LTC — Call Transcript 2022

Nov 21, 2022

3Q22 Earnings Conference LITEON Technology

2 0 2 2 / 1 0 / 2 0

Agenda

==> picture [952 x 43] intentionally omitted <==

• Host Julia Wang, IR Senior Director

• 3Q22 Results and 4Q22 Outlook Patricia Chou, CFO

• Operation Plan and Growth Strategy Anson Chiu, President

• Q&A

Safe Harbor Notice

==> picture [960 x 20] intentionally omitted <==

LITEON Technology’s statement of its current expectations are forward-looking statements which are subject to significant risks and uncertainties. Actual results may differ materially from those contained in any forward-looking statements.

The numbers of the presentation are prepared under IFRS.

==> picture [466 x 187] intentionally omitted <==

----- Start of picture text -----

Information
Opto- Cloud & Technology &
electronics AIoT Consumer
Electronics
Optoelectronics Datacenter, Server, NB, Tablets, DT,
Product Solutions, Networking, AIoT, Gaming,
Automotive Electronics, Smart Devices,
Consumer Electronics,
Outdoor Lighting Video Intelligence
Multifunction Peripherals
Solutions Solutions
applications
----- End of picture text -----

3

3Q22 Income Statement

==> picture [960 x 20] intentionally omitted <==

==> picture [725 x 406] intentionally omitted <==

----- Start of picture text -----

In NT Millions 3Q22 2Q22 QoQ 3Q21 YoY
Amount % Amount % % Amount % %
Net Sales 46,174 100.0 42,957 100.0 7 41,864 100.0 10
COGS 37,172 80.5 34,180 79.6 9 33,780 80.7 10
Gross Profit 9,003 19.5 8,777 20.4 3 8,084 19.3 11
Operating Expenses 4,608 10.0 4,407 10.3 5 4,562 10.9 1
Operating Profit 4,394 9.5 4,370 10.2 1 3,522 8.4 25
Other Income/ Expense 954 2.1 623 1.5 53 351 0.8 172
Profit Before Tax 5,348 11.6 4,993 11.6 7 3,872 9.2 38
Income Tax Expense 1,096 2.4 1,024 2.4 7 782 1.9 40
Non-Controlling Interests 12 0.0 10 0.0 26 10 0.0 15
Profit Attributable to Parent 4,240 9.2 3,960 9.2 7 3,080 7.4 38
After Tax EPS 1.86 1.74 1.33
----- End of picture text -----

4

Record GP and OP in 3Q22

==> picture [960 x 20] intentionally omitted <==

In NT Millions 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Gross Profit 4,717 8,114 7,844 6,709 6,718 7,994 8,084 7,702 7,067 8,777 9,003 41,326 41,864 46,174 ~~19.0%~~ ~~19.3%~~ 19.5% 9.6% 8.4% 9.5%* 0% 5% 10% 15% 20% 25% 30,000 35,000 40,000 45,000 50,000 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Revenue GP% OP% NT$ Mn	In NT Millions 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Gross Profit 4,717 8,114 7,844 6,709 6,718 7,994 8,084 7,702 7,067 8,777 9,003 41,326 41,864 46,174 ~~19.0%~~ ~~19.3%~~ 19.5% 9.6% 8.4% 9.5%* 0% 5% 10% 15% 20% 25% 30,000 35,000 40,000 45,000 50,000 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Revenue GP% OP% NT$ Mn
	3Q22 9,003
Operating Profit 752 3,646 3,987 1,820 2,107 3,801 3,522 3,613 2,981 4,370	4,394

*SSD has been transferred at the end of 2Q20

5

Profitable Growth by 9M22

==> picture [960 x 20] intentionally omitted <==

==> picture [555 x 410] intentionally omitted <==

----- Start of picture text -----

In NT Millions 9M22 9M21 YoY
Amount % Amount % %
Net Sales 130,362 100.0 120,259 100.0 8
COGS 105,515 80.9 97,464 81.0 8
Gross Profit 24,847 19.1 22,795 19.0 9
Operating Expense 13,101 10.0 13,366 11.1 -2
Operating Profit 11,745 9.0 9,429 7.8 25
Other Income/ Expense 1,253 1.0 5,046 4.2 -75
Profit Before Tax 12,998 10.0 14,475 12.0 -10
Income Tax Expense 2,665 2.0 3,061 2.5 -13
Non-Controlling Interests 30 0.0 36 0.0 -17
Profit Attributable to Parent 10,304 7.9 11,377 9.5 -9
After Tax EPS 4.51 4.90
----- End of picture text -----

6

53% of Revenue from High GPM Opto and Cloud & AIoT

==> picture [960 x 20] intentionally omitted <==

==> picture [613 x 396] intentionally omitted <==

----- Start of picture text -----

3Q22 Product Mix 3Q21 Product Mix
19% 20%
Opto-electronics
47% $46,174 Cloud & AIoT 48% $41,864
NT$mn NT$mn
Information Technology &
34% Consumer Electronics 32%
Revenue GPM from Operating Profit
NT$Mln Amount YoY % High-End Products 3Q22 3Q21
Opto-electronics 8,842 6% 19% 30%+ 996 634
Cloud & AIoT 15,809 17% 34% 25%+ 1,509 978
Information Technology
21,523 7% 47% 18%+ 2,674 2,343
& Consumer Electronics
----- End of picture text -----

7

Yearly Growth in Core Business in 3Q22

==> picture [960 x 20] intentionally omitted <==

==> picture [759 x 410] intentionally omitted <==

----- Start of picture text -----

YoY Growth in 3Q22
70%
Revenue Growth in 3Q22
58%
60%
NT$ Mn 30,000 CAGR: 28% in 2020~22
50%
25,000
40%
30%
20,000
20%
11%
15,000 10%
0%
10,000 Opto-semiconductor Automotive
Photocoupler Electronics
45% 41%
5,000 40%
35%
30%
25%
-
20%
15% 11%
10%
Cloud & AIoT Opto-electronics 5%
0%
AIoT Cloud Computing
Power
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22
----- End of picture text -----

8

Balance Sheet

heet
In NT millions	3Q22	2Q22 3Q21
	Amount %	Amount % Amount %
Cash & Equivalent	70,507 35%	70,468 36% 69,459 38%
Accounts Receivable	44,519 22%	41,528 21% 38,737 21%
Inventories	31,449 15%	30,738 16% 30,791 17%
Current Assets	167,656 83%	157,965 82% 144,513 80%
Short Term Debt	33,900 17%	38,386 20% 31,349 17%
Accounts Payable	48,096 24%	42,340 22% 44,976 25%
Current Liabilities	116,985 58%	114,092 59% 108,779 60%
Equities	79,513 39%	76,151 39% 70,098 39%
Key Indices Quick Ratio (x) Net Cash (NT Millions) BVPS	1.2 36,607 34	1.1 1.0 32,082 38,110 33 30

9

3Q22 Executive Summary

==> picture [960 x 20] intentionally omitted <==

• 3Q22 consolidated sales of NT$ 46 billion, up 10% YoY, hitting third quarter record high in 3 consecutive years, mainly benefits from strong growth towards cloud computing, auto electronics and high-end photocouplers.

• GP, OP and EPS all hit record high in 3Q22, with EPS of NT$ 1.86, up 40% YoY. Continuing profits growth thanks to product mix optimization, increase of output value and market shares as well as operational resilience and efficiency.

• Consolidated sales of NT$ 130 billion by 9M22, up 8% YoY, also hitting record high in the same period in 3 consecutive years；GP and OP are up 9% and 25% YoY respectively, continuing to show profitable growth.

• 9M22 GPM: 19.1% (YoY +0.1ppt), 9M22 OPM: 9% (YoY +1.2ppts); EPS reached NT$ 4.51 by 9M22.

• R&D expense accounts for 4% of sales by 9M22, up 20% YoY, mainly due to strong investment towards software & firmware development and solution of system integration.

==> picture [960 x 35] intentionally omitted <==

Outlook for 4Q22

==> picture [960 x 20] intentionally omitted <==

• Sales and profit growth is expected, given solid development in our core business.

• Key growth drivers: Cloud computing power management, 5G & AIoT, Automotive electronics, and Photocouplers for green energy and industrial automation.

• Rising shipment of ITCE high-end products thanks to continuous enhancement through product mix and supply chain management.

==> picture [960 x 35] intentionally omitted <==

Empowering A Green Future 光電節能環境永續 https://www.liteon.com/en-us liteontech.ir@liteon.com