Wireless & Positioning Solutions - U-blox · Mission u-blox aims to be the leading provider of embedded wireless communication and positioning ... The company introduced a revolutionary

Wireless & Positioning SolutionsHALF YEAR REPORT 2014

Content

Foundation 1997

Business Fabless semiconductor provider of embedded wireless and positioning communication solutions

Headquarter Thalwil, Switzerland

Offices Australia, Belgium, China, Finland, Greece, India, Ireland, Italy, Japan, Korea, Pakistan, Singapore, Sweden, Taiwan, United Kingdom and USA

Listed SIX Swiss Exchange (UBXN)

Employees 447 (December 31, 2013, FTE based); 540 (June 30, 2014, FTE based)

Revenue 2013: CHF 219.8 million; H1/2014: CHF 121.6 million

EBIT 2013: CHF 30.1 million; H1/2014: CHF 18.8 million

Net profit 2013: CHF 24.6 million; H1/2014: CHF 14.4 million

Markets Industrial, Automotive and Consumer

Mission u-blox aims to be the leading provider of embedded wireless communication and positioning solutions to the global electronics industry

u-blox at a glance

Half year report 2014 | Page 1

Contents

2 Financial highlights

4 Half year report at June 30, 2014

6 Halbjahresbericht per 30. Juni 2014

8 Condensed consolidated interim financial statements u-blox Holding AG, Thalwil 9 Consolidated statement of financial position10 Consolidated income statement11 Consolidated statement of comprehensive income12 Consolidated statement of changes in equity13 Condensed consolidated statement of cash flows14 Notes to the condensed consolidated interim financial statements

17 Investor information and contacts

18 Worldwide presence

Page 2 | Half year report 2014

Financial highlights

Key figures (CHF in million)

2011 2012 2013 H1/12 H1/13 H1/14

Revenue 124.7 173.1 219.8 77.7 105.1 121.6

Growth rate over previous year 10.6% 38.8% 27.0% 24.3% 35.4% 15.7%

EBIT 21.2 22.9 30.1 11.3 13.8 18.8

Margin on revenue 17.0% 13.3% 13.7% 14.6% 13.1% 15.5%

Growth/(decline) rate over previous year 11.2% 8.2% 30.9% -3.6% 21.6% 36.5%

Net profit 16.5 17.1 24.6 8.9 12.2 14.4


Growth rate over previous year 27.8% 3.5% 44.3% 20.0% 36.8% 18.4%

Net operating cash flow 18.6 32.1 38.5 0.1 20.4 15.7


Growth/(decline) rate over previous year -10.0% 72.5% 72.5% -99.4% > 1’000% -23.2%

CHF in million % of revenue

Gross profitGross profit and gross profit margin

Gross profit as % of revenue

Revenueu-blox revenue split per market

Estimate

Automotive

Consumer Industrial

Revenues

(CHF in million)

APACAmericasEMEA

Revenues by geography

0

50

100

150

200

250

2011 2012 2013 H1/12 H1/13 H1/14

24%

25%

35%

29%

41%

45%

46% 30%

28%

42%48%

26%

26%

27.8

28%

37%

36%

27%

26%

50.3%46.9% 46.0% 45.7%

46.7%47.4%

0%

10%

20%

30%

40%

50%

60%

0

20

40

60

80

100

120

2011 2012 2013 H1/12 H1/13 H1/14

(million CHF) % of revenue


CHF in million % of total assets

Equity

Total equity

Total equity and equity ratio

equity ratio

CHF in million

Performance

EBITDARevenues

Financial performance

EmployeesEmployee breakdown Total: 540 (end of H1/14, FTE based)

75% of employees based outside Switzerland (spread over 16 countries)

Logistics,Administration

12%

Sales,Marketing,

Support19%

Research &development

69%

65

101 374

EmployeesEmployee development

Average number of employees (FTE = full time equivalent)

138151

180

142162

191

84.3%

78.7% 79.7%

84.0%

77.9%73.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

20

40

60

80

100

120

140

160

180

200

2011 2012 2013 H1/12 H1/13 H1/14

Total Equity Equity ratio

(million CHF) (% of total assets)

215

294

408

241

353

464

0

50

100

150

200

250

300

350

400

450

500

2011 2012 2013 H1/12 H1/13 H1/14

124.7

173.1

219.8

77.7

105.1 121.6

29.135.2

46.2

15.9 21.2 27.3

0

50

100

150

200

250

2011 2012 2013 H1/12 H1/13 H1/14

124.7

173.1

219.8

77.7

105.1 121.6

29.135.2

46.2

15.9 21.2 27.3

0

50

100

150

200

250

2011 2012 2013 H1/12 H1/13 H1/14


u-blox maintains growth, improves EBIT margin and makes progress in strategic development

u-blox (SIX:UBXN), a global leader in wireless and positioning semiconductors and modules, today announced revenue for the first half year 2014 of CHF 121.6 million. This constitutes a 15.7% increase over the first half year of 2013. Gross profit increased to CHF 57.6 million, resulting in a gross profit margin of 47.4%. EBIT for the first half year of 2014 was CHF 18.8 million, a strong growth of 36.5%. The net profit grew 18.4% to CHF 14.4 million. u-blox confirms its previously published guidance for the full year of revenues between CHF 264-275 million, with an EBIT in the range of CHF 35-39 million.

u-blox acquired the Malmö based (Sweden) connectBlue AB. After the balance sheet date, the Athens based (Greece) Antcor was acquired. Both firms come with proven technologies for short range radio (Bluetooth and Wi-Fi) communications.

Financial highlights of the first half of 2014

• Overall sales expanded by 15.7% (20% at constant exchange rates) to CHF 121.6 million as compared to H1 2013.

• Gross profit increased to CHF 57.6 million with gross profit margin reaching 47.4%.

• EBITDA of CHF 27.3 million was reached, with an EBITDA margin of 22.4%.

• EBIT grew 36.5% to CHF 18.8 million, resulting in an EBIT margin of 15.5%.

• Net profit grew 18.4% to CHF 14.4 million, or 11.8% of revenues during the period.

• Current assets increased by CHF 6.7 million compared to December 31, 2013, mainly due to the growth of the business.

• Capital expenditure before acquisitions was CHF 12.9 million mainly used for capacity expansion and investments for product development.

• A net operating cash flow of CHF 15.7 million was recorded.

Strong overall performanceAs compared to the same period in 2013, u-blox revenues based on billing location increased in Asia Pacific and EMEA. Asia Pacific sales experienced a strong growth of 33.1%, revenue in EMEA grew with 7.6% and the America sales were flat with –0.7% due to the decision by some US customers to outsource manufacturing to Asia. Without that effect, Americas would have grown by around 13%.

Continued growth in industrial marketsStrong performance was achieved in u-blox’ industrial markets. The driving application continued to be fleet management systems. This was followed by good performance in industrial timing and synchronization applications which grew remarkably as compared to the first half of 2013.

Telematics devices such as insurance boxes and Automatic Teller Machines/Point of Sales terminals experienced robust growth. Healthcare devices, which are included in the industrial sector, exhibited outstanding growth, becoming the company’s fastest growing industrial sector.

Sales into the global automotive and consumer markets were flat.

Strong profitabilityu-blox continued to achieve strong profitability with EBITDA growing by 29.0% and EBIT growing by 36.5%. Net profit growth of 18.4% was impacted by a higher tax rate as a consequence of

one-off accounting effects in deferred taxes.

Strategic products launched In the first half, u-blox launched several strategic products in both the wireless and positioning product lines that exploit cutting edge technologies. The world’s fastest LTE module, the TOBY-L2, was launched in January. It is the first LTE module on the market to deliver category 4 performance, capable of speeds up to 150 Mb/s. It also supports 3G and 2G networks, a crucial feature to allow our customers to upgrade their products already without compromising on network coverage. 4G LTE is the state-of-the-art in cellular communications, and is the fastest growing telecommunications standard in history.

On the positioning side of the business, u-blox successfully deployed its 8th generation positioning chip technology u-blox M8 into its industry-standard module series MAX, NEO and LEA. The modules can acquire and track all visible GPS, GLONASS, BeiDou, QZSS and SBAS satellites and can track any two satellite systems simultaneously for increased reliability, accuracy and faster acquisition time. u-blox M8 is at the forefront of global positioning technology, and is being offered alongside the company’s previous u-blox 7 based products in order to provide customers with both cost and performance optimized options.

The company introduced a revolutionary 3D dead reckoning chip which enables car navigation equipment to calculate a position within multi-level structures, a typical scenario when driving through stacked highways and multi-story park houses.

As a result of the connectBlue acquisition, u-blox incorporated seven new short range radio module products conforming to the Bluetooth and Wi-Fi standards. These products support u-blox’ strategy of providing both long-range and short-range wireless communication modules, a key requirement for providing end-to-end communication solutions in the Internet of Things.

Two new positioning modules with integrated antenna were launched,PAM and CAM. Both modules integrate u-blox’ core positioning chip technology together with u-blox’ embedded antenna know-how to provide complete, compact, stand-alone positioning solutions.

Business developmentSales increased strongly in several of our market sectors. Highlights during the first half year include:

• Double-digit sales increase of positioning chips and modules for fleet management and vehicle tracking applications, u-blox’ strongest market.

• Revenue from cellular and positioning components used for portable healthcare devices multiplied with the start of production of new end devices.

• Sales of GNSS receivers used to generate precision timing and frequency reference required by mobile base stations more than doubled.

• The TOBY-L100 4G LTE module was certified by Verizon Wireless, enabling customers to leverage the Verizon Wireless

network to develop high speed data connectivity for applications for the American markets.• Ctrack, a division of South Africa based Digicore, a leading

provider of fleet management and vehicle tracking solutions, selected u-blox as their strategic partner for embedded positioning and mobile communications technology.

• Swedish WTS (“Wonder Technology Solutions”) launched Trax, the world’s smallest and smartest personal tracking device for children and pets based on a u-blox positioning receiver module with integrated antenna and u-blox cellular module.

Half year report at June 30, 2014


AcquisitionsFrom the beginning of 2014 until the release of these half year results, u-blox acquired two companies which have developed mature technologies for short range wireless communications:

• Swedish connectBlue, an established provider of industrial-grade short range radio modules. connectBlue’s products support industry standards Bluetooth and Wi-Fi that enable the last hundreds of meters of connectivity between equipment and the internet. The company has 35 employees and was acquired on May 19, 2014 for 25 million CHF.

• Greek Antcor, a developer of Wi-Fi baseband intellectual property (IP). The purchase gives u-blox technology that will enable the company to develop ruggedized short range communication solutions tailored to demanding industrial and automotive environments. The company has 25 employees and was acquired on August 6, 2014 for 6.3 million CHF. This acquisition is therefore not calculated into the half year results.

These acquisitions expand u-blox’ ability to provide wireless communication components optimized for long-range as well as short-range communications. This is a key advantage for applica-tions in the “Internet of Things” where end devices such as sensors, meters and home appliances are often located within a few hundred meters of a cellular communications terminal or Wi-Fi router.

Condensed consolidated income statement

EmployeesThe number of employees worldwide increased during the first half of 2014. The company employed 550 people at June 30, 2014, an increase of 21.1% as compared to end of 2013.

Revenue breakdown u-blox operates in two segments:

• Wireless and positioning products u-blox develops and sells embedded positioning chips and

modules, and wireless modules which are used in automotive, industrial and consumer applications. Revenue was CHF 121.5 million for the first half of 2014 as compared to CHF 104.4 million in the first half of 2013.

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

terms of reference designs and software. In the first half of 2014, revenue for wireless services was CHF 9.5 million as compared to CHF 9.1 million during the first half year 2013.

Expanded global presenceUntil the release of this half year report, u-blox expanded its global organization through the two acquisitions, gaining a center of competence for short range radio modules based in Malmö, Sweden, and a research and development center for industrial Wi-Fi based in Athens, Greece.

Outlooku-blox is on track to meet its previously communicated guidance with revenues between CHF 264 -275 million with an EBIT in the range of CHF 35 – 39 million for the full year 2014. The company continues to gain traction in key markets where the “Internet of Things” is making strong inroads, particularly mobile healthcare devices, small cell communication base-stations, point-of-sales terminals and vehicle applications. Continued strong growth in all these market sectors is forecast.

The indications are based on exchange rates of 1.23 for EUR/CHF, 1.45 for GBP/CHF and 0.90 for USD/CHF. u-blox’ natural hedge against foreign exchange variations at the level of material costs helps maintain its relative gross margin. Revenue and EBIT, however, remain sensitive to the further variation of currency fluctuations against the Swiss Franc.

Fritz Fahrni Thomas Seiler Chairman of the Board of Directors CEO

locate, communicate, accelerate page 4

Condensed consolidated income statement

Revenue breakdown u-blox operates in two segments:

• Wireless and positioning products u-blox develops and sells embedded positioning chips and modules, and wireless modules which are used in automotive, industrial and consumer applications. Revenue was CHF 121.5 million for the first half of 2014 as compared to CHF 104.4 million in the first half of 2013.

• Wireless services u-blox offers wireless communication technology services in terms of reference designs and software. In the first half of 2014, revenue for wireless services was CHF 9.5 million as compared to CHF 9.1 million during the first half year 2013.

Expanded global presence Until the release of this half year report, u-blox expanded its global organization through the two acquisitions, gaining a center of competence for short range radio modules based in Malmö, Sweden, and a research and development center for industrial Wi-Fi based in Athens, Greece.

January - June Jan. - Dec.(in CHF 000s) 2014 2013 2013

(unaudited) (unaudited) (audited)

Revenue 121'625 105'106 219'813% growth 15.7% 35.4%Cost of sales -64'031 -56'003 -118'654

Gross profit 57'594 49'103 101'159% gross profit margin 47.4% 46.7% 46.0%

Operating expenses -38'897 -35'416 -71'192Other income 101 85 83

Operating profit (EBIT) 18'798 13'772 30'050% EBIT margin 15.5% 13.1% 13.7%

Financial income 1'090 299 1'013Finance costs -385 -331 -2'193

Profit before income tax (EBT) 19'503 13'740 28'870

Income tax expense -5'100 -1'577 -4'227

14'403 12'163 24'643% net profit margin 11.8% 11.6% 11.2%

Depreciation and amortization 8'489 7'383 16'138

EBITDA*) 27'287 21'155 46'188% EBITDA margin 22.4% 20.1% 21.0%

EBITDA growth 29.0% 33.2%EBIT growth 36.5% 21.6%Net profit growth 18.4% 36.8%

(*) EBITDA (earnings before interest, taxes, depreciation and amortization) calculated by adding depreciation and amortization to Operating profit(EBIT), in each case determined in accordance with IFRS.

Net profit, attributable to owners of the parent


Halbjahresbericht per 30. Juni, 2014

u-blox bleibt im ersten Halbjahr 2014 auf Wachstumskurs, verbessert EBIT-Marge und macht strategische Fortschritte u-blox (SIX: UBXN), ein führender globaler Anbieter von Halbleiterbau-steinen und Modulen für Elektroniksysteme im Bereich der Positionierung und drahtlosen Kommunikation, gibt heute einen Umsatz von CHF 121.6 Millionen für das erste Halbjahr 2014 bekannt. Das entspricht einem Umsatzwachstum von 15.7% gegenüber dem ersten Halbjahr 2013. Der Bruttogewinn steigt auf CHF 57.6 Millionen, woraus sich eine Bruttogewinnmarge von 47.4% ergibt. Der Betriebsgewinn (EBIT) für das erste Halbjahr 2014 beträgt CHF 18.8 Millionen, ein starkes Wachstum von 36.5%. Der Reingewinn wächst um 18.4% auf CHF 14.4 Millionen. u-blox bestätigt die zuvor veröffentlichte Prognose für das Gesamtjahr und erwartet einen Umsatz im Bereich von CHF 264 – 275 Millionen bei einem EBIT im Bereich von CHF 35–39 Millionen.

u-blox erwarb die connectBlue AB mit Sitz in Malmö (Schweden). Nach demBilanzstichtag wurde die Firma Antcor (Griechenland) mit Sitz in Athenübernommen. Beide Unternehmen verfügen über ausgereifte Technologienfür die Kurzstrecken-Funkkommunikation (Bluetooth und Wi-Fi). Finanzielle Kennzahlen für das erste Halbjahr 2014

• Der Gesamtumsatz konnte gegenüber dem ersten Halbjahr 2013 um 15.7% (20% zu konstanten Wechselkursen) auf CHF 121.6 Millionen gesteigert werden.

• Der Bruttogewinn stieg auf CHF 57.6 Millionen bei einer Bruttogewinnmarge von 47.4%.

• Der Betriebsgewinn vor Abschreibungen (EBITDA) betrug CHF 27.3 Millionen bei einer EBITDA-Marge von 22.4%.

• Der Betriebsgewinn (EBIT) wuchs um 36.5% auf CHF 18.8 Millio-nen, was einer EBIT-Marge von 15.5% entspricht.

• Der Reingewinn erhöhte sich im Berichtszeitraum um 18.4% auf CHF 14.4 Millionen oder 11.8% des Umsatzes.

• Das Umlaufvermögen erhöhte sich im Vergleich zum 31. Dezem-ber 2013 um CHF 6.7 Millionen, hauptsächlich infolge des Geschäftswachstums.

• Die Investitionen vor Akquisitionen betrugen CHF 12.9 Millionen, die in erster Linie für den Kapazitätsausbau und die Produkt-entwicklung getätigt wurden.

• Der Cashflow aus operativer Tätigkeit betrug CHF 15.7 Millionen. Allgemein starker Geschäftsverlaufu-blox konnte den Umsatz nach Fakturierungsort im ersten Halbjahr 2014 gegenüber dem Vergleichszeitraum 2013 in Asien-Pazifik und in der EMEA-Region steigern. In Asien-Pazifik wurde ein starkes Umsatzwachstum von 33.1% verzeichnet. In der EMEA-Region erzielte u-blox ein Umsatzplus von 7.6%; der Umsatz in Amerika blieb mit -0.7% praktisch unverändert, bedingt durch die Entscheidung einiger Kunden in den USA, die Produktion nach Asien auszulagern. Ohne diese Effekte wäre der Umsatz in Amerika um 13% gestiegen. Anhaltendes Wachstum im IndustriegütermarktIm u-blox Geschäftsbereich Industriegüter wurden erneut überdurch-schnittliche Ergebnisse erzielt. Wichtigster Umsatzträger waren erneut die Flottenmanagementsysteme, gefolgt von Zeitsynchronisations-anwendungen, die eine beachtliche Zunahme verzeichneten und ihren Umsatzbeitrag im Vergleich zum ersten Halbjahr 2013 deutlich steigerten.

Telematiksysteme, die unter anderem für Versicherungszwecke einge-setzt werden, und Geldautomaten/Kassenterminals erzielten ebenfalls ein stabiles Wachstum. Gesundheitsgeräte, die dem Industriegütermarkt zugeordnet sind, legten überdurchschnittlich zu und wurden das wachs-tumsstärkste Industriesegment des Unternehmens.

Der Umsatz in den weltweiten Automobil- und Konsumgütermärkten verlief konstant. Gute Rentabilität u-blox erreichte erneut eine sehr hohe Rentabilität mit einer EBITDA-Zunahme von 29.0% und einer Steigerung beim EBIT von 36.5%. Das Wachstum des Reingewinns betrug 18.4%, beeinflusst allerdings durch einen höheren Steuersatz aufgrund von Einmaleffekten im Bereich der latenten Steuern.

Markteinführung strategischer ProdukteIm ersten Halbjahr lancierte u-blox mehrere strategische Produkte in den Produktlinien Wireless und Positionierung, in denen neueste Technologien zum Einsatz kommen. Im Januar wurde mit TOBY-L2 das weltweit schnellste LTE-Modul auf den Markt gebracht. Es ist das erste am Markt erhältliche LTE-Modul der Kategorie 4, das Geschwindigkeiten von bis zu 150 Mbit/s unterstützt. Gleichzeitig bietet es Kompatibilität mit 3G und 2G-Netzen – ein wichtiges Merkmal, damit unsere Kunden ihre Produkte ohne Abstriche an die Netzabdeckung aufrüsten können. 4G LTE ist der aktuelle Stand des technisch Möglichen im Bereich der Mobilfunkkommunikation und der Telekommunikationsstandard mit der bisher rasantesten Verbreitung.

Im Bereich Positionierung brachte u-blox die bekannten Modulserien MAX, NEO und LEA auf Basis der 8. Generation der eigenen Positionie-rungschiptechnologie u-blox M8 auf den Markt. Die Module können alle Signale sichtbarer Satelliten der Systeme GPS, GLONASS, BeiDou, QZSS und SBAS empfangen und auswerten und beliebige zwei Satellitensysteme gleichzeitig nutzen, was zu erhöhter Zuverlässigkeit und Genauigkeit sowie schnelleren Aufstartzeiten führt. u-blox M8 ist die weltweit fortschrittlichste Positionierungstechnologie. Sie wird parallel mit den auf der Plattform u-blox 7 basierenden Produkten angeboten, um Kunden sowohl kosten- als auch leistungsoptimierte Optionen zur Verfügung zu stellen.

Das Unternehmen hat seinen ersten Chip mit der revolutionären 3D-Koppelnavigationstechnologie auf den Markt gebracht. Sie ermöglicht Fahrzeugnavigationssystemen die Berechnung einer Position beim Fahren auf mehreren Ebenen, ein typisches Szenario auf mehrstöckigen Strassen oder in Parkhäusern.

Als Ergebnis der connectBlue Akquisition konnte u-blox sieben neueKurzstreckenfunk-Module mit Bluetooth und Wi-Fi-Standard in dasProduktportfolio aufnehmen. Diese Produkte unterstützen u-blox‘ Strategie, Lang- und Kurzstreckenfunk-Module für drahtlose Kommu-nikation anbieten zu können. Beides sind Schlüsselanforderungen für ganzheitliche Kommunikationslösungen im „Internet der Dinge“ (Internet of Things).

Zudem wurden zwei neue Positionierungsmodule mit integrierter Antenneeingeführt: PAM und CAM. Beide Module verbinden die Positionierungs-chip-Kerntechnologie von u-blox mit dem Know-how von u-blox im Bereich integrierter Antennen zu kompakten, eigenständigen Komplett-lösungen für die Positionierung.

GeschäftsentwicklungIn mehreren Marktsektoren wurde ein starkes Umsatzwachstum erzielt. Höhepunkte aus dem ersten Halbjahr:

• Zweistelliger Umsatzanstieg bei Positionierungschips und modulen für Flottenmanagement- und Fahrzeugortungssysteme, dem stärksten Marktsegment von u-blox.

• Der Absatz von Mobilfunk- und Positionierungskomponenten für tragbare Geräte im Gesundheitsbereich hat sich mit dem Produktionsbeginn neuer Endgeräte vervielfacht.

• Der Verkauf von Positionierungsempfängern für Zeitsynchronisation in Mobilfunkbasisstationen hat sich mehr als verdoppelt.

• Das LTE-Modul TOBY-L100 4G LTE wurde von Verizon Wireless zertifiziert. Damit können Kunden das Netz von Verizon Wireless nutzen, um Anwendungen für den amerikanischen Markt mit Hochgeschwindigkeits-Datenkonnektivität auszustatten.

• Ctrack, ein Tochterunternehmen der südafrikanischen Digicore-Gruppe, eines führenden Anbieters von Flottenmanagement- und Fahrzeugortungslösungen, hat u-blox als strategischen Partner für eingebettete Positionierungs- und Mobilkommunikations-Technologie ausgewählt.

• WTS („Wonder Technology Solutions“) aus Schweden hat Trax, das weltweit kleinste und intelligenteste Personal Tracking-Gerät für Kinder und Haustiere, auf den Markt gebracht. Das Gerät basiert auf dem u-blox Positionierungsmodul mit integrierter Antenne und einem Mobilfunkmodul von u-blox.


AkquisitionenIm Zeitraum von Anfang 2014 bis zur Veröffentlichung dieser Halbjahresergebnisse hat u-blox zwei Unternehmen erworben, die ausgereifte Technologien für die Kurzstrecken-Funkkommunikation entwickelt haben:

• connectBlue aus Schweden, einen etablierten Anbieter von Kurzstrecken-Funkmodulen für den Einsatz in der Industrie. Die Produkte von connectBlue unterstützen die Industriestandards Bluetooth und Wi-Fi und ermöglichen die Internetanbindung von Geräten auf den letzten hundert Metern. Das Unternehmen beschäftigt 35 Mitarbeiter und wurde am 19. Mai 2014 für einen Kaufpreis von CHF 25 Millionen übernommen.

• Antcor aus Griechenland, einen Entwickler von geistigem Eigentum (IP) im Bereich Wi-Fi Basisband. Durch die Übernahme verfügt u-blox über Technologie, die dem Unternehmen die Entwicklung robuster Kurzstrecken-Kommunikationslösungen, speziell für anspruchsvolle Umgebungsbedingungen im Industrie- und Automobilbereich, ermöglichen wird. Antcor beschäftigt 25 Mitarbeiter und wurde am 6. August 2014 für einen Kaufpreis von CHF 6,3 Millionen übernommen. Diese Akquisition ist daher in den Halbjahresergebnissen nicht berücksichtigt.

Mit diesen Übernahmen baut u-blox seine Fähigkeit aus, Komponenten für die drahtlose Kommunikation anzubieten, die sowohl für die Langstrecken- als auch die Kurzstreckenkommunikation optimiert sind. Dies ist ein wichtiger Vorteil bei Anwendungen im „Internet der Dinge“ (Internet of Things), in dem Endgeräte wie Sensoren, Messgeräte und Haushaltsgeräte sich oftmals im Umkreis von wenigen hundert Metern eines Mobilfunkterminals oder Wi-Fi-Routers befinden.

Zusammengefasste konsolidierte Erfolgsrechnung

MitarbeiterDie Anzahl der Mitarbeiter weltweit hat sich im ersten Halbjahr 2014 erhöht. Zum 30. Juni 2014 beschäftigte das Unternehmen 550 Mitarbeiterinnen und Mitarbeiter. Das entspricht einer Zunahme von 21.1% gegenüber Ende 2013.

Umsatzaufteilung Die Geschäftstätigkeit von u-blox gliedert sich in zwei Segmente:

• Produkte im Bereich drahtlose Kommunikation und Positionierung u-blox entwickelt und verkauft integrierte Positionierungschips und module sowie drahtlose Kommunikationsmodule, die im Auto-

mobil-, Industriegüter- und Konsumgütermarkt Verwendung finden. Der Umsatz belief sich im ersten Halbjahr 2014 auf CHF 121.5 Millionen gegenüber CHF 104.4 Millionen im ersten Halbjahr 2013.

• Dienstleistungen für drahtlose Kommunikation u-blox bietet auch Dienstleistungen auf dem Gebiet der drahtlosen

Kommunikation in Form von Referenzdesigns und Software an. Im ersten Halbjahr 2014 betrug der Umsatz in diesem Segment CHF 9.5 Millionen gegenüber CHF 9.1 Millionen im ersten Halbjahr 2013.

Erweiterte globale PräsenzBis zur Veröffentlichung dieses Halbjahresberichts erweiterte u-blox die globale Organisation: Im Zuge der beiden Akquisitionen übernahm das Unternehmen ein Kompetenzzentrum für Kurzstreckenfunkmodule in Malmö (Schweden) und ein Forschungs- und Entwicklungszentrum für industrielle Wi-Fi-Anwendungen in Athen (Griechenland).

Ausblicku-blox ist auf gutem Weg, die zuvor veröffentlichte Umsatzprognose von CHF 264–275 Millionen bei einem EBIT im Bereich von CHF 35 –39 Millionen für das Gesamtjahr 2014 zu erfüllen. Das Unternehmen baut seine Position in wichtigen Märkten, in denen das „Internet der Dinge“ stark auf dem Vormarsch ist, weiter aus. Dies gilt insbesondere für mobile Gesundheitsgeräte, kleine Mobilfunkbasisstationen, Kassenterminals und Fahrzeuganwendungen. Für alle diese Marktsektoren wird ein anhaltend starkes Wachstum vorhergesagt.

Die Angaben basieren auf Wechselkursen von 1.23 für EUR/CHF, 1.45 für GBP/CHF und 0.90 für USD/CHF. Die natürliche Fremdwährungsabsicherung (Natural Hedge) auf Ebene der Materialkosten hilft die relative Bruttomarge zu stützen. Dennoch werden Umsatz und EBIT von weiteren Änderungen der Währungsbewertungen gegenüber dem Schweizer Franken abhängig sein.

locate, communicate, accelerate Seite 4

Zusammengefasste konsolidierte Erfolgsrechnung

Umsatzaufteilung Die Geschäftstätigkeit von u-blox gliedert sich in zwei Segmente:

• Produkte im Bereich drahtlose Kommunikation und Positionierung u-blox entwickelt und verkauft integrierte Positionierungschips und -module sowie drahtlose Kommunikationsmodule, die im Automobil-, Industriegüter- und Konsumgütermarkt Verwendung finden. Der Umsatz belief sich im ersten Halbjahr 2014 auf CHF 121.5 Millionen gegenüber CHF 104.4 Millionen im ersten Halbjahr 2013.

• Dienstleistungen für drahtlose Kommunikation u-blox bietet auch Dienstleistungen auf dem Gebiet der drahtlosen Kommunikation in Form von Referenzdesigns und Software an. Im ersten Halbjahr 2014 betrug der Umsatz in diesem Segment CHF 9.5 Millionen gegenüber CHF 9.1 Millionen im ersten Halbjahr 2013.

Erweiterte globale Präsenz Bis zur Veröffentlichung dieses Halbjahresberichts erweiterte u-blox die globale Organisation: Im Zuge der beiden Akquisitionen übernahm das Unternehmen ein Kompetenzzentrum für Kurzstreckenfunkmodule in

Jan. - Juni Jan. - Dez.(in Tausend CHF) 2014 2013 2013

(ungeprüft) (ungeprüft) (geprüft)

Umsatz 121'625 105'106 219'813Wachstumsrate gegenüber Vorjahr 15.7% 35.4%Herstellungskosten der verkauften Produkte -64'031 -56'003 -118'654

Bruttogewinn 57'594 49'103 101'159Bruttogewinnmarge in % 47.4% 46.7% 46.0%

Operative Kosten -38'897 -35'416 -71'192Übriger Ertrag 101 85 83

Betriebsgewinn (EBIT) 18'798 13'772 30'050EBIT-Marge 15.5% 13.1% 13.7%

Finanzertrag 1'090 299 1'013Finanzaufwand -385 -331 -2'193

Gewinn vor Steuern (EBT) 19'503 13'740 28'870

Steuern -5'100 -1'577 -4'227

Reingewinn 14'403 12'163 24'643Reingewinnmarge in % 11.8% 11.6% 11.2%

Abschreibungen 8'489 7'383 16'138EBITDA (1) 27'287 21'155 46'188EBITDA-Marge in % 22.4% 20.1% 21.0%

EBITDA Wachstum 29.0% 33.2%EBIT Wachstum 36.5% 21.6%Wachstum Reingewinn 18.4% 36.8%

(1) EBITDA (earnings before interest, taxes, depreciation and amortization) als Addition der Abschreibungen zum Betriebsgewinn (EBIT) berechnet, immer auf Grundlage der Regeln nach IFRS.

Fritz Fahrni Thomas Seiler Chairman of the Board of Directors CEO


u-blox Holding AG, ThalwilCondensed consolidated interimfinancial statements June 30, 2014

(in CHF 000s) NotesJune 30, 2014

(unaudited)December 31, 2013

(audited)

Assets

Current assets

Cash and cash equivalents 30’390 33’163

Marketable securities 24’920 27’395

Trade accounts receivable 35’179 29’204

Other receivables 6’799 6’765

Current tax assets 3’631 1’652

Inventory 26’509 22’671

Prepaid expenses and accrued income 1’619 1’501

Total current assets 129’047 122’351

Non-current assets

Property, plant and equipment 13’824 13’764

Goodwill 3 53’265 37’825

Other intangible assets 3 58’864 44’570

Financial assets 480 1’222

Deferred tax assets 6’104 6’777

Total non-current assets 132’537 104’158

Total assets 261’584 226’509

Liabilities and equity

Current liabilities

Trade accounts payable 15’823 15’318

Other payables 5’429 5’454

Current loans 4 20’000 0

Current tax liabilities 235 1’391

Accrued expenses 14’530 13’811

Total current liabilities 56’017 35’974

Non-current liabilities

Other payables 90 822

Provisions 2’761 1’879

Employee benefits 5’145 4’213

Deferred tax liabilities 6’619 3’185

Total non-current liabilities 14’615 10’099

Total liabilities 70’632 46’073

Shareholders’ equity

Share capital 5’899 5’810

Share premium 88’340 92’556

Retained earnings 96’713 82’070

Total equity, attributable to owners of the parent 190’952 180’436

Total liabilities and equity 261’584 226’509

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


Consolidated statement of financial position


Consolidated income statement

(in CHF 000s) NotesJan. - June 2014

(unaudited)Jan. - June 2013

(unaudited)Jan. - Dec. 2013

(audited)

Revenue 121’625 105’106 219’813

Cost of sales 2 -64’031 -56’003 -118’654

Gross profit 57’594 49’103 101’159

Distribution and marketing expenses -11’505 -10’412 -21’217

Research and development expenses -22’703 -20’134 -38’941

General and administrative expenses -4’689 -4’870 -11’034

Other income 101 85 83

Profit from operations (EBIT) 2 18’798 13’772 30’050

Financial income 1’090 299 1’013

Finance costs -385 -331 -2’193

Profit before income tax (EBT) 19’503 13’740 28’870

Income tax expense -5’100 -1’577 -4’227

Net profit, attributable toowners of the parent 14’403 12’163 24’643

Basic earnings per share (in CHF) 2.22 1.92 3.86

Diluted earnings per share (in CHF) 2.13 1.89 3.75

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

Consolidated statement of comprehensive income

(in CHF 000s)Jan. - June 2014



(audited)

Net profit for the period 14’403 12’163 24’643

Other comprehensive income:

Remeasurements on definedbenefit obligations -795 181 703

Income tax on remeasurements on defined benefit obligations 151 -34 -135

Items that will not be reclassified to income statement, net of tax -644 147 568

Currency translation differences -622 263 -96

Items that are or may be reclassified subsequently to income statement -622 263 -96

Other comprehensive income for the period,net of taxes -1’266 410 472

Total comprehensive income, attributable to owners of the parent 13’137 12’573 25’115




Consolidated statement of changes in equity


(in CHF 000s)Share

capitalShare

premium

Cumulative translation differences

Other retained earnings

Retainedearnings

Total equity

Balance at January 1, 2013 5’675 94’132 -3’814 54’857 51’043 150’850

Net profit for the period 0 0 0 12’163 12’163 12’163

Other comprehensive income for the period, net of taxes 0 0 263 147 410 410

Total comprehensive income 0 0 263 12’310 12’573 12’573

Share based payments1) 0 0 0 1’608 1’608 1’608

Dividend out of share premium 0 -6’375 0 0 0 -6’375

Options exercised during the year, net of transaction costs 98 3’425 0 0 0 3’523

Total transactions with owners of the parent 98 -2’950 0 1’608 1’608 -1’244

Balance at June 30, 2013 5’773 91’182 -3’551 68’775 65’224 162’179

Balance at January 1, 2014 5’810 92’556 -3’910 85’980 82’070 180’436

Net profit for the period 0 0 0 14’403 14’403 14’403

Other comprehensive income for the period, net of taxes 0 0 -622 -644 -1’266 -1’266

Total comprehensive income 0 0 -622 13’759 13’137 13’137

Share-based payments1) 0 0 0 1’506 1’506 1’506

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

Options exercised during the year, net of transaction costs 89 4’271 0 0 0 4’360

Total transactions with owners of the parent 89 -4’216 0 1’506 1’506 -2’621

Balance at June 30, 2014 5’899 88’340 -4’532 101’245 96’713 190’952

1) Represents the amount of stock option expense of CHF 1.7 million (2013: CHF 1.0 million) including respective tax effects of CHF -0.2 million (2013: CHF 0.6 million) recognized per June, 2014 and 1) 2013 respectively

Condensed statement of cash flows


(in CHF 000s)Jan. - June 2014



(audited)

Net cash provided by operating activities 15‘655 20‘379 38’483

Net cash provided by/(used in)investing activities -33’882 -13’447 -33’638

Net cash provided by/(used in) financing activities 15‘778 -3‘980 -4’784

Net (decrease)/increase in cash andcash equivalents -2’449 2’952 61

Cash and cash equivalents at beginning of period 33’163 33’416 33’416

Effect of exchange rate fluctuations on cash and cash equivalents -324 59 -314

Cash and cash equivalents at end of period 30‘390 36‘427 33’163

1) Net cash used in investing activities consists of investments into property, plant and equipment of CHF 2.6 million and investments into intangible assets of CHF 10.3 million as well as an acquisition of a subsidiary, net of cash acquired of CHF 23.6 million in the first half year 2014.

2) Net cash used in financing activities contains the exercise of employee stock options of CHF 4.4 million, the dividend payment out of reserves from capital contributions of CHF 8.5 million and proceeds from issuance of a loan of CHF 20 million, see note 4.


1)

2)

Page 15 | u-blox Annual Report 2008

Notes to the condensed consolidated interim financial statements

1 Basis of preparation of the condensed consolidated

interim financial statements

The condensed consolidated interim financial statements of u-blox Holding AG (‘u-blox’ or the ‘Group’) were prepared in accordance with IAS 34 “Interim Financial Reporting”. These condensed consolidated interim financial statements do not include all the notes contained in the consolidated annual financial statements, and for that reason should be read in conjunction with the consolidated annual financial statements for the year ended December 31, 2013.

The condensed consolidated interim financial statements have been prepared in Swiss francs (CHF), rounded to the nearest thousand. The accounting policies applied in the condensed consolidated interim financial statements are consistent with those used in the consolidated financial statements for the year ended December 31, 2013, except for the changes mentioned in the chapter below.

The preparation of the condensed consolidated interim financial statements requires management judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses as well as disclosure of contingent assets and liabilities.

Although these judgments, estimates and assumptions are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates.

In the condensed consolidated interim financial statements significant estimates and assumptions made by management are not different from those made in the consolidated financial statements for the year ended December 31, 2013.

Income taxes are recognized based on best estimate of the weighted average annual tax rate for 2014. The Group operates in markets where no significant seasonal or cyclical variations in revenue are experienced during the financial year.

For the condensed consolidated interim financial statements, a EUR/CHF exchange rate of 1.215 and a USD/CHF exchange rate of 0.890 was applied at the end-of-period (31 December 2013 EUR/CHF 1.226, USD/CHF 0.889). For the period an average exchange rate of EUR/CHF 1.235 and USD/CHF 0.900 was applied (previous period: EUR/CHF 1.228, USD/CHF 0.944).

Changes in accounting policiesAs of January 1, 2014, u-blox adopted various new and amended International Financial Reporting Standards (IFRS) and Interpretations, none of which have a material impact on the consolidated financial statements of u-blox.


u-blox Annual Report 2008 | Page 16Half year report 2014 | Page 15

2 Segment information

Positioning andwireless products

Wireless services

Totalsegments

Non-allocated/ eliminations Group

January – June January – June January – June January – June January – June

(in CHF 000s) 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

Revenue third 121’532 104’448 93 658 121’625 105’106 0 0 121’625 105’106

Revenue intragroup 0 0 9’434 8’393 9’434 8’393 -9’434 -8’393 0 0

Total revenue 121’532 104’448 9’527 9’051 131’059 113’499 -9’434 -8’393 121’625 105’106

EBITDA 25’420 19’608 2’288 1’720 27’708 21’328 -421 -173 27’287 21’155

Depreciation -2’122 -1’339 -801 -373 -2’923 -1'712 0 0 -2’923 -1’712

Amortization -4’902 -4’855 -664 -816 -5’566 -5'671 0 0 -5’566 -5’671

EBIT 18’396 13’414 823 531 19’219 13'945 -421 -173 18’798 13’772

Financial income 1’090 299

Finance costs -385 -331

EBT 19’503 13’740

June 30,2014

Dec. 31,2013

June 30,2014

Dec. 31,2013

June 30,2014

Dec. 31,2013

June 30,2014

Dec. 31,2013

June 30,2014

Dec. 31,2013

Assets 184’050 142’431 15’639 15’521 199’689 157’952 61’895 68’557 261’584 226'509

Page 17 |

3 Acquisition of subsidiary

The following business combination took place during the six months period ended June 30, 2014:

Acquisition of 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 player in the short range radio markets worldwide and employed 35 employees as of the acquisition date. The company is headquartered in Malmö, Sweden.

Due to the timing of the acquisition, the final allocation of the purchase price is not yet finalized - especially the value of the acquired technology, R&D costs as well as the resulting goodwill is subject to further assessment. The acquisition had the following provisional effect on the Group’s assets and liabilities:


(in CHF 000s)

Carrying amount of the acquired assets

and liabilitiesFair value

adjustments

Identifiable assets acquired and

liabilites assumed at fair value

Cash and cash equivalents 1’548 1’548

Trade accounts receivable 1’237 1’237

Inventory 611 611

Other receivables 212 212

Prepaid expenses and accrued income 147 147

Property, plant and equipment 248 248

Intangible assets

Orderbook 2’720 2’720

Acquired technology 6’562 6’562

Capitalized development costs 224 224

Deferred tax assets 875 55 930

Total assets 5’102 9’337 14’439

Trade accounts payables -745 -745

Other payables -19 -19

Accrued expenses -990 -990

Deferred tax liabilities -2’042 -2’042

Net assets 3’348 7’295 10’643

Goodwill 15’625

Total consideration transferred 26’268

Settled by

Cash payment 25’142

Cash net debt adjustment deferred 1’126

Total consideration transferred 26’268

Paid in cash -25’142

Cash and cash equivalents acquired 1’548

Acquisition of subsidiary, net of cash acquired -23’594

The fair value of the receiveables is equal to the gross contractual amounts. All receiveables are expected to be collectible.

The goodwil represents intangible assets that do not qualify for a separate recognition as well as the assembled workforce of connectBlue AB. The goodwil is fully allocated to the positioning and wireless products segment.

| Page 18Half year report 2014 | Page 17

Had connectBlue AB been taken over at January 1, 2014, the revenue had been increased by CHF 4.4 million and an EBIT had resulted of approximately CHF 19.2 million. The impact on revenue and profit since acquisition is not significant.

The name of the company was changed to u-blox, Malmö in August 2014.

4 Current loans

Due to the acquisition of u-blox Malmö AB a short term loan of CHF 20.0 million was borrowed. The short term bank loan of CHF 20.0 million at a variable interest rate of 0.6% (based on the libor plus spread) is denominated in CHF and has a duration of 1 month.

5 Financial instruments

Carrying amounts and fair values of financial instruments The carrying amounts and fair values of financial assets and financial liabilities as at 30 June 2014are as follows:

(in CHF 000s)Carrying amount

June 30, 2014Fair Value

June 30, 2014Carrying amount

Dec 31, 2013Fair Value

Dec 31, 2013

Cash and cash equivalents 30’390 30’390 33’163 33’163

Trade accounts receivable 35’179 35’179 29’204 29’204

Other receivables 1’117 1’117 504 504

Accrued income 818 818 412 412

Financial assets 480 480 1’222 1’222

Loans and receivables 37’594 37’594 31’342 31’342

Marketable securities 24’920 24’920 27’395 27’395

Financial assets at fair value through profit or loss 24’920 24’920 27’395 27’395

Trade accounts payable 15’823 15’823 15’318 15’318

Other payables - other 3’712 3’712 5’034 5’034

Current loans 20’000 20’000 0 0

Accrued expenses 5’794 5’794 6’488 6’488

Liabilities at amortized costs 45’329 45’329 26’840 26’840

Other payables - contingent consideration 369 369 962 962

Liabilities designated at fair value through profit and loss 369 369 962 962

The carrying amount of the marketable securities recognized at their fair value is determined on the basis of the bonds prices at the balance sheet date.

Page 19 | u-blox Annual Report 2008Page 18 | Half year report 2014

Fair value hierarchyThe different levels of financial instruments carried at fair value have been defined as follows in the table below:Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or the liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).Level 3: inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

June 30, 2014(in CHF 000s) Total Level 1 Level 2 Level 3

Marketable securities 24’920 24’920 0 0

Total assets 24’920 24’920 0 0


Total liabilities 369 0 0 369

December 31, 2013(in CHF 000s) Total Level 1 Level 2 Level 3

Marketable securities 27’395 27’395 0 0

Total assets 27’395 27’395 0 0


Total liabilities 962 0 0 962

There were no reclassifications between the various levels in 2014. In 2014 a contingent consideration over CHF 0.6 million has been released.

u-blox Annual Report 2008 | Page 20Half year report 2014 | Page 19

6 Dividend

On April 29, 2014 the Annual General Meeting of u-blox AG approved a gross dividend of CHF 1.30 per share. A total dividend amount of CHF 8.5 million was paid out on May 5, 2014.

7 Guarantees, pledges in favor of third parties and

other contingent liabilities

At June 30, 2014 and Dember 31, 2013 there were no guarantees in favour of third parties. The group is not exposed to any significant other contingent liabilities. There is no known threatened or pending litigation against any group company.

8 Subsequent events

Pending acquisition of Antcor Advanced Network Technologies S.A.At August 6, 2014 u-blox announced the acquisition of 100% of the shares of Antcor Advanced Network Technologies S.A. Athen (GR) a developer of Wi-Fi baseband intellectual property (IP).The acquisition at a price of approximately EUR 5 million excluding an earn-out which offers the sellers the possibility to participate in certain future revenues of the company. Due to the timing of the acqusition, the final allocation of the purchase price is not yet finalized.

The Board of Directors authorized on September 4, 2014 these condensed consolidated interim financial statements for publication.

Page 21 | Page 20 | Half year report 2014

Investor information and contacts

u-blox Holding AG

Corporate address

Investor relations

Website

Financial calendar

Ticker details for u-blox shares• Listing SIX Swiss Exchange• Ticker symbol UBXN• ISIN-No. CH0033361673• Swiss Security-No. 3336167• Reuters UBXN.S• Bloomberg UBXN:SW

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

Roland JudChief Financial Officer E-mail: [email protected]

www.u-blox.com

• Annual results 2014: March 19, 2015• Annual General Meeting 2014: April 28, 2015

mailto:roland.jud%40u-blox.com?subject=Half%20Year%20Report%202012

http://www.u-blox.com

| Page 22

DisclaimerThis document contains certain forward-looking statements. Such forward-looking statements reflect the current views of management and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the u-blox Group to differ materially from those expressed or implied. These include risks related to the success of and demand for the Group’s products, the potential for the Group’s products to become obsolete, the Group’s ability to defend its intellectual property, the Group’s ability to develop and commercialize new products in a timely manner, the dynamic and competitive environment in which the Group operates, the regulatory environment, changes in currency exchange rates, the Group’s ability to generate revenues and profitability, and the Group’s ability to realize its expansion projects in a timely manner. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report. u-blox is providing the information in this release 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.

ImprintPublisher / Copyright: September 2014 u-blox Holding AG, Thalwil, Switzerland.

Worldwide presence

R&D centerEspoo, FIMalmö, SEReigate, UKMelbourn, UKLuton, UKCork, IELeuven, BE

R&D centerSgonico, ItalyAthens, GreeceLahore, Pakistan

Americas regional officeReston, Virginia, USA

West Coastarea officeIrvine, CA, USAR&D centerSan Diego, CA, USA

Corporate headquarters EMEA regional officeR&D centerThalwil, Switzerland

APAC regional officeSingapore

APAC area offices

Beijing, China

Seoul, Korea

Tokyo, Japan

Shanghai, China

Taipei, Taiwan

Shenzhen, China

Bangalore, India

Sydney, Australia

Documents

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