ACCTON — Call Transcript 2022

Nov 17, 2022

智邦科技 2022 法人說明會 ACCTON 2022 INVESTOR CONFERENCE

2022/11/18

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AGENDA

1 Financial Review 2 Corporate Highlights FANNY CHEN, CFO EDGAR MASRI, CEO

3 Solutions & New Trends 4 Q&A MICHAEL LEE, Sr. VP of RD EDWARD LIN, Spokesperson

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PRESENTERS

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Edgar Masri Michael Lee Fanny ChenEdgar CEO Sr. VP of RD CFO

Edward Lin Spokesman

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SAFE HARBOR STATEMENTS

◼The information contained in this confidential document (“Presentation”) has been prepared by Accton Technology Corporation (“ACCTON”) and may not be disclosed without the prior permission of ACCTON. This Presentation on ACCTON's strategy and possible future developments, products and or solutions are all subject to change and may be changed by ACCTON at any time without notice. The information is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. ACCTON assumes no responsibility for errors or omissions, except if such damages were caused by ACCTON intentionally or grossly negligent.

◼This Presentation should not be considered as the giving of investment advice by Accton or any of its shareholders, directors, officers, agents, employees or advisers. This Presentation includes certain statements that may be deemed “forward-looking statements”. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Prospective Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in forward-looking statements.

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01

FINANCIAL REVIEW

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CONSOLIDATED COMPREHENSIVE INCOME (IFRS)

in millions of New Taiwan Dollars

		2022 Q3	2022 Q2	QoQ	2022 Q1-Q3	2021 Q1-Q3	YoY
	Operating Revenue	20,581	18,696	10%	55,007	42,455	30%
	Gross Margin	22.0%	21.8%	1%	21.1%	18.5%	14%
	Operating Expenses	1,912	1,627	18%	5,010	4,168	20%
	Operating Margin	12.7%	13.1%	-3%	12.0%	8.6%	40%
	Non-Operating Income & Expenses	652	185	252%	918	223	312%
	Net Income	2,461	2,073	19%	5,821	3,178	83%
	Net Income Margin	12.0%	11.1%	8%	10.6%	7.5%	41%
	EPS (NTD)	4.41	3.72	19%	10.44	5.70	83%

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CONSOLIDATED BALANCE SHEET (IFRS)

in millions of New Taiwan Dollars

Debt Ratio(%) 57% 59% 57% Current Ratio (%) 200% 169% 179% Inventory Turnover (days) 81 91 81 Cash Turnover (das) 62 77 66 Current Liabilities 19,398 46% 20,464 54% -5% 16,355 51% 19% Total Liabilities 24,108 57% 22,523 59% 7% 18,300 57% 32% Capital 5,601 13% 5,600 15% 0% 5,598 17% 0% Total Equity 18,156 43% 15,618 41% 16% 13,972 43% 30% Total Liabilities and Equity 42,264 100% 38,141 100% 11% 32,272 100% 31% Cash and cash equivalents 13,578 32% 6,896 18% 97% 5,375 17% 153% Notes and trade receivables, net 11,390 27% 11,999 31% -5% 8,874 27% 28% Inventories 12,427 29% 14,153 37% -12% 12,387 38% 0% Property, plant and equipment 1,409 3% 1,442 4% -2% 1,462 5% -4% Total Assets 42,264 100% 38,141 100% 11% 32,272 100% 31% 2022.09.30 2022.06.30 QoQ 2021.09.30 YoY Amount % Amount % Amount %

y

REVENUE BY SEGMENT

in millions of New Taiwan Dollars

	2022 Q1-Q3	%	2021 Q1-Q3	%	YoY
Switch	31,972	58%	26,862	63%	19%
Network Application	14,188	26%	7,988	19%	78%
Metro Access Switch	5,691	10%	5,695	13%	0%
Wireless	882	2%	698	2%	26%
Broadband Access and Others	2,274	4%	1,212	3%	88%
Subtotal	55,007	100%	42,455	100%	30%

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REVENUE BY REGION

in millions of New Taiwan Dollars

	2022 Q1-Q3	%	2021 Q1-Q3	%	YoY
America	35,114	64%	25,202	59%	39%
Europe	10,632	19%	9,690	23%	10%
Asia	8,707	16%	7,002	17%	24%
Taiwan	534	1%	535	1%	0%
Others	20	0%	26	0%	-23%
Subtotal	55,007	100%	42,455	100%	30%

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02

CORPORATE HIGHLIGHTS

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CORPORATE HIGHLIGHTS (2022) Continued Revenue Growth and Improving Margin Managing Supply Chain and Inventory Construction of New Facilities Underway R&D Full Steam on Next-Generation Networks Taking Leadership Action in ESG Initiatives

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GROWTH AND PROFITABILITY

in New Taiwan Dollars

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$59.6B
$55.4B $54.5B $55.0B (Q1~Q3)​
$43.1B
$36.5B
$29.4B
+30%
YoY
Year 2016 2017 2018 2019 2020 2021 2022 (Q1~Q3)
EPS 3.51 4.68 5.33 8.91 9.07 8.44 10.44
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MANAGING SUPPLY CHAIN & INVENTORY

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Challenges Our Actions
Increase component availability by reducing lead
Pandemic & China’s control policy
time & transparent delivery
Multiple sources and suppliers;
Components shortage
Multiple manufacturing locations
Big data analytics to support business applications
Geopolitical issues
& strategic decisions
AI & machine learning to develop new MRP
Foreign exchange & Inflation
algorithm
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MRP: Material Requirements Planning

CONSTRUCTION OF NEW FACILITIES UNDERWAY

▪ Streamline Production Processes and automation

▪ Align with Strategy Geographic Positioning

▪ Increase Capacity Fulfill growing demand

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FACTORY EXPANSION PLAN

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Shenzhen, CN Zhunan, TW Vihn Phuc , VN Irvine, US Zhubei, TW
2005 2019 2023’Q1 2023’Q3 2024’1H
Joytech TW 1 VN Modularized line TW 2
Asian Market
NPI High volume Engineering Verification NPI
High Value Single Site Customer High Value SKD High Value
High Technology Backup Site Low Quantity High Technology
TAA TAA
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NPI: New Product Introduction TAA: Trade Agreements Act Compliance SKD: Semi Knocked-Down Manufacturing

Functionality

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Technologies

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Performance

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2022 ESG ACHIEVEMENT AWARDS

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Digital Climate Asia-Pacific Emerging
Action Award Sustainability Market
Action Award Contribution
Award
Jul 2022 Aug 2022 Oct 2022
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03

SOLUTIONS & NEW TRENDS

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ACCTON SOLUTIONS

Broadest Connectivity Solutions In Network Infrastructure

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Telecommunications Innovative Carrier Access Platforms and Disaggregated Open Solutions

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Data Center/Cloud Infra High-Performance, High Port Density, & Standardized OCP-compliant Platforms

Edge Computing Network Appliance, ex SD-WAN, Edge Router Edge Server AI Training/Inferencing

Enterprise/SMB Feature Rich, High Value & Best Price-Performance Platforms Wired, wireless network appliance solutions for the connected campus

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Campus Network

PLANNING FOR THE FUTURE

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TALENT INVESTMENT

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Expanding R&D Teams Closer to Customers Collaboration with Universities

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EQUIPMENT INVESTMENT New Labs New Equipment Automation to improve Test Cycle

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Design Quality Assurance

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800G Solutions

Improve system reliability at the best performance/cost ratio

Next-gen 800G Data Center Switch System Concept

800G Interconnect Solutions

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Embed intelligence in the cloud, network, edge and every other of computing device

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Deep Learning Smart NIC

AI and Edge Compute

AI/ML System

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Liquid Cooling

Next-generation HPC Data Centers Aiming for long-term sustainability

30%[Energy saving] Waste reduction 50%

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More Balanced Design More Stringent Qual More Agile to Adapt Expertise Process on Product New Technologies Quality

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04 Q&A

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Thank you We look forward to working with you

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