u-blox redirects attention towards Global Navigation Satellite System (GNSS) solutions, terminates cellular operations.
Swiss technology company u-blox has announced a significant strategic shift, focusing on its Locate business and phasing out its Cellular business. This decision comes after the successful completion of a CHF 20 million cost optimisation program as of December 2024.
The Locate business, which includes autonomous vehicles, industrial IoT, and tracking applications, will be u-blox's primary focus moving forward. This pivot aims to capitalize on trends in automated driving, mobile robotics, and asset tracking, areas with growing demand for accurate GNSS/chip technologies.
In a bid to free resources and focus solely on core capabilities in positioning and location-based technologies relevant to automotive and industrial sectors, u-blox plans to divest the Cellular business. The company expects to eliminate at least CHF 30 million EBIT annual losses from this decision.
The Q&A session to discuss this phase-out will take place on January 14, 2025, at 14:00 CET. Registration for this webcast can be done via the webcast registration page.
The strategic shift is anticipated to reinforce u-blox's position as a premier provider of world-class location solutions. The company expects its EBIT margin (adjusted) for Q4 2024 to be between -25% and -15%. The first savings from the cost optimisation program will be reflected in the P&L in H2 2024. The full effect of the cost optimisation program is expected in H1 2025.
u-blox will also work to improve the performance of its Short-Range business, which includes Wi-Fi and Bluetooth modules. The company has confirmed its Q4 2024 revenue guidance to be between CHF 60-70 million.
Despite the phase-out of its Cellular business, u-blox will continue to be a leading provider of GNSS semiconductor solutions. The company's Cellular business, which currently employs over 200 people, generated revenue of CHF 27 million and had an adjusted EBIT loss in excess of CHF 15 million in H1 2024.
This strategic shift is expected to have a one-time negative EBIT impact of around CHF 65 million in Q1 2025, with around 40% being cash. There will also be a one-time non-cash negative EBIT impact of CHF 31 million in Q4 2024 from intangible assets impairment (capitalized R&D).
u-blox has built a strong balance sheet with over CHF 100M net cash flexibility from the sale of the Cellular business, supporting strategic investments and partnerships. The company expects to eliminate at least CHF 30 million EBIT annual losses from this decision, reinforcing its position as a premier provider of world-class location solutions.
- Moving forward, the Locate business, which involves autonomous vehicles, industrial IoT, and tracking applications, will be u-blox's primary focus in both finance and technology, as it aims to capitalize on trends in areas with growing demand for accurate GNSS/chip technologies.
- To protect its position as a premier provider of world-class location solutions, u-blox plans to divest the Cellular business, a technology sector, in an effort to eliminate at least CHF 30 million EBIT annual losses and free resources for core capabilities in positioning and location-based technologies.
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