Wireless & Positioning Solutions

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1 Wireless & Positioning Solutions HALF YEAR REPORT 2014

2 Contents Content 2 Financial highlights 4 Half year report at June 30, Halbjahresbericht per 30. Juni Condensed consolidated interim financial statements u-blox Holding AG, Thalwil 9 Consolidated statement of financial position 10 Consolidated income statement 11 Consolidated statement of comprehensive income 12 Consolidated statement of changes in equity 13 Condensed consolidated statement of cash flows 14 Notes to the condensed consolidated interim financial statements 17 Investor information and contacts 18 Worldwide presence u-blox at a glance Foundation 1997 Business Headquarter Offices Listed Employees Revenue EBIT Net profit Markets Mission Fabless semiconductor provider of embedded wireless and positioning communication solutions Thalwil, Switzerland Australia, Belgium, China, Finland, Greece, India, Ireland, Italy, Japan, Korea, Pakistan, Singapore, Sweden, Taiwan, United Kingdom and USA SIX Swiss Exchange (UBXN) 447 (December 31, 2013, FTE based); 540 (June 30, 2014, FTE based) 2013: CHF million; H1/2014: CHF million 2013: CHF 30.1 million; H1/2014: CHF 18.8 million 2013: CHF 24.6 million; H1/2014: CHF 14.4 million Industrial, Automotive and Consumer u-blox aims to be the leading provider of embedded wireless communication and positioning solutions to the global electronics industry Half year report 2014 Page 1

3 Financial highlights Key figures (CHF in million) Gross profit Gross profit and gross profit margin H1/12 H1/13 H1/14 Revenue Growth rate over previous year 10.6% 38.8% 27.0% 24.3% 35.4% 15.7% Gross profit (million CHF in CHF) million as % of revenue %% of of revenue EBIT Margin on revenue 17.0% 13.3% 13.7% 14.6% 13.1% 15.5% Growth/(decline) rate over previous year 11.2% 8.2% 30.9% -3.6% 21.6% 36.5% % 46.9% 46.0% 45.7% 46.7% 47.4% 60% 50% Net profit % Margin on revenue 13.2% 9.9% 11.2% 11.4% 11.6% 11.8% Growth rate over previous year 27.8% 3.5% 44.3% 20.0% 36.8% 18.4% 60 30% Net operating cash flow % Margin on revenue 14.9% 18.5% 17.5% 0.1% 19.4% 12.9% 20 10% Growth/(decline) rate over previous year -10.0% 72.5% 72.5% -99.4% > 1 000% -23.2% H1/12 H1/13 H1/14 0% Revenues Revenues by geography EMEA Americas (CHF in million) 250 APAC Revenue u-blox revenue split per market Estimate % Automotive % 28% % 41% 28% 26% % 26% 27% 30% 46% 37% 45% 35% % 42% 36% H1/12 H1/13 H1/14 Consumer Industrial Page 2 Half year report 2014

4 Employees Employee breakdown Total: 540 (end of H1/14, FTE based) 75% of employees based outside Switzerland (spread over 16 countries) Employees Employee development Average number of employees (FTE = full time equivalent) Logistics, Administration 12% Sales, Marketing, Support 19% Research & development 69% H1/12 H1/13 H1/14 Performance Financial performance Revenues EBITDA CHF in million Equity Total equity and equity ratio Total equity equity ratio CHF (million in CHF) million (% of % total of total assets) assets % 78.7% 79.7% % 84.0% 77.9% 73.0% 80% % 60% % % % % % H1/12 H1/13 H1/14 0 0% H1/12 H1/12 H1/13 H1/13 H1/14 H1/14 Total Equity Equity ratio Half year report 2014 Page 3

5 Half year report at June 30, 2014 u-blox maintains growth, improves EBIT margin and makes progress in strategic development u-blox (SIX:UBXN), a global leader in wireless and positioning semiconductors and modules, today announced revenue for the first half year 2014 of CHF million. This constitutes a 15.7% increase over the first half year of Gross profit increased to CHF 57.6 million, resulting in a gross profit margin of 47.4%. EBIT for the first half year of 2014 was CHF 18.8 million, a strong growth of 36.5%. The net profit grew 18.4% to CHF 14.4 million. u-blox confirms its previously published guidance for the full year of revenues between CHF million, with an EBIT in the range of CHF million. u-blox acquired the Malmö based (Sweden) connectblue AB. After the balance sheet date, the Athens based (Greece) Antcor was acquired. Both firms come with proven technologies for short range radio (Bluetooth and Wi-Fi) communications. Financial highlights of the first half of 2014 Overall sales expanded by 15.7% (20% at constant exchange rates) to CHF million as compared to H Gross profit increased to CHF 57.6 million with gross profit margin reaching 47.4%. EBITDA of CHF 27.3 million was reached, with an EBITDA margin of 22.4%. EBIT grew 36.5% to CHF 18.8 million, resulting in an EBIT margin of 15.5%. Net profit grew 18.4% to CHF 14.4 million, or 11.8% of revenues during the period. Current assets increased by CHF 6.7 million compared to December 31, 2013, mainly due to the growth of the business. Capital expenditure before acquisitions was CHF 12.9 million mainly used for capacity expansion and investments for product development. A net operating cash flow of CHF 15.7 million was recorded. Strong overall performance As compared to the same period in 2013, u-blox revenues based on billing location increased in Asia Pacific and EMEA. Asia Pacific sales experienced a strong growth of 33.1%, revenue in EMEA grew with 7.6% and the America sales were flat with 0.7% due to the decision by some US customers to outsource manufacturing to Asia. Without that effect, Americas would have grown by around 13%. Continued growth in industrial markets Strong performance was achieved in u-blox industrial markets. The driving application continued to be fleet management systems. This was followed by good performance in industrial timing and synchronization applications which grew remarkably as compared to the first half of Telematics devices such as insurance boxes and Automatic Teller Machines/Point of Sales terminals experienced robust growth. Healthcare devices, which are included in the industrial sector, exhibited outstanding growth, becoming the company s fastest growing industrial sector. Sales into the global automotive and consumer markets were flat. Strong profitability u-blox continued to achieve strong profitability with EBITDA growing by 29.0% and EBIT growing by 36.5%. Net profit growth of 18.4% was impacted by a higher tax rate as a consequence of one-off accounting effects in deferred taxes. Strategic products launched In the first half, u-blox launched several strategic products in both the wireless and positioning product lines that exploit cutting edge technologies. The world s fastest LTE module, the TOBY-L2, was launched in January. It is the first LTE module on the market to deliver category 4 performance, capable of speeds up to 150 Mb/s. It also supports 3G and 2G networks, a crucial feature to allow our customers to upgrade their products already without compromising on network coverage. 4G LTE is the state-of-the-art in cellular communications, and is the fastest growing telecommunications standard in history. On the positioning side of the business, u-blox successfully deployed its 8th generation positioning chip technology u-blox M8 into its industry-standard module series MAX, NEO and LEA. The modules can acquire and track all visible GPS, GLONASS, BeiDou, QZSS and SBAS satellites and can track any two satellite systems simultaneously for increased reliability, accuracy and faster acquisition time. u-blox M8 is at the forefront of global positioning technology, and is being offered alongside the company s previous u-blox 7 based products in order to provide customers with both cost and performance optimized options. The company introduced a revolutionary 3D dead reckoning chip which enables car navigation equipment to calculate a position within multi-level structures, a typical scenario when driving through stacked highways and multi-story park houses. As a result of the connectblue acquisition, u-blox incorporated seven new short range radio module products conforming to the Bluetooth and Wi-Fi standards. These products support u-blox strategy of providing both long-range and short-range wireless communication modules, a key requirement for providing end-to-end communication solutions in the Internet of Things. Two new positioning modules with integrated antenna were launched, PAM and CAM. Both modules integrate u-blox core positioning chip technology together with u-blox embedded antenna know-how to provide complete, compact, stand-alone positioning solutions. Business development Sales increased strongly in several of our market sectors. Highlights during the first half year include: Double-digit sales increase of positioning chips and modules for fleet management and vehicle tracking applications, u-blox strongest market. Revenue from cellular and positioning components used for portable healthcare devices multiplied with the start of production of new end devices. Sales of GNSS receivers used to generate precision timing and frequency reference required by mobile base stations more than doubled. The TOBY-L100 4G LTE module was certified by Verizon Wireless, enabling customers to leverage the Verizon Wireless network to develop high speed data connectivity for applications for the American markets. Ctrack, a division of South Africa based Digicore, a leading provider of fleet management and vehicle tracking solutions, selected u-blox as their strategic partner for embedded positioning and mobile communications technology. Swedish WTS ( Wonder Technology Solutions ) launched Trax, the world s smallest and smartest personal tracking device for children and pets based on a u-blox positioning receiver module with integrated antenna and u-blox cellular module. Page 4 Half year report 2014

6 Acquisitions From the beginning of 2014 until the release of these half year results, u-blox acquired two companies which have developed mature technologies for short range wireless communications: Swedish connectblue, an established provider of industrialgrade short range radio modules. connectblue s products support industry standards Bluetooth and Wi-Fi that enable the last hundreds of meters of connectivity between equipment and the internet. The company has 35 employees and was acquired on May 19, 2014 for 25 million CHF. Greek Antcor, a developer of Wi-Fi baseband intellectual property (IP). The purchase gives u-blox technology that will enable the company to develop ruggedized short range communication solutions tailored to demanding industrial and automotive environments. The company has 25 employees and was acquired on August 6, 2014 for 6.3 million CHF. This acquisition is therefore not calculated into the half year results. These acquisitions expand u-blox ability to provide wireless communication components optimized for long-range as well as short-range communications. This is a key advantage for applications in the Internet of Things where end devices such as sensors, meters and home appliances are often located within a few hundred meters of a cellular communications terminal or Wi-Fi router. Condensed consolidated income statement Condensed consolidated income statement January - June Jan. - Dec. (in CHF 000s) (unaudited) (unaudited) (audited) Revenue 121' ' '813 % growth 15.7% 35.4% Cost of sales -64'031-56' '654 Gross profit 57'594 49' '159 % gross profit margin 47.4% 46.7% 46.0% Operating expenses -38'897-35'416-71'192 Other income Operating profit (EBIT) 18'798 13'772 30'050 % EBIT margin 15.5% 13.1% 13.7% Financial income 1' '013 Finance costs '193 Profit before income tax (EBT) 19'503 13'740 28'870 Income tax expense -5'100-1'577-4'227 Net profit, attributable to owners of the parent 14'403 12'163 24'643 % net profit margin 11.8% 11.6% 11.2% Depreciation and amortization 8'489 7'383 16'138 EBITDA *) 27'287 21'155 46'188 % EBITDA margin 22.4% 20.1% 21.0% EBITDA growth 29.0% 33.2% EBIT growth 36.5% 21.6% Net profit growth 18.4% 36.8% (*) EBITDA (earnings before interest, taxes, depreciation and amortization) calculated by adding depreciation and amortization to Operating profit (EBIT), in each case determined in accordance with IFRS. Employees The number of employees worldwide increased during the first half of The company employed 550 people at June 30, 2014, an increase of 21.1% as compared to end of Revenue breakdown u-blox operates in two segments: Wireless and positioning products u-blox develops and sells embedded positioning chips and modules, and wireless modules which are used in automotive, industrial and consumer applications. Revenue was CHF million for the first half of 2014 as compared to CHF million in the first half of Wireless services u-blox offers wireless communication technology services in terms of reference designs and software. In the first half of 2014, revenue for wireless services was CHF 9.5 million as compared to CHF 9.1 million during the first half year Expanded global presence Until the release of this half year report, u-blox expanded its global organization through the two acquisitions, gaining a center of competence for short range radio modules based in Malmö, Sweden, and a research and development center for industrial Wi-Fi based in Athens, Greece. Outlook u-blox is on track to meet its previously communicated guidance with revenues between CHF million with an EBIT in the range of CHF million for the full year The company continues to gain traction in key markets where the Internet of Things is making strong inroads, particularly mobile healthcare devices, small cell communication base-stations, point-of-sales terminals and vehicle applications. Continued strong growth in all these market sectors is forecast. The indications are based on exchange rates of 1.23 for EUR/CHF, 1.45 for GBP/CHF and 0.90 for USD/CHF. u-blox natural hedge against foreign exchange variations at the level of material costs helps maintain its relative gross margin. Revenue and EBIT, however, remain sensitive to the further variation of currency fluctuations against the Swiss Franc. Fritz Fahrni Chairman of the Board of Directors Thomas Seiler CEO Revenue breakdown u-blox operates in two segments: Wireless and positioning products u-blox develops and sells embedded positioning chips and modules, and wireless modules which are used in automotive, industrial and consumer applications. Revenue was CHF million for the first half of 2014 as compared to CHF million in the first half of Wireless services u-blox offers wireless communication technology services in terms of reference designs and software. In the first half of 2014, revenue for wireless services was CHF 9.5 million as compared to CHF 9.1 million during the first half year Half year report 2014 Page 5

7 Halbjahresbericht per 30. Juni, 2014 u-blox bleibt im ersten Halbjahr 2014 auf Wachstumskurs, verbessert EBIT-Marge und macht strategische Fortschritte u-blox (SIX: UBXN), ein führender globaler Anbieter von Halbleiterbausteinen und Modulen für Elektroniksysteme im Bereich der Positionierung und drahtlosen Kommunikation, gibt heute einen Umsatz von CHF Millionen für das erste Halbjahr 2014 bekannt. Das entspricht einem Umsatzwachstum von 15.7% gegenüber dem ersten Halbjahr Der Bruttogewinn steigt auf CHF 57.6 Millionen, woraus sich eine Bruttogewinnmarge von 47.4% ergibt. Der Betriebsgewinn (EBIT) für das erste Halbjahr 2014 beträgt CHF 18.8 Millionen, ein starkes Wachstum von 36.5%. Der Reingewinn wächst um 18.4% auf CHF 14.4 Millionen. u-blox bestätigt die zuvor veröffentlichte Prognose für das Gesamtjahr und erwartet einen Umsatz im Bereich von CHF Millionen bei einem EBIT im Bereich von CHF Millionen. u-blox erwarb die connectblue AB mit Sitz in Malmö (Schweden). Nach dem Bilanzstichtag wurde die Firma Antcor (Griechenland) mit Sitz in Athen übernommen. Beide Unternehmen verfügen über ausgereifte Technologien für die Kurzstrecken-Funkkommunikation (Bluetooth und Wi-Fi). Finanzielle Kennzahlen für das erste Halbjahr 2014 Der Gesamtumsatz konnte gegenüber dem ersten Halbjahr 2013 um 15.7% (20% zu konstanten Wechselkursen) auf CHF Millionen gesteigert werden. Der Bruttogewinn stieg auf CHF 57.6 Millionen bei einer Bruttogewinnmarge von 47.4%. Der Betriebsgewinn vor Abschreibungen (EBITDA) betrug CHF 27.3 Millionen bei einer EBITDA-Marge von 22.4%. Der Betriebsgewinn (EBIT) wuchs um 36.5% auf CHF 18.8 Millionen, was einer EBIT-Marge von 15.5% entspricht. Der Reingewinn erhöhte sich im Berichtszeitraum um 18.4% auf CHF 14.4 Millionen oder 11.8% des Umsatzes. Das Umlaufvermögen erhöhte sich im Vergleich zum 31. Dezember 2013 um CHF 6.7 Millionen, hauptsächlich infolge des Geschäftswachstums. Die Investitionen vor Akquisitionen betrugen CHF 12.9 Millionen, die in erster Linie für den Kapazitätsausbau und die Produktentwicklung getätigt wurden. Der Cashflow aus operativer Tätigkeit betrug CHF 15.7 Millionen. Allgemein starker Geschäftsverlauf u-blox konnte den Umsatz nach Fakturierungsort im ersten Halbjahr 2014 gegenüber dem Vergleichszeitraum 2013 in Asien-Pazifik und in der EMEA-Region steigern. In Asien-Pazifik wurde ein starkes Umsatzwachstum von 33.1% verzeichnet. In der EMEA-Region erzielte u-blox ein Umsatzplus von 7.6%; der Umsatz in Amerika blieb mit -0.7% praktisch unverändert, bedingt durch die Entscheidung einiger Kunden in den USA, die Produktion nach Asien auszulagern. Ohne diese Effekte wäre der Umsatz in Amerika um 13% gestiegen. Anhaltendes Wachstum im Industriegütermarkt Im u-blox Geschäftsbereich Industriegüter wurden erneut überdurchschnittliche Ergebnisse erzielt. Wichtigster Umsatzträger waren erneut die Flottenmanagementsysteme, gefolgt von Zeitsynchronisationsanwendungen, die eine beachtliche Zunahme verzeichneten und ihren Umsatzbeitrag im Vergleich zum ersten Halbjahr 2013 deutlich steigerten. Telematiksysteme, die unter anderem für Versicherungszwecke eingesetzt werden, und Geldautomaten/Kassenterminals erzielten ebenfalls ein stabiles Wachstum. Gesundheitsgeräte, die dem Industriegütermarkt zugeordnet sind, legten überdurchschnittlich zu und wurden das wachstumsstärkste Industriesegment des Unternehmens. Der Umsatz in den weltweiten Automobil- und Konsumgütermärkten verlief konstant. Gute Rentabilität u-blox erreichte erneut eine sehr hohe Rentabilität mit einer EBITDA- Zunahme von 29.0% und einer Steigerung beim EBIT von 36.5%. Das Wachstum des Reingewinns betrug 18.4%, beeinflusst allerdings durch einen höheren Steuersatz aufgrund von Einmaleffekten im Bereich der latenten Steuern. Markteinführung strategischer Produkte Im ersten Halbjahr lancierte u-blox mehrere strategische Produkte in den Produktlinien Wireless und Positionierung, in denen neueste Technologien zum Einsatz kommen. Im Januar wurde mit TOBY-L2 das weltweit schnellste LTE-Modul auf den Markt gebracht. Es ist das erste am Markt erhältliche LTE-Modul der Kategorie 4, das Geschwindigkeiten von bis zu 150 Mbit/s unterstützt. Gleichzeitig bietet es Kompatibilität mit 3G und 2G-Netzen ein wichtiges Merkmal, damit unsere Kunden ihre Produkte ohne Abstriche an die Netzabdeckung aufrüsten können. 4G LTE ist der aktuelle Stand des technisch Möglichen im Bereich der Mobilfunkkommunikation und der Telekommunikationsstandard mit der bisher rasantesten Verbreitung. Im Bereich Positionierung brachte u-blox die bekannten Modulserien MAX, NEO und LEA auf Basis der 8. Generation der eigenen Positionierungschiptechnologie u-blox M8 auf den Markt. Die Module können alle Signale sichtbarer Satelliten der Systeme GPS, GLONASS, BeiDou, QZSS und SBAS empfangen und auswerten und beliebige zwei Satellitensysteme gleichzeitig nutzen, was zu erhöhter Zuverlässigkeit und Genauigkeit sowie schnelleren Aufstartzeiten führt. u-blox M8 ist die weltweit fortschrittlichste Positionierungstechnologie. Sie wird parallel mit den auf der Plattform u-blox 7 basierenden Produkten angeboten, um Kunden sowohl kosten- als auch leistungsoptimierte Optionen zur Verfügung zu stellen. Das Unternehmen hat seinen ersten Chip mit der revolutionären 3D-Koppelnavigationstechnologie auf den Markt gebracht. Sie ermöglicht Fahrzeugnavigationssystemen die Berechnung einer Position beim Fahren auf mehreren Ebenen, ein typisches Szenario auf mehrstöckigen Strassen oder in Parkhäusern. Als Ergebnis der connectblue Akquisition konnte u-blox sieben neue Kurzstreckenfunk-Module mit Bluetooth und Wi-Fi-Standard in das Produktportfolio aufnehmen. Diese Produkte unterstützen u-blox Strategie, Lang- und Kurzstreckenfunk-Module für drahtlose Kommunikation anbieten zu können. Beides sind Schlüsselanforderungen für ganzheitliche Kommunikationslösungen im Internet der Dinge (Internet of Things). Zudem wurden zwei neue Positionierungsmodule mit integrierter Antenne eingeführt: PAM und CAM. Beide Module verbinden die Positionierungschip-Kerntechnologie von u-blox mit dem Know-how von u-blox im Bereich integrierter Antennen zu kompakten, eigenständigen Komplettlösungen für die Positionierung. Geschäftsentwicklung In mehreren Marktsektoren wurde ein starkes Umsatzwachstum erzielt. Höhepunkte aus dem ersten Halbjahr: Zweistelliger Umsatzanstieg bei Positionierungschips und modulen für Flottenmanagement- und Fahrzeugortungssysteme, dem stärksten Marktsegment von u-blox. Der Absatz von Mobilfunk- und Positionierungskomponenten für tragbare Geräte im Gesundheitsbereich hat sich mit dem Produktionsbeginn neuer Endgeräte vervielfacht. Der Verkauf von Positionierungsempfängern für Zeitsynchronisation in Mobilfunkbasisstationen hat sich mehr als verdoppelt. Das LTE-Modul TOBY-L100 4G LTE wurde von Verizon Wireless zertifiziert. Damit können Kunden das Netz von Verizon Wireless nutzen, um Anwendungen für den amerikanischen Markt mit Hochgeschwindigkeits-Datenkonnektivität auszustatten. Ctrack, ein Tochterunternehmen der südafrikanischen Digicore- Gruppe, eines führenden Anbieters von Flottenmanagement- und Fahrzeugortungslösungen, hat u-blox als strategischen Partner für eingebettete Positionierungs- und Mobilkommunikations- Technologie ausgewählt. WTS ( Wonder Technology Solutions ) aus Schweden hat Trax, das weltweit kleinste und intelligenteste Personal Tracking-Gerät für Kinder und Haustiere, auf den Markt gebracht. Das Gerät basiert auf dem u-blox Positionierungsmodul mit integrierter Antenne und einem Mobilfunkmodul von u-blox. Page 6 Half year report 2014

8 Akquisitionen Im Zeitraum von Anfang 2014 bis zur Veröffentlichung dieser Halbjahresergebnisse hat u-blox zwei Unternehmen erworben, die ausgereifte Technologien für die Kurzstrecken-Funkkommunikation entwickelt haben: connectblue aus Schweden, einen etablierten Anbieter von Kurzstrecken-Funkmodulen für den Einsatz in der Industrie. Die Produkte von connectblue unterstützen die Industriestandards Bluetooth und Wi-Fi und ermöglichen die Internetanbindung von Geräten auf den letzten hundert Metern. Das Unternehmen beschäftigt 35 Mitarbeiter und wurde am 19. Mai 2014 für einen Kaufpreis von CHF 25 Millionen übernommen. Antcor aus Griechenland, einen Entwickler von geistigem Eigentum (IP) im Bereich Wi-Fi Basisband. Durch die Übernahme verfügt u-blox über Technologie, die dem Unternehmen die Entwicklung robuster Kurzstrecken-Kommunikationslösungen, speziell für anspruchsvolle Umgebungsbedingungen im Industrieund Automobilbereich, ermöglichen wird. Antcor beschäftigt 25 Mitarbeiter und wurde am 6. August 2014 für einen Kaufpreis von CHF 6,3 Millionen übernommen. Diese Akquisition ist daher in den Halbjahresergebnissen nicht berücksichtigt. Mit diesen Übernahmen baut u-blox seine Fähigkeit aus, Komponenten für die drahtlose Kommunikation anzubieten, die sowohl für die Langstrecken- als auch die Kurzstreckenkommunikation optimiert sind. Dies ist ein wichtiger Vorteil bei Anwendungen im Internet der Dinge (Internet of Things), in dem Endgeräte wie Sensoren, Messgeräte und Haushaltsgeräte sich oftmals im Umkreis von wenigen hundert Metern eines Mobilfunkterminals oder Wi-Fi-Routers befinden. Zusammengefasste konsolidierte Erfolgsrechnung Zusammengefasste konsolidierte Erfolgsrechnung Jan. - Juni Jan. - Dez. (in Tausend CHF) (ungeprüft) (ungeprüft) (geprüft) Umsatz 121' ' '813 Wachstumsrate gegenüber Vorjahr 15.7% 35.4% Herstellungskosten der verkauften Produkte -64'031-56' '654 Bruttogewinn 57'594 49' '159 Bruttogewinnmarge in % 47.4% 46.7% 46.0% Operative Kosten -38'897-35'416-71'192 Übriger Ertrag Betriebsgewinn (EBIT) 18'798 13'772 30'050 EBIT-Marge 15.5% 13.1% 13.7% Mitarbeiter Die Anzahl der Mitarbeiter weltweit hat sich im ersten Halbjahr 2014 erhöht. Zum 30. Juni 2014 beschäftigte das Unternehmen 550 Mitarbeiterinnen und Mitarbeiter. Das entspricht einer Zunahme von 21.1% gegenüber Ende Umsatzaufteilung Die Geschäftstätigkeit von u-blox gliedert sich in zwei Segmente: Produkte im Bereich drahtlose Kommunikation und Positionierung u-blox entwickelt und verkauft integrierte Positionierungschips und module sowie drahtlose Kommunikationsmodule, die im Automobil-, Industriegüter- und Konsumgütermarkt Verwendung finden. Der Umsatz belief sich im ersten Halbjahr 2014 auf CHF Millionen gegenüber CHF Millionen im ersten Halbjahr Dienstleistungen für drahtlose Kommunikation u-blox bietet auch Dienstleistungen auf dem Gebiet der drahtlosen Kommunikation in Form von Referenzdesigns und Software an. Im ersten Halbjahr 2014 betrug der Umsatz in diesem Segment CHF 9.5 Millionen gegenüber CHF 9.1 Millionen im ersten Halbjahr Erweiterte globale Präsenz Bis zur Veröffentlichung dieses Halbjahresberichts erweiterte u-blox die globale Organisation: Im Zuge der beiden Akquisitionen übernahm das Unternehmen ein Kompetenzzentrum für Kurzstreckenfunkmodule in Malmö (Schweden) und ein Forschungs- und Entwicklungszentrum für industrielle Wi-Fi-Anwendungen in Athen (Griechenland). Ausblick u-blox ist auf gutem Weg, die zuvor veröffentlichte Umsatzprognose von CHF Millionen bei einem EBIT im Bereich von CHF Millionen für das Gesamtjahr 2014 zu erfüllen. Das Unternehmen baut seine Position in wichtigen Märkten, in denen das Internet der Dinge stark auf dem Vormarsch ist, weiter aus. Dies gilt insbesondere für mobile Gesundheitsgeräte, kleine Mobilfunkbasisstationen, Kassenterminals und Fahrzeuganwendungen. Für alle diese Marktsektoren wird ein anhaltend starkes Wachstum vorhergesagt. Die Angaben basieren auf Wechselkursen von 1.23 für EUR/ CHF, 1.45 für GBP/CHF und 0.90 für USD/CHF. Die natürliche Fremdwährungsabsicherung (Natural Hedge) auf Ebene der Materialkosten hilft die relative Bruttomarge zu stützen. Dennoch werden Umsatz und EBIT von weiteren Änderungen der Währungsbewertungen gegenüber dem Schweizer Franken abhängig sein. Finanzertrag 1' '013 Finanzaufwand '193 Gewinn vor Steuern (EBT) 19'503 13'740 28'870 Steuern -5'100-1'577-4'227 Reingewinn 14'403 12'163 24'643 Reingewinnmarge in % 11.8% 11.6% 11.2% Abschreibungen 8'489 7'383 16'138 EBITDA (1) 27'287 21'155 46'188 EBITDA-Marge in % 22.4% 20.1% 21.0% EBITDA Wachstum 29.0% 33.2% EBIT Wachstum 36.5% 21.6% Wachstum Reingewinn 18.4% 36.8% (1) EBITDA (earnings before interest, taxes, depreciation and amortization) als Addition der Abschreibungen zum Betriebsgewinn (EBIT) berechnet, immer auf Grundlage der Regeln nach IFRS. Fritz Fahrni Chairman of the Board of Directors Thomas Seiler CEO Umsatzaufteilung Die Geschäftstätigkeit von u-blox gliedert sich in zwei Segmente: Produkte im Bereich drahtlose Kommunikation und Positionierung u-blox entwickelt und verkauft integrierte Positionierungschips und -module sowie drahtlose Kommunikationsmodule, die im Automobil-, Industriegüter- und Konsumgütermarkt Verwendung finden. Der Umsatz belief sich im ersten Halbjahr 2014 auf CHF Millionen gegenüber CHF Millionen im ersten Halbjahr Half year report 2014 Page 7

9 u-blox Holding AG, Thalwil Condensed consolidated interim financial statements June 30, 2014 Page 8 Half year report 2014

10 Consolidated statement of financial position (in CHF 000s) Notes June 30, 2014 (unaudited) December 31, 2013 (audited) Assets Current assets Cash and cash equivalents Marketable securities Trade accounts receivable Other receivables Current tax assets Inventory Prepaid expenses and accrued income Total current assets Non-current assets Property, plant and equipment Goodwill Other intangible assets Financial assets Deferred tax assets Total non-current assets Total assets Liabilities and equity Current liabilities Trade accounts payable Other payables Current loans Current tax liabilities Accrued expenses Total current liabilities Non-current liabilities Other payables Provisions Employee benefits Deferred tax liabilities Total non-current liabilities Total liabilities Shareholders equity Share capital Share premium Retained earnings Total equity, attributable to owners of the parent Total liabilities and equity These condensed consolidated interim financial statements should be read in conjunction with the accompanying notes. Half year report 2014 Page 9

11 Consolidated income statement (in CHF 000s) Notes Jan. - June 2014 (unaudited) Jan. - June 2013 (unaudited) Jan. - Dec (audited) Revenue Cost of sales Gross profit Distribution and marketing expenses Research and development expenses General and administrative expenses Other income Profit from operations (EBIT) Financial income Finance costs Profit before income tax (EBT) Income tax expense Net profit, attributable to owners of the parent Basic earnings per share (in CHF) Diluted earnings per share (in CHF) These consolidated interim financial statements should be read in conjunction with the accompanying notes. Page 10 Half year report 2014

12 Consolidated statement of comprehensive income (in CHF 000s) Jan. - June 2014 (unaudited) Jan. - June 2013 (unaudited) Jan. - Dec (audited) Net profit for the period Other comprehensive income: Remeasurements on defined benefit obligations Income tax on remeasurements on defined benefit obligations Items that will not be reclassified to income statement, net of tax Currency translation differences Items that are or may be reclassified subsequently to income statement Other comprehensive income for the period,net of taxes Total comprehensive income, attributable to owners of the parent These consolidated interim financial statements should be read in conjunction with the accompanying notes. Half year report 2014 Page 11

13 Consolidated statement of changes in equity (in CHF 000s) Share capital Share premium Cumulative translation differences Other retained earnings Retained earnings Total equity Balance at January 1, Net profit for the period Other comprehensive income for the period, net of taxes Total comprehensive income Share based payments 1) Dividend out of share premium Options exercised during the year, net of transaction costs Total transactions with owners of the parent Balance at June 30, Balance at January 1, Net profit for the period Other comprehensive income for the period, net of taxes Total comprehensive income Share-based payments 1) Dividend out of share premium Options exercised during the year, net of transaction costs Total transactions with owners of the parent Balance at June 30, ) Represents the amount of stock option expense of CHF 1.7 million (2013: CHF 1.0 million) including respective tax effects of CHF -0.2 million (2013: CHF 0.6 million) recognized per June, 2014 and 1) 2013 respectively These consolidated interim financial statements should be read in conjunction with the accompanying notes. Page 12 Half year report 2014

14 Condensed statement of cash flows (in CHF 000s) Jan. - June 2014 (unaudited) Jan. - June 2013 (unaudited) Jan. - Dec (audited) Net cash provided by operating activities Net cash provided by/(used in) investing activities 1) Net cash provided by/(used in) 2) financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of period Effect of exchange rate fluctuations on cash and cash equivalents Cash and cash equivalents at end of period ) Net cash used in investing activities consists of investments into property, plant and equipment of CHF 2.6 million and investments into intangible assets of CHF 10.3 million as well as an acquisition of a subsidiary, net of cash acquired of CHF 23.6 million in the first half year ) Net cash used in financing activities contains the exercise of employee stock options of CHF 4.4 million, the dividend payment out of reserves from capital contributions of CHF 8.5 million and proceeds from issuance of a loan of CHF 20 million, see note 4. These consolidated interim financial statements should be read in conjunction with the accompanying notes. Half year report 2014 Page 13

15 Notes to the condensed consolidated interim financial statements 1 Basis of preparation of the condensed consolidated interim financial statements The condensed consolidated interim financial statements of u-blox Holding AG ( u-blox or the Group ) were prepared in accordance with IAS 34 Interim Financial Reporting. These condensed consolidated interim financial statements do not include all the notes contained in the consolidated annual financial statements, and for that reason should be read in conjunction with the consolidated annual financial statements for the year ended December 31, The condensed consolidated interim financial statements have been prepared in Swiss francs (CHF), rounded to the nearest thousand. The accounting policies applied in the condensed consolidated interim financial statements are consistent with those used in the consolidated financial statements for the year ended December 31, 2013, except for the changes mentioned in the chapter below. The preparation of the condensed consolidated interim financial statements requires management judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses as well as disclosure of contingent assets and liabilities. Although these judgments, estimates and assumptions are based on management s best knowledge of current events and actions, actual results may ultimately differ from those estimates. In the condensed consolidated interim financial statements significant estimates and assumptions made by management are not different from those made in the consolidated financial statements for the year ended December 31, Income taxes are recognized based on best estimate of the weighted average annual tax rate for The Group operates in markets where no significant seasonal or cyclical variations in revenue are experienced during the financial year. For the condensed consolidated interim financial statements, a EUR/CHF exchange rate of and a USD/CHF exchange rate of was applied at the end-of-period (31 December 2013 EUR/CHF 1.226, USD/CHF 0.889). For the period an average exchange rate of EUR/CHF and USD/CHF was applied (previous period: EUR/CHF 1.228, USD/CHF 0.944). Changes in accounting policies As of January 1, 2014, u-blox adopted various new and amended International Financial Reporting Standards (IFRS) and Interpretations, none of which have a material impact on the consolidated financial statements of u-blox. Page u-blox Half year Annual report Report

16 2 Segment information Positioning and wireless products Wireless services Total segments Non-allocated/ eliminations Group January June January June January June January June January June (in CHF 000s) Revenue third Revenue intragroup Total revenue EBITDA Depreciation ' Amortization ' EBIT ' Financial income Finance costs EBT June 30, 2014 Dec. 31, June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31, 2013 Assets '509 u-blox Half Annual year Report report Page 15 16

17 3 Acquisition of subsidiary The following business combination took place during the six months period ended June 30, 2014: Acquisition of connectblue AB, Malmö At May 19, 2014 u-blox AG acquired 100% of the shares of connectblue, a company specializing in short range radio communication modules. ConnectBlue established itself as a player in the short range radio markets worldwide and employed 35 employees as of the acquisition date. The company is headquartered in Malmö, Sweden. Due to the timing of the acquisition, the final allocation of the purchase price is not yet finalized - especially the value of the acquired technology, R&D costs as well as the resulting goodwill is subject to further assessment. The acquisition had the following provisional effect on the Group s assets and liabilities: (in CHF 000s) Carrying amount of the acquired assets and liabilities Fair value adjustments Identifiable assets acquired and liabilites assumed at fair value Cash and cash equivalents Trade accounts receivable Inventory Other receivables Prepaid expenses and accrued income Property, plant and equipment Intangible assets Orderbook Acquired technology Capitalized development costs Deferred tax assets Total assets Trade accounts payables Other payables Accrued expenses Deferred tax liabilities Net assets Goodwill Total consideration transferred Settled by Cash payment Cash net debt adjustment deferred Total consideration transferred Paid in cash Cash and cash equivalents acquired Acquisition of subsidiary, net of cash acquired The fair value of the receiveables is equal to the gross contractual amounts. All receiveables are expected to be collectible. The goodwil represents intangible assets that do not qualify for a separate recognition as well as the assembled workforce of connectblue AB. The goodwil is fully allocated to the positioning and wireless products segment. Page Half year report 2014

18 Had connectblue AB been taken over at January 1, 2014, the revenue had been increased by CHF 4.4 million and an EBIT had resulted of approximately CHF 19.2 million. The impact on revenue and profit since acquisition is not significant. The name of the company was changed to u-blox, Malmö in August Current loans Due to the acquisition of u-blox Malmö AB a short term loan of CHF 20.0 million was borrowed. The short term bank loan of CHF 20.0 million at a variable interest rate of 0.6% (based on the libor plus spread) is denominated in CHF and has a duration of 1 month. 5 Financial instruments Carrying amounts and fair values of financial instruments The carrying amounts and fair values of financial assets and financial liabilities as at 30 June 2014 are as follows: (in CHF 000s) Carrying amount June 30, 2014 Fair Value June 30, 2014 Carrying amount Dec 31, 2013 Fair Value Dec 31, 2013 Cash and cash equivalents Trade accounts receivable Other receivables Accrued income Financial assets Loans and receivables Marketable securities Financial assets at fair value through profit or loss Trade accounts payable Other payables - other Current loans Accrued expenses Liabilities at amortized costs Other payables - contingent consideration Liabilities designated at fair value through profit and loss The carrying amount of the marketable securities recognized at their fair value is determined on the basis of the bonds prices at the balance sheet date. Half year report 2014 Page 18 17

19 Fair value hierarchy The different levels of financial instruments carried at fair value have been defined as follows in the table below: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or the liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: inputs for assets or liabilities that are not based on observable market data (unobservable inputs). June 30, 2014 (in CHF 000s) Total Level 1 Level 2 Level 3 Marketable securities Total assets Other payables - contingent consideration Total liabilities December 31, 2013 (in CHF 000s) Total Level 1 Level 2 Level 3 Marketable securities Total assets Other payables - contingent consideration Total liabilities There were no reclassifications between the various levels in In 2014 a contingent consideration over CHF 0.6 million has been released. Page u-blox Half year Annual report Report

20 6 Dividend On April 29, 2014 the Annual General Meeting of u-blox AG approved a gross dividend of CHF 1.30 per share. A total dividend amount of CHF 8.5 million was paid out on May 5, Guarantees, pledges in favor of third parties and other contingent liabilities At June 30, 2014 and Dember 31, 2013 there were no guarantees in favour of third parties. The group is not exposed to any significant other contingent liabilities. There is no known threatened or pending litigation against any group company. 8 Subsequent events Pending acquisition of Antcor Advanced Network Technologies S.A. At August 6, 2014 u-blox announced the acquisition of 100% of the shares of Antcor Advanced Network Technologies S.A. Athen (GR) a developer of Wi-Fi baseband intellectual property (IP). The acquisition at a price of approximately EUR 5 million excluding an earn-out which offers the sellers the possibility to participate in certain future revenues of the company. Due to the timing of the acqusition, the final allocation of the purchase price is not yet finalized. The Board of Directors authorized on September 4, 2014 these condensed consolidated interim financial statements for publication. u-blox Half Annual year Report report Page 19 20