H1/2018 Results u-blox Holding AG

Thomas Seiler, CEORoland Jud, CFO

August 24, 2018

u-blox Holding AG2

Disclaimer

This presentation contains certain forward-looking statements. Such forward-looking

statements reflect the current views of management and are subject to known and

unknown risks, uncertainties, assumptions and other factors that may cause actual

results, performance or achievements of the Group to differ materially from those

expressed or implied herein.

Should such risks or uncertainties materialize, or should underlying assumptions prove

incorrect, actual results may vary materially from those described in this presentation.

u-blox is providing the information in this presentation as of this date and does not

undertake any obligation to update any forward-looking statements contained in it as a

result of new information, future events or otherwise.

Operational highlights H1/2018

Financial results H1/2018

Business review

Outlook

Q&A

u-blox Holding AG3

Agenda

• 2.6% revenue increase as compared to the first half of 2017

• Gross profit increased by 7.1%

• R&D efforts continued at high pace

• EBIT margin at guided level 14.3%

• Increase in working capital for assuring delivery punctuality

• Reduced cash flow from operating activities

• Revenue, EBITDA and EBIT guidance updated

• Strong product innovation

• 7 new cutting-edge products launched

• Continued strong investment in R&D for next generation products

• New strategic partnership with Kudelskiu-blox Holding AG4

Operational highlights H1/2018

u-blox Holding AG5

u-blox group H1/2018

Change H1/2018

to H1/2017

Revenue 199.0m - 2.6%

Gross profit adjusted1) 94.0m 47.2% 7.1%

IFRS reported 93.6m 47.0% 7.1%

EBITDA adjusted1) 45.1m 22.7% -1.5%

IFRS reported 40.1m 20.1% -0.5%

Operating profit (EBIT ) adjusted1) 34.9m 17.5% -3.8%

IFRS reported 28.5m 14.3% -3.3%

adjusted1) 30.2m 15.2% 27.3%

IFRS reported 25.1m 12.6% 39.3%

Net cash generated from operating

activities13.7m 6.9% -37.7%

In relation to

revenue

Net profit, attributable to owners of

the parent

Key figures Amount CHF

1) Excl. Share-based payments, impacts based on IAS-19, amortization of intangible assets acquired and non-recurring expenses

u-blox Holding AG6

Revenue and EBITDA

Comments

• Organic revenue growth

(+2.6% compared to H1/2017)

• Currency impact on revenues

• at H1/2017 rates: -0.5%

• at guidance rates: -0.1%

Revenue and EBITDA

338.3

360.2

403.7

179.7193.9 199.0

78.7 81.8 87.4

39.1 40.3 40.1

0

50

100

150

200

250

300

350

400

450

2015 2016 2017 H1/16 H1/17 H1/18

Revenue EBITDA

(million CHF)

CAGR 5.2%

CAGR 9.2%

u-blox Holding AG7

Market trends

Comments

• Consumer market soft

• Good progress in automotive for

telematics control units (TCU)

• Industrial markets expanding in many

applications

Revenue split per market for H1/2018

Note: Estimate

55.1%

10.5%

28.9%

5.5%

Industrial Consumer Automotive Not assigned

0

50

100

150

200

250

300

350

400

2015 2016 2017 H1/16 H1/17 H1/18

Americas EMEA APAC

(million CHF)

338.3

360.2

403.7

179.7 193.9 199.0

40%

27%

33%

39%

26%

35%

37%

26%

37%

37%

26%

37%

42%

26%

31%

33%

36%

31%

2.6%

12.1%

u-blox Holding AG8

Revenues by geography

Comments

Growth in geographic regions compared

to H1/2017:

• EMEA: +35.4%

• Strong growth with expanding customer

base

• Americas: 0.0%

• Constant business level with shifted

application importance; delays in network

readiness

• Asia Pacific: -19.2%

• Decline due to weak China business

affected by trade war implications

Revenues by geographic region

Note: based on reporting area

u-blox Holding AG9

Gross profit

Comments

• Increase in gross profit to CHF 93.6m in

H1/2018

• Growth of gross profit of +7.1%

compared to H1/2017

• Gross profit margin in H1/2018

increased compared to H1/2017 due to

changes in the product mix

Gross profit / Gross profit margin

155.0167.1

184.0

82.5 87.4 93.6

50.3%

46.4%

45.6%

50.3%

45.1%

47.0%

42%

43%

44%

45%

46%

47%

48%

49%

50%

51%

0

20

40

60

80

100

120

140

160

180

200

2015 2016 2017 H1/16 H1/17 H1/18

Gross Profit % of revenue

(million CHF) (in % of revenue)

u-blox Holding AG10

Shipments and ASP development

• Good volume growth

with modules

• Decline of chipset

volumes due to end-of-

life of several projects

with u-blox 7

• Strong growth with

u-blox 8/M8

• Chip ASP increased

Modules GNSS Chips

8.50

9.00

9.50

10.00

0

10

20

30

40

2015 2016 2017 H1/16 H1/17 H1/18

Shipments modules ASP

(million units) (CHF)

6.3%

10.5%

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

0

10

20

30

40

50

60

70

80

2015 2016 2017 H1/16 H1/17 H1/18

u-blox 5 u-blox 6

u-blox 7 u-blox 8/M8

u-blox 9 ASP

(million units) (CHF)

-13.0%

28.1%

u-blox Holding AG11

Revenue split

• Constant share of module and chip

revenue

• Modules dominate the gross margin

generation

• Chip volume essential for economies of

scale

Revenue by product type

0

50

100

150

200

250

300

350

400

450

2015 2016 2017 H1/16 H1/17 H1/18

Modules Chips Other

(million CHF)

68%

27%

72%

26%

72%

25%

74%

24%

71%

27%

73%

24%

360.2 338.3

179.7 193.9 199.0

403.7

u-blox Holding AG12

Global customer base

Comments

• Strong and stable customer base, now

serving 5’900 customers worldwide

• Continued wide spread across different

applications and geographical regions

• No significant customer dependency:

Largest customer accounts for less than

3.9% of total revenue in H1/2018

• 10 biggest customers account for 25.1%

of total revenue in H1/2018

Number of customers totaling 80% of revenue

65 71

84

63 74

104

0

20

40

60

80

100

120

2015 2016 2017 H1/16 H1/17 H1/18

(Customers)

u-blox Holding AG13

Distribution & marketing / Research & development

Research & development expensesDistribution & marketing expenses

27.7

32.0

36.2

15.9 17.2 18.8

8.2%

8.9% 9.0% 8.8% 8.8%

9.5%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

0

5

10

15

20

25

30

35

40

2015 2016 2017 H1/16 H1/17 H1/18

D&M % of revenues

(million CHF) (in % of revenue)

65.0 63.5 65.6

32.1 32.036.7

19.2%

17.6%16.2%

17.9%16.5%

18.5%

0%

5%

10%

15%

20%

25%

0

10

20

30

40

50

60

70

2015 2016 2017 H1/16 H1/17 H1/18

R&D % of revenues

(million CHF) (in % of revenue)

u-blox Holding AG14

Employment

Average employee level (FTE based)Employee breakdown (end of H1/2018, FTE based)

Note: 75% of employees based outside Switzerland (spread across 18 countries) Note: Average number of employees (FTE = full time equivalent)

671

786893

729

839926

0

200

400

600

800

1000

2015 2016 2017 H1/16 H1/17 H1/18

(Average FTE)

Research &

development

68%

Sales,

marketing,

support 17%

Logistics,

admin

15%

691172

148

Total = 1'010 FTE

u-blox Holding AG15

Income statement - IFRS

Comments

• Revenue increase of 2.6% from H1/2017 to H1/2018

• Increased gross profit by 7.1%

• OPEX 32.7% of revenue (H1/2017: 30.2%)

• H1/2018: costs for share based payments in the amount

of CHF 4.3m (H1/2017: CHF 4.1m)

• EBITDA with margin of 20.1% (H1/2017: 20.8%)

• With an EBIT margin of 14.3%, EBIT declined by 3.3%

compared to H1/2017

• Financial result contains mainly unrealized foreign

exchange gains and interests for the bonds

• Tax rate of 20.2% (year end 2017: 20.8%)

• Net profit margin of 12.6% (H1/2017: 9.3%)

• EPS = CHF 3.59 / diluted EPS = CHF 3.58

(H1/2017: CHF 2.61 / CHF 2.57)

Consolidated income statement (condensed)Jan-Jun Jan-Jun Jan - Dec

(in CHF 000s) 2018 2017 2017

(unaudited) (unaudited) (audited)

Revenue 198'983 193'908 403'712

Cost of sales -105'395 -106'518 -219'695

Gross profit 93'588 87'390 184'017

% gross profit margin 47.0% 45.1% 45.6%

Operating expenses -66'108 -58'707 -120'852

Other income 1'063 845 1'921

Operating profit (EBIT) 28'543 29'528 65'086

Finance income 5'364 309 5'668

Finance costs -1'042 -6'979 -5'652

Share of profit of equity-accounted

investees net of tax -1'443 0 -400

Profit before income tax (EBT) 31'422 22'858 64'702

Income tax expense -6'339 -4'846 -13'442

25'083 18'012 51'260

Operating profit (EBIT) 28'543 29'528 65'086

Depreciation and amortization 11'510 10'730 22'290

EBITDA*) 40'053 40'258 87'376

(*) 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.

Net profit, attributable to owners

of the parent

u-blox Holding AG16

Income statement – Adjusted

Jan-Jun Adjustments Jan-Jun Jan-Jun

(in CHF 000s)

2018

(IFRS) Share based

payments

Pension impact

based on

IAS-19

Non-

recurring

expenses

Amortization

intangible assets

acquired

2018

(adjusted)

2017

(adjusted)

Revenue 198'983 198'983 193'908

% growth 2.6% 2.6% 7.9%

Cost of sales -105'395 382 -105'013 -106'131

Gross Profit 93'588 382 0 0 0 93'970 87'777% gross profit margin 47.0% 47.2% 45.3%

Operating expenses -66'108 3'939 758 1'281 -60'130 -52'326

Other income 1'063 1'063 845

Operating profit (EBIT) 28'543 4'321 758 0 1'281 34'903 36'296% margin 14.3% 17.5% 18.7%

Finance income 5'364 5'364 309

Finance costs -1'042 -1'042 -6'979

Share of profit of equity-accounted investees, net of taxes -1'443 -1'443 0

Profit before income tax (EBT) 31'422 4'321 758 0 1'281 37'782 29'626

Income tax expense -6'339 -872 -153 -258 -7'622 -5'925

25'083 3'449 605 0 1'023 30'160 23'701

Earnings per share in CHF 3.59 4.32 3.44

Diluted earnings per share in CHF 3.58 4.31 3.39

Operating profit (EBIT) 28'543 4'321 758 0 1'281 34'903 36'296

Depreciation and amortization 11'510 -1'281 10'229 9'512

EBITDA1) 40'053 4'321 758 0 0 45'132 45'808% EBITDA margin 20.1% 22.7% 23.6%

1) EBITDA (earnings before interest, taxes, depreciation and amortization) calculated by adding depreciation and amortization to operating profit

(EBIT), in each case determined in accordance with IFRS.

Net profit, attributable to owners of the parent

u-blox Holding AG17

Segment information

(in CHF 000s) 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017

Revenue third 198'877 193'815 106 93 198'983 193'908 198'983 193'908

Revenue intragroup 16'043 12'172 16'043 12'172 -16'043 -12'172 0 0

Total revenue 198'877 193'815 16'149 12'265 215'026 206'080 -16'043 -12'172 198'983 193'908

EBITDA*) 39'623 39'728 430 367 40'053 40'095 163 40'053 40'258

Depreciation -3'392 -3'397 -1'252 -1'056 -4'644 -4'453 -4'644 -4'453

Amortization -6'851 -6'253 -15 -24 -6'866 -6'277 -6'866 -6'277

Impairment 0 0 0 0

Operating profit (EBIT)

Finance income 5'364 309 5'364 309

Finance costs -1'042 -6'979 -1'042 -6'979

Share of profit of equity-accounted investees, net of taxes -1'443 0 -1'443 0

EBT 4'322 -6'507 31'422 22'858

Positioning and

wireless products

Wireless services Total segments Non-allocated/

eliminations

Group

28'543 29'528

January - June January - June January - June

0 16329'380 30'078

January - June January - June

29'36528'543-837 -713

u-blox Holding AG18

Statement of financial position

Comments

• Strong financial position with a liquidity (incl. marketable

securities) of CHF 150.2m (Dec. 2017: CHF 172.4m)

• Inventory CHF 56.7m (Dec. 2017: CHF 44.2m) increased due

to tight supply chain

• Trade receivables CHF 58.6m (Dec. 2017: CHF 50.4m)

increased with accelerated business at end of H1/2018

• Increased intangible assets due to capitalization of R&D

expenses

• Goodwill of CHF 56.4m (Dec. 2017: CHF 57.6m) slightly

decreased as result of exchange rate changes

• Trade payables of CHF 24.7m (Dec. 2017: CHF 20.3m)

• Non-current liabilities contain bonds of CHF 119.0m,

Deferred tax liabilities (CHF 7.5m), Employee benefits (IAS-

19) (CHF 15.7m) , Provisions (CHF 5.9m)

• Share capital increase due to exercise of options

0

100

200

300

400

500

600

2014 2015 2016 2017 H1/2018

Fixed Assets

Inventory

Accounts Receivable

Other current assets

Cash (incl. marketable

securities)

(mil

lio

n C

HF

)

0

100

200

300

400

500

600

2014 2015 2016 2017 H1/2018

Short Term Debt

Long Term Debt

Shareholder's Equity

(mil

lio

n C

HF

)

u-blox Holding AG19

Statement of financial position

Comments

• Strong capital base

• Equity ratio of 62.0%

• Treasury shares for option program

CHF 24.4m

• Equity ratio without treasury shares:

63.6%

Total equity and equity ratio

248285

319

254275

346

64.2% 67.0%60.7% 65.4%

58.1%62.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

250

300

350

400

2015 2016 2017 H1/16 H1/17 H1/18

Equity Equity ratio

(million CHF) (% of total assets)

u-blox Holding AG20

Statement of financial position

Comments

• Cash flow from operating activities negatively impacted by investment into working capital of CHF 21.6m

• Cash flow from investing activities:• CHF -4.3m investments into property, plant and

equipment (equipment, tools)• CHF -27.6m investments into intangible assets

(Software, capitalization of R&D)• CHF 0.4m net proceeds from marketable

securities• CHF -4.1m investment into Sapcorda GmbH

• Cash flow from financing activities:• CHF -15.4m dividend 2017 paid in May 2018• CHF +13.6m capital increase from options• CHF -1.8m paid interests for bonds

Consolidated statement of cash flows (condensed)

For the period ended

June 30, June 30, December 31,

(in CHF 000s) 2018 2017 2017

Net cash generated from operating activities 13'736 22'061 60'504

Net cash used in investing activities -35'158 -27'914 -63'511

Net cash provided by / used in financing activities -3'654 26'021 26'012

Net increase in cash and cash equivalents -25'076 20'168 23'005

Cash and cash equivalents at beginning of year 169'624 149'545 149'545

Exchange gains/(losses) on cash and cash equivalents 3'291 -5'928 -2'926

Cash and cash equivalents at end of the period 147'839 163'785 169'624

u-blox Holding AG21

Business update

u-blox Holding AG22

Product launch highlights

UBX-P3The industry’s smallest V2X communication chip and takes u-blox’s commitment to shaping the future of active safety and autonomous driving technologies to the next level.

ANNA-B1Ultra-compact Bluetooth 5 module designed for tough environments, ANNA-B1 is fully tailored to applications for the Industrial Internet of Things.

u-blox F9 platform High precision positioning solutions for mass market industrial and automotive applications.

ZED-F9PFirst high precision GNSS module based on u-blox F9 technology delivering centimeter-level accuracy in seconds.

SARA-R410MThe world’s smallest multi-modeLTE Cat M1, NB-IoT module, ideal for diverse IoT and M2M applications including smart cities, connected healthcare, and more.

Cellular Communication

Short RangeCommunication

Positioning

NINA-B2Ultra-compact NINA-B2 dual mode Bluetooth stand-alone module features strong security for the Industrial IoT.

SARA-R412MThe world’s smallest multi-modeLTE Cat M1 module with 2G fallback , ideal for diverse IoT and M2M applications in EMEA.

UBX-P3 is industry’s smallest concurrent dual-channel V2X

communication chip

u-blox Holding AG23

UBX-P3 - the next step towards increased traffic safety and autonomous driving

UBX-P3 chip with a combination

of unique features:

→ Concurrent dual-channel

→ Flexibility of installation

→ Smallest size

→ Low power

u-blox Holding AG24

UBX-P3: V2X enables wide-ranging applicationsMaking transportation safer, more efficient, and more sustainable

• Active traffic safety

• Smart cities and traffic

management

• Platooning

• Autonomous driving

• Other applications

u-blox Holding AG25

UBX-P3: ApplicationsMaking transportation safer, more efficient, and more sustainable

Autonomous driving – heading towards level 5

Driver OnlyDriver undertakes lane holding and lane changing activities.

Assisted DrivingDriver carries out all lane holding or lane changes.

Partly AutomatedSystem handles lane holding and lane changes in a special application case.

Highly AutomatedDriver no longer needs to continuously monitor the system. Must potentially be available to take over.

Fully AutomatedNo driver is necessary in special applications.

Driverless

LEVEL 0LEVEL 1

LEVEL 2LEVEL 3

LEVEL 4LEVEL 5

u-blox High Precision GNSS and V2X

u-blox solutionswith functionalsafety & integrity

u-blox Holding AG26

F9 takes GNSS precision to the next level

• Delivers accuracy

down to the

centimeter level

• Paves the way for

high precision

navigation,

augmented reality,

and unmanned

vehicles

u-blox Holding AG27

F9: High Precision GNSS is a reality in automotiveResults from typical road-test, a trip in Zurich

L1 ADR High Precision GNSS (SSR) and ADR

Po

sit

ion

ing

err

or

[m]

u-blox Holding AG28

Kudelski – a new strategic partnership

• Leading player in IoT connectivity

• Established IoT customer base

• Sets standards in the industrial, tracking &

automotive markets

• Building services platform to provide

customers access to innovative services from

u-blox

Field-proven security technologies to empower

customers to secure their IoTproducts and devices

• 30 years securing their customers’ business

• $90B revenue enabled annually

• 400M connected devices secured

• Innovative security experts with proven track

records

• Comprehensive security offering from design,

platform to managed security services

Kudelski protects IoT solutionsu-blox connects IoT devices

u-blox Holding AG29

Strategic priorities 2018 (1)

Market position

• Further develop our position in the

automotive market, including for

autonomous vehicles

• Expand high-precision positioning into a

broader range of markets to support

general automation

• Capitalize on strong move towards LTE

based cellular connectivity for the IoT

• Establish short range radio solutions

based on latest standards

Technology & innovation

• Push ahead with the development of our

own silicon to give us even more control

over the core technology in our products

• Launch products based on our own

silicon across all three technology areas

• Continually strive to make our products

more secure

• Expand our offering of solutions

combining u-blox products from

different lines

u-blox Holding AG30

Strategic priorities 2018 (2)

Operational excellence

• Strongly focus on emerging applications

in IoT space

• Further explore unique partnerships with

suppliers of key components

• Improve the resilience of our supply chain

by reducing dependency on any single

supplier

Strategic partnerships & acquisition

opportunities

• Develop new and expand existing

relationships with key players in our

markets

• Continue to review potential acquisitions

that will strengthen our product portfolio

and technology base and accelerate our

strategy

u-blox Holding AG31

Outlook

u-blox Holding AG32

Financial performance and guidance 2018

• Guidance amended reflecting H1.2018

• Stronger H2 but cannot compensate fully

slow first half year 2018

• R&D efforts maintained for supporting

new platforms

• Impact by product mix on gross margin

• Natural hedging protects gross margin

against foreign exchange variations

+10% of USD EUR GBP

Revenue + 9% + 1% 0%

EBITDA + 16% 0% -1%

EBIT + 22% - 1% - 2%

Exchange rate assumptions for 2018:

• EUR/CHF: 1.11 USD/CHF: 0.98 GBP/CHF: 1.27• FX-sensitivity against CHF on Guidance 2018

*) This guidance is based on the absence of unforeseen economic adversity and exchange

rates assumed at budget level.

ActualFY

2016

ActualFY

2017

Previous Guidance 2018

Updated Guidance 2018*)

(IFRS)

Revenue 360.2m 403.7m 460m…475m 435m…445m

EBITDA 81.8m 87.4m 95m…105m 90m…100m

EBIT 59.0m 65.1m 65m… 70m 60m… 65m

CHF CHF CHF CHF

• Investor and Analyst Day November 21, 2018

• 2018 Annual Results March 15, 2019

• Annual General Meeting April 25, 2019

u-blox Holding AG33

Upcoming events

u-blox Holding AG34

Thank you for your attention