LTC — Call Transcript 2024

May 7, 2024

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1Q24 Earnings Conference LITEON Technology

2 0 2 4 / 0 4 / 3 0

法說會議程

• Host, 1Q24 Results Julia Wang, IR Senior Director

• Operation Plan and Growth Strategy Anson Chiu, President

• Q&A

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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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Core Business & Profit expansion by high value business since 2021

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NT$ Mn
1Q24 Product Mix
80,000 25.0%
23%
20.3% 20.0%
42%
60,000 17.8% 18.8% $28,776 58%
17.1% NT$mn
15.0%
41,230
40,000 37,718 34,174 ** 35%
28,776 10.0%
7.8%
20,000
5.6% 7.2% 6.3% 5.0% Revenue
GP% 1Q21 Product Mix
OP%
- 0.0%
1Q 2021 1Q 2022 1Q 2023 1Q 2024 22%
NT$ 1Q21 1Q22 1Q23 1Q24 CAGR
$37,718
50%
EPS 1.83 0.92 * 1.03 1.04 11% NT$mn 50%
1Q21 Recognized non-operating income of NT$3.4 billion
28%
1Q23 Excluded divested IMG department
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1Q24 Executive Summary

【Operational Result】

• 1Q24 consolidated sales reached NT$28.8 billion. Gross Margin and Operating Margin reached 20.3% and 7.8%, up 1.5 ppt YoY respectively, attributable to synergies of enhanced high-value business, AI tools implemented and digitalized operational management.

• RD expense accounted for 6% of 1Q sales, reflecting steady investment in cloud, optoelectronics, 5G and new business.

• 1Q Net profits reached NT$2.4 billion and EPS of NT$1.04.

【Core businesses】

• Cloud Computing Power Management grew over 10% YoY, benefited from model migration of AI server power management and cloud computing products.

• IT&CE product mix continues optimization, and increased shipments of high-end power supplies and intelligent peripheral devices.

• New progress in Opto-electronics, including automotive lighting and Infrared sensing applications, in spite of the soft consumer demand.

【2024 AGM】

• The Annual Shareholders Meeting is expected to be held on May 27th, 2024.

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© LITE-ON Technology Corporation. All Rights Reserved.

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Operation Plan and
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Growth Strategy
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Operation Plan and Growth Strategy

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Data center business progress

• 5.5KW power supplies and 33KW power shelves have been delivered. Continue to develop 8KW PSU and higher power density and conversion efficiency solutions to support next-gen AI servers.

• Rack-level solutions integrate five core capabilities - power supply, liquid cooling, mechanism, software and system

• Independently develops core thermal management technology at the data center level, and establishes three major cooling systems: immersion, air cooling (side car), and in-row liquid cooling.

• Four major competitive advantages: (1) Full active digital control with MCU; (2) Exclusive patented technology - active cooling management based on load; (3) Integration of power supply, liquid cooling, mechanism, software, and system integration solutions; (4) Fast global manufacturing and deployment capabilities, providing customers with a comprehensive AI server liquid cooling solution.

Outlook 2Q

• 2Q expected to see quarterly up driven by the growth of high-value core businesses, cloud computing, optosemiconductors, high-end IT power supplies and smart input devices.

• Investment in R&D will continue and focus on the high value and high profit business.

Outlook 2024

• Cloud computing power, Opto-semiconductors, high-end power supplies and smart input devices will are expected to sustain growth, contributing to total quarterly revenue increase quarter by quarter.

• Long-term operations and investments in high-value IOE (Internet of Energy) businesses remains positive.

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Announcement on the strategic investment and alliance

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Strategic Investment in COSEL

+

• Investment amount: NTD 2.53 billion

• Purchase shares: 8,221k

• Shareholding: 19.99%[1]

• Board seats: rights of nomination and suggestion for one director and one independent director respectively.

• Valuation: P/E 9.14x[2]

Note 1: Calculation excludes treasury shares. Note 2. Based on COSEL’s EPS in the last 4 quarters (FY22Q4, FY23Q1-Q3). FY2022 means 2022/5 - 2023/5, FY2023 means 2023/5-2024/5

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Unlock the global power supply solution by strategic partnership

Accelerates mutual growth in niche power markets

Enhances ability to capture TAM together

Solid Financial opportunity

• Synergies from advanced AC/DC power supply and DC/DC converter are pivotal in power supply markets, enhancing business capabilities through overseas distributions and sales channels.

• COSEL stands out as a robust partner for LITEON in global power supply solutions, possessing a leading market position in the industrial SPS, a sound financial structure, and sustained profitability.

• Strategic cooperation in product development, manufacturing, geographic footprint, market expansion and leading technology

• Engaging new markets in industrial, semi-conductor equipment, medical, networking, transportation and renewable energy sectors, with a total addressable market (TAM) of NTD 400 billion.

• Increase profitable growth in power supply solution profile

• Substantial operating efficiencies

• Expected to be accretive to Operating Profit and Investment Income.

• COSEL financial performance in 3 years

Unit: JPY bn	FY2021	FY2022	FY2023 Q1-Q3
	ended 2022/5/20	ended 2023/5/20	ended 2024/2/20
Sales	28.1	35.3	31.5
GPM	28.3%	30.1%	34.3%
OPM	10.0%	14.0%	19.0%

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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