LTC — Call Transcript 2023

Nov 1, 2023

3Q23 Earnings Conference LITEON Technology

2 0 2 3 / 1 0 / 3 0

Agenda

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• Host, 3Q23 Results Julia Wang, IR Senior Director

• Operation Plan and Growth Strategy Anson Chiu, President

• Q&A

Safe Harbor Notice

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.

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Information
Opto- Cloud & Technology &
electronics AIoT Consumer
Electronics
Opto-semiconductors, Datacenter, Server, NB, Workstations,
Automotive Electronics, Networking, AIoT, Tablets, DT,
Intelligent Transportation Smart Devices,
Gaming,
Lighting Solutions Video Intelligence
Consumer Electronics
Solutions
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3Q23 Income Statement

In NT Millions	3Q23	QoQ YoY 3Q22 2Q23
	Amount %	Amount % % Amount % %
Net Sales	39,957 100.0	37,293 100.0 7 46,174 100.0 -13 *
COGS	30,526 76.4	28,615 76.7 7 37,172 80.5 -18
Gross Profit	9,432 23.6	8,678 23.3 9 9,003 19.5 5
Operating Expenses	4,812 12.0	4,353 11.7 11 4,608 10.0 4
Operating Profit	4,620 11.6	4,325 11.6 7 4,394 9.5 5
Other Income/ Expense	1,124 2.8	970 2.6 16 954 2.1 18
Profit Before Tax	5,744 14.4	5,295 14.2 8 5,348 11.6 7
Income Tax Expense	1,178 2.9	1,085 2.9 8 1,096 2.4 7
Non-Controlling Interests	9 0.0	9 0.0 -4 12 0.0 -25
Profit Attributable to Parent	4,558 11.4	4,200 11.3 9 4,240 9.2 7
After Tax EPS	1.99	1.84 1.86

• 3Q23 revenue -9% YoY, excluding IMG disposal

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9M23 Income Statement

e Statement
In NT Millions	9M23	YoY 9M22
	Amount %	Amount % %
Net Sales	111,424 100.0	130,362 100.0 -15 *
COGS	86,893 78.0	105,515 80.9 -18
Gross Profit	24,532 22.0	24,847 19.1 -1
Operating Expense	13,433 12.1	13,101 10.0 3
Operating Profit	11,099 10.0	11,745 9.0 -6
Other Income/ Expense	2,915 2.6	1,253 1.0 133
Profit Before Tax	14,014 12.6	12,998 10.0 8
Income Tax Expense	2,873 2.6	2,665 2.0 8
Non-Controlling Interests	30 0.0	30 0.0 0
Profit Attributable to Parent	11,111 10.0	10,304 7.9 8
After Tax EPS	4.86	4.51

• 9M23 revenue -9% YoY, excluding IMG disposal

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Revenue and profits contribution in 3Q23

20% 34% 46% Opto-electronics (including auto electronic) Cloud & AIoT Information Technology & Consumer Electronics 21% 36% 43% 3Q23 Product Mix 2Q23 Product Mix $37,293 NT$mn $39,957 NT$mn	20% 34% 46% Opto-electronics (including auto electronic) Cloud & AIoT Information Technology & Consumer Electronics 21% 36% 43% 3Q23 Product Mix 2Q23 Product Mix $37,293 NT$mn $39,957 NT$mn	20% 34% 46% Opto-electronics (including auto electronic) Cloud & AIoT Information Technology & Consumer Electronics 21% 36% 43% 3Q23 Product Mix 2Q23 Product Mix $37,293 NT$mn $39,957 NT$mn	20% 34% 46% Opto-electronics (including auto electronic) Cloud & AIoT Information Technology & Consumer Electronics 21% 36% 43% 3Q23 Product Mix 2Q23 Product Mix $37,293 NT$mn $39,957 NT$mn	20% 34% 46% Opto-electronics (including auto electronic) Cloud & AIoT Information Technology & Consumer Electronics 21% 36% 43% 3Q23 Product Mix 2Q23 Product Mix $37,293 NT$mn $39,957 NT$mn	20% 34% 46% Opto-electronics (including auto electronic) Cloud & AIoT Information Technology & Consumer Electronics 21% 36% 43% 3Q23 Product Mix 2Q23 Product Mix $37,293 NT$mn $39,957 NT$mn
	20% 34% 46% Opto-electr (including a Cloud & AIo Information Consumer 23 Product Mix $39,957 NT$mn		onics uto electronic) T Technology & Electronics 2Q2	21% 36% 43% 3 Product Mix $37,293 NT$mn
		Revenue	GPM		Operating Profit
		rom High-End Products Amount QoQ %
NT$Mln					3Q23 2Q23 QoQ
Cloud & AIoT		13,657 3% 34% 28%+			2,028 1,619 25%
Information Technology & Consumer Electronics		18,442 14% 46% 20%+			3,257 2,746 19%
Opto-electronics (including auto electronic)		7,858 -1% 20% 30%+			639 756 -15%

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6

Robust Balance Sheet

ance Sheet
In NT millions	3Q23	2Q23 3Q22
	Amount %	Amount % Amount %
Cash & Equivalent	94,834 47%	83,711 45% 70,507 35%
Accounts Receivable	36,663 18%	32,929 18% 44,519 22%
Inventories	26,015 13%	23,303 12% 31,449 15%
Current Assets	167,111 83%	153,330 82% 167,656 83%
Short Term Debt	31,999 16%	30,179 16% 33,900 17%
Accounts Payable	43,215 22%	36,592 20% 48,096 24%
Current Liabilities	109,929 55%	99,452 53% 116,985 58%
Long Term Borrowings	3,000 1%	3,000 2% 3,000 1%
Equities Key Indices Quick Ratio (x)	84,510 42% 1.3	81,685 44% 79,513 39% 1.3 1.2
Net Cash (NT Millions)	59,835	50,533 33,607
BVPS	36	35 34

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7

3Q23 & 9M23 Executive Summary

3Q23

• 3Q23 consolidated sales reached around NT$40 billion. Gross margin reached 23.6%, up 4.1ppts YoY, attributable to increasing proportion of high-end products, centralized manufacturing, improved operational efficiency and supply chain collaboration; Operating margin reached 11.6%, up 2.1ppts YoY.

• RD expense accounts for 5.1% of sales in 3Q23, up nearly 10% YoY, mainly reflecting LITEON’s investment on cloud, opto-electronics, 5G and new business.

• 3Q23 profits reached NT$4.6 billion and EPS reached NT$1.99, up 7% YoY.

• Revenue from Cloud Computing Power grew around 20% YoY, benefited from spec migration of AI server power and cloud computing products.

• New products launched from IT customers, driving revenue and profit for IT&CE’s high-end products to grow.

• New in such as automotive and invisible progress opto-electronics lighting sensing

• applications, while overall performance is still affected by soft consumer demand.

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9M23 Executive Summary

9M23

• 9M23 consolidated sales reached NT$111.4 billion; Gross margin and Operating margin reached 22% and 10%, up 2.9ppts and 1ppt YoY, respectively; EPS reached NT$4.86, up 8% YoY.

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© LITE-ON Technology Corporation. All Rights Reserved.

Operation Plan and Growth Strategy

• 3Q23 consolidated sales reached around NT$40 billion, with gross margin of 23.6% and operating margin of 11.6%, both surpassing the targets of 20/10% respectively. The optimization of operating costs came mainly from improved operating structure and adjusted product strategies.

• Pii (Power Innovations International), one of the company’s US subsidiary, has officially launched the Level 3 DC EV fast chargers, providing a high-speed charging solution ranging from 30 kW to 180 kW. The solution is widely adopted in commercial or public fields, including public EV infrastructure, fleets, and service operators.

• For cloud computing power business, 5.5kW high-end power products has started shipping. At the 2023 OCP Global Summit, the latest OrV3 specification power management system and COOLITE liquid cooling solution have been exhibited concurrently.

• The products and solutions mentioned above all incorporate LITEON’s core technology, aligning with our ten-year strategy for Internet of Energy (IOE). We gradually move towards the direction of energy conservation, energy storage, energy control, and energy conversion to achieve our Net Zero ESG goals of 555 strategy.

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Operation Plan and Growth Strategy

• The expansion of Dallas plant is proceeding smoothly, with trial production expected to begin in 4Q23, and revenue contributions expected to start in 2024. The company is actively planning global capacity, with the Vietnam site poised to become one of the largest manufacturing centers.

• For 4Q23, the company expects cloud power business to continue growing, with stable shipment in mid to in IT&CE the foundation for stable

• recovery high-end products segments, laying development of overall revenue and profits in 4Q23.

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

Issuance of Domestic Unsecured Convertible Corporate Bonds

BOD approved the issuance of the domestic unsecured convertible corporate bonds

• Purpose of Issuance: To enrich mid to long-term working capital and to optimize company’s financial structure.

• Total amount issued: The maximum total issued amount is NT$10 billion.

• Issuance period: 5 years.

• Coupon rate: 0%.

• Issuance condition and content: The conversion measures will be handled in accordance with relevant laws and regulations and will be reported to the relevant competent authorities for approval before being announced in a separate announcement.

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