u-blox Investor Presentation · Source: McKinsey The internet of things: Mapping the value beyond...

locate, communicate, accelerate

u-blox Investor Presentation

January 2017

Disclaimer

This presentation contains certain forward-looking statements. Such forward looking statements reflect the current views of management and are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance or achievements of the Group to differ materially from those expressed or implied herein.

Should such risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation.

u-blox is providing the information in this presentation 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.

© u-blox Holding AG Slide 2

Company Overview

Our vision


To be the leading supplier of high-quality

communications and positioning components in

The Internet of Things that Really Matter

The Internet of Things: Billions of devices waiting to be connected


Source: Geeny.io

Drones ~5 Mio

Pets ~0.5 bn

Cars ~0.5 bn

Laptops ~900 Mio

Bicycles ~1.3 bn

Kids ~1.8 bn

Parking Spaces ~1.2 bn

Hospital Beds ~1 Mio

Power Tools ~1.3 bn

u-blox: Enabling the Internet of Things (IoT)

• Founded in 1997

• Listed on the SIX Swiss Exchange since 2007 (SIX:UBXN)

• Global semiconductor player

• The only company focusing on wireless and positioning, with leading technology delivered as both integrated circuits and modules

• 2015 revenue CHF 338m; 2016 H1 revenue CHF 180m

• 2009-2015 compound annual growth 28%

• More than 800 employees worldwide (end of June 2016)


A global business


Revenue by geography / EBITDA in m CHF u-blox revenue split per market

Expanding the global reach

• Broad customer base with more than 5700 customers and significant market share

• Expanding customer base: customers in more than 66 countries worldwide

• Customer diversity: Top 60 customers in 25 countries

• No single customer responsible for more than 6% of total sales

• 15 sales offices; 14 R&D locations


5700

CUSTOMERS

WORLDWIDE

15

SALES OFFICES

66 COUNTRIES

WORLDWIDE

Strong product line-up for IoT


Positioning Cellular

Communication Short Range

Communication

Integrated Circuits

Modules

Services and Solutions

CellLocate®

AssistNowTM

Correction Data

Reference Designs

Maker boards

• u-blox technology is available in a unique combination of chips and modules

• This combination provides for a inimitable market positing and drives our profitability

u-blox leading connectivity technology for the Internet of Things that Really Matter

• u-blox solves the What, Where and When of the IoT

• What – the data transmitted

• Where – the device located

• When – the time the data was captured

• u-blox unique technology

• Technology leader in GNSS based positioning and timing

• Strong intellectual property in GNSS, LTE, BT and Wi-Fi

• Driving connectivity technology for adoption to IoT


u-blox plays in the high growth markets


Source: Ericsson Mobility Report, November 2016

• The mobile phone market has plateaued

• The future growth lies in both, wide-area and short-range IoT applications

They are u-blox heartland

Connected devices (billions)

u-blox target markets

0

50

100

150

200

250

2000 2005 2010 2015 2020 2025

Ever expanding Mobility index

Mobility and the Cloud economics drive our markets for IoT (1)


Source: The Economics Of The Cloud, Microsoft

Strong scale economies in the Cloud

• The mobility of people continues to increase year on year

• Cost of data processing in the cloud decreases exponential with volume

These forces work hand in hand giving a multiplier effect for IoT

80% reduction of total

cost of ownership

TC

O/S

erv

er

(at

avera

ge

uti

lizati

on

)

# of Servers in Public Cloud

Source: Transport Outlook 2011, OECD



Internet Cloud

Sensors & Actuators Content

Mobility

Rover

Infrastructure



Internet Cloud

Sensors & Actuators Content

Mobility

Rover

Infrastructure

Source: u-blox estimates

400m BLE (Bluetooth Low

Energy) beacons shipping in

2021

90m cars sold with USD300

electronic components

content by 2020

65m smart meters

installed by 2020

20b connected devices

by 2020

The Internet of Things that Really Matter – IoT market will become large

• M2M deployments to grow strongly

• Price points to decline

• Strong integration into

chipset feasible for cellular

M2M modems

This is the opportunity for

u-blox in-house silicon


Source: ABI research 2016 Cellular M2M

0

100

200

300

400

500

600

700

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Cellular M2M

LTE Cat-1 LTE Cat-M NB-IoT

millions of units

Our Focus

Four IoT focus areas for u-blox


Connected vehicle Connected city Connected industry

Adaptive cruise control shipments to be 80 million by 2025

7.7 million truck platoon systems to ship by 2025

Over 246 million connected auto infotainment systems to ship between 2015-2020 (Source: ABI research, 2016)

600 million Smart home device shipments by 2021

Home care robotics to revenue to quadruple to $6 Billion by 2025

46 million Connected street lights by 2021

Smart meter connections to exceed 789 million by 2021

(Source: ABI research, 2016)

Goods tracking market to swell to $5.6 Billion in 2021

From 2014 to 2020, the number of connected industrial controllers will triple; growing at an average rate of 20%

Global wireless sensor network market expected to grow to $1 Billion by 2020

Source: (Technavio 2016)

Connected consumer

Massive use of smart phones: 3.9 Billions in 2016 will grow to 6.8 Billions in connected consumers in 2022 with many regions having more subscriptions than people

100 million BT connected sports and wellness devices and 250 million Wi-Fi connected flat screen TVs and set top boxes by 2020

Global wearable market expected to grow to $5.8 Billion by 2018

Source: (Ericsson Mobility Report November 2016, ABI Wireless IoT and Cellular 2016 & Statista 2016 )

The IoT focus areas offer vast potential

• Attractive value of connectivity and positioning in the four IoT segments

• Expected CAGR of 19.2% from 2015 to 2025

• Especially the potential of smart factories (Industry 4.0) is very large

• The size of the economical benefits will drive investments


Source: McKinsey The internet of things: Mapping the value beyond the hype. 2015

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Vehicle City Industry Consumer

$ b

illio

ns

Connectivity value by 2025

Low estimate High estimate

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Vehicle City Industry Consumer

$ b

illio

ns

Positioning value by 2025

Low estimate High estimate

Connected vehicle


Automated parking

technology to grow by 30% CAGR over next decade

7.7 million truck platoon systems to ship by 2025

Over 246 million connected

auto infotainment systems to

ship between 2015-2020 (Source: ABI research, 2015)

u-blox applications

• ADAS

• Car connectivity

• Driving recorder

• Emergency call

• In-car navigation

• Insurance box

• Mobile gaming

• Road pricing

• Stolen vehicle recovery

• Vehicle telematics

• Vehicle tracking

• Infotainment

• V2X

The future of the connected vehicle

Slide 20 © u-blox Holding AG

2015 2020 2025 2030

Basic V2X

Communication

• Roadwork warning

• Emergency Vehicle Warning

• Traffic-jam warning

• Post-crash warning

Fusion of V2X and

Sensor Data

• ACC-Adjustment

• Lane Change Warning

• Simple Merge-In warning

Fully Developed

Situation Analysis

• Advanced Merge-in assistance

• Hazardous Area Warning

• Platoon start at intersection

Active Coordination

• Highly Automated Driving

• Cooperative Merging

• Overtaking Assistance

V2X Basis Data Fusion Collective Perception Cooperative

Agreements

Wireless connectivity and high precision positioning enable the autonomous car.

Connected city


600 million Smart home

device shipments by 2021

Home care robotics to

revenue to quadruple to $6 billion by 2025

46 million connected street

lights by 2021

Smart meter connections to

exceed 789 million by 2021

(Source: ABI research, 2016)

u-blox applications

• Point of sales

• Home entertainment

• Metering

• Mobile hotspot & router

• Street light systems

• Traffic management system

• Waste & water management

The future of the connected city


2015 2020 2025 2030

Smart meters

• Power balancing

• Supply stability

• Network management

Smart

infrastructure

• Adaptive capacity

• Preventive maintenance

2000W community

• Power and energy control

• Optimizing supply and demand

• Reduction of losses

Autonomous public

transport

• More granular transport capacity

• Adaptive capacity

• Reduction of foot print

Collective

Perception System adoptions Deep change Optimization

Cellular and positioning technology are the route to connected infrastructure.

Connected industry


Goods tracking market to

swell to $5.6 billion in 2021

From 2014 to 2020, the

number of connected industrial controllers will

triple; growing at an

average rate of 20%

Global wireless sensor network market expected to

grow to $ 1 billion by 2020

Source: (Technavio 2016)

u-blox applications

• Asset tracking

• Aviation & UAV

• Healthcare

• Industrial terminal

• Machine control

• Monitoring & control

• Router and gateway

• Security

• Farming

• Fleet management systems

The future of the connected industry


2015 2020 2025 2030

Cloud and agility

• Smart service

• Customer feedback

• Self learning

Smart Engineering

• Digital collaboration

• Digital modeling

Smart Factory

(Industry 4.0)

• Integrated planning

• Proactive maintenance

• Process automation

• Product lifecycle

Digital Marketing

• CRM

• Omni channel presence

• Self service portals

• Dynamic pricing

Agility Fast loop Closed loop Cooperative loop

Wireless technology makes the things that matter connected.

Connected consumer


Massive use of smart phones:

3.9 billion in 2016 will grow to

6.8 billion in connected

consumers by 2022 with many

regions having more

subscriptions than people

100 million BT connected sports

and wellness devices by 2020

250 million Wi-Fi connected flat

screen TVs and set top boxes by

2020

Global wearable market

expected to grow to $5.8

billion by 2018

Source: (Ericsson Mobility Report November 2016, ABI Wireless IoT and Cellular 2016 & Statista 2016 )

u-blox applications

• Child tracking

• Pet tracking

• Fitness

• Cameras

• Watches

• Toys

• Personal health

The future of the connected consumer


2015 2020 2025 2030

Social Media

• Media landscape reshuffled

• Immense information flow

• Internet giants dominate

Smart sensing

• Immense data gathering

• Extraction of features and patterns

• Fast feed-back

Augmented Reality

• Seamless merging of virtual and real world

• Broader access to relevant information on the spot

Artificial intelligence

• Delegating tasks to personal agents

• Agents learns and anticipates users needs

Sharing Intelligence

gathered Deeper involved

Enhanced

capabilities

Wireless technology and position sensors make the consumer connected.

Highly automated driving calls for

Dead reckoning and high

integrity

Inspection drones call for

Decimeter accuracy

Cellular infrastructure calls for

Precision timing

Personal tracking call for

Ubiquitous positioning

In car infotainment calls for

High-bandwidth cellular

Water, waste, lighting, etc call for

Low whole-life cost: NB-IoT

Asset tracking, fleet mgt

call for

Global coverage

Consumer devices call for

Low and high bandwith

connectivity

Highly automated driving calls for

Vehicle to Vehicle comms

Point of Sale, smart home call for

Multi-standard solutions

Sensor networks

call for

Intelligent gateways

The quantified self call for

Low power connectivity


Leading u-blox IP for the IoT focus markets

Positioning technology

• Standard precision products

• Meter level accuracy

• Suitable for most applications

• High tracking sensitivity

• Low power consumption

• High precision products

• Centimeter to decimeter level accuracy

• Suitable for a range of new applications

• Dead Reckoning products

• 100% positioning coverage incl. tunnels

and urban canyons

• For road-vehicle applications

• Timing & Frequency products

• For stationary and time, or frequency

synchronization


LEA

17 x 22.4 mm2

CAM

9.6 X 14 mm2

NEO

12.2 x 16 mm2

EVA

7 x 7 mm2

MAX

9.7 x 10.1 mm2

u-blox module form factors – de-facto industry standards

High precision for the mass market

Communication link

Base

NEO-M8P-2

Rover

NEO-M8P-0

Cellular

• Extensive range of cellular modules for

GSM, UMTS and CDMA

• Global coverage; competitive

specification, common physical

footprint and software APIs

• High performance multi-mode LTE

modules

• Global certifications, Cat 4 & Cat 6

performance with higher categories to

follow, automotive specification

options

• Low data-rate single-mode LTE, NB-IoT

and RPMA modules

• Leading edge products, first to market

in many territories

• Aimed at IoT applications


Short-Range technology

• Bluetooth Low Energy for low data rates

• BT 4.2

• Expansion; BT 5.0 and Mesh in 2017

• Wi-Fi for high data rates

• 802.11 a/b/g/n/ac

• Expansion; 2.4/5 GHz 802.11ax

• V2X modules for automotive applications

• Based on a variant of Wi-Fi (IEEE

802.11p)

• US legislation drives deployment for 2021 timeline


0

2

4

6

8

10

12

14

16

18

20

22

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Millio

ns

per

year

Positioning Cellular Short Range

Developing profitable growth

• On track to build a robust business

with three “legs”

• Positioning

• Cellular

• Short-Range

• Strong volume growth track

• Synergies between each area in the

key markets

• Combination of 3rd Party and u-blox

silicon provides a broad product range and scope for differentiation

© u-blox AG Slide 31

* acquisition of assets

modules

shipped

Neon Seven

Geotate

Fastrax

Signav*

4M Wireless

Cognovo

lesswire* antcor

connectBlue

AirSemi*

Fusion Wireless

Financial Outlook

Continuous growth and profitability (1)


Geographical revenue mix Application revenue mix

25.3%

Continuous growth and profitability (2)


Gross Profit trend EBIT trend

Outlook Goals


• Grow business with new products

Wireless

• Expansion of module product line for 4G and LPWA

Positioning

• Business growth based on u-blox M8 and u-blox 8

• Attractive new products

Short Range

• Expansion of product line

• Growth driven by many IoT* applications

• Continued focus on strategic development

• Strengthening of the global presence

• Operational excellence for higher efficiency

*) Internet of Things

Financial performance prediction 2016 and guidance 2017


• Continued business growth in 2017

• Impact by product mix on relative gross margin

• Natural hedging protects relative gross margin against foreign exchange variations

Actual

FY 2015

Actual

H1.2016

Prediction 2016 Guidance 2017*)

Revenue 338.3m 179.7m 360m 410m…425m

EBIT 51.3m 27.8m 56m…58m 60m… 65m

CHF CHF CHF CHF

+10% of USD EUR GBP

Revenue + 8.6% + 1.3% 0%

EBIT + 21.1% + 1.0% - 2.0%

• Exchange rate assumptions for 2017: EUR/CHF: 1.07 USD/CHF: 1.02 GBP/CHF: 1.23

• FX-sensitivity against CHF on Guidance 2017

*) This guidance is based on the absence of unforeseen economic adversity and exchange rates assumed at budget level

Key takeaways

u-blox positioned for profitable growth

Technology Leadership: investing to expand our technology roadmap and lead in GNSS and wireless technology for IoT

Consistent Execution: First to market with new products tailored to various applications

Focus and invest in key markets with a sustainable future

Control of the core technology

Growing organization to meet market demands


Corporate Information

Legal structure u-blox group u-blox Holding AG Thalwil, Switzerland

u-blox AG (Headquarter)

Thalwil, Switzerland

u-blox Singapore Pte. Ltd.

Singapore

u-blox Japan K.K.

Japan

u-blox Asia Pacific Ltd.

Hong Kong

100% 100% 100% 100%

u-blox Italia S.p.A. Italy

100%

u-blox Espoo Oy

Finland

100%

u-blox America, Inc.

USA

u-blox AG Beijing

representative office

Beijing

Representative office of u-blox Singapore Pte. Ltd. Taipei

u-blox Singapore Pte. Ltd. (Branch office) Seoul

Sales organization R&D entities

u-blox AG Shenzen


Shenzen Representative office of u-blox Singapore Pte. Ltd. Bangalore

Representative office of

u-blox Singapore Pte. Ltd. Sydney

u-blox AG Shanghai


Shanghai

100% u-blox UK Ltd.

UK

u-blox San Diego Inc. USA

100%

u-blox Luton Ltd. UK

100%

u-blox Melbourn Ltd. UK

100%

u-blox Lahore (Private) Pty.

Pakistan

100%

u-blox Melbourn Ltd. Leuven Branch

Belgium

100% u-blox Cork Ireland

u-blox Malmö Sweden

100% ConnectBlue Inc. USA

u-blox Athens

Greece

100%

u-blox Berlin Germany

100%


u-blox AG Chongqing representative office Chongqing

100%

Board of directors

Additional information – see Corporate Governance and Financial Report 2015 p. 8 - 13


Fritz Fahrni Chairman

Member NCC

André Müller Member AC

Prof. Gerhard Tröster Chairman NCC

Gina Domanig Dr. Paul van Iseghem Chairman AC

Thomas Seiler CEO

Jean-Pierre Wyss COO

Executive Committee

Additional information – see Corporate Governance and Financial Report 2015 p. 14 - 16


Thomas Seiler CEO

Head of Marketing and Sales

Jean-Pierre Wyss Executive Vice President

Head of Production and Logistics

Co-founder u-blox AG

Daniel Ammann Executive Vice President

Positioning Products


Andreas Thiel Executive Vice President

Wireless Products


Roland Jud CFO

Shares


Stock Exchange SIX Swiss Exchange

Swiss Security Number / ISIN 3336167 / CH0033361673

Ticker UBXN

Nominal value CHF 0.90

Shares issued 6'835'094 (December 31, 2016)

Market cap CHF 1.3 billion (December 31, 2016)

High / Low 52 weeks CHF 249.00/ CHF 162.30 (December 31, 2016)

Latest market price CHF 191.20 (December 31, 2016)

Analyst Coverage & Market making

Please note that any opinions, estimates or forecasts regarding u-blox' performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of u-blox or its management.


Analysts

Zürcher Kantonalbank Andreas Müller

Credit Suisse Felix Remmers

Vontobel Michael Foeth

MainFirst Schweiz Michael Inauen

Bank am Bellevue Mischa Roelli

Kepler Chevreux Torsten Sauter

Baader/Helvea Günther Hollfelder

Julius Bär Bruno Winiger

Mirabeau Mark Diethelm

BRYAN, GARNIER & CO Dorian Terral

UBS Francesca Caramenti Market making Zürcher Kantonalbank

© u-blox Holding AG

Upcoming events

• Annual results 2016: March 16, 2017

• Annual General Meeting: April 25, 2017

Slide 44

Investor relations contact

Thomas Seiler

Chief Executive Officer

u-blox Holding AG

Zürcherstrasse 68

8800 Thalwil, Switzerland

Phone: +41 44 722 74 44

Fax: +41 44 722 74 99

E-mail: [email protected]

Roland Jud

Chief Financial Officer

u-blox Holding AG

Zürcherstrasse 68

8800 Thalwil, Switzerland

Phone: +41 44 722 74 44

Fax: +41 44 722 74 99

E-mail: [email protected]


Thank you!

locate, communicate, accelerate

u-blox Investor Presentation · Source: McKinsey The internet of things: Mapping the value beyond...

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