U-blox repositions attention towards Global Navigation Satellite System (GNSS) solutions, discontinues cellular operations

U-blox repositions attention towards Global Navigation Satellite System (GNSS) solutions, discontinues cellular operations

Swiss Technology Company u-blox Announces Strategic Shift

Swiss-based u-blox, a leading provider of positioning and wireless communication semiconductors, has announced a strategic shift in its business focus. The company will be phasing out its Cellular business and focusing on its Locate business, which includes products and services in positioning and tracking technologies primarily used in autonomous vehicles, industrial IoT, and tracking applications [1][3].

The decision to focus on the Locate business was finalized in January 2025 after a thorough evaluation. This move is aimed at allowing u-blox to concentrate on its core areas and enhance technological leadership and growth potential [1][3].

Financially, this strategic shift involves recognizing impairments on goodwill (CHF 1.2 million) and property, plant, and equipment (CHF 2.9 million) related to the Cellular business, with these impairment charges recorded within Research and Development expenses from discontinued operations [1]. By divesting the Cellular segment, u-blox aims to streamline operations and resource allocation under one main reportable segment focusing on location technologies [1][3].

The Locate business's applications are crucial for autonomous vehicles, where precise positioning is vital for navigation and safety; industrial IoT, where asset tracking and operational efficiency depend on reliable location data; and tracking applications such as logistics and fleet management [1][3]. This focus aligns with growing market demands for high-accuracy location and tracking solutions leveraged in these sectors.

The phase out of the Cellular business will affect over 200 employees. However, u-blox has already completed a CHF 20 million cost optimisation program as of December 2024 [2]. The majority of the cost reduction actions are expected to be executed in 2025 [2].

The cost optimisation program does not directly result from the strategic shift towards the Locate business. The first savings from the cost optimisation program will be reflected in the P&L in H2 2024 [2]. The full effect of the cost optimisation program is expected in H1 2025.

The Locate business's applications are expected to eliminate at least CHF 30 million EBIT annual losses [1][3]. However, there will be a one-time negative EBIT impact of around CHF 65 million in Q1 2025 from restructuring, with around 40% being cash [2]. Additionally, there will be a one-time non-cash negative EBIT impact of CHF 31 million in Q4 2024 from intangible assets impairment (capitalized R&D) [1].

u-blox has confirmed its Q4 2024 revenue guidance of CHF 60-70 million and EBIT margin (adjusted) of -25% to -15% [1]. The company will host a Q&A session to discuss the phase out of its Cellular business on 14 January 2025 at 14:00 CET. Registration for the u-blox Q&A session can be done via the webcast registration page.

It's worth noting that u-blox's Short-Range business (Wi-Fi and Bluetooth modules) will continue to be improved [1]. The strategic shift does not affect the continuation of this business.

Sources: [1] u-blox Press Release, 10 January 2025, https://www.ublox.com/en/news/ublox-announces-strategic-shift-to-focus-on-locate-business [2] u-blox Press Release, 15 December 2024, https://www.ublox.com/en/news/ublox-completes-chf-20-million-cost-optimisation-program

The strategic shift at Swiss Technology Company u-blox involves concentrating on their Locate business, which mainly deals with positioning and tracking technologies in business sectors like autonomous vehicles, industrial IoT, and tracking applications, utilizing finance resources. This move aims to enhance their technological leadership and growth potential in the finance sector [1][3].

By streamlining operations and resource allocation through the phase out of their Cellular business, u-blox hopes to leverage technology for financial growth under one main reportable segment focusing on location technologies, potentially eliminating at least CHF 30 million EBIT annual losses [1][3].

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