LTC — Call Transcript 2023

Mar 24, 2023

4Q22 Earnings Conference LITEON Technology

2 0 2 3 / 2 / 2 1

Agenda

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• Host, 4Q22 Results Julia Wang, IR Senior Director

• Operation Plan and Growth Strategy Anson Chiu, President

• Q&A

Safe Harbor Notice

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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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3

4Q22 Income Statement

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In NT Millions	4Q22	QoQ YoY Amount % % Amount % % 46,174 100.0 -7 44,569 100.0 -3 37,172 80.5 -7 36,867 82.7 -6 4Q21 3Q22	QoQ YoY Amount % % Amount % % 46,174 100.0 -7 44,569 100.0 -3 37,172 80.5 -7 36,867 82.7 -6 4Q21 3Q22
	Amount %
Net Sales	43,095 100.0
COGS	34,679 80.5
Gross Profit	8,416 19.5	9,003 19.5 -7 7,702 17.3	9
Operating Expenses	5,088 11.8	4,608 10.0 10 4,089 9.2 24 4,394 9.5 -24 3,613 8.1 -8 954 2.1 59 -455 -1.0 -
Operating Profit	3,327 7.7
Other Income/ Expense	1,520 3.5
Profit Before Tax	4,848 11.2	5,348 11.6 -9 3,158 7.1	54
Income Tax Expense	994 2.3	1,096 2.4 -9 642 1.4 55 12 0.0 -47 7 0.0 -4 4,240 9.2 -9 2,509 5.6 53 1.86 1.11
Non-Controlling Interests	6 0.0
Profit Attributable to Parent	3,847 8.9
After Tax EPS	1.68

4

2022 Full year performance

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In NT Millions 2022 2021 YoY
Amount % Amount % %
Net Sales 173,456 100.0 164,828 100.0 5
COGS 140,194 80.8 134,330 81.5 4
Gross Profit 33,262 19.2 30,498 18.5 9
Operating Expense 18,190 10.5 17,455 10.6 4
Operating Profit 15,073 8.7 13,042 7.9 16
Other Income/ Expense 2,773 1.6 4,590 2.8 -40
Profit Before Tax 17,846 10.3 17,632 10.7 1
Income Tax Expense 3,658 2.1 3,703 2.2 -1
Non-Controlling Interests 36 0.0 43 0.0 -15
Profit Attributable to Parent 14,151 8.2 13,887 8.4 2
After Tax EPS 6.19 6.01
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Revenue & Profit expansion by core business growth 2020~2022

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NT$ Mn
175,000 173,456 20%
19.2% 18%
170,000 18.5%
17.4%
16%
164,828
165,000
14%
160,000 12%
157,134
10%
155,000
8%
8.7%
150,000 7.9%
6%
6.5%
145,000 4%
2020 2021 2022
Revenue GP% OP%
Unit: $NTD 2020 2021 2022 CAGR
EPS 4.31 6.01 6.19 20%
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2020 Product Mix
18%
$157,134
51% 49%
NT$mn
31%
Opto-electronics (including auto electronic)
Cloud & AIoT
Information Technology & Consumer Electronics
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2022 Product Mix

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20%
47% $173,456 53%
NT$mn
33%
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Strong Growth in Core Business 2020~2022

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Revenue CAGR 2020~2022

Revenue Growth 2020~2022

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25%
22%
NT$ Mn CAGR: ~10% in 2020~22
20%
100,000
15%
12%
90,000
10%
80,000
5%
70,000
60,000 0%
Opto-semiconductor Automotive
50,000 Photocoupler Electronics
35%
32%
40,000
30%
30,000
25%
20,000 20%
10,000 15%
10%
7%
-
2020 2021 2022 5%
Cloud & AIoT Opto-electronics (including auto electronic) 0%
AIoT Cloud Computing
Power
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53% of Revenue from Opto and Cloud & AIoT in 2022, supporting profitable growth

	Revenue GPM from	Operating Profit	Operating Profit	Operating Profit
NT$Mln	High-End Products Amount YoY %		2022	2021 YoY
Opto-electronics (including auto electronic)	34,349 3% 20% 30%+		4,135	2,914 42%
Cloud & AIoT	56,994 10% 33% 25%+		4,746	3,089 54%
Information Technology & Consumer Electronics	82,113 3% 47% 18%+		9,668	7,999 21%

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Robust Balance Sheet

lance Sheet
In NT millions	4Q22	3Q22 4Q21
	Amount %	Amount % Amount %
Cash & Equivalent	91,066 46%	70,507 35% 68,276 37%
Accounts Receivable	38,128 19%	44,519 22% 41,246 22%
Inventories	27,747 14%	31,449 15% 32,299 18%
Current Assets	164,953 83%	167,656 83% 147,111 80%
Short Term Debt	32,629 16%	33,900 17% 28,385 15%
Accounts Payable	44,883 22%	48,096 24% 46,659 25%
Current Liabilities	111,781 56%	116,985 58% 107,915 59%
Equities	81,987 41%	79,513 39% 72,874 40%
Key Indices Quick Ratio (x)	1.2	1.2 1.1
Net Cash (NT Millions)	58,437	36,607 39,891
BVPS	35	34 32

9

Q4 & 2022 Executive Summary

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4Q

• 4Q22 consolidated sales mainly benefit from the strong growth of cloud computing and auto electronics with +31% and +48% YoY, respectively. Gross profit up 9% YoY and gross margin reaches 19.5%, up 2.2ppts YoY, attributable to the optimization of supply chain management and operational efficiency.

• RD expense accounts for 5% of sales in 4Q22, up >30% YoY, mainly reflecting LITEON’s investment on cloud, 5G, auto electronics and high-end opto-semiconductors.

• To stay focused on LITEON’s core businesses and strategy, the transfer of Image business has completed at the end of 2022.

2022

• Consolidated sales of NT$174 billion in 2022, up 5% YoY, thanks to the growth of high value business, including cloud computing power, auto electronics and high-end photocouplers. GP and OP are up 9% and 16% YoY, respectively, continuing to deliver the profitable growth.

• GPM and OPM reach 19.2% and 8.7%, up 0.7ppts and 0.8ppts YoY, respectively, mainly benefit from the expansion of revenue and the enhancement of operational efficiency. Net Profit is up 2% YoY and EPS reaches NT$6.19 in 2022.

10

Dividend Policy

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• BOD approved the fourth quarter of 2022 cash dividend of NT$3 per share.

• Including the NT$1.5 cash dividend per share in the first half of 2022, the cash dividend of 2022 FY reaches NT$4.5 per share.

• LITEON’s dividend policy will be flexible, considering financial, business and operational plans, aiming to maximize total shareholders’ return.

Period	2018	2019	2020	2021	2022
DPS (NT$)	2.92	3.2	3.4	4.5	4.5
Stock Price (NT$)*	45.7	50.8	59.4	62.9	70.4
Yield%	6.4%	6.3%	5.7%	7.2%	6.4%

• 2018~2021 stock prices are based on the closed prices of the previous day of the coming year AGM, 2022 stock price is based on the closed price of 2023/2/20.

11

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