u blox acquisition connectblue slides

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u-blox acquires connectBlue

May 19, 2014

© u-blox Holding AG, May 19, 2014

Disclaimer

Slide 2

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.

Agenda

• Transaction highlights

• Introduction to connectBlue AB

• Strategic rationale and Internet of Things

• Outlook

• Q&A

Slide 3 © u-blox Holding AG, May 19, 2014

Overview

• Manufacturer of short-range radio (Bluetooth and Wi-Fi) modules located in Malmö, Sweden

• Strong reputation for high reliability and robust links, based on enhanced stacks and application software embedded in the module

• Worldwide sales of SEK 85 million in 2013 (CHF 12m)

• Key markets: industrial automation, medical & healthcare, measurement & data acquisition

• Own IP and years of knowhow in Bluetooth and Wi-Fi (Wireless LAN)


Why the acquisition?

1. We add a third range of products: Short Range Radio

2. We extend our portfolio into local area networks

3. We gain synergies with our existing Cellular and Positioning

products


The Internet of Things

• The market is big and growing at fast pace

• Only a percentage is cellular (wide area), growth will come from short range (local area)

• Market potential is greater than people-to-people communications

• Numerous markets available; u-blox focuses on high growth sectors such as industrial and automotive


Source: Cisco

Implementing our strategy – adding value by making our

product range more comprehensive


Short Range Module

Cellular Module

Positioning Module

Short Range Module

All three technologies

• incorporate same core know-how: Radio frequency and signal processing

• Have strong cross selling effect with our customers

• Apply same manufacturing processes

Bluetooth and Wi-Fi

• Technologies that enable wireless communication over a few hundred meters

• Eliminate the need for expensive cabling while providing flexibility and mobility

• Evolving standards ensure the technology remains relevant

• Bluetooth

• Classic Bluetooth: simple low latency communication

• Bluetooth low energy, marketed as Bluetooth Smart: ultra low

power connectivity ideally suited to low data rate IoT applications

• Wi-Fi (IEEE 802.11, WLAN)

• High data rate connectivity solution

• Popular solution used to connect devices such as phones and

tablets to the internet

© u-blox AG Slide 8

With this acquisition u-blox enables the IoT

Slide 9

Network Server

Centre Wide Area

(cellular)

Local Area

(Wi-Fi, Bluetooth)

Wide Area

Communications

Things


Cellular Module

Cellular Module

Short Range Mod.

Cellular Module

Positioning Mod.

Positioning Mod.

Short Range Mod.

Short Range Mod.

Gateway

Strategic Rationale

Overview of

connectBlue

• High quality vendor of Bluetooth and Wi-Fi modules

• Industrial and professional markets

• Excellent reputation

Strategic Rationale

• Increased coverage of Internet of Things

• Complements u-blox’ product portfolio

• Platform for additional innovation

Shareholder value

creation

• Increased sales into existing customer base

• Puts u-blox in a position to grow as the

Internet of Things grows


Acquisition Overview

• Acquisition of 100% of the shares of connectBlue AB from the existing shareholders

• Acquisition price: Enterprise value SEK 185m (CHF 25m). fully paid up in cash

• Closing date 19 May 2014


connectBlue: A history of market firsts


World’s 1st FDA-approved

Bluetooth medical device

World’s 1st Industrial Bluetooth product

World’s 1st industrial wireless

I/O-system

Patent Bluetooth easy

pairing/ configuration

Introduced WLAN

Introduced Ethernet Port

Adapters

Introduced WLAN dual-band

& iOS / Android connectivity Award

Frost&Sullivan

Introduced Low Energy Serial

Port Service

Award CW100

Introduced Multiradio

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Bluetooth SIG influence Automation Working Group

Bluetooth Architecture Review Board

Internet Working Group

connectBlue Strengths

Slide 13

• Excellent reputation in industrial automation and medical device markets

• Long experience with short range radio technology

• Bluetooth

• Dual-band Wi-Fi (Wireless LAN / IEEE 802.11)

• Full stack knowledge for BT and BT Low Energy

• Embedded stack and software optimized for high robustness for use in industrial and medical environments

• Specific application know-how

• Supports Apple iOS and Android connectivity

• Highly configurable products to meet application needs


connectBlue Key Value Proposition

Slide 14

Product Offer

• Wide product range matches professional needs for Bluetooth and Wi-Fi

• Very robust solutions with high data rate – “better than a cable”

• Good technical support

• High-end market positioning

Customer Value

• Short range radio as an innovative solution

• Greater mobility

• Cable replacement for challenging situations

• Smooth installation, commissioning and modification

• Lower cost than a physical connection


Global customer base


Examples of success stories (1)

• Tridentify: Blood bag monitor with Bluetooth Low Energy

• Stoneridge: Tachograph – send information via Bluetooth to mobile phone


Examples of success stories (2)

• Anywhere science: Bluetooth Low Energy Mobile Laboratory

• Atlas Copco: Wireless connection of industrial power tools for the motor vehicle industry


Business model after acquisition

• Focus our short-range radio with additional Product Center in Malmö, Sweden

• Implement the u-blox economies of scale in sales, purchasing, manufacturing, logistics and quality

• Align the connectBlue product range with the u-blox’ strategy

• Build synergies across the u-blox product portfolio


Impact on u-blox business (Guidance)

• Outlook 2014 for acquired business (remaining 7 months)

• CHF 9…10m revenues

• Accretive to EBIT by ca. CHF 1.0m

• Update of u-blox guidance*

• Exchange rate assumptions for 2014: EUR/CHF: 1.23 USD/CHF: 0.90 GBP/CHF: 1.45

• FX-sensitivity against CHF on Guidance 2014:

Slide 19

Actual FY 2012

Actual FY 2013

Guidance 2014 (March)

Guidance 2014 (May, with

ConnectBlue)

Revenue 173.1m 219.8m 255 – 265m 264 – 275m

EBIT 22.9m 30.1m 34m – 38m 35 – 39m

CHF CHF CHF CHF

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

+10% of USD EUR GBP

Revenue + 8% + 2% 0%

EBIT + 20% - 0.5% - 3.5%


Thank you!

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