D-LINK — Interim / Quarterly Report 2018

Mar 18, 2019

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4Q18 Operating Results

March 18, 2019

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Financial Review

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4Q18 Income Statement & QoQ/YoY Comparison
4Q18 3Q18 QoQ % 4Q17 YoY %
Change Change
Unit: NT$ million AMT % AMT % AMT %
Net Sales 4,604 100.0 4,593 100.0 0.2 5,007 100.0 (8.1)
Cost of Goods Sold - Product 3,225 70.1 3,275 71.3 (1.5) 3,615 72.2 (10.8)
Gross Profit 1 1,379 29.9 1,318 28.7 4.6 1,392 27.8 (0.9)
Inventory Related Gain/(Loss) (33) (0.7) 22 0.5 29 0.6
Gross Profit 2 1,346 29.2 1,340 29.2 0.4 1,421 28.4 (5.3)
Operating Expenses 1,287 28.0 1,266 27.6 1.7 1,407 28.1 (8.5)
Operating Income 58 1.3 74 1.6 (21.4) 14 0.3 314.0
Total Non-Op. Inc. (Loss) 146 3.2 (1) (0.0) 123 2.5
Income Before Tax 204 4.4 73 1.6 137 2.8
Tax (Exp.) / Income (45) (1.0) (45) (1.0) (44) (0.9)
Net Income 159 3.4 29 0.6 93 1.9
Non-controlling Interests (17) (0.3) (23) (0.5) (20) (0.4)
Consolidated Income 142 3.1 6 0.1 73 1.5
EPS (NT$)- Per Weighted-Avg. 0.21 0.01 0.11
Capital of NT$6,507M
The numbers are consolidated and the net income is audited/reviewed.
Weighted-Avg. Capital adjusted for treasury shares.
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4Q18 Non-op Income/Loss & QoQ Comparison
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Unit : NT$ million 4Q18 3Q18 Investment Income 118 (15) Sub./Aff. 16 (6) Capital Gain 102 (9) FX Gain/(Loss) 13 4 Fin. Income/(Exp.) & Other 15 11 Total Non-op Income/Loss 146 (1) * The numbers are consolidated and the net income is audited/reviewed. 3

2018 Income Statement & YoY Comparison	2018 Income Statement & YoY Comparison	2018 Income Statement & YoY Comparison	2018 Income Statement & YoY Comparison
	2018		2017		YoY %
Unit: NT$ million	AMT	%	AMT	%	Change
Net Sales	19,383	100.0	19,316	100.0	0.3
Cost of Goods Sold - Product	13,724	70.8	14,178	73.4	(3.2)
Gross Profit 1	5,659	29.2	5,138	26.6	10.1
Inventory Related Gain/(Loss)	(57)	(0.3)	60	0.3
Gross Profit 2	5,602	28.9	5,199	26.9	7.8
Operating Expenses	5,353	27.6	5,656	29.3	(5.4)
Operating Income	249	1.3	(458)	(2.4)
Total Non-Op. Inc. (Loss)	48	0.2	332	1.7
Income Before Tax	297	1.5	(125)	(0.7)
Tax (Exp.) / Income	(152)	(0.8)	(47)	(0.2)
Net Income Minority Interest Consolidated Income	145 (39) 106	0.7 (0.2) 0.5	(172) (21) (193)	(0.9) (0.1) (1.0)
0.16 EPS (NT$)- Per Weighted-Avg. Capital of NT$6,507M			(0.3)
The numbers are based on consolidated numbers and the net income is audited/reviewed.
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QoQ % 12/31/18() 9/30/18() Unit: NT$ million % % AMT AMT Change Cash & S-T Investment 4,433 25.2 3,328 19.4 33.2 Account Receivable 4,279 24.3 5,100 29.7 (16.1) Inventory 3,112 17.7 3,008 17.5 3.5 Long-term Investments 2,690 15.3 2,738 16.0 (1.8) Total Assets 17,607 100.0 17,147 100.0 2.7 Accounts Payable 3,522 20.0 3,711 21.6 (5.1) Current Liabilities 7,663 43.5 7,351 42.9 4.2 Common Stock 6,520 37.0 6,520 38.0 0.0 Stockholders’ Equity 9,199 52.2 9,089 53.0 1.2

Adjusted based on IFRS15. 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 4Q18 () 3Q18 () 2Q18 () 1Q18() 4Q17 ** Days A/R 80 88 87 83 84

Days Inventory 83 84 81 73 81**

Days A/P 91 96 105 89 93 Cash Cycle 72 76 63 68 72 Current Ratio 1.61 1.61 1.57 1.59 1.56 Debt/Equity Ratio 0.87 0.84 0.90 0.83 0.87** ***

Net Debt/Equity Ratio 0.39 0.48 0.52 0.47 0.45 ROE 6.16 0.24 -2.4 0.6 3.2

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

• Adjusted based on IFRS15. ** Annualized *** Net of Cash & S-T investment

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In NT$, up 0.2% QoQ, down 8.1% YoY

• N.A. down 2.3% QoQ, down 11.8% YoY

• Europe down 3% QoQ, down 19.9% YoY

• Emerging Mkts & APac up 1.8% QoQ, down 2.4% YoY

In US$, down 0.2% QoQ, down 10.4% YoY

• N.A. down 2.8% QoQ, down 13.6% YoY

• Europe down 3.2% QoQ, down 22.5% YoY

• Emerging Mkts & APac up 1.3% QoQ, down 4.7% YoY

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NT$ mln
6,000
10%
12% 9%
12% 11%
4,000
26% 31% 35%
24% 23%
2,000
62% 60% 55% 65% 66%
0
4Q17 1Q18 2Q18 3Q18 4Q18
Emerging Markets & AsiaPac Europe North America
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In NT$ terms:

• Switch up 4% QoQ, down 16% YoY

• Wireless down 20.7% QoQ, down 3.1% YoY

 B.B. up 10% QoQ, down 55.8% YoY

In US$ terms:

• Switch up 3.7% QoQ, down 18.1% YoY

• Wireless down 21% QoQ, down 5.5% YoY

 B.B. up 10.2% QoQ, down 56.7% YoY

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 D.H. up 33.5% QoQ, up 6.8% YoY  D.H. up 33% QoQ, up 4% YoY
6,000
14%
13%
16%
6%
4,000 7% 5% 18% 21%
10%
14% 14% 7%
9%
6%
6%
26% 38%
30% 35%
28%
2,000
40%
35% 32% 35% 36%
0
4Q17 1Q18 2Q18 3Q18 4Q18
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.