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team with Thomas Seiler as CEO achieved outstanding results. For the full year we reported record revenue and profitability. Our shareholders benefit from this as we pay a record dividend and invest into our future growth at the same time. We are successful in our target applications and regional markets. We made use of the tight supply situation to optimize our product mix, ramp cost-optimized products faster, and rediscuss business which did not meet the margin expectations with our customers. We closed the year with a well-filled order book for 2023, which is a good starting point for me as CEO. Before we continue, I would like to take the opportunity to thank and congratulate Thomas Seiler on behalf of the uBlocks team for his more than 20 years of commitment to the company, his leadership and his vision, and for all he has accomplished during his tenure as CEO. I'm very happy that Thomas stays with us as Board of Director member and as a valuable advisor. As a small thank you, Thomas, I have a bottle of champagne, vintage 2007, the year of the IPO of U-Blocks. Please join me in applauding Thomas. Of course, I get many questions about my plans as new CEO. So let me share the status on my day 69 as CEO of uBlocks. Standing here, I'm proud to say that our long-term business strategy has successfully paid off. And we have many ideas how to further advance it. I am convinced that by continuing to be laser-focused on our long-term goals, we will be able to continue to excel and provide meaningful results to our shareholders. Therefore, we continue to focus our efforts on industrial and automotive markets. Our goal is to drill down to individual applications even further. for example autonomous driving, to make sure that we have the best solution in the marketplace. We also plan to expand the cooperation with well-selected distributors to serve the long-time and innovative newcomers. This frees up our time to go deep and develop larger accounts and by this enabling us to capture additional value. uBlocks history is a history of groundbreaking technical innovations in positioning and wireless connectivity. There are many examples where we created world's best, world's smallest solution. In my opinion, our recipe for innovation is as follows. Identify a problem jointly with our customers. have the most talented people on board and have a culture which allows to create non-standard solution approaches, either on our own or with partners. This is part of our startup culture and we want to foster it even further. There's no doubt that uBlocks grew significantly. We want to take advantage of our size and add to our bottom line. Developing our organization to a greater operational excellence will help to maintain our growth path. The uBlocks team is highly committed to excel and bring us to the next level. And I am looking forward to update you about the progress regularly and outline our refined strategy during the capital market day at the end of the year. In our presentation, Roland and I will share the 2022 review. Afterwards, I will explain our 2022 outlook and key aspects of our strategy. I think we are a bit stuck with the presentation slide. But I already... can make room for Roland to take us through the financials.

This was an intended break to have enough time to... So thanks a lot Stefan, good afternoon ladies and gentlemen. As said, as soon as we got the slide to bring you through the deeper view into the financial figures, uBlocks reached with 624 million Swiss francs, a new record level in revenue this year. This implies an year-on-year growth of 51%. In 2022, we have also had some tailwind from the foreign currencies. of 4.1% or 17 million Swiss francs. But even without this tailwind, the growth at 2021 average exchange rates would have been 47%, a really impressive number. Reached not only on top line a new record level, Also, ABTA adjusted reached with 170 million Swiss francs a new level. This implies an adjusted ABTA margin of 27% for 2022, or 987 base points more than in 2021, where we have had an adjusted ABTA margin of 17%. The revenue growth in 2022 is driven by our module business with a growth rate over 2021 of 48%, as well as by our own chipset business where we have been able to grow even by 71%. Volume was the main driver for this growth, but also price increases and changes in the product mix towards higher end products helped to reach this strong result. Overall the revenue split between modules and chipsets does not change dramatically. Also in 2022 we made about 79% of our revenue from modules and 20% with chipsets. With the growth on top line also our gross profit grew to a new level. In 2022, we made an adjusted gross profit of 307 million Swiss francs. The change in product mix, price increase and improvement in operational effectiveness led to a large gross profit margin from 47% in 2021 to 49% this year. Next slide. Also in 2022, we invested further in our next generation products. Although R&D expenses grew only slightly from 102 million in 2021 to 106 million in 2022, this represents an increase of R&D expense by only 4%. Operational effectiveness improvements help to keep R&D expenses under control. With the growth in top line, R&D expense in relation to revenue came down from 25% to 17% in 2022. If we have a look at the gross R&D costs counted as adjusted R&D expense without capitalized R&D and corresponding amortization expenses, They amounted in 2022 to 124 million Swiss francs. In 2021, this was 115 million. In 2022, we spent about 72 million Swiss francs for SG&A compared to 62 million in 2021. The main driver for this increase is an absolute amount of 16% are the sales bonus payments coming based on the record contribution we made in 2022. Percentage-wise, SG&A also was reduced from 15% to 11% this year. So now let's have a look to the complete income statement. In the column on the left hand you find our P&L for 2022 according to the IFRS accounting rules. More details on the various positions of this statement you find in the financial section of our annual report. The columns on the right hand side then show the corresponding adjusted figures. And the adjustments we made are the usual ones. We adjusted share-based payments $4.4 million. The pension impact based on IAS 19 was in this year $1.8 million. And amortization of intangible assets acquired amounted to $3.3 million. no other non-recurring expenses are adjusted. With these 9.5 million adjustments on EBIT, we reached an EBIT of 131 million Swiss francs, or 21%. This is again 1,287 base points better than in 2021, where our EBIT margin was 8.5%. The financial results consist mainly of financial expenses for the bond and for the right of use assets booked under IFRS 16 accounting standards. And the adjusted rate on tax was 15.9%. And this leads then to the net profit of 100 million Swiss francs. As you can see on this slide, uBlocks has a solid balance sheet with a liquidity of 138 million. The inventory increased in 2022 to 118 million Swiss Francs. This to cope with the supply constraints which are in the market and consists mainly of raw material and work in progress. In total, uBlocks has current asset of 352 million end of the year 2022. The non-current assets of 316 million Swiss francs contained capitalized R&D of 193 million, but also goodwill of 56 million, PPE of 13 million, and the right of use assets booked under IFRS 16 of 34 million Swiss francs. In the current liabilities besides the trade payables also the bond which is due mid of April this year is shown now in this figure. In previous years this number is under the non-current liabilities shown as the maturity was not so close. The non-current liabilities at the end contain 67 million for leasing liabilities 30 million, provisions of 10 million, employee benefits of 10 million, and deferred tax of 11 million Swiss francs were included. So with that, uBlocks was able to keep a solid equity base with an equity ratio of 62% in 2022. This is worth 412 million Swiss francs. Some treasury shares in 2022 were used to cover the employee share option program, and treasury shares amounted, end of the year, 28 million Swiss francs. Without the deduction of these treasury shares, the equity ratio would even have reached 63.1%, compared to the 62.3 last year. Now, last one of these, the increased business led to a record level of cash flows in 2022. Cash flow from operating activities was 117 million Swiss francs and it reached a free cash flow of 66 million. The increased networking capital to cope with the supply constraint prevented an even higher operating cash flow. As already mentioned, uBlocks is still investing into the future as 62% of our investments went into development of our new products and 4% into capacity expansions. Overall, we used in 2022 51 million Swiss francs in investing activities, which led then to this free cash flow number of 66 million. Although we were paying a dividend in form of a par value reduction, also last year in July 2022, uBlocks was able to increase its cash position by 55 million and had end of the year cash and cash equivalents on its accounts of 138 million Swiss francs. And with that I have finished the part of the financial insights and hand over back to Stefan for the business review.

Thank you Roland for explaining the financials. So let me give you some business background to the numbers. 2022 I could summarize as strong market, right products, reliable partnerships. Let me add some more flavor. During the year, like most of our peers, we operated in a positive market environment. And we worked hard to capture new opportunities with the right customers which ramped new products based on our solutions. Our new offerings were widely accepted. Our cellular module platforms with our own chipset ramped up very well. Our new positioning chip ramped to a millions per month run rate within six months. Previously, this took years. We expanded our position in 5G infrastructure. Overall, we want projects from competition. Obviously, besides the differentiating features of our solutions, delivery performance was a key topic in 2022. Our long-term relationships with our diversified supplier network paid off. We could deliver while others couldn't. Our customers liked this. The key growth drivers in automotive were infotainment, navigation and telematics. And of course the automotive market recovery overall. The key drivers in our industrial business were healthcare as well as industrial and building automation. In summary, a broad range of applications. Regionally, Asia-Pacific grew the fastest. But it wasn't China this time. We enjoyed good success in Australia, Japan and Korea. Key growth drivers in America and Europe were in automotive, complemented with healthcare in the US and industrial automation in Europe. A well-balanced regional business distribution should make us more resilient to short-term regional pushbacks. uBlocks is a high-tech semiconductor solutions company. Innovation is in our DNA. Here are just a few examples what innovative products and solutions we brought to market in 2022, the result of our long-term consistent development activities. Small is not only beautiful, but also a key requirement for many industrial applications. We launched world's smallest Zellular LTE CAD1 module and have already sold millions of it. With our GNSS module, we did cut the size in half compared to competition. We help industrial customers to quickly embark on the low-power and feature-rich Wi-Fi 6 standard with our new short-range radio module. And with our service offering, we intend to create a stream of recurring revenues We added several new services to our portfolio, aiming to allow customers out-of-the-box solutions for secure IoT cloud access. Those few examples, and there would be many more, showcase our innovation power. It takes about four years to develop a significant innovation. Afterwards, we enjoy around 10 years of revenue with such a product. Therefore, we capitalize R&D. We understand that this raises questions about the value of our capitalized R&D in our balance sheet. I would like to give some more background to this. In the last year, the share of capitalized R&D assigned to products which are selling increased significantly to around 75%. Some major projects, mainly chip developments, started to generate revenue. In other words, our long-term R&D investment pays back. At the end of the year, the capitalized R&D also was very well balanced between our cellular and positioning products. The capitalization is driven by our own chipset development, which is focused on cellular and positioning. Of course, we manage our R&D investments carefully and review the value of our capitalized R&D regularly. As a high-tech company, we must continuously invest in R&D to develop new products and offer innovative services to stay ahead of competition. Overall, those numbers underline that the R&D costs in our balance sheet generate revenue. We are in the lucky situation that we have by far more R&D ideas than we can afford or can cover with our own team members. But we do not even intend to do everything ourselves. We rather prefer to work with the best in the industry. In the case of end-to-end safety solutions for autonomous driving, we partnered with the Spanish company GMV. This helps our customers to have a faster time to market, less development effort and less development risk. Partnerships also open up new opportunities for us with less R&D effort on our side. Working with strong partners like GMB creates a value for us and our customers. Talking about customers, we generate less than 30% of our revenue from our top 10 end customers. And the largest one is below 10%. Therefore, we have strong customers, but there is no dependency from a single customer. This type of customer portfolio is part of our DNA for long. We established a strong sales channel on a global basis. Our sales channel strategy focuses on distribution partners to grow business with medium-sized customers and innovators in the long tail. We also pay special attention to larger customers, ourselves. In 2022, we made significant progress in ramping up sales with our largest customers. Let's have a look at some examples of our wider customer portfolio. Our customer Rico uses our GNSS module in their robust 360 degree camera. They chose us because it's important for their industrial customers to have a precise position, smallest size and lowest power consumption. This is just one example showcasing our success at very large customers. We also have been successful with our new and fast-growing customers, the innovators in the long tail. NoFence developed a livestock collar using our positioning and cellular modules. The market for such a solution is almost infinite. 1.4 billion cattle, 1 billion goats, 1 billion sheep. We are ready to support them and be part of their success story. This is one of many examples which showcases our success with startups and medium-sized companies. An important additional success factor for the fragmented industrial customer base is ease of use. Connecting devices to the cloud requires skills and effort. We are very happy that Amazon Web Services chose uBlocks as a partner to make it easier for their industrial customers to connect to the cloud. This partnership is a multiplier for us. Let me come to the outlook to 2023. In our automotive and industrial target markets, we expect overall a positive environment despite some visible temporary clouds. We expect a continuing content growth in automotive and still some catch-up effects in car production. However, we notice that customers are ordering more carefully compared to last year. Inventory stock levels at our customers are sufficiently high and they could adapt their orderings, focusing on the overall demand for the next months. In industrial applications, we see continued penetration of IoT functionalities in more and more applications. This is a good sign for us, as it should lead to continuously growing volumes. Right now, some industrial customers are still affected by industry-wide supply chain bottlenecks not related to us. We assume that those will ease over the year. However, in some applications, for example medical or industrial tools, we see a slowdown. This could be caused by temporary, more careful investment decisions at customer level due to high inflation. In our small consumer business, which is not a focus market for us. We see a slowdown in line with the consumer electronic market. In the regional view, we see Americas and Europe rather muted in growth, while Asia-Pacific shows solid growth. We even think there might be an upside with China's post-COVID reopening. Our business visibility in this context is good compared to pre-COVID times. We have a strong order book, especially for the first half of the year, and overall we have more than 50% of our planned business in 2023 secured with contractual agreements. The overall semiconductor market is predicted to shrink by 3.6% in 2023. The automotive semiconductor market on average grows with 6 to 8% on the long term. In this environment we expect a growth between 6 and 16% in 2023. For EBIT, we expect a range between 14% and 18%. For EBITDA, we expect a range between 21% and 24%. We acknowledge that the environment is influenced by macroeconomic conditions and geopolitical energy or pandemic-related restrictions. Consequently, it's hard to make accurate predictions. but we are ambitious to expand our business and the guidance reflects our current view of orders, customer contracts and structural growth drivers. With this guidance, we reconfirm that uBlocks is on a structural growth path at a sustainable profitability level. Let me briefly recap uBlocks long-term market view and strategy. uBlocks will benefit from global megatrends. Climate change and resource scarcity will require that we make best use of our resources. Solutions for asset tracking and positioning in autonomous vehicles will directly benefit from this trend. Demographic change is clearly visible already now. Solutions for remote wireless connected healthcare equipment will directly benefit. Urbanization will drive up the need for automated parking, car sharing, delivery services, micromobility. All those applications need solutions for exact positioning and wireless connectivity. Digital transformation is everywhere. The fourth and fifth industrial revolution will require remote monitoring and operation of industrial equipment, autonomous indoor positioning, virtual reality. Solutions for positioning and wireless connectivity will be key for this. uBlocks has a history in automotive, which is remarkable over the last 10 years. We did not only outperform the car sales growth, we extended our success from very few platforms to hundreds. We also capture more and more content per car we serve. We have proven that we are able to drive innovation in the automotive market and we should capture significant additional value in the years to come. The car of the future will be autonomous, electric and increasingly shared. The average bill of material addressable by our current offering will almost double in the next five years. This is mainly driven by a strong increase in the telematic control unit and in higher levels of advanced driver assistance system. Let me give you a concrete example of just one use case. An autonomous vehicle needs to know the absolute position when it leaves a tunnel. It needs to know on which side of the tunnel it is and which direction it is traveling. quick and with centimeter accuracy. A high precision GNSS based solution is the best choice for this task. There's one more complication. The autonomous driving computer needs to know if it can rely on the correctness of the position. This is called functional safety. uBlocks is known for its precise and reliable positioning solutions. We also invested early in functional safety. We complement this with our GMV partnership for an end-to-end functional safe positioning solution for autonomous vehicles. We are the perfect fit for autonomous driving. We are strongly committed to capture a significant share of this upcoming growth in automotive and we should even strengthen our position. The fourth and fifth industrial revolution require that industrial applications become connected and autonomous. Positioning indoor and outdoor will become widespread. Every device will be connected to a cloud. Applications like remote monitoring and operations will be much more commonly used going forward. Let me give a concrete example here too. Remote healthcare was a huge topic during the pandemic. Many people enjoyed its benefits. On the long term it will help our aging population to stay self-determined. Many of the more complicated healthcare equipments like injector pumps or respirators need parameter setting and supervision by the manufacturer. and give doctors the ability to remotely supervise measurements. Or the devices should send alerts themselves. This is a large market for our wireless connectivity solution and therefore a strategic growth area for us. This was just one of many industrial growth applications. Also in industrial market, we outperformed the semiconductor market in the last 10 years. We expanded our business from a few dominating applications to a much broader coverage of the industrial space. One key aspect in the future for industrial applications is positioning. It is predicted that the demand for this grows remarkably. The growing requirement of the industrial markets is uBlock's home turf. We should take advantage of this and continue our growth path. uBlock's strategy focuses on industrial and automotive target applications. We provide solutions enabling our customers to determine their position precisely, have a reliable wireless connection to the cloud, combined with more edge computing capabilities. Our solutions are reliable and safe. This means they do what they are supposed to do. And they are secure. This means it's hard to compromise them. Our solutions are easy to implement and designed to work for thousands of end customers. With this, we are confident about our future long-term growth and we want to reconfirm our long-term financial ambitions introduced in the Capital Market Day 2022. So far, we talked about organic growth plans. Let me mention our M&A criteria. We are set up for growth. We consider M&A when it helps to improve our profitability by economies of scale or if we can complement our offering. So far, uBlocks has had an impressive track record of complementing its offering by M&A. Most impressive for me is how well the acquired team members are integrated in uBlocks even years after the acquisition. I can say integrating acquired teams is an asset of the uBlocks team and culture. And one reason why this integration works so well is culture. Therefore, we consider M&A only if the culture of the acquired company enriches our culture in a good way. And of course, the purchase price must allow us to create value for our shareholders. In summary, we are incredibly strong in automotive and industrial growth markets. Our profitability and free cash flow has reached a solid and sustainable level, which is reflected in our proposal to increase the dividend. And we clearly target to provide reliable and growing return to shareholders. Thank you for your attention. And with this, we would like to answer your questions. We start with the questions in the room and continue with the questions in the chat afterwards. And I guess Roland has to join me on stage.

Thank you. Just on your sales growth, I think you grew like four quarters in a row now, sequentially, every quarter. Sorry, half year, not quarter. So how should we look into the first half of this year? Do you expect some... Compared to the second half of last year to some, I don't know, a plateau level or some seasonal declines or do you have any visibility for the first half?

So I will not be able to give a half year guidance right now, but what I can say is we entered the first half of the year with a very good visibility based on our order books, especially for the first half. We will report quarterly revenue updates. That's also new compared to previous years. So you will be able to check our performance much more timely than before. Overall, if you look on our yearly projection, we stand to our guidance and we feel comfortable in giving such guidance, even in this, by and large, volatile macroeconomic environment. But I wouldn't go so far to make now quarterly revenue forecasts.

Maybe just as a second on the EBIT margin guidance, this five percentage points decline you're guiding, is there anything you could add in terms of gross margin or OPEX? Yes.

We do not change the structure of our guidance. So I will not give you now a cross-margin guidance. What we did in addition in the last capital market day, we showed our long-term financial ambition, which says we want to have a cross-margin around 50%. But this is not a short-term guidance, but gives you... some idea what we target. I don't think we have more to add on this specific question.

But do you see in the product mix already changes why the gross margin should be down this year? Or is there a chance to keep it stable?

Well, let's talk about the EBIT and EBITDA where we give a guidance. And for sure we have had certain effects last year which resulted in a very positive EBIT. We also need to know we grew very quickly, so we also grew our teams in a certain way. and not everything will be repeatable absolutely in 2023. In terms of product mix, in our business there are no quick changes, that it's completely going upside down and I think we also mentioned in the presentation that we have contracts and long-term agreements in place with our customers securing about the volumes and the respective prices. So the volatility also there has certain limits and that's positive for us.

I have also a question on the guidance with regards to the exchange rates. So we saw that you have a dollar exchange rate in there of $98 Swiss franc. I'm just wondering, given the fact that for this year the current rate is lower, I'm wondering what you base that on, or have you hedged something, or are you in a position that you use hedging going forward? Thank you.

So regarding exchange rates, It's not our business to predict exchange rates in the future. So that's why we take one prediction at this point, at the point in time when we made the budget, and this is the basis for the guidance at the end. We take this number and put it in, but we did, and show also on the slide, you see a sensitivity analysis, what happens if the dollar goes up and down. With that, you can calculate what would happen to the guidance numbers in case, for example, the dollar ratio compared to the numbers indicated go up by 10%. Regarding hatching, yes, we are so far for the dollar side until down to contribution. We had a natural hatching as such because we sell 85% roughly of our products in dollars and get... Also, cost-wise, roughly 85% are dollar costs on the COX, on the material expense. So there is a natural hatching, but we have no hatching further down where we say, okay, this is the cash flow and this we hatch it.

Yes, good afternoon. Serge Rotzer from Credit Suisse. I want to pick up again the questions with the order book and revenue recognition for this year. In the old days, you mentioned that the order book has 12-month lead times, as it used to be a one-month lead time. Can you give us some indication here with the first question?

So in general, the lead times came down. So we are not at a 12-month lead time anymore. So depending on the products, the range is still quite wide. So it can be, in the best case, around 12, 14 weeks. But there are also products in there which have up to 40 weeks. So it's not a uniform picture as it used to be.

Okay, got it. So you mentioned also that you can cover your new guidance, although with the order book, I start again. With your order book, you can cover more than 50% of your guidance, but the gap between the low and the high range is 63 million. This is quite a number. This is obviously one month sales on average. So I'm wondering, is the backlog now covering more the lower range or the high range, or you refer to the midpoint?

No, so first of all we say with the order, we have long-term agreements in general covering roughly 50% of our yearly plans. Those are the long-term agreements we have with our customers and this can be typically there is in such an agreement not an exact delivery date in there, so it's more a yearly agreement. And then you have the orders, the order book, where we have good visibility for the first half years. And due to the shorter lead times and also the sufficiently high safety stock levels at our customers, there's literally no need for our customers to place an order, let's say, for September or October this year.

So you see destocking effects currently? No.

Again, we have thousands of customers. I cannot exclude that some of our customers have a high stock level. But in general, what I say, especially if you look at the larger accounts, last year we were in a situation where customers tried desperately to build up stocks and not to be affected by any fluctuations. Now, I would say, by and large, the stock levels have reached a height where our customers say, this is okay, this is where we want to operate. And based on this level, they place the orders according to the lead time. This is the mechanics.

Okay, got it. Very helpful. And probably the last one to the CFO, Mr. Jutte. Can you tell us about how much or how you burn cash next year or this year in regard to R&D, networking capital, and capex? I understood that R&D will remain on a level of 50% in line with the long-term guidance. Is this true? Point one. Point two, can you give us any indication on capex? And probably do you believe that you will bring down the networking capital also in your inventory?

Yeah, you talk about, first of all, you talk about capitalization, how much is capitalized and how much is not capitalized. So the level remains capitalization level as in the past. So we are at roughly the same level what we capitalize or what we invest into project which are capitalized and let's say the rest maintenance or project which are before capitalization or after capitalization. So this has no big change in, or will have no big change in 2023. Your question about networking capital, yes, of course, we want to bring networking capital down. This is a normal financial goal you have, but how much we really can do that and how much is then really suitable We will see, especially also if you look at last year, there was a buildup of networking capital, maybe more from a financial point of view than I want to have as a CFO, of course. On the other hand, this high networking capital, the high inventory, also helped us to be able to deliver at the end and to do some business which we otherwise couldn't.

I was wondering if you can comment on your input cost development and on your pricing strategy. Now you have been in a position to increase prices, which was for the industry probably not a typical practice. And I'm a bit wondering, yeah, a little bit, what was the trigger? Was it mainly the input cost or labor and energy cost that I included in this calculation, if you were able to? to give that through the clients and what is a little bit the expectation for the next year? Do you see some more favorable trends in terms of input cost? I assume labor and energy probably not, but yeah. And what impact has it on your pricing?

So let me first talk about the pricing. And there are two aspects to this. So we rely and we are absolutely interested in long-term reliable customer relationships. This means that there is... Both parties, both sides need to rely that we behave in a fair way and not just increase prices to the moon just because we can. So we did this in a reasonable way. What the team also did is we introduced products with new features and also better cost. This helped us also. And for sure we also worked with our customers and told them if we had really a non-performing product and told them it does not make sense that if material is short that we do business which does not meet our expectations. So there was a mix of topic what you saw in 2022. It was for sure not just plain price increase even if it resulted in higher prices. Over the course of the year, we did agreements with our customers, stabilizing the volumes, giving them peace of mind for their delivery performance, giving us certain security about the price levels. And this is for sure helpful right now. So this is what we can disclose. I hope you understand that I will not disclose our pricing policy looking forward. When we did the budget and also did the guidance, we already saw significant increases in on our input side yeah so we took our assumptions there so it's both sides are included so to answer your question now It's on the pricing side, we are interested in long-term customer relationship. We prove that we do it, and we see our customers behaving in a similar way. And on the input side, the increased costs were part of the budget, and as it's always in life, that's an assumption, but we feel comfortable with this assumption, yeah.

Yes, good afternoon. I have two questions, a very simple one, maybe for Mr. And then a complex one, maybe for both. Oh, thank you. The simple one, the tax rate was very low this year. Can you guide us on the taxes to be expected in 2023 and beyond? What's the sustainable tax rate, maybe?

Yeah, the tax rate was low this year. This has also some impact on accounting. Accounting rules changes, we have the tax impact at the end, which works positively. Not further elaborated, it goes around treating employee share of programs and so on, and how this is treated. Tax-wise, this is new. So, therefore, the tax rate is a little bit low on the long term or on a model basis. I would still assume that the tax rate remains as in the past, so between 18.5% and 20%.

Okay, very clear. Now, the complex.

Now you made it.

To be honest, I don't know where to start really, but in your introductory remarks about your 60-something days as a CEO, you mentioned a lot the word focus. And I noticed that, I mean, I wonder if my interpretation is correct. I noticed that the chart of the customer numbers is missing in the presentation, and I noticed in the disclosure about the intangible assets, the self-created capitalized R&D, the short-range communications element was missing as intangible asset. Can I conclude from that that you are basically simplifying the company a little bit, de-emphasizing certain clients and certain activities? No. Very clear.

Sorry, but I explain. So, no, that would be the wrong conclusion. What we said, so, you know, uBlocks has a very broad end customer base, and this is very helpful. Now, once you reach a certain level and you think of those growth applications I mentioned, for example, autonomous driving, it's absolutely mandatory to go deep on very specific applications and also very specific customers to make sure first of all you work with the innovators which sometimes happen to be very large and also that you focus your R&D effort on exactly those topics which you assume to have the highest growth. And this is good even for the broad customer base. Because we do not only want to have the technically best products. And I hope this came over. We want to have ease of use. Because starting with, I call it teaching customer to go deep and have a good solution. And then making out of this and out of the box easy to use solutions for a customer which needs a similar kind of solution, which you have quite often in the industrial customer base. That's a real asset. So it's not a contradiction. It's complementing each other very, very well.

I'm just thinking, can I follow up question on that? Can you disclose the customer numbers just to have a feel? And second question, maybe later, but would it be something that we can expect going forward? Sorry, and the second question, just to throw it in, can you talk a little bit about a strategy for short range? For example, do you also want to develop a chip there?

Okay, let's take the first question first. So in my opinion, it's important that we have thousands of customers. If we have 11,000, 12,000, 13,000, makes a difference, obviously every customer counts. But in terms of strategy, how we approach things does not make a huge difference. And I also want to avoid that we also guide the company in a wrong direction. So we are not an end customer company. We are a business to business company. And for this, we need a very good mix of very large and very innovative customers. And this is why we changed also a bit the representation to make this clearer, how this is put together. It gives you also more visibility where our revenue comes from if you observe this term over term. On the short range, so right now, as I mentioned very clearly, we do chip development in the areas where we cannot buy something from the market to meet our targets. or end and or typically combined if you have very good IP which is best implemented in a chip. And what I said is that our focus of chip development is on wireless and and sorry, on cellular and positioning and this makes a lot of sense for us. On the short range area, if you watch what we bring out as news, we have very good relationships with industry leaders, we partner with them, we are, for many of them, we are their preferred module partner And this is where we add value there. Wi-Fi sounds very simple because everybody has it at home. But Wi-Fi 6 is really a technical challenge to have optimum usage in a very wide area. And therefore, it's an excellent value add for us to make sure that especially on the industrial customer base, but also for automotive applications, we provide the modules in a form which is easy to implement for our customers. Thank you.

On the sales growth guidance, do you wanna comment on automotive and industrial, where you expect above or below group average growth? Is there anything you can add?

No, we don't guide on market segments.

Yeah, okay, yeah. I mean, it's not a real guidance I'm asking for, just some additional color based on how you see the markets or... Well, this of course I can do.

So, of course, in automotive, we have the effect that... several structural things are coming together. So the BOM content overall grows, the higher-end cars take more and this we enjoyed a lot in the last year and structurally we see this continuing. Also for this year, due to the huge backlog of car manufacturers, I'm not talking about our backlog, but delivery times of new cars are still high, the backlog is still high. There are certain catch-up effects to be expected. So in this aspect at least the automotive market looks quite stable and in the sense quite predictable. In industrial by nature of this market with hundreds of applications it's different and I mentioned two of them. But this can change also very quickly again.

Maybe just on the M&A slide you were showing and also related to that your cash position and the bond refinancing. I think you even... I mean, you have probably also a good free cash flow this year. And so is there a certain cash level or cash cushion you think you need for potential M1A that prevents you from just reducing or eliminating this debt and just working with the existing gross cash? So do you think you need additional financing to have such a cushion for cash?

So first of all let me underline we are clearly a growth company and of course if you look what is typically the best way to generate value it's typically organic growth and this is what the company has proven. But of course, we look out if there are good opportunities to do this inorganically. But I wouldn't say, but maybe you can say this, if we need an extra buffer just to be prepared.

I don't believe at the moment that you... should take a bond to put on your balance sheet to just get the money ready if you don't know what to do at the end with the money. Of course, a certain buffer is needed to cover the ongoing business, but this level is for sure not 200 million or something like that. So at the moment, at the current interest rates, You have really to look closely, okay, for what do you need the cash if you take something up again, or if you don't repay the bond and say, okay, I keep the money on my balance sheet and, let's say, do a refinancing as such. As long as we have not directly a clear... target and say, okay, in two months there is this and that and I need this and this amount of money. It doesn't make any sense to just put cash on the balance sheet.

Maybe just the last one also, follow up on the network capital question. At the inventories, I think you're at around 130 days at the moment. Is there a certain target or normal range for you where you would feel more I don't know, comfortable or what, yeah.

We have, of course, we have internally such targets also given to our sourcing team to say, hey, this is the level where we want to be. But you must understand we cannot disclose this figure now. but there are targets and they are for sure lower than today's inventory level, but also today's inventory level at the end of the year was also in the view of the shortage and with that also the target changes as well. So we adjust the targets to the business, to what happens in the business at the moment and what is needed and in the market, but we are looking to that and maybe it's not, Quite a big surprise if I say, yes, of course, we look at networking capital and if everything stays as it is at the moment, we will have hopefully a lower networking capital than today.

Many thanks.

Serge Rotzer again. I have a follow-up question here on this networking capital, on DSO still. Can you remind us how much different the DSOs are in Europe, America, and Asia-Pacific? And how easy it is to bring them down in these different regions, these three regions?

Yeah, so the sales conditions are for all the same 30 days. That's, let's say... In reality? And the reality is, of course, different, but it does not differ from region. It's different from customer to customer. So we cannot say traditionally in markets like Asia, you have longer payment terms than you have in the Americas or... in Europe, but you cannot say, okay, this customer now is an Asian one, and therefore, so we have no rule to say, okay, an Asian customer can have 60 days and an American 145 or so. It all gets the same, and depending on the business, depending on the situation, they get a lower or a higher payment term. And with that also, you have the movement in payment in DSO over the year, depending on the individual customer structure.

Okay, got it. And probably a second one and then I'll stop. You mentioned that the sales mix had a positive impact on the margin, and I believe that this is probably mainly coming from positioning from GNSS. Is this true, point one and point two, when you guide for more auto and less industrial and consumer sales? I believe that automotive is more communication, so the sales mix will change to a disadvantage in fiscal 23.

Let me start with the second question. We don't guide for a change in our revenue share mix. So if you concluded this of my statement, this was not the intention. We do not see a short-term shift in this year which would be significant enough to call to call it like this and to your first question no it was across the board so there is no single product family where we would say the sales mix changed it was across the board in all of our product families because there was a strategy behind to do this and the strategy was make sure that the most cost-effective products are sold to our customers because it's helpful for our margins. So we introduced new generations and this is not specific for one single product family, this is across the board. And the second thing is also Why, when we do this, why would we limit it to one product family? Would not make even sense.

In your financial reporting, you're continuing to show segment reports for products and services. And after the introduction of intra-group revenues, this results in 600 million something product revenues and a growth from half a million to about 1 million on the service side. How do you see that going forward? In anticipation of growth on the services side, I would assume The segmentation view of the 600 to 1 continues to make sense. And I'm asking you, well, not for guidance, but how do you see that going forward? Or do you reconsider the segment reporting that you're presenting?

So about the segment reporting, reconsidering, no. I think we have the segment reporting as we have today. And you're right, there is a very big segment, the product segment, which is... roughly the revenue we have, and then there is this internal segment of services, which at the moment just contains a small third-party revenue number of roughly one million. Going forward, yes, we expect that service revenue or the service business is growing also in the future, not only from 500 to 1 million. We expect much more in there. And with that, of course, the importance of this segment, it gets more important or more important for the company result as it is today. So then with that, we will also see then in that segment a shift from the split of intercompany revenue and third-party revenue, as the third-party revenue is growing much more than the intercompany one. All right. Thank you.

Questions from the chat? Yes, we have a couple of questions from the chat. First, Nicandro Varille from Health Ethic Trust. He asks, can you please remind us that a new competitor, the entry barrier for a specific market is very high. How much? 200 million Swiss francs or even more?

I could... I can give you an order of magnitude because we are in a certain way, we invested roughly one billion in R&D to get there where we are, right? And you know how difficult it is to justify to investors that this is well invested. You need to show a track record, you need to show progress and so on. So I cannot judge exactly what is the entry barrier of a new competitor. But just looking at our success and our accumulated efforts, you can assume that it's really significant.

Then he asks, when it comes to the EV charging market, what is your market share there?

I... do not have it on the top of my mind. I cannot answer this question right now.

He asks as well, is there anything which makes you extremely headache for financial year 2023? Labor shortage, US-China technology war, etc.? ?

Again, I mentioned it during my guidance. There are some unknowns, obviously, which we cannot influence. So geopolitical tensions, as we see it right now, it has no major impact on us. So Thomas already reported this the last years, there's no change. Our dependency from China on the supply chain is, at least in the first step, not really visible. As a market, China is obligated obviously important, but it's also not dominant in any way, so we feel comfortable. Guessing about future geopolitical developments is difficult. As we see it right now, we feel confident with our guidance, but of course I would say that's always... a thing which keeps all of us nervous, what happens tomorrow, because even if we don't have a direct dependency, if some of our customers get in trouble or some other suppliers who cannot supply anymore, then obviously it would have effects on us. But this is wild guessing. And also to answer this, of course I like accurate forecasts, so... I don't like that there's one area which is, for all of us, for all companies, for all competitors, hard to control in this geopolitics.

Then Mr. Van Es from Teslin. First of all, congratulations with the strong 2022 results. Could you please explain the key reasons for the 5% decline in the EBIT margin guidance midpoint 2023 compared to the EBIT margin in 2022? While the midpoint sales growth is at 11%, so why is the margin expectation so much lower in a year of good growth?

Maybe to the whole guidance discussion and thinking about guidance. There is an impact of margins. There is an impact on costs as well, which we don't have in 2022. And this will have also put some pressure onto EBIT and EBITDA margins. So based on that... Yes, this impact is there, and of course there is also some cautiousness built into the guidance where we can be confident, okay, this is reachable for us. On the midpoints, it's also... difficult to predict how capitalization and amortization will be at the during 2023 so we just took a prediction and our best guess at the moment but this might change and the best guess but leads then at the lower end You might think of other capitalization rates than you have on the upper end and also in the midpoint. And therefore, you see there also a difference.

Then Mr. Neumann from Credit Suisse. You highlighted that you sold more than 100 million units. Is it fair to say that the average price per unit seems to be now 6 Swiss francs? In the past, it was closer to 10 Swiss francs. How can this be explained in a time where pricing was strong?

Yeah, that's a question of product mix, obviously. And we have a super wide range of products. So the cheapest products, it's single digit Swiss franc range. The highest one are well into the double digit. And depending on the mix, obviously the ASP changes. So looking at the overall ASP, for the whole company with such a diverse portfolio. At least I couldn't read or out too much value out of this. So this calculation, I would say, if you do this calculation, it could be highly misleading.

Then Mr. Neumann, America's sales in the second half slowed down 38% from 60.8% in the first half, while in Asia, sales growth accelerated versus the first half. And Europe was stable. Any color on why U.S. sales slowed down?

Well, the... I mentioned it in Asia we were highly successful with customers outside of China or we were successful in China but we were even more successful with customers outside of China in Japan, Korea and in Australia. and that the growth was driven also by certain kinds of applications. So I would see this as a big success that we could penetrate new markets there. In America, Also very clear, we see a slowdown, and this is also what we integrated in our outlook. So we see a slowdown, which is in our opinion not structural, but rather temporary. Our focus applications where we had excellent growth were automotive and also healthcare. I also mentioned that healthcare sometimes nowadays sees a certain level of slowdown. And if you combine this, this might give you an indication why.

Then Mr. Northdorf from Northdorf Capital. Question concerning dividend policy. How much in percentage of the net income will be distributed via dividends in the years to come? Thank you.

So first of all, uBlocks is a growth stock. So we want to provide an overall shareholder return via growth of the share price and of course also via an attractive dividend policy. So in my opinion it's best to look at both of this and this I want to reinforce and as I did in my summary slide this is important for us to provide an overall value. This year we had, sorry we are already one year further, In 2022 we had an excellent year and we proposed to the General Assembly an increase of our dividend of 50%, which is highly attractive in our opinion, especially if you look that at the same time we continue to invest in our R&D to continue our growth story. So we are absolutely committed to provide shareholder return, total shareholder return. I cannot give you an outlook of future dividends right now. First of all, that's beyond the responsibility of a CEO, because that's a topic for the shareholders to decide. And first of all, because I think the overall package must make sense and also depends a bit what we currently do and what we currently don't do. But reinforced, we are a growth stock providing an attractive return. That's our target.

Then Mr. Laurent Stoeckli from Quera Capital. Your valuation is low. Why not doing a share buyback?

Well, maybe you start.

A share buyback is, as Stefan mentioned before, it's a kind of giving back something to the shareholders. And, of course, yes, we look into such programs constantly, and when it makes sense, we will announce. But, as we see, we must always see the full package, so dividend... share buyback, maybe what we can give, how we can give back some money and how much we invest into the future. Share buyback is also cash out, and the question is always the same, is it better to invest the money into future, for example, for M&A or something, or do we give it back to the shareholders?

this must be done case by case and constantly and we constantly look into that then michael schultz from jms invest you have grown very strongly in 2022 with despite a very slim inventory as per end of 2022 your inventory level has three folders why do you need such a high inventory level now

As I said before, the high inventory was needed to cope also the shortage in the market of components. If this eases up and gets easier, then we can keep our delivery commitments which we gave to our customers. If a lower inventory, of course, we will reduce the inventory and try to bring it down. And maybe just another thought on this inventory question. It's maybe the wrong thing if you say... end of 2021 you have a very low inventory and now we have a big growth with a big inventory yes that just says that we could even have grown more if we have the inventory also the all components were available and not everything if not that because not every component is available also our customer couldn't do as much as they want and therefore not all the inventories needed

Mr. Barile from Helvetic Trust. Regarding your market share gains, was it only because you could deliver anytime or because you have the best products?

Well, At the end of the day, it sounds trivial, but it's literally both. And let me elaborate a bit to get it away from the trivial answer. If you are a small innovative company, then it's all about developing the best, best, best product, because this is how you create success. And I think uBlocks demonstrated that we are far beyond this case, because in parallel, the team built up capabilities with a very diversified supplier network, even in super difficult time, to have a better delivery performance than a lot of our competitors. And now many of our customers have the combination of two excellent ingredients. The best products, because innovation is our DNA, plus a very resilient, proven, In the worst supply crisis, at least I can remember, a very resilient supplier network and our customers liked us.

So we are almost at the finish of our questions in the chat. Mr. Blakelock from UBS wants to know, what gives you confidence in the new guidance? I know you mentioned the order book is still strong, but it would be useful to know what other factors you see. In particular, in the scenario where you're hitting the top of your guided range.

Well, Well, I mean, that's of course a very tricky question because I mentioned it myself. The market volatility, the macroeconomic environment is complex. There's no doubt. So we have several factors in there. So our order book is one of the factors, our long-term agreements with our customers, which is a bit of, which is a stabilization effect what we see. I think important is also that we have focused and we work on structural growth markets. So even if there are weaker market phases, there are certain... growth applications which will continue to grow. This is one of the factors which make us confident. And maybe the other one which is also mentioned in a slide, we said The China post-COVID recovery is, in our opinion, not fully factored in. At least in our opinion, it's not fully factored in in our midpoint where we had. So therefore we see a certain range also to a very positive revenue development and therefore we have the span.

Then we have three more questions from Lukas Spang from Tigris Capital, whereas the first question was already answered. From you, the second one would be concerning your margin outlook. In which cost position do you see pressure on the margin compared to 2021 and 2023? Do you see a weaker gross profit margin?

Sorry, could you repeat that? Was it 2021 to 2023? Do you see pressure on the margin compared to 2022 in 2023? Yes.

Do you see a weaker gross profit margin? What is the expected investment number in 2023?

Okay, I think you partially answered this before. So, of course, we do not provide guidance on our gross profit margin. And what we... What we see for sure, we have factored in a certain price development, where we have pretty good visibility due to our long-term agreements. We also factored in the cost increases, what we saw last year in our guidance. and this leads together with the planned investment in R&D and also sales team ramp up to the EBIT guidance we have and yes this leads to a decrease in our EBIT and EBITDA margin.

And what is expected in Western number in 2023?

I'm not sure if I can answer this. So let me answer it differently, because we do not disclose so far. But what I want to underline Even if it sounds boring, but it's important for me. We are a growth company. We continuously invest in R&D. And even if the markets around us currently look a bit volatile and some of our competitors struggle, we continuously invest in our innovation roadmap. Because In 2022, you could see the positive effect of such a long-term investment, R&D investment strategy. And we absolutely believe that this creates value. A big chance in R&D because of a certain development in the market or do not make a lot of sense in the long term.

So the few remaining questions in the chat have been already answered.

Now we have more in the room. Now I triggered more in the room. Thank you.

Sorry for the follow-ups on Friday afternoon. You have built a significant service portfolio. And two questions there. Question one, are you big and resourceful enough to leverage these businesses, and there are many businesses, to a global lead? And secondly, wouldn't it make sense to increase the disclosure on the performance of these businesses simply because, I mean, the market obviously values recurring revenues, platform revenues much higher than product revenues? Thank you.

So the second question I take as an input, even if I'm not answering it right now, but I appreciate the input. On the first question, Yes, our service business is a startup, and we acquired companies to get started, but obviously it's at this stage not a business which has a huge impact on the revenue and performance of our customers. company. However, please keep in mind all startups start small and the biggest value creation you typically get if you are on the right track and grow up as such a startup. Again, looking at this, the numbers are small, the growth rates are huge and we are looking at it from this point of view. We have a clear ambition to make this business significant for us on the long term.

Yes, hello. I just have a very few quick questions. For the clarification reasons, you mentioned before medical and industrial are supposed to be a bit weaker versus IoT a bit stronger going forward. Did I understand that correctly?

If I said it like this, then it was a misunderstanding or miscommunication from me. So let me reiterate. In the industrial market space, in which we also include medical healthcare applications, we see certain applications currently a bit weaker. Not the whole market segment. And one of them is in the healthcare side. Maybe due to inflation-related buying decision deferrals. Structurally, it's a super highly interesting application because of the macroeconomic trends in our aging society.

Thank you very much. What's the percentage of segment medical for you in general? Is it significant?

It's significant, but we don't disclose.

Okay, thank you. And the next one, I hope it's not a stupid question, but EV charging, is that part of industrial or automotive for you? Industrial.

And the very last one... It's not a stupid question at all.

Thank you. And the very last one is, do you ever plan to... to remove the adjusted figures? I mean, you're not coming out of a structuring phase or something?

This is now a very clear question.

No, we don't have at the moment a plan to remove or to do not disclose the adjusted figures. We disclose all the other figures too. It's just an additional information that's mainly due to the fact that many of our, or nearly all of our competitors show retested figures, and we just do the same.

You're like semi-peer competitors, not Swiss industrial IFRS competitors.

Also, mainly the international competitors and peers are disclosing these kind of figures. And... At the end, I see no value to not disclose it because it's just something which you can anyway calculate it out of the numbers which are disclosed on IFRS. But it helps to make the comparison between our peers and ourselves much easier than to compare the numbers better than we can do now. Thank you.

Sorry, another follow-up. Maybe just on the foundry situation. I assume the nodes you're using are still pretty tight, or is there some ease? How do you see your foundry prices going forward? Is there some potential for cost declines for you at the foundry side?

So then we are on so-called trailing edge. And obviously what we see in the market that exactly on those nodes there's quite a significant structural demand both from automotive and also IoT. So the good news is the situation is really much better than it was last year. And now I scratch my head if I say it's good or bad, but it's a fact. Those nodes will be in one way or the other tied in the way that one needs to manage them carefully. It's also in a certain way an advantage for us because those nodes are typical for the applications we are in and it's in a certain way also good for our prices on our side if there is a structural limit in there. So it's much better in terms of supply situation than last year, but again it's still a high value to manage those relationships carefully and make sure that we get the volumes what we need for our growth exactly in the time we need it.

And maybe just on the pricing of the external chips, like for some cellular and also Bluetooth, some other short-range you're buying, how's the situation there? Is there also some ease or even some price declines for you?

So I do not want to comment on this one, first of all, because it's very heterogeneous. So there is no general statement possible, and I think it would not help the business disclosing those internal.

Okay, thank you.

Okay, then I thank especially the people on the web conference to stay so long and follow us. It was a pleasure to have you here. It was a very big pleasure to have you here also in person. And I would be happy if some of you in the room stay here for a short apparel on a Friday evening.