Switzerland's u-blox flags earnings growth on IoT demand

M2M hardware player u-blox has reported strong growth in revenue and profits last year on the back of rising demand for Internet of Things technologies.

The Swiss company said that net profit rose by 44.3%, to CHF24.6 million ($27.94 million), between 2012 and 2013, while revenues grew by 27%, to CHF219.8 million, over the same period.

u-blox (Thalwil, Switzerland) flagged major improvements in the Asia-Pacific and EMEA regions, but noted a loss of business in the Americas, where “several large US customers chose to outsource manufacturing to Asia”.

However, it also indicated that uncertainty in some European markets will continue to be an issue in 2014 and may affect some of its customers.

Despite that, u-blox claims to enjoy some protection against adverse market developments because its serves “thousands of customers spread across many market sectors”.

The company’s largest customer accounts for less than 11% of its revenues, u-blox added.

Elaborating on the 2013 performance, u-blox said that it had maintained its dominance in the market for vehicle-tracking components, growing its share of the market for in-dash automotive navigation technologies.

“Business also grew strongly for people and animal monitoring devices, financial transaction terminals, recreation equipment and vehicle telematics systems,” said u-blox in a statement.

u-blox is aiming to increase its annual revenue to half a billion dollars over the next few years, growing its earnings before interest and taxation at a comparable rate.

Next year, it is targeting EBIT of between CHF34 million and CHF38 million, up from CHF30.1 million in 2013, and guiding for revenue of between CHF255 million and CHF265 million.

In particular, u-blox is investing heavily in the development of devices that will connect to 4G LTE networks.

Last year it opened a new R&D center in Ireland focusing on 4G LTE, and it said that its strategic decision to invest in LTE was largely responsible for a tripling in capitalized development costs, to CHF14.9 million between 2012 and 2013.