Advantech — Annual Report 2018

Mar 13, 2019

Y2018 Financial Results

Eric Chen, CFO & President of General Management, Advantech Mar, 2019

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.

Y18 Financial Results

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Consolidated

Y18 Sales By Region

Local Sales: US$1,618M, +11.2%

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USD$M Y2017 Y2018 GR% %
North America 393 445 13% 28%
Europe 256 306 20% 19%
Greater China 463 508 10% 31%
Asia & Intercon 206 232 13% 14%
DMS/E2E 70 58 -16% 4%
Affiliates 68 69 1% 4%
Total 1,455 1,618 11% 100%
North America Asia & Intercon
Affiliates
ANA: 415.4M GR%: +15.7% Japan: 43.7M GR%: +9.2%
DMS/E2E 4% 4% iConnectivity Americas 29.4M GR%: -13.9% Korea: 65.0M GR%: +7.8%
North Europe AAU/NZ: 11.6M GR%: -5.3%
Asia &
ASEAN: 30.4M GR%: +5.3%
America AEU: 259.6M GR%: +17.6%
Intercon
28% ADLoG: 46.0M GR%: +31.8% India 15.3M GR%: +56.6%
14%
Russia 15.2M GR%: -12.4%
Greater China
ME&A 33.5M GR%: +60.5%
China: 400.4M GR%: +10.9% LATAM 16.4M GR%: +12.4%
Taiwan: 108.0M GR%: +5.7% Affiliates
Advanixs: 15.3M GR%: -0.8%
DMS/E2E
ALNC: 20.4M GR%: +11.9%
Greater
China DMS(NC): 44.7M GR%: -22.0% A-Cermate: 12.4M GR%: +15.6%
31% Europe DMS(AC): 10.3M GR%: +14.2% A-Kostec: 2.8M GR%: -41.5%
19%
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4

Y18 Sales by SBG

Local Sales: US 1,618M, +11.2%

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US 708.3M, 44%, +7.6% Embedded-IoT + Allied DMS (Design-in)
Networks & Communications Embedded Core & IoT Modules Applied Computing
• Telecom & Mission Critical Systems • Computing on Modules • WISE-PaaS & Cloud Software • Industrial Mobile Computing
• Enterprise Network Platforms • Single Board Computers US 439.6M • ARM/ RISC Computing • Applied Computing DMS
•• Network & Embedded Switches Video Broadcasting Solutions US 164.7M •• Industrial Motherboards Embedded Box Computers 27%, +12.3% •• Modular Board Design Services Gaming Solutions US 104.0M • Service-IoT DMS
• Industrial Displays
10%, -1.5% • Industrial Flash Storage (SQFlash) 7%, +4.7%
• Embedded Wireless Modules (M2.COM)
APS & AGS
US 209.8M
Industrial-IoT 13%,+16.3% Service-IoT
+11% Industrial Automation Intelligent Systems +16% Intelligent Healthcare
• Industrial I/O & Controllers • Industrial Computers • Medical Computing & Tablets
• Automation Computing & HMI • Industrial Servers & Storage • Intelligent Hospital Solutions
• Motion Controls & Machine Vision • Intelligent Video Solutions Intelligent Retail
• Remote IoT Devices (WISE) US 554.2M • Transportation Solutions • iRetail Platforms US 145.6M
• WebAccess+ Software 34%, +13.3% •• Intelligent Retail & Hospitality Solutions 9%, +14.4%
• iFactory (Industry 4.0) Solutions iConnectivity Digital Signage Solutions
• Machine Automation Solutions • Network Edge Solutions Intelligent Logistics
• Energy & Environment Solutions • Industrial Switches +11% • In-Vehicle Computing
• Industrial Wireless Devices • Digital Logistics & Fleet Management Solutions
• Industrial Cellular Routers
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% of Sales, YoY Growth

5

Y18 Performance By SBG

Y2018 US$ mn	Y2018 US$ mn	Revenues YoY	Gross Margin **Range **	Operating Profit OP Margin
Industrial IOT		554 13%	45~50%	122 21.9%
Embedded IOT		440 12%	33~38%	72 16.3%
Allied DMS	ACG	104 5%	30~35%	15 14.1%
	NCG	165 -1%	35~40%	26 15.8%
Service IOT		146 14%	35~40%	9 6.0%
AGS & APS		210 16%	20~25%	24 11.3%
Other unallocated expenses				-20
Total		1618 11%		248 15.3%

• IIoT grew 13%, GP range to be between 45~50%,

• EIoT grew 12%, low to the medium GP product line had a higher growth rate

• SIoT margin improved due to conduct the production transfer from Germany to Taiwan and China plant

Y18 Working Capital

Consolidated

NT$ M

Cash Position

Account Receivable DSO Da s ( y ) Inventory DOH Da s ( y ) Account Payabile AP Days

2016 Full 7,237 73,640 60 5,597 77 4,983 60	2017 Full 8,300 7,866 63 6,242 80 5,281 69		2018	2018
		Q1 End 8,386 7,797 61 6,818 87 5,376 69	Q2 End 10,275 8,358 62 7,174 82 6,251 71	Q3 End 6,993 8,346 61 7,600 84 6,248 70	Q4 End
					8,676
					8,351 61
					7,558 84
					5,811 67