u-blox Holding AG

Ladies and gentlemen, welcome to the uBlock's half-year 2025 results conference call and live webcast. I am Sandra, the course call operator. I would like to remind you that all participants have been listened only mode and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rafael Duarte, Head of Investor Relations. Please go ahead, sir.

Hi, everyone. Thank you for joining our call today. Here with me are our CEO, Stefan Sala, and our CFO, Kamila Jaipur. Our agenda for today, we start with a brief recap of our strategy, including our transformation. Then we dive into our half-year results, outlook, and finally, Q&A. As always, in order to make a question, please follow the instructions in the website platform. And with that, I hand over to you, Stefan. Go ahead. Thank you, Raphael, and welcome, everybody.

We are reshaping uBlocks for the future. I'm very pleased to walk you through our progress and the performance over the past six months. Let's begin with the key highlights. In H1, we delivered strong revenue growth of 32% year over year, driven by a solid recovery in our automotive and industrial businesses. The momentum in our locate and short-range business is very good. we saw strong demand for our products as excess inventory at customers continued to decrease. Importantly, our efforts to reduce costs are clearly paying off. Our cash EBIT margin turned positive at 2.4%, 30 percentage point higher than one year ago. We also generated 5.4 million in free cash flow, thanks to continued business recovery, cost discipline, and working capital improvements. Lastly, in June, we closed the divestment of our cellular business to Trasna. This was a pivotal strategic move, which allowed us to dedicate full attention and resources to our core business, where we have a clear technological leadership and growth potential. Our reported financials reflect this transition with the cellular business now presented as discontinued operations. Let's go to slide number five. Yes. Before we dive into our results, I would like to recap key points of our strategy, starting with our market position and our growth prospects. uBlocks is the undisputed leader in the GNSS chip and module market. That hasn't changed and it won't because we will continue innovating fast and maintaining our technology leadership. Our target markets are expected to grow by about 10% annually over the next five years. We focus on structurally growing market segments. Next page, please. 60% of that growth in Locate will come from three applications which are core to our strategy and are shaping the future. Automated driving, automated agriculture and construction, and mobile robotics. In each of these domains, uBlocks is not just participating, we are enabling the transformation. Let's have a closer look. starting with automated driving. uBlocks is the leading provider of GNSS solutions for automotive. As vehicles become more autonomous, the need for precise and reliable positioning becomes crucial. We expect that 45% of all vehicles shipped in 2030 will use GNSS for automated driving functionalities. Opening up. a substantial growth opportunity that plays directly to our strengths. Next, agriculture and construction. The world is facing a shortage of skilled labor in those fields, and there's an increasing demand for precision. We expect more than 4 million machines to require high accuracy positioning by 2030. uBlocks is not only serving this market, we are enabling it. Our new X20 product family delivers centimeter level accuracy at an affordable cost, making it a game changer. We like this market a lot. Finally, mobile robotics. Think of robotic lawnmowers, a real world example of mass market adoption of precise positioning. Our partnership with Husqvarna, the market leader, is a success story. Our customers enjoys great market success with boundary wire-free robotic lawnmowers as they revealed at their Q2 earnings call. Our products contribute to this success. And this is just the beginning as we have more customers in mobile robotics lined up. We see a future where millions of mobile robots from delivery bots to industrial machines are autonomous, precise, and reliable. Powered by uBlocks. Page number seven. Let's turn to the transformation uBlocks is currently going through. It didn't happen overnight. In 2023, we launched our Focus Innovate Execute theme. We intensified focus on our positioning business, took first measures to improve profitability of our Connect business and worked on our execution performance. In 2024, We conducted a strategic review of the Connect business and started a process to exit Cellular. We overachieved on cost savings, delivering 25 million and took bold steps to simplify our organization. This year, with the cellular divestment now completed, we emerge as the new uBlocks, a technology leader in positioning solutions, playing in structural growth markets with a leaner, more focused organizations, strong margins, and a high cash generation potential. Let's go to page number eight. Over the last two years, We have taken decisive actions to reshape uBlocks into a leaner, more focused, and more transparent company. And the impact is clear now. We have reduced our op-back space from 215 million Swiss francs in 2023 to 155 million today, a reduction of nearly 30%. We have also streamlined our organization from 1400 full-time employees to under 850 employees. And we also reduced the number of sites. At the same time, we have made significant progress in working capital management, reducing our net working capital from 150 million to 33 million. These improvements reflect a more agile and capital efficient operating model. On the transparency side, we have fundamentally changed how we communicate and how we measure success. We have reduced R&D capitalization from 41 million in 2023 to just 2 million. Now, giving us a much clearer view of our real cost base and investment levels. We now provide quarterly trading updates with both revenue and profit, as well as quarterly guidance. We have also introduced a new financial model and a focused set of KPIs centered on cash generation. This reflects our commitment to running uBlocks as a high-performance, accountable organization and giving the market the transparency and consistency you expect. Page number 9 please. What we have now is a robust and scalable business model as you can see on the right hand side. One with low capital intensity, a lean structure and the ability to generate strong margins and free cash flows. Page 10 please. Finally, let me touch on capital allocation. Our priority is to invest in innovation and growth, especially in our core markets. We will continue to maintain a strong balance sheet and as cash flow strengthens, we will evaluate further shareholder returns and strategic investments that align with our focus strategy. Turning now to the half year results. starting with our revenue performance. We are pleased to report strong top line growth in the first half of 2025. Revenue increased by 32% year on year, reflecting the strength of our core business and the success of our strategic focus. Sequentially, we also saw good momentum. Q2 grew by 5% over Q1, And when we strip out the negative impact of currency, particularly the weakening US dollar, growth was even stronger at 11% in constant FX rates. Let me comment on three aspects of this growth. First, we have seen a significant reduction in customer inventories, meaning end market demand is now flowing more directly into orders. Second, our automotive and industrial segments delivered strong double-digit growth, supported by structural trends and increasing adoption of our technology. And third, both of our businesses, locate and short-range, performed well and contributed meaningfully to the overall growth. Next page 13, please. Let me now break down our revenue performance in more detail to show where the growth is coming from and how it aligns with our strategic focus, starting with our business lines. Our Locate business grew by 32% year on year, reaching 106.7 million Swiss francs. This was driven by robust demand in both automotive, which grew 42%, and industrial, which rose 29%. Locate remains the backbone of our business and a key enabler of high-precision applications. Our short-range business also delivered solid performance with 24% revenue growth to 16.7 million Swiss francs. Here too, we saw a rebound in both automotive and industrial applications, up 20 and 33% respectively. Geographically, growth was broad-based. In Asia Pacific, revenue grew 20%, reaching 58.5 million, with automotive up 57%, offsetting some softness in industrial. In Europe, revenue grew 41% to 37.2 million, driven by strong demand in industrial markets. And in the Americas, revenue was up 49%, reaching 27.8 million, primarily on the back of a rebound in industrial applications. Now looking at our end markets. Our automotive business grew 40% year on year to 52.1 million. Asia Pacific led the way, accounting for around two thirds of the total automotive revenue. A key highlight, our autonomous driving business, which grew the fastest. Our industrial segment reached 68.1 million, up 30%. Growth was broad-based, coming from UAVs, factory automation, aftermarket telematics, and increasingly mobile robotics. All areas of long-term strategic importance for us. As expected, consumer and other applications continued their decline. with revenue down 27% to 3.3 million, consistent with the trend we have seen since 2022. The clear takeaway here is that our growth is coming from all major business segments, markets that are aligned with our long-term strategy. Well, I will pause here and hand over to Camilla, who will go through the financials. Camilla, over to you.