Shareholder letter

Dear Shareholders,

2021 was our best year ever. We reported record numbers in term of revenues and bookings. We increased FY 2021 revenue by 24.2% to CHF 414.1 million, expanded adjusted EBITDA by 71.0% to CHF 72.1 million, grew adjusted net profit by 684.9% to CHF22.9 million, and generated free cash flow of CHF 56.0 million.

Demand continued to grow throughout our business segments, end markets, and geographies. Bookings recovered strongly in all regions and the growth pace of our orderbook exceeded the revenue growth rate. Our orderbook at the end of 2021 was approximately eight times the amount recorded a year before.

While we are encouraged by the current strength of our orderbook, we are still managing tight component availability due to the continuation of higher demand for electronic components, which is an issue that is impacting the entire industry. Despite the economic crisis and supply chain shortage, our team was able to successfully navigate this complex situation and gain access to key components and fulfill customers’ demands as quickly as possible. We worked around specific shortages and negotiated with multiple suppliers and sub-contractors, which enabled us to achieve prompt delivery schedules with our customers.

Strong growth across all our segments and regions  

During the year, our automotive segment experienced higher demand for navigation and infotainment applications, especially for electric vehicles, and we were able to successfully rebound after the strong decline in 2020. Our industrial segment grew thanks to strong demand for existing applications such as smart devices, but also due to new applications in micro mobility, medical, automation and networks. Higher revenues in the consumer segment were a result of increased demand for telematics and wearables.

Financial Overview

In 2021 u-blox generated revenues of CHF 414.1 million, EBIT (adjusted) of CHF 35.1 million and EBITDA (adjusted) of CHF 72.1 million. Revenues in all regions were higher in FY 2021 compared to the previous year, reflecting strong and broad-based expansion of overall demand. In particular, the automotive and consumer end markets exhibited robust year-over-year growth. The weakened USD/CHF exchange rate had a negative impact of ‑2.7%.

Bookings recovered solidly in all regions, and the growth pace of the orderbook has exceeded by far the current revenue growth rate.

Revenues by region:

AMEC: FY 2021 revenues increased to CHF 136.9 million from CHF 99.5 million in FY 2020 (+38%). Strong revenue growth was mainly due to particularly higher demand for industrial automation, automotive navigation, and infotainment applications.

EMEA: FY 2021 revenues increased to CHF 124.9 million from CHF 95.9 million in FY 2020 (+30%) primarily due to a higher demand in industrial automation and consumer telematics, and strong rebound in the automotive sector.

APAC: FY 2021 revenues increased to CHF 153.9 million from CHF 137.7 million in FY 2020 (+12%) driven by strong growth in Japan and Korea for applications in industrial automation, navigation, infotainment, and automated driving. Growth in APAC was tempered by relatively flat results in China due to supply constraints and by continued COVID impacts in certain countries.

Leading with innovation

2021 was a year of innovation. We introduced several new capabilities and products across our entire portfolio and re-designed or re-modeled other products for better coping with the component supply shortages.

Our CloudLocate service, which offloads the position calculation from IoT devices into the cloud, is now available through the u-blox Thingstream IoT service delivery platform. Our IoT certificate manager, also a new security service introduced in 2021, can continuously renew device credentials in a fully automated mode.  

The NEO-M9V global navigation satellite system (GNSS) receiver is our first positioning receiver to offer both untethered dead reckoning (UDR) and automotive dead reckoning (ADR). Our LTE-M modules had increased demand, as the industry has swiftly migrated to this LTE standard. We also won the first design-ins for the u-blox M10 ultra low power GNSS platform.

Investing in our future

Our strong balance sheet has positioned us well to take advantage of many opportunities, to create new revenue streams by introducing new products and capabilities, and to continue our growth organically and through acquisitions. We ended the year with a strong cash position of CHF 83.7 million.

A surge in general demand and the lagging supply followed by inflation, will continue to affect businesses worldwide in 2022. However, we are well positioned to take advantage of multiple opportunities arising from the widespread IoT adoption and the desire for connectivity throughout the world. We are confident that we can continually increase production output over the year.

Our strategy is to lead with innovative solutions that combine core technology in the form of chipsets and modules, together with services.  In 2022 we intend to:
The future of electronics and technology is an especially prominent topic in 2022. The pandemic has resulted in employees, customers, suppliers, and organizational ecosystems converting to virtual positions. As our clients’ needs shift to address this new environment, we are constantly changing alongside them, making sure that our goals are in line with theirs. Being constantly innovative is what has kept our customers loyal to u-blox.

Within a short amount of time, demand within the automotive industry shifted completely. Carmakers invested heavily in R&D as they wanted to keep up with the higher demand for safe and eco-friendly products. Electric vehicles became quite popular, requiring those companies to strengthen their electronics systems.

The industrial sector strongly expanded throughout the world. There was continuous evolvement in smart devices connected to the Cloud, along with new applications in micro-mobility, the medical field, and automation. Our solutions enable our customers to connect their previously stand-alone devices with little risk and bring them quickly to market.

As the world shifted towards interconnectivity from people’s homes to their cars and to their offices, we invested in advanced technologies and designed products to offer solutions that would meet our customers’ expectations.

We design our products with socio-economic and eco-friendly factors in mind. We stand by our products being high-quality and long lasting, compliant with the relevant standards, and we continuously take steps to improve and streamline our supply and distribution chain.

We are optimistic in 2022 and beyond.

We are well positioned to take advantage of multiple opportunities arising from the widespread IoT adoption and the desire for connectivity throughout the world. For FY 2022, we expect to see continued strong demand throughout regions and product line expansion.

Our confidence is based on our commitment to advance the four pillars of our strategy.
These pillars are:

Maintain and grow our leading position: we provide existing and potential clients with innovative and high-quality products, solutions and capabilities that leverage our core IP. We aim to be a strong global brand by expanding the channels in international markets.

Technology and innovation: we continue to strengthen, expand, and assess our product portfolio. Our focus is geared towards optimal growth and planning for the next 2-5 years ahead. As technology is vastly expanding and our clients are becoming more informed about our solutions, we must ensure that our designs and products are high quality and long lasting.

Operational excellence focused on social, environmental, and ethical responsibility: while having leading technology and products are important factors in winning and retaining customers, we strongly believe that our socially responsible practices positively impact our brand identity and help bolster customer trust and respect. We published our second Sustainability Report in 2021, which reinforced our commitment to important issues in the areas of business ethics, employees, environmental responsibility, supply chain responsibility and our communities.

Strategic partnerships and acquisitions: we will continue to pursue new opportunities that complement and augment our own capabilities and intellectual property. The full ownership acquisition of the Sapcorda Joint Venture in 2021 drives global innovation and growth, improves efficiency, strengthens our position in existing markets, and enables our entry into new markets.  

Finally, on behalf of our Board of Directors, we want to extend our appreciation and recognition to our talented employees who deserve praise for their engagement, continuous commitment, professionalism, and dedication to transform u-blox into a competitive company with a resilient business.

We would also like to extend our appreciation and recognition to our various partners, customers, suppliers, and our shareholders for their ongoing support.
Thomas Seiler
Roland Jud
Andre Müller