D-LINK — Interim / Quarterly Report 2018

Sep 3, 2018

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2Q18 Operating Results

August 6, 2018

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Financial Review

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2Q18 Income Statement &	2Q18 Income Statement &	2Q18 Income Statement &	QoQ/YoY Comparison	QoQ/YoY Comparison	QoQ/YoY Comparison	QoQ/YoY Comparison	QoQ/YoY Comparison
	2Q18		1Q18		QoQ %	2Q17		YoY %
Unit: NT$ million	AMT	%	AMT	%	Change	AMT	%	Change
Net Sales	5,204	100.0	4,982	100.0	4.5	4,678	100.0	11.2
Cost of Goods Sold - Product	3,688	70.9	3,537	71.0	4.3	3,544	75.8	4.1
Gross Profit 1	1,516	29.1	1,446	29.0	4.8	1,134	24.2	33.7
Inventory Related Gain/(Loss) (34)		(0.6)	(12)	(0.2)		23	0.5
Gross Profit 2	1,483	28.5	1,434	28.8	3.4	1,157	24.7	28.2
Operating Expenses	1,427	27.4	1,373	27.6	3.9	1,373	29.3	3.9
Operating Income	55	1.1	61	1.2	(9.8)	(216)	(4.6)
Total Non-Op. Inc. (Loss)	(98)	(1.9)	2	0.0		53	1.1
Income Before Tax	(43)	(0.8)	63	1.2		(163)	(3.5)
Tax (Exp.) / Income	(29)	(0.6)	(33)	(0.7)		34	0.7
Net Income	(72)	(1.4)	30	0.5		(129)	(2.8)
Non-controlling Interests	18	0.3	(17)	(0.3)		43	0.9
Consolidated Income	(54)	(1.0)	13	0.3		(86)	1.8
EPS (NT$)- Per Weighted-Avg. Capital of NT$6,420M	(0.08)		0.02			(0.13)

• The numbers are consolidated and the net income is audited/reviewed. *Weighted-Avg. Capital adjusted for treasury shares.

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2Q18 Non-op Income/Loss & QoQ Comparison
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Unit : NT$ million

2Q18 1Q18

Investment Income

Sub./Aff. Capital Gain FX Gain/(Loss) Fin. Income/(Exp.) & Other Total Non-op Income/Loss

(15) (28) (15) (10) 0 (18) (41) 17 (42) 13 (98) 2

• The numbers are consolidated and the net income is audited/reviewed.

3

**1H18 Income Statement & **	**1H18 Income Statement & **	**YoY **	Comparison	Comparison	Comparison	Comparison	Comparison
	1H18			1H17				YoY %
Unit: NT$ million	AMT	%		AMT	%		Change
Net Sales	10,187	100.0		9,408	100.0			8.3
Cost of Goods Sold - Product	7,225	70.9		7,030	74.7			2.8
Gross Profit 1	2,962	29.1		2,378	25.3			24.6
Inventory Related Gain/(Loss)	(45)	(0.4)		10	0.1
Gross Profit 2	2,917	28.6		2,388	25.4			22.2
Operating Expenses	2,800	27.5		2,798	29.7			0.1
Operating Income	116	1.1		(409)	(4.4)
Total Non-Op. Inc. (Loss)	(97)	(0.9)		51	~~0.5~~
Income Before Tax Tax (Exp.) / Income	20 (62)	0.2 (0.6)		(358) 19	(3.9) 0.2
Net Income Minority Interest	(42) 1	(0.4) 0.0		(339) 37	(3.7) 0.4
(41) (0.06) Consolidated Income EPS (NT$)- Per Weighted-Avg. Capital of NT$6,420M		(0.4)		(302) (0.47)	(3.2)

The numbers are based on consolidated numbers and the net income is audited/reviewed.

4

6/30/2018 Balance	Sheet	& QoQ Comparison	& QoQ Comparison	& QoQ Comparison	& QoQ Comparison
Unit: NT$ million	AMT 6/30/18	%	AMT 3/31/18	%	QoQ % Change
Cash & S-T Investment	3,549	20.5	3,254	19.6	9.1
Account Receivable	5,019	28.9	4,453	26.9	12.7
Inventory	2,767	16.0	2,832	17.1	(2.3)
Long-term Investments	2,794	16.1	2,943	17.8	(5.1)
Total Assets	17,339	100.0	16,567	100.0	4.7
Accounts Payable	4,056	23.4	3,315	20.0	22.4
Current Liabilities	7,478	43.1	6,769	40.9	10.5
Common Stock	6,520	37.6	6,520	39.4	0.0
Stockholders’ Equity	9,117	52.6	9,020	54.4	1.1

The numbers are consolidated and the net income is audited/reviewed. *Weighted-Avg. Capital adjusted for treasury shares.

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Key Financial Ratios
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Unit: % , days 2Q18 1Q18 4Q17 3Q17 2Q17
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Unit: % , days	2Q18	1Q18	4Q17	3Q17	2Q17
Days A/R **	84	80	84	81	80
Days Inventory **	81	73	81	88	89
Days A/P **	105	89	93	95	100
Cash Cycle	60	65	72	74	70
Current Ratio	1.60	1.62	1.56	1.57	1.49
Debt/Equity Ratio	0.86	0.79	0.87	0.81	0.93
***
Net Debt/Equity Ratio	0.48	0.43	0.45	0.53	0.58
ROE	-2.4	0.6	3.2	1.6	-3.9

The numbers are based on consolidated numbers and the net income is audited.

** Annualized

• *** Net of Cash & S-T investment

6

In NT$, up 4.5% QoQ, up 11.2% YoY

• N.A. up 15.6% QoQ, down 15.8% YoY

• Europe up 16.4% QoQ, up 48.2% YoY

• Emerging Mkts & APac down 3.5% QoQ, up 1.4% YoY

In US$, up 3% QoQ, up 13.2% YoY

• N.A. up 13.9% QoQ, down 14.2% YoY

• Europe up 14.7% QoQ, up 51.3% YoY

• Emerging Mkts & APac down 4.8% QoQ, up 3.1% YoY

NT$ mln

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6,000
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10%
12% 9%
13%
14%
4,000
21% 26% 31% 35%
26%
2,000
60% 66% 62% 60% 55%
0
2Q17 3Q17 4Q17 1Q18 2Q18
Emerging Markets & AsiaPac Europe North America
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In NT$ terms:

In US$ terms:

• Switch down 3.3% QoQ, up 2.8% YoY

• Wireless up 30% QoQ, up 35.6% YoY

• B.B. down 25.7% QoQ, down 18.5% YoY

• Switch down 4.6% QoQ, up 4.8% YoY

• � Wireless up 28.2% QoQ, up 38.1% YoY

• B.B. down 26.6% QoQ, down 17% YoY

• D.H. up 16.8% QoQ, down 26.6% YoY

• D.H. up 15.2% QoQ, down 24.9% YoY

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6,000
15%
12% 13% 16%
12%
6%
4,000 9% 7% 8% 5% 10%
14% 13% 14%
13%
26% 37%
33% 30%
31%
2,000
40%
35% 34% 35% 32%
0
2Q17 3Q17 4Q17 1Q18 2Q18
Switch Wireless Broadband Digital Home Others
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Safe Harbor Statement
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All numbers are consolidated. Except for statements in respect of historical matters, the statements contained in this release are "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of D-Link Corporation to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements.