and additional finished products. Due to the slowdown in the market at the end of the fiscal year 2008 and additions to the product portfolio, inventory of finished products grew. u-blox does not expect an obsolete risk as all our products are standard off-the shelf products and continued demand will decrease these inventories.
For the year ended
December 31,
------------------
(in CHF 000s) 2008 2007
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Net cash provided by operating activities 2,570 16,663
Net cash used in investing activities -50,239 -4,974
Net cash (used in)/provided by financing activities -364 58,870
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Net (decrease)/increase in cash and cash
equivalents -48,033 70,559
Cash and cash equivalents at beginning of year 85,922 16,011
Effect of exchange rate fluctuations on cash and
cash equivalents -742 -648
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Cash and cash equivalents at end of year 37,147 85,922
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Table 2: Condensed Consolidated Cash Flow Statement
Investing activities
In 2008, main investments were CHF 1.2 million in capitalized development costs, CHF 1.1 million in tools and test infrastructure and approximately CHF 0.6 million in office and laboratories expansion. Furthermore, CHF 0.9 million were invested in software tools and CHF 0.7 million in Intellectual Property rights. In 2008, several short-term investments in the amount of CHF 47.5 million were made. These fixed-term deposits were denominated in Swiss Francs with a maturity of between 3 and 6 months at the time of investment.
Financing activities
In 2008, there were no major financing activities. In 2007, the proceeds from the issue of shares on the SIX Swiss Exchange and the exercise of employee stock options and net of transaction costs were CHF 59.4 million.
Strong balance sheet
u-blox has a very strong balance sheet with an equity ratio of 87.6%.
At December 31
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(in CHF 000s) 2008 2007
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ASSETS
Current assets
Cash and cash equivalents 37,147 85,922
Short-term investments 47,500 0
Other current assets 25,605 15,350
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Total current assets 110,252 101,272
Non-current assets
Property, plant and equipment 2,466 2,511
Intangible assets 3,314 3,129
Financial assets 307 247
Deferred tax assets 4,529 6,034
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Total non-current assets 10,616 11,921
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Total assets 120,868 113,193
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LIABILITIES AND EQUITY
Current liabilities 12,626 14,210
Non-current liabilities 2,325 1,381
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Total liabilities 14,951 15,591
Shareholders' equity
Share capital 5,619 5,619
Share premium 102,132 101,860
Cumulative translation differences 176 156
Accumulated losses -2,010 -10,033
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Total equity 105,917 97,602
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Total liabilities and equity 120,868 113,193
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Table 3: Condensed Consolidated Balance Sheet
Outlook 2009
The strength of u-blox' business and the growing contributions from new products and technologies will positively support our business into the future. We see continued success with u-blox 5-based products with a large number of our new applications reaching production status. However given the challenging economic environment the short term outlook cannot be foreseen. However, actual business activities indicate that we will achieve similar business levels as in 2008. We plan to break even at sales of CHF 70 million for the GPS activities and at sales of CHF 6 million for the business of Neonseven. With the recent addition of the wireless communication products we intend to double our sales and triple our profits by 2011.
For more information, please view the presentation slides on: http://www.u-blox.com/investors/IR_presentations.html
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.
About u-blox
u-blox is a fabless semiconductor provider of embedded positioning and wireless communication solutions for the consumer, industrial and automotive markets. Our solutions enable people, devices and machines to locate and communicate their exact position -- reliably, instantly and accurately. With a broad portfolio of chips, modules and wireless design services, u-blox is uniquely positioned to enable its OEM customers to develop feature-rich and innovative solutions quickly and cost-effectively. Headquartered in Switzerland and with global presence in Italy, the USA, Singapore, Hong Kong, China, Taiwan, Korea and Japan, u-blox is employing 155 people. The company was founded in 1997 and is listed on the Swiss Stock Exchange. For more information, please visit: www.u-blox.com
Financial calendar
Shareholders' meeting: April 30, 2009
Half year results 2009: September 4, 2009