connections that count · contents introduction 4 financial highlights 5 operational highlights 6...

CONNECTIONS THAT COUNT

ANNUAL REVIEW 2015

CONTENTS

Introduction

4 Financial highlights

5 Operational highlights

6 This is u-blox

8 Letter to the shareholders

11 Brief an unsere Aktionäre

Focus story

14 Internet of Things

Business review 2015

22 Financial summary

26 Strategy

30 Products

32 Innovation

34 Markets

36 Customers

38 Customer story: Xirgo

40 Our values and brand

42 Risk management

Sustainability

44 Business ethics

45 Employees

46 Social commitment

47 Market

47 Environment

Information for investors

48 Information for investors

49 Investor contact

Content |

338.3

64.2

51.3

37.1

45.8

Revenue in m CHF

Equity ratio in %

Operating profit in m CHF

Net profit in m CHF

Gross profit in %

Revenue 2014: 270.0 – Growth rate: + 25.3%

74.7

Operating cashflow in m CHF

Operating cashflow 2014: 53.7 – Growth rate: 39.1%

Equity ratio 2014: 70.5

Operating profit 2014: 39.1 – Growth rate: 31.3%

Net profit 2014: 34.4 – Growth rate: 7.9%

Gross profit in % 2014: 45.4

Financial highlights

Total equity Equity ratio, % of total assets

u-blox revenue split per market Employee breakdown spread over 17 countries

Total equity and equity ratio CHF in million

250

200

150

100

50

0

75% of employees based outside Switzerland

Total: 736

Logistics, admin 12% (87)

Sales, marketing,support 19% (140)

Research &development

69% (509)

(end of 2015, FTE based)(Estimate)

2011 2012 2013 2014 2015

138151

180

21384.3%78.7% 79.7%

70.5%

Automotive

Consumer

Industrial

| Financial highlights

248

64.2%

Americas EMEAAPAC EBITDA

Revenue by geography / EBITDA CHF in million

350

300

250

200

150

100

50

02011 2012 2013 2014 2015

78.729% 58.6

46.235.229.1

26%

45%

124.7

173.1

41%

24%

35%

219.8

46%

28%

25%

48%

27%

25%

270.0

338.2

48%

29%

23%

Acquistion of Lesswire

In 2015, we finalized the takeover of automotive-grade Bluetooth and Wi-Fi module products as well as a team of key engineers, from Lesswire AG, strengthening our position as a supplier to the fast-growing market for in-car and Vehicle-to-Vehicle (V2V) communications.

Partnerships

We joined the M2M Alliance and CAR 2 CAR CommunicationConsortium, where we will play a role in the development of next-generation M2M applications for the automotive and industrial markets and help improve road traffic safety and efficiency.

Cohda Wireless V2X module

In October, we took over the manufacture and marketing of the Cohda Wireless Vehicle-to-everything (V2X) module in a move to meet rapidly increasing demand for the modules for trial purposes, early deployments and infrastructure roll-outs.

New offices worldwide

As part of moves to expand our R&D team and make customer contact easier, we opened up new offices in Chongqing, Tampere, Berlin and Osaka, significantly increasing the workforce.

Strategic new products

The year saw the launch of 9 stand-out products in all three areas: cellular, short range and positioning. The new products cover the entire range from low-cost to expensive and significantly improve coverage, compatibility and functionality.

Revenue up strongly

We look back on another year in which both revenue and EBIT surged upward in all regions, meeting our top-level targets, and taking us another significant step towards our intermediate goal of half-billion-dollar annual revenues.

Operational highlights

Operational highlights |

This is u-blox

Positioning & Wireless• Fleet management• Remote monitoring and control• Automatic meter reading• Point-of-sales• Remote displays• Remote security and surveillance

Positioning & Wireless• In-car navigation• Stolen vehicle recovery• Emergency call• Mobile Internet• Vehicle black-box

Positioning & Wireless• Smartphones• Personal navigation devices• Notebooks and mobile internet devices• Cameras• Person locators• Drones• Wearables

Technologies:• GSM/GPRS• CDMA• UMTS/HSPA• LTE

Cellularmodules

Industrial

Short rangemodules

Automotive

Positioningchips & modules

Consumer

Technologies:• Bluetooth• Bluetooth low energy• Wi-Fi• Multiradio

Technologies:• GPS• GLONASS• BeiDou• Galileo• QZSS

OUR TECHNOLOGIES

OUR MARKETS

| This is u-blox

HOW WE

CREATE VALUE

Fabless business modelWorking with leading semiconductor fabrication and module assembly companies allows us to focus our resources on research and development in order to deliver the breakthrough technologies that our customers need to stay ahead of their competitors.

Comprehensive product lines and IPOur success depends on our ability to deliver continuous innovation to our customers. We therefore direct our research and development efforts to the development of ever smaller, higher performance products. We have also amassed an extensive intellectual property portfolio.

Global presenceWith physical presence in all the world’s main markets, we stay close to our customers to make sure our innovation cycles are in synch and to ensure our customers get their products to market fast.

Focus on quality From product concept to final shipment, our quality systems ensure that every component we deliver is of the highest quality and reliability while supporting environmental sustainability.

Close customer relationshipsWe are a close and reliable partner to our customers, fully supporting them from prototype to final production. Providing the highest levels of local technical and customer support is essential for our customers to achieve fast time-to-market.

This is u-blox |

Letter to the shareholders

Dear Shareholders,

For u-blox 2015 was another year in which all performance

indicators progressed encouragingly. We further strengthened our

positions in our strategic markets, posted significant increases in

revenue, EBIT, customers and overall market share. We completed

an important strategic acquisition at the beginning of the year, and

a 53% increase in our share value that took it to CHF 214.50 at

year-end was a positive indication of market sentiment.

The Board of Directors proposes a dividend payout of CHF 1.90 per

share and will put the motion to shareholders for approval at the

Annual General Meeting in Thalwil on April 26, 2016.

Ongoing rise in revenue and profit

In 2015, consolidated Group revenues rose to CHF 338.3 m, equal

to a 25.3% increase over 2014, with progress across all regions.

EBIT climbed even more strongly and CHF 51.3 m was at the upper

end of our predicted range for the year, showing a 31.3% increase

over the previous year.

Growth in the Americas remained strong, and revenues were up by

32.6%. Apart from macroeconomic factors, it was fueled mainly by

the rise in demand for our range of sophisticated products for

tracking applications and the exponential increase in the importance

of Internet of Things solutions. There was great interest in our new

LTE products, while expansion into new areas, with the emphasis

on telematics, led to a gratifying rise in market share and a

significant increase in new customers. Overall, the keen interest in

our products and technologies bodes well for future operations.

Markets in Europe, the Middle East and Africa (EMEA) reported a

growth of 15.3% with expansion in all geographical regions and

application areas, especially asset tracking and automation.

We are pleased to report strong expansion in new business

opportunities driven by lively demand for in-vehicle telematics and

the trend towards increased internet connectivity in cars.

With their economies still buoyant and an ongoing positive climate,

the Asian markets reported a more-than-satisfactory 26.3% growth.

There was continued high demand for wearables and portable

devices, as well as automotive applications.

Firmly on course for intermediate goal

Last year marked another significant step towards our strategic

medium-term goal of half-billion-dollar annual revenues. Having

established the third pillar in our product offering, short range

radio connectivity, with acquisitions made in 2014, we finalized a

third acquisition in the short range sector in early 2015, with

Lesswire, a German-based leading developer of automotive-grade

short range radio system technology that supports Bluetooth and

Wi-Fi. The technology enables superior-performance wireless

applications and enhances in-vehicle connectivity between the

telematics box and portable devices.

As in the past, we have taken steps to fully integrate the employees

and assets of any companies acquired, significantly increasing our

R&D capacity and widening our product offer for single-radio and

multi-radio devices. Today, we offer a full selection of short range

connectivity products that link devices to the Internet.

In the course of 2015, we expanded the R&D team and set up new

offices in Berlin, Germany and Tampere, Finland to accommodate

them. As part of a move to improve contacts with our customers

and make it easier for them to connect with us when necessary, we

also opened new sales offices in Chongqing, China, and Osaka in

Japan.

25.3%Worldwide revenue growth of

over 2014 was achieved

74.7Net cash generated from operating activities in m CHF

2014: 53.7 – Growth rate: 39.1%

| Letter to the shareholders

Product highlights Over the years, we have developed an extensive portfolio of easy-to-use products designed to adapt to any requirement. They include three core technologies – cellular, short range and positioning – that have made a significant contribution to the Internet of Things. In 2015 we launched significant additions to all three areas:• Cellular Four cellular modules were released, all featuring high-speed

data transfer and wider geographical coverage.• Short range Of the four products launched last year, two are automotive

grade for multi-radio standards and compatible with Wi-Fi, Bluetooth and NFC. The third and fourth were designed specifically for IoT applications needing advanced multi-radio capability.

• Positioning In 2015, we unveiled a small, low-profile GNSS plug-and-play

positioning module with an integrated wideband chip antenna for reception across the entire L1 band. We also ramped up production of u-blox M8.

Our gateway to the futureA relatively new phenomenon, that we call “the Internet of Things that Really Matter,” has established itself as the de facto driving force of our business. An increasing number of customers are confronted with new business models and the need to connect more and more devices – using both high- and low-data rates – to the Internet in order to streamline the management of a virtually infinite range of applications. With our extensive product range, we are positioned to meet this need. We are further consolidating our leading role in the industry by contributing toward the definition of standards for next generation short range and cellular applications and to this end have teamed up with some of the industry’s big

names, such as Intel, Huawei and Vodafone. Positioning also plays an increasingly important role and there are synergies from which all involved parties can benefit.

Challenges and risksWherever possible, we take active, practical steps to decrease the impact of risks that can threaten any business or operation, our customers included, at global, regional or national level. The first step is to ensure that we supply our customers with top-quality products that can be relied on to meet their needs and keep their own clients happy. The second is to circumvent the negative impact

of currency exchange movements: to achieve this, we look for natural hedges and ensure that our production and operational costs are in line with the currencies in which our income is generated. Finally, we have a large and widening customer base of over 5'200 customers. Of these, no single customer account for more than 7% of revenue.

51.3Operating profit in m CHF

Operating profit 2014: 39.1 – Growth rate: 31.3%

Thomas Seiler, CEO; Fritz Fahrni, Chairman of the Board; Roland Jud, CFO.

Letter to the shareholders |

Board and managementIn 2015, Hans-Ulrich Müller retired from u-blox Holding AG's Board of Directors after serving as Vice-Chairman since 2007. Dr. Paul Van Isegehm, who was elected to the Board in 2011, has taken over his position, and André Müller has been appointed Board member.

OutlookBillions of interconnected devices worldwide are changing the way we work, play and source our entertainment. The Internet of Things that Really Matter will transform our lives on a scale that would have been barely imaginable just a few years ago. Driverless cars lie in the not-too-distant future, but until then a plethora of telematic devices are making every aspect of driving easier, safer and more convenient than ever before. Management and tracking of vehicles, containers, fleets and assets provide transparency, making countless aspects of business more efficient and economical.

And finally, manufacturers can communicate continuously with theirproducts while they are in the field, allowing new ways of doing business and consolidating relationships with their customers.

u-blox continues to invest in a vast range of innovative new devices that are driving the speed of change, bringing high-speed connectivity and access to unlimited cloud computing for an ever-growing global market. But we are not only at the forefront of technological development. We also play a key role in the establishment of industry standards that will define and delineate the way forward in the years ahead. With a strong customer base, our future growth potential stands on solid foundations. For the current year, we are targeting revenues of between CHF 395 million and CHF 405 million, with EBIT of between CHF 56 million and CHF 60 million. These expectations exclude unforeseen economic adversity and budgeted exchange rates (USD/CHF: 0.97; EUR/CHF: 1.08; GBP/CHF: 1.42).

On behalf of the Board of Directors and the Executive Committee, we would like to thank our growing team of highly skilled employees for their commitment and excellent performance in 2015. Our gratitude also goes to our shareholders for their trust and confidence in u-blox, and to our valued customers, suppliers and manufacturing partners.

We look forward to another exciting and successful year.

45.8Gross profit in %

Gross profit 2014: 45.4 – Growth rate: 26.3%

| Letter to the shareholders

Fritz Fahrni Thomas Seiler Roland JudChairman of the Board of Directors CEO CFO

Sehr geehrte Aktionärinnen und Aktionäre,

2015 war ein weiteres Jahr für u-blox, in dem sich alle Leistungs-kennzahlen erfreulich entwickelt haben. Wir konnten unsere Position in unseren strategischen Märkten weiter festigen und Umsatz, EBIT, Kundenbasis und Gesamtmarktanteil kräftig steigern. Zu Beginn des Jahres wurde eine wichtige strategische Akquisition abgeschlossen. Der Kursanstieg unserer Aktie von 53% auf CHF 214.50 am Jahresende spiegelte die positive Marktstimmung wider.

Der Verwaltungsrat schlägt die Auszahlung einer Dividende von CHF 1.90 pro Aktie vor. Ein entsprechender Antrag wird den Aktionären an der Generalversammlung am 26. April 2016 in Thalwil zur Genehmigung vorgelegt.

Anhaltendes Umsatz- und Gewinnwachstum2015 wurde konzernweit ein Umsatz von CHF 338.3 Millionen erzielt, zu dem alle Regionen beitrugen. Das entspricht einer Zunahme von 25.3% gegenüber dem Vorjahr. Noch stärker wuchs der EBIT, der mit CHF 51.3 Millionen am oberen Ende unserer prognostizierten Spanne für das Geschäftsjahr lag und den Vorjahreswert um 31.3% übertraf.

Die Region Amerika blieb auf starkem Wachstumskurs und erzielte ein Umsatzplus von 32.6%. Ursächlich hierfür waren neben makroökonomischen Faktoren vor allem die steigende Nachfrage nach unseren technologisch anspruchsvollen Produkten für Tracking-Anwendungen und der exponentielle Anstieg der Bedeutung von Lösungen für das „Internet der Dinge“. Es bestand grosses Interesse an unseren neuen LTE-Produkten. Gleichzeitig führte der Vorstoss in neue Bereiche, allen voran die Telematik, zu erfreulichen Marktanteilsgewinnen und einer erheblichen Zunahme des Neukundengeschäfts. Insgesamt ist das rege Interesse an unseren Produkten und Technologien ein gutes Vorzeichen für unsere künftige Geschäftstätigkeit.

Die Märkte in der EMEA-Region (Europa, Naher Osten und Afrika) erreichten ein Wachstum von 15.3%. Dabei konnten wir in allen geografischen Regionen und Anwendungsbereichen, insbesondere Asset-Tracking und Automatisierung, zulegen. Positiv ist auch die starke Expansion in neuen Geschäftsfeldern, die durch die lebhafte Nachfrage nach Fahrzeugtelematik und den zunehmenden Trend zu Fahrzeugen mit Internetverbindung geschürt wurde.

In den asiatischen Märkten erzielten wir ein mehr als zufrieden-stellendes Wachstum von 26.3%, zu dem die weiterhin gute Konjunkturlage und positive Stimmung in den Ländern der Regionbeitrug. Es bestand eine anhaltend hohe Nachfrage nach Wearables und tragbaren Geräten sowie nach Automobil-anwendungen.

Fest auf Kurs zum ZwischenzielIm letzten Jahr haben wir eine weitere wichtige Etappe zu unserem mittelfristigen strategischen Ziel zurückgelegt, einen jährlichen Umsatz von einer halben Milliarde US-Dollar zu erreichen. Nach dem Aufbau der dritten Säule unseres Produktangebots – der Kurzstrecken-Konnektivität – mit den 2014 durchgeführten Akquisitionen schlossen wir Anfang 2015 mit dem Erwerb von Lesswire eine dritte Akquisition im Kurzstreckenbereich ab. Lesswire ist ein führender deutscher Entwickler von Kurzstrecken-Funksystemtechnik für Fahr-zeuganwendungen, die Bluetooth und Wi-Fi unterstützt.

Die Technologie ermöglicht zudem hochleistungsfähige Funk-anwendungen und verbessert die Fahrzeugvernetzung zwischen der Telematik-Box und tragbaren Geräten.

Wie in der Vergangenheit haben wir Massnahmen zur vollständigenIntegration der Mitarbeiter und Vermögenswerte der erworbenen Unternehmen ergriffen, mit denen wir unsere F&E-Tätigkeit und unser Produktangebot für Single- und Multi-Funkmodule erheblich

25.3%Umsatzwachstum weltweit von

wurde gegenüber 2014 erreicht

74.7Cashflow aus operativer Geschäftstätigkeit in M CHF

2014: 53.7 – Wachstumsrate: 39.1%

Brief an unsere Aktionäre

Brief an unsere Aktionäre |

ausgebaut haben. Heute bieten wir das gesamte Spektrum an Produkten im Bereich der Kurzstrecken-Konnektivität für die Internetanbindung von Geräten an.

Im Jahresverlauf 2015 haben wir das F&E-Team erweitert und neue Standorte in Berlin (Deutschland) und Tampere (Finnland) ein-gerichtet. Um einen besseren Kontakt zu unseren Kunden zu halten und für sie einfacher erreichbar zu sein, wurden ausserdem neue Vertriebsbüros in Chongqing (China) und Osaka (Japan) eröffnet.

ProdukthighlightsIm Laufe der Jahre haben wir ein umfangreiches Portfolio an einfach anzuwendenden Produkten entwickelt, die sich an jeden Bedarf anpassen lassen. Sie umfassen drei Kerntechnologien – Mobilfunk, Kurzstreckenfunk und Positionierung –, die einen massgeblichen Beitrag zum Internet der Dinge (Internet of Things, IoT) leisten. 2015 haben wir in allen drei Bereichen wichtige neue Produkte auf den Markt gebracht:• Mobilfunk Es wurden vier Mobilfunkmodule eingeführt, die sich durch High-

Speed-Datenübertragung und eine grössere geografische Reichweite auszeichnen.

• Kurzstreckenfunk Zu den drei Produkteinführungen im letzten Jahr gehörten zwei

Multi-Radio-Module für den Automobilmarkt, die mit Wi-Fi, Bluetooth und NFC kompatibel sind. Das dritte und vierte Modul wurde speziell für IoT-Anwendungen entwickelt, die eine erweiterte Multi-Radio-Fähigkeit erfordern.

• Positionierung 2015 lancierten wir ein kleines GNSS-Plug-and-Play-

Positionierungsmodul mit wenig Platzbedarf und integrierter Breitband-Chipantenne für Empfang auf dem gesamten L1-Band. Ausserdem nahmen wir die Produktion von u-blox M8 auf.

Unser Tor zur ZukunftEin relativ neuer Trend, den wir das „Internet der wirklich wichtigen Dinge" (Internet of Things that Really Matter) nennen, hat sich de facto als treibende Kraft für unser Geschäft etabliert. Eine zunehmende Anzahl von Kunden ist mit neuen Geschäftsmodellen und der Notwendigkeit konfrontiert, immer mehr Geräte – sowohl mit hohen als auch niedrigen Datenübertragungsraten – an das Internet anzubinden, um die Verwaltung einer praktisch unend-lichen Vielfalt an Anwendungen zu vereinfachen. Mit unserem umfassenden Produktangebot sind wir ideal aufgestellt, um diesen Bedarf zu decken. Wir festigen unsere führende Position in der Branche, indem wir zur Definition von Standards für Kurzstrecken- und Mobilfunkanwendungen der nächsten Generation beitragen. Hierzu haben wir uns mit einigen grossen Unternehmen der Branche, wie Intel, Huawei und Vodafone, zusammengeschlossen. Der Bereich Positionierung wird ebenfalls immer wichtiger, und es sind Synergien vorhanden, von denen alle Parteien profitieren können.

Herausforderungen und RisikenWir ergreifen nach Möglichkeit aktive, praktische Massnahmen, um die Auswirkung von Risiken, die mit jeder Geschäftstätigkeit, einschliesslich der unserer Kunden, verbunden sind, auf globaler, regionaler oder nationaler Ebene zu verringern. Erstens stellen wir sicher, dass unsere Kunden mit erstklassigen Produkten beliefert werden, die ihre Anforderungen erfüllen und damit die Zufrieden-heit ihrer eigenen Kunden gewährleisten. Zweitens umgehen wir die negativen Effekte von Fremdwährungsschwankungen. Hierzu nutzen wir natürliche Absicherungen und stellen sicher, dass unsere Produktions- und Betriebskosten in denselben Währungen anfallen, in denen wir unsere Erlöse erzielen. Drittens haben wir eine breite, weiter wachsende Kundenbasis, wobei kein einziger dieser über 5’200 Kunden einen Umsatzanteil von mehr als 7% hat.

Verwaltungsrat und Geschäftsleitung2015 ging Hans-Ulrich Müller als Vizepräsident des Verwaltungs-rates der u-blox Holding AG in Pension. Er hatte seit 2007 den Vize-Vorsitz inne. Dr. Paul Van Isegehm, der bereits 2011 in den Verwaltungsrat gewählt worden war, übernahm in der Folge seine Position. An seine Stelle wiederum tritt André Müller als neues Verwaltungsratsmitglied.

51.3Betriebsgewinn (EBIT) in M CHF

Betriebsgewinn 2014: 39.1 – Wachstumsrate: 31.3%

| Brief an unsere Aktionäre

Fritz Fahrni Thomas Seiler Roland JudChairman of the Board of Directors CEO CFO

AusblickMilliarden vernetzter Geräte weltweit verändern unseren Arbeitsalltag und unsere Freizeit. Das „Internet der wirklich wichtigen Dinge" wird unser Leben in einem Ausmass beeinflussen, wie dies noch vor wenigen Jahren kaum vorstellbar war. Fahrerlose Fahrzeuge liegen in nicht allzu ferner Zukunft. Bis dahin wird eine Fülle von Telematikgeräten jeden Aspekt des Fahrens einfacher,

sicherer und komfortabler als je zuvor machen. Management- und Ortungslösungen für Fahrzeuge, Container, Fuhrparks und Gegen-stände sorgen für Transparenz und machen unzählige Aspekte der Wirtschaft effizienter und ökonomischer. Nicht zuletzt können Hersteller permanent mit ihren im Einsatz befindlichen Produkten kommunizieren. Dadurch entstehen neue Geschäftsmodelle und neue Möglichkeiten, die Beziehungen zu ihren Kunden zu festigen.

u-blox investiert weiter in eine Vielzahl innovativer neuer Produkte, die das Tempo der Veränderung beschleunigen und Breitband-Konnektivität und Zugang zu grenzenlosem Cloud-Computing für einen weiter wachsenden globalen Markt ermöglichen. Wir sind jedoch nicht nur Vorreiter der technologischen Entwicklung, sondern übernehmen auch eine wichtige Rolle bei der Festlegung von Industriestandards, die den Weg in den kommenden Jahren definieren und abstecken. Mit einer starken Kundenbasis steht unser künftiges Wachstumspotenzial auf einem soliden Fundament.

Für 2016 erwartet u-blox einen Umsatz zwischen CHF 395 Millionenund CHF 405 Millionen bei einem EBIT zwischen CHF 56 Millionen und CHF 60 Millionen. Diese Prognose basiert auf der Annahme, dass keine unvorhergesehenen negativen wirtschaftlichen Entwick-lungen eintreten und die Wechselkurse im Planbereich liegen (USD/CHF: 0.97; EUR/CHF: 1.08; GBP/CHF: 1.42).

Im Namen des Verwaltungsrats und der Geschäftsleitung möchten wir unserer wachsenden Belegschaft hoch qualifizierter Mitarbeiter für ihren Einsatz und ihre ausgezeichnete Leistung 2015 bestens danken. Ein Dank geht auch an unsere Aktionäre für ihre Unter-stützung und ihr Vertrauen in u-blox und unsere geschätzten Kunden, Lieferanten und Fertigungspartner.

Wir freuen uns auf eine Fortsetzung unseres Erfolgs in einem weiteren spannenden Geschäftsjahr.

45.8Bruttogewinn in %

Bruttogewinn 2014: 45.4 – Wachstumsrate: 26.3%

Brief an unsere Aktionäre |

| Focus story: Internet of Things

DEFINING THE ROAD MAP

Pelle is part of a team specializing in short range connectivity in Malmö, Sweden. Liaising closely with u-blox's international sales network, the team defines product roadmaps for short range com-munication technologies for future Internet of Things applications. It is where everything begins. When building the roadmap u-blox addresses the ever changing needs of customers and the markets we operate in.

As Pelle explains: “We add value by building customer software tools into our modules. It allows our customers to add specific functionalities and produce the IoT-compatible devices that are changing every aspect of our lives.”

PELLE SVENSSON

CONNECTIONS THAT COUNTOur world is becoming increasingly interconnected. Machines, medical

apparatuses, vehicles and the devices we wear and carry around with us

rely more and more on chips and modules that connect them with and

establish their position relative to everything else.

In the Internet of Things, everything from washing machines and light

switches to pacemakers and running shoes is smart and connected.

Data that can make our lives better and easier is instantaneously

available wherever it is needed.

u-blox plays a central role in making it happen. To help us consolidate

our position and cement our success, we have a team of dedicated and

talented specialists who are personally involved in developing the

solutions that count and getting them to our customers.

Let’s meet some of them.

Focus story: Internet of Things

Focus story: Internet of Things |

Fleet management Asset tracking Usage-based insurance

INDUSTRIAL MARKETS


CONNECTED CITIES

Payment

5.3L

Metering Precision timing

14:23:55:36:10

T I M E

14:23:55:36:10

T I M E


CONNECTED CITIES

OUR OBJECTIVE IS CLEAR: ENABLE THINGS TO COMMUNICATE WITH EVERYTHING ELSE

Hanna is a senior engineer in u-blox's software department in Malmö, developing short range radio technologies. As the rotating scrum master for her team, she oversees product development and has played a central role in the development of software for the connected city. She says that one of the greatest pleasures of her job is putting together complex input from many different sources to make things work for the customer.

Hanna is part of a team that develops and perfects components like NINA-B1, a short range device that makes cities more intelligent. Installed in streetlights that react automatically to traffic density and lighting up as frequency increases, NINA-B1 transmits a signal that activates the next lamp. As a result, energy costs can be significantly reduced.

HANNA WINBERG

100 m 40 m 80 m 1.2 km 100 m 100m

In-car navigation Automatic assistance accident Stolen vehicle recovery

AUTOMOTIVE MARKETS


CONNECTED VEHICLES

MY TEAM HELPS CAR MANUFACTURERS DELIVER OUTSTANDING CONNECTIVITY

Jasna is a Senior IC Design Engineer, developing multifunctional chipsets for a broad range of applications that target all three u-blox's markets: consumer, industrial and automotive. Her team develops the integrated circuits used in automotive modules that bring multiple functions such as infotainment and telematics to cars.

Jasna is currently working on the powerful TOBY-L3, which is an in-vehicle LTE cellular communications gateway, enabling vehicles to connect to the Internet. TOBY-L3 is a platform for telematics applications such as eCall, diagnostics, concierge services, stolen vehicle tracking and many others.

JASNA MRCARICA

eCall Road pricing Connected car (Entertainment)


CONNECTED VEHICLES

Watches

CONSUMER MARKETS

WearablesToys


CONNECTED CONSUMERS

Child/pet locator Routers/GatewaysGolfing equipment


CONNECTED CONSUMERS

MY JOB IS TO ENSURE MAXIMUM PRECISION IN DEVICES WHERE ACCURACY IS KEY

Alex is a senior manager at headquarters in Thalwil and leads a navigation team specializing in positioning software. One focus project is the development of the high-precision chips and modules used in drones. As drones play an increasingly important role in a vast range of applications, accuracy is set to become a major priority. As Alex points out, customers can rely on u-blox products that have been tested thoroughly and offer unmatched functionality.

One of the products Alex had a hand in is the NEO-M8P. This is a small, affordable and easy-to-integrate navigational product that enables the down-to-the-centimeter precision required in unmanned aerial vehicle applications, such as Infrastructure inspection and mapping, for which drones are the ideal solution.

ALEXANDER SOMIESKI

Financial summary

Revenue breakdownu-blox operates in two segments:

• Positioning and Wireless products u-blox develops and sells chips and modules for positioning and

wireless connectivity that are used in automotive, industrial and consumer applications. Revenue was CHF 338.0 million for 2015 as compared to CHF 269.8 million in 2014.

• Wireless services u-blox also offers Wireless communication technology services in

terms of reference designs and software. In 2015, revenue for Wireless services was CHF 26.1 million compared to CHF 24.1 million in 2014 (including intra-group revenue).

| Financial summary

In 2015 based on billing location, Asia-Pacific generated 48.3%, EMEA 22.9% and Americas 28.8% of total revenue. u-blox was able to grow revenues in all areas. Revenue for Asia Pacific grew by 26.3% to CHF 163.5 million, EMEA grew by 15.3% to CHF 77.4 million and America increased its revenue by 32.6% to CHF 97.4 million.

In 2015, the company made about 80% of its total revenue from65 customers. u-blox's largest customer accounted for less than7% of revenue. u-blox served over 5’200 customers and achieved global expansion into new regions and markets.

(CHF in million) 2015 2014 2013

Revenue 338.3 270.0 219.8

Growth rate over previous year 25.3% 22.9% 27.0%

Gross Profit 155.0 122.7 101.2


Gross Profit in % of revenue 45.8% 45.4% 46.0%

EBITDA 78.7 58.6 46.2


EBITDA in % of revenue 23.3% 21.7% 21.0%

EBIT 51.3 39.1 30.1


EBIT in % of revenue 15.2% 14.5% 13.7%

Net Profit 37.1 34.4 24.6


Net Profit in % of revenue 11.0% 12.7% 11.2%

Cash generated from operating activities 74.7 53.7 38.5


in % of revenue 22.1% 19.9% 17.5%

Equity 248.3 212.9 180.4

in % of total assets 64.2%.. 70.5% 79.7%

Dividend per share 1.90*) 1.600 1.300

*) proposal of the Board of Directors to the AGM

Financial highlights

Consolidated income statement

(in CHF 000s)

For the year ended December 31,

2015 % revenue


2014 % revenue

Revenue 338’341 100.0% 270’045 100.0%

Cost of sales -183’323 -54.2% -147’323 -54.6%

Gross profit 155’018 45.8% 122’722 45.4%

Distribution and marketing expenses -27’659 -8.2% -24’525 -9.1%

Research and development expenses -65’033 -19.2% -49’859 -18.5%

General and administrative expenses -13’509 -4.0% -10’131 -3.8%

Other income 2’474 0.7% 868 0.3%

Operating profit (EBIT) 51’291 15.2% 39’075 14.5%

Finance income 996 0.3% 4’546 1.7%

Finance costs -4’674 -1.4% -658 -0.2%

Profit before income tax (EBT) 47’613 14.1% 42’963 15.9%

Income tax expense -10’515 -3.1% -8’566 -3.2%

Net profit, attributable to owners of the parent 37’098 11.0% 34’397 12.7%

Operating profit (EBIT) 51’291 15.2% 39’075 14.5%

Depreciation and amortization 27’421 8.1% 19’529 7.2%

EBITDA1) 78’712 23.3% 58’604 21.7%

1) Management calculates EBITDA (earnings before interest, taxes, depreciation and amortization) by adding back depreciation and amortization to operating profit (EBIT), in each case determined in accordance with IFRS.

Increased gross profitGross profit increased by 26.3% to CHF 155.0 million in 2015 from CHF 122.7 million in 2014. Gross profit margin was 45.8% for 2015, increasing from 45.4% in 2014 because of the changes in product mix.

Distribution and marketing activitiesDistribution and marketing expenses increased in 2015 due to the expansion of the business. In 2015, distribution and marketing activities were CHF 27.7 million as compared to CHF 24.5 million in the previous year. As a percentage of revenue, distribution and marketing expenses were 8.2% in 2015 compared to 9.1% in 2014.

Financial summary |

Research and product development R&D expenses in 2015 were CHF 65.0 million as compared to CHF49.9 million in 2014. As a percentage of revenue, R&D expenses in 2015 were 19.2% as compared to 18.5% in 2014. The percentage increase is due to an impairment of some capitalized R&D expenses. With the acquisition of the assets of Lesswire, u-blox strengthens its position in the short range, Bluetooth/Wi-Fi based radio communications for automotive applications.

InvestmentsInvestments in property, plant and equipment and intangible assets increased to CHF 43.0 million in 2015 (2014: CHF 33.7 million). As a percentage of sales, the investment ratio remained stable at 12.7% in 2015 (2014: 12.5%).

With the continued expansion of the R&D pipeline and the increase of number of development projects for all product categories, the investments into capitalized development costs increased to CHF 27.0 million (2014: CHF 20.7 million). Additionally CHF 5.9 million (2014: CHF 4.6 million) was invested into intellectual property rights and CHF 1.6 million (2014: CHF 1.4 million) into software. In 2015, CHF 8.4 million of investments were used for property, plant and equipment (2014: CHF 7.0 million).

u-blox invested 76.7% of total investments (2014: 75.3%) into the development of new products and 0.9% of total investments were invested into capacity expansion (2014: 2.1%).

Share based paymentThe share based payment expenses recognized in 2015 were CHF 4.4 million as compared to CHF 3.3 million in 2014.

Growth of operating profit (EBIT)EBIT was CHF 51.3 million in 2015 as compared to CHF 39.1 million in the previous year. The growth rate from 2014 to 2015 was 31.3%. EBIT margin was 15.2% and EBITDA margin was23.3% in 2015.

Finance income and costs Finance income was CHF 1.0 million. Finance costs were CHF4.7 million, mainly due to foreign exchange effects from the EUR/CHF drop at the beginning of the year and costs for the bond issue.

Positive net cash generated from operating activitiesIn 2015, u-blox generated cash from operating activities in the amount of CHF 74.7 million as compared to CHF 53.7 million in2014. A strong growth of 39.1% compared to previous year. Inventory level and trade receivables have increased due to the expansion of the business and due to higher revenue.

Main investing activitiesInvestments in capitalized development costs were CHF 27.0 million as compared to CHF 20.7 million in 2014. CHF 8.4 million was invested in furniture, equipment, tools and test infrastructure for the further expansion of capacity along with approximately CHF 7.6 million in software, intellectual property rights and acquired technology. Financing activitiesu-blox paid in 2015 dividends of CHF 10.7 million and received proceeds from the issuance of ordinary shares connected with the employee share option plan of CHF 5.3 million. To profit from the good market conditions and to secure future operating flexibility u-blox issued on 27 April 2015 a CHF 60.0 million bond with duration of 6 years at an interest rate of 1.625% p.a.

Strong financial position u-blox has a very strong balance sheet with an equity ratio of64.2%. Cash and cash equivalents and marketable securities amounted to CHF 124.0 million at December 31, 2015, compared to CHF 59.4 million at December 31, 2014.

Despite the acquisition of Lesswire assets, goodwill decreased due to changes in EUR/CHF exchange rate from CHF 57.9 million in 2014 to CHF 56.7 million or 14.7% of total assets in 2015.

Due to this strong financial position and the positive outlook, the Board of Directors proposes at the Annual General Meeting to pay out dividends. For this year an increased dividend of CHF 1.90 per share is suggested, which represents a payout ratio of 34.6% of consolidated net profit, attributable to owners of the parent.

| Financial summary

Condensed consolidated statement of cash flows

(in CHF 000s)For the year ended December 31, 2015

For the year ended December 31, 2014

Net cash generated from operating activities 74’659 53’686

Net cash used in investing activities -33’367 -65’400

Net cash generated from/(used in) financing activities 33’776 14’991

Net increase in cash and cash equivalents 75’068 3’277

Cash and cash equivalents at beginning of the year 37’662 33’163

Exchange (losses)/gains on cash and cash equivalents -343 1’222

Cash and cash equivalents at end of year 112’387 37’662

(in CHF 000s) At December 31, 2015 At December 31, 2014

Assets

Current assets

Cash and cash equivalents 112’387 37’662

Marketable securities 11’659 21’730

Trade accounts receivables 43’790 38’842

Other current assets 51’933 54’862

Total current assets 219’769 153’096

Non-current assets

Property, plant and equipment 14’708 14’836

Goodwill 56’716 57’903

Other intangible assets 88’042 70’502

Financial assets 678 584

Deferred tax assets 6’930 4’826

Total non-current assets 167’074 148’651

Total assets 386’843 301’747

Liabilities and equity

Current liabilities 55’405 70’860

Non-current liabilities 83’117 18’011

Total liabilities 138’522 88’871

Shareholders’ equity

Share capital 6’053 5’930

Share premium 84’006 89’531

Retained earnings 158’262 117’415

Total equity, attributable to owners of the parent 248’321 212’876

Total liabilities and equity 386’843 301’747

Condensed consolidated statement of financial position

Financial summary |

u-blox's overarching strategy has proved its worth in the past and remained central in 2015. We aim to supply everything that auto-motive, industrial and consumer companies need to locate and communicate with their products. This we call the WHAT, WHERE and WHEN of the Internet of Things that Really Matter.

Delivering the WHAT, WHERE and WHEN The rapid pace of change in data capture, processing and trans-mission has opened up new avenues in the way the world does business. The ability to connect and use information from widely disparate sources is the essence of the Internet of Things That Really Matter and is set to affect every area of our lives.

New, disruptive business models are appearing, where product manufacturers offer their customers new ways of buying their product or the service that product provides. To do so they need to know WHAT, WHERE and WHEN information about the product; they need to control and manage their product remotely, taking that responsibility from their customer, as they deliver their service. This move from “product” to “service” is happening across all industries. So, u-blox continues to develop and extend a compre-hensive portfolio of cellular and short range modules together with positioning chips and modules compatible with a vast range of applications. With inbuilt quality, reliability and robustness, they offer professional, industrial and automotive companies the solutions they need for business-critical applications in the IoT world.

Adapting to the needs of an exponentially growing marketAccording to analysts, the market for wireless and positioning chips and modules is growing at a rate of around 20% a year. u-blox itself is increasing both its workforce and operational base to accom-modate that growth. As we make acquisitions we invest in those organizations, setting up R&D centers at locations worldwide. In the course of 2015, we sharpened our focus on the development and production of high-quality, high-margin components for the Internet of Things That Really Matter, pinpointing specific areas where we can deploy u-blox's strengths to best advantage. The auto-motive and industrial sectors in particular appreciate the unmatched

quality of our products. These components are also ideally suited to a wide range of consumer applications, such as wearables, which generates additional revenue streams. Moreover, the development of components that can be used in so many applications enables us to increase production figures and profit from economies of scale.

Creating less dependence A marked tendency towards consolidation in the component supply industry has reinforced a crucial element in our strategy. Our aim for the future, then, is to increasingly develop our expertise in the core technologies, thus reducing our reliance on component suppliers and enabling us to take control of our own future. This will inevitably involve substantial long-term investment, but we firmly believe that this is the right approach.

Supporting not competing with customers We know that our customers add considerable value on top of our products; they build systems where we are a component. We intend that this should continue to be the case. u-blox does not intend to develop products or services that take revenue from markets that are better served by our customers, and their customers. This clarity avoids potential conflict and competition with customers, which can be damaging in an industry where partnerships are central to business development.

Strategic partnerships As part of our commitment to our customers and their own customers,we have also worked with some of the industry’s big names.

In communications we have cooperated with Huawei and Vodafone in particular, to drive the creation of new standards for IoT communi-cations within licensed spectrum. Over the years ahead, we expect this approach to be a major benefit for everyone involved.

In the automotive sector we have close R&D relationships with well-known car manufacturers, and their suppliers, as we bring to market positioning components that are essential to the autonomous car and its safe deployment.

FOCUSED ON THEINTERNET OF THINGS THAT REALLY MATTER

Strategy

| Strategy

WHAT? Our customers can move their data

WHERE? from devices at known locations

WHEN? knowing exactly the time when the data was captured

U-BLOX: u-blox products move data from cars, trucks, point-of-sale terminals, medical equipment, sensors etc., into the wireless Internet so customers can gather and analyze their data.

LOREM IPSUMSIBI HABENT

5.3L

100 m 40 m 80 m 1.2 km 100 m 100m

AMBULANCE

Strategy |

Strategy

In 2015, we maintained the strategic thrust outlined in previous annual reports and recorded another year of important milestones in both wireless communications and positioning technologies.We also expanded existing product lines, finalized an acquisition

and strategic partnerships, and improved our operational excellence.Overall, the year was an encouraging and successful mix of innovation, groundbreaking products, market leadership and solid financial growth.

Market position

Technologyand innovation

Operational excellence

Strategic partnerships and acquisition opportunities

1

2

3

4

| Strategy

Goals

• Ongoing consolidation of our position in the automotive sector

• Address high-value markets in the IoTTRM* while ensuring that our components deliver outstanding performance in high-volume consumer applications

Goals

• Maintain our benchmark-setting quality standards as we scale operations up to produce 100 million units p.a.

• Continue to implement EFQM** standards across the company

Achievements 2015

• Defined a significantly clearer vision of the IoTTRM

• Extended our reach to the maker community with a variety of initiatives to help start-ups and small operations use our products in innovative ways, often through crowd funding

Achievements 2015

• Expanded our workforce by 125 in 25 locations worldwide. New offices in Berlin, Chongqing, Tampere and Osaka

• Completed integration of manufacture of all short range modules with our manufacturing partner Flextronics. Followed on with second year of EFQM** program implementation

Outlook 2016

• Put our enlarged sales force to work to focus on specific market sectors and accelerate growth in specific markets

• Improve navigation technology and automotive quality products to consolidate our leading position in global automotive markets

Outlook 2016

• Adoption of lean processes for the management of innovation and creativity (new products)

• Cost-effective ways of developing hardware and software compatible with international functional safety standards (ISO 26262)

Goals

• Cooperation with customers using two or more u-blox products

• Continue to improve Bluetooth- and Wi-Fi-based short range wireless communications, embedded high-speed 4G/LTE wireless connectivity and industry-leading GNSS precision timing products

Achievements 2015

• Gateway product that gives customers embedded programming

• Small, easy-to-use, low-power, high-performance module with built-in antenna for easy integration in GPS and GLONASS, and suitable for positioning in wearables

• Cost-effective, 4G-compatible cellular module designed for IoT applications

Outlook 2016

• Enable customers to integrate their own IP and software in our modules

• Add value and performance by allowing customers to use several u-blox components side by side

• Adding new features with outstanding performance

Goals

• Establish further partnerships with cellular operators, infrastructure specialists and cloud service providers operating in our ecosystem

• Evaluate potential acquisition targets that will help us to strengthen our core business

* IoTTRM: Internet of Things That Really Matter

**EFQM: European Foundation for Quality Management

Achievements 2015

• Acquisition of Lesswire provided access to short range automotive communications technology

• Joined CAR 2 CAR Communications Consortium which exists to improve V2V and V2I communications and harmonize standards

• Acquired rights to manufacture and supply Cohda Wireless V2X modules for V2V communications

Outlook 2016

• Establish partnerships with companies offering services that augment performance and add value to our components

• Review acquisition opportunities through which we can acquire technologies that broaden our existing portfolio

Strategy |

Products

DriversThanks to the Internet of Things, we stand at a crossroads in the way the world does business. Modules providing wireless communication in devices from photocopiers to coffee machines are transforming the devices we use in our everyday lives from mere products into ser-vices. And it is a win-win situation. For consumers, the changeover from product to service industries will mean greater convenience, positioning and recurring, predictable costs. For manufacturers, it means regular income streams rather than one-off purchases.

u-blox has developed a product portfolio geared specifically to the needs of the Internet of Things, but has another, greater objective: the company is committed to making products easier to integrate and use, both for its own customers and the end-consumer. These factors, together with u-blox's aspiration to be the automotive sector’s leading supplier, mean the company is poised for even greater success and increasing profitability well into the future.

Achievements 2015u-blox has a wide-ranging portfolio of customer-friendly, high-quality products that meet any conceivable need. The portfolio embraces three core technologies – cellular, short range and positioning.

u-blox combines smart, modular design with simple adaptability. This results in flexible components, such as the antenna-equipped CAM-M8C GNSS positioning module, which can be adopted for virtually any application, regardless of the customer’s own techni-cal expertise. Combined with our field engineering and a simple website, they come packed with simple-to-use features and can be adapted to the needs of a customer base totalling around 5200.

In 2015 u-blox launched nine stand-out products: four cellular, four short range and one positioning. We also ramped up production of u-blox M8, a new GPS/GLONASS receiver platform for low-power devices.

| Products

Future focusLooking forward, one of the most exciting prospects is the advent of the autonomous car, a development that will be fuelled by four discrete factors:• High precision for positioning technology. This will have simple,

practical benefits, such as being able to locate any device with the utmost precision, but is also a crucial stage in the process of developing the fully automated car.

• A broader range of products for addressing the specific needs of certain applications or simplifying their installation. Modules comprising sensors or specific platforms embedded in a new chip set u-blox's product offer apart from the competition.

• Major progress on the short range communication front. u-blox has purchased a license that will expedite realization of vehicle-to-vehicle (V2V) communication and is working steadily on the improvement of vehicle-to-infrastructure (V2I) systems. These components will help to reduce the number of accidents and save lives.

• Ultra low-cost cellular communications for the Internet of Things. This will make the entire concept more effective and applicable in many more use cases. u-blox is continuously working to ensure that in-vehicle electronics are safe against hacking and unwanted influence from outside.

Quality and product gradesu-blox's reputation stands on the foundation of its top-quality products. To guarantee that quality, u-blox has a simple, zero-defect policy. Effectively, it means that nothing is left to chance. We test every single module for its entire functionality. It inevitably costs more money, but guarantees top quality. Quality is integral to the u-blox philosophy: it is simply part of the genetic make-up of every single module we make.

The versatile, stand-alone ODIN-W262 module features an integrated antenna and is designed specifically for IoT applications that need ad-vanced multi-radio capabilities. It interlinks with all Wi-Fi and Bluetooth standards. The acquisition of Berlin-based Lesswire’s operations at the beginning of the year also extended u-blox's product range to include multi-mode automotive modules.

TOBY-L280 is the fastest 4G module in an ultra-small package and works in specific regions because it supports frequency band 28. Band 28 is used commercially in Taiwan, Australia and New Zealand, and u-blox has further rollouts planned throughout Asia Pacific, Brazil and Argentina.

TOBY-L201 is the world’s first 4G Cat 4 module with 3G WCDMA fall-back and is massively important for the US market. It supports multiple carriers, which translates into its key selling point: seamless geographic coverage. In terms of performance, cost and footprint, it outperforms similar devices on the market and is ideal for a wide spectrum of ap-plications ranging from infotainment and mobile terminals to remote security and video systems.

u-blox continues to supply design support in wireless applications and customized features for a select clientele. Our software team develops protocol-stack and test solutions, control of which is crucial to u-blox's 4G-technology development and ability to set itself apart from the competition.

The CAM-M8C offers simultaneous GNSS operation for GPS/GLONASS, GPS/BeiDou or GLONASS/BeiDou and is thus able to pick up more satellites, even with restricted sky visibility. It delivers precise, jamming-resistant and reliable positioning anywhere in the world, and is ideal forurban situations with high-rise buildings. u-blox caters to a growing trendin the markets for positioning modules designed for base stations, for example, which not only pinpoint locations but also provide atomic time.

TOBY-R2 and LARA-R2 modules are two low-data-rate products with 4G technology. Designed for M2M and industrial/automotive applica-tions, they have been optimized to replace the 2G system and require significantly less power.

ODIN-W262

TOBY-L280

TOBY-L201

Wireless services

CAM-M8C

TOBY-R2 / LARA-R2

FEB

APR

AUG SEP

APR

ELLA-W1 and EMMY-W1 are automotive grade for multi-radio standards, able to handle Wi-Fi, Bluetooth and NFC in automotive environments.

ELLA-W1 / EMMY-W1

FEB

Products |

THEO-P1 is a compact, automotive grade module that communicates between in-vehicle equipment and roadside infrastructure. Superior performance enables it to work with vehicles at speeds up to 250 km/h within a 1000-meter range and makes it ideal for V2X trials and early deployments.

THEO-P1

OCT

Innovation

A well-structured approach to innovation managementWhen it comes to innovation and product development, u-blox leaves nothing to chance and actively promotes the process. Meet-ings twice a year bring our R&D specialists, senior salespeople and product managers to corporate headquarters in Thalwil where they discuss progress made, identify and define market demand, and draw up roadmaps for future innovation and development.

There are three defined sides to the product development processat u-blox: time-to-market, functionality improvement and cost optimization. In the case of new products, the main focus is on time to market: meeting the carefully thought out specifications and getting the product out into the marketplace as quickly as possible.Once a product has been launched, the emphasis switches to improving its functionality or lowering the cost, or both. TOBY-L280 (see Products, p. 31), for instance, now has enhanced functional-ity in the form of Band 28 compatibility, while other components feature multi-carrier capability. Other examples of the same thinking

u-blox maintains a process of continuous development for all chips and modules in

the product range and for all three markets, adapting components to changing

needs. R&D specialists from u-blox subsidiaries all over the world regularly meet in

Thalwil to sustain process and draw up roadmaps for future products.

are positioning modules whose size and cost have been significantly reduced.

Another area that calls for a significant level of innovative thinking is the wearables and wrist-based market. Having pinpointed a ris-ing trend in the West and the Far East toward health/fitness moni-toring modules, personal tracking devices and running watches, u-blox has developed complex algorithms that combine extremely intricate electronics and GNSS functionality with one of the most pressing demands of such items: ultra-low power consumption. The company’s foresight in this area led to a significant increase in revenues in 2015. Laying the foundations for innovations of the futureu-blox's forward-looking innovation policy is well supported by the fact that the past year saw an increase in the (FTE-based) R&D engineering team, bringing it from 428 to 509. This was due to intensive recruiting and the addition of new R&D centers in Berlin

Having pinpointed a rising trend in the West and the Far East toward health/fitness monitoring modules, personal trackingdevices and running watches, u-blox has developed complex algorithms that combine extremely intricate electronics and GNSS functionality with one of the most pressing demands of such items: ultra-low power consumption.

Wearables and wrist-based innovation

| Innovation

and Tampere. Expenses on R&D in 2015 accounted for 19.2% of revenues. The growth process is ongoing, and we continue to recruit R&D talent for our locations in twelve different countries.

All things to all playersIn its attitude to innovation, u-blox maintains a high degree of flexibility, adapting to changing market needs and demands. For all that, it never loses sight of a crucial factor in its success: the maximization of market coverage using the same products. In practice, this may mean integrating identical modules in positioning-based and wireless products as varied as drones and fitness trackers. Apart from saving enormous amounts in R&D, it boosts the company’s efficiency, cost-effectiveness and, ultimately, its profitability.

Innovation and the Internet of Thingsu-blox is also a major player in the cellular market, where there is a lot of reliance on the establishment of standards and thus compa-tibility between different devices from different manufacturers. Two years ago, recognizing the need for a universal standard aimed

directly at the Internet of Things, u-blox joined with Huawei and Vodafone. Over the past year, this has led to Huawei making the base stations, Vodafone assuming the role of operator and u-blox providing the modules. It seems very likely that this collaboration will result in the adoption of “Narrowband IoT (NB-IoT)”, as it is known in the industry, as a fully-fledged new standard in 2016.

The Internet of Things links countless devices to central data computers. This inevitably creates lots of ways that systems can be hacked or attached from a security perspective. u-blox has an over-arching security philosophy to help customers secure their systems against malicious acts: ensure that only our software runs on our hardware; keep our test systems confidential and secure; encrypt the data as it is transferred; use smart techniques to spot spoofing and jamming of our products; and provide a means that allows the customer to program our products without impacting the software that we provide.

of revenue spent on research & development

new research & development centers

R&D engineers

research & development centers

19.2%

2

509

14

Innovation |

Markets

There was no significant shift in any of our three strategic markets in 2015, with

Industrial remaining the largest focus. However, the growing demand for the

Internet of Things-related devices drove the development, design and manufacture

of products that enable customers in all three areas to meet market needs, and

resulted in a 25% increase in revenues.

To better reflect our growing range of products we have redefined how items are categorized as: Industrial, Consumer or Automotive. More specifically, only products that are factory fitted by the car manufacturer are classified as automotive. This means that the distribution calculated and shown is not comparable with those in previous annual reports; we have therefore provided both the 2015 and 2014 sales distribution to enable year-on-year comparison.

Automotive Industrial

Consumer

| Markets

Comparable

20142015

Automotive

Consumer

Industrial

Industrial markets

With increasing demand for more wide-spread connectivity across the entire Industrial market, certain applications retained their prominent positions in 2015 while other new areas established themselves in the hierarchy of importance.

• Tracking using a combination of GNSS and cellular products remained the company’s number one market segment. Uses include fleet management, vehicle recovery, and asset tracking.

• Usage-based insurance (UBI) for cars and other vehicles has expanded rapidly in recent years and established itself as a significant market for our GNSS and cellular products.

• Timing solutions that deliver nanosecond precise synchronization of communication networks were in strong demand due to the on-going expansion for networks capacities for the Internet of Things.

• Point-of sale terminals and vending applications using embedded Bluetooth, Wi-Fi and cellular modules continued to grow in importance.

Automotive markets Automotive sales grew faster than the market in 2015.

• Factory-fitted GNSS receivers continued to account for the majority of automotive revenue. Navigation is the prime

application and is increasingly a standard feature on new cars. Here u-blox is a major player and we plan to maintain and consolidate our strong position.

• The connected car is moving into the mainstream. We continued to make a whole array of important applications available to drivers from emergency call through to infotainment and Wi-Fi hotspots.

• The move towards more automated driving and, ultimately, the autonomous car continues relentlessly, despite the fact that the necessary legal framework is lagging behind. In particular, we see customers now demanding lane-level accuracy as sensing systems combine to enable cars to understand and interact with their current location and, where necessary, take appropriate action to maintain safety.

• The benefits of car-to-car communica-tion, referred to as V2V, continue to be appreciated through extensive trials for which u-blox provides leading edge technology.

• The European Union’s decision to make e-Call services mandatory in any new car sold within the EU from 2018 generated lots of traction for GNSS and cellular products, which provide this functionality.

Consumer markets

Embedded in a wide range of device including: sports watches, notebooks, personal trackers and recreational devices, our GNSS and cellular modems and wireless solutions do far more than guide users to their destinations. Although the consumer market accounts for the smallest part of total revenues, there was some notable progress in 2015.

• There was a marked rise in the number of devices used for locating children and pets, particularly in the Asian region.• Drones, or unmanned autonomous vehicles (UAVs), are finding increasing use in many areas including consumer

applications such as aerial photography. This is a new and exciting market for u-blox that made significant strides in 2015 and which we expect to see grow in the coming years, assuming sympathetic legislation is developed alongside the applications.

• Wearables, including watches quantifying sports performance remained a buoyant and fruitful market. Wearable technology is at the forefront of product innovation in mobile computing. Shipments of wearable devices are forecast to rise from 19 million units in 2014 to almost 112 million units in 2018, according to research from IDC*.

Markets |

Customers

In 2015, u-blox reported growth in all markets and now has an expanding

customer base in more than 66 countries worldwide. Our diversity is reflected in

the fact 65 customers in 24 countries accounted for 80% of total revenues, with

no single customer responsible for more than 7% of total sales.

CUSTOMERS WORLDWIDE

5200

OFFICESWORDLWIDE

25

RESEARCH AND DEVELOPMENT

CENTERS

14

U-BLOX SERVES CUSTOMERS OUT OF 25 LOCATIONS WORLDWIDE.

| Customers

One of the reasons for u-blox's on-going success is our approach

to the market combined with a structured product portfolio

and the ability to address the needs of a broad range of

customers. We achieve this by focusing on five distinct areas.

4

Clearly defined role

u-blox takes a strictly defined role in its customers’ value chains: we do not compete with our customers; and we lay no claim to being systems integrators. Our aim is to add value by supplying the components that enable our customers to build systems of their own and in turn develop strong relationships with their own clients. In 2015, we took steps to extend our ecosystem to include several more major partners.

Manufacturing concept

Whether a customer decides to buy a chip or module will depend largely on volume and scalability. Customers who require a relatively small number of components will usually opt for modules while those foreseeing much larger volumes will go for chips. u-blox has the flexibility to accommodate both. Our infrastructure includes a multi-continent fabless manufacturing chain that includes chips made in Asia, modules made in Europe, along with stock points in America, Europe, and Asia to enable fast response to orders. In 2015, to boost quality, u-blox moved short range manufacture, including all products from acquisitions made in 2014, to our manufacturing partner in Austria.

Customer satisfaction

A three-tier support concept delivered by our R&D teams and field application engineers takes our customers from conceptual design and development through to evaluation, blueprint design and working prototypes. We package our products so that they are easy to use. And, finally, we have many years of experience in the same markets in which our customers operate.

Quality

Quality is at the heart of everything u-blox does, and we offer products in three distinct grades: Standard (for consumer product applications), Professional (for industrial and professional applications) and Automotive (for equipment used in harsh environmental conditions). The factor that sets us apart from the competition, however, is our adherence to a quality assurance program that covers every aspect of R&D, module and IC manufacturing, testing and even the supply chain.

Customers |

Technological expertise

u-blox has established a firm place at the forefront of R&D in its industry and offers products geared to the needs and expectation of companies of all sizes. Our products enable our customers to manufacture hybrid solutions that uniquely combine positioning and communication functionality. Among the company’s most recent achievements is untethered dead reckoning, which does away with the need for a connec-tion to the car's systems and sensors, and thus combines excellent positioning with extremely simple operation. We are also taking a leading role in the Narrowband IoT field and in 2015 continued to promotenew standards for cellular products, including in one of our key sectors, automotive communications.

NEW OFFICES IN FINLAND, GERMANY,

JAPAN ANDCHINA

Shawn Aleman, Managing Partner and co-founder of Xirgo in 2005, sums up the biggest challenge that faces any company in his industry in one word: customization. “We might have two customers in the same business, but the chances are that they will want two totally different solutions and different functions. Our job is to design a product using the chips and modules available that will answer all their needs.” Doing it successfully means being nimble enough to adapt to changing market conditions and supplying the kind of quality that keeps customers coming back. And one of the suppliers helping Xirgo to achieve its ambitious targets is u-blox.

Xirgo is a hardware design and manufacturing company with a clear focus on IoT customized products for different vertical markets, different applications and different technologies. Its expertise lies in its ability to develop and manufacture devices that can be remotely attached to assets such as cars, trucks and containers, and ocean-going vessels. The information gathered can then be sent wirelessly to computers anywhere in the world. Applications cover the entire spectrum from vehicle telematics and transportation (mainly dry and refrigerated containers and trailers) to usage-based insurance (UBI), and involve a full range of products that includes positioning, short range and cellular.

u-blox solutions are used for various applications: In the transpor-tation industry, Xirgo uses a u-blox global 3G module for the tracking, monitoring and control of containers for one of the world’slargest container shipping companies. In doing so, it worked closely to support AT&T’s deployment of a global 3G enabled service incorporating a device that can track, monitor and control various functions of refrigerated containers. For a large global transpor-tation company, Xirgo used u-blox LTE and GPS modules in the design of a custom energy harvesting device to monitor the move-ment and precise location of trailers without a need for an external power source. And for some years, Xirgo has supplied Progressive Insurance, one of the largest providers of car insurance in the US,

with a device that plugs into a vehicle’s existing OBD port and keeps a precise track of driving habits, including speed and distance travelled. The technology allows Progressive to offer personalized insurance rates to customers who enroll in their usage based insurance.

Xirgo’s customers demand speed, adaptability and quality, and that means the company has to rely on components suppliers who can deliver under the same pressures. “One of the reasons we work with u-blox is that they can meet our expectations regarding turnaround and supply us with products that are either already customized or easy to adapt to a particular customer’s needs,” explains Shawn Aleman. “Ultimately, u-blox meets all our selection criteria and supplies us with technology that meets all our expectations. They’re easy to work with, get things done and come up with top-quality products that are suitable for different verticals. We’re more than satisfied.”

Xirgo Technologies, Inc. in Camarillo, California, is a leading provider of innovative,

application-specific products for machine-to-machine vertical markets. Its solutions

are used in a range of devices designed for automotive applications, mobile

monitoring and control, fleet management, and container and trailer tracking. Xirgo

works closely with some of the biggest names in their respective markets to create

significant time-to-market advantages, enabling its customers and partners to realize

powerful and highly differentiated solutions for their own customers and markets.

High-performance solutions for client specific needs

| Customer story

Customer story

Progressive's dongle "Snapshot"

Customer story |

Xirgo has supplied Progressive Insurance, one of the largest providers of car insurance in the US, with a device that plugs into a vehicle’s existing OBD port and keeps a precise track of driving habits, including speed and distance travelled. The technology allows Progressive to offer personalized insurance rates to customers who enroll in their usage based insurance.

u-blox solutions are used for various applications

u-blox continues to expand at an exponential rate, and our ambitious growth plans demand all we can give. In this scenario, it is essential that we hold fundamental principles that determine how we act and do business. We have identified five core values that define responsible and ethical corporate behaviour.

Customer focusAll our activities must bring value to and earn the trust of our customers. By building positive partnerships, cooperating closely, and listening carefully, we aim to exceed our customers’ expectations.

PassionPassion is the lifeblood of our company. We are continuously moving forward and seeking ways to improve our products and services, either by ourselves or through partners and acquisitions.

All round reliabilityThe way we do things is precise. From initial contact, through design in, and on to prototypes and production, our customers can depend on us for technical and logistical support and excellence every step of the way.

Unmatched qualityOnly by conforming to the industry’s most demanding quality standards can we maintain the trust we have built with our customers.

Ethical standardsWe commit to conduct ourselves in an ethical manner and act as a good corporate citizen in all environments in which our company operates. We listen to others, work together to achieve shared goals, treat each other with respect and dignity, and maintain high ethical standards.

u-blox pursues a single brand strategy formulated to strengthen our leading market position and set us apart from the competition. We project a consistent image that fosters brand recognition worldwide. Our brand is also our pledge to provide our customers with innovative, versatile, high-quality solutions tailored precisely to their needs.

In 2015, we continued to build brand awareness among others by maintaining our presence at international trade shows. It was also the year that saw the introduction of an entirely overhauled, new-look website with substantially enhanced user-friendly navigation. The site was designed to meet all existing and potential customers’ and stakeholders’ needs and to make it easier for them find the products they are looking for.

Our brand is protected worldwide by copyrights and trademarks, and we leave no stone unturned in our efforts to prevent its abuse. We continuously strengthen our brand’s presence with richer content and dynamic visuals, and by placing it in an ever-wider range of media.

Everything we do is underpinned by our corporate values and they are reflected in

the day-to-day behavior of our company. They are crucial to sustainable growth

and provide our entire workforce with guidelines showing how they can help the

company achieve its goals. These values are not just words on paper: they are part

of our DNA.

Our values and brand

Our values Global brand recognition

Brand protection

| Our values and brand

Our values and brand |

New website: www.u-blox.com

u-blox Online-Shop: shop-emea.u-blox.com/en/eur/homeu-blox Forum: forum.u-blox.com

Quick product summaries and PDFs with more dataDirect access to investor information

Risk management

Assessing and controlling risk is crucial to sustainable business success.

u-blox employs strategies that effectively mitigate risk and prevent losses.

RISKS RISK MITIGATION

Markets and customersEconomic and market-trend uncertainties could impact our business and customer demand. This may lead to lower volumes

and decreased profitability.

• Customer diversification: No single customer accounts for more than 7% of u-blox's turnover.• Continual expansion of the customer base. • Continuous monitoring and assessment of market developments and needs.• Expansion with a third technology category (Short range radio).

CompetitionOur markets are highly competitive in terms of pricing, product features and

service quality. In many sectors we face price pressures that could negatively

impact our results.

• Review and replan R&D activities every 6 months.• Foster a high level of innovation.• Maintain high technical support capabilities globally.• Product range well structured to provide customers with solutions tailored to their needs.

IPCompetitors or other parties in our

industry may seek to yield benefits from our technical innovations by duplicating

our products.

• Maintain a high level of trade secrecy.• Protect our current business and IP from being copied or used by others. by appropriate use of patents, copyrights and trade secrets on a global basis.• Accelerate the innovation rate.• Manage third party licenses.

Product quality Poor product quality may result in

reputational and brand damage, resulting in lower volumes and financial claims.

• Continual expansion of the quality management system and laboratory capabilities.• Thorough testing and qualification at our own laboratory facilities.• Maintain high technical support level globally.

Innovationu-blox's competitive position, sales and

earnings depend significantly on the development of new products and

technologies. Failure to achieve our aggressive R&D and innovation goals could

negatively impact our ability to grow.

• Continual stream of new products launched yearly with targeted features to several markets.• Invested CHF 65.0 million, or 19.2% of revenues in R&D in 2015.• Expand range in key technologies, acquired short range radio know-how.

| Risk management

RISKS RISK MITIGATION

Personnel Skilled and dedicated employees are

essential for the success of our growth-oriented corporate strategy. The loss of

these individuals could disrupt the company’s operations.

• Globally positioning the company as an attractive employer. • Develop and increase management talent pipeline. • Regular employee satisfaction survey.• Maintain attractive employment conditions and compensation packages plus a stock option plan.• Offer career path opportunities group wide.

Suppliers u-blox outsources its capital-intensive

production to leading productionsuppliers around the world. Rising raw material prices, capacity constraints or

business interruption could lead toa shortage of supply with negative

consequences for our business.

• Lean supply base with few key suppliers.• Long-term relationships with suppliers and close interaction to plan and manage capacity.• Inventory buffers to respond to unplanned demand fluctuations.

Compliance Non-compliant or unethical behavior

could lead to reputational damage,fines and liability claims.

• Active fostering of high ethical standards and membership in the UN Global Compact• u-blox Code of Conduct.• Anti-bribery policy.• Speak-up culture, formal compliance process and sanctions.• Sustainable supplier program containing regular risk assessments and inspections of production suppliers’ operations.

Currency fluctuationsThe majority of u-blox's revenue,material costs and R&D expenses

are in US dollar currency.

• Foster natural hedging by matching revenue currency amounts with expense currency amounts.

LiquidityFailure in liquidity management may have

a negative effect on u-blox's financial performance.

• Monitor our liquidity on a quarterly basis.• Successfully raised CH 60.0 million fixed rate bond to increase u-blox's financial flexibility. • Cash flow program to optimize liquidity and cash flow management. • Efficient use of available cash through cash pooling.

Credit Credit risks arising from financial

institutions and from customers could have a negative impact on u-blox's financial

performance.

• Individual risk assessment of customers and definition of appropriate credit lines.• Insurance for all customer credit lines.• Frequent and thorough follow-up on late payments.

Risk management |

Strict compliance with ethical principlesWe communicate openly with internal and external stakeholders, informing them of our commitment to moral and ethical principles in every aspect and at every level of our business. We support the policies and principles set out by the UN Global Compact, which unites us with other companies prepared to align their operations and strategies with universally accepted principles on human rights, labor, the environment and corruption. We report yearly on progressmade in implementing the ten principles. The Communication on Progress (COP) can be viewed at www.unglobalcompact.com.

Overarching Code of Conduct Our employees come from widely differing backgrounds. Such diversity makes the importance of a set of common values even more important. Our Code of Conduct is based on the UN Global Compact and, together with other related information, can be found on the corporate intranet in seven languages. It clearly defines the standards, business ethics and behavior we expect of our employees and others acting on our behalf. In 2015, we initiated an e-learning course on our Code of Conduct and Anti-bribery Guidelines, which employees are obliged to take every year.

Anti-corruptionThe anti-bribery guidelines are a vital component in our efforts to stamp out corruption in any form. The international nature of our operations inevitably means that we are present in certain countries where corruption is rife, so it is vital that we provide our people with clear, objective instructions on how to deal with corruption should they be confronted with it. In 2015 u-blox was not affected by investigations or legal procedures relating to corruption or human rights.

Insider tradingu-blox has implemented a policy for all employees prohibiting thetrade with u-blox shares in case of insider knowledge of factswhich could have an impact on the share price if they werepublicly known. Under the policy, employees are prohibited fromtrading with u-blox shares in case of insider know-how.

Political organizations No political parties enjoy funding or subsidies from u-blox.

Strict confidentiality and data protectionAs part of its compliance with all relevant data protection legislation, u-blox makes every effort to ensure that its employees’ personal data is treated in the strictest confidence.

When it comes to the implementation of strategy, policy and every other aspect of our

operations, one factor is at the heart of everything we do: corporate social responsibility.

Sustainability

1 Business ethics

The keyword in u-blox's recruitment policy is diversity. We can maintain our strong position only by employing the very best people at locations all over the world. At the end of 2015, we had 750 employees, 25.2% of them at Thalwil headquarters in Switzerland. The remaining 74.8% were employed at 14 R&D centers and 15 sales and marketing offices around the globe. Our expanding market activities necessitated an increase in the number of employees from 117 to 140 FTEs in sales, marketing and support. R&D saw numbers grow from 428 to 509, while Logistics and Administration FTEs increased from 69 to 87.

u-blox: creating a place people want to workOur ambitious growth and development plans call for the best people. u-blox is prepared to find and, more importantly, to retain them. We have a vested interest in fostering a culture that encourages employees to develop their professional and leadership skills. We have an annual appraisal process that helps our employees define and stay on track towards their personal goals, and our policy of filling vacant management posts with our own people opens up attractive promotion prospects. Last year, our salaries and social benefits spend amounted to CHF 59.0 million (compared with CHF 48.0 million in 2014).

Despite a fair and non-discriminatory employment policy, u-blox's workforce at the end of 2015 comprised 13.7% women (2014: 14.6%). There are no women in Executive Management and the Board of Directors comprises one woman and six men. The main reason for the discrepancy lies in the predominance within the company of engineering positions, for which only a relatively small pool of women is suitably qualified. Recruitment potential is thus limited. In non-product functions like logistics, administration, HR, etc, the ratio of women exceeds 70%. We support various activities to attract women to engineering education at high school level.

We gather feedback on employee satisfaction through annual performance review meetings. Performance and compensation are assessed using both Group and individual targets. Every other year, we also conduct a detailed employee satisfaction survey. The next one is scheduled for 2016.

u-blox has a set of guidelines relating to compensation and promotion that are based on clearly defined individual and corporate goals. Assessments of employee performance are carried out once a year. u-blox's reputation as an attractive employer is well known and the company is regularly cited as one of Switzerland’s top 100 employers. Staff turnover in 2015 stood at 8.7% (2014 8.6%).

Life and work: getting the balance rightThe quality of our employees’ lives is all-important to their well-being. We actively strive to achieve this balance by offering flexible working hours and specially tailored work/ pay/ vacation programs. Our people are also entitled to a sabbatical after five years’ employment with the company. Interactive, real-time internal communications are accessible to employees worldwide and the workforce receives regular updates on the state of the company.

2 Employees

Employees per region (end of 2015, FTE based)

APAC20% (148)

Switzerland25% (185)

Sales, marketing, support19% (140)

Research &development69% (509)

Rest of EMEA48% (350)

Logistics, admin12% (87)

Americas7% (53)

Employees per function (end of 2015, FTE based)

Performance indicators 2014 2015

Total headcount (end of the year) 625 750

Jobs created 80 126

Women in overall workforce 14.6% 13.7%

Part-time employees 7.2% 7.3%

Fluctuation 8.9% 8.7%

Sustainability |

| Sustainability -

u-blox has a presence in many countries around the globe. One of our main concerns is to demonstrate our commitment to the regions where we have commercial interests by giving something back. We harness the human, financial and technical resources at our disposal to make significant, tangible changes that makes communities stronger and less dependent. As in previous years, we have continued to support health and educational programs, but in 2015 extended our range to support employees who are involved in charity work as a means of eliminating some of the problems facing the people in the communities to which they belong.

Doing our best to ease the refugee crisisIn a concrete push to support the Slovenian Red Cross in its efforts to handle the thousands of refugees straining its resources, u-blox's office in Italy organized a donation and clothing collection. With winter approaching, refugees were in dire need of suitable garments to keep out the cold. Our colleagues quickly collected funds and used clothing, and participated at a second-hand winter market.

An employee summer event with a difference In 2015, u-blox's team in Greece organized their annual summer event at the community home run by the Smile of the Child welfare organization. As their way of contributing, our people in Greece donated the money they had saved for their summer event, contributed money out of their own pockets and gave personal gifts, mainly books, to the children.

3 Community

A busy October for San Diegou-blox employees in San Diego were involved in two separate volunteer and corporate events to help local people. One group teamed up with Ronald McDonald House Charities to provide a home-cooked meal for more than 150 seriously ill children and their family members. A few days later, employees represented the company in the 2015 Bike the Coast century ride (100 miles, to be precise) that took them along Highway 101 from Oceanside to Del Mar.

A global effort for children at ChristmasUnlike their more fortunate counterparts, thousands of financially disadvantaged children and orphans worldwide do not receive gifts at Christmas. To alleviate the problem, u-blox ran a global campaign embracing Italy, Greece, Singapore, Korea, Sweden, Pakistan and Switzerland that encouraged employees to donate Christmas presents such as toys, games and food for distribution to children in need. Site managers gave employees precise information about local projects, specifying the organization(s) receiving assistance and the kind of gifts that could be donated. Thanks to our people, scores of children around the world got a surprise visit from Santa Claus for Christmas 2015.

Donating presents to children in need in Pakistan Employee summer event in Greece

| Sustainability

Sustainability | Page 53Sustainability - employees | Page 57

Ensuring the safety of the supply chainSince initiating its Sustainable Supplier Program in 2012, u-blox has spared no effort to maximize the safety of working conditions in the supply chain, ensure that workers worldwide are treated with respect and consideration, and minimize the impact of its operationson the environment. u-blox's in-house program is based on the Electronic Industry Citizenship Coalition (EICC) Code of Conduct, which applies to labor and human rights, health and safety, environmental factors, ethics and management systems. The sustainable auditing of our supply chain is done internally. Each yearwe inspect a subset of chosen suppliers’ factories. In 2015 we defined improvement actions together with suppliers. No evidence was found that made a formal audit necessary.

Taking responsibility for the world we live inAs part of its efforts to ensure effective control of our environment and sustainability objectives, u-blox works closely with key contract manufacturers and suppliers to tighten up and improve an already impressive set of measures. We expect the same exacting sustainability standards from all our suppliers as we impose on ourselves. Over the years, we have closely supervised potentially harmful materials used at all stages of the manufacturing cycle. Conflict minerals from any source are absolutely prohibited. We liaise closely with our partners to identify the provenance of all the metals used in our products and to ensure that tantalum, tin, tungsten and gold come from acceptable sources.

As a fabless semiconductor company, we insist that all our key manufacturing partners comply fully with legal, industrial and customer-specific environmental requirements. Ensuring that these standards are met and maintained is a complex and laborious process. We therefore make ongoing efforts to improve the collection and storage of all essential data while monitoring compliance.

Carbon dioxide emissions Our contribution to reducing CO2 emission starts at headquarters in Thalwil and manifests itself the entire way along the value-added chain and in our products. In Switzerland, we cover the cost of our employees’ journeys to and from work by public transport, thus discouraging the use of their own vehicles. We have taken further steps to reduce our CO2 footprint by introducing a video-conferencing system at all our major offices worldwide, thus reducing the need for employees to travel to meetings. And we have a manufacturing model that lowers our own CO2 output by outsourcing production to third-party manufacturing partners with ISO 14001 certification. In compliance with our strict environmental requirements, they too have their own CO2-reduction programs in place.

Finally, the actual products we make can lead to a significant reduction in CO2 emissions. Sensors used in vending machines, for example, eliminate unnecessary journeys to replenish stocks. In cars and trucks, they cut fuel use and emissions by calculating the shortest and quickest routes from A to B. Used by utility companies,they remove the need for visits to read meters. Sensor-activated street lighting systems massively cut the power bill for municipalities.Every day, new ways of using our products contribute to this global effort.

4 5Supply chain responsibility Environment

Sustainability |

Jan

Feb

Mar

Apr

M

ay Jun Ju

lAug Se

pOct

Nov Dec

Share price performanceThe share price increased by approximately 53% during this year going from CHF 140.60 to CHF 214.50.

At December 31, 2015, u-blox had 4'130 shareholders. Information on our major shareholders can be found in the Corporate Governance section of the Financial Report.

DividendIn light of the positive future business outlook and the good cash situation of the company, the Board of Directors has proposed a dividend for 2015 of CHF 1.90 per share, equivalent to a total dividend payment of approximately CHF 13.0 million. The proposed dividend will be put to shareholders for approval at the Annual General Meeting of the company which will be held at 4 PM, April 26, 2016.

Share information (at December 31, 2015)Stock Exchange SIX Swiss ExchangeSwiss Security Number / ISIN 3336167 / CH0033361673Ticker UBXNNominal value CHF 0.90Shares issued 6’725’736Reuters UBXN SBloomberg UBXN SW

Publications and calendaru-blox pursues an open and ongoing information policy with the general public and the capital markets. The company also meets investors regularly throughout the year, presents its financial results at analyst meetings and road shows, hosts an analyst day, and keeps its shareholders regularly informed about its business through press releases.

The annual report is published in March and presented at the analysts and press conference. It is also available online at:www.u-blox.com/en/investor-relations-section.html. The half-year report is published in September.

April 15, 2016:Closing of share register for the Annual General Meeting

April 26, 2016: Annual General Meeting

April 28, 2016:Proposed ex-dividend trading day

May 2, 2016:Proposed dividend payout date

August 26, 2016: Publication of half-year results 2016

Information for investors

Share price (in CHF) 2015 2014 2013

Highest 220.00 143.00 98.00

Lowest 115.40 99.25 39.90

Closing at December 31, 214.50 137.40 96.15

Market capitalization at December 31, (Mio CHF) 1'443 905 621

Key Figures 2015 2014 2013

Registered shares with a nominal value of CHF 0.90 6’725’736 6’588’681 6’455’496

Nominal share capital (in TCHF) 6'053 5’930 5’810

Basic earnings per share (in CHF) 5.55 5.27 3.86

1'443 Market capitalization end 2015, Mio CHF Basic earnings per share (in CHF)

5.55 | Information for investors

Jan

Feb

Mar

Apr

M

ay Jun Ju

lAug Se

pOct

Nov Dec

Investor contactCorporate addressu-blox Holding AGZürcherstrasse 688800 Thalwil, SwitzerlandPhone +41 44 722 74 44Fax +41 44 722 74 47

Investor RelationsRoland JudChief Financial [email protected]

Website www.u-blox.com

u-blox share price (CHF per share)January 1 – December 31, 2015

230.00

220.00

210.00

200.00

190.00

180.00

170.00

160.00

150.00

140.00

130.00

120.00

110.00

100.00

u-blox SPI SWX ID TECH

Andreas ThielExecutive Vice President (Head of Wireless Products)

Roland JudCFO

Thomas SeilerCEO

Daniel AmmannExecutive Vice President (Head of Positioning Products)

Jean-Pierre WyssExecutive Vice President (Head of Production and Logistics)

Information for investors |

Notes

| Notes

u-blox Holding AGZürcherstrasse 688800 ThalwilSwitzerlandPhone +41 44 722 74 44Fax +41 44 722 74 47www.u-blox.com

CORPORATE GOVERNANCEAND FINANCIAL REPORT 2015

Content | Page 3

Corporate GovernanceOpinion of the statutory auditor on the compensation report

Corporate Governance

622

Financial Report 2015

Consolidated financial statements u-blox Holding AG

Consolidated statement of financial positionConsolidated income statement

Consolidated statement of comprehensive incomeConsolidated statement of changes in equity

Consolidated statement of cash flowsNotes to the consolidated financial statements

Report of the statutory auditor

Financial statements of u-blox Holding AG

Statement of financial positionIncome statement

Notes to the financial statementsProposal of the Board of Directors

Report of the statutory auditor

Three year overview

Condensed consolidated income statementCondensed consolidated statement of financial position


24252526272865

666768

7375

767777

| Corporate Governance


2015

Corporate Governance | Page 5



The report describes the management structure, organization and control within the u-blox group at December 31, 2015. The report in conjunction with the Compensation Report fulfill the main requirements of the “Directive on Information relating to Corporate Governance” of the SIX Swiss Exchange.

1 Group structure

u-blox group The registered domicile of u-blox Holding AG and u-blox AG is: Zürcherstrasse 68, 8800 Thalwil, Switzerland. u-blox AG was founded in 1997. u-blox Holding AG, the only shareholder ofu-blox AG, was incorporated in September 2007 and listed on the SIX Swiss Exchange on October 26, 2007 (Valor No. 3336167, ISIN CH0033361673, ticker symbol: UBXN). Hereinafter, u-blox Holding AG is referred to as u-blox.

The market capitalization at December 31, 2015 was CHF 1’442’670’372 based on the outstanding ordinary share capital (6’725’736 shares).

Business operations are conducted through u-blox group companies.u-blox Holding AG directly or indirectly owns all companies belonging to the u-blox group. The shares of these companies are not publicly traded. u-blox subsidiaries are listed in note 2 to the consolidated financial statements. The operational group structure is organized according to different areas of responsibilities of each member of the Executive Committee. These responsibilities apply across the entire group and on a global basis.

2 Shareholders of u-blox

Significant shareholdersAs of December 31, 2015, u-blox had 4’130 registered shareholders. According to the disclosures of shareholders, the largest shareholders (> 3%), based on the share capital registered in the commercial register (6’595’970), were:

Black Rock Inc. (indirectly), USA 4.99%

Camox Master Fund, London, UK 3.01%

Credit Suisse Funds AG, Zurich, Switzerland 4.08%

UBS Fund Management AG, Basel, Switzerland 3.00%

Black Rock Global Funds-Swiss Small & Mid Cap Opportunities Fund, Switzerland 3.02%

The shareholders reduced or increased their shareholding progressively. For further detail see: www.six-swiss-exchange.com under “Market Data – Overview – Significant Shareholders.”

Cross shareholdingsu-blox has no cross shareholdings in any company.

3 Capital structure

Share capital of u-blox

Ordinary share capital On December 31, 2015 the outstanding ordinary share capital of u-blox was CHF 6’053’162.40 fully paid in and divided into6’725’736 registered shares of CHF 0.90 nominal value each. There are no preferential voting shares. All shares have equal voting rights. No participation certificates, nonvoting equity securities (Genuss- scheine) or profit-sharing certificates have been issued.

Authorized share capitalAccording to art 3b of the articles of association, the Board of Directors is authorized, at any time until October 16, 2017, to increase the share capital through the issuance of up to 979’000 fully paid-in registered shares with a nominal value of CHF 0.90 each in an aggregate amount not to exceed CHF 881’100.An increase in partial amounts is permitted. The Board determines the issue price, the date of issue of new shares and the type of payment.

The Board of Directors is authorized to exclude the subscription rights of shareholders and allocate such rights to third partiesif the shares are to be used for the acquisition of enterprises through an exchange of shares, or for the financing of an acquisition of enterprises, parts of enterprises or participations, or for new investments of u-blox.

The Board of Directors has not increased the share capital on the basis of article 3b of the articles of association in 2015.

Conditional share capitalAccording to article 3a of the articles of association, the share capital of u-blox may be increased by a maximum aggregate amount of CHF 305’608.50 by issuing up to 339’565 fully paid-in registered shares with a nominal value of CHF 0.90 each through the exercise of options granted to directors and employees of the group and its subsidiaries on the basis of participation plans. The subscription rights of the shareholders are excluded for such a capital increase.

Changes in share capitalAs a result of the exercise of options in 2015 the conditional share capital has reduced to 209’799 registered shares and the outstanding ordinary share capital has increased to 6’725’736 registered shares. Refer to page 75(condensed consolidated statement of financial position) of this report for more information on changes in share capital over the last three years.


4 Shareholder rights

Each registered share entitles the holder to one vote at general meetings. Shareholders representing at least 10% of the share capital may request that an extraordinary general meeting of shareholders be convened. Shareholders representing shareswith an aggregate nominal value of at least CHF 1’000’000 may request that an item be included in the agenda of a general meeting.

Such requests must be made in writing at least 45 days beforethe date of the general meeting, specify the item and contain the proposal on which the shareholder requests a vote. Shareholders have the right to receive dividends, appoint a proxy and other rights as are granted under the Swiss Code of Obligations.

Registration as shareholderNo restrictions apply to the registration as shareholder. Persons who have acquired registered shares will, upon application, be entered in the register of shares as shareholders with votingpower, provided they expressly declare to have acquired the shares in their own name and for their own account. Only shareholders registered in the u-blox share register may exercise their voting rights.

Shareholders recorded in the share register as voting shareholders, usually 7-12 days before the date of the general meeting, are admitted to the meeting and entitled to vote.The deadline for registration is defined by the Board of Directors and published on the company’s website under Investor Relations (www.u-blox.com).

No restriction on transfer of sharesNo restrictions apply to the transfer of shares.

Bonus certificates, options and convertibles u-blox has not issued bonus certificates, convertible or exchange- able bonds, warrants or other securities granting rights to u-blox shares, except i) options under the employee stock option plan and ii) a bond. The total number of outstanding options issued to employees and members of the Board of Directors at December 31, 2015 was 494’152 (7.4% of the outstanding ordinary share capital). See under note 14 for further information on the bond.

Options Exercise outstanding price at Dec. 31,

Grant Vesting date Expiry date in CHF 2015

2011 January 1, 2014 January 1, 2017 48.58 10’938

2011 January 1, 2014 January 1, 2017 50.30 * 382

2012 January 1, 2015 January 1, 2018 39.91 30’966

2012 January 1, 2015 January 1, 2018 41.20 * 764

2013 January 1, 2016 January 1, 2018 25.50 102’588

2013 January 1, 2016 January 1, 2018 39.15 ** 9’723

2014 January 1, 2017 January 1, 2019 59.29 123’170

2014 January 1, 2017 January 1, 2019 96.15 ** 15’822

2015 January 1, 2018 January 1, 2020 136.72 175’175

2015 January 1, 2018 January 1, 2020 137.40 ** 24’624

Total 494’152

* Options granted to employees of u-blox America Inc.

** Options granted to employees of u-blox America Inc., u-blox San Diego Inc., u-blox Espoo Oy, u-blox Melbourn Ltd., Leuven branch.

One option grants the right to purchase one share.

Prof. Fritz Fahrni, Swiss

5 Board of Directors

Dr. Paul Van Iseghem, Belgian

Fritz FahrniFunction at u-blox Prof. Fritz Fahrni was elected Chairman of the Board of Directors of u-blox Holding AG and u-blox AG since 2008. He is a memberof the nomination and compensation committee. He is a Non- Executive Director.

Professional backgroundProf. Fahrni holds a degree in mechanical engineering from the Swiss Federal Institute of Technology Zurich (ETH) and a PhD from the Illinois Institute of Technology, Chicago, USA, as well as a SMP from Harvard Business School, USA. He joined Sulzer AG in 1977 and acted as Chief Executive Officer from 1988 to 1999. From2000 until 2007, he was Professor for Technology Management and Entrepreneurship at both ETH Zurich and the University of St. Gallen. He now is an Emeritus Professor at both universities.

Other positions or consultancy agreementsProf. Fritz Fahrni is a member of the Board of the University Hospital Balgrist, Switzerland and he is an individual member of the Swiss Academy of Technical Sciences.

Paul Van IseghemFunction at u-blox Dr. Paul Van Iseghem was elected member of the Board of Directors of u-blox Holding AG and u-blox AG in 2011. He is vice-chairman and chairs the audit committee. He is a Non-Executive Director.

Professional backgroundDr. Paul Van Iseghem holds a Ph.D. in Engineering from the University of California, USA, and a master degree in Engineering from the University of Leuven, Belgium. He led LEM Holding SAas CEO and president from 2005 to 2010. From 2000 to 2005, he led the components division of LEM. Before joining LEM, he held various management positions in Europe and the US in the engineering industry.

Other positions or consultancy agreementsNone.

Election and term of officeEach Director, the chairman and the members of the committees are elected individually. Their term expires in 2016 and must be extended annually pursuant to the Swiss Ordinance against Excessive Compensation.

Composition of the Board of Directors at December 31, 2015:

Page 8 | Corporate Governance

Prof. Gerhard Tröster, German and Swiss Thomas Seiler, Swiss

Gerhard TrösterFunction at u-bloxProf. Gerhard Tröster has served as a member of the Board of Directors since the incorporation of u-blox Holding AG in 2007. He is also a member of the Board of Directors of u-blox AG.He has served as Chairman of the Board of Directors and asExecutive Officer of u-blox AG between 1997 and 2001 andas Vice-Chairman of the Board of Directors between 2001 and2003. He chairs the nomination and compensation committee. He is a Non-Executive Director.

Professional background Prof. Gerhard Tröster holds a Diploma degree from the Technical University of Karlsruhe, Germany and a PhD degree from the Technical University of Darmstadt, Germany, both in electrical engineering. He led the Advanced Integrated Circuit Design’ group at Telefunken Electronic, Germany from 1984 to 1993. Since 1993 he is Professor for electronics at the Swiss Federal Institute of Technology Zurich (ETH) heading the Electronics Laboratory. In 1997, he co-founded u-blox AG.

Other positions or consultancy agreementsProf. Gerhard Tröster is member of the Board of Amphiro AG, Switzerland.

Thomas SeilerFunction at u-bloxThomas Seiler has served as a member of the Board of Directors and as CEO since the incorporation of u-blox Holding AG in2007. He serves as CEO and Head of Marketing and Sales ofu-blox AG since 2002. In 2006 he was appointed member of theBoard of Directors of u-blox AG.

Professional backgroundThomas Seiler holds a degree in mechanical engineering fromthe Swiss Federal Institute of Technology Zurich (ETH) and a MBA diploma from INSEAD, France. In 1987 he was appointed member of the executive committee of Melcher Holding AG, Switzerland and CEO from 1991 to 1998. Thereafter, he served as CEO of Kistler Holding AG, Switzerland from 1999 to 2001. Other positions or consultancy agreementsThomas Seiler is a member of the Board of Artum AG, Switzerland.



Jean-Pierre Wyss, Swiss Soo Boon Quek, Singaporean

Jean-Pierre WyssFunction at u-blox Since the incorporation of u-blox Holding AG in 2007 Jean-PierreWyss has served as a member of the Board of Directors and, until2011, as CFO. Since 1997, he has served as a member of the Board of Directors, CFO (until 2011) and Head of Production and Logistics of u-blox AG.

Professional backgroundHe holds a degree in electrical engineering from the Swiss Federal Institute of Technology Zurich (ETH) and a Finance for Executives diploma from INSEAD in Singapore. From 1995 to 1997 hewas a research assistant and project manager at ETH. In 1997, he co-founded u-blox AG.

Other positions or consultancy agreementsJean-Pierre Wyss is a member of the board of Ardo Medical AG, Switzerland.

Soo Boon QuekFunction at u-bloxSoo Boon Quek has served as a member of the Board of Directors of u-blox Holding AG since the incorporation of u-blox in 2007.She also serves as a member of the Board of Directors of u-blox AGsince 2006. She is a Non-Executive Director.

Professional backgroundSoo Boon Quek holds a B.Sc. degree in mathematics from King’s College, University of London. She was Senior Vice President / Deputy General Manager of Vertex Management Inc. from 1987 to1999. She founded iGlobe Partners, Singapore in 1999 and is theManaging Partner of iGlobe Partners.

Other positions or consultancy agreementsSoo Boon Quek is a Board member of the following companies: Verisilicon Holdings Co. Ltd., Forte Media Inc., Anacle Systems Pte Ltd. and Sparky Animation Pte Ltd. She is Council Member of the Singapore Chinese Chamber of Commerce and the Singapore Board

member of Swissnex.

Composition of the Board of Directors at December 31, 2015:


Other positions or consultancy agreementsMr. André Müller is member of the board of Essemtec AG (Switzerland), DW Holding AG (Switzerland), Odevis Automation AG (Germany) and Bangerter Microtechnik AG (Switzerland).

Name Member since Terms expires Age Position Position Committee

Fritz Fahrni 2008 2016 73 Chairman Member NCC

Paul Van Iseghem 2011 2016 69 Vice-Chairman Chairman AC

Gerhard Tröster 2007 2016 62 Member Chairman NCC

Thomas Seiler 2007 2016 59 Member

Jean-Pierre Wyss 2007 2016 46 Member

Soo Boon Quek 2007 2016 65 Member

André Müller 2015 2016 62 Member Member AC

André Müller, Swiss and Italian

André MüllerFunction at u-blox André Müller acts as member of the Board of Directors of u-blox Holding AG and u-blox AG since 2015. He is a member of the audit committee. He is a Non-Executive Director.

Professional backgroundAndré Müller holds a degree in mechanical engineering from the Swiss Federal Institute of Technology Zurich (ETH). André Müller was active as CEO of Cicorel SA (Switzerland) and member of the CICOR group management from 2006 – 2009. From 1998 – 2007 he was CEO and as of 1999 chairman of the board of HCT Shaping Systems SA (Switzerland). From 1993 – 1996 he was vice-president and from 1996 – 1998 General Manager of ESEC SA (Switzerland). Prior to that, he held different positions in research and development divisions in the aerospace industry.


6 Internal Organization of the 6 Board of DirectorsDecisions are made by the Board of Directors as a whole, with the support of the Nomination and Compensation Committee and the Audit Committee.

The primary functions of the Board of Directors include:

• Providing the strategic direction of the group.• Determining the organizational structure and governance rules of

the group.• Approving acquisitions.• Reviewing and approving the annual financial statements and

results.• Preparing matters to be presented at General Meetings.• Reviewing the Risk Management System.• Appointment and removal of, as well as the structure of

remuneration/compensation payables to members of the Executive Committee and of the Board of Directors.

Further detail is provided under the Rules of Procedure available under the Investor Relations / Corporate Governance section of the company website.

The Board of Directors convened 9 times in 2015. The duration of each meeting was typically between 2 and 4 hours.

Role and functioning of the Board CommitteesEach Committee member and its chairman are elected by the Board with the exception of the members of the Nomination Committee, which are elected by the General Meeting. For further detail seethe Rules of Procedure available under the Investor Relations / Corporate Governance section of the company website.

Audit Committee The Audit Committee is composed of Paul Van Iseghem (chair)and André Müller.

The Audit Committee’s main duties include the assessment of:

• The completeness, integrity and transparency of financial statements, their compliance with applicable accounting principles and proper reporting to the public.

• The functionality and effectiveness of external and internal control systems including risk management and compliance.

• The quality of audit services rendered by the external and internal auditors.

The Committee convened three times, once for the preparation of the annual report and twice for the preparation of the half year report. The auditors, the members of the audit committee, the CFO, the CEO, the Chairman of the Board, Jean-Pierre Wyss and the General Counsel participated in the meeting. The duration of each meeting was about 1 hour.

Nomination and Compensation CommitteeThe Nomination and Compensation Committee is currently composed of Gerhard Tröster (chair) and Fritz Fahrni. The Committee supports the Board of Directors in the performance of its duties as follows:

• It prepares the personnel-related decisions to be adopted by the Board of Directors, such as personnel planning, compensation policy and report, appointment and removal of, as well as the structure of remuneration/ compensation payables to members of the Executive Committee and of the Board of Directors.

• It drafts the employee stock ownership program.• It proposes the allotment of options within the scope of the

employee stock ownership program.

The Committee convened twice. The CEO participated in each meeting. The CFO and the General Counsel participated in one meeting. The duration of each meeting was about one hour.

DelegationThe Board delegates the executive management of the company to the members of the Executive Committee, as further defined in the Rules of Procedure available under the Investor Relations / Corporate Governance section of the company website.


7 Information and control systems of 7 the Board towards management

Information The Board ensures that it receives sufficient information from the Executive Committee to perform its supervisory duty. The Board obtains the information required to perform its duties as follows:

• The CEO and the Executive Vice President Production and Logistics are members of the Board of u-blox. All Board members are also members of the Board of u-blox AG. All Executive Committee members participate in the Board meetings and each member presents a status report at each meeting.

• A monthly status report is prepared by the CEO and submitted to the Board.

• The CFO and CEO participated in each Audit Committee. The minutes of Committee meetings are made available to all Board Members.

• The Chairman of the Board meets the CEO approximately every month to discuss the strategy or prepare Board meetings.

• A working group consisting of the CEO and Mr. Paul Van Iseghem (chair) ensures that the Board is informed on the strategic options of the company. The working group has convened once and informed the Board on the strategic options it has identified.

• The auditors participated in each Audit Committee meeting. Risk managementA risk assessment plan for the group is prepared by the Executive Committee and presented to the Board on an ongoing basis. The risk assessment plan identifies the type of risks, the likelihood of the occurrence of the risk, as well as the damage that may be caused if the risk materializes.

At each Board meeting risks and a risk mitigation plan were presented by the Executive Committee. The plan enables the Board to evaluate the appropriateness of the risk management and to monitor the progress achieved in controlling or mitigating the risks.

The Executive Committee is responsible for the execution and implementation of the plan, as well as ensuring that u-blox has the right processes in place to support the early mitigation and avoidance of risks.

8 Management of the group

The members of the Executive Committee are:

Position Name Age

CEO Thomas Seiler 59

CFO Roland Jud 48

EVP Production and Logistics Jean-Pierre Wyss 46

EVP Positioning Products Daniel Ammann 46

EVP Cellular Products Andreas Thiel 48

The Board has delegated to the Executive Committee the coordination of the group’s day-to-day business operations. The Executive Committee is headed by the Chief Executive Officer.

The primary functions of the Executive Committee include:

• Conduct of the day-to-day-business and developing of new business.

• Implementation and enforcement of resolutions adopted and instructions given by the Board.

• Management and supervision of staff. Management contractsu-blox does not have management contracts with third parties. The Executive Committee members are employed by u-blox AG.

Thomas Seiler, Swiss Jean-Pierre Wyss, Swiss

Thomas SeilerFunction at u-bloxThomas Seiler has served as a member of the Board of Directors and as CEO since the incorporation of u-blox Holding AG in 2007. He serves as CEO and Head of Marketing and Sales of u-blox AG since 2002. In 2006 he was appointed member of the Board of Directors of u-blox AG.

Professional backgroundThomas Seiler holds a degree in mechanical engineering fromthe Swiss Federal Institute of Technology Zurich (ETH) and a MBA diploma from INSEAD, France. In 1987 he was appointed member of the executive committee of Melcher Holding AG, Switzerland and CEO from 1991 to 1998. Thereafter, he served as CEO of Kistler Holding AG, Switzerland from 1999 to 2001.

Other positions or consultancy agreementsThomas Seiler is a member of the Board of Artum AG, Switzerland.

Jean-Pierre WyssFunction at u-bloxSince the incorporation of u-blox Holding AG in 2007 Jean-Pierre Wyss has served as a member of the Board of Directors and, until2011, as CFO. Since 1997, he has served as a member of the Board of Directors, CFO (until 2011) and acts as Executive Director Production and Logistics.

Professional backgroundHe holds a degree in electrical engineering from the Swiss Federal Institute of Technology Zurich (ETH) and a Finance for Executives diploma from INSEAD in Singapore. From 1995 to 1997 he was a research assistant and project manager at ETH. In 1997, he co-founded u-blox AG.

Other positions or consultancy agreementsJean-Pierre Wyss is a member of the board of Ardo Medical AG, Switzerland.

9 Executive Committee


Daniel Ammann, Swiss Andreas Thiel, German and Swiss

Daniel AmmannFunction at u-bloxDaniel Ammann has served as Executive Vice President (R&D Software) of u-blox Holding AG from 2007 to 2012. He has been a member of the Board of u-blox AG from 1997 to 2003 and acted as Executive Vice President R&D Software from 1997 to2012. He acts as Executive Director Positioning Product Development since 2012. Professional backgroundHe holds a degree in electrical engineering from the Swiss FederalInstitute of Technology Zurich (ETH). From 1995 to 1997 he was a research assistant and project manager at ETH. In 1997, heco-founded u-blox AG.

Other positions or consultancy agreementsDaniel Ammann is a member of the Board of Scancorner AG, Switzerland.

Andreas ThielFunction at u-bloxAndreas Thiel has served as Executive Vice President (R&D Hardware) of u-blox Holding AG from 2007 to 2012 and as Executive Vice President R&D Hardware of u-blox AG from1997 to 2012. He acts as Executive Director Cellular ProductDevelopment and IC Design Services since 2012. Professional backgroundHe holds a degree in electrical engineering from Aachen University (RWTH) in Germany. From 1994 to 1997 he was a research assistant and project manager at the Swiss Federal Institute of Technology Zurich (ETH). In 1997, he co-founded u-blox AG.

Other positions or consultancy agreementsNone.


Roland Jud, Swiss

Roland JudFunction at u-bloxRoland Jud has been appointed CFO of both u-blox Holding AG and u-blox AG in 2011.

Professional backgroundHe holds a degree in economics from the University of St. Gallen (HSG), a diploma as Swiss Certified Auditor (CPA) and a diploma as Certified IFRS/ IAS Accountant. From 1992 until 1999 he was auditor and consultant at KPMG. He served as Group Controller and Deputy CFO at Gurit-Heberlein Holding AG, Switzerland from 1999 to 2008. Thereafter, he was Head of Accounting, Reporting and ICS at Ascom Holding AG, Switzerland until 2010. From 2010 until 2011 he held the position of CFO and member of the executive committee at Nexgen AG, Switzerland.

Other positions or consultancy agreementsRoland Jud is a member of the advisory board of c-crowd AG, Zürich.

10 Shareholdings

Ownership of u-blox sharesThe total number of u-blox shares owned by members of theExecutive Committee and the Board of Directors at December31, 2015 (including holdings of “persons closely linked”*) is shown in the tables below.

Non-executive members of the Board Number of shares

Fritz Fahrni 15’294

Gerhard Tröster 15’663

Paul Van Iseghem 175

André Müller 0

Soo Boon Quek 0

Executive Committee Number of shares

Thomas Seiler 126’768

Andreas Thiel 36’500

Jean-Pierre Wyss 29’109

Daniel Ammann 44’000

Roland Jud 489

* “Persons closely linked” are (i) their spouse, (ii) their children below age 18, (iii) any legal entities that they own or otherwise control, or (iv) any legal or natural person who is acting as their fiduciary.

Ownership of u-blox options

The total number of u-blox options owned by members of theExecutive Committee and the Board of Directors at December31, 2015 is shown in the tables below.

Non-executive members Number of Number ofof the Board vested non vested Options* Options**

Fritz Fahrni 0 998

Gerhard Tröster 0 998

Paul Van Iseghem 426 998

Soo Boon Quek 624 998

** Stock option grants in 2012.** Stock option grants in 2013, 2014.

Executive Committee Number of Number of vested non vested Options* Options**

Thomas Seiler 0 20’290

Andreas Thiel 0 20’290

Jean-Pierre Wyss 0 20’290

Daniel Ammann 0 20’290

Roland Jud 0 19’783

** Stock option grants in 2012

** Stock option grants in 2013, 2014, 2015.


12 Information policy

In addition to the annual report, u-blox will publish condensed interim financial information bi-annually. u-blox providesstock-price-sensitive information in accordance with the ad hoc publicity requirements of the Listing Rules of the SIX Swiss Exchange.

All information is distributed through third party electronic and print media resources. Additionally, all interested parties have the possibility to directly receive from u-blox, via an e-mail distribution list, free and timely notification of publicly released information. All of this information as well as the registration form for thee-mail distribution service, general corporate information and company publications can be found on the investor relations section of u-blox’ website: www.u-blox.com.

Contact addressu-blox Investor Relationsu-blox Holding AGRoland Jud, CFOZürcherstrasse 688800 Thalwil, SwitzerlandPhone: +41 44 722 74 25E-mail: [email protected]

u-blox CommunicationsGitte JensenZürcherstrasse 688800 Thalwil, SwitzerlandPhone: +41 44 722 74 86E-mail: [email protected]

With respect to options with a grant date on or prior to 1. January 2012 and on 1. January 2015, the exercise price is the lower amount of a) the volume- weighted average share price on the SIX Swiss Exchange during the 30 trading days preceding the grant date and b) the closing share price at the SIX Swiss Exchange on the last trading day before the grant date.

With respect to options with a grant date on January 1, 2013, or January 1, 2014 the exercise price is calculated by deducting 33% from the lower price of a) the volume-weighted average share price on the SIX Swiss Exchange during the 30 trading days prece-ding the grant date and b) the closing share price at the SIX Swiss Exchange on the last trading day before the grant date.The exercise price, vesting period, duration and subscription ratio of each plan are mentioned in section 3 of the Corporate Govern-ment Report (Capital structure).

11 Auditors

Duration of the mandate and term of office of the lead auditor In 2015, KPMG AG, Lucerne was re-appointed as Statutory Auditor of u-blox. KPMG Lucerne has been appointed each year since incorporation of u-blox in 2007. Mr. Daniel Haas, Partner, has been acting as the lead auditor.

Auditing feesTotal auditing fees charged by KPMG for mandatory audits ofu-blox for the financial year 2015 amount to CHF 507’265 (excl. VAT).

Additional feesAdditional fees charged by KPMG during the financial year2015 amounted to CHF 177’703 (excl. VAT) for tax advice and consulting.

Supervisory and control instruments The External Auditor presents to the Audit Committee an overview of issues found during the audit of the annual financial statement, the half year financial statement, as well as the internal control system. The External Auditors were present at both Audit Committee meetings in 2015.

The Board of Directors monitors the work and audit results of the External Auditors through the Audit Committee. The Audit Committee reviews annually the selection of auditors as wellas the level of the external audit fees. In its review, the Audit Committee takes into account the External Auditor’s quality of service, the expenses compared to other auditing companies and the fees for non-audit related services.



13 Compensation policy 2015

The compensation of members of the Board of Directors (BOD) and the Executive Committee members (EC) is reviewed annually by the Nomination and Compensation Committee (NCC). The total compensation is benchmarked against companies in the SWX Technology index (SWX ID TECH TR). In 2015, 12 companies were included in the benchmark based on the aforementioned criteria (the Benchmark).

The BOD determines the compensation of the members of the BOD and the EC based on the recommendations of the NCC. The total compensation is based on a discretionary decision of the BOD, without external consultants, taking into account the Bench-mark and the salary structure of the Company.

The compensation for the BOD is proposed for approval at the general assembly for the period from the annual general assembly to the following annual general assembly. The compensation of the EC is proposed for approval at the general assembly for the next fiscal year.

1 Composition and modus operandi of the NCCThe members of the NCC are elected by the GA. The NCC is chaired by a member nominated by the BOD. The CEO, the CFO or other members of the BOD, the auditors or expert persons may, at the request of the chairman of the NCC, attend the meetings in an advisory capacity.Minutes of the meetings are distributed to the BOD. The NCC Chairman reports on the activities of the NCC at the next meeting of the BOD.

The NCC prepares the compensation policy concerning remuneration for the BOD and the EC and submits proposals to the BOD. The BOD approves the compensation policy, the fixed salary, the number of options and the variable compensation for the members of the EC and, as applicable, for the members of the BOD. Only non-executive members of the BOD have voting rights onthe compensation policy.

The NCC prepares the compensation report and ensures that the report is approved by the auditors.

2 Compensation of the non-executive members of theBoard of DirectorsThe remuneration of the members of the BOD is designed to attract and retain experienced and motivated people for the BOD function. The remuneration should be competitive and in an appropriate relation to remunerations paid out in the market. No options are granted to BOD members.

FeeThe remuneration is a fee related to the member’s function and paid out in cash. No variable profit-related compensation is paid.

Pension and other benefitsNo pension, social insurance contributions or benefits are granted to the BOD members, except where compulsory under Swiss law.

Compensation 2015The compensation of the BOD was compared to the Benchmark. In order to approach the Benchmark, the compensation was increased by 21.8%. The decision was taken by the BOD within its discretion, without external consultants and in accordance with the principles defined in this compensation policy.

3 Compensation of the members of theExecutive CommitteeThe remuneration policy of u-blox is designed to retain highly skilled and motivated entrepreneurial executive staff over the long term and provide an incentive to achieve a sustainable increasein the shareholder value. It is designed to achieve the following objectives:• Total remuneration should attract and retain EC members. • The interests of management should be aligned with the long

term interests of shareholders.• The remuneration model should support team effort and spirit

among EC members. • The achievement of Key Performance Indicators (KPIs) should be

rewarded as a team achievement.

The compensation package of the EC consists of a base salary, stock options, a variable bonus and contributions to pension funds and social insurance. EC members are not remunerated for BOD or other executive positions held within the Group.

Base SalaryThe base salary of the CEO is defined to offer a competitive base salary compared to base salaries offered by other companies in the benchmarked market and taking into account his seniority and experience.The base salary of the other EC members is defined to achieve both a competitive base salary compared to base salaries offered by other companies in the benchmarked market and to ensure a strong team spirit. The base salary is therefore not defined indi-vidually, but as a ratio of the base salary of the CEO. The base salary is paid out monthly in cash.

Stock OptionsThe aim of the stock option scheme has remained unchanged since inception of the participation schemes: encourage the long term commitment of employees to u-blox and ensure that both shareholders and employees have a common long term interest. Stock options were granted to virtually all employees for more than 10 years. The number of options granted is therefore not determined by the achievement of personal long or short term performance objectives. Instead, each EC member is granted the same numberof options, also in an attempt to support a strong team spirit.Each option grants the owner the right to purchase one share ata certain price (exercise price). The option can be exercised earliest


three years and latest six years after the grant date and expiressix years after the grant date. The unvested options expire onthe day following the last day of employment of the EC member. Unvested options may be exercised in case of death or invalidity and – with respect to options granted in 2014 or thereafter – in case of retirement (accelerated vesting).The exercise price is the lower amount of a) the volume-weighted average share price on the SIX Swiss Exchange during the 30 trading days preceding the grant date and b) the closing share priceat the SIX Swiss Exchange on the last trading day before the grant date. At the beginning of each year, the NCC proposes a maximum amount to be paid out in options for the EC members and the corresponding number of options determined pursuant to an estimated Fair Value of the options at grant date, to the BOD. The BOD proposes such amount to the general assembly for approval. The options provisionally allocated to the EC members representa significant value by comparison to the base salary in order to ensure the market competiveness of the total compensation, and that long term commitment and the continual increase of shareholder value is appropriately incentivized.

Variable BonusThe bonus is designed to achieve two purposes: firstly reward the achievement of proven KPIs which should reflect the interest of shareholders and secondly, maintain a strong team spirit.

In order to ensure that a strong team spirit is maintained between EC members, KPIs should be measurable according to objective (not subjective) criteria and, wherever reasonable, be identical for each EC member. The bonus depends on two KPIs:i) the increase of the EBIT in percent of revenue (EBIT margin) and ii) the change of the revenue of the group compared to the previous year (revenue growth rate).

For the CEO, in view of his responsibilities, both KPIs are weighted more strongly than compared to other members of the EC. E.g.a 20% increase in revenue and a 10% EBIT margin results in a67.7% bonus (in percent of the base salary) while a 20% increase in revenue and a 15% EBIT margin results in a 87% bonus.The CEO has a maximum bonus of 150% of the base salary.

The bonus of the CEO considers both the revenue growth and the EBIT growth, whereby a linear model applies to the revenue growth and an exponential model for the EBIT growth.

The bonus rate as a multiplier of the base salary is defined as follows for the CEO:3 + 0.7 x ((revenue growth factor – 1) – 0.15)) x e (EBIT margin – 0.4) x 5).

For other EC members than the CEO the impact of changed KPIs is lower. E.g. a 20% increase in revenue and a 10% EBIT margin results in a 39% bonus (in percent of base salary), while a 20% revenue increase and a 15% EBIT margin would result in a 49.5%

bonus. The bonus of the other EC members is limited to 100% of the base salary.

The bonus of the other EC members considers both the revenue growth and the EBIT growth with a linear model.

The bonus rate as a multiplier of the base salary is defined as fol-lows for the other EC members:1 + 0.4 x ((revenue growth factor – 1) – 0.15) + 2.1 x (EBIT margin – 0.4).

For both schemes no bonus is paid out if the EBIT margin is zero or negative.

The bonus is paid out in cash after the annual general assembly.

Pension funds and social insurance benefitsThe aim is to provide EC members, respectively their family members, a financial coverage in case of retirement, illness, invalidity or death in line with market practices and regulations. The members of the EC, like all eligible employees in Switzerland, are insured against the risks of old age, death and disability (AHV). With respect to pension benefits (amounts which give rise to pension entitlements or increase pension benefits) the employer contrib- utes with 60% of the obligatory pension scheme fees and with approximately 65% of the non-obligatory private pension scheme fees.

Other BenefitsThe CEO is entitled to the use of a company car.

Compensation 2015At the beginning of 2015 a review of the total compensation including base salary, stock options and bonus of EC memberswas performed by the Chairman of the NCC. The benchmark was performed with the companies selected form the SWX technol-ogy index (SWX ID TECH TR). On the basis of the review, the BOD decided that as of 1. January 2015, the base salary of the CEO will be increased by 8.4 % and the other EC members by 9.5% in order to reach the median total compensation of the benchmarked companies.

The total number of options to be granted was defined by the BOD within its discretion, without external consultants, and taking into account the Benchmark.

The KPIs and formula for determining the variable bonus amount remained unchanged compared to the previous years because the long development times for products (several years), together with the long adoption period of u-blox products by relevant customers, make the selected KPIs most appropriate in this business environ-ment. The long market cycles reward only a long term strategy and engagement, and continual effort by the EC. Furthermore, over the last decade, the KPIs have remained unchanged. The success of the past proves that the bonus scheme is in the interest of shareholders.


Employment contractsThe employment contracts of the members of the EC may be subject to a minimum of six and a maximum of twelve-month notice period. No termination benefits are payable. The contracts do not contain a clause relating to change of control.

EC members may be subject to non-compete provisions upon termination of their employment contract which however will not exceed 12 months after the termination date. In case an EC member terminates his contract, the company may trigger the non-compete obligation in exchange for a fee limited to 50% of the EC member’s annual base salary.

LoansNo loans or credits are granted to members of the BOD or EC.

Compensation Policy 2016The general assembly April 24th, 2015 approved the compensa-tion amount for the BOD (from GA 15 to GA16) and maxium compensation amount for the EC (for the fiscal year 2016). The existing compensation policy will be applied in 2016.

Compensation Policy 2017u-blox plans for the EC compensation to convert the existing Stock Option Plan into a Long Term Incentive ESOP for the attribution of stock options to the EC for fiscal year 2017. The BOD favours an attribution system of options which (as a change to the current system) honours the financial achievements of the company. Under the new policy, the attribution of options for the performance achieved in 2017 will depend on the EBTIDA change in 2017 compared to the average EBITDA in the preceding three year period (2014 – 2016). More options are attributed in case the EBITDA increases, less if the EBITDA decreases.

14 Compensation report 2015

1 Board

Compensation for the members of the Board of Directors 20151

FeeSocial

insurance2

TotalCompensation

CHF CHF CHF

Fritz Fahrni(Chairman) 125’000 8’000 133’000

Paul Van Iseghem(Chairman Audit Committee) 92’667 5’931 98’598

André Müller(Audit Committee) 66’667 5’000 71’667

Gerhard Tröster(Chairman NCC) 92’667 6’950 99’617

Hans-Ulrich Müller3

(Chairman Audit Committee) 26’000 1’664 27’664

Soo Boon Quek 70’000 0 70’000

Thomas Seiler 0 0 0

Jean-Pierre Wyss 0 0 0

Total 473’001 27’545 500’546

1) The compensation is calculated based on Fiscal year 2015, the numbers are therefore lower than the approved budget, which is for the period AGM 2015 to AGM 2016

2) Mandatory social insurance3) Hans-Ulrich Müller resigned at AGM 2015

Compensation for the members of the Board of Directors 2014

FeeSocial

insurance1

TotalCompensation

CHF CHF CHF

Fritz Fahrni(Chairman) 95’000 6’080 101’080

Hans-Ulrich Müller(Chairman Audit Committee) 78’000 4’992 82’992

Gerhard Tröster(Chairman NCC) 78’000 5’850 83’850

Soo Boon Quek 60’000 0 60’000

Paul Van Iseghem(Strategy Committee) 78’000 4’992 82’992

Thomas Seiler 0 0 0

Jean-Pierre Wyss 0 0 0

Total 389’000 21’914 410’914

1) Mandatory social insurance


Compensation paid to the members of the Executive Committee 2015

Base SalaryNumber of

OptionsValue ofOptions1 Bonus2

Pensionand Socialinsurance

funds3

Other benefits4

Total Compensation

CHF CHF CHF CHF CHF CHF

Thomas Seiler, CEO 410’000 6’672 344’275 363’753 178’120 7’558 1’303’706

Jean-Pierre Wyss 285’000 6’672 344’275 148’061 109’737 0 887’073

Andreas Thiel 285’000 6’672 344’275 148’061 104’027 0 881’363

Daniel Ammann 285’000 6’672 344’275 148’061 103’995 0 881’331

Roland Jud5 277’875 6’506 335’710 144’360 106’053 0 863’998

Total 1’542’875 33’194 1’712’810 952’296 601’932 7’558 4’817’471

1) Options granted in 2016 for performance of 2015. The fair value of the options is CHF 51.60 per option at grant date on 1. January 2016. Strike price: CHF 210.28, Vesting date: 1 January 2019; Expiry date: 1 January 2022.

2) Bonus paid out in 2016 for performance of 2015. 3) Mandatory social insurance paid on the fee and on the fair value of options granted on 1. January 2016.4) Company car. 5) Mr. Jud has a 97.5% working time contract.

Compensation for the members of the Executive Committee 2014

Base SalaryNumber of

OptionsValue ofOptions1 Bonus2

Pensionand Socialinsurance

funds3

Other benefits4

Total Compensation

CHF CHF CHF CHF CHF CHF

Thomas Seiler, CEO 378’000 7’804 238’724 322’194 128’199 8’654 1’075’772

Jean-Pierre Wyss 257’575 7’804 238’724 127’570 82’747 0 706’616

Andreas Thiel 257’575 7’804 238’724 127’570 80’740 0 704’609

Daniel Ammann 257’575 7’804 238’724 127’570 81’938 0 705’807

Roland Jud5 250’639 7’609 232’759 124’135 80’903 0 688’436

Total 1’401’362 38’825 1’187’657 829’039 454’527 8’654 3’881’240

1) Options granted in 2015 for performance of 2014. The fair value of the options is CHF 30.59 per option at grant date on 1. January 2015. Strike price: CHF 136.72, Vesting date: 1 January 2018; Expiry date: 1 January 2021.2) Bonus paid out in 2014 for performance of 2013.

2) Bonus paid out in 2015 for performance of 2014.3) Mandatory social insurance paid on the fee and on the fair value of options granted on 1. January 2015.4) Company car. 5) Mr. Jud has a 97.5% working time contract.

3 Other Compensations

Share allotmentNo shares were allocated to the members of the BOD or the EC in 2015.

Additional fees, remunerations, guarantees and loansNo additional fee or remuneration was paid to the members or former members of the BOD or the EC.No guarantees or loans were granted by a group company to the members of the BOD or the EC or were outstanding on December 31, 2015.

Persons closely linkedNo remuneration, fees or loans were paid, respectively granted, to persons closely linked to members of the BOD or members of the EC. Persons closely linked are (i) their spouse, (ii) their children below age 18, (iii) any legal entities that they own or otherwise control, or (iv) any legal or natural person who is acting as their fiduciary.

| Report of the statutory auditor

Report of the Statutory Auditor to the General Meeting of

u-blox Holding AG, Thalwil

We have audited the accompanying compensation report of u-blox Holding AG for the year ended December 31, 2015. The audit was limited to the information according to articles 14-16 of the Ordinance against Excessive compensation in Stock Exchange Listed Compa-nies contained in paragraph 14 of the compensation report 2015 on pages 20 to 21.

Responsibility of the Board of DirectorsThe Board of Directors is responsible for the preparation and overall fair presentation of the remuneration report in accordance with Swiss law and the Ordinance against Excessive compensation in Stock Exchange Listed Companies (Ordinance). The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the accompanying remuneration report. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reaso-nable assurance about whether the remuneration report complies with Swiss law and articles 14 – 16 of the Ordinance.

An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuneration report with regard to compensation, loans and credits in accordance with articles 14 – 16 of the Ordinance. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the remuneration report, whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value components of remuneration, as well as assessing the overall presentation of the remuneration report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

OpinionIn our opinion, the remuneration report for the year ended December 31, 2015 of u-blox Holding AG complies with Swiss law and articles 14 – 16 of the Ordinance.

KPMG AG

Daniel Haas Nicole Charrière RoosLicensed Audit Expert Licensed Audit ExpertAuditor in Charge

Lucerne, March 17, 2016

Financial Report | Page 23

Financial Report

2015

Consolidated financial statements u-blox Group

Page 24 | Consolidated financial statements

(in CHF 000s) Note At December 31, 2015 At December 31, 2014

Assets

Current assets

Cash and cash equivalents 6 112’387 37’662

Marketable securities 7 11’659 21’730

Trade accounts receivables 8 43’790 38’842

Other receivables 6’717 6’591

Current tax assets 5’620 5’184

Inventories 9 37’356 33’345

Prepaid expenses and accrued income 2’240 9’742

Total current assets 219’769 153’096

Non-current assets

Property, plant and equipment 10 14’708 14’836

Goodwill 11 56’716 57’903

Other intangible assets 11 88’042 70’502


Deferred tax assets 23 6’930 4’826

Total non-current assets 167’074 148’651

Total assets 386’843 301’747


Current liabilities

Trade accounts payables 12 24’195 28’623

Other payables 7’732 2’544

Financial liabilities 14 0 20’000

Current tax liabilities 1’496 1’994

Provisions 15 0 925

Accrued expenses 13 21’982 16’774

Total current liabilities 55’405 70’860

Non-current liabilities

Financial liabilities 14 59’284 0


Provisions 15 5’780 3’525

Net pension liability 16 12’153 8’930

Deferred tax liabilities 23 4’628 3’815

Total non-current liabilities 83’117 18’011

Total liabilities 138’522 88’871


Share capital 17 6’053 5’930

Share premium 17 84’006 89’531

Cumulative translation differences -10’665 -4’565

Retained earnings 168’927 121’980

Total equity, attributable to owners of the parent 248’321 212’876

Total liabilities and equity 386’843 301’747

These consolidated financial statements should be read in conjunction with the accompanying notes.

Consolidated statement of financial position

Consolidated financial statements u-blox Group

Consolidated financial statements | Page 25

Consolidated income statement

(in CHF 000s) NoteFor the year ended December 31, 2015


Revenue 5 338’341 270’045

Cost of sales -183’323 -147’323

Gross profit 155’018 122’722

Distribution and marketing expenses -27’659 -24’525

Research and development expenses 20 -65’033 -49’859

General and administrative expenses -13’509 -10’131

Other income 2’474 868

Operating profit (EBIT) 51’291 39’075

Finance income 22 996 4’546

Finance costs 22 -4’674 -658

Profit before income tax (EBT) 47’613 42’963

Income tax expense 23 -10’515 -8’566

Net profit 37’098 34’397

Basic earnings per share (in CHF) 18 5.55 5.27

Diluted earnings per share (in CHF) 18 5.33 5.05



Net profit 37’098 34’397

Other comprehensive incomeRemeasurements on net pension liability 16 -1’875 -5’295

Income tax on remeasurements on net pension liability 23 350 870

Items that will not be reclassified to income statement -1’525 -4’425

Currency translation differences -6’104 -651

Items that are or may be reclassified subsequently to income statement -6’104 -651

Other comprehensive income, net of taxes -7’629 -5’076

Total comprehensive income, attributable to owners of the parent 29’469 29’321

Consolidated statement of comprehensive income


Consolidated statement of changes in equity

(in CHF 000s) NoteShare

capitalShare

premiumTreasury

shares

Cumula-tive

transla-tion

differ-ences

Retained earnings

Total equity,

attribut-able to owners

of theparent

Balance at January 1, 2014 5’810 92’556 0 -3’910 85’980 180’436

Net profit for the period 0 0 0 0 34’397 34’397

Other comprehensive income for the period, net of taxes 0 0 0 -651 -4’425 -5’076

Total comprehensive income 0 0 0 -651 29’972 29’321

Share-based payments1) 19/23 0 0 0 0 6’531 6’531

Purchase of treasury shares 0 0 -2’001 0 0 -2’001

Transaction with treasury shares 0 0 2’001 0 -507 1’494

Dividend out of share premium 0 -8’487 0 0 0 -8’487

Options exercised during the year, net of transaction costs 19 120 5’462 0 0 0 5’582

Total transactions with owners of the parent 120 -3’025 0 0 6’024 3’119

Balance at December 31, 2014 5’930 89’531 0 -4’561 121’976 212’876

Net profit for the period 0 0 0 0 37’098 37’098

Other comprehensive income for the period, net of taxes 0 0 0 -6’104 -1’525 -7’629

Total comprehensive income 0 0 0 -6’104 35’573 29’469

Share-based payments1) 19/23 0 0 0 0 11’378 11’378

Dividend out of share premium 0 -10’684 0 0 0 -10’684

Options exercised during the year, net of transaction costs 19 123 5’159 0 0 0 5’282

Total transactions with owners of the parent 123 -5’525 0 0 11’378 5’976

Balance at December 31, 2015 6’053 84’006 0 -10’665 168’927 248’321

For further information on share capital and share premium see note 17.

Approximately CHF 3.3 million of the share premium and retained earnings is not available for distribution due to legal restrictions.

1) Represents the amount of stock option expense of CHF 4.4 million (2014: 3.3 million) including respective tax effects of CHF 7.0 million (2014: CHF 3.2 million) recognized for 2015 and 2014 respectively


Page 26 | Consolidated financial statements

Consolidated statement of cash flows



Net profit 37’098 34’397

Adjustments for:

Depreciation 10 8’027 6’272

Amortization 11 16’636 13’257

Impairment of intangible assets 11 2’758 0

Share-based payment transactions 19 4’404 3’361

Change of net pension liability 1’408 771

Other non-cash transactions -2’561 -413

Change of allowance for doubtful receivables 276 198

Change of allowance for obsolete inventories 9 850 -860

Finance income 22 -996 -4’546

Finance costs 22 4’674 658

Income tax expense 23 10’515 8’566

Change in trade and other receivables, prepaid expenses and accrued income -6’646 -11’891

Change in inventories -4’883 -9’225

Change in trade and other payables and accrued expenses 5’272 16’441

Change in provisions 1’364 2’571

Income tax paid -3’537 -5’871

Net cash generated from operating activities 74’659 53’686

Acquisition of property, plant and equipment 10 -8’432 -6’963

Acquisition of intangible assets 11 -34’568 -26’721

Proceeds from disposal of property, plant and equipment 66 98

Proceeds from disposal of intangible assets 21 2

Prepayment for a business combination 4 0 -7’455

Proceeds from sale of marketable securities 9’690 7’409

Acquisition of financial assets -108 -92

Acquisition of business 4 -361 -30’149

Acquisition of marketable securities 0 -2’046

Interest received 325 517

Net cash used in investing activities -33’367 -65’400

Proceeds from exercise of options 5’282 5’582

Dividends paid to owners of the company -10’684 -8’487

Repayments of financial liabilities 14 -20’000 0

Proceeds from financial liabilities 14 60’000 20’000

Transaction costs related to financial liabilities -806 0

Purchase of treasury shares 0 -2’001

Interest paid -16 -103

Net cash generated from/(used in) financing activities 33’776 14’991

Net increase in cash and cash equivalents 75’068 3’277

Cash and cash equivalents at beginning of year 37’662 33’163

Exchange gains/(losses) on cash and cash equivalents -343 1’222

Cash and cash equivalents at end of year 6 112’387 37’662


Consolidated financial statements | Page 27

Notes to the consolidated financial statements

1 CORPORATE INFORMATION AND BASIS OF PREPARATIONu-blox group (’u-blox’ or the ’group’) consists of u-blox Holding AG (’the company’ or ’the parent’), incorporated on September 21, 2007 in Thalwil, Switzerland, and its consolidated subsidiaries (together “the group entities”). u-blox Holding AG was incorporated by a contribution in kind of all shares of u-blox AG in exchange for shares of the new holding company. The shares of u-blox Holding AG are listed on the Main Standard of the SIX Swiss Exchange.

u-blox’ core activities comprise the development, manufacturing and marketing of products and services supporting GPS/GNSS satellite positioning systems. u-blox offers a range of GPS/GNSS positioning products, including satellite receiver chips and chipsets, receiver modules, receiver boards, antennas and smart antennas which are in use worldwide for navigation, automatic vehicle location, security, traffic control, location based services, timing and agriculture. Since 2009 u-blox offers also wireless products and services. In 2015 and 2014, u-blox expanded its wireless activities by acquisition into short range radio area (note 4). Hardware production is fully outsourced to external contractors.

Statement of compliance and basis of preparation of the consolidated financial statementsThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law. They have been prepared using the historical cost convention except for items requiring fair value accounting and for net defined benefit obligations, which are measured at fair value of plan assets less the present value of the defined benefit obligations. The consolidated financial statements are presented in Swiss Francs (CHF), rounded to the nearest thousand unless otherwise stated. Group entities prepare their individual financial statements using their functional currency, which was identified to be the respective local currency.

The preparation of financial statements in conformity with IFRS requires management to make 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. The estimated and underlying assumptions are reviewed on an ongoing basis, and revised if necessary (see note 3).

2 ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been

consistently applied to all the years presented, unless otherwise stated.

Changes in accounting policy and disclosure IAS 19 Employee Contributions (Amendments to IAS 19) Various Annual Improvements to IFRSs 2010-2012 Cycle Various Annual Improvements to IFRSs 2011-2013 Cycle

As of January 1, 2015, u-blox has adopted various amendments to existing International Financial Reporting Standards (IFRSs) and Interpretations. The new and amended standards have no material impact on the Group’s results or financial position.

Page 28 | Notes to the consolidated financial statements

Notes to the consolidated financial statements | Page 29

New IFRSs issued but not yet effective in 2015The following new and revised standards and interpretations, which are or may be applicable to u-blox, have been issued, but are not yet effective and are not applied early in these consolidated financial statements. Their impact on the consolidated financial statements of the group has not yet been systematically analyzed. The expected effects as disclosed below reflect a first assessment by group management.

Standard/Interpretation Impact Effective datePlanned application

by u-blox

New Standards and Interpretations

IFRS 15 Revenue from Contracts with Customers 2) January 1, 2018 Reporting year 2018

IFRS 9 Financial Instruments 3) January 1, 2018 Reporting year 2018

IFRS 16 Leases 3) January 1, 2019 Reporting year 2019

Revisions and amendments of Standards and Interpretations

Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11) 1) January 1, 2016 Reporting year 2016

Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to IAS 16 and IAS 38) 1) January 1, 2016 Reporting year 2016

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) 1) to be determined to be determined

Annual Improvements to IFRSs 2012-2014 Cycle 1) January 1, 2016 Reporting year 2016

Disclosure Initiative (Amendments to IAS 1) 3) January 1, 2016 Reporting year 2016

Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) 1) January 1, 2016 Reporting year 2016

1) No or no significant impacts are expected on the consolidated financial statements of u-blox. 2) Mainly additional disclosures are expected in the consolidated financial statements of u-blox. 3) The impact on the consolidated financial statements of u-blox cannot yet be determined with sufficient reliability.

| Notes to the consolidated financial statements

Principles of consolidationThe consolidated financial statements include the financial statements of u-blox Holding AG, which provides holding functions, and its subsidiaries, the following entities at December 31, 2015 and 2014:

CompanyShare capital

(million)

Ownershipinterest

Dec. 31, 2015

Ownershipinterest

Dec. 31, 2014 Function

u-blox AG, CH-Thalwil CHF 4.23 100% 100% E

u-blox Europe Ltd., UK-Charing GBP 0.06 100% 100% I

u-blox Asia Pacific Ltd., HK-Hong-Kong USD 0.10 100% 100% M

u-blox America Inc., US-Reston USD 0.10 100% 100% S

u-blox Singapore Pte. Ltd., SG-Singapore SGD 0.10 100% 100% M

u-blox Japan K.K., JP-Tokyo JPY 10.00 100% 100% M

u-blox Italia S.p.A., IT-Sgonico EUR 0.40 100% 100% E

u-blox UK Ltd., UK-Reigate GBP 0.00 100% 100% D

u-blox San Diego Inc., US-San Diego USD 0.00 100% 100% D

u-blox Melbourn Ltd., UK-Melbourn GBP 0.14 100% 100% D

u-blox Espoo Oy, FI-Espoo (former Fastrax) EUR 0.05 100% 100% E

u-blox Luton Ltd., UK-Luton GBP 0.00 100% 100% E

u-blox Lahore (Private) Ltd., PK-Lahore PKR 14.11 100% 100% D

u-blox Cork Ltd., IE-Cork EUR 0.00 100% 100% D

u-blox Malmö AB, SE-Malmö (former connectBlue) SEK 0.83 100% 100% E

connectBlue Inc., US-Illinois USD 0.00 100% 100% I

u-blox Athens S.A., GR-Athen (former Antcor) EUR 0.18 100% 100% D

u-blox Berlin GmbH, DE-Berlin EUR 0.03 100% - D

E = Engineering, Logistics, Marketing, Sales and SupportS = Sales and SupportM = MarketingD = Engineering I = Inactive

In 2015, the group acquired the assets of Lesswire (the transaction qualified as a business combination) and founded u-blox Berlin to integrate the business. In 2014, the group acquired u-blox Malmö AB (former connectBlue) and u-blox Athens S.A. (former Antcor), see note 4. Subsidiaries are all entities that u-blox Holding AG has the ability to control. u-blox Holding AG controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is obtained by the group. They are de-consolidated from the date that control is lost.

The group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.

Any contingent consideration to be transferred by the group is recognized at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not re-measured, and its subsequent settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in the financial result.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss.

Intercompany transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses resulting from intercompany transactions that are recognized in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.


Foreign currency translationTransactions in foreign currencies are translated to the respective functional currencies of group entities at transaction date exchange rates. Any difference in exchange rates between the original transaction date and the subsequent settlement date is recorded in the income statement as a gain or loss. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at year-end rates and related unrealized gains and losses are presented in the income statement within finance income or costs. Non-monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate prevailing at the date of the transaction.

The group uses CHF as its presentation currency, which is the functional currency of the parent. Group entities prepare their individual financial statements using their functional currency, being the currency of the primary economic environment in which the entity operates.

The results and financial position of all the group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;b) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable

approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

c) all resulting exchange differences are recognized in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognized in other comprehensive income. When a foreign operation is disposed of, in part or in full, the related accumulated translation difference included in equity is transferred to profit or loss. Translation differences on long-term loans to foreign operations that in substance form part of the net investment in the foreign operation are also classified as equity until disposal of the net investment. Upon disposal of the net investment, all related cumulative translation differences are recognized in the income statement.

The following rates were used to translate the financial statements of the group’s entities into CHF for consolidation purposes:

December 31, 2015 December 31, 2014

Average rate Closing rate Average rate Closing rate

EUR 1.09219 1.08252 1.22941 1.20240

USD 0.97037 0.99248 0.91634 0.99022

GBP 1.49003 1.46913 1.51660 1.54211

HKD 0.12509 0.12805 0.11880 0.12767

SGD 0.71115 0.70136 0.72655 0.74869

CNY 0.15508 0.15286 0.14907 0.16086

JPY 0.00804 0.00825 0.00880 0.00828

PKR 0.00949 0.00938 0.00906 0.00974

SEK 0.11691 0.11779 0.13416 0.12750

Segment informationIn accordance with the management structure and the reporting made to the Board of Directors (the Group’s Chief Operating Decision Maker), the reportable segments are the two operating Corporate Groups ’Positioning and Wireless products’ and ’Wireless services’. Segment accounting is prepared up to the level of Operating Profit (EBIT) because this is the key figure used for management purposes. All operating assets and liabilities that are directly attributable or can be allocated on a reasonable basis are reported in the respective Corporate Groups. No distinction is made between the accounting policies of segment reporting and those of the consolidated financial statements. No operating segments were aggregated.

Cash and cash equivalentsCash and cash equivalents are stated at nominal value. They include cash on hand, bank accounts and fixed-term deposits or call deposits with original terms of less than 3 months.

Marketable securitiesMarketable securities include investments in bonds denominated in CHF with a remaining duration of maximum 4 years at the date of investment, which are classified at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the income statement. Marketable securities are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership.

Trade accounts receivables and other receivablesTrade accounts receivables and other receivables are recognized initially at fair value and subsequently measured at amortized cost, less allowances for doubtful receivables. An allowance for doubtful receivables is recorded if there is an objective indication, such as insolvency of a counterparty, that the amounts due in respect of such accounts cannot be recovered in full. The allowance is measured as the difference between the carrying amount of the receivable and expected future cash flows.

InventoriesInventories consist principally of purchased raw materials, work in progress and finished products which are stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price less the estimated cost of completion and selling expenses. Raw materials consist of components which are assembled by external contractors into finished products. The cost of all inventories is based on the weighted average cost principle and includes costs incurred in acquiring the inventory and bringing it toits present location and condition. It excludes overheads and borrowing costs. Allowances are made for slow-moving items. Obsolete items are written off.

Property, plant and equipment Property, plant and equipment is stated at acquisition cost less accumulated depreciation and impairment losses. Depreciation is calculated on a straight-line basis over the following useful lives:

Estimated useful life (years)

Furniture, equipment and vehicles 2-6

IT infrastructure 2-5

Tools and test infrastructure 2-5

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than it’s estimated recoverable amount. At the time of disposal, items of property, plant and equipment are eliminated from the statement of financial position. Any gains or losses on disposal are recognized in the income statement as a component of other income and expenses.

GoodwillThe group measures goodwill at the acquisition date of business combinations as:• the fair value of the consideration transferred, plus • the recognized amount of any non-controlling interests in the acquiree, less • the net recognized amount of the identifiable assets acquired and liabilities assumed.



For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Cash Generating Units (CGU’s), or groups of CGU’s, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level. Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment is recognized immediately as an expense and is not subsequently reversed.

Other intangible assetsOther intangible assets are stated at acquisition cost or in the case of intellectual property rights, technology and customer relationships acquired in a business combination at fair value less related accumulated amortization and impairment losses. Amortization is calculated on a straight-line basis over the following useful lives:

Estimated useful life (years)

Intellectual property rights/acquired technology 2-5

Software 2-5

Capitalized development costs 2-5

Customer relationships/other intangible assets 2-5

Intangible assets with finite useful lives are amortized over their estimated useful lives as stated above. Intangible assets with indefinite useful lives are not amortized but tested for impairment annually or whenever an indication of impairment exists.

Capitalized development costs Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditures are capitalized if they can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditures capitalized include the cost of materials as well as direct labour and overhead costs that are directly attributable to preparing the asset for its intended use.

The group expenses research and development costs incurred in the preliminary project stage. To the extent that research and development costs include the development of embedded software, the group believes that software development is an integral part of the semiconductor design. Therefore, such costs are expensed as incurred until technological feasibility has been established. Thereafter, any additional development costs are capitalized.

Expenditures for research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are expensed in profit or loss when incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.

Capitalized development costs are measured at cost less accumulated amortization and accumulated impairment losses. Amortization starts if the asset (or a part of it) is in use or when the product is released to customers.

Impairment of property, plant and equipment and intangible assetsThe carrying amounts of the group’s property, plant and equipment and intangible assets are reviewed at each annual balance sheet date or earlier if a significant event has occurred to determine whether there is any indication of impairment. If any such indication exists, an impairment test is performed. Goodwill and capitalized development costs not yet available for use are tested for impairment at least every year.

An impairment loss is recognized in the income statement whenever the carrying amount of an asset or Cash Generating Unit exceeds its recoverable amount. Recoverable amount is the higher of fair value less cost of disposal and the asset’s or cash generating unit’s valuein use. In assessing value in use, the estimated future cash flows are discounted to their present value based on the risks specific to the asset(s).

An impairment loss is reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. However, an impairment of goodwill is not reversed.

Financial assetsFinancial assets primarily consist of rent deposits for offices and loans. These deposits and loans bear interest at current market rates and are stated at amortized cost, which approximates their fair value. Exchange rate gains and losses on financial assets are recorded in the income statement. Impairments in value of financial assets are immediately expensed in the income statement.

Trade and other payablesTrade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Other payables include other obligations including contingent payments to former shareholders of acquired subsidiaries. Accounts payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables and other payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

Financial liabilitiesInterest-bearing loans and borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing loans and borrowings are measured at amortized cost with any difference between cost and redemption value recognized in the income statement over the period of the borrowings using the effective interest method. Interest-bearing loans and borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months subsequent to the balance sheet date.

ProvisionsA provision is recognized when the group has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

LeasesLease agreements in which the group assumes substantially all the risks and rewards of ownership are classified as finance leases. During the year ended December 31, 2015, the group did not enter into any finance lease agreement (2014: none). Other leases represent operating leases for which the leased assets are not recognized on the group’s statement of financial position. Operating lease payments are recognized in the income statement on a straight line basis over the term of the lease.

Employee benefitsa) Pension obligationsThe group maintains pension plans for employees located in Switzerland, the United Kingdom (UK), Italy, Japan, Sweden, Greece, Belgium, Ireland, Finland, the United States of America (USA), Singapore, Pakistan and China. These plans comply with the respective legislation in each country and are financially independent of the group. The funds are generally financed by employer and employee contributions.

The plans in the UK, partly in Italy, Belgium, Ireland, Sweden, the USA, Pakistan, China and Singapore qualify as defined contribution plans since the group has no further payment obligations once the fixed contributions have been paid. Employer contributions paid or due are recognized in the income statement as incurred. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.

The plan in Switzerland is contracted with an insurance company and qualifies as defined benefit plan. The part of the Italian TFR (Trattamento di fine rapporto) which has vested before December 31, 2006 and the Greek plan also qualify as defined benefit plans.

The net liability (asset) recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of any plan assets. The defined benefit obligation is calculated annually and separately for each defined benefit plan by independent qualified actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.

The group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability (asset).



Re-measurements arising from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The group recognizes them immediately in other comprehensive income and all other expenses related to defined benefit plans in employee benefit expenses and finance cost respectively.

When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, is recognized immediately in profit or loss when the plan amendment or curtailment occurs.

The group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs. The gain or loss on a settlement is the difference between the present value of the defined benefit obligation being settled as determined on the date of settlement and the settlement price, including any plan assets transferred and any payments made directly by the group in connection with the settlement.

Surpluses are only capitalized if they are actually available to the group in the form of expected refunds from the fund or reductions in contributions to the fund.

b) Profit-sharing and bonus plansThe group recognizes a liability and an expense for bonuses and profit-sharing, either based on a formula that takes into consideration sales and earnings before interest and taxes (EBIT) attributable to the company’s shareholders or a formula based on gross margin improvementin comparison to local costs. The group recognizes an accrual where contractually obliged or where there is a past practice that has created a constructive obligation.

Income taxesThe tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an assetor liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets on tax loss carry forwards and deductible temporary differences are recognized only to the extent that it is probable that future profits will be available to utilize the deferred tax asset. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.


Share-based paymentsThe group operates equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (options and shares) of the group. The fair value of the employee services received in exchange for the grant of the equity instruments is based on a binomial model for options and on the listed share price for shares, respectively, and is recognized as an expense with the counter-entry recognized in equity. The total amount to be expensed is determined by reference to the fair value of the equity instruments granted, excluding the impact of any service and non-market performance vesting conditions.

Non-market performance and service conditions are included in assumptions about the number of equity instruments that are expected to vest. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

At the end of each reporting period, the group revises its estimates of the number of equity instruments that are expected to vest based on the service and non-market vesting conditions. It recognizes the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity. When the options are exercised, the company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.

Revenue recognitionRevenue for goods and services are measured at fair value of the consideration received or receivable, net of returns and allowances, sales taxes and rebates.

Sales of positioning & wireless products are recognized when the significant risk and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.

For sales of wireless services, revenue is recognized in the accounting period in which the services are rendered, by reference to stage of completion of the specific transaction and assessed on the basis of the actual service provided as a proportion of the total services to be provided. The revenue for service licenses is considered at the time of the transfer of the rights.

Financial instrumentsNon-derivative financial instrumentsNon-derivative financial instruments comprise cash and cash equivalents, trade accounts receivables and other receivables, loans and borrowings, marketable securities, accrued income, accrued expenses and trade and other payables. These financial instruments are recognized initially at fair value. Subsequent measurement is at amortized cost except for marketable securities and liabilities for contingent considerations which are both subsequently measured at fair value through profit or loss.

Share capitalIncremental costs directly attributable to issue ordinary shares and share options are recognized as a deduction from equity.


3 CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATESIn the process of applying the group’s accounting policies, management has made the following judgments and assumptions that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial years:

InventoriesManagement records a write-down for inventories which have become obsolete or are in excess of anticipated demand or net realizable value. A detailed review of inventories is performed each period considers multiple factors including demand forecasts, market conditions, product life cycle status, product development plans and current sales levels. If future demand or market conditions for the products are less favorable than forecasted or if unforeseen technological changes negatively impact the utility of component inventory, management may be required to record additional write-downs which would negatively impact gross margins and EBIT in the period when the write-downs are recorded. If actual market conditions are more favorable, the group may have higher gross margins when products incorporating inventory that was previously written down are sold. At December 31, 2015 inventories amounted to TCHF37’356 (2014: TCHF 33’345) that include allowance for obsolete inventories of TCHF 1’106 (2014: TCHF 256), see note 9.

Recoverability of trade accounts receivablesManagement makes estimates of the collectability of accounts receivables and regularly reviews the adequacy of the allowance for doubtful accounts after considering the amount of aged accounts receivables, each customer’s ability to pay, and the collection history of each customer. Management regularly reviews past due invoices to determine if an allowance is appropriate based on the customer’s risk category using the factors discussed above. Assumptions and judgments regarding collectability of trade accounts receivables could differ from actual events. While credit losses have historically been within the group’s expectations and the allowance established, the group may not continue to experience the same credit loss rates as in the past.

To control the risk of the recoverability of accounts receivables, an insurance policy covering the risk of customers’ insolvency has been entered into. The gross amount of trade accounts receivables at December 31, 2015 amounted to TCHF 45’022 (2014: TCHF 39’876) and the allowance for doubtful receivables amounted to TCHF 1’232 (2014: TCHF 1’034), see note 8.

Capitalization of development costsAfter the technical feasibility of products to be developed has been demonstrated, u-blox capitalizes the related development costs until such time as the product is commercialized. However, there can be no assurance that such products will complete the development phase or will be commercialized or that market conditions will not change in the future requiring a revision of management’s assessment of such future cash flows which could lead to additional amortization or impairment charges. The group has capitalized development costs with a carrying amount of TCHF 54’734 (2014: TCHF 38’402), see note 11.

Impairment of non-current assetsIn addition to the regular, periodic test applied to goodwill, non-current assets are reviewed whenever there are indications that, due to changed circumstances or events, their carrying amount may no longer be recoverable. If such a situation arises, the recoverable amount is determined on the basis of expected future cash inflows. It corresponds to either the discounted value of expected future net cash flows or the expected net selling price. If the recoverable amount is below the carrying amount a corresponding impairment lossis recognized in the income statement. The main assumptions on which these measurements are based include growth rates, margins and discount rates. The cash inflows actually generated can differ considerably from discounted projections. In addition, useful lives can become shorter or assets impaired if the purpose for which property, plant and equipment are used changes, or medium-term revenues are lower than expected. The carrying amounts and information regarding impairments of the items of property, plant and equipment and intangible assets affected are set out in notes 10 and 11. At December 31, 2015 the net value of the property, plant and equipment is TCHF 14’708 (2014: TCHF 14’836) and for the other intangible assets TCHF 88’042 (2014: TCHF 70’502).

GoodwillAs of December 31, 2015, the carrying amount of goodwill from acquisitions totaled TCHF 56’716 (2014: TCHF 57’903). The recoverability of goodwill is tested for impairment annually. The value of goodwill is primarily dependent upon projected cash flows, the discount rate (WACC) and long-term growth rate. The significant assumptions are disclosed in note 11. Changes to these assumptions may result in an impairment loss in the following year.


Income taxesAt December 31, 2015, the current tax liability is TCHF 1’496 (2014: TCHF 1’994) and the current tax asset is TCHF 5’620 (2014: TCHF 5’184). The liability for deferred income taxes is TCHF 4’628 (2014: TCHF 3’815), the asset for deferred income taxes is TCHF 6’930 (2014: TCHF 4’826) and not capitalized tax loss carry forwards amounted to TCHF 0 (2014: TCHF 464), as disclosed in note 23. Current tax liabilities are measured on the basis of interpretations of the tax regulations in place in the relevant countries. Management believes that these estimates are reasonable and that the recognized assets and liabilities taking into account income tax-related uncertainties are adequate. Various internal and external factors may have favorable or unfavorable effects on income tax assets and liabilities. The adequacy of the group’s interpretation is assessed by the tax authorities in the course of the final assessments or tax audits, which can result in material changes to tax expense.

Furthermore, in order to determine whether tax loss carry forwards are recognized as an asset, the group critically assesses the probability that there will be future taxable profits against which to offset them. This assessment depends on a variety of influencing factors and developments. Changes in these factors may have a material effect on tax expense (see note 23).

ProvisionsCertain participants in the wireless industry protect and pursue their intellectual property rights. Relying on third party technology that is integrated into some of the products implies the risk of paying royalties for use of such technology. u-blox is involved in personnel and warranty related claims incidental to the ordinary course of business. The process of determining the appropriate provision requires judgement. Based on best estimates provisions of TCHF 5’780 (2014: TCHF 4’450) has been recorded to reflect potential liabilities for royalties, personnel related costs and warranties (see note 15).

Net pension liabilityThe Swiss pension plan qualifies as a defined benefit plan. The determination of the net pension liability and cost from this plan are based upon statistical and actuarial calculations. The present value of the defined benefit obligation is impacted by assumptions on discount rates used to arrive at the present value of future pension liabilities and assumptions on future increases in salaries and benefits. Additionally, the group’s independent actuaries use statistically based assumptions covering areas such as future withdrawals of participants from the plan and estimates on life expectancy. The actuarial assumptions used may differ materially from actual results due to changes in market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants and other changes in the factors being assessed.

The pension obligation in Italy is to accrue for each individual employee a pension amount which will be due on retirement or when employment ends, unless the employee decides to have the yearly cost to be paid in a defined contribution plan. The accrued amount is considered as a defined benefit plan and has to be provisioned for by the company. The present value of the defined benefit obligation is impacted by assumptions on discount rates used to arrive at the present value of future liabilities and assumptions on future increases in salaries and benefits. Additionally, the group’s independent actuaries use statistically based assumptions covering areas such as future withdrawals of participants.

The above described differences could materially impact the assets or liabilities recognized in the statement of financial position in future periods. At December 31, 2015, the net present value of the group’s defined benefit obligation is TCHF 12’153 (2014: TCHF 8’930) (see note 16).


4 CHANGES IN SCOPE OF CONSOLIDATIONAt January 1, 2015 u-blox has founded u-blox Berlin GmbH for integration of the asset deal with Lesswire.

The following business combination took place during the twelve months period ended December 31, 2015:

Asset deal with Lesswire, BerlinAt January 1, 2015 u-blox AG acquired from Lesswire, a company specializing in short range radio communication modules the following business.

The business combination in accordance with IFRS 3 of Lesswire established itself as a successful player in the Vehicle-to-Vehicle (V2V) communication systems markets worldwide. With the asset deal u-blox take over 11 employee at the acquisition date. The company is headquartered in Berlin, Germany. Lesswire products are an excellent complement to the existing portfolio of u-blox and will benefit from u-blox’ worldwide market presence.

The business combination had the following effect on the Group’s assets and liabilities:

(in CHF 000s)Acquired assets

at fair value

Inventories 224

Property, plant and equipment 121

Intangible assets

Acquired technology 3’093

Customer relationship 534

Intellectual property 361

Total assets 4’333

Net assets 4’333

Goodwill 3’483

Total consideration transferred 7’816

Settled by

Cash payment in 2014 7’455

Cash payment in 2015 361


Paid in cash in 2014 -7’455

Paid in cash in 2015 -361

Acquisition of business -7’816

The goodwill represents intangible assets that do not qualify for a separate recognition as well as the assembled workforce of Lesswire. The goodwill is fully allocated to the Positioning and Wireless products segment and expected to be not deductible for tax purposes. The acquired receivables are measured at fair value which is equal to the contractual gross amounts. They are expected to be fully collectible. The acquisition had a positive impact on revenues of the group in 2015 of CHF 5.7 million and a positive impact of CHF 0.3 million on net profit of the group in 2015 since the date of acquisition.


The following business combinations took place in 2014:

connectBlue AB, MalmöAt 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 successful player in the short range radio markets worlwide and employed 29 employees as of the acquisition date. The company is headquartered in Malmö, Sweden. connectBlue’s products are an excellent complement to the existing portfolio of u-blox and will benefit from u-blox’ worldwide market presence.

The acquisition had the following effect on the Group’s assets and liabilities:

(in CHF 000s)

Acquired assetsand liabilities at

fair value

Cash and cash equivalents 1’548

Trade accounts receivables 1’237

Inventories 611

Other receivables 212

Prepaid expenses and accrued income 147


Intangible assets

Customer relationship 2’720


Capitalized development costs 224

Deferred tax assets 930


Trade accounts payables -743

Other payables -19

Accrued expenses -990

Deferred tax liabilities -1’970

Net assets 10’390

Goodwill 15’878



Cash and cash equivalents acquired 1’548

Acquisition of subsidiary, net of cash acquired -24’720

The goodwill represents intangible assets that do not qualify for a separate recognition as well as the assembled workforce of connectBlue. The goodwill is allocated to the Positioning and Wireless products segment and is not expected to be deductible fortax purposes. The gross contractual amount of receivables is equal to the fair value. All receivables are expected to be collectible. The acquisition had a positive impact on revenues of the group in 2014 of CHF 8.5 millions and a positive impact of CHF 1.4 million on net profit of the group in 2014 since the date of acquisition.

Antcor S.A., AthensAt August 6, 2014 u-blox AG acquired 100% of the shares of Antcor, a company specializing in short range radio communication modules. Antcor established itself as a successful player in the short range radio markets worlwide and employed 23 employees as of the acquisition date. The company is headquartered in Athens, Greece. Antcors technology is an excellent complement to the existing portfolio of u-blox and will benefit from u-blox’ broader know-how and worldwide market presence.

The acquisition had the following effect on the Group’s assets and liabilities:

(in CHF 000s)

Acquired assetsand liabilities at

fair value

Cash and cash equivalents 293

Trade accounts receivables 91

Other receivables 202


Intangible assets


Intellectual property 1’590

Financial assets 4

Deferred tax assets 92


Trade accounts payables -26

Other payables -206

Accrued expenses -48

Short-term loan liabilities -142

Net pension liabilities -15

Deferred tax liabilities -455

Net assets 3’212

Goodwill 4’758


Settled by:

Cash payment -5’721

Deferred payment in cash -2’249


Cash and cash equivalents acquired 292

Acquisition of subsidiary, net of cash acquired -5’429

The undiscounted contingent consideration is estimated to be in a range of CHF 0 to CHF 3.9 million in dependency of the licence revenue with the Antcor IP and governmental grants in 2015 and 2016. The acquired receivables are measured at fair value which is equal to the contractual gross amounts. They are expected to be fully collectible. The goodwill represents intangible assets that do not qualify for a separate recognition as well as the assembled workforce of Antcor. The goodwill is fully allocated to the Positioning and Wireless products segment and is not expected to be deductible for tax purposes. The acquisition had a positive impact on revenuesof the group in 2014 of CHF 0.7 million and a positive impact of CHF 0.3 million on net profit of the group in 2014 since the date of acquisition.

Had the two acquisitions taken place at January 1, 2014, the consolidated income statement for 2014 would show pro-forma revenue of CHF 274.8 million and net profit of CHF 33.0 million. Acquisition related costs for all acquisitions of total CHF 0.1 million have been charged to general and administrative expenses in the consolidated income statement for the year ended December 31, 2014.



5 SEGMENT REPORTINGAccording to IFRS 8 ’Operating Segments’, the identification of the reportable operating segments has to follow the management approach. Therefore the external segment reporting is based on the internal organizational and management structure, as well as internal reports to the Chief Operating Decision Maker (CODM). The group’s CODM is the Board of Directors of u-blox Holding AG.

The following reportable segments were identified:

Positioning and Wireless productsThe group develops and distributes GPS/GNSS positioning receivers and wireless communication modules which are mainly used in automotive, industrial and consumer applications. Products are marketed and sold by the u-blox worldwide sales organization. The products are manufactured by third parties. The group coordinates the whole supply chain and manages the world-wide production and distribution of the products. The acquisition of u-blox Malmö AB (former connectBlue), u-blox Athens (former Antcor) in 2014 and the business combination of Lesswire in 2015 are allocated to this segment.

Wireless servicesSince the acquisitions of u-blox Italia S.p.A. and u-blox San Diego, Inc., u-blox offers also services in the wireless communication technology which forms a separate business segment as these products consist of delivery of reference designs and software.

Segment information at December 31

Positioning and Wireless products

Wireless services Total segments

Non-allocated/eliminations Group

(in CHF 000s) 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

Revenue third 337’956 269’799 385 246 338’341 270’045 0 0 338’341 270’045

Revenue intragroup 0 0 25’732 23’827 25’732 23’827 -25’732 -23’827 0 0

Total Revenue 337’956 269’799 26’117 24’073 364’073 293’872 -25’732 -23’827 338’341 270’045

EBITDA 73’184 54’889 6’707 4’436 79’891 59’325 -1’179 -721 78’712 58’604

Depreciation -6’192 -4’602 -1’835 -1’670 -8’027 -6’272 0 0 -8’027 -6’272

Amortization -16’232 -12’238 -404 -1’019 -16’636 -13’257 0 0 -16’636 -13’257

Impairment -2’758 0 0 0 -2’758 0 0 0 -2’758 0

EBIT 48’002 38’049 4’468 1’747 52’470 39’796 -1’179 -721 51’291 39’075

Finance income 996 4’546

Finance costs -4’674 -658

EBT 47’613 42’963

Assets 240’232 223’485 14’956 13’460 255’188 236’945 131’655 64’802 386’843 301’747

Liabilities 126’695 79’835 5’705 4’931 132’400 84’766 6’122 4’105 138’522 88’871

Additions to non-current assets 48’936 45’434 1’535 1’099 50’471 46’533 0 0 50’471 46’533

Revenues are derived from:

(in CHF 000s)For the year endedDecember 31, 2015

For the year endedDecember 31, 2014

Sale of goods 337’472 269’170

Services rendered 385 246

License fees 484 629

Total 338’341 270’045


Geographic informationu-blox in Switzerland is the main decision making body and bears the associated business risks. For reasons of maintaining a market presence in proximity to the customers, marketing and sales are managed by three regional managers, respectively. However, resource allocation to these regions is not meaningful as the regional staff is mainly acting as representative of u-blox and regional managers are not part of the management of u-blox. Furthermore most of the businesses are developed on a global base with partners of our customers involved in various geographic regions.

The following table summarizes revenue by geographic region based on customers’ location:



in CHF 000s % share in CHF 000s % share

EMEA 77’379 22.9 67’085 24.8

thereof: Switzerland 766 0.2 1’331 0.5

thereof: Germany 21’432 6.3 18’141 6.7

America 97’432 28.8 73’482 27.2

thereof: United States of America 91’756 27.1 65’785 24.4

Asia Pacific 163’530 48.3 129’478 48.0

thereof: China and Hong Kong 105’020 31.0 86’030 31.9

Total 338’341 100.0 270’045 100.0

The following table summarizes property, plant and equipment and intangible assets by geographic region as allocated:



in CHF 000s % share in CHF 000s % share

EMEA 155’445 97.5 139’041 97.1

thereof: Switzerland 77’654 48.7 57’191 39.9

thereof: UK 22’779 14.3 24’537 17.1

thereof: Sweden 20’460 12.8 23’754 16.9

America 3’009 1.9 3’054 2.1

Asia Pacific 1’012 0.6 1’146 0.8

Total 159’466 100.0 143’241 100.0


6 CASH AND CASH EQUIVALENTS


Petty cash 14 13

Cash at banks 112’007 37’282

Call and fixed-term deposits 366 367

Total 112’387 37’662

Composition of cash and cash equivalents by currency

(in CHF 000s)

CHF 32’192 7’581

USD 55’007 22’346

EUR 23’289 5’365

GBP 563 1’813

SGD 34 16

CNY 179 66

KRW 44 60

TWD 5 12

JPY 435 81

PKR 387 244

SEK 219 40

INR 34 38

7 MARKETABLE SECURITIESIn November 2009, u-blox entered into an asset management agreement with Zürcher Kantonalbank to invest in CHF bonds. This amount is being increased or decreased at least on an annual basis, based on the cash requirements of the group. The interest received on the investments is reinvested. The rating of the debtors of the bonds which may be invested into have to meet highest credit ratings at purchase date, see note 24. The agreement can be terminated with immediate effect.

8 TRADE ACCOUNTS RECEIVABLES


Gross amount 45’022 39’876

Allowance for doubtful receivables -1’232 -1’034

Total 43’790 38’842

Composition by currency (in CHF 000s)

USD 38’595 33’361

EUR 6’212 5’162

JPY 214 157

GBP 0 156

CHF 0 4

SEK 1 2

Composition by regions (in CHF 000s)

EMEA 10’546 7’438

Americas 20’682 17’477

Asia Pacific 13’794 13’927

Trade accounts receivables by region are based on customer billing location.


At the balance sheet date the aging structure of trade accounts receivables was as follows:

At December 31, 2015 At December 31, 2014

(in CHF 000s)Gross

receivablesNet

receivablesGross

receivablesNet

receivables

Not yet due 37’882 37’808 16’398 16’398

1 - 30 days overdue 5’288 5’288 14’995 14’995

31 - 90 days overdue 564 553 6’519 6’461

91 - 180 days overdue 110 106 1’000 902

More than 180 days overdue 1’178 35 964 86

Total 45’022 43’790 39’876 38’842

Trade accounts receivables which are not yet due are mainly receivables arising from long-term standing customer relationships. Based on past experiences, u-blox does not expect any significant defaults.

The allowance for doubtful receivables can be further analyzed as follows:

(in CHF 000s) 2015 2014

Individually assessed value adjustments

At January 1, 1’034 563

Additions due to business combinations 0 273

Change 198 198

Total value adjustments at December 31, 1’232 1’034

The individually assessed impairment allowance amounts to TCHF 1’232 (previous year: TCHF 1’034). It is assumed that a small part of theunderlying receivables will eventually be paid. For further information on credit management and trade accounts receivables see note 24.

9 INVENTORIES


Raw material (components) 10’810 12’494

Work in process 13’359 10’160

Finished products 14’293 10’947

Allowance for obsolete inventories -1’106 -256

Total 37’356 33’345

Components and changes in finished products recognized as cost of sales amounted to CHF 169.2 million (2014: CHF 138.8 million). The allowance relates to inventories considered obsolete.


1)

10 PROPERTY, PLANT AND EQUIPMENT

Cost (in CHF 000s)

Furniture, equipment

and vehiclesIT

infrastructure

Tools andtest

infrastructure Total

Balance at January 1, 2014 16’840 1’234 13’796 31’870

Addition 4’141 424 2’398 6’963

Acquisitions due to business combinations 10 119 204 333

Derecognition -49 -39 -84 -172

Translation differences 85 33 46 164

Balance at December 31, 2014 21’027 1’771 16’360 39’158

Additions 4’543 505 3’384 8’432

Acquisitions due to business combinations 121 0 0 121

Derecognition -400 -64 3 -461

Reclassification -212 48 164 0

Translation differences -993 -82 -95 -1’170


Accumulated depreciation (in CHF 000s)

Furniture, equipment

and vehiclesIT

infrastructure

Tools andtest

infrastructure Total

Balance at January 1, 2014 8’965 712 8’429 18’106

Depreciation 3’412 378 2’482 6’272


Translation differences -7 18 7 18


Depreciation 4’103 437 3’487 8’027


Translation differences -520 -42 -20 -583


Net carrying amount at December 31, 2014 8’694 700 5’442 14’836

Net carrying amount at December 31, 2015 8’520 763 5’425 14’708

The value of property, plant and equipment for the purposes of insurance against fire amounted to CHF 10.0 million at December 31, 2015 (CHF 11.8 million at December 31, 2014). During 2015 and 2014 no impairment losses were recognized on tangible assets. The group did not have any capital commitments at December 31, 2015 (December 31, 2014: none).

Depreciation for the year is recorded in the following income statement positions:

(in CHF 000s) 2015 2014

Cost of sales 2’180 2’169

Distribution and marketing expenses 122 132

Research and development expenses 5’003 3’536

General and administrative expenses 722 435

Total depreciation 8’027 6’272


11 GOODWIL AND OTHER INTANGIBLE ASSETS

Cost (in CHF 000s) Goodwill

Intellectual property

rights/acquired

technology Software

Capitalized development

costs

Customer relationships/other intangi-

ble assets

Totalother

intangibleassets

Balance at January 1, 2014 37’825 33’152 9’644 40’719 3’173 86’688

Additions 0 4’630 1’360 20’731 0 26’721

Acquisitions due to business combinations 20’636 9’572 0 224 2’720 12’516

Derecognition 0 0 -2 0 0 -2

Translation differences -558 134 64 -49 -123 26

Balance at December 31, 2014 57’903 47’488 11’066 61’625 5’770 125’949

Additions 0 5’932 1’597 27’039 0 34’568

Acquisitions due to business combinations 3’483 3’454 0 0 534 3’989

Derecognition 0 0 -201 -22 0 -223

Translation differences -4’670 -1’410 -361 -95 -436 -2’302

Balance at December 31, 2015 56’716 55’464 12’101 88’547 5’868 161’981

Accumulated amortization and impairment losses (in CHF 000s) Goodwill

Intellectual property

rights/acquired

technology Software

Capitalized development

costs

Customer relationships/ other intan-gible assets

Totalother

intangibleassets

Balance at January 1, 2014 0 14’245 7’455 18’131 2’287 42’118

Amortization 0 5’364 1’934 5’099 860 13’257

Derecognition 0 0 0 0 0 0

Translation differences 0 35 20 -7 24 72

Balance at December 31, 2014 0 19’644 9’409 23’223 3’171 55’447

Amortization 0 6’677 1’127 7’934 898 16’636

Impairment 0 67 0 2’691 0 2’758

Derecognition 0 -1 -201 0 0 -202

Translation differences 0 -112 -357 -35 -197 -701

Balance at December 31, 2015 0 26’275 9’978 33’813 3’872 73’938

Net carrying amount at December 31, 2014 57’903 27’844 1’657 38’402 2’599 70’502

Net carrying amount at December 31, 2015 56’716 29’189 2’123 54’734 1’996 88’042

1) The largest part consists of internally developed costs

In 2015 u-blox recognized an impairment loss on capitalized development cost in the amount of CHF 2.7 million. The impairment was caused by a change in the supplier’s roadmap that requires u-blox to re-design the specific modules based on the chipset of a new supplier. During 2014 no impairment losses were recognized on intangible assets. The group did not have any capital commitments at December 31, 2015 (December 31, 2014: none).

Amortization for the year is recorded in the following income statement positions:

(in CHF 000s) 2015 2014

Cost of sales 2’217 1’324

Distribution and marketing expenses 582 430

Research and development expenses 13’679 11’392

General and administrative expenses 158 111

Total amortization 16’636 13’257

The impairment for the year is recorded in the income statement position research and development expenses.

1)

1)


GoodwillGoodwill has been allocated to the group’s Cash Generating Units (“CGU“) which are identical to the group’s reportable segments as follows:


Positioning and Wireless products 55’880 56’975

Wireless services 836 928

Total goodwill 56’716 57’903

ImpairmentThe group of intangible assets of each CGU, including allocated goodwill, is tested for impairment at least annually. The value in use is thereby determined based on future discounted cash flows. As a basis for the calculation, the four-year mid-term plan is used. Subsequent years are included using a perpetual annuity. The projections are based on knowledge and experience and also on judgments made by management as to the probable economic development. Consequently, it is assumed that for all CGU’s, there are no planned significant changes in their organization. The underlying projections for the next four years are therefore calculated based on historical figures and the latest market estimates. Pre-tax discount rates were applied in determining the recoverable amount of the units. The discount rates were estimated based on an industry weighted average cost of capital.

Following parameters have been used for the calculations:

Discount rate

2015Growth rate

(residual value) Discount rate

2014Growth rate

(residual value)

Positioning and Wireless products 9.49% 3% 10.00% 3%

Wireless services 9.49% 3% 9.99% 3%

Pre-tax discount rate for:

Positioning and Wireless products 11.00% 11.90%

Wireless services 11.84% 12.54%

The growth rate does not exceed the long-term average growth rate for the industry.

For the CGU Positioning and Wireless products and the CGU Wireless services u-blox management is of the opinion that none of the anticipated changes in key assumption which can be reasonably expected would cause the carrying amount of the CGU to exceed its recoverable amount.


12 TRADE ACCOUNTS PAYABLES


Trade accounts payables 24’195 28’623

Total 24’195 28’623

Composition by currency (in CHF 000s)

CHF 359 1’484

USD 21’941 24’375

EUR 1’712 2’031

GBP 4 20

SEK 174 708

PKR 0 5

JPY 5 0

13 ACCRUED EXPENSES


Personnel related 12’487 9’087

Other accruals 9’495 7’687

Total 21’982 16’774

Thereof classified as financial instruments (note 24) 9’495 6’534

Accrued expenses include liabilities for profit sharing as well as accruals for compensated untaken leave, social security, licenses, insurances, warranties, lawyer and administration services.

14 FINANCIAL LIABILITIESAt April 23, 2015, u-blox issued a bond for CHF 60.0 million (net cash inflow of CHF 59.2 million) with a coupon of 1.625% p.a. and a term to maturity of 6 years. The current borrowings from 2014 of CHF 20.0 million were repaid in 2015.

15 PROVISIONS

(in CHF 000s) Royalties Other Total

At January 1, 2015 3’442 1’008 4’450

Additions 991 2’942 3’933

Release -1’600 -460 -2’060

Used during year 0 -543 -543

At December 31, 2015 2’833 2’947 5’780

u-blox products are designed to conform to certain wireless industry standards which are based on certain patented technologies. A provision for royalty payments is recorded which is estimated to be due to these patent holders once the license agreements are concluded with them. The provision is based on absolute amounts, and on a percentage of individual product revenues and is recorded at the time revenue is recognized. Should the actual royalties to be paid under license agreements signed in the future differ from the estimates, the royalty provision would have to be revised. The provisions for royalties are considered to have a duration of more than one year and therefore are classified as non-current. u-blox is also involved in various personnel or warranty related legal cases incidental to the ordinary course of its business. Provisions are recorded based on the best estimate of future probable economic outflow. Management believes that these provisions are sufficient. The other provisions are considered to have a duration between 1 and 5 years, therefore TCHF 0 (2014: TCHF 925) are classified as current and TCHF 2’947 (2014: TCHF 83) are classified as non-current.


16 PENSION LIABILITYThe group maintains defined benefit plans in Switzerland, Greece and Italy and defined contribution plans in the United Kingdom (UK), in the United States of America (USA), Italy, Sweden, Belgium, Ireland, Finland, Japan, Singapore, Pakistan and China. These plans comply with prevailing legal requirements to cover the majority of employees in the event of death, disability and retirement. The plans are financed by employer and employee contributions in compliance with local legal and fiscal regulations.

16.1 Defined benefit plans

SwitzerlandThe Swiss pension plans are governed by the Swiss Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG), which stipulates that pension plans are to be managed by independent, legally autonomous units. The assets of the pension plan are held within a separate foundation and cannot revert to the employer. Pension plans are overseen by a regulator as well as by a state supervisory body.

u-blox participates in two “Sammelstiftungen”, which are a collective foundations administrating the pension plans of various unrelated employers. The pension plans of u-blox are fully segregated from the ones of other participating employers. One collective foundation bears longevity risk, but has reinsured the investement and other demographic risks with an insurance company. The other collective foundation bears the investment risk, but has no longevity risks.The most senior governing body of the collective foundation is the Board of Trustees, which is also ultimately responsible for the investment strategy and policy, taking into account the foundation’s objectives, benefit obligations (i.e. asset-liability management) and risk capacity. The Board of Trustees has delegated the implementation of the investment policy to an Investment Committee. The benefit-related operations are managed by a life insurance, which is also re-insuring the risks described below. The segregated pension plan of u-blox is administered by a Parity Pension Committee, which is composed of equal numbers of employees and employer representatives. All governing and administration bodies have an obligation to act in the interests of the plan participants.

Plan participants, their spouse and children are insured against the financial consequences of old age, disability and death. Their benefits are defined in pension plan rules compliant with the BVG, which is specifying the minimum benefits that are to be provided. Retirement benefits are based on the accumulated retirement capital which can either be drawn as a life-long annuity or as a lump sum payment. The annuity is calculated by multiplying the retirement capital with the currently applicable conversion rate. The accumulated retirement capital is made of the yearly contributions towards the old age risk by both employer and employee and the interest thereon until retirement. Contributions towards the old age risk are approved by the Parity Pension Committee, based on the rules defined by the Board of Trustees of the collective foundation. Minimum contributions and interest are defined by the BVG and the Swiss Parliament. In2015 the minimum interest was 1.75%; in 2016 it will be 1.25%. Employer and employee are also making contributions towards the disability and death risks; the corresponding benefits are defined based on the current salary and fully re-insured with a life-insurance. The pension fund has concluded an insurance contract with Helvetia that covers death benefits, disability benefits and old age pensions. The pension fund is the policy holder and the beneficiary of the contract. If the applicable tariff of the insurance company results in a lower old age pension than the old age pension according to the plan rules, the pension fund has to finance this difference buy buying a further pension amount within the insurance company.

The benefit plan was replaced as of October 1, 2014 by two benefit plans. These benefit Plans differentiate one from another by the definition of the insured salary, by which the salaries higher than CHF 150’000 have now for the insured salary, a ceiling of 4.5 times the maximum AHV Pension.

These events qualify as plan amendments and the past service gain/loss are reflected and recognized immediately in the service cost of 2014.

As of October 1, 2014 a third Plan was introduced to cover the salary that will not be insured anymore by the Sammelstiftung Swisscanto and will be now insured by Pensflex. This plan also provides benefits in the event of retirement, death, or disability. The plan benefits are based on age, years of service, salary and on an individual old age account. The plan is funded by assets held within a separate independent legal entity. The plan is financed by contributions paid by the employees and by the employer. This new Plan will only pay at retirement the accumulated old-age account. This plan considers the free choice of investment strategy for the individual accounts and three savings model. Given the free choice for the investment strategy, there is no guarantee of interest rate to be allocated to these accounts.

In case of an underfunding of the pension plan measured based on its Swiss GAAP FER financial statements, various measures can be taken such as increasing current contributions of both employer and employee or decreasing the interest on the retirement capital.


ItalyEmployee severance indemnities are due under an Italian plan, the Trattamento di fine rapporto, which is mandatory for Italian companies pursuant to article 2120 of the Italian Civil Code. The deferred compensation to be paid when the employee leaves the Italian entity is based on the employees’ years of service and the taxable compensation earned by the employee during the service period, i.e. the accumulated retirement capital at the time when the employment ends. Benefits are payable in the event of retirement, death, disability or resignation.A liability has been recognized for this plan to be treated as a defined benefit plan for the amounts vested up to December 31, 2006. The liability is not associated with any vesting condition or period or any funding obligation; hence, there are no assets servicing the provision. From January 1, 2007, Italian law has provided that employees may choose whether they accrue their employee severance indemnity to supplementary pension funds or to the company: following the changes defined by Law no. 296 of 27 December 2006 (the “2007 Finance Act”) and the subsequent decrees and regulations (the “Pension Reform”), the severance indemnities accruing from 2007 have been assigned, as elected by the employees, to either the INPS Treasury Fund or to supplementary pension funds and take the form of a defined contribution plan.However, revaluations of the provision for the employee severance indemnities vested up to December 31, 2006, made on the basis of the official cost-of-living index and legally prescribed interest, are retained in the provision for employee severance indemnities.

Movement in net defined benefit liabilityThe following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit liability and its components. The movements in the table below represent mainly the Swiss plan. The unfunded Italian and Greek plans are also included but have no significant impact on the movements.

Defined benefitobligation

Fair value of plan assets

Net defined benefit liability

(in CHF 000s) 2015 2014 2015 2014 2015 2014

Balance at 1 January 33’483 20’781 -24’553 -16’568 8’930 4’213

Included in income statement

Current service cost 3’163 1’731 - - 3’163 1’731

Plan amendments -179 -1’135 - - -179 -1’135

Interest cost / (income) 439 559 -347 -479 92 80

Administration cost - - 56 35 56 35

3’423 1’155 -291 -444 3’132 711

Included in other comprehensive income

Remeasurements loss / (gain):- Actuarial loss / (gain) arising from:

- financial assumptions -489 5’005 - - -489 5’005

- experience adjustments 1’291 1’025 - - 1’291 1’025

- return on plan assets excluding interest income - - 1’073 -735 1’073 -735

Exchange rate differences -56 -12 - - -56 -12

746 6’018 1’073 -735 1’819 5’283

Other

Additions from business combinations - 15 - - - 15

Contributions by employer -3 - -1’725 -1’292 -1’728 -1’292

Plan participants’ contributions 1’098 845 -1’098 -845 - -

Benefits received, net 5’869 4’669 -5’869 -4’669 - -

6’964 5’529 -8’692 -6’806 -1’728 -1’277

Balance at 31 December 44’616 33’483 -32’463 -24’553 12’153 8’930

thereof: funded 11’661 8’371

thereof: unfunded (refers to the Italian and Greek pension plans) 493 559

The expected contribution of the group for defined benefit plans for the financial year 2016 amount to TCHF 1’830.


Principal actuarial assumptions for the Swiss plan only

Calculation of defined benefit obligations At December 31, 2015 At December 31, 2014

Discount rate 1.10% 1.20%

Future salary increases 1.50% 1.50%

Future pension indexations 0.25% 0.25%

Mortality table BVG 2010G BVG 2010G

At 31 December 2015, the weighted-average duration of the defined benefit obligation for the Swiss plan was 22.6 years(2014: 22.5 years).

Sensitivity analysisThe calculation of the defined benefit obligation is sensitive to significant actuarial assumptions. The impact of a change in the respective assumptions on the defined benefit obligation at the end of the reporting period would be as follows:

2015 2014 2015 2014

Change +0.25% +0.25% -0.25% -0.25%

(in CHF 000s)

Change of the discount rate -1’604 -1’439 1’749 1’571

Change of the expected increase in salaries 122 150 -134 -157

The sensitivity analysis is based on realistically possible changes as of the end of the reporting period. Each change in a significant actuarial assumption was analyzed separately as part of the test. Interdependencies were not taken into account.

Asset classes (Swiss plan only)

Fair value of plan assets (CHF 000s) 2015 2014

Equities 9’071 6’727

Bonds 10’522 10’669

Real estate 2’152 2’394

NTF Alternative investments 960 2’130

Qualified insurance policies - 539

Other 4’163 0

Cash 5’595 2’094

32’463 24’553

All equity securities and bonds have quoted prices in active markets.

16.2 Defined contribution plansIn 2015, group contributions recognized as an expense for defined contribution plans were TCHF 1’993 (2014: TCHF 1’487).


17 SHARE CAPITAL AND SHARE PREMIUM

Number of shares

Ordinaryshare capital

CHF 000s

Sharepremium

CHF 000sTotal

CHF 000s

At January 1, 2014 6’455’496 5’810 92’556 98’366

Dividends paid-out -8’487 -8’487

Options exercised during the year 133’185 120 5’462 5’582

At December 31, 2014 6’588’681 5’930 89’531 95’461

Dividends paid-out -10’684 -10’684

Options exercised during the year 137’055 123 5’159 5’282

At December 31, 2015 6’725’736 6’053 84’006 90’059

Ordinary share capitalThe company’s ordinary share capital at December 31, 2015 consists of 6’725’736 registered shares with a nominal value of CHF 0.90 each. Dividends per share of CHF 1.60 were paid out in 2015 (2014: CHF 1.30). Transaction costs related to the options exercised in2015 amounting to TCHF 232 have been netted off with the deemed proceeds and recorded in share premium.

Authorized share capitalThe Board of Directors is authorized, at any time until October 16, 2017, to increase the share capital through the issuance of up to 979’000 fully paid-in registered shares with a nominal value of CHF 0.90 each in an aggregate amount not to exceed CHF 881’100. In 2015 the Board of Directors has decreased the authorized share capital.

Conditional share capitalAt the ordinary shareholders’ meeting held on April 24, 2015, the shareholders resolved that the Board of Directors shall be authorized to increase the share capital by a maximum aggregate amount of CHF 567’452.70 by issuing no more than 630’503 fully paid-in registered shares with a nominal value of CHF 0.90. The conditional share capital is used for the exercise of option rights that are and will be granted to the members of the Board of Directors and to the employees of the company and its subsidiaries according to any employee share option plans (ESOP) as approved by the Board of Directors. In 2015, 137’055 options were exercised out of the conditional share capital (2014: 133’185). The conditional share capital amount available decreased accordingly to CHF 188’819 (209’799 shares with a nominal value of CHF 0.90).

18 EARNINGS PER SHAREBasic earnings per share are calculated by dividing the net profit attributable to the equity holders of u-blox Holding AG by the weighted average number of shares outstanding during the year. In the case of diluted earnings per share, the weighted average number of shares outstanding is adjusted assuming all outstanding dilutive options will be exercised. The weighted average number of shares is adjusted for all dilutive options issued under the stock option plans which have been granted.



Net profit (in CHF 000s) 37’098 34’397

Weighted average number of outstanding shares (basic) 6’680’756 6’529’029

Effect of share options on issue 276’341 280’971

Weighted average number of outstanding shares (diluted) 6’957’097 6’810’000

Basic earnings per share (in CHF) 5.55 5.27

Diluted earnings per share (in CHF) 5.33 5.05

At December 31, 2015 the group had 494’152 outstanding options (December 31, 2014: 437’574 outstanding options) granted to employees (see note 19). All the potential ordinary shares arising from outstanding stock options were “in the money” at December 31, 2015. Therefore all granted options were considered for the calculation of the diluted earnings per share in 2015.


19 EMPLOYEE COMPENSATION AND BENEFITS

Personnel expensesPersonnel expenses included in operating expenses consist of the following:



Salaries 37’339 32’236

Share-based payments 4’404 3’361

Social taxes 9’474 8’148

Pension cost 5’125 2’198

Other personnel related expenses 2’866 2’038

Total personnel expenses 59’208 47’981

Average number of employees (FTE*) 670.7 538.4

* (FTE = Full Time Equivalent)

Employee stock option planEmployees of the group are entitled to receive options under a stock option plan with a vesting period of three years and an option period of 6 years. The exercise price is determined by the Board of Directors. For US, Belgium and Finland residents, the exercise price equals the closing price of the share on the SIX Swiss Exchange on the granting date. For all other employees, the exercise price is the volume weighted average share price of the company on the SIX Swiss Exchange during the thirty trading days preceding and including the granting date or the closing price of the share on the SIX Swiss Exchange on the grant date. One option grants the right to purchase one u-blox Holding AG share.

In 2015, 177’548 options were granted to certain members of the Board of Directors, Executive Committee members and employees at an exercise price of CHF 136.72 and 24’995 employee stock options at an exercise price of CHF 137.40.

In 2015, 137’055 options were exercised to buy one share with a nominal value of CHF 0.90 at a share price of CHF 25.50, 26.25, 39.91, 41.20, 48.58, 50.30 and 59.29 per option respectively. Share transaction costs of TCHF 232 were deducted from the proceeds. Net proceeds were recorded in share capital TCHF 123 and share premium TCHF 5’159.

The following table details the movements of outstanding employee stock options:



Weighted average

exercise price in CHF

Number of options

Weighted average

exercise price in CHF

Number of options

Opening balance 44.59 437’574 37.67 431’008

Granted 136.80 202’543 63.64 145’459

Exercised 40.24 -137’055 43.10 -133’185

Forfeited 74.88 -8’910 42.34 -5’708

Ending balance 82.91 494’152 44.59 437’574

Thereof vested and exercisable 42.23 43’050 43.07 39’587


The following table summarizes the employee stock options outstanding at December 31, 2015 and December 31, 2014 respectively:

Expiry dateExercise Price

CHF

Optionsoutstanding at

December 31, 2015

Optionsoutstanding at

December 31, 2014

2016 25.50 0 9’477

2016 26.25 0 55

2017 48.58 10’938 28’909

2017 50.30 382 1’146

2018 39.91 30’966 133’309

2018 41.20 764 7’369

2019 25.50 102’588 104’886

2019 39.15 9’723 9’876

2020 59.29 123’170 126’190

2020 96.15 15’822 16’357

2021 136.72 175’175 0

2021 137.40 24’624 0

Total 89.91 494’152 437’574

Weighted average remaining expected life at December 31, 2.48 years 2.30 years

Weighted average remaining contractual life at December 31, 3.98 years 3.80 years

The weighted average fair value of the outstanding options was CHF 30.54 (2014: CHF 41.11). The fair value of stock options granted is estimated at the date of grant using a binomial model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the valuation model applied at grant date and used for the consolidated financial statements ended December 31, 2015 and 2014 respectively:

2015 2014

Dividend yield 1.30% 1.34%

Expected volatility 33.10% 34.70%

Risk-free interest rate 0.01% 0.61%

Expected life of option 4.50 years 4.50 years

Expected exit rate after vesting 3.00% 3.00%

Weighted average share price CHF 136.80 CHF 63.64

For 2015 and 2014 the expected volatility was based on the historical volatility of the u-blox share.

The expense for employee services received is recognized over the vesting period. The expense from the employee stock option plan recognized in 2015 was TCHF 4’404 (2014: TCHF 3’361).


20 RESEARCH AND DEVELOPMENT

(in CHF 000s) 2015 2014

Research and development expenditures 43’592 34’932

Depreciation and amortization 18’683 14’927

Impairment 2’758 0

Total research and development expenses 65’033 49’859

21 OPERATING EXPENSES BY NATURE

(in CHF 000s) Note 2015 2014

Material costs 9 169’239 138’825

Personnel expenses 19 59’208 47’981

Depreciation 10 8’027 6’272

Amortization and impairment 11 19’394 13’257

Travel- and representation expenses 5’169 4’564

Administration expenses 4’698 5’565

Marketing expenses 2’867 2’132

Rent expenses 3’751 2’710

Other expenses 17’171 10’532

Total 289’524 231’838

The position other expenses mainly consists of product development and software maintenance expenses.

22 FINANCE INCOME/FINANCE COSTS

(in CHF 000s) 2015 2014

Interest income 325 517

Gains on financial instruments at fair value for trading 9 17

Foreign exchange result (gain), net 0 3’500

Other finance income 662 512

Finance income 996 4’546

Losses on financial instruments at fair value for trading -341 -268

Interest expenses -16 -11

Foreign exchange result (loss), net -2’946 0

Other finance costs -1’371 -379

Finance costs -4’674 -658

Total, net -3’678 3’888

All finance income and costs from financial assets and financial liabilities have been recognized in the income statement.


23 INCOME TAX EXPENSE

Income taxes can be analyzed as follows:


Current income taxes 4’527 3’194

Deferred income taxes 5’988 5’372

Total income tax expense 10’515 8’566

The group has operations in various locations, where differing tax laws and income tax rates apply. Consequently, the effective tax rate on consolidated income may vary from year to year, based on the source of earnings. The reconciliation between the effective income tax and the expected income tax based on the consolidated profit before income tax computed with the expected tax rate of the main operating company in Thalwil, is as follows:

2015 2014

in % in CHF 000s in % in CHF 000s

Profit before income tax 47’613 42’963

Income tax rate of u-blox AG, Thalwil 19.2 19.2

Expected income tax expense 9’142 8’249

Effect of different tax rates 1’845 1’524

Effect of non-tax-deductible expenses 176 756

Tax effect of tax-exempt income 0 -26

Prior year adjustments -455 419

R&D tax credits -284 -328

Utilisation of previously unrecognised tax losses 0 -2’064

Other 91 36

Effective income tax expense 10’515 8’566

Deferred tax assets and liabilitiesEffects of temporary differences and tax loss carry forwards that give rise to significant components of deferred tax assets and deferred tax liabilities are as follows:


(in CHF 000s)Deferred

tax assets

Deferred tax

liabilitiesDeferred

tax assets

Deferred tax

liabilitiesChange

2015

Trade accounts receivable (net) 126 - 182 - -56

Inventory - 824 - 824 -

Intangible assets 6 3’335 - 2’841 -488

Other assets 774 328 60 150 536

Pension 2’403 - 830 - 1’573

Accrued expenses personnel 1’130 - 842 - 288

Other liabilities 147 141 528 - -522

Tax loss carry forwards 2’344 - 2’384 - -40

Deferred tax assets/liabilities1) 6’930 4’628 4’826 3’815 1‘291

1) The deferred tax assets/liabilities are calculated at the respective closing date rate whereas the changes in temporary differences are calculated at the average rate for the respective year.


(in CHF 000s) 2015 2014

Deferred income taxes recognized in the income statement -5’988 -5’372

Addition due to business combination 0 -1’403

Deferred income taxes recognized in other comprehensive income 350 870

Recognized in equity 6’974 3’169

Translation differences -45 155

Total changes compared to previous year 1’291 -2’581

The tax deduction resulting from share-based payments exceeds the amount of the related cumulative remuneration expenses from share-based payments. The excess of the deferred tax in the amount of CHF 7.0 million was recognized directly in equity. On temporary differences from investments in subsidiaries of TCHF 2’056 (2014: TCHF 1’720), no deferred tax liability was recorded, as a reversal of the differences through realization (dividend payment or sale of subsidiaries) is not expected in the foreseeable future.

Tax loss carry forwards Deferred tax assets for the carry forward of unused tax losses are recognized to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilized. The tax loss carry forwards structured by expiry date areas follows:

Gross value of tax loss carry forwards Potential tax benefits

(in CHF 000s) 2015 2014 2015 2014

Expiry dates

Expiry within 1 year 0 309 0 62

Expiry within 2 years 0 20 0 4



Expiry between 5 and 16 years 553 1’749 111 306

To be carried forward unlimited 10’738 11’080 2’196 1’956

Total tax loss carry forwards capitalized 11’480 13’436 2’344 2’384

Expiry dates

Expiry within 1 year 0 333 0 67




Expiry between 5 and 16 years 0 0 0 0

To be carried forward unlimited 0 131 0 26

Total tax loss carry forwards not capitalized 0 464 0 93

Total tax loss carry forwards1) 11’480 13’900 2’344 2’477

1) The tax loss carry forwards and the deferred tax assets respectively are calculated at the respective closing date rate. Therefore, the movements in unrecognized tax loss carry forwards include currency differences.


24 FINANCIAL RISK MANAGEMENTThe following table shows the carrying amount of all financial instruments per category. They correspond, approximately, to the fair values in accordance with IFRS.



Cash and cash equivalents 112’387 37’662

Trade accounts receivables 43’790 38’842

Other receivables 6’717 6’591

Accrued income 1’571 1’706


Loans and receivables 52’756 47’723


Financial assets at fair value through profit or loss 11’659 21’730

Trade accounts payables 24’195 28’623


Accrued expenses 9’495 7’585

Financial liabilities 59’284 20’000

Liabilities at amortized costs 96’213 57’336

Other payables – contingent consideration 1’272 1’934

Liabilities at fair value through profit or loss 1’272 1’934

The carrying amount of the marketable securities recognized at their fair value is determined on the basis of the bonds prices at the balancesheet date. Information with respect to measurement of contingent consideration is found in note 4. The contingent consideration contains the latest earn-out estimate in connection with the business combinations 2014. The earn-outs reflect the present value of the expected cash outflow which is measured on the basis of the achievement of profit goals defined in the corresponding purchase agreements.

Fair value hierarchyThe different levels of financial instruments carried at fair value or for which the fair value is disclosed 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).


Carrying amounts Fair value

(in CHF 000s) Total Level 1 Level 2 Level 3

Marketable securities 11’659 11’659 0 0

Total assets 11’659 11’659 0 0

Other payables – contingent consideration 1’272 0 0 1’272

Financial liabilities 59’284 60’600 0 0

Total liabilities 60’556 60’600 0 1’272


(in CHF 000s) Total Level 1 Level 2 Level 3

Marketable securities 21’730 21’730 0 0

Total assets 21’730 21’730 0 0

Other payables – contingent consideration 1’934 0 0 1’934

Total liabilities 1’934 0 0 1’934

There were no reclassifications between the various levels in 2015 and 2014. The group has not disclosed the fair value for financial instruments such as trade accounts receivables and payables, because their carrying amounts are a reasonable approximation of fair value.


The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in level 3 of the fair value hierarchy:

(in CHF 000s) 2015 2014

Balance at January 1, 1’934 962

Arising from business combinations 0 1’520

Total gains for the period recognized in other finance income -662 -548

Balance at December 31, 1’272 1’934

Risk exposureThe group has exposure to the following risks from its use of financial instruments:

a) credit riskb) liquidity riskc) market riskc1) interest rate riskc2) currency risk

This note presents information about the group’s exposure to each of the above risks, the group’s objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these consolidated financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the group’s risk management framework. The group’s risk management policies are established to identify and analyze the risks faced by the group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the group’s activities. The group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The group Audit Committee oversees how management monitors compliance with the group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the group. Internal reviews by the group accountant assist the group Audit Committee in its oversight role. Internally both regular and ad hoc reviews of risk management controls and procedures are affected.

a) Credit riskCredit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the group’s cash and cash equivalents, trade accounts receivables from customers and investment securities.

Trade accounts receivables and other receivables The group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the group’s customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit risk. In general, the group minimizes part of the credit risk as far as possible by way of credit insurance or a requirement of customers to either guarantee their payment by Letter of Credit (L/C) or to make a payment in advance. Collections and payments are continuously monitored.

The group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.


Cash and cash equivalents and marketable securitiesThe group limits its exposure to credit risk by only investing in fixed time deposits and marketable securities such as Swiss Francs bonds or similar instruments with counterparties that have a credit rating of at least A+ from Standard & Poor’s and A1 from Moody’s. The maximum duration is limited to 4 years. Given these high credit ratings, management does not expect any counterparty to fail to meet its obligations.

GuaranteesThe group’s policy is to provide financial guarantees only to wholly-owned subsidiaries. At December 31, 2015 no guarantees were outstanding (December 31, 2014: none).

The maximum credit risk on financial instruments corresponds to the carrying amounts of the individual financial assets. u-blox has not entered into any guarantees or similar obligations that would increase the risk over and above the carrying amounts. Details of the due dates of receivables are shown in note 8.

The maximum credit risk as per the balance sheet date was as follows:

(in CHF 000s)For the year endedDecember 31, 2015


Total cash and cash equivalents 112’387 37’662


Total trade accounts receivable (net) 43’790 38’842

Total other receivables 6’717 6’591

Accrued income 1’571 1’706

Total financial assets 678 584

Total 176’802 107’115

b) Liquidity riskLiquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to managing liquidity is to ensure, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation.

The group uses short-term forecasts, which assists it in monitoring cash flow requirements and optimizing its cash return on investments. Typically the group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the group maintains the following lines of credit:

The group has access to an undrawn CHF 40.0 million overdraft facility that would be – in case of a draw down – secured by a pledge of the trade accounts receivables. Interest would be payable at the rate of 3% p.a. plus commission of 0.25% per quarter. The bank may adjust the interest rate in line with the market interest rates. Management considers that the group is not exposed to any significant risks arising from not being able to meet the financial obligations at the end of the reporting period.


The following are the contractual maturities of financial liabilities:

For the year ended December 31, 2015 (in CHF 000s)

Carrying amounts

Contrac-tual cash

flowsup to 6 months

6-12 months

1 - 5 years

morethan 5

years

Total trade accounts payables 24’195 24’195 24’195 0 0 0

Other payables 3’322 3’322 3’322 0 0 0

Other payables – contingent consideration 1’272 1’272 0 0 1’272 0

Accrued expenses 9’495 9’495 9’495 0 0 0

Financial liabilities 59’284 65’892 981 0 3’924 60’987

Total 97’568 104’176 37’993 0 5’196 60’987

For the year ended December 31, 2014 (in CHF 000s)

Carrying amounts

Contrac-tual cash

flowsup to 6 months

6-12 months

1 - 5 years

morethan 5

years

Total trade accounts payables 28’623 28’623 28’623 0 0 0

Other payables 1’128 1’128 1’128 0 0 0

Other payables – contingent consideration 1’934 1’934 414 0 1’520 0

Accrued expenses 7’585 7’585 7’585 0 0 0

Loans 20’000 20’000 20’000 0 0 0

Total 59’270 59’270 57’750 0 1’520 0

c) Market riskMarket risk is the risk that changes in market prices, such as foreign exchange and interest rates will affect the group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

c1) Interest rate riskInterest rate risk arises from movements in interest rates which could have adverse effects on the group’s net income or financial position. The group places its cash and cash equivalents primarily in marketable securities. Interest rate risk exposure exists for the invested assets as the fair value of the bonds depend on the actual interest rates. The risk is limited by investing in bonds of a maximum remaining duration of 4 years. Revenue and operating cash flows are substantially independent of changes in market interest rates. The cash position is used for general corporate purposes and to fund the planned growth. Management considers that the group is not exposed to any significant risks arising from changes in market interest rates and therefore no hedging instruments are utilized.

An increase of the Swiss Franc interest rate of 0.25% would decrease the value of the marketable securities by 0.27% resulting in a negative impact of TCHF 59 on the profit before income tax.

c2) Currency riskAlmost all of the revenue and cost of sales are denominated in USD or EUR. A majority of overhead and other fixed costs are denominated in CHF. This exposure to different currencies potentially results in gains or losses with respect to movements in foreign exchange rates and the impact of such fluctuations can be material. Accordingly, u-blox enters from time to time into economic hedging transactions pursuant to which u-blox purchases CHF under forward purchase contracts in order to minimize its CHF exposure. These transactions require judgments and assumptions about the future expense levels, and as a result, do not entirely eliminate the exposure to currency fluctuations. Furthermore, while the hedging transactions provide fixed currency rates for periods covered by the contracts, the transactions will not protect the group from long-term movements in currency rates. The fact that revenue and cost of sales are to a certain extent denominated in the same currency provides a natural hedge.


The table below shows the significant currency risks arising from financial instruments in a foreign currency from the perspective of the group entity which holds these financial instruments:



(in CHF 000s) USD EUR USD EUR

Cash and cash equivalents 49’250 21’677 16’859 3’828

Trade accounts receivables 17’750 6’012 16’500 5’165

Receivables from subsidiaries 28’418 1’325 22’078 2’829

Other receivables 126 3’592 134 4’381

Trade accounts payables -21’911 -1’201 -24’371 -1’764

Other payables – other -2’248 -1’301 -306 -1’371

Other payables – contingent consideration 0 -1’352 -414 -1’520

Payables to subsidiaries -17’553 -11’222 -9’158 -6’656

Accrued expenses -30 0 -1’011 0

Total currency exposure 53’802 17’530 20’311 4’892

A 10% change in exchange rates at December 31, 2015 would have increased or decreased net profit by the amounts listed below. The assumption underlying this analysis is that all other variables, in particular interest rates, remain unchanged. Substantially larger effects on the income statement can be caused by exchange rate changes related to business transactions during the year, which do not lie within the scope of IFRS 7.

Sensitivity analysis 2015 2014 2015 2014

USD/CHF USD/CHF EUR/CHF EUR/CHF

Change 10% 10% 10% 10%

(in CHF 000s)

Impact on income statement for positive change 4’347 1’641 1’416 395

Impact on income statement for negative change -4’347 -1’641 -1’416 -395

In respect of other monetary assets and liabilities denominated in foreign currencies, the group ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances. In 2015 the group did not enter into any derivative financial instruments contracts (2014: none).

25 CAPITAL MANAGEMENT

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors both the number of shareholders, as well as the return on capital, which the group defines as net profit divided by total shareholders’ equity. Return on capital was 14.9% in 2015 (2014: 11.2%). Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements. The Board plans to invest future profits, if any, into the long-term growth of the business but also, based on the sound cash situation, wants to let the shareholders participate in the business result by dividend payments or by repaying part of the share premium.


26 OPERATING LEASESFuture minimal rental payments for equipment and facility leases at December 31, 2015 are as follows:

Operating leases due (in CHF 000s) At December 31, 2015 At December 31, 2014

Within 1 year 3’321 2’769

Within 2 years 3’057 2’248



Thereafter 1’549 7’196

Total 12’387 15’982

This position mainly consists of office space rented.

27 GUARANTEES, PLEDGES IN FAVOR OF THIRD PARTIES AND OTHER CONTINGENT LIABILITIESAt December 31, 2015 and 2014 there were no guarantees in favor 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 companies.

28 RELATED PARTIESRelated parties are members of the Board of Directors and Executive Committee, close family members of the aforementioned parties, and shareholders with a significant influence or control over the group, as well as entities under these parties’ control.

The total compensation to the Board of Directors and Executive Committee was:



Salaries 2’958 2’604

Share-based payments 1’139 606

Social taxes 580 344

Employee benefit costs 286 193

Other non cash benefits 8 9

Total compensation 4’971 3’756

There were no other significant transactions with related parties during the years ended December 31, 2015 and 2014. The detailed disclosure of compensation and shareholdings of the Board of Directors and Executive Committee as per Swiss law can be found in the compensation report.

29 POST BALANCE SHEET EVENTSThe Board of Directors authorized these consolidated financial statements for issuance on March 17, 2016. In January 2016 u-blox granted 163’950 employee stock options at an exercise price of CHF 210.28 and 43’370 employee stock options at an exercise price of CHF 214.50 under a new stock option plan to members of the Board of Directors, Executive Committee members and certain employees. There have been no other events between December 31, 2015 and the date of authorization of these consolidated financial statements that would lead to an adjustment of the carrying amounts of assets and liabilities presented at December 31, 2015.

Report of the statutory auditor | Page 65

Report of the Statutory Auditor to the General Meeting of Shareholders of


Report of the Statutory Auditor on the Consolidated Financial Statements

As statutory auditor, we have audited the consolidated financial statements of u-blox Holding AG, which are presented on page 24 to 64 and comprise the consolidated statement of financial position, consolidated income statement, consolidated statement of com-prehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and notes for the year ended December 31, 2015.

Board of Directors’ ResponsibilityThe board of directors is responsible for the preparation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and the requirements of Swiss law. This responsibility includes designing, implementing and main-taining an internal control system relevant to the preparation of consolidated financial statements that are free from material misstate-ment, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards as well as International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstate-ment of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effec-tiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements for the year ended December 31, 2015 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the board of directors.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG



| Financial statements

(in CHF) Note At December 31, 2015 At December 31, 2014

Assets

Current assets

Cash at bank 24’757’758 1’769’343

Marketable securities 11’659’004 21’729’965

Other receivables - third parties 30’837 38’683

- companies in which the entity holds an investment 13’279’818 22’916’667

Prepaid expenses and accrued income 246’873 179’945

Total current assets 49’974’291 46’634’603

Non-current assets

Prepaid expenses and accrued income 2.2 582’134 0

Loans to group companies 153’010’183 77’900’000

Investment in group company 2.1 14’697’917 14’697’917

Total non-current assets 168’290’234 92’597’917

Total assets 218’264’525 139’232’520

Liabilities and shareholders’ equity

Current liabilities

Accrued expenses 985’732 396’781

Total current liabilities 985’732 396’781

Non-current liabilities

Long-term interest-bearing liabilities 2.2 60’000’000 0

Total non-current liabilities 60’000’000 0

Total liabilities 60’985’732 396’781


Share capital 2.3 6’053’162 5’929’813

Legal capital reserve

- Reserves from capital contributions 2.4 101’387’982 88’969’290

Legal retained earnings

- general legal retained earning 5’801’047 5’568’784

Voluntary retained earnings

Available earnings

- profit brought forward 38’367’852 30’464’612

- profit for the year 5’668’750 7’903’240

Total shareholders’ equity 157’278’793 138’835’739

Total liabilities and shareholders’ equity 218’264’525 139’232’520

Financial statements u-blox Holding AG

Statement of financial position

Financial statements | Page 67

(in CHF) NoteFor the year ended December 31, 2015


Income

Dividend income 2.6 6’000’000 6’000’000

Other financial income 2.7 1’845’687 2’801’629

Other operating income 1’782 1’000

Total income 7’847’469 8’802’629

Expenses

Financial expenses 2.8 -1’342’395 -496’523*

Other operating expenses -829’863 -278’757*

Direct taxes -6’461 -124’111

Total expenses -2’178’719 -899’390

Net profit for the year 5’668’750 7’903’240

Income statement

| Notes to the Financial statements

Notes to the financial statements

1 PRINCIPLESu-blox Holding AG was incorporated on September 21, 2007 in Thalwil, Switzerland by exchange of 100% of the shares obtained by the shareholders of u-blox AG. On October 25, 2007, u-blox Holding AG offered in an initial public offering some of its shares to the public.

1.1 GENERAL ASPECTSThese financial statements were prepared according to the new provisions of the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Certan prior-year amounts have been reclassified to conform to the current year’s presentation and have been marked with an asterisk (*). Where not prescribed by law, the significant accounting and valuation principles applied are described below. The principal accounting policies applied in the preparation of the financial statements are set out below.

1.2 MARKETABLE SECURITIES Securities with a short-term holding period are valued at their quoted market price as at the balance sheet date. A valuation adjustment reserve has not been accounted for.

1.3 LOANS TO GROUP COMPANIES Financial assets include a long-term loan to u-blox AG. It is valued at its acquisition cost.

1.4 SHARE-BASED PAYMENTS Shares awarded to employees within share-based payment programs are granted by capital increase. The amount paid by the employees for the nominal value of the shares awarded is recorded in share capital, while the paid amount exceeding the nominal value is considered to be a share premium and is recorded in legal capital reserves. The difference between the amount paid and the market value of the shares is also recorded in legal capital reserves. u-blox Holding AG is compensated for the difference by subsidiaries.

1.5 LONG-TERM INTEREST-BEARING LIABILITIES Interest-bearing liabilities are recognized in the balance sheet at nominal value. Discounts and issue costs for bonds are recognized as prepaid expenses and amortized on a straight-line basis over the bond’s maturity period. 2. INFORMATION ON BALANCE SHEET AND INCOME STATEMENT ITEMS

2.1 INVESTMENTS

Share capital in (million)Share in capital andvoting rights in %

Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014 indirectly held

u-blox AG, CH-Thalwil CHF 4.23 CHF 4.23 100% 100% indirectly held

u-blox Europe Ltd., UK-Charing GBP 0.06 GBP 0.06 100% 100% indirectly held

u-blox Asia Pacific Ltd., HK-Hong-Kong USD 0.10 USD 0.10 100% 100% indirectly held

u-blox America Inc., US-Reston USD 0.10 USD 0.10 100% 100% indirectly held

u-blox Singapore Pte. Ltd., SG-Singapore SGD 0.10 SGD 0.10 100% 100% indirectly held

u-blox Japan K.K., JP-Tokyo JPY 10.00 JPY 10.00 100% 100% indirectly held

u-blox Italia S.p.A., IT-Sgonico EUR 0.40 EUR 0.40 100% 100% indirectly held

u-blox UK Ltd., UK-Reigate GBP 0.00 GBP 0.00 100% 100% indirectly held

u-blox San Diego Inc., US-San Diego USD 0.00 USD 0.00 100% 100% indirectly held

u-blox Melbourn Ltd., UK-Melbourn GBP 0.14 GBP 0.14 100% 100% indirectly held

u-blox Espoo Oy, FI-Espoo (former Fastrax) EUR 0.05 EUR 0.05 100% 100% indirectly held

u-blox Luton Ltd., UK-Luton GBP 0.00 GBP 0.00 100% 100% indirectly held

u-blox Lahore (Private) Ltd., PK-Lahore PKR 14.11 PKR 14.11 100% 100% indirectly held

u-blox Cork Ltd., IE-Cork EUR 0.00 EUR 0.00 100% 100% indirectly held

u-blox Malmö AB, SE-Malmö (former connectBlue) SEK 0.83 SEK 0.83 100% 100% indirectly held

connectBlue Inc., US-Illinois USD 0.00 USD 0.00 100% 100% indirectly held

u-blox Athens S.A., GR-Athen (former Antcor) EUR 0.18 EUR 0.18 100% 100% indirectly held

u-blox Berlin GmbH, DE-Berlin EUR 0.03 n.a. 100% n.a. indirectly held

Notes to the Financial statements | Page 69

2.2 LONG-TERM INTEREST-BEARING LIABILITIES At April 23, 2015, u-blox issued a bond for TCHF 60’000 (net cash inflow of TCHF 59’200) with a coupon of 1.625% p.a. and a term to maturity of 6 years.

2.3 SHARE CAPITAL The share capital consists of 6’725’736 (2014: 6’588’681) registered shares with a nominal value of CHF 0.90 each.

AUTHORIZED SHARE CAPITAL


Number of registered shares 979’000 1’261’000

With a nominal value of CHF 0.90 each CHF 881’100 CHF 1’134’900

The Board of Directors is authorized, at any time until October 16, 2017, to increase the share capital through the issuance of up to 979’000 fully paid-in registered shares with a nominal value of CHF 0.90 each in an aggregate amount not to exceed CHF 881’100. In 2015 the Board of Directors has decreased the authorized share capital.

CONDITIONAL SHARE CAPITAL


Number of registered shares 209’799 346’854

With a nominal value of CHF 0.90 each CHF 188’819 CHF 312’168

In 2015, 137’055 options were exercised, which reduced the conditional share capital at December 31, 2015 to 209’799 shares with a nominal value of CHF 0.90. At December 31, 2015 there were 494’152 options (at December 31, 2014: 437’574 options) on u-blox Holding AG shares outstanding.

2.4 RESERVES FROM CAPITAL CONTRIBUTIONS The reserves from capital contributions include the premium from capital increases, minus the dividends distributed to date.

From a fiscal point of view, any distributions made from reserves from capital contributions are treated the same as a repayment of share capital. The Swiss Federal Tax Administration (SFTA) has confirmed that it will recognize disclosed reserves from capital contributions as a capital contribution as per art. 5 para. 1 bis Withholding Tax Act.

2.5 TREASURY SHARES

Number of registered shares At December 31, 2015 At December 31, 2014

Inventory as at 1.1. 0 0

Acquisitions 0 15’822

Sales 0 0

Provided to former owners of Fastrax 0 -15’822

Inventory as 31.12. 0 0

In 2014, based on the share purchase agreement of Fastrax in 2012 treasury shares in the amount of CHF 2.0 million were purchased and provided to the former owners of Fastrax as a deferred payment.

2.6 DIVIDEND INCOMEIn the reporting year, dividend income amounted to TCHF 6,000 (previous year: TCHF 6,000) from u-blox AG.

2.7 OTHER FINANCIAL INCOMEThe other financial income mostly consists interest income from u-blox AG over TCHF 1’540 (2014: TCHF 2’328).


2.8 INTEREST AND SECURITIES EXPENSES

CHF 1’000 At December 31, 2015 At December 31, 2014

Securities expenses 573 497

Interest on bonds 766 0

Amortization of discounts and issue costs 3 0

Total 1’342 497

3 OTHER INFORMATION

3.1 FULL-TIME EQUIVALENTS u-blox Holding AG does not have any employees.

3.2 SIGNIFICANT SHAREHOLDERSAccording to the disclosures of shareholders, the largest shareholders of u-blox Holding AG held the following percentages at:

Voting rights as at December 31, 2015

Voting rights as atDecember 31, 2014

Black Rock Inc. (Indirectly), USA 4.99% 9.82%

Werner und Anne Dubach, Hergiswil, Switzerland n.a.* 9.56%

LB Swiss Investment AG, Zurich, Switzerland n.a.* 4.89%

Credit Suisse Funds AG, Zurich, Switzerland 4.08% 4.08%

BlackRock Global Funds-Swiss Small&Mid Cap Opportunities Fund, Switzerland 3.02% 3.02%

Camox Master Fund, London 3.01% n.a.*

UBS Fund Management AG, Basel, Switzerland 3.00% 3.17%

*) n.a. = 0-3% voting rights

Notes to the Financial statements | Page 71

3.3 SHAREHOLDING OF MEMBERS OF THE BOARD OF DIRECTORS, EXECUTIVE COMMITTEE OR PERSONS RELATED TO THEMThe total number of u-blox shares and options owned by members of the Executive Committee, the Board of Directors and the persons related to them are shown in the tables below. The shares are not restricted.

Shareholdings of Non-Executive members of the Board of Directors

Number of u-blox Holding AG shares at

December 31, 2015


December 31, 2014

Fritz FahrniChairman of the Board of DirectorsMember of the audit committeeMember of the nomination and compensation committee 15’294 14’670

Hans-Ulrich Müller1)Vice Chairman of the Board of DirectorsChairman of the audit committee 0 25’000

Gerhard TrösterChairman of the nomination and compensation committee 15’663 23’190

Soo Boon QuekMember of the Board of Directors 0 0

Paul Van IseghemVice Chairman of the Board of DirectorsChairman of the audit committee 175 175

André Müller2) Member of the Board of Directors 0 0

Total Non-Executive members of the Board of Directors 31’132 63’035

1) Resigned as of the date of the AGM 2015

2) Elected at the AGM 2015

Shareholdings Executive Committee (including Executive members of the Board of Directors)


December 31, 2015


December 31, 2014

Thomas SeilerMember of the Board of DirectorsCEOHead of Marketing and Sales 126’768 120’964

Jean-Pierre WyssMember of the Board of DirectorsExecutive Vice President (Production/Logistics) 29’109 34’805

Andreas ThielExecutive Vice President (R&D Wireless Products) 36’500 44’000

Daniel AmmannExecutive Vice President (R&D Positioning Products) 44’000 39’000

Roland JudCFO 489 300

Total Executive Committee (incl. Executive members of the Board of Directors) 236’866 239’069


Options of Non-Executive members of the Board of Directors

Number of u-blox Holding AG options at

December 31, 2015


December 31, 2014

Fritz FahrniChairman of the Board of DirectorsMember of the audit committeeMember of the nomination and compensation committee 998 1’622

Hans-Ulrich Müller1)Vice Chairman of the Board of DirectorsChairman of the audit committee 0 1’622

Gerhard TrösterChairman of the nomination and compensation committee 998 1’622

Soo Boon QuekMember of the Board of Directors 1’622 1’622

Paul Van Iseghem Vice Chairman of the Board of DirectorsChairman of the audit committee 1’424 1’424

André Müller2) Member of the Board of Directors 0 0

Total Non-Executive members of the Board of Directors 5’042 7’912

1) Resigned as of the date of the AGM 2015

2) Elected at the AGM 2015

Options Executive Committee (including Executive members of the Board of Directors)


December 31, 2015


December 31, 2014

Thomas SeilerMember of the Board of DirectorsCEOHead of Marketing and Sales 20’290 20’290

Jean-Pierre WyssMember of the Board of DirectorsExecutive Vice President (Production/Logistics) 20’290 20’290

Andreas ThielExecutive Vice President (R&D Wireless Products) 20’290 20’290

Daniel AmmannExecutive Vice President (R&D Positioning Products) 20’290 28’094

Roland JudCFO 19’783 15’363

Total Executive Committee (incl. Executive members of the Board of Directors) 100’943 104’327

3.4 OPTIONS ON SHARES FOR MEMBERS OF THE BOARD AND EXECUTIVE COMMITTEE

2015 2014

Quantity Value

CHF 1’000 QuantityValue

CHF 1’000

Allocated to members of the board 0 0 0 0

Allocated to executive committee 33’194 1’713 38’825 1’188

3.5 SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATEThere have been no events between December 31, 2015 and March 17, 2016 that would lead to an adjustment of the carrying amounts of assets and liabilities presented at December 31, 2015 or would otherwise have to be disclosed.

Proposal of the Board of Directors | Page 73

Proposal of the Board of Directors for appropriation of available earnings

and the use of reserves from capital contributions

The Board of Directors proposes to the Annual General meeting the following appropriation of available earnings and the use of reserves from capital contributions at December 31, 2015

(in CHF) 2015 2014

Net profit for the year 5’668’750 7’903’240

Brought forward from previous year 38’367’852 30’464’612

Available earnings before appropriation 44’036’602 38’367’852

Release of reserves from capital contributions1) 12’778’898 10’541’890

Total available earnings before appropriation 56’815’500 48’909’742

Dividend payment out of reserves from capital contributions, CHF 1.90 per share on 6’725’736 shares1) -12’778’898 -10’541’890

To be carried forward 44’036’602 38’367’852

1) Depending on the number of shares issued at April 28, 2016.

The Board of Directors is proposing to the General Meeting, to be held at April 26, 2016, to carry forward the available earnings 2015 of CHF 44’036’601 and to pay out a dividend of CHF 1.90 per share exempt from Swiss withholding tax out of the reserves from capital contributions. The last trading day with entitlement to receive the dividend is April 27, 2016. The shares will be traded ex-dividend as of April 28, 2016. The dividend will be payable as of May 3, 2016.

Thalwil, March 17, 2016

For the Board of DirectorsThe Chairman Fritz Fahrni

Report of the statutory auditor | Page 75

Report of the Statutory Auditor to the General Meeting of Shareholders of


Report of the Statutory Auditor on the Financial Statements

As statutory auditor, we have audited the accompanying financial statements of u-blox Holding AG, which are presented on page 66 to 72 and comprise the statement of financial position, income statement and notes for the year ended December 31, 2015.

Board of Directors’ ResponsibilityThe board of directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements for the year ended December 31, 2015 comply with Swiss law and the company’s articles of incorporation.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the board of directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles of incorpo-ration. We recommend that the financial statements submitted to you be approved.

KPMG AG



| Three year overview


(in CHF 000s) 2015 2014 2013

Revenue 338’341 270’045 219’813

% growth 25.3% 22.9% 27.0%

Cost of sales -183’323 -147’323 -118’654

Gross profit 155’018 122’722 101’159

% gross profit margin 45.8% 45.4% 46.0%

Operating expenses -106’201 -84’515 -71’192

Other income 2’474 868 83

Operating profit (EBIT) 51’291 39’075 30’050

% EBIT margin 15.2% 14.5% 13.7%

Finance income 996 4’546 1’013

Finance costs -4’674 -658 -2’193

Profit before income tax (EBT) 47’613 42’963 28’870

% EBT margin 14.1% 15.9% 13.1%

Income tax expense -10’515 -8’566 -4’227

Net profit, attributable to owners of the parent 37’098 34’397 24’643

% net profit margin 11.0% 12.7% 11.2%

Depreciation and amortization 27’421 19’529 16’138

EBITDA*) 78’712 58’604 46’188

% EBITDA margin 23.3% 21.7% 21.0%

*) EBITDA (earnings before interest, taxes, depreciation and amortization) calculated by adding depreciation and amortization to profit from operations (EBIT), in each case determined in accordance with IFRS.

Three year overview

Condensed consolidated income statement

Three year overview | Page 77

Condensed consolidated statement of financial position

(in CHF 000s)At

December 31, 2015At

December 31, 2014At

December 31, 2013

Assets

Current assets

Cash and cash equivalents 112’387 37’662 33’163

Marketable securities 11’659 21’730 27’395

Trade accounts receivables 43’790 38’842 29’204

Other current assets 51’933 54’862 32’589

Total current assets 219’769 153’096 122’351

Non-current assets

Property, plant and equipment 14’708 14’836 13’764

Goodwill 56’716 57’903 37’825

Other intangible assets 88’042 70’502 44’570

Financial assets 678 584 1’222

Deferred tax assets 6’930 4’826 6’777

Total non-current assets 167’074 148’651 104’158

Total assets 386’843 301’747 226’509


Current liabilities 55’405 70’860 35’974

Non-current liabilities 83’117 18’011 10’099

Total liabilities 138’522 88’871 46’073


Share capital 6’053 5’930 5’810

Share premium 84’006 89’531 92’556

Retained earnings 158’262 117’415 82’070

Total equity, attributable to owners of the parent 248’321 212’876 180’436

Total liabilities and equity 386’843 301’747 226’509


(in CHF 000s) 2015 2014 2013

Net cash generated from operating activities 74’659 53’686 38’483

Net cash used in investing activities -33’367 -65’400 -33’638

Net cash provided by/used in financing activities 33’776 14’991 -4’784

Net increase in cash and cash equivalents 75’068 3’277 61

Cash and cash equivalents at beginning of year 37’662 33’163 33’416

Exchange gains/(losses) on cash and cash equivalents -343 1’222 -314

Cash and cash equivalents at end of year 112’387 37’662 33’163


| Notes

Notes

u-blox Holding AGZürcherstrasse 688800 ThalwilSwitzerlandPhone +41 44 722 74 44Fax +41 44 722 74 47www.u-blox.com

connections that count · contents introduction 4 financial highlights 5 operational highlights 6...

Documents