Advantech — Interim / Quarterly Report 2016

Aug 1, 2016

Y2016 1H Financial Results

By Eric Chen VP of finance & IT Aug, 2016

Safe Harbor Notice

• 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.

Y2016 1H Financial Results

Consolidated

	Y2015		Y2016
NT\$M	1H	2H	1Q	2Q	1H	QoQ	YoY
Net Sales	18,812	19,189	10,073	10,713	20,786
YoY%	8%	5%	15%	7%	10%	6%	10%
Gross Margins%	40.2%	40.5%	41.1%	40.2%	40.6%	-0.9%	0.4%
Operating Expense	4,588	4,828	2,654	2,630	5,284	-1%	15%
Operating Margin%	15.9%	15.4%	14.7%	15.6%	15.2%	0.9%	-0.7%
No-operating Income	122	240	152	149	302	-2%	147%
Effective Tax Rate	18.2%	18.7%	19.4%	19.7%	19.6%	0.3%	1.4%
NPAT	2,539	2,588	1,318	1,462	2,780	11%	9%
EPS (NT\$)	4.01	4.07	2.08	2.31	4.39	11%	9%

Y2016 1H Sales By Region/Sales Force

Local Sales: US 628M, +4%

USD\$M	Y15 1H	Y16 1H	GR%	$\mathbf{v}_{\alpha}$
North America	182	200	$+10%$	32%
Europe	93	100	$+7%$	16%
Greater China	183	189	$+4%$	30%
Asia/Intercon.	80	78	$-2%$	12%
DMS/E2E	42	33	$-20%$	5%
Affiliates	26	28	$+6%$	5%
Total	606	628	4%	100%

				North	America		Asia/Intercon
	DMS/E2E	Affiliates 8%	North	ANA:	145.9M	GR%: -4%	Japan:	15.4M	GR%:	+20%
	5%		America				Korea:	20.2M	GR%:	-5%
			28%	B+B:	24.8M		AAU/NZ:	5.9M	GR%:	-8%
Asia				Europe		SAP:	11.2M	GR%:	-1%
Intercon.							Intercon:	19.4M	GR%:	-5%
12%				AEU:	82.7M GR%:	+7%	LATAM	5.5M	GR%:	-24%
				ADLoG:	17.6M	GR%: +11%
			Greater	China	Affiliates/M&A
	Greater			China:	145.9M	GR%: +2%	Advanixs:	10.6M	GR%:	-4%
	China		Europe 16%				ALNC:	7.3M	GR%:	+7%
30%				Taiwan: 41.6M		GR%: +13%	A-Cermate:	4.4M	GR%:	-7%

Y2016 1H Sales By Strategic Product Group

Networks & Communications •Blade Computing & Systems •Network Appliances •Network Virtualization Platforms •Network & Embedded Switches •Broadcasting & Surveillance Platforms

Embedded Design-In

Embedded Core Computing +5% -4% -7%

•Embedded Box Computer •Modular Computing Boards US 301.8M

•Wireless IoT Modules •Display Systems & Gaming Solutions 48%, -2%

•Industrial Motherboard & DTOS •Embedded Peripherals

US 73.0M

12%,+6%

Local Sales: US 628M, +4%

Applied Computing •Medical Computing •Embedded Systems •Portable Computing •Service Automation DTOS

% of Sales, YoY Growth

Industrial Automation +4%
•Industrial I/O & Controllers
US 207.1M •Industrial HMI
•Automation Computing
33%, +14% •IoT Devices & Solutions
•WebAccess+ Solutions
•iFactory (Industry 4.0) Solutions
•Machine Automation Solutions
•Power & Energy Solutions

Intelligent Systems •Industrial Computers •Industrial Servers & Storage •Intelligent Video Solutions •Intelligent IoT Modules •Transportation Solutions iConnectivity •Intelligent Hospital -1% +189%

•Industrial Communications •Industrial Switches

Smart City Solutions

Service Automation Platforms

•Industrial Mobile Computing •iRetail Platforms •Medical Computing & Tablets •In-Vehicle Computing US 46.4M 7%, +0%

•Digital Logistics & Fleet Management •Intelligent Retail & Hospitality Intelligent Service Solutions

Y2016 1H Working Capital

Consolidated

	2014		2015		2016
NT\$ M	Full	1Q End	2Q End	1Q End	2Q End
Cash Position	5,648	6,778	7,564	6,008	6,562
Account Receiveable	5,952	5,535	6,557	6,321	7,230
DSO (Days)	59	58	63	57	63
Inventory	4,782	4,880	4,680	5,232	4,991
DOH (Days)	78	87	71	79	70
Account Payable	3,397	3,107	3,536	3,512	3,540
Days	56	56	53	53	50