LTC — Call Transcript 2023

Sep 12, 2023

2Q23 Earnings Conference LITEON Technology

2 0 2 3 / 7 / 2 8

Agenda

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• Host, 2Q23 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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2Q23 Income Statement

In NT Millions	2Q23	QoQ YoY 2Q22 1Q23
	Amount %	Amount % % Amount % %
Net Sales	37,293 100.0	34,174 100.0 9 42,957 100.0 -13 *
COGS	28,615 76.7	27,752 81.2 3 34,180 79.6 -16
Gross Profit	8,678 23.3	6,422 18.8 35 8,777 20.4 -1
Operating Expenses	4,353 11.7	4,268 12.5 2 4,407 10.3 -1
Operating Profit	4,325 11.6	2,154 6.3 101 4,370 10.2 -1
Other Income/ Expense	970 2.6	821 2.4 18 623 1.5 56
Profit Before Tax	5,295 14.2	2,975 8.7 78 4,993 11.6 6
Income Tax Expense	1,085 2.9	610 1.8 78 1,024 2.4 6
Non-Controlling Interests	9 0.0	12 0.0 -21 10 0.0 -2
Profit Attributable to Parent	4,200 11.3	2,353 6.9 79 3,960 9.2 6
After Tax EPS	1.84	1.03 1.74

• 2Q23 revenue -7% YoY, excluding IMG disposal

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1H23 Income Statement

e Statement
In NT Millions	1H23	YoY 1H22
	Amount %	Amount % %
Net Sales	71,467 100.0	84,187 100.0 -15 *
COGS	56,367 78.9	68,343 81.2 -18
Gross Profit	15,100 21.1	15,844 18.8 -5
Operating Expense	8,621 12.1	8,493 10.1 2
Operating Profit	6,479 9.1	7,351 8.7 -12
Other Income/ Expense	1,791 2.5	299 0.4 499
Profit Before Tax	8,269 11.6	7,650 9.1 8
Income Tax Expense	1,695 2.4	1,568 1.9 8
Non-Controlling Interests	21 0.0	18 0.0 17
Profit Attributable to Parent	6,553 9.2	6,064 7.2 8
After Tax EPS	2.86	2.66

• 1H23 revenue -10% YoY, excluding IMG disposal

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Revenue and profits continue to grow sequentially in 2Q23

2	Q23 Product Mix $37,293 NT$mn 43%	21% 36% Opto-electro (including a Cloud & AIo Information Consumer E	21% 36% Opto-electro (including a Cloud & AIo Information Consumer E	1Q2 nics uto electronic) T Technology & lectronics	1Q2 nics uto electronic) T Technology & lectronics	22% 36% 42% PM f Operating Profit 3 Product Mix $34,174 NT$mn	22% 36% 42% PM f Operating Profit 3 Product Mix $34,174 NT$mn
		Revenue				PM f
		rom High-End Products Amount QoQ %					2Q23 1Q23 756 482 1,619 788 2,746 1,894
NT$Mln
Opto-electronics (includingauto electronic)		7,935 4%	21%		30%+		756 482
Cloud & AIoT		13,218 9%	36%		25%+		1,619 788
Information Technology & Consumer Electronics		16,140 12% 43% 18%+

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Robust Balance Sheet

ance Sheet
In NT millions	2Q23	1Q23 2Q22
	Amount %	Amount % Amount %
Cash & Equivalent	83,711 45%	77,675 42% 70,468 36%
Accounts Receivable	32,929 18%	30,423 17% 41,528 21%
Inventories	23,303 12%	25,366 14% 30,738 16%
Current Assets	153,330 82%	149,469 81% 157,965 82%
Short Term Debt	30,179 16%	20,840 11% 38,386 20%
Long Term Borrowings	3,000 2%	3,000 2% 0 0%
Accounts Payable	36,592 20%	37,828 21% 42,340 22%
Current Liabilities	99,452 53%	100,962 55% 114,092 59%
Equities Key Indices Quick Ratio (x)	81,685 44% 1.3	77,401 42% 76,151 39% 1.2 1.1
Net Cash (NT Millions)	50,533	53,835 32,082
BVPS	35	33 33

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2Q23 & 1H23 Executive Summary

2Q23

• 2Q23 consolidated sales reached NT$37.3 billion, which mainly benefited from YoY growth of cloud computing power, auto electronics, 5G and networking. Gross margin reached 23.3%, up 2.9ppts YoY, attributable to increasing proportion of high growth & high value business, supply chain collaboration and improvement of operational efficiency; Operating margin reached 11.6%, up 1.4ppts YoY.

• RD expense accounts for 5.2% of sales in 2Q23, up over 10% YoY, mainly reflecting LITEON’s investment on cloud, auto electronics, 5G and new business.

• 2Q23 profits reached NT$4.2 billion and EPS reached NT$1.84, up 6% YoY.

• BOD approved the second quarter of 2023 cash dividend of NT$2 per share.

1H23

• 1H23 consolidated sales reached NT$71.5 billion; Gross margin and Operating margin reached 21.1% and 9.1, up 2.3ppts and 0.4ppts YoY, respectively; EPS reached NT$2.86, up 8% YoY.

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© LITE-ON Technology Corporation. All Rights Reserved.

Operation Plan and Growth Strategy

Growth Strategy

• Opted for selective sectors and concentrated resources to develop high growth & high value business such as cloud computing, auto electronics, 5G and networking.

• Market-oriented growth strategy with highly integrated resources in RD, sales, production, and strategic procurement to successfully enter new market while mastering time-to-market approach, high end for AI server a The will our successful business

• power being great example. company actively expand models, strengthen our efficiency and capability of each business unit to enter new markets in the future.

• Macro, industry and markets continued to correct in 1H23. Although the company was affected by the consumer industry, we actively adjusted our operational structure and developed towards high-end markets. Three main segments continuously increased their profitability, which improved our overall gross margin significantly.

3Q23 Outlook

• Expected to see revenue growth contributes to high growth & high value business including cloud computing power, auto electronics, 5G network, etc.

• Besides focusing RD resources on core business to increase added value and gross profit, the company will also combine our core competence and invest in long-term growth areas such as energy transformation, conservation, control, and storage.

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10

2022 LITEON Sustainability Report Please scan QR code for further info.

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