Financial summary

Revenue breakdown
u-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 360.1 million for 2016 as compared to CHF 338.0 million in 2015.
  • Wireless services
    u-blox also offers Wireless communication technology services
    in terms of reference designs and software. In 2016, revenue
    for Wireless services was CHF 26.0 million compared to CHF
    26.1 million in 2015 (including intra-group revenue).

In 2016 based on billing location, Asia-Pacific generated 49.5%, EMEA 25.5% and Americas 25.0% of total revenue. u-blox was able to grow revenues in Asia Pacific by 9.1% to CHF 178.4 million and EMEA by 18.5% to CHF 91.7 million. In the Americas revenue decreased by 7.4% to CHF 90.2 million due to delayed investments of customers into mobility solutions and a more prudent approach by our customers in launching new products.

In 2016, the company made about 80% of its total revenue from 71 customers. u-blox's largest customer accounted for less than 6% of revenue. u-blox served over 5’700 customers and achieved global expansion into new regions and markets.

Increased gross profit
Gross profit increased by 7.8% to CHF 167.1 million in 2016 from CHF 155.0 million in 2015. Gross profit margin was 46.4% for 2016, increasing from 45.8% in 2015 because of a more favorable product mix.

Distribution and marketing activities
Distribution and marketing expenses increased in 2016 due to the expansion of the business. In 2016, distribution and marketing activities were CHF 32.0 million as compared to CHF 27.7 million in the previous year. As a percentage of revenue, distribution and marketing expenses were 8.9% in 2016 compared to 8.2% in 2015.

Research and product development
R&D expenses in 2016 were CHF 63.5 million as compared to CHF 65.0 million in 2015. As a percentage of revenue, R&D expenses in 2016 were 17.6% as compared to 19.2% in 2015. The percentage decreased because contrary to the previous year, there was no impairment of capitalized R&D expenses in 2016.

Share based payment
The sharebased payment expenses recognized in 2016 were CHF 7.0 million as compared to CHF 4.4 million in 2015.

Growth of operating profit (EBIT)
Operating profit (EBIT) was CHF 59.0 million in 2016 as compared to CHF 51.3 million in the previous year. The growth rate from 2015 to 2016 was 15.0%. Operating profit (EBIT) margin was 16.4% and EBITDA margin was 22.7% in 2016.

Finance income and costs
Finance income was CHF 4.3 million. Finance costs were CHF 1.7 million, mainly due to foreign exchange effects and interests for the bond.

Strong net cash generated from operating activities
In 2016, u-blox generated cash from operating activities in the amount of CHF 93.6 million as compared to CHF 74.7 million in 2015. A strong growth of 25.3% compared to previous year. Due to strict management inventory level and trade receivables decreased despite of the expansion of the business and higher revenues.

Main investing activities
Investments in property, plant and equipment and intangible assets increased to CHF 49.5 million in 2016 (2015: CHF 43.0 million). As a percentage of sales, the investment ratio remained stable at 13.7% in 2016 (2015: 12.7%).

With the continued expansion of the R&D pipeline and the increased number of development projects for all product categories, the investments into capitalized development costs increased to CHF 37.2 million (2015: CHF 27.0 million). Additionally CHF 1.2 million (2015: CHF 5.9 million) was invested into intellectual property rights and CHF 1.4 million (2015: CHF 1.6 million) into software. In 2016, CHF 9.7 million of investments were used for property, plant and equipment (2015: CHF 8.4 million).

u-blox invested 77.5% of total investments (2015: 76.7%) into the development of new products and 2.9% of total investments were invested into capacity expansion (2015: 0.9%).

Financing activities
In 2016 u-blox paid dividends of CHF 12.9 million and received proceeds from the issuance of ordinary shares connected with the employee share option plan of CHF 3.4 million.

Strong financial position
u-blox has a very strong balance sheet with an equity ratio of 67.0%. Cash and cash equivalents and marketable securities amounted to CHF 157.1 million at December 31, 2016, compared to CHF 124.0 million at December 31, 2015.

Goodwill decreased due to changes in EUR/CHF exchange rate from CHF 56.7 million in 2015 to CHF 54.1 million or 12.7% of total assets in 2016.

On the basis of 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 2.10 per share is suggested, which represents a payout ratio of 31.1% of consolidated net profit, attributable to owners of the parent.