Advantech Co., Ltd. — Annual Report 2017

Mar 7, 2018

2017 Financial Results

Mar. 2018 By Eric Chen General Management, President

Safe Harbor Notice

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 This presentation contains forward-looking statements and is subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements.  The projections should not be interpreted as legally

binding commitments, but rather as flexible information subject to change occasionally.

2017 Financial Results

NTM	2014	2015	2016			2017
$				1Q	2Q	3Q	4Q	Full
Net Sales YOYgrowth	35,732 17%	38,001 6%	42,002 11%	10,006 0%	11,406 6%	11,203 8%	11,706 9%	44,375 6%
Gross Magin % Gross Margin	40.3% 14,393	40.4% 15,345	40.8% 17,118	40.5% 4,051	38.6% 4,401	39.0% 4,371	38.8% 4,558	39.2% 17,381
Operating Expense YOYgrowth	8,884 12%	9,416 6%	10,486 11%	2,548 -4%	2,648 1%	2,643 2%	2,763 6%	10,602 1%
Operating Margin Operating Margin %	5,509	5,929	6,632	1,503	1,753	1,728	1,795	6,779
	15.4%	15.6%	15.8%	15.0%	15.4%	15.4%	15.3%	15.3%
Non-OperatingIncome	547	361	466	4 -	386	252	121	755
Effective Tax Rate	18.5%	18.5%	19.8%	19.6%	19.5%	19.3%	15.2%	18.4%
NPAT	4,932	5,127	5,689	1,206	1,723	1,598	1,622	6,149
EPS (NT$)	7.09	7.35	8.15	1.73	2.47	2.29	2.35	8.84

2017 Sales By Region

Local Sales: US 1,455M, +12%

2017 Sales By Region Local Sales: US 1,455M, +12%	**2017 Sales By Region **	Local Sales: US 1,455M, +12%
USD$ M 2016 2017 GR% % 395 409 +4% 28% 195 242 +24% 17% 423 463 +9% 32% 170 206 +21% 14% 54 70 +29% 5% 62 66 +7% 4% Total 1,299 1,455 +12% 100% Affiliates North America Europe Greater China Asia/Intercon DMS/E2E Europe AEU: 206.8M GR%: +28% ADLoG: 35.4M GR%: +8% Greater China China:360.3M GR%: +8% Taiwan:102.3M GR%: +15% Asia/Intercon Japan: 55.4M GR%: +5% Korea: 60.3M GR%: +32% AAU/NZ: 12.3M GR%: +1% ASEAN: 28.9M GR%: +19% India: 9.8M GR%: +21% Russia: 17.1M GR%: +61% ME&A: 22.7M GR%: +16% LATAM 14.6M GR%: +14% Affiliates ALNC: 18.2M GR%: +27% Advanixs: 15.4M GR%:-20% A-Cermate:10.7M GR%: +19% A-KOSTEC:4.8M GR%:-19% North America 28% DMS/E2E 5% Affiliates 4% Greater China 32% Asia Intercon. 14% Europe 17%	USD$ M 2016 2017	GR% % +4% 28% +24% 17% +9% 32% +21% 14% +29% 5% +7% 4% +12% 100%
	395 409 North America
	195 242 Europe
	423 463 Greater China
	170 206 Asia/Intercon
	54 70 DMS/E2E
	62 66 Affiliates
	Total 1,299 1,455
	Euroe	Asia/Intercon

4

2017 Performance by SBG

Local Sales: US 1,455M, +12%

US 687.4M, 47%, +8.3%, 99%

Embedded-IoT + Allied DMS (Design-in)

Networks & Communications

Embedded Core & IoT Modules

Applied Computing

• Telecom & Mission Critical Systems

• Enterprise Network Platforms

• Network & Embedded Switches

• • Video Broadcasting Solutions US 167.2M 11%, +7.5%, 100%

• Computing on Modules

  • Industrial Mobile Computing

• WISE-PaaS & Cloud Software

• Single Board Computers US 391.5M • ARM/ RISC Computing

• • Industrial Motherboards • 27%, +16.9%, • 106% Embedded Box Computers

• Applied Computing DMS

• Service-IoT DMS US 128.7M 9%, -10.7%, 82%

• Modular Board Design Services

• Gaming Solutions

• Industrial Displays

• Industrial Flash Storage (SQFlash)

• Embedded Wireless Modules (M2.COM)

APS & AGS

US 181.2M

Industrial-IoT

13%,+19.4%, 106%

Service-IoT

+15%, 102% +18%, 108% Industrial Automation

Intelligent Systems

• Industrial Computers

• Industrial I/O & Controllers

• Industrial Servers & Storage

• Automation Computing & HMI

• Motion Controls & Machine Vision • Intelligent Video Solutions

• • US 484.8M • Remote IoT Devices (WISE) Transportation Solutions

• • WebAccess+ Software 33%, +14.9%, 102% • iFactory (Industry 4.0) Solutions iConnectivity

• Network Edge Solutions

• Machine Automation Solutions

• Industrial Switches +5%, 87%

• Energy & Environment Solutions

• Industrial Wireless Devices

Intelligent Healthcare

• Medical Computing & Tablets

• Intelligent Hospital Solutions

Intelligent Retail • iRetail Platforms US 101.7M • Intelligent Retail & Hospitality Solutions • Digital Signage Solutions 7%, +12.5%, 91%

Intelligent Logistics

• In-Vehicle Computing

• Digital Logistics & Fleet Management Solutions

• Industrial Cellular Routers

% of Sales, YoY Growth, Achv.

2017 Working Captial

Consolidated

Cash Position Account Receivable DSO (Days) Inventory DOH (Days) Account Payable Days NT$ M	2015 Full 5,633 6,467 60 4,869 76 3,226 47	2016 Full 7,237 7,378 63 5,597 78 4,983 69		2017	2017
			Q1 6,678 6,719 58 5,799 88 3,605 54	Q2 8,315 7,730 65 5,969 77 4,198 54	Q3 6,477 7,534 63 6,587 84 5,174 68	Q4
						8,300
						7,866 62
						6,242 78
						5,281 66