u-blox AG / Key word(s): Half Year Results
Thalwil, Switzerland – 7 August 2024 – u-blox (SIX: UBXN), a global provider of leading positioning and wireless communication technologies and services, announced today its half-year 2024 financial results. In the first half of 2024, u-blox reached revenue of CHF 121.1 million. Revenue troughed in Q1’24 as expected, and Q2’24 was 16% higher quarter on quarter. Year-over-year, revenue declined similarly in all regions and markets, while more pronounced in the connectivity and industrial businesses. Signs of recovery in the automotive business were identified in Q2’24, as revenue grew double-digit versus Q1’24, mainly driven by Locate. EBIT amounted to CHF -40.9 million (EBIT (adjusted) CHF -36.2 million), and free cash flow was CHF 15.7 million in the first half of 2024. The cost optimization program initiated this year already realized savings of CHF 4.9 million in H1’24. The emphasis on working capital management has also yielded positive outcomes, resulting in cash generation during this period. Due to the continued weak economic environment in the industry, u-blox is expanding the scope of the cost optimization plan launched in 2023, targeting annual savings of over CHF 20 million from H2’24 onwards. Stephan Zizala, u-blox’s Chief Executive Officer, commented, “The first half 2024 results came in as expected. We reached the trough in the first quarter and saw a slight improvement in the second quarter. Despite the weak revenue, we made good progress on winning new businesses (double digit increase in positioning YoY), cost control and cash generation. Going forward, we expect the business to improve further in Q3. Orders from customers are improving, but at a slower pace than previously expected due to a continued weak industrial market environment and still significant overstock in the value chain. Therefore, we further focus on topics crucial for our mid- and long-term growth strategy while further reducing other costs.” Operational highlights
Financial Overview In the first half of 2024, u-blox generated revenues of CHF 121.1 million, EBIT of CHF -40.9 million (EBIT (adjusted) CHF -36.2 million), and free cash flow of CHF 15.7 million in the first half of 2024. Revenue declined in most regions and markets, reflecting overstocking from our customers. Foreign currency exchange rates negatively affected revenue by -1.2%, mainly from the strengthening of the Swiss Franc versus the Euro and the US Dollar. Revenue by region
Revenue by market
Gross Profit Gross profit reached CHF 52.7 million in the first half of 2024 from CHF 155.5 million in 2023. The respective gross profit margin amounted to 43.5% in the first half of 2024 from 46.8% one year earlier. The better performance of Locate created a positive mix effect, offset by the lower operating leverage. Research and Development expenses R&D expenses totaled CHF 60.6 million in the first half of 2024, compared to CHF 62.3 million in 2023. Cash R&D expenses stayed flat at CHF 66.9 in the first half of 2024. R&D cost reduction initiatives generated CHF 2.7 million in savings in H1’24. Cash R&D expenses exclude non-cash items such as amortization and add back capitalized development costs. Sales, General, and Administration expenses (SG&A) SG&A expenses declined by -4.8% to CHF 33.0 million in the first half of 2024 (CHF 34.7 million in 2023) mainly due to CHF 2.2 million savings in the period. Operating Profit (EBIT) On an IFRS basis, EBIT amounted to CHF -40.9 million in the first half of 2024, lower than in 2023 (CHF 58.5 million). The respective EBIT margin decreased to -33.8% in the first half of 2024 compared to 17.6% in 2023. On an adjusted basis, EBIT (adjusted) reached CHF -36.2 million in the first half of 2024, lower than in 2023 (CHF 61.7 million). Accordingly, the adjusted EBIT margin decreased to -29.9% in the first half of 2024 compared to 18.6% in 2023. Financial Results Net finance results in the first half of 2024 amounted to CHF 9.2 million from CHF -3.9 million in 2023. Excluding FX effects, net finance results totaled CHF 0.9 million in the first half of 2024 from CHF -0.4 million one year earlier. FX results reached CHF 8.2 million in the first half of 2024 compared to CHF -3.4 million in the same period last year. Net Profit Net profit amounted to CHF -25.8 million compared to CHF 46.1 million in the prior year period. Diluted EPS in the first half of 2024 amounted to CHF -3.51 per share compared to CHF 6.35 in 2023. Net profit (adjusted) decreased to CHF -21.7 million compared to CHF 48.3 million in the prior year period. Diluted EPS (adjusted) in the first half of 2024 amounted to CHF -2.96 per share compared to CHF 6.67 in 2023. Cash Flow Changes in net working capital totaled CHF 38.5 million in the first half of 2024 vs. CHF -67.0 million in 2023 due to improvements in working capital management in the period, mainly by reducing accounts receivables significantly. Income tax paid was CHF -0.3 million in the first half of 2024, from CHF -3.6 million in 2023. Capex reached CHF 20.6 million in the first half of 2024 (CHF 23.4 million in H1’23). As a result, free cash flow increased to CHF 15.7 million in the first half of 2024 compared to Balance Sheet and Financing After a dividend payment of CHF 7.3 million, u-blox’s net cash position on 30 June 2024 stood at CHF 99.1 million versus CHF 86.2 million on 31 December 2023. Outlook After a weak first half of 2024, u-blox expects market conditions to remain muted for the rest of 2024. Orders from customers show steady improvement, albeit at a slow pace. Signs of recovery are most promising in the positioning business. Given this scenario, u-blox is expanding the cost optimization program launched in 2023. The plan now targets annual savings of over CHF 20 million. u-blox expects the full effect of the savings to be realized on an EBIT level from H2’24. One-off costs below CHF 20 million are expected in H2’24. In 2023, u-blox announced measures to turnaround its Connectivity business. As a first step, u-blox remains positive on its long-term development prospects. Demand and requirements for semiconductor solutions for automated and autonomous driving, asset tracking, healthcare offerings, and industrial automation grow significantly. Guidance for Q3 2024 u-blox expects revenue of CHF 75 - 85 million in the third quarter of 2024, and EBIT margin (adjusted)[1] of -10% to -5%, reflecting a gradual business recovery. Conference call and webcast details For details on the half-year 2024 results webcast, please click here. [1] Excluding restructuring costs For further information, please contact:
u-blox (SIX:UBXN) provides semiconductor chips, modules, and IoT services that reliably locate and connect every thing. Our cutting-edge solutions drive innovation for the car of the future and the Internet of Things. Headquartered in Thalwil (Zurich), Switzerland, we have a global presence of 1,400 experts who enable our customers to build solutions for a precise, smart, and sustainable future.
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Language: | English |
Company: | u-blox AG |
Zürcherstrasse 68 | |
8800 Thalwil | |
Switzerland | |
Phone: | +41 44 722 74 44 |
Fax: | +41 44 722 74 47 |
E-mail: | ir@u-blox.com |
Internet: | www.u-blox.com |
ISIN: | CH0033361673 |
Listed: | SIX Swiss Exchange |
EQS News ID: | 1962419 |
End of Announcement | EQS News Service |
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1962419 07-Aug-2024 CET/CEST