Shareholder letter

Dear Shareholders,

The year 2022 marks the 25th anniversary of u-blox and represents the best year in our history. We are proud of the incredible journey since our beginnings and the very solid work and dedication of our entire team in transforming u-blox from an ETH spin-off with some novel positioning components, to a global leader in innovative chip to cloud solutions for the automotive, industrial and product markets.

Thus, for full year 2022, we reported record numbers in terms of revenue, profitability, EBITDA, and cash-flow with an orderbook reaching far into 2023. We achieved buoyant revenue growth of 51% to CHF 624 million, expanded adjusted EBITDA by 136% to CHF 170 million, grew adjusted net profit by 376% to CHF 109 million and generated free cash flow of CHF 66 million.

While 2022 was still a challenging year with regards to the supply chain environment, we were able to successfully manage tight component availability and fulfilled customer demands to a large extent. Thanks to established long-term relationships, we were able to work around specific shortages and succeeded in negotiating with suppliers and subcontractors. Our diversified supplier base gave us the ability to support our customers with strongly growing demand in their markets. Our technology often helps our customers to gain markets share and win the leading position in the market.

Strong growth across all segments and regions  
Demand was strong throughout all of our business segments, end markets and geographies. All regions contributed to the encouraging growth, with APAC showing the strongest increase. We also noted continued broad demand for our solution offerings across all applications. During the year, our largest segment, industrial solutions, grew across the board thanks to strong ramp-ups with existing and new customers in core applications like network infrastructure, healthcare, automation and telematics. Our Automotive segment also experienced robust growth, mainly in demand for navigation and infotainment applications, whereby the shift of end users demand towards more electric vehicles accelerated our customers’ demand for our products. Higher revenues in the consumer segment, our smallest segment, were the result of increased demand for telematics and wearables.

Leading with innovation
2022 was again a year of innovation across our entire product portfolio. We introduced new products, enhanced functionalities and provided our customers with an even larger set of solutions. During the year, we launched a total of 15 new products and shipped more than 100 million units to customers which is testimony to the continued successful implementation of our focused research and innovation strategy across the verticals we are present in.

Investing in our future
Over the last 15 years, we have persistently invested more than CHF 1 billion in our core Intellectual Property (IP), which laid the foundation for our competitive advantage by building our strong capabilities in radio technology and signal processing, all cast into our own silicon. We thus being able to offer our customers a value-adding edge for easy integration and secure upgrades to their solutions.  Our strong balance sheet and cash position allows us to invest further in new technologies, by introducing new products and capabilities for us to grow our business organically, and by acquisitions and partnerships. As such, as part of our growth strategy, we completed a total of 18 acquisitions over the years, mainly with a focus on adding technology, know-how, and people. These investments have created a sustainable competitive advantage over our competitors and have positioned us well to take advantage of multiple opportunities arising from the expanding IoT adoption and the desire for connectivity throughout the world. Several partnerships add possibilities for our customers in a synergistic way.  

Our strategy going forward is to continue to lead with innovative solutions that combine core technology in the form of chipsets and modules, together with services.  

Innovation is our life blood, and our growth is fueled by our diverse, global talent pool of employees who help u-blox stay ahead of the global IoT innovation curve and the competition. We offer solutions that fully meet our customers’ expectations and we design our products with socio-economic and eco-friendly factors in mind. Our products have a very small CO2 footprint and enable enormous improvements of environmental friendliness in all the applications where they are used. We stand behind our products as we are offering high-quality and long-lasting products that are compliant with relevant standards, and we continuously take steps to improve and streamline our supply and distribution channels.

We are confident for 2023 and beyond
We are well positioned to take advantage of multiple opportunities arising from the expanding IoT adoption and the desire for connectivity throughout the world. For FY 2023, we expect continued growth throughout regions and product lines and we expect our revenues to continue to grow.  

Our continued 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 (Intellectual Property). 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 leading edge and high quality.  

Operational excellence: In today’s highly competitive market place, the continuous optimization of operational efficiencies is necessary to effectively compete, gain market share and as well as maintain along-term sustainable growth. Through a holistic approach and a business culture that promote teamwork and problem-solving, in 2022 we established a number of flexible and dynamic initiatives designed to maximize internal operational and financial efficiencies, increase our competitiveness in the global marketplace and improve customer satisfaction. We believe these initiatives have made our business more resilient.

Strategic partnerships and acquisitions: We will continue to pursue new opportunities that complement and augment our own capabilities and intellectual property. We entered into new partnerships that accelerate access to emerging markets and enhance our position as a leading supplier for innovative positioning and connectivity solutions.  

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 are publishing our third Sustainability Report in 2023, which reinforces our commitment to important issues in the areas of business ethics, employees, environmental responsibility, supply chain responsibility and our communities.

On behalf of our Board of Directors, we would like to extend our appreciation and recognition to our highly engaged and talented employees for their enormous contribution and commitment over the years which has been the catalyst for forming u-blox into a competitive company with a resilient business. We would also like to extend our thanks and recognition to our various partners, customers, suppliers, and our shareholders for their ongoing support.  

Finally, we would like to express our thanks and appreciation to Thomas Seiler who led this outstanding company for more than two decades as its CEO. We are proud to say that together with our highly dedicated and engaged team of experts, we have created a world leader in industrial IoT. Furthermore, while Thomas Seiler will continue to support u-blox as a member of the board and strategic advisor, we are confident that his successor, Stephan Zizala, who brings more than 20 years of management and engineering experience focused on microcontroller and power semiconductors, as well as global customer experience in the industrial and automotive sectors, will be leading u-blox to new heights.
Shareholder photo
Roland Jud
Andre Müller
Thomas Seiler