Good afternoon, ladies and gentlemen. Welcome to our Capital Markets Day. I'm very glad to welcoming you here in Horgen, but also online with quite a number of participants on this channel as well. Very glad to give you an update, what does u-blox and how w e go forward. We are making this presentation with the usual disclaimer about forward-looking statements and are of course showing the full text here. Now, the agenda is quite rich. We will have more than three hours of being together here with presentations, but also two times the occasion that you can ask your questions. I like to introduce now who is talking to you. Unfortunately, the first colleague I cannot welcome, he is ill, has got a cold, and cannot present. Andreas Thiel, our founder, will unfortunately not be here. Here at the table, are Roland Jud, our CFO, Markus Schaefer, our head of Marketing and Sales, and Stephan Zizala, our incoming CEO and successor for me from 1 January 2023. We have guest speakers. We have three customers presenting today. They present what they realize with our products. One company called Nofence from Norway, represented by Knut Bengtsson and Oskar Røed. They will talk online. The second customer is Tractive, represented by Michael Hurnaus, also online. Here in the room we have Hermann Reiter from Digi-Key, one of our distributors. First of all, I hand over to Stephan Zizala. He is giving you a first introduction about himself. Stephan, please. I don't need this. Thanks a lot, Thomas, for the nice introduction, and good afternoon, everybody. I'm very happy to be here today and to introduce myself. As you heard from Thomas, I have the privilege to take over the u-blox CEO role from January 2023 onwards. Before joining u-blox in October, I was for a long time with Infineon Technologies, working in a various set of different functions, mainly in their microcontroller and power business. In the last 8.5 years, I led a newly founded business line focusing on the electrification of cars. Probably you can guess that this was a great growth story, both business-wise and organizationally. I would say growth is the keyword which connects extremely well with u-blox. Within my first weeks, during the handover phase from Thomas, I already had the possibility to talk to hundreds of colleagues, customers and partners. I think I have a very good insight where we stand. I must say I'm really impressed. We are perceived technologically very strong, so that's maybe the least surprise. Our culture at u-blox, the innovation culture, the positioning at our customers, this was really very impressive for me. Taking this, I'm also in a position to say what I will initially focus on once I take over on 1 January 2023. Implementing the strategy we have set and advancing it to the next step will be a key focus. For sure, also in nowadays uncertain times, making the company as resilient as possible to all those changes which could happen will be another focus. With this growth, I will also spend quite some effort on developing the organization to prepare it for its future growth, which is right around the corner. I'm really looking forward to work with the team to make this happen. Of course, I will also take over the capital market communication activities from Thomas. This is particularly important for me because it complements my picture. Your outside-in view will be very helpful to make u-blox even more successful than it is right now. I'm also really looking forward to discussing with you over time in a regular manner. Handing back to Thomas again. Thank you, Stephan. Let me talk a little as an introduction, where we come from and how, what is our journey here. You know, of course, we are 25 years old. We are a spinoff of ETH, the Swiss Technology Institute. We have made it to quite a company in this market. I would say we can be very proud as a u-blox. There are few technology companies of this sort in the Swiss market, I can even say in the European market. I think it is a really great achievement and, okay, I'm leaving the company, I must say a few words of proud that we have it made to the size we are and the importance we have in the market. I think this is also what we like to show you today, that what we do with in the Americas, in Europe and in APAC with customers, in all the markets we are, mainly automotive and industrial, and that we have a very large customer base, 15,000 customers worldwide. We do it with 1,300 colleagues. These are 70% R&D colleagues that are really brilliant talents that create solutions to make the world better, to help to communicate, and to automate many of the functionalities we use every day. We are present also with this activity around the globe, mainly in Europe. These are a few locations that have quite the size of more than 100 employees. Of course, we are present in front of our customers, with local salespeople, with dedicated and highly trained people to help our customers to bring the solution into real life. We started very slow, small, not slow, small. From the early days of creating first GPS receiver module, we made it to a company that helps the industry to connect wirelessly and to bring information into the cloud. Of course, we went through several phases, and of course, the technology has developed, the technology ecosystem has developed over these many years. When it was in the early times, mainly to determine position and it was a great achievement that this was possible with the satellite signals that were ubiquitously available around the globe, it became then a solution how to bring information into a system, respectively later into the cloud. All this has helped to provide a growth track that was strong, and it is almost 70% compounded average growth rate that we achieved, much higher than what was the semiconductor market in general. I think we have really made here strong progress, have expanded into a position that is unique in the market. We are driven by some important trends. Of course, these trends are all around us that, for example, we talk about climate change, that we are still a growing population on this Earth, that urbanization is ongoing, and of course, everybody has some digital things in their hands and is using it every day. These are hundreds and millions of users that are digitalized. All this makes it that we have enormous growth tractions in the market, and mainly we have two that drive our business. It is on the one side that these many devices, these many instances, and elements that make our infrastructure are becoming more and more, and more and more automated and connected to the cloud, are no longer standalone. The other is that mobility drives us. It's the mobility mainly from the car side that shall become more, economic, ecologic, and also more automated. These two trends are forming markets that are expanding and in which we are active and are making solutions that fit the needs of our customers. For this, we are core to these customers that make these devices. We need to be competent and, of course, leading. The demand for wireless is here and is expanding. It's the most efficient way to connect, to transport information. The wires have almost gone, we could say. Of course, this is a technology that is not standing still. We have still enormous possibility to expand, to make it better, to use more principles that can give this functionality a broader range of application and a deeper value. Finally, it is, of course, not easy to do. This is why we are an important player in the market. We are a specialist to help our customers and help customers to keep the risk low when they implement such connectivity solutions. We are here to deliver, we are here to be the partner of our customers, and this gives us the good value that we can propose, and of course, the preference to be the partner with our customer. We did it over many steps. It was a constant voyage to innovation, to better solutions, to more capabilities. I think we have really made important steps from the early days to what we are today. The early day was more or less a mechanical innovation, a module that later then transferred into innovation in the area of radios and of signal processing, because we found out that the technology at the time was not that great. We were then on a step to go into integrated circuits to put all the functionality into something that is very small and advanced here our overall knowledge to make it smaller and smaller, but also to make it more capable. Not only making a receiver but a transceiver, meaning you, we can also sense the signal. Finally, and latest, that the whole connectivity is organized for our customers. As you see it from last year, we are also in the domain of safe solutions. This means this is an important step forward towards automation, especially for vehicles. Our vision for the future is that we are continuing innovation. This is really the heart blood of u-blox. This is where we put all our efforts to make sure we have great ideas implemented, and there are many more possibilities that we can implement into solutions for our customers. Of course, it is always a question of what is the best, where does it make sense to spend the money? We have hard decisions to make. What are we not creating? This selection is very important for the path forward and finally for the financial success also because we want to make it so that the investment, of course, has a very good return. We need to make selections also at the technology level. We have many possibilities to create our products, but we only can take the most promising one. Insofar also, we are not serving all the markets. We have a selection and a focus with regard to where we want to play and where we want to win. This is a constant effort, of course, and a constant decision-making for building our future. I think we are well partnering with our customers. We really help them to bring their products to a higher level, to give more content and make them more successful. The examples we are showing today, I think, give you a good insight what this all means. Insofar, we are also positive with regard to what is our future. We see continuous solid demand in our markets, in automotive and industrial. Perhaps you hear sometimes noise about consumer products market, but this is not our realm and has a different reason also why you hear such noise. Fortunately, we can stand outside of some of the trade war tensions and also the latest US sanctions. We are not in the most critical area in this regard. Also, with regard to the overall more macroeconomic or even political situation on this globe, I think, our customers are very aware of with whom they work together, who is the partner, and they think a lot long term to make sure they also, their business is warranted over the time. Of course, we have also inflation to deal with, but, so far, I think the markets are adapting to a situation that one must deal with inflation and increasing prices. Thanks to our very good standing and acceptance, we have also here a good standing with regard to setting the price. We have made it to a chip to cloud solution provider, as we call us, and I think that's a very good summary in a few words what we are. We provide connectivity, and we have the core knowledge of how we do it. I think this is the most attractive element for our customers. They know this supplier has the knowledge. They talk, they know what they talk, and they bring solutions that can really make them helpful. Insofar we are for the long term, we derive it with our customers for the long term. We have a very long-term view in all we do and also in what we have to decide. How we are realizing this in the markets and how these solutions play, Markus Schaefer will tell you more. Thank you, Thomas. Hello, everyone. I'm leading you through the next session. Unfortunately, Andreas Thiel is not here. He would otherwise would have given you the insights here, so I'm taking over for him. This section is about our innovative solutions and services. I'm sharing this section also with our customer, Nofence, who will join online after my brief introduction here. Now, we as u-blox, when we talk about solutions, we actually start with the problem. We try to understand our customer's problem to then, based on that understanding, offering a solution to this problem. We believe that the solution needs to be very easy to implement. On a very high level, when we look into our applications into the market space, we always identify four pain points. Talking now about these pain points, we as u-blox have a good understanding of those pain points and have decided to offer best-in-class solutions here to solve this problem. First, positioning. In a lot of our applications the positioning needs to be precise and accurate. We are working on our 11th generation of GNSS technology but have complemented that also with positioning services, and that allows us to have a very high, precise, and accurate positioning signal. Beyond GNSS, we are also working on Bluetooth and Wi-Fi positioning solutions for indoor. The positioning signal, the positioning information is very important here and always is a pain point around customer applications. The second pain point is to connect the devices solidly and robust to the cloud. You have a lot of solutions out there to connect signals to the cloud, but very important here is to understand, to do this very robust and solid. We have IP developed, we have technology developed, we have our own cellular implementation, for instance, that we can offer into applications that make it super robust. Beside that, also, not just the connectivity here is robust, but also the supply chain that we are putting in place, and the safety of supply for our customers. The third point is that at the edge where we have our devices, you always need kind of an effortless approach to utilize those signals coming from the sensors. The computing needs to be, as I mentioned, very effortless. We have also implementations in place to make it very easy for customers. Last but not least, the simple and efficient transport and transfer of information. You hear also a lot about services today. Especially the service capabilities that we have developed are allowing to have a very simple and efficient transfer of information there to the cloud. Efficiency there means also that you are using, for instance, a very small payload, and this is important when you have devices that need to utilize very low power. Efficiency is here critical. We as u-blox are making devices connected from the chip to cloud. We have strong growth drivers in the markets that we play. In the industrial market here has about 61% here of our revenue, the automotive market 28%, and the consumer market here 10%. There are certain criteria that we see in those markets. The scope of application is increasing very rapidly in industrial applications. We see more and more demand for connectivity in those applications. Automotive. Electronic content is e-expanding, especially in the new vehicles that are coming out into the markets. EV vehicles have a lot of rich content. Autonomous driving you'll hear today about is a key market driver in this particular market. Now consumer applications become more feature-rich. Now there's a huge choice of applications to play in, and we are selling roughly into 20 different market segments and many more use cases in the industrial, in the automotive, and in the consumer space. For us, it's very important to identify really the markets where we can create value. Strong growing markets where our technology can be an important differentiation, and you will hear some of those markets being mentioned today. This is one interesting market that shows significant growth. It's the EV charging market. I wanna show you how we are addressing here really the market needs and what problems we are solving in this market. Now, in the EV charging applications, there are different wireless technologies that can be applied that we are offering in our portfolio. It is important for these stations or that the users know where these stations are. Locate the location of this charging station is important. The charging station status needs to be delivered to the cloud. Monitor availability and status of the charging station needs to be available. Remote monitoring and predictive maintenance of the EV charging station is a key element. Peak load reduction, dynamic load management, bi-directional charging, connecting the vehicle to the grid. All these are important elements, features, problems that our customers have in this particular application. Last but not least, the car needs to be connected to the station and the user. The control of the charging is a key element, but also the optimization of charging time, energy consumption, and cost. Now we have here, this is what you see on this slide, multiple products that we are selling into this. Bluetooth implementation, Wi-Fi products, cellular products, not to forget here the Thingstream platform, which is a delivery platform offering also services that allows a very easy connection here to the cloud. This market is taking off significantly and therefore has become one of our focus market. It is a strong growing market where 136 million EVs are expected to be on the street in 2030. We are seeing a 36% growth rate for EV battery chargers in the period of 2021 to 2030. 58% of these charging station are expecting to be installed in 2024. There's a lot of demand out in the market for our devices here, where these charging stations, as I mentioned before, expect to be connected with cellular or Wi-Fi. That concludes my first part here, and I'm handing now over to our customer, Nofence, who shows you another interesting solution realized with our technology. Wonderful. If you move to next, please. My name is Knut Bengtsson. I am the CEO of Nofence, and so fortunate to join this team in scaling up a virtual fencing solution globally. Next to me, I got the founder and CTO. Hello, I'm Oskar, founder of this company, been together with u-blox actually from the very beginning. Next, please. We have developed a virtual fencing solution. It is not only tracking, it's actually removing the hassle for farmers of doing fencing. The reason for that is that we believe that grazing animals, they should be on pasture rather than being fed in a barn or in a feedlot or whatever. You could go to next, a video will show how it works. Sound, which is working almost like a parking sensor on a car for the animal actually. They are extremely good at learning this. We have 250 million hours of data that actually shows that this is something all the animals learn. Ye ah. Our success is, as Knut says, the animals react to the system very calmly and avoids the electric pulse that they will feel if they don't turn back into the pasture. We have built this solution based upon GNSS and cellular connectivity using u-blox modules. That is what we see is very scalable for us. We could ship one collar to the customer, and the customer could just download an app, install it on the smartphone, and then just start draw pastures, like you see on the slide. Next, please. It's valuable for us to have a strong partner in these two very important parts of the product. We enjoy very much of being the customer of u-blox that is so strong in innovation and especially in the connectivity part. It is for farmers, it is necessary to have cell coverage to use the product. That will, at some point, make our scalability decrease over time. So far it has been the perfect choice for us, and we are very looking into how u-blox will be a player in the future of especially for connectivity. I would also mention that the GNSS modules from u-blox is chosen because of the power saving features, as well as the features for accuracy, because the product needs to be very accurate when the animal is close to the boundary, and the system starts kicking, so to say. Yeah. Next. Yeah. The power consumption is also important because farmers doesn't wanna change battery on their animals all the time. That's for us to have something that works through the season, with the solar panel, of course, is extremely important. Yeah. Next. On the problems we solve, you can move to the next one. There actually hasn't been any innovation in fencing for 90 years. Since 1936, that's when the electrical fence was invented, and before that, it was the barbed wire in 1874. Very little has happened since then. If you move on to the next one, you can see that we thought when we set out on this journey that we would go out and solve the problem and hassle with physical fences for farmers and enable them to have animals on pastures, also on pastures that weren't fenced today. You see this in many parts of the world, that there's a lot of pastures that's growing over, because the demographics aren't like they used to be, and the work of keeping fences is simply not paying off. People stop making fences, which means they can't have animals there. That's really what we set out to solve this hassle for the farmer. The farmer is really the hero in our story, and we want to give them a tool that they can use to make life better for themselves and for their animals. During this journey, we actually realized. The farming practices globally are starting to rely so heavily on monocropping, which means basically growing the same type of crops time and time and time after each other, using fertilizer and pesticides to be able to do this, and also moving animals into more centralized type of units and even totally off pasture. In many parts of the world, you will see large amounts of animals actually being fed human food, which is corn, grain, soy and so forth, in order for them to grow faster and produce more and of course, then more profit for the farmer. The problem is that this kills the soil. Over time you will see topsoil really deplete and organic matter will really, really reduce. If you move to the next one. You can see this is a picture of two soil samples from the US, where both these fields, they're right next to each other, have been driven intensively over several decades. These practices started really in the fifties and sixties to really mount up. In the one to the left, there's only 0.5% organic matter. You can see it's almost like desert sand. What's been done between that one and the one to the right is basically a practice called cover crop grazing. It means that you let animals graze on the residuals after harvest, and then they go out and they fertilize the soil naturally, with all the bacteria and all the living organisms that is in the stomach of the ruminant. Then you plant a cover crop and you let that grow, and then you bring the animals back again and let them graze on the cover crop. This practice in two years has quadrupled organic matter. The soil to the right, when you get a heavy rainfall or wind and erosion and so forth during winter, you won't lose any soil. It will swallow up all the waters. It's also keeping the hydrological balance in the soil to a much higher level. These are practices that we can enable because in a lot of these areas, there aren't any fences left. They're re-removed for large machinery to be able to play as they should. We can sort of help farmers combine these two techniques and regenerate soil. Next, please. On product market fit, we will move on. Next. This is actually a live picture I screenshotted yesterday and sent over. It's showing herds. You can see we've sort of carpet-bombed Norway with Nofence. We're actually not able to supply the demand in Norway at the moment, so we were sold out in February this year for the entire year's production. That's not a good situation to be in. We've ordered a lot more components this year, and it's looking good. We're looking into quadrupling the amount of collars that we are manufacturing this year. We're doing two things. We're bringing them into the Norwegian market and to the international market, namely UK, Spain and the US, and that's where we are now focusing the initial international growth. Next. I mentioned these 250 million hours of data and operation. This proves to us a lot of things, how the animals react and how the solution is working, but it's also providing a wealth of insight in terms of animal health, animal movements and so forth. This is a huge opportunity for us to develop services both ourselves and also with third-party players in this field. Next. Two seconds about the growth plan. Just move on to the next one. In this market, it was interesting to see the u-blox slide little bit earlier on. I mentioned also, look a billion, a billion, a billion. There was a sort of a common factor in some of these markets that you're looking at. It's the same thing within the AgTech sector that we're playing in. There's about 1.4 billion cattle in the world. There's a billion goats, there's a billion sheep, roughly. In the European and US markets, there's about 180 million cattle alone. And we are addressing these in number one areas, of course, with cell phone coverage, and also grazing animals. We really have an ambition, though, to help change ag into making it profitable, easy and sustainable to raise animals and produce healthy meat on pasture like nature intended it, and not in these huge factories that we tend to see a lot of. For that to happen, it needs to be economically viable for the farmer, and we're helping that part. 20,000 units sold this year brings us up to about 50,000 units in total. And like I said, the demand is just fantastic. There's already more than 100,000 collars in our pipe for the coming year. If we move on to the next. You can see, like I just mentioned, 1/2 and 1/2 is the sort of export rate, roughly, that we're looking at for 2023. From 2024 on, we're gonna double again and then really the export markets are going to be more important to us. And we will look into expanding also into other regions, first with pilots and then with commercial launches as we move on. Next. I guess this is a bit of a, it's a bit of a bragging slide and it's a bit of a fact-based slide. This is what we've done so far. That's the plan that we are setting out to do. And if you move on to the next. We have actually been able to do a Series A, and I do believe in this forum, you can all acknowledge it's not the easiest of markets. And we're extremely both humbled, but also super happy that we've been able to gather really good investors in this round that now will help us over the next two years plan for expansion of the Nofence solution. That was pretty much what we were planning on saying, Oskar. More happy animals on pasture and more happy farmers. That's our goal. That's our goal, absolutely. We are about to achieve this goal with a slogan that we call "Sjørågod customer experience". Sjørågod is a Norwegian kind of a special word for very good. The customer experience is the most important thing for us. A reliable product that enables farmers to take down the fencing they have and increase flexibility on their farm and their land. Also increase yield, actually, quite heavily wi th our product. Yeah. We can talk on for hours about this. Let me give you a fun fact. If you put animals inside a normal fence and you're not able to move it like the normal behavior of grazing animals would be, which would be to go from pasture to pasture, and if you just keep them fenced in in the same place, they will overgraze, and they will get more sick because they walk in the same area that they that their dumplings go. Both being able to move them in terms of animal health, but also in terms of yield. We have projects that shows that you can double the growth in a pasture if you move it properly instead of overgrazing. This is n ature actually had this figured out before we started destroying it with so-called better solutions. This is helping nature do what it is actually intended to do. Thank you. Great. Thank you, Knut and Oskar, for giving us insight into your application, into your use case, what problems you are trying to solve here, and how we can be part of the solution. Now, in summary, looking at this particular application and specifically the value proposition that we have with our products, you know, the virtual fence is based on a very accurate and reliable GNSS positioning signal. You need a low power solution to last the season. This is what we can offer here with our products. The solution is reliable, it's robust, it has a low power consumption, it's future proof due to seamless upgrade possibilities also to the next generation. If you know our products, they are kind of footprint compatible. The modules have these interesting names, and you can replace the technology very easily. Last but not least, integrating technical requirements in the next generation products. It's also a key differentiator that we are bringing here to Nofence. Yeah. This, in summary here, shows that our solution attitude here enhances really our profitable growth. The solution attitude means engaging very, very closely with our customers. I'm sharing more insight here on our go-to-market strategy as a company. Building this relationship, understanding really the problem, and then turning the in-depth market and application understanding into salient solutions. We can maximize our customer value through innovative functionality, better cost performance ratio, less implementation risk, and very important, quick time to market. Our customer focus and differentiation is enhancing here really the value creation for all stakeholders, enabling a profitable growth for u-blox. With this, I'm handing over again to Thomas. Thank you, Markus. Thank you also to our guests. I think that was insightful, and this is why I like now to talk about why are customers choosing us. Because this is of course a hurdle we have to take. First they will have to make a selection. A customer has normally a goal that is. We can describe to make a good product, of course, that is successful, that he can bring to a market that very often is global. We have just seen what Nofence is doing very quickly. They go to different markets. Of course, they have a customer normally, many problems to solve, have to develop something that works for the eye of his customer, and is very happy he gets support, that at least the technology inside is finally something that has low risk and that he can count on the supplier. This is of course what is driving the decision and where we have to make sure we can propose this to the customer a way he can count on us and he can make decision he's that are sound. Insofar, we give, of course, products that have excellent features that explain by themselves that they can deliver the solution. Also often customers have not one product, they have different variants. What is called the stock keeping unit. The SKU is multiple, and this also needs a support from a concept of, from our side that can help to make these variations very simply and with little extra effort. We mentioned already, the whole product must normally work on a global scale, in a variety of jurisdictions, for example, and local habits that the customers must apply to. Reliability, resilience, robustness, security, all these values is what u-blox is supporting to the customer, is what we have as a DNA in our company and of course, what we have to live for daily. How can we bring it to a good understanding with the customer? I think when you go through around the circle here, first of all, understanding the problem, understanding what is the customer looking after, this is very important. Of course, we also like to understand it not only of business we do for several years, we need to especially know it for new endeavors and new ideas that customers have and create. The Nofence is a very nice example. This is something new. There was no innovation for fencing. Suddenly, here is a team that has a better idea, and this is what we need to take into account also in what we are finally when we are looking forward. Of course, we are experts and must remain experts with regard to wireless technology. We want and can deeply understand the technology. We have the mastering. We have built it over two decades and more, and have expanded it away from just the radio to something that has a system approach that can fulfill more requirements around the basic connectivity because we integrate into systems. We need to drive us forward. We need to drive us forward also because our customers want to go forward, and insofar, give them a next possibility for, and the possibility for a next generation of their products. This all we do with good relationships, with close talking to customers and of course, exchanging information, helping them, giving them the answers to questions they have. All this is making us the partner. Again, we can build leadership. Now, we talked a lot about value, and this is easily said and perhaps needs some more explanation. What is really the value we give to customers? It's not only that he has a product, of course, that alone is a big step, but finally, there are always many opportunities to create the product, and there's always a next best alternative. What really makes the difference is when we help the customer to reduce the economic cost, and it's really the economic value we are talking. A customer has, of course, first an effort to make the product. He has engineering efforts he has to do. He has also engineering that is unplanned because something doesn't work. Of course, he has to create the product. He has procurement, logistics, manufacturing and so on. These are all the costs to create the product. This all, of course, with a bill of material that is finally giving the physical capability of the product. With what we do, we always try to make it better, to make it less. We can reduce engineering efforts by per se because a lot is already pre-integrated and already created. We have scale effects that help us to do this and make it more efficient. We can especially reduce the risk so that the unplanned efforts are becoming much smaller or even disappearing. Of course, it's also easier to buy a module than many components. This reduces the procurement and logistics efforts. Of course, the whole manufacturing is a lot more easy when using our modules. Last but not least, also, the bill of material is lower. Normally, we can deliver our module as a conceived solution at a lower overall cost than if the customer has to buy all the in-individual components and put it together to the same format. This means we have here the way how we create additional value to the customer by quite a few angles because we can really be at help and be the partner that has an economic effect. Our value, of course, that we get out of this is we deliver a product. We also help the customer to be quicker in the market. That is an additional value that we can carve out, and that is, of course, our interest for the partnership. I like to hand over to our customer, Tractive, to Michael Hurnaus, who will explain what they do and hopefully also why they choose u-blox. Hello, Michael. Hello. Thank you very much for the warm introduction. Hello, everyone. My name is Michael Hurnaus. I'm the CEO and Co-Founder of Tractive, a company that we founded just over 10 years ago, based out of Linz, Austria, so not too far from Switzerland. What we do and what we are focused on over the years is the GPS tracking and lately also health and wellness monitoring for cats and dogs. I will talk in the next two slides a little bit about what solution that we have built over the years, several generations of devices. Also what some of the challenges are that we face as a pet wearable, how we call the category. Next slide, please. As I said initially, we started out about 10 years ago, when I was looking for a dog of a friend who got lost back in San Francisco or in the Bay Area where I live. We found the dog eventually 1.5 hours later, but we were all surprised that there's not a solution in the market today that really does this. Coming from a tech background, I immediately said, we have to build something like this. It actually happened, roughly like this, and I quit my job the next day at Amazon and moved back to Austria, to build this product in a, what I believe a huge category with a ton of tailwinds, and very much recess-recession-proof category, as you will hear and probably know. Next slide, please. What you see here on this slide is a few pictures of the devices that we create. We have a cat product as well as various dog products. This is again generation number six. We have over the years, built a lot of additional, or improved products, almost each and every one with u-blox components. At the end of the day, what does it do? You see on your smartphone where your dog is at any point in time, or you get an alarm if the dog actually runs away or comes back into a certain area. We do this for cats and dogs, and we set out from the beginning saying, we wanna create a solution that's the best solution for one vertical rather than an average GPS tracking device or various solutions. And that, I think, has helped us get the clear number one in the world of pets for tracking. Next slide, please. This slide, very high level, shows on where we use u-blox components and how our devices are connected. On one side, they use a simple GNSS or GPS chip on the device, so the device itself knows where it is. We use cellular components from u-blox as well to connect to our servers, where it actually transmits all the information like GPS positions, activity data, sleep data that we also track, and we send this back to our servers in the later generations with Cat M1 LTE technology, in the earlier generations with 2G or 3G respectively. Really, all the device does is communicate with one server through a roaming on various cellular networks and gets the GPS positions from the satellites, as you would expect. There are some other connectivity ways that we have with our app, but they are more on the firmware update side of things and less related to the day-to-day operations. Next slide, please. The way we have built the devices was from the beginning, we didn't want the customer to actually have to enter a SIM card or to be very complicated. It was always the idea that anyone who has a dog can do it regardless how technical they are. We have a fully integrated product with an embedded SIM chip, and we develop all the hardware in-house. Everything we do hardware and firmware-wise, we develop in-house, and then we do contract manufacturing in China, but we are building up additional manufacturing plants outside of China as well right now. We roam on multiple networks. That differentiates us from many of our competitors in the field. Meaning that we really have not just one cellular partner in a given country, but multiple partners. This is important because our animals obviously roam around, and as they run around, they might be in areas where there's lower coverage than the areas that you typically cover as a human or where cars are present or in the cities. Device is super lightweight. The latest generation is actually below 30 grams already, 100% waterproof. As I mentioned, over the six generations now, we've always used u-blox for both connectivity as well as GPS and have been very impressed by what they have done, and how easy they've made it for us to actually develop our devices. The big challenge for us, and I'll talk about this later, really is always the form factor and size and battery life, which at the end of the day go hand in hand. Next slide, please. The business model that this allows us to work with is actually a subscription or a SaaS-like business model. We are selling the hardware at roughly EUR 49, GBP 49, $49, all the same these days anyway, or almost. Then a re-required subscription for customers to use the device. This covers all the networking fees, the roaming fees, the SMS fees from us as a company to the provider. It's a flat rate for the consumer of around EUR 5 per month, depending on what plan they choose. What helps us here really is that most customers decide to pay us one or two years ahead of time, which means that from a cash profile and from a business model profile, very thankful, because if they pay us ahead of time, we can actually reinvest the revenue early on already in financing inventory and our own growth. Next slide. As I've said initially, we'd started with GPS tracking, so basically, where is my dog? Where does my dog run around? We have now transitioned over a lot towards what we call health and wellness monitoring. What we do is we capture activity data similar to what you might be familiar with from a Fitbit or other wearable device in the human field. Capture activity, we capture sleep, and behind the scenes we have a team of 20 data scientists that do nothing else than dissect this data, run machine learning algorithms on this data, and really try to identify early signs of certain illnesses or health patterns for a particular dog or cat. That's something that we are doubling down on right now because we believe there is not really any product out there in the market today that does this well, and we have so much insights based on being on so many cats and dogs in the field. Next slide. One of the big things, and I'll share some more numbers later. We're at around 700,000 active subscribers or active customers that use our product every day. What we offer to them is what we call peer group benchmarking. This is a feature where we can actually show a customer not just how active their dog is, but we can actually put this into a perspective. We can tell them, "This is how active a normal three-year-old beagle is," or, "This is the benchmark of other 2-year-old Rottweilers." This helps you as the pet owner understand whether you're over-exercising your dog or whether your dog is more on the lazy side, and what you can do about it. It also gives some information to the vet, if you bring your dog to the vet, to see how treatments work or how the performance is actually improving of your dog if you intend to have a healthier relationship, or a healthier dog in your pet-parent relationship. Next slide. The biggest challenges that we face as a company or in our pet wearable world is size and weight. We have to make the devices as small as possible to capture the full market or a larger market. The smaller the device obviously goes hand in hand with smaller battery, shorter battery life. We always have to be creative on identifying ways where we can save battery, but while still staying connected so customers can actually do live tracking at any point in time. The antennas are always particularly challenging in this small form factor as well, as it gets exponentially harder with every millimeter the device actually gets smaller. Another situation that we are facing in the cellular world that's hopefully gone for a while after now is most everyone shifting towards NB-IoT and Cat M1 is the 2G and 3G deprecation, which is something, especially in the sector of consumer devices, that's very challenging as we have to exchange the modules. What's extremely helpful here is it's really that u-blox provides for us modules that actually have backwards compatibility, so we can actually use them on the old networks as well as on the newest ones, that allows for us for a smoother transition out in the field and has been very, very helpful over the years. We also want to ideally create one solution that works globally. We have tracked the focus on the North American markets plus Europe, but we still wanna make sure that it works in most any country in the world. That's also something that really helps us using and leveraging the features that u-blox has built. A big additional challenge for us that's a little bit outside of this scope is really roaming agreements and national roaming, where there's dependencies on our cellular carrier that we work with or the cellular partners that we work with, and some national restrictions on national roaming, such as in Brazil or Turkey or China, where devices are only allowed to roam on one particular network or are not allowed to roam permanently in this country. You have to have a local SIM after a certain period of time. Last but not least, supply chain is obviously always an issue and a challenge in times like this. At least from our perspective, it seems like it's getting in a better direction across the board with all kinds of components that our devices use. Next slide, please. A few more numbers before we come to an end to give you a little bit of a better perspective also on the size of our business. We have around 200 employees, headquartered in Austria. 190 people work here on our brand-new campus near Linz. We have about 10 people in the US, in Seattle, in our external office. As I said, we founded the company about 10 years ago. We're just shy of 700,000 active subscribing customers. We still continue to grow over 50% year-over-year. Certainly, want to fly through the 1 million subscriber mark, the 1 million connected pets mark, and we're very proud of comparatively high NPS scores for a consumer product, especially for a connected consumer product. Also our churn rates. If you are familiar with the subscription world or SaaS businesses, a churn rate below 2% is roughly in the territory of a Netflix or other consumer subscription that really are very well known out there, and this makes us proud. This really means our customers use our devices and use our products quite a bit. Next slide. This just to show you a little bit the growth on a quarterly basis. As you can see, particularly this year, second quarter and third quarter, have been strongly accelerating. This is coming A, from tailwinds, from the pet market, as well as from, our launch in the US, where we launched about two years ago, and now it seems to be really taking off in the US market but also other European markets. One of the top challenges for us is, as a product or as a category, is category awareness. People don't know that this product category even exists. This is something that we now push more with TV advertising in UK, France, Germany, as well as in the US, and that really helps us to accelerate our growth. Hopefully, especially as a consumer brand, we are proud that we achieved that in the last two quarters. We're looking forward to a strong third quarter, as we regularly see it and excited to continue to go the way with u-blox. That was it from my side. Thank you very much. Okay. Very, very well. Let me just thank our colleagues from Austria for this nice example how our products are used. It's always exciting for us to see how the end product looks like. The chips and systems, if you look on them, you can get very enthusiastic as an engineer, but you can get even more enthusiastic once you see it in real life. Exactly these examples combines many of our technologies from positioning, but also in terms of connectivity. Very nice example. With this, I can hand over to Roland. Oh, sorry, there was one more slide which I wasn't aware. I think it was mentioned before that one key thing to make it happen at those customers is being very close to the customer, working with them in a very early stage, also making sure that we meet their requirements. You heard they need it small, they need it with low power. This is exactly something where u-blox is very strong in. It's a very nice fit in terms of technical fit. The other thing is, you saw the growth rates. Obviously we could cause major damage to such a growth story if our supplies chains are not robust. This is also an area where u-blox has proven to be a reliable partner for our customers. Next, please. Increasing the capabilities of your products by connecting them to the cloud is a great way to attract new customers. Are you concerned with the complexity involved? The burden that advanced hardware design will place on your R&D team? Managing security or slow time to market? This demo will show how easy connecting products to the cloud can be. The NORA-W2 series comes pre-integrated with the Amazon Web Services cloud. This means that you as product manufacturer, don't have to spend time with dealing with complex topics such as provisioning, security, firmware development, and software updates. We've already solved them for you. Instead, you can put full focus on building the key application that will make your product special. Meet Green Kitchen, a gardening company that creates no-tech kitchen gardens to grow herbs for eating and cooking. They're losing market share and are looking for ways to improve their products to increase competitiveness. The team at Green Kitchen know that they can do this by making their products smarter. They put their brains together to design a new IoT-enabled product based on the NORA-W2 model. The company has limited knowledge in radio design, protocols for wireless communication, and security, but they need the product to hit the market in time for the Christmas sales. The solution they come up with integrates the NORA-W2 module into one of their kitchen gardens and includes an application to manage lighting, watering, and nutrients. They also develop a small phone application to give customers full control over the growing conditions of the herbs. Why are we competitive? You heard it several times now. Innovation is a key thing. We were founded from ETH, and we are very proud that two of the founders are still with the company. It's really for me, coming from the outside, it's a very special thing to have those on board which originated the company and drove this innovation over all those years. The enthusiasm is more or less given by nature if you have such a spirit and culture. When an organization grows and u-blox grew heavily, as you could see in the numbers, it's very important and very crucial to keep up this flow of innovation. Therefore, we focus a lot on agile development methodologies, which keeps us close to the customer and close to the market. Well, with this main ingredients, we were able to stay innovative, capture our market share, and even expand. If you go one slide ahead. Of course, there's competition out there, and I could say now to everybody something or how we are differentiating from them. The combination of having core IP in a chip, having the modules, plus adding the services is unique in our market. We think we are just at the start with this value proposition. It will expand even further and become more important in the future. We have a very strong positioning in our key markets, and we are having everything in place, the team, the culture, the processes to grow this even more. There's no wonder that we have a lot of enthusiastic customers. We have over 14,000 customers which use our products, not all of them are served directly by us. Some of them are also, or many of them, not some of them. Many of them are served by our distribution partners. Larger ones are served by us directly. For us, as you could now sense also during the presentation, it's a two-way cooperation. We provide the products, we jointly solve problems, and we get inspiration for our new product roadmaps. We have many ideas out there, to fill our innovation pipeline. For us, the focus is more focusing on the right topics than searching for innovation fields. There's a lot for us to innovate. Next one. With this, finally We get some more hard facts, on the financial numbers by Roland. Thanks a lot. Thank you, Stephan. Tricked me a bit by being a bit too early on the stage... [crosstalk] Yeah, right. Right. Thanks a lot. Thank you, Stephan. Good afternoon, ladies and gentlemen. A warm welcome from my side. u-blox experienced a very good first half year in 2022 with a strong growth of revenues of 52.7%. We reached a new record level of revenues in the first half year with CHF 300 million revenues we have made until end of June 2022. This is based on a strong rebound of orders which has started already in 2020, but is ongoing. Also the accelerated trend for connected devices or/and the expansion of our production output helped to reach such a high level. The US dollar developed posit ively in the first half year. Even if we have had worse dollar rate, the same as in 2021, the growth rate is still nearly 50%. The growth also continued. You have for sure seen our announcement to the third quarter revenue figures. In third quarter, we reached revenues of CHF 475 million. Not only revenues developed positively, also on the profitability side, EBITDA adjusted margin increased strongly to 26% from 19% in the comparable year 2021. This represents CHF 76.6 million for the first half year of 2022. Gross profit margins also went up in the first half year. The trend beginning in 2021 continued, and we reached in the first half year a level of 48.9% or CHF 143.8 million gross profit. This is an increase of over 60% over the first half year of 2021. The increase is driven on one hand by a favorable product mix and on the other hand, by sales price increases, with which we are able to compensate some price increases of our suppliers. Innovation, we mentioned it is key to our generation of such gross margins. Our chipsets are the basis of our core IP, and together with our modules, we make it available to a large customer base, as Ste phan already mentioned. Thanks to this investment into core IP, we generate gross margins, and in absolute terms, three-fourths of the total gross margin is based on products with our own chipset. Also the third-party chipsets are necessary to have a complete offer for our customer and to offer to them a full solution. On the cost side, R&D expenses ratio was reduced significantly in the first half year to 17.9%, all with mainly due to the increased top line because we have not reduced our efforts and investments into new products and into establishing our servicing offer. The level of R&D expense as such remains the same as in the first half year, 2021. Now, as you all know, accounting rules for IFRS oblige us to capitalize our R&D efforts to match on one at the R&D efforts with revenue recognition. I like to make an example here with u-blox 8 platform. u-blox 8 was developed between 2012 and 2014. market introduction was in 2014. That's so-called on this picture here, you see this is the R&D phase, and this is the phase where we capitalize the efforts which go into this platform. End of life is expected then in 2025, so 11 years where we harvest in total from the investments we made in the R&D phase. With market introduction, amortization starts. We have a conservative approach from a financial point of view so that we amortize not over this useful life of nine years and CHF 1 billion expected sales. We amortize the costs or the capitalized costs already over seven years. This way of capitalizing and amortizing costs makes it more comparable revenues where with cost creation. On distribution and marketing events, we significantly reduced the distribution and marketing effort expenses. They increased slightly in absolute terms to CHF 21.6 million in the first half year 2022. The percentage rise in, of revenue, it was reduced significantly to 7.3%. Of course, the strong growth has an impact on cash flows. Networking capital, sorry. Networking capital was impacted by the very low level we had in 2021. In 2022, we were then able to bring them back to a more normal level. Together with the strong top-line growth, net working capital increased in the first half year, 2022. This has a negative impact on cash flow of CHF 51 million. Therefore, operating cash flow was lower in the first half year. It was CHF 30.4 million, and also free cash flow was lower, but we still were, in the first half year, capable to create a positive free cash flow of CHF 6.6 million. For the second half year, it's, of course, not expected a similar increase of net working capital so that we can also expect to have higher operating cash flows and also higher free cash flows. u-blox as a company has and has had a strong balance sheet with a cash position end of June of CHF 89 million. This cash position is expected also to further increase due to good cash flows in the second half-year. In the balance sheet, we have around CHF 46 million inventory level, but only 20% of this inventory is really finished goods. The major part is raw material components we need to serve and produce our modules and products, about 24% is work in progress, so products which are on production. The increase in short-term, you might, debt you might see, is only due to the fact that, our outstanding bond, which is repayable, mid of April next year, has now switched from long-term debt to short-term debt, and therefore, short-term debt increases. On the other hand, long-term debt went down. For this bond, in mid of April, we have several options from repayment through our high cash position to also to renewal. We are looking and analyzing this now, in the next months until, mid of April and find out which will be the best and most profitable solution to do this repayment. With that, I'm through to the financial numbers. We come now to a first Q&A session. I think we do first the ones here in the room and afterwards then others, right? Exactly. Good. Please. Yes. Hello. Thank you very much. Ermin Bašić from Baader Helvea. I have a couple of questions. I'm just gonna start with the going back to the presentations you have with the startups. Out of your 14,000 clients, how many of them are approximately representing startups that are kind of like early stage? It is difficult to say what's the percentage of those startups. You will see in later slides that I will present that, especially through distribution, we are able to reach more and more customers. We have doubled our customer base over the last three years with the help of distribution. Now, high service, distributors like Digi-Key, is providing samples, you know, low volume samples for engineers to quickly start developing. Under these, small customers are certainly the innovators and makers of tomorrow. Those are certainly startups, but I can't give you a percentage. I don't know, could you give an indication of how many of those customers who were with you approximately five years ago are still with you today? We have a very high retention rate of customers, and this is also really our unique value of our go-to-market approach. The value is that we focus on customers, and we stick to customers, and customers stick to us. We don't lose many customers. Maybe you have also heard in the example before that Nofence started actually with u-blox and stayed with u-blox along the way. This is what you can see with many of our customers. Okay. Thank you. The last one regarding this topic, could you give us an indication of like the cluster in terms of the end markets? How many of them are in the industrial, consumer, and automotive segment? The majority of the markets are in the industrial markets. The main markets on the automotive side is certainly infotainment and navigation, telematics, autonomous driving. You have two, three more like car monitoring, EV charging. On the automotive sides that, I would say about 10. We are selling into 15 more easily, right? Which are on the industrial side, and there are more and more new applications coming up, especially on the industrial side. Today, we say roughly 20 markets are important to us. While I would say there is probably 1/2 of them, which are nicely high growth markets where we have a special focus on. Are you referring to the startups now? No. To your questions, what markets we serve on the industrial and automotive side. In terms of startups, as I said, I can't give you an exact number of customers in this particular field. All right. Okay. Thank you very much. Yeah, man. I'm gonna hand over maybe later. Okay. Thank you. It's Harold from ZKB. I have three questions, please. First one, I understand you maintained your guidance, but at the same time you were like, if I got it right, referring that growth momentum in third quarter is continuing like upbeat third quarter, right? How does this basically reconcile? Second question would be, I think you mentioned a favorable macro view for 2023, if I got it right? I mean, everybody else is, I would say, guiding probably more to the downside. Probably if you have some more color here. Three is more, yeah, I would say long-term questions. What kind of free cash flow conversion could we see in terms of EBITDA as a percentage point? Also regarding your end market setup, what would you be your desired end market portfolio given industrial, automotive and consumer? Is it going to be more industrial geared, or is it probably more shifting to the consumer? Thank you. Okay. Last question or... [crosstalk] Last question, one of us can take. Our major focus markets are clearly in industrial and automotive. This is where we have most of our efforts and our highest focus. On selective consumer applications, we go after, but the majority is industrial and automotive. In this sense, our revenue share distribution will not deviate so much from what we have right now. Maybe on the financial questions. On the more long-term outlook, free cash flow and EBITDA conversion, as you know, we do not make any guidance and also no long-term. I cannot also not make any long-term guidance in this regard. There are too many components influencing that which we just don't know and it's just speculation. Especially network, for example, network and capital development. The first question was about the third quarter and the third quarter. Yes, it is right that the third quarter was tremendously good. We do not expect such good third quarter as we in third quarter, the same. The statement is more about the overall growth. If you take the guidance and we stick to this guidance, you calculate out a 50%, then I would say, yes, this is really outstanding. It is not expected that we do now every year in the next four years, 50% top line growth, with the corresponding profitability growth. This is not possible. 2023, also we will give you then in with our market presentation as soon as we have the year-end results. I was simply a bit puzzled, as you mentioned, a favorable macro perspective, I think on one of the first slides, basically. The presentation with the... You mean the one with the aims we have? Yes. This is the... As it said, it's a goal. It's the goal we have to reach and where we plan to be or to get or to keep in the future. This is just an indication where our goals are. This is not the guidance. It is not a prediction. We do it and this year or in two years or in five years, it's just our goal, and that's what we are working on to. Okay. One last, and then I promise I'm not finished... [crosstalk] No problem. What is basically your impression of the inventory levels of your clients? Where would you see them? I mean, broad-based in the economy, you could also have to see that inventory levels could be probably a bit elevated for the time being. Please, Markus. Certainly inventory levels are going up, they are going up in certain areas. I mean, it started with the consumer side, right? With the slowdown in APAC, especially in China, inventory levels of products that are being used in the consumer area are certainly going up. We see that as well. Part of that inventory is becoming available also in the industrial and automotive side. When you go into industrial and automotive, it really depends what kind of technologies you are utilizing. There are technologies that are not so easily available, right? When the crisis there started, we had a lot of wafer fabs that were booked three, four times. The situation has eased there, right? Overall the market, I mean we read it everywhere, is kind of slowing down. There are nodes, there are technologies that are not so easily available and those remain really as part of the supply crisis. We still have customers that we can't deliver to 100%, but the situation is becoming better as we're also showing there into the slides. There are market areas that continuously have a high growth. Healthcare, you know, keeps growing, also is pretty much not so sensitive to the recession. As we are focusing on selected markets, we are a part of those markets that are growing stronger and continue to grow stronger next year. There are also markets that are slowing down. Of course, overall, you know, we have still a very high order book, as you are going to see. Customers, yes, some customers are pushing out, some customers are canceling, but some customers keep escalating because they urgently need the products. Thank you so much. It's Michael from Stifel. I have a question on the slide 66 on a competitive environment. First of all, thank you for that. It's very interesting. I was just wondering, maybe you can give us a bit of an insight. What has actually changed here in, let's say, the last two, three years? Because I'm not sure if I remember correctly, a couple of new names that have popped up here. So I was wondering how is it really evolving the competitive environment? Maybe the second question: How do you see the latest M&A developments in the industry? We have seen Semtech buying Sierra Wireless, for example. A part of Thales is merging with Telit. How do you see those involvements and maybe overall and what's a critical size of a company like u-blox? I mean, you spend a lot of R&D to actually, let's say, grow. Let's say in a normal environment, you grow, thanks also to the R&D. When can you actually reduce the absolute amount or the percentage amount of R&D to grow, you know? I mean, what's a critical size of a company like u-blox that you don't have to spend such amounts of money to exist, basically? To be provocative, I know. Yeah, man. Yeah. I understand the, the question. Let me, let me first start with your first part of the questions. Yes, there are acquisitions ongoing in the market, especially on the, on the module side as we could see there. You, you saw it from our history. u-blox acquires company if we can complement our offering. Just acquiring for size and economy of scale, it's history. I was not there, but for me it was very logical, was never focus of the company. That might be different if you have a lot of own production, then you have different effects. u-blox just didn't see this and therefore we never did such an acquisition. We acquired something if we could complement something. If we want to go into services, we took a head start by acquiring a company who has experience in services and this proved to be a very successful approach and which makes a lot of sense for me. Yes, there's consolidation ongoing, but it's not our strategy just to buy for size. The other point you mentioned is R&D spending. Of course, every Swiss franc we save goes into profit. That's easy math. But we are developing high tech products. We are by good reasons, investing in our chip technology to have our core IP in realized in the best possible way and also enjoy certain benefits out of this. If you do something like this, 20% R&D spending is not outrageous. Yeah. Of course we can debate if it should be a few points lower or if it can be even for special reasons, a few points higher. The order of magnitude is where we see the commonly. This is why you also saw it in the ambition that yes, we want to bring it down. If you could bring it down to 5%, yeah, there are companies out there who survive very well with 5%, we would kill our business model. It would not be an innovation business model. Erwin. As you said, it's right. You must see what u-blox is. What is the core of u-blox? Sorry, Markus. It's not sales, it's not logistics, it's not production, it's development of new product. The major part, 70% of our employees are R&D employees. What we must make sure is that they develop something which has value at the end. If we do that, then I like to spend some more money into this R&D because I get, later on, new products, also a bigger volume, and I could support the growth in the future. For this said, as I've shown in one slide of my slides, it's three quarter of our products contain our own chips at our core IP. With this, we are also capable to keep on the top the gross margin level. There was a trend in the past, at least gross margins have only one trend, downwards the last 20 years. This would go on if you just try and not innovate and be not innovative, invest into new products, maybe also to the setup of a chipset, how much components you need, how big the silicon base is or the die size is. This is all cost which helps you to keep also the gross margin tight. It's also profitable, although you have invested something into R&D for this. Maybe let me add to this, because you mentioned our strong R&D history and footprint. Already today in this presentation, you can sense or observe a difference. Of course, it's a huge opportunity for a company like u-blox coming out of R&D, developing the organization that we work with partners, with distributors, strengthen our sales and marketing approach, being appreciated by our customers, by our robust supply chain. That's a huge opportunity for us to complement our R&D strength. The company started to do so, and we will continue on this way. to add on that, we have especially seen in the last two years that our business approach, our business model here, offering chips, modules, combining it with services is super robust. Why? Especially in a time where customers did not get supply, they reached out to us and reach out to many companies and ask, "Okay, can you give me an alternative here?" Right? We could. So we provided second sourcing, not just, you know, against our competitors, but also on technologies that we were not able to get, like on the GNSS side. So we had a dual sourcing strategy as u-blox. So we came up with modules which were footprint, which were feature competitive and could offer these to the customers. We did that on the GNSS, on the cellular, also on the short range side. We have gained through that. We got additional business through that. We didn't lose business, we are proud that we have not been one of those companies that stopped production lines. Why? Yes, it has cost us something. We had to invest there. Now we have a broader portfolio and a more competitive portfolio. This has been really because of this chart, because we have the intellectual property, we have the competence internally to turn this around very quickly. This is also part of the growth that you are seeing. We gained market share because of that. Thank you very much. Next question on this side. Yes. Thank you. Thomas Frank from GAM. I have actually two questions. I just ask them one by one. The first one is bit on the big picture. At the very start of the presentation, we saw the long-term sales development of u-blox, it was quite obvious that from 2017 onwards, the company stagnated a bit on the top line. Now, this year it seems to be coming a huge acceleration into sales. Maybe the first part of the question would be why the stagnation phase? The second one would be the acceleration this year. The colleagues can help me if I lack of history, but the huge acceleration had, of course, several reasons. One was many of the R&D projects we started years ago, and which were also capitalized in a financial point of way, came to production in the last years. That's one area. The second one is we focused on the right growth areas to be in. We saw volume growth. It's not just a price growth, what you saw in the last year. Markus mentioned we even gained market share in the supply crisis because of our flexibility. In this sense, it's the right focus topics with the right R&D investments. Yes, the market picked up, and we were able to deliver this. This, I would say are the main reasons for this growth. If you go one step back, you will hear later on what market segments we focus both in an industrial side and in the automotive side. It's everything which makes the car more intelligent and everything which makes the Internet of Things connected and precisely to be located. Both of those topics are just at the start of their growth. We will cover this in the next session a bit more in detail. Now to the dip in the previous years, maybe one of the colleagues can say a few words better than I. Maybe in the previous years. We worked at, in 2017, 2018, 2019, especially 2020, in a stagnating phase, you're right. There we're facing also some, let's say, more macroeconomic, topics like the China-US trade war, which hit us. At the same time, we saw, for example, in the US, a delay on network operating, deciding on which technology they will put their, the following, of the 2G. Is it now Cat 1 or is it Cat M1? This, let's say, so to say, delays our customers to do the next step, to do the new devices, to grow themselves. Therefore, also we lack of growth in these years. Now it's at least part of them. The Chinese-US trade war is still alive, but not that heavy as it was, for example, in 2018, 2019. The operation topic in the US is, so to say, solves. The decision are taken, and we see now, of course, also the customers now releasing and replacing, for example, their 2G devices with 4G Cat M devices or seeing this market growth also coming back. Yes, for market growth and what the growth effects are, Markus, you may be the better one there. Yep. I am. I joined three years ago, it would be easy to say, you know, I was part of the growth story. I have been the sales head since three years, and I can certainly tell you know, what we have done to making sure we are winning market share. I mean, when you look at 2019, 2020, right? I mean, the corona crisis started in 2020. I mean, of course, the market went down, right? The market went down because, you know, there were lockdowns, nobody ordered. Suddenly, you know, end of 2020, right, the markets came on and everybody started to order. I mean, we see that in the industry. Just to say, okay, this growth is purely, you know, a story of growth of u-blox. I mean, everybody would have the same story. What I can say is, we have gained, as I explained before, market share. Why? We started to focus on areas of growth, on markets that are growing faster than others. Of course, we have a competitive environment. You know, we all know we are not, let's say, a market leader in cellular modems, right? You have Chinese competitors coming in and undercutting the price. We have stopped competing in those markets because of price. You see that our margins are growing there, right? We are not going after business, which is suicide business. Where we are going after are the markets where we can really extract value due to what I explained before, the robustness of the solutions that we have, the competitive advantages of positioning, combining it then with cellular and short range in the application. A very important element is also the service element that we put, we're putting into it. We are super sticky into certain applications. We, there is a very high barrier of entry for our competitors in those customers where we decided to choose to play. I will elaborate it on the go-to-market strategy later, why that is the case. Yes, through the supply crisis, we were able to win because we could either deliver or we would have the right products that others couldn't. Also, in the last three years, we doubled our customer base, right. We literally went from 7,000 to 14,500 customers. You will hear about it later as well. Increasing the customer base gives us access to new applications, gives us access also to startups, as per the question asked before. All those customers are start ordering. You know, they are starting ordering. I mean, twice as the amount of customers basically allow us really to grow, to grow share. There is a growth story that you see in the numbers. Thank you. Do we have more questions in the room? Oh, two more. If I may, before probably you want to go to break. Serge from Credit Suisse. I was a bit puzzled as you, Mr. Zizala said that you don't go for scale, that you go for technology. If I could remember it correctly, a year ago, you made a bid for Telit, you know. I don't see where the incremental technology is coming from Telit you don't cover. For me, this would have been a pure scale takeover, if you would like so. Secondly, also I think you're the best proof of pudding that scale is giving much higher margin. Three times you increased the top line guidance and three times you materially increase the EBITA margins. You want to tell us that you want to go for lower growth in future with much lower margin? Is this the interim product? No. As you could hear in my opening words, we are clearly set up for growth for sure. We do not just acquire companies for the sake of having additional similar business. The rest, you are right. A lot of the rest, besides all the strategic topics, obviously also depends on the price. If there are opportunities out there to become more profitable, growing, then we will look at this and do this. In general, if you look on the history, huh? The company complemented its business and this led to a very impressive growth so far. Again, what would have been the logic to take over Telit? I apologize, I cannot comment on this one because I was not part of the process, yeah. I'm not even sure if we should... [crosstalk] Maybe without... [crosstalk] Comment. Without commenting to exactly to Telit. Of course, it's not an aim to just to buy revenues for whatever the price tag of these revenues. Of course, if I get a revenue in addition at a price tag where I can say, "Okay, with this, I really get some economies of scale," then it makes sense. As many of these attempts, and not only Telit, also others, we have looked into other companies, shows that the price tag is at a level where we have to say, "Okay, and what do we get?" This is at the end the way. That's why also focusing more on technology additions. There, the price tag is also high, but there you get maybe more economy of scale or more profitability back even if you pay a certain price tag. Also there it's clear, it must also not only add a technology, it must also add a way forward in profitability, otherwise it's then too expensive. Okay. Got the message. Thank you. Probably a last one. Mr. Zizala, you have been working with Infineon for a long time, great experience. What do you believe? Where can u-blox benefit the most from the experience you bring with from Infineon? Is it on sales? Is it on procurement? Is it to use processes to improve R&D? Happy to get three bullets from you in that respect. I would like just to repeat and maybe better explain the topics I mentioned at the beginning. I have been part of an incredible growth story as Infineon, and in a certain way, I've seen quite a lot, quite a number of businesses in Infineon in the context of a larger corporation. For sure, I want to work with the team to develop the organization to cope the larger scale of business, to prepare for the next wave of growth, to improve in certain areas operational efficiency. There I think we can bring together as a value. I do not have a blueprint that I come over and copy an Infineon approach to u-blox. This would be absolutely non-appropriate. My clear target is to bring in this experience and work with the team to find out and define the u-blox way. The overall strategy is very well set up. Therefore, I said as a first topic where I want to focus on is making sure what we have as target, what we defined as strategy, we implement it in a way which gives us then enough headroom to think of the next big strategic movements in this course. Just out of experience, having seen many different businesses at Infineon, at least I've done it before in similar situations. I think I can contribute and then jointly with the team, make it happen. Maybe the third thing is, yeah, we saw it now very nicely as, as a growth story. That's maybe a difference between a startup company and a company which is much more mature. I've seen some crisis in my previous life in, where, where business was unexpected or we had a big business there and we were, maybe we, we found out that there's a trouble here or a technology change there. This is what I meant with making u-blox resilient for whatever comes. You can guess that I challenge the team currently quite a, quite a lot. Have you thought about this? What, what do we do if happens that? This is something I want to contribute and then define with the team the right way forward. There was one more? No, two more. Maybe I try. Good afternoon, gentlemen. Torsten Sauter from Kepler Cheuvreux. I have two quick questions. Firstly, I think you showed this nice table with the product offering and the peers. Should we expect u-blox to develop a short-range chip, so a Wi-Fi chip, a Bluetooth chip, or something like that? Secondly, quickly, should we expect u-blox to provide on a recurring basis quarterly information, basically? First question, our strategy for chipsets is we invest in our chipsets if we have core IP to protect or if we can create a solution which is very optimized to the market. If you look on positioning, obviously we have core IP, and we can differentiate there. Therefore, we do a lot of chipsets since here. On the wireless part, on the cellular part, we optimize the chipset exactly for the target applications. It's low-power wide-area network. It's not just any cellular standard. We optimize for Internet of Things usage, low power and also costs exactly for those applications. And we do this only if there's no suitable offering out there in the market, because otherwise why should we spend so much R&D money? To the time being, we didn't see this in short range. There was not the need to do it. Just to be a me too with another Bluetooth chipset, at least, it was explained to me, and it makes perfect sense to me, did not make a lot of sense for u-blox in the strategy. On the quarterly numbers, I would ask Roland to answer. You should not expect to have quarterly numbers now from us down to profitability side, no. A quarterly statement with revenues, for example, is something you would envisage? That we look into if we do it further... [crosstalk] Yeah. It's not yet decided to do it every quarter. Okay. It's also because why did we do then third quarter? We do third quarter because of its, let's say, an extreme good year. It gives an intention also to show why we are so convinced that we can make our guidance and or can say, "Okay, we do our guidance. Look." We can also say, "Yes, we do the guidance," and saying, "Okay, look, third quarter really shows that we are on the way to reach the guidance numbers. It's Guenther Hollfelder, Polar Capital. It looks like, as if, you know, the process nodes you're using for your positioning chips are still pretty tight. At the same time, you were mentioning some relief. I mean, right now, like in the fourth quarter, is sales still constrained by the supply you get from your foundry? What's the outlook here for the coming months? In third quarter, we have areas where we are still supply constraints. As Markus mentioned before, there are areas where we have supply constraints, and we also expect areas next year where we will face supply constraints. However, if we compare it to the situation a year ago, it's getting relief. There are less such areas, and the gap becomes smaller in this area. This is the reason for this is in the trailing nodes, as you probably have heard from several foundries, there's not so much capacity investment coming on top, and therefore, this segment remains narrow. Maybe to add here, when we said it's supply constrained, indeed on certain nodes. What we also did is that we came up with new nodes that are less supply constrained with alternatives. On the GNSS, we have ramped the tenth generation in a record time that we have never done before in such a growth, right? We were, especially in the industrial and also in the consumer space, able to introduce the M10 chip this year, while then we would have more parts available for other applications like automotive, where you can't make that change so quickly. Again, this is another proof, you know, that, through the resilience of our supply chain, we are able basically to offer here the right parts into the market. The eight you're referring to? Yeah. Okay. Good. We have still a couple of questions from the chat, if we can take them. Yes. Good. We start with the first one from Reto Huber, Research Partners. Is there still no temporary peak in sight at u-blox after growth base growth in the first nine months, with which applications and markets saw the strongest growth in October 2022? The answer is simple. We do not provide such information, anyway, so, we cannot say which growth market now is in October still growing at the most and the least. Thomas Kaiser from Family Office: To what revenue share do you plan to increase your recurring revenues above the next years? This figure is a figure which we do not disclose as such, what revenue is recurring and which one is really new business. It is also rather difficult to say what is a recurring revenue. If this question is relating to services revenue, services revenue today is very small. First half year was CHF 500,000, roughly. Even if we take their 500% growth, it will be also for the next year, not really a lot, and not the major part of the growth story of u-blox in 2023. Lucas Schwenk from Tigris Capital: Your margin increased strongly the last two years. Do you see this margin level as sustainable level? What is your expected CapEx number for the coming years? This is all question about guidance. As I said, we give some guidance then with our full year numbers in March, but none now. We have a question about customers from Markus Anderson: It is said that your biggest 70 customers make 80% of your revenue, and they get highest level of attention. My question is, are Nofence AS one of your top 70 customers? We would not give information what customers are part of the 70 customers. Wait for my next presentation. I will show you also that we are treating the long tail customers very, very well and are as important as the large customers. Maybe I missed the answer, but could you please elaborate why you have inventory at all, even though you don't produce yourself? Just because inventory is not only finished goods. As I elaborate in my presentation, roughly 20% at the moment is really finished goods. The rest is components which we buy and then are produced with our contract manufacturer or by our contract manufacturer and used in this production. This is inventory of raw material, and part of it as production last three months of the product, you will have work, so-called work in process. This is then also inventory. Secondly, some finished goods inventory exists because, of course, we can gain some economies of scale at our contract manufacturing, ordering not only 10,000 pieces, but maybe 500,000 pieces, which we know we will sell them in the future to certain to the customers or to the market. With that, we have also a certain inventory level. This is also assurance to keep our own lead time lower, or to keep the lead time lower to our customers in this case. Thomas Kaiser asks: Do you see increasing customer interest to be more independent from China suppliers? Of course, that's a very good question, you can be sure, we ask them every customer we visit to find out if this is a short-term reaction or if it's a long-term concern. In what I could judge within those few weeks and probably a double-digit customer meetings, I would say it's in majority a real concern to for various reasons, to become less dependent from Chinese suppliers in one way or the other. With our offering, with our strong focus of our own development in many areas in Europe, we are a very well-selected partner in such topics. Yes, we expect benefits out of this. Thank you. Jonathan Ayrton from Azon Partners. Can you expand on your comment about walking away from suicidal pricing in seller? What does that mean for your seller module business? Can you share growth and margin in this segment? How bad is the Chinese pricing? Let me just add first. Again, as Roland said, we don't provide details of our businesses, and this is also true in this case. The comment about suicidal business, this only means we will not do business which comes at so low margin that we do not expect to bring it on our target levels even over a certain period of time. Those businesses, why should we do this? We are growing very nicely, especially also in Geneva. We are not doing business which do not create value for the company and by shareholder. Good. Thank you. Those were the major questions. A lot of questions were answered during the Q&A. Thank you. Thanks a lot. I think now we have a break. Yeah, very short. Many thanks to the great presentations, especially to those ones that have been held remotely. We have now 15 minutes break until 4:20 PM. We're meeting here again for the second half of the presentations, where you will get some kind of interesting insights to our go-to market and also to one of our distribution partners. See you in 50 minutes. Thank you. Okay, let's restart after the break and maybe just one comment. Thomas is doing better. As it looks right now, it just was a cold and he is on his way home and probably will see a doctor there. But no life-threatening emergency, fortunately. With this, I would hand over to Marcus. Thank you, Stephan. This was the best introduction, I guess, for my part. Yes. Now, we are going to talk about our go-to market strategy. There were a lot of interesting questions in the Q&A, and hopefully I can elaborate a bit more and give you a better understanding as to why we are growing. It has to do also a lot with our go-to market strategy. Because of that market strategy, we have become an undisputed foundation in the value chain of our industry. In a nutshell, this is because how we partner with customers. We wanted to give you already that impression by having customers to talk to you. I'm sharing this session also with our distribution partner, and Hermann Reiter will explain how we work together here to service our customers. Our position builds up from core and cannot easily be attacked. That's easier said than done. I guess everybody can say that. What are we doing here is to focus. We choose the market segments that are, A, high growth segments, where we can gain value out of those market segments. Those market segments have a need for the technology that we have in our portfolio. They are I have shown you earlier these applications, the different use cases, and many of them, you know, we can design in one part, but there are also many where we can design in many of our parts, combination of parts we can bundle. The key differentiation, even though recurring revenues we heard is still relatively slow, the benefit of services is that it makes it really unique. An important element is the focus on the right segments. The second element is to win. What does that mean? Well, it means first winning the heart and the minds of our customers. Why we do this, we do this actually to win market share at the end. Not only market share in the markets we choose to play, but with the selected customers to increase our share of wallet in those customers. Second, we deliver complex technology to our OEM customers that otherwise is very difficult for them to get. The key word here is solution. You heard a lot about the terminology solution, and we have this discussion also quite a bit within our company. What is actually a solution? We see it from a problem statement. We see it from a customer point of view. You know, you can try to sell whatever you want to a customer, but if it doesn't solve a problem, you know, you don't really get the value back, right? The solution from us is actually a deep understanding of the customer problem first to then offer a tailored solution, which can be one product. Can be even better combination of product and can be also the hardware together with services or services only. It really depends on what does the customer want. Focus to win with solutions, and we offer high touch customer experience with service capabilities and competencies that are unique in the industry. I'm writing here leading. What we do is actually having a leading portfolio. We call it best in class in the eye of the customer to achieve this high touch with the customer. I emphasize here again, services, again, even though the recurring service revenue is still small, the service element, the product that we deliver with the hardware has an important element to make the whole offering much better. A GNSS receiver with an AssistNow service allows a very fast time to first fix, for instance. I mentioned before also saving power through an MQTT protocol on cellular because it allows to communicate with a very small payload, right? At the end, the customer data plan that they are buying is cost-effective for them. The whole implementation becomes really a leading differentiator for us. What does that do? It actually allows us because we are in the mind and the hearts of the customers, as I mentioned before, we measure. We have a good sense about our customer satisfaction, and we are very much focused to have a very high customer satisfaction. The question was before, if we lose customers, how long we keep our customers? We keep them very long because they are very satisfied with us. Now we expand our reach and the value chain with services. Key point here is selection. Selecting the right partners also for services. Why is that? I'm showing you in a second here. Before I do, I wanna mention one more point. As we are going into solution selling, and obviously we heard our customers here offer a solution to their customers, we are not competing with our customers. We are enabling our customers with a faster time to market. We make it easy for them, and we have here a leading portfolio. Why is the selection of partners also for services so important? This is the value chain, very simplified picture. We create intellectual property that we are using in integrated circuits. We build the modules that we are selling to the OEM, the end customer, and that end customer can buy the service. We have also in the whole ecosystem, a situation where that particular customer might be a design house who might only buy hardware, will sell the hardware to somebody else, but somebody else is buying the service. To sell the service, we are having now a larger ecosystem that we are working with. This is more effort, yes, but it's a much higher reward because now we are establishing a very strong brand in the whole ecosystem of the market by working with these partners. These partners then sell the service to service providers. Here we are expanding also the ecosystem in the markets that we choose to play. A key element of our success, a key factor for our success is the structure of the sales organization that we have built over the last three years actually. It is a structure to support our customer base, also a very large customer base. We keep saying we have doubled our customer base from 7,000 to 14,000 in three years, and you might think, okay, you know, how can you manage? Yes, we can manage that very well. This is because we have the right structure in place with very, very well thought through concept based on direct sales. Our direct sales organization consists of key account managers that getting in the hearts and minds of our direct customers, so they spend time. Building credibility, intimacy with those customers, making sure those customers are satisfied. We have also salespeople that work in the target segments that we are focusing on, and we have channel partners. We have channel managers that are working very closely with our distribution channels. We have about 70 customers that make 80% of our revenues, and they get highest level of attention. That doesn't mean that other customers do not get any attention. On the contrary, we have to be very selective with the resources that we have, and we have put a lot of resources into making sure the rest of the customer base, the 14,500 customers, are very satisfied with us. How are we doing this? First of all, the selection of the right distribution partners. We have the right tools, forums, portal, documentation, that allows also the customer that cannot be supported directly to get all the answers they need. I will elaborate on that a bit later. We have deep engagement with customers. To our technical and also sales resources and channel partners, which allows us to build a very long-term partnership and closely aligned with our customers' product lifetimes. I mentioned the sales channels. This is a key element of success that we have built the structure here that allows us to manage this large customer base. Actually, I think we are just at the beginning. We have doubled the customers over the last three years, I don't think that we will stop here. We will expand that customer base through three global distribution partners, Digi-Key, one of them. We were able to reach many more customers that we had before. We have about 60 local distributors we are working worldwide with, we have three global distribution partners. We have quite an extensive portfolio of channel partners that put hundreds and hundreds of people on the ground to sell our products, and that makes a huge difference. Last but not least, the high service distribution partners like Digi-Key and Hermann Reiter will explain it later, play a very important part to reach out to the innovators of tomorrow. We take our customers on the hand on a very rewarding journey. That journey typically starts with the awareness. We have PR activities. You might have seen the green board outside about healthcare. We have campaigns that lead customers to our website. If you have been recently to the u-blox website, you will be able to find many more customer success stories, why they c hoose u-blox. You will find a lot of information about applications and what offering we make into those applications. In the next step, we obviously wanna influence the decision-making of our customers, and we do that through webinars, through meetings. Very important here is the support portals that we have that our customers can tap into and get the information they need. Now, a very important aspect of winning the business is the designing phase, and that is at the end where the customer decides for u-blox. Here we have an extensive part, an important part in the sales organization, our technical support. We are really hands-on with those customers. I will show you later also a demonstration tool that allows us to actually win the whole content that we can in that particular application because we make it so easy for customers. Finally, the production ramp up and lifetime management is critical for our customers. They know they can rely on us. We support them in the certification and qualification process, for instance. We support them with logistic programs, EDI, for consignment, for instance. That finally leads really to a very high level of customer satisfaction that we are able to achieve. Those customers give us also input into our roadmaps. They drive our roadmaps so that we are coming out with something really unique. If you followed u-blox over the years, we were always eager to be one of the first introducing something new. We are always a bit ahead of our competition when you are looking at the positioning, high precision, accuracy. We are the leading vendor in this market. That actually allows us to play an important role. You see that later in autonomous driving, for instance. Finally, cross-selling. There is always a leading horse that gets you basically into a socket. If you do everything right with the customer, you can sell a lot with along with this. This is also what our distribution partners have helped us to realize because they are the experts in doing this. Therefore, our distribution partners are important for us actually to sell more. Good questions deserve good answers. Why can we support a customer base of 14,000 customers or even more? I wanna get to easily 30,000 customers, doubling it again, and we will be able to manage this very well. Why? Because we have invested in the right tools. We make it easy for every customer. They all get answers. How? Well, the customer typically is an engineer who has a problem with a particular product. If it's a large customer, small customer, they all come with similar questions, and we make sure that they get the answer to these questions. We have 160,000 page views in average, per month from engineers. We allow them to get to a support community. We have 3,000 new members each month in the support community. There are 1,900 question asked, but also 1,900 answers given. Answers to give them the best solution, recommendations for the problems they face in their design. There are developer forum discussions, direct access to documentation, and that really makes a difference. We have over 4,000 acting contributors over one year in these forums. Now I give you an example of a robotic lawnmower, and cross-selling and making it easy for the customer actually is nicely shown in this example. If you have a robotic lawnmower at home, you know that if you put wires around, you know this is actually quite a hassle. There is a tendency in this market, and robotic lawnmowers is one of our growth markets because they require high precision and accurate signals. This high precision signal can be offered here through our ZF9 module, high precision module, but the high precision is enabled through the positioning service. It's a combination with the service. You get centimeter-level accuracy. This is a trend in the market. You know, you have robot like applications where high precision is really needed. In this particular case, you want to program the robot or you wanna get information of the robot through connecting with Bluetooth and Wi-Fi, right? To kind of program the robot. This is also enabled here through a Bluetooth Wi-Fi chip. You don't find a microcontroller in here because it's also integrated in our Bluetooth Wi-Fi module here. This robotic lawnmower is connected to the cloud, providing sensor information, providing positioning information to the cloud. This is enabled through our communication service. You have precision, you have a location service, you have communication service also enabled here. You see hardware, four different modules that we have in this particular application. You don't see the service working. However, we provide monitoring tools here, and that is shown also in the, in the picture, that makes it easy for the customer to basically really use this implementation. We're providing also the demonstration and the whole design to the customer. It's a super fast time to market with an implementation that is second to none. This is why we are able to compete in applications like this. Now, this is the last slide before I hand over to Hermann Reiter here. This is to elaborate why we work with high service distribution and how high service distribution has been part of our growth story. They service the innovators and makers that are becoming our Shaper customers of the future. Why? Because there is a fast sampling turnaround time with high service distribution. Customers that want to have certain product, they start looking around, and if they can't get it quickly, they go somewhere else, right? Clear, right? However, we have the right partners that allow them to get the products within hours, 24 hours or something like that, right? That they order, they get the part. We are nurturing a lot of the design community out there, startups, the question came before, that we support very easily with this concept. Also, the partners are attaching to a broad innovation customer base. They have deep access into large accounts, important source of feedback, vivid contributors to our forum. A very important part, and this is part of the solution selling, yes, we have a portfolio that we design in into an application, but our partners have also adjacent relevant products that actually make the solution complete. If you can work with a customer and with a partner, giving our customers the complete solution, even with products outside of u-blox, it makes a real difference. Last but not least, they provide strong commercial and also logistical services. Such, we were able to expand our customer base and double it in the last three years. With this, to give you more insight, I'm handing over to Hermann Reiter from Digi-Key. Thank you very much, Markus. Thank you. Thank you very much for having us today on the Capital Market Day and to present our partnership with u-blox. It's been a great time together. We started officially in 2016 and obviously way before we had connections to u-blox and tried to build that relationship. Digi-Key, we are a digital innovator of high service distribution for electronic components and automation products, we service worldwide. Before I go into the details, maybe we can first slide. Okay, sorry. I should do it myself, I guess. Okay. Before I go into details, I wanna explain how distribution started for me like 30 years ago. I was a salesman out there, like a however you wanna call it. My territory was Baden-Württemberg, scratching very-Close to the Lake Constance. My car was always filled with books, driving around the customers and had this one-to-one relationship. Was trying to buy a one-to-one relationship to sell and explain the company I was working there before. These were the good old days I would say, where you were able to meet purchasing managers, application engineers, and they were willing to talk to you. Obviously, what matters today, another example. I think that's an example to give you, how do we live and breathe today? By the way, there is no different internet at home than it is at work. I'm just trying to allude to that example because that's kind of the thrill we see as a digital company being fully digital without any sales force. Who we are. When Digi-Key started first, our owner, Dr. Ronald Stordahl was trying to sell a so-called Digi-Key. He was a ham radio guy, and he thought maybe there's other engineers and partners out there who wants the same high level of services. They want small quantities and better customer service. Nothing has changed. Digi-Key is a services customers regardless of how big or how small are their needs and anywhere in the world. Digi-Key provides everything needed to make innovation easier for our customers. Digi-Key is a privately owned company, and we in the high service distribution industry, as I mentioned, for electronic components and automation products. We born in 1972, and ever since we service our customers, no matter, but only in a digital model. We have no ou tside salespeople. We work purely on our 54 websites out there in our languages we provide to our customers there. We have about. We sell in 180 countries. Last year, we serviced 857,000 customers, and we believe this year we're gonna sell to 900,000 customers. This is not just looking at the web pages. This is selling piece, getting money, and shipping the products. Last but not least, we. This year we're gonna be performing around a $5 billion plus revenue with about 2,300 manufacturers worldwide, one of them being u-blox, our preferred partner of course. Distribution is out there for a long time and redefining high service, I think is a big word. There is a new generation and the e-commerce needs a change and a redefinition of distribution and high service. Why? There is a study out there from AspenCore, the question is to the engineers, what are the modes used to learn about product and technologies? If you can see these rankings here, they represent 2020 and 2018, whereby 2020 is the red and the bottom is 2018. It shows you the change. If you look at the first of the six answers, which were highly rated from the engineers, what they use to learn about new technologies, they're all digital. There's no face-to-face. That all happens in the back scenery, sometimes, maybe 2:00AM. Others like social media and online forums equally perform in the same way. That's why earlier on said there is no different internet at home than it is in, in business. I think that's pretty straightforward. Looking at the life cycle of the overall product, I think the concept of long tail, I think We wanna keep the design engineer. In the front end, you can see the design engineer, the speed to market. In the middle, you see the purchasing professionals, and on the end, you see the maintenance of the engineers. I think Digi-Key tries to play in all that areas. I think we try to provide a service in all the areas to position products like u-blox in the earliest stage possible with the design engineer. When we talk about concept, proto, or series or ramping, we believe that 60% to 70% of the decision is made when the customer goes and buys a product at the website. Hopefully then he'll buy a u-blox product, obviously. We are enabling the world of ideas from concept to end of life. You can also see in the back end of the chart, you see the cost of downtime when you talk about MRO, which is maintenance, repair, operation, or end of life service or long tail. Our business is based on inventory. We support that process as well from supplier and product content to application. We provide them with learning and seminars. We are supporting universities. We are supporting webinars of chats, blogs, whatever is needed to basically reach the customer at any time of the day, 24/7, 365 in all languages around the globe. I think alongside furthermore; to support the customers with so-called EDA tool, these are development tools. In order to talk to them when they then start the design and make sure that we are able to help them when they build their prototypes and their PCBs. The idea is to have all the data on the fingertip at 2:00 AM in the morning, without talking to anybody. As I mentioned, we do not have a sales force in the field. We're purely digital operator of our websites. Talking about distribution, maybe giving you a little bit of a sense how we see distribution overall or how distribution plays. Distribution must balance their financial ROI, the working capital investment and the service levels and support customer needs. I think that's something you know best, particularly at the financial side. Such a stock availability, based on our partnership with u-blox, that's an important piece to our overall system. I show you the ecosystem of distribution today. There is two areas. One is the volume distribution and one is the breadth of customers and the smaller range. Obviously the ecosystem today, there is a typical customer distribution from left to right. You have a big customer on the left side and the smaller customers on the right side. There are obviously companies who do service these bigger customers themselves in a direct sales channel. You have volume distribution who basically goes directly on for these big customers, and you have specialists obviously in that area. Then you have the online channel who goes from, who sells to everybody. For us it's not important what the customer does. For us it's more important to assure that the customer has a good user experience and the customer is able to buy the product whenever he wants in a seamless way. We support the long tail of the customer overall. Then there is other players coming to play like marketplaces. Digi-Key plays in both areas to support adjacent markets alongside our products what we have in the electronic and automation products. There's more to it because there are more machine-to-machine connectivity needed via APIs, EDI, or other mechanisms. There are software partners needed these days to basically talk to the ERP systems of the OEM customers. How do we talk to them? We need these partners to basically support the overall ramp up and the communication phases. We believe there must be also a strong balance of our price availability and the user experience. This leads obviously to the decision making on the end. This is for our customers and for our partners on both sides, suppliers and customers as they select the product. Here I try to illustrate the prototype to production journey from left to right and what a typical customers go through over time. He reads an article, watches a webinar, looking for parts, solution collaboration, request for quote, completes an order, sets up EDI, and that's the journey of a, of a typical customer. That is by the way, happening 24/7, 365 in addition in all regions in the worldwide time zones obviously. There is a study, from Roland Berger about the competencies of digital distribution. I think that's goes without saying that the important piece here is the content, never out of stock, things like sell across the channels, omni-channel availability, and making sure that you have the right, customer relationship. Last but not least, the data is a key to these customers. You need to have the data, but you also need to know what you do with the data on the end of the day to support the journey of the customer. Our model is data-driven to make sure that we offer the right compelling products to the customers. Markus alluded earlier on, it's a system selling cross-selling to make sure what do they need when they build their products, what do they need when they build their mowers and so on. How does the future looks like overall? We believe there is. We did some innovations overall for Digi-Key where we excited to share that we have built a massive warehouse out in Thief River Falls, where the company is founded, which is in the north of Minnesota, just south of the Canadian border. We built a 2.2 million sq ft warehouse, 240,000 sq m warehouse to have inventory. This is second to none best-in-class automation, where we have a pr oduct to picker system we built with an Austrian company by the way. Trying to be a step ahead of our journey to assure that we have many more suppliers coming to us and bringing and supporting the volume which u-blox gonna bring along over the course of the next decade. Very interesting for us. And as I said, for us inventory is key and it's the bread and butter for our business. The capacity will help us to drive to the next level and hopefully to help us to be sustainable moving forward. A little look ahead in where this market is headed. It's not only the component but the overall solution, as we heard earlier on. There is the data plans. There is a huge activity from our side in the automation and control market. We strongly believe the component market and the automation and control market and the IT market will move together since they all wanna go to the cloud. I think that's all their aim on the end. We believe there is a strong market where we can expand to, and we wanna support the full bill of material. We are not passive. We don't wanna define who is the next, you know, mower or the next no-fence cow. That's not our business. We just wanna make sure everybody gets treated the same, great user experience. They buy the u-blox products plus maybe a couple of bit more in the back. Over that, we're trying to be available for a one-stop shop. I think that's our... [crosstalk] The engineer wants a one-stop shop with a trusted experience. One-stop shop, I think that's a key driver for us because in Digi-Key, inventory drives sales not sales drives inventory. That's a very different model to obviously to the investor community, is probably why we are still privately owned, I guess. Thank you for overall. Yeah, we'll collaborate and partner for mutual success together with u-blox, and I think we will buy future together. As I mentioned, we are now a $5.2 billion company this year. We grew 80% over two years. We're gonna be hopefully reaching next year 1 million customer which we will sell to. I think, yeah. What else can we do together? We were always thrilled to be together with u-blox. They are definitely our partner of choice. Yeah, thank you, Stephan. That was a very nice closing. Thank you, everybody. Thanks for mentioning that you are privately owned, so no distraction from this capital market day. Thank you. I know we are a bit out of time. We try to manage without any huge delays, so we compress a bit. Markus and I step in for Andreas Thiel now, who was supposed to explain to you a bit how we develop and what comes out of it. Let's start a bit with the how. In general, you can see this going on a bit as a surprise because you're here with a high-tech company, so you expect very rapid cycles. Our product life cycle is rather 15 years than what you might expect in months or something like this. The reason for this is due to the complexity of technology, it takes roughly one to two years to come up with really new concepts, then up to three years to develop new products, and then the products are in the field for around nine years. This makes up a rather long product life cycle. We do this with roughly 850 engineers globally in 18 development centers, and we spend roughly CHF 100 million. The obvious question is, why do you have so many development sites for those engineers? The answer is twofold. First of all, we mentioned we acquired quite some companies, and with the companies we acquired them because of their knowledge, and it's in the people, and you do not transfer knowle dge easily. The second thing is we can hear its talents are very tight. For this, we see it as a big advantage that we learned how to operate in such a decentral organization, and it works very well. I'm very impressed by this. I see it as a clear advantage. We can hire talents where the talents are. They don't need to necessarily move to Tailville in any case. If you sum this up, what we invested in R&D, it's quite a lot. The number what we invested in R&D over the last years or last decade and a bit more is roughly CHF 1 billion. The reason why we do this continuously is obviously we want to be on the market first with leading products. Yes, I know CHF 100 million above is quite a lot of money every year. We also said a 20% R&D spending. This is where we think we are. But of course, we work very hard to bring this down, work with distribution partners, to get more business for the same products, and in this sense, improve also our ratios and especially in terms of R&D. You see in the last years, we made quite good progress on this topic. With this, I would like to give you another view how we spend R&D. There are three horizons where we could look at a little bit in a different way. One horizon is maintaining products which we sell currently. You might ask, why do you spend R&D on products which are already developed? Two main reasons. First of all, we work on cost downs continuously, this is possible very well. For example, reducing testing times of those products, this saves money. The other thing is, Markus mentioned this several times, we exchange chips which are not available with other ones and provide the same module with the same functionality for our customer. That's a very big value. The 2nd big one, it's the black part of the circle of the left-hand side, is really new product development. This is what you expect, where we should spend the money. Maybe also interesting on the right-hand side, maturity goes into platforms. Those are the big topics which are used over many applications. Then of course, software, to make those systems work and also adapt it to certain customer needs. With this, I would hand over to Markus on the second part of the R&D. Thanks, Stephan. You have seen this slide before. I had it in my first part, but now it's equipment parts with products. This shows the u-blox solution here, where we deliver a chip to cloud implementation. On the positioning side, precise and accurate, the M10, I mentioned it before, we had a record ramp this year because customers needed parts. They are on the market. We have a very solid and robust implementation of SARA-R5, our own cellular module, Cat M1. As mentioned before, we have been always trying to be the first in the market. Yes, we don't have a huge market share for cellular over all markets or all products, but we have a significant market share with Cat M1 because we have been the first one. We are able to really differentiate in this R5, which is on the very right side. We make it simple and efficient with security as a service because the R5 cellular modem has security built in. Last but not least, it's effortless computing at the edge with the u-connectXpress. We have a full end-to-end implementation here that actually makes it easy for the customer to use high precision connectivity, high precision connectivity implementation, which is also secure. An important area of growth is the assisted and autonomous driving. This is an ideal place for us because there's a lot of innovation happening. We are in every second, we are out of two vehicles, has u-blox GNSS solution already today. Customers know us. We know customers very well. Also, we have the positioning IP developed in-house. Therefore, it's not a surprise that our solutions are already in the market with major tier ones for first ADAS level three vehicles. Now a complete portfolio of chipsets and modules that are spanning from standard precision to high precision and now integrity also together with a correction and assistance service. This is a unique offering and there are not many. Actually, there's no one else who can offer this today in such a form. It's high quality, reliable. We are following automotive ISO qualification with a structured product life cycle. High accurate, secure and trustable. A really true differentiated offering in autonomous driving. You heard Thingstream before, this is a platform. Thingstream has been a company we acquired. We acquired them because they have developed a service delivery platform. A platform that allows us to delivering today all the services that we offer to the customer. It's a one-stop-shop solution. Again, making it easy for customer to adapt to our offering. It's offering the IoT communication, security, location service, all through one delivery platform. Can connect everything, easily connect, manage IoT devices, including the online services. At the same time, we offer a flexible plan, flexible data plan. Simple pay-as-you-go pricing tailored to suit the customer needs. With a data flow manager making the programming interface very easy, simple enterprise integration, and enterprise-grade auto-scaling technology proven to support billions of messages. A really true differentiated service delivery platform. There was the question of recurring revenue, and this is an exciting chart that I show. Even though on a very small scale, we have seen actually this revenue growing over the last two years. Why is it building up? It's building up because it's recurring revenue, but it's also cumulative over lifetime. While on the gray part you have the hardware revenue, you know, once the service is enabled, right? It adds on and on, and that's actually cumulative on the underlying hardware. We offer here the communication-as-a-service, location-as-a-service, and security as a service. Recurring project revenue can achieve obviously a very high part, can maybe subsidize hardware, but we are not yet there. It's not to the level. We have customers who choose us also because of the service products and are eager also to buy the hardware along. With this, I'm handing back over to Stephan. Thanks a lot, Markus. I would like to share some insights about long-term trends in our strong market momentum for the key markets we are in. In industrial, we know that the market is extremely fragmented. Nevertheless, there are a few overarching themes, and I would like to highlight those. One of them is our customers sell products, but increasingly they also sell services to their products. Quite often over the year, they offer updates, so the product gets better over time. With our Thingstream platform, which was just mentioned before, we support this with communication as a service, positioning as a service, and security as a service. We benefit from this trend and of our customers to add services to their portfolio. Second, remote monitoring and increasingly also autonomous operations or at least remote operations become more widespread, both in classical industrial applications but also in healthcare applications. This becomes affordable, it becomes reliable, it is safe. With our positioning solutions, our safe positioning solutions, with our connectivity, we also contribute to this and therefore will also benefit from this. Third, I mentioned now several times already, connectivity. It's an even more overarching trend, and the addition I need to make is a scalable connectivity. Meaning you need at certain points low power devices, connectivity devices. In the next moment, you need a bit more data bandwidth. Scalable connectivity is also a key trend we participate with our connectivity solutions, short range, cellular, and our services. Now talking about this, it also answers one of the questions, how do we develop products for a fragmented market? We look for those themes which are common, and then optimize our platform development in this area, so more than one application can benefit from this. Now talking about connectivity, obviously, there's the question of 5G. 5G and more advanced Wi-Fi standards as six and seven see very good adoption, especially in high data rate applications. For Internet of Things applications, the data rates are lower, and the power requirements are more stringent. With the current low power wide area networks solution which are there, it's currently a better fit. 5G adaptation in industrial IoT applications will come a bit later than in the cellular phones on the high data rate applications. Nevertheless, u-blox benefits from the introduction of 5G because our highly accurate timing chips, which are market leading and appreciated highly by the network vendors, are used in the base stations as a timing reference, therefore, already right now in this area, in the network infrastructure, we take part of the 5G introduction and we benefit from it. We talked now a lot about smaller customers in the startups, and I would like to add another example of a startup, a small German company called Thingfox. We do this because it uses all the competence what we have in their idea. What they do is they provide tracking devices which are robust and come in an attractive package. They use our connectivity solution, so our cellular connectivity solution. They use our Bluetooth to update them over the equipment, and they use our GNSS modules. On top of this, they use our services, and this made it easy and doable for Thingfox to develop a product which on the one hand they can rely on that it works, so it takes out development risk. On the other hand, especially talking about communication services, they can rely on u-blox to make sure that this service is available for a long time. Therefore it's no wonder that especially in positioning, we see a huge growth in volumes in the industrial space. 40% is predicted as a volume growth until 2026, which is an incredible number in one of the core markets of u-blox. Turning to automotive. The car of the future will be self-driving and electric. It will also be software-defined, and it will be upgradable over the year. Also, passengers will connect to the car and personalize it to their experience. With our highly reliable positioning and connectivity solutions, we clearly benefit from this trend in automotive. Talking about autonomous driving, it gets interesting once you can take off your hands from the steering wheel, meaning at least for a short time. This is autonomous driving level two plus and above. As you can see from the charts, there's a huge growth coming within this decade in exactly this area. In autonomous driving, you need to know where you are in absolute terms. GNSS is a very safe and reliable solution to determine the absolute position of a car within centimeter accuracy. u-blox is in this area since 25 years. We are a trusted partner of automotive tier ones and OEMs. We have a very well set up and already first customer successes to support autonomous driving. We drive this one step further. We just announced a partnership with GMV. GMV is a Spanish company, a Spanish system and software company, which has a lot of experience in safe positioning solutions. We jointly target to reduce our customers' development effort and risk by a joint solution for their automotive safe positioning. We talked about partners before. We talked about distribution partner. There's another aspect of this. Serving so many customers, it's helpful to work with partners, which complement you. Here's one example where Nvidia integrated one of our positioning modules in their autonomous vehicle development platform. This helps our customers to evaluate quicker if this is a good technical solutions for their purpose. It reduces their development time. For us, the benefit is we get a very good access to an even broader customer base. Now, Marcus already mentioned we are on the street in many cars, and I just want to underline this once more. Our solutions, especially also in automotive, are on the street. We are an appreciated partner of traditional auto players, but also newcomers and startups in this area. Here's one example of Li Auto, which integrates one of our modules for their ADAS solution. Summing this up, we have some very exciting trends in our market space, and with our competence, with our technological strength, with our culture for innovation, and with our reliability, we will benefit from those in future. Now this goes hand in hand with another topic. The way what we do in our business and how we do our business must sustainable. Must be sustainable. I want to give you an idea, a short idea how we approach this. Basically, it falls in two categories. With Internet of Things as a very important application, our products help to improve the sustainability. And there are many applications, like healthcare or fleet management, which can show this. On the other hand, also, the way we do business must be sustainable, and we are absolutely convinced of this, and therefore, we also signed the respective United Nations agreement. To make it manageable for us, we have five activities within our customers. We focus on business ethics, employees, environmental responsibility, supply chain responsibility, as main themes. What I would like to highlight are just a few examples. Of course, there are many, many more what we do, so that you get an idea that we take this serious. If you look on our components, the components which we develop are considered by our customers as very reliable, and they do not plan very quick exchanges. This is an advantage. There's even one more aspect. By our focus on upgradeability over the air with services, we prolong the useful lifetime of those products. Of course, even during development, we already consider how the products are going to be produced and will be used. To give you an example, a fleet management which always needs positioning. The chip for positioning, production of a chip for positioning, takes 50 grams. You can save 50 tons. Of course, there's more needed to do this. This is absolutely clear to me. This gives you the perspective about the lever you have with semiconductor products and our modules in the market. Then there's another one which is very important for us as a company. Yeah. We do not say this because it's currently a bit the trend of the time due to this dramatic war in Ukraine. Already in 2002, u-blox had a very clear policy that our products should not be in any weapons, and we do a lot to prevent this. Of course, we reinforce this now through the due to the recent events, but it's in the DNA of the company. We do not want that our products are used in weapon, and we do a lot to prevent this. With this, I would hand over to Roland to take over, in this case, Thomas' part about our guidance. Thank you, Stephan. A few words about full year 2022 guidance and our long-term ambitions, I mentioned it already in the first part. We stick to our guidance we gave in August, on 19 August 2022. The plan is to have revenue growth between 46% and 54%, with an EBITDA margin between 22% and 25%, and an EBIT margin between 16% and 19%. This how we can stick to that, of course, because the content extension in the automotive, there is more and more content going into the automotives. We have an expansion on the industrial IoT product, also has the ramp up with new products, looks very good. With that, we can make this prediction and state the prediction we made already in August. This is also supported that supply constraints for electronics components are gradually to ease. This said, it's not only said, it's not finished. The component supply still remains constrained for certain components because the fabs are still overloaded for critical components. For example, our chips are mixed signals, so analog have an analog and a digital part, which is combined, and such chips are manufactured with trailing edge technologies. That means above 26, 28 nanometers. We as u-blox use only one chips floor, chip platform, which uses 28 nanometers. With that said, this technology is still short, so the fabs are full. The supply is not as much as the demand is in the market also for the long-term future. What are our key strategic initiatives? The strategy we have defined is on track. We are on one hand broadening our sales channel, tapping more market potential, increase our share of wallet. Another initiative is expanding our product offer, so with new products, more solution granularity. Enhance our focus on more promising applications and becoming in these markets also the market leader. Another initiative is all with autonomous driving, the safe positioning engine, correction data are the buzzwords here in this strategic initiative. On the longer term, continued revenue expansion is on site. What you see here, our, starting from the full year 2020, we have 24% growth to 2021. Now, the growth of 46% to 54%. This growth will continue also in the next years as we have a continued expansion of the digitization in the core, as we have low power solutions allow us to expand into wearables. We have an ongoing trend for smart industrial devices and also our solution capabilities, which Markus explained before, will give us an option to grow. The key investments for the future to become market leader in the industrial IoT with the strong revenue growth, our financial model is proven with a long-term resilient model, high innovation. We are fabless, with that, we are independent from high investments into production itself. u-blox has had and will have also in the future, a reliable dividend policy, with a robust free cash flow also for the future. With that said, what are our ambitions? Not our guidance, it's our ambitions is to keep the gross margin levels at around 50%. This is doable through product mix and price increases we have seen in the past and we will also see in the future. Our OpEx R&D, keep them as an agile organization, below 20% and on sales and marketing, below 9%. With that, we are through all presentations and I open the forum again for some other questions to the second part. Now the contrast should be better, right? Any questions? Yes. Thank you, v ery much. Two questions. I think recently Infineon shared a view on the market outlook for next year for their connected secure system segment and the industrial IoT end market to be rather challenging next year, given the macro environment. Is it something that is, like, well, that can be shared with you as well? Or is it a view that you can share as well for your industrial IoT end market? The problem with industrial IoT is it's hundreds of different applications. I do not want to comment on Infineon's statement, even if I worked there for a long, long time. The situation for us is might be different because of course we are in the same macroeconomics, but you saw with the positioning, that's a mega trend, there are more applications upcoming. You see those start-ups, what we presented today. They all start very small, the numbers all of a sudden can go up very, very increasingly. We have the two effects in classical applications in which we have now, so industrial automation, healthcare. The share of content is growing. On top we have newer applications in addition. Those three start-ups we mentioned today are good examples for this. Looking at our books, I cannot give you an outlook to our revenue, but the market dynamics over a larger timeframe might be different due to the fact that we look on slightly different segments than other companies. Okay. In the last slide, your ambitions, the numbers that you presented, does it mean or implied mean that you have an ambition to have an EBIT margin of around 16% to 17%? You can do now a calculation. Gross margin 50%, minus 20% R&D, minus 9%, the sales and marketing is 29%, so we are at 21%. You have to add something for G&A. Assuming G&A is somewhere between 4%, 3% and 6%, then you end up with the EBIT margin. That's then the calculation, yes. This is just number crunching. Okay. it doesn't help to have an EBIT... [crosstalk] My job. T arget because we, that's why the ambition is set on R&D and on sales and marketing and not the other side, because especially the G&A part is influenced by many things which you have no influence or too. Therefore, it's better to have these three targets than only one EBIT target. Okay. Thank you very much. Sorry, maybe, just again on your guidance for the second half, indicating quite a sequential decline in the fourth quarter compared to the third quarter. I mean, we don't have any historical information regarding the quarterly trends, but is there a certain seasonality? So is it normal that third quarter is weaker than third quarter? I'm not sure whether you know the numbers or can comment on it. I mean, you have very high level of industrial and automotive sales, but you're still seeing this decline. Is this the push-outs and cancellations that you were also mentioning? Uh. Is this more in consumer and some parts of the industrial areas? First of all, no, it's not the seasonality. We have not a seasonal way of what quarter to quarter. It's just by occasion, next year, or this fourth quarter is by days, working days, less working days than the third one. This third quarter was very good. This leads to the fact that then all, let's say, negative, so to say, comes into the fourth quarter. It's not seasonal that you could say, "Okay, every fourth quarter is now below the third one." That's not the case. At least not in the past. The push-outs and cancellations are not that significant, right? No. No, it's not push-outs or cancellations now in the fourth quarter. For sure, there might be some cancellations there which could have happened in the third one, but now happens in the fourth. Have nothing to do with that. Much again. just asking. I've been following u-blox for many years already. I cannot recall that before the last two years you've used the order book a s a criteria to tell the investor community that your business is doing very well. Maybe you can just give us an explanation on how should we really look at your order book. I mean, I would understand that now you have long lead times, but I would understand usually this is rather short in a, in a perfect environment. What should we read from an order book that is eight times higher than pre-COVID? You know, what does it really mean for us? I don't fully understand it, because in the past, has never been a number that we paid attention to. Maybe shall I? Or will you... [crosstalk] Yeah, I can comment on that. Well, there hasn't been a situation like the last two years, right, in the past. I think we are looking here at a very special situation. Now it's always good to have a good order book if customers or a high order book if customers actually want the parts. We are very confident about that order book. Customers want the parts. We are seeing that we are getting more supply, that lead times are going down so that we can actually fulfill a big part of that order book. What we don't deliver this year, we will deliver next year. Also, we have been able to find agreement with customers who are still very concerned about the long-term supply, right? Like non-cancelable orders, in return for agreements of supply, right? That allows us also to give stability, right? I think the message we wanna give is we have a stable order book here that, you know, gives us some, yeah, positive indication. Maybe just a second question. Just one word to that as well. I think the second message behind this order book is also that now with going up lead times, not only on our supplier side, but also on our side, we have still customers who have now ordering earlier. This gives us more visibility also into the future to tell, "Okay, we are we know not six weeks ahead what really happens. We might know it three months ahead or even six months ahead. You want to say the other way. What you want to say, some of our customers learned their lesson. In the end, I mean, we cannot generalize this, but for sure, there are strategic thinking customers out there who say, "We build very big and expensive machines. and it cannot be that we cannot build the machines because there's a comparable cheap part missing." I don't want to generalize, but for sure, there are such effects in the order books, which should remain even if situation on supply side eases. Very much. Maybe just one, last one from my side. Is there any kind of a cluster risk in your revenues? Because, you know, we used to see, for example, the shared bicycle topic in China when the business suddenly, you know, break away and you saw that on the revenues. Is there anything in your business that you would say could be, as an overarching theme, could be at risk if anything changes? You know, the example is really shared bicycles. Maybe there's something similar that you could say, "Okay, this breaks away, 10% of our revenues is gone," for example. I would not see anything which is such a huge cluster risk. Of course, you can always draw scenarios where all your businesses is gone. If you look on what Markus presented, the number of customers, 14,500 customers, there is no big cluster risk visible. 70 customers for 80% of the revenue. Usually, distributions are very different there. I would rather say from this perspective, it should be rather resilient. Of course, there are other effects which we watch carefully and especially on the supply chain side to make sure we remain as resilient as we used to be in the last years. From the business, I don't see a huge single cluster risk. I maybe have another question. This would be about your connectivity and data safety business. What I really cannot understand what differentiates you in this, in this part of your business, and maybe you can explain it with how you made it into the base station for charging, because it does not seem an obvious business for you to be in. How could you win the business, and what brought you into charging stations? In these, charging stations, I mentioned Wi-Fi, and I also mentioned cellular. Also with, the different cellular frequencies, you need to make sure that the Wi-Fi, Bluetooth is actually working together with cellular in such an implementation. There are certain requirements that, requires us to adjust the product to make it work in a charging station. It is again, as I mentioned, the understanding really of how such an implementation works to actually have adjustment in the product and making it work for the end customer. They can come to us, they can buy the cellular, they can buy the Wi-Fi, and they can make sure that both working in the same station, you know, works. It's the same also now adding the service capability on top. I showed you the lawnmower application. It also has a Wi-Fi. It has a cellular implementation. What I haven't shown you is also that we built the glue, which is what we call the u-blox drivers, to make it really easy for the customers to actually adopt here to our part. It is an adjustment of the roadmap towards that particular application and make it easy for the customers to work to work with us. Does that answer the question? Yes. Serge Rotzer. I only have a few questions to understand whether I understood it, basically. You mentioned record high backlog. The current backlog today is higher than in August. We've increased the guidance because you got fab capacity. This is correct? Even you have been working down your old backlog when you increased the guidance August. Today it's higher. It's a record high backlog. It's a record high backlog. The question is with what you compare? Yeah, that's it... [crosstalk] The record high... [crosstalk] Basically, as you can always see, simpler and easier way in. Yes. I don't really know an easy way to say. If you look in the backlog, we went into 2020, 2021, 2022 and now 2023. It's a record backlog going into next year... [crosstalk] You compare this with November 2021? I don't know what relate to what I'm saying... [crosstalk] I don't know. I'm asking... [crosstalk] I'm saying it's a record backlog going into next year... [crosstalk] It's probably lower than you had in summer this year. I don't remember the number that we had in summer compared to now. Okay... [crosstalk] In summer, we had A record backlog. Yeah. Already, already beginning of the year, we had a record backlog. I mean, you can compare it to a certain reference, right? I can tell you that when we went in 2022, right, the order book we had there was smaller than the order book now going into 2023. For instance, I can compare and I can say it's high. It's a record in a way. We never had that before. You got capacity in summer. This is why you have increased the guidance, and then you were able to work down or off the backlog, you know. We decreased the guidance for 2022. We do not increase the guidance for 2023. We have not made that. We increased the guidance for 2022 because we see that we are making more revenue in 2022 than expect before. Part of it, of this revenue is coming from backlog in January, right. Part of it is coming maybe new into backlog already in June. Maybe also part of it might come into backlog in July or August and, but is faster delivered for whatever reason. Maybe it's a very good business, we get all the components and so on. The guidance updates are not directly linked to the backlog. The backlog just tells you, okay, there is business out in the future, and this is our orders we have now in our hands and we know to deliver at certain point in time... [crosstalk] Yeah, this is kind of my question... [crosstalk] What the guidance does is the guidance says we have orders in our hand which we are also able to deliver. Delivery does not only depends on the order, it depends also on the supply situation that we really get it. If a wafer fab, for example, tells us, "Hey, you've got another 100 wafers." Okay, I'm able to deliver order. The backlog does not change, but the guidance might change because I was in an assumption that I don't get this and therefore they'll make this order now. The guidance change is not directly linked to the order backlog. Yeah, over time, when you get capacity, you work down... [crosstalk] Yeah. The backlog, you know. Sequentially, this is what I assume the backlog is... [crosstalk] Yeah. Than in... [crosstalk] That's right. It is. Okay. At the end of the day, you mentioned by yourself, fab capacity is still a constraint. Basically, you don't get more capacity today. Even if the backlog would be really record, then you could not. Sorry, I don't want to over. Then you can't, you could not grow more than this is the capacity you get. This would be the run rate, what we have seen now over the last two quarters or so. Let's say the third quarter is a good run rate proxy because you got the capacity, the most capacity of the year. I like your questions. You try to get a guidance. No, no. I understand that you're used to give charts. No, no. I understand. I think you cannot Tell what is a good proxy. I think what you just summarized yourself, that, if you look on 2023, we have what Markus Schaefer also mentioned, a record backlog for the next year at this point in time. We don't know on the top of my head, at least I don't know on the top of my head, how the backlog for 2023 was in August. I just don't know... [crosstalk] Let me ask you one thing. Did you got more capacity today from your manufacturer, chip manufacturer or not? Do you see more capacity you receive going into next year? The indication positive, yes. We assume that we get more capacity. Will it be that it's completely... [crosstalk] Completely unconstrained? No. Yeah, yeah. We get more. Yeah. Okay. Stop you now. Thank you so much. Yeah. There's another question. Maybe just on the automotive design wins. You showed that you were part of the reference design of Nvidia. It also translated in a design win at this the DRIVE Orin. Could you remind us what's your dollar content for with a chip, a high precision chip in such a car? Maybe also how whether there it's the same tier one. I think XPeng also got the design win. Is it the tier one or is it the car OEM or has one tier one chosen you that you end up in all of those Nvidia based platforms? First of all, I must avoid a misunderstanding. I did not say the Nvidia platform went into. No, I checked it. Whether it uses the Nvidia platform. It's the DRIVE Orin that's used in this L nine that you showed with your chip, I think. This still might be the case, but I was talking about a specific Nvidia development platform. I do not know if exactly this one was used. Okay. Yeah. This I just cannot say. The concept is still very valid, and it would be nice if it would be exactly like this. The second thing we need to say is, in this area, car makers take much more responsibility than in the past. They take really on critical systems, and autonomous driving is clearly a critical systems for them. They decide over the value chain, or at least they heavily influence over the value chain. If you look on our products in this area, positioning. For autonomous driving, positioning is absolutely a core topic. Very high safety regulations. We are doing here a lot. We have a track record even in the safety applications. Therefore, car makers directly influence. Sometimes they take a direct decision, sometimes not, but sometimes they leave it to the tier one. In the example what you mentioned, XPeng, I cannot exactly say, tell no you what part of the decision was taken by the tier one and which by the OEMs. In general, this is correct. On the dollar content, I think we rather would take this question with us and think a bit, how what is the best way to communicate so-such topics. I understand your question, but I think we cannot answer right now. Questions from Renault. We have still a couple of questions from the chat. Harry Blakelock from UBS is asking, "Can you give any color around pricing in 2022, and what trends you see around that going into 2023? Well, I think we cannot comment in public about our pricing policies. Also Harry Blakelock. Apologies if I missed, but please could you provide a bit more color around the supply resilience on your part and what exactly it was that enabled you to take share while competitors weren't able to deliver products? I think you cannot. Indeed, right? If you cannot deliver, right, customers are desperate to look for alternatives, right? In our case, we have a certain market share. Customers came to us and said, "Can you offer something else?" We were able basically to secure our business in that case. Now, there were other cases where we were able actually to deliver an alternative by pro duct development. We spend a lot of money on developing new variants in on the GNSS side for instance. Also, we have competitors that have cloned us in the past and couldn't deliver, so the footprint was the same, so customers came back. You know, we won the design, for instance, right? 'Cause our competitors couldn't deliver. On the GNSS side, you know, we have really a very fast footprint, and the modules that we are offering have almost a standard achieved in the market where others have just adhered to our footprint. That allowed us basically to gain in that particular case also again, more share. Also from UBS, François-Xavier Bouvignies. R&D OpEx has been stable in the last few years. How should we think about it going forward in the light of inflation? On the long run, R&D OpEx, we try to keep the level, but on the long run, we should expect that a very slight increase on R&D OpEx is occurring due to more complex future products will also create more effort. We try to keep our level and our we have at the moment. If we say we are on R&D OpEx an ambition to be below 20%, this is the level we are today already. That means with increasing revenues also number-wise increasing R&D OpEx. Stéphane Frouin from Groupama Asset Management. As a follow-up of the question regarding connectivity and data security business, and the example of the charging station, is it fair to say that in this area, your technology is less differentiated than in positioning GNSS? How shall we best answer this? Obviously, we are talking about communication standards, yeah. One must fulfill a standard. That's the whole idea of a standard. When it comes to products, then customers quite often have specific requirements. In GNSS, for example, super accurate positioning and low power consumption. This is how we started the company, and there we have a lot of IP, and we are very differentiated here. In standard connectivity, applications, this potential is a bit lower, but nevertheless, it's there because, as Markus mentioned before, sometimes, you need a specific combination as products in a module. Sometimes you need, the customer appreciates if there is a service already, combined with it. Sometimes the customer needs the option to upgrade positioning accuracy later in the field when their customers buy this. As nobody can offer such a complete solution as u-blox can also in those area, I would say we are still differentiated in this area. And we see this by many customer examples which where the customers appreciate exactly this. David Sachs from Hauck & Aufhäuser. Question to Stephan. What aspects of u-blox's business most attracted you to joinin g the company? That's a nice question. where... What attracted me? u-blox has an incredible strong technical base, and I'm an engineer myself. I come from a very technological-driven company, and this was a very good aspect that the company is so technologically strong. In my opinion, second point, addressing the right mega trends in the market. That's a great combination. I would say what really made the last piece of the decision are the people. I mean, it was a great pleasure already during the interviews to talk to the people. After a few weeks, I only can confirm this. This is a company culture where innovation will prosper. If innovation prospers, our joint business should prosper. Thank you. Jeffrey Meyers. Do you feel your use of multiple fabs helped you again share where competitors could not supply? This was one effect, but the major effect was, as Markus mentioned, we were flexible on the module level and agile when customer needed a new solution. It was one effect but not the main effect. Thank you. Those are the major questions. The rest has been answered during the day. Yes. Before, before we close, Sven, I mean, it's, it's really a pity that Thomas could not give this presentation. He spent so much effort to prepare it, because basically this was, I would say his story. And I would, yeah, Andre is coming and wants to say something, but before he does, I would like to underline that I highly appreciate the enthusiasm how Thomas prepared this Capital Market Day and phased me in as incoming CEO. Thanks to the colleagues who saved me today because I could not cover every part of the presentation. That brings me as the chairman to the end of this presentation here, and how proud obviously can you be as a chairman of a company to see when the CEO drops out and the crew takes over. That in an environment where we have a succession planning, where we have the new guys coming in. For a moment when we accompanied Thomas home, Thoris and I suspected him to have orchestrated that on purpose, which obviously was not the case, but it was very well done. You see how we do successions at u-blox. As with 40 years plus experience in high-tech industries, I know that as a high-tech industry, you have to be very agile in development, in bringing new products, but you have to be very stable and slow and with some inertia when you give authorities and competencies to the management. That is what we try to demonstrate here. Thank you very much for coming. Sven closing. This is now really the end. I would like to thank all of our great presenters, so Stephan, Roland and Markus, as well as Thomas, now in absence. Special thanks to Hermann Reiter. Really great that you've shown us how high, high touch distribution is working. We would like to invite you to stay with us for another 20 minutes, half an hour. There will be an apéro directly out here. With this, I saw already some of you moaning. Have a nice day. Thanks for joining. Thanks for all of your participation and see you next time. Thank you.