Primax — Interim / Quarterly Report 2021

Jun 17, 2021

PRIMAX ELECTRONICS

QUARTERLY FINANCIAL RESULTS | TAIWAN | 30 APRIL 2021

For More Information Please Contact

Ellen Tseng

Director | Investor Relations | Taiwan lR@primax.com.tw

INVESTOR RELATIONS Primax Electronics 1Q 2021 Financial Results

==> picture [67 x 22] intentionally omitted <==

PRIMAX | PRIVATE & CONFIDENTIAL

==> picture [161 x 6] intentionally omitted <==

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

INVESTOR RELATIONS & BUSINESS OUTLOOK I 1
----- End of picture text -----

PRIMAX AT A GLANCE AND LONG-TERM GROWTH STRATEGY

2019 Group numbers of:

• Revenue = NTD 80.65 billion Net profit = NTD 2.26 billion

CAGR 1989-2019

• Revenue = 16%

• Net profit = 14%

Stable returns

• 50%+ dividend payout

• 4-6% dividend yield















Founded in 1984 with long-term growth strategy of:

• Riding on the trend of “A World of Smart Everything”

• “3 senses In 1” strategy

• Value over scale

• Diversity to mitigate risks

Worldwide employee of 17,000+

Solid financial performance

• Strong cash cow business

• High ROE (5-year average

• of 15.6%)

Corporate governance & ESG

• First rated (2016, 2017, 2019, 2020)

• High ranked CSR/ESG (#38)

• SGS Sustainability Elite Award

• TCSA (top 50 Sustainability Award & Platinum Award for CSR report)

INVESTOR RELATIONS & BUSINESS OUTLOOK I 2

PRIMAX | PRIVATE & CONFIDENTIAL

DIFFERENTIATION AND CORE COMPETENCY

==> picture [59 x 58] intentionally omitted <==

==> picture [59 x 58] intentionally omitted <==

==> picture [59 x 58] intentionally omitted <==

==> picture [59 x 58] intentionally omitted <==

==> picture [58 x 58] intentionally omitted <==

Uniquely Positioned

Long History of ReODM Design Service Investing Provider

Moving Away From Low Diversity To Mitigate Value Add Risks

• 3 senses in 1 strategy

• A value added approach

• Long, proven track record since 1984

• Positioned as the go to ODM design service provider

• Moving away from  China, Thailand and me-too business Czech manufacturing

• Moving to higher  Singapore treasury margin products center

• All in one solutions  Achieving through  Original design and manufacturing product life cycle

• provider  Flexible approaches transition

• Visual, audio and  New technology and strong and long interface expertise lasting relations with evolution clients

• Seeking out cloud  US early engagement based service engineering team provider customers  UK R&D center in need of a reliable  Taiwan R&D and long-term hardware pilot run site provider

INVESTOR RELATIONS & BUSINESS OUTLOOK I 3

PRIMAX | PRIVATE & CONFIDENTIAL

PRODUCT PORTFOLIO AND APPLICATIONS

==> picture [657 x 300] intentionally omitted <==

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

Historical 2020 Sales
Classification Product Portfolio
Range Breakdown
14-30% 14
Visual Technology Dash Camera Police Body Camera ADAS Camera Camera Module Multi-Camera Ultra-Slim 360 Cam 4K 360 Cam
29-48% 39
Dash Camera Wireless Docking Gaming Mouse Mouse & Keyboard Gaming Controller [Smart Remote] Trackpad
Intelligent Interface Charging & Keyboard
6-13% 6
Business Equipment Surveillance MFP Thermal Printer Scanner / ADF Mobile Photo Printer
15-51% 42
Conference TWS Headphones Smart Portable Home Audio Loud Speaker Transducer
Audio Products Speaker Speaker
----- End of picture text -----

INVESTOR RELATIONS & BUSINESS OUTLOOK I 4

PRIMAX | PRIVATE & CONFIDENTIAL

PRIMAX HIGHLIGHTS OF THE QUARTER

==> picture [672 x 313] intentionally omitted <==

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

Quarterly Revenue (NTD million) Quarterly Revenue Growth YoY (%)
25,291 25,014 35%
29%
27%
Revenue up 27% YoY 18,907 [19,559]
Record high 1Q revenue 16,704 16,251 17,159 15% 13%
13,641 13,524
Gross profit up 41% YoY
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
Gross profit up 1.2ppt YoY
-1%
-3%
Operating profit up 188% YoY 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 -25% [-22%]
Operating profit up 1.9ppt YoY
Quarterly Revenue Growth QoQ (%) Quarterly Earnings Per Share (NTD)
1.72 1.73
22% 20% 1.35
16%
1.13 1.13
• PBT increased 139% YoY 3% 0.80 0.93 0.82
• PBT margin was 3.9% 0.62
• PBT up 1.7ppt YoY 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
-1% -12%
• EPS grew 82% YoY -26%
• Record high for Q1 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
-46%
----- End of picture text -----

INVESTOR RELATIONS & BUSINESS OUTLOOK I 5

PRIMAX | PRIVATE & CONFIDENTIAL

PRIMAX FINANCIAL DASHBOARD

==> picture [653 x 294] intentionally omitted <==

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

Earnings Per Share (NTD) Cash Dividend Per Share (NTD) Cash Dividend Payout & Dividend Yield (%)
2.63 [2.91] 1.55 3.57 4.06 4.40 [4.67] 4.12 4.80 4.30 2020 2.50 3.20 2.40 2.40 3.00 57% 70% 61% 50% 70%
2.10
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 NTD 4.30 6.2%
5.0% 5.1% 4.7%
4.0%
1Q21
NTD 1.13
2015 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Quarterly And Annual Sales Breakdown
1Q21 Sales Breakdown (%) Annual Sales Breakdown (%) Return On Equity & Return On Assets (%)
Audio, 29% 2020 39% 14% 6% 42% 2020 4.2% 13.0%
2019 29% 13% 7% 51% 2019 5.0% 15.4%
Business 4.8%
Equipment, Interface, 2018 34% 16% 9% 42% 2018 13.7%
6% 53% 2017 34% 23% 9% 34% 2017 5.9% 17.2%
5.4%
2016 40% 30% 9% 21% 2016 16.3%
VT, 12% Interface VT Business Equipment Audio ROA ROE
----- End of picture text -----

INVESTOR RELATIONS & BUSINESS OUTLOOK I 6

PRIMAX | PRIVATE & CONFIDENTIAL

PRIMAX INCOME STATEMENT

	Gross Margin (%) Operating Margin (%) 11.8% 11.2% 11.9%11.7% 11.3%11.3% 13.0% 11.7% 12.5% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 1.6% 2.4% 4.8% 3.7% 1.5% 2.4% 4.7% 4.1% 3.5% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21		Q1 2021 QoQ YoY Q4 2020 Q1 2020 (NTD million)
			Net Sales 17,159 19,559 13,524 -12.3% 26.9%
			COGS 15,011 17,269 11,999
			Gross Profit 2,148 2,290 1,525 -6.2% 40.8%
			Gross Margin (%) 12.5% 11.7% 11.3% 0.8% 1.2%
			Operating Expense 1,556 1,490 1,320
			Operating Expense (%) 9.1% 7.6% 9.8% 1.5% -0.7%
			Operating Income 592 801 205 -26.0% 188.4%
			Operating Margin (%) 3.5% 4.1% 1.5% -0.6% 1.93%
			Non-operating Items 42 (254) 60
			Income before Tax 634 547 266 15.9% 138.7%
			Income Tax 133 109 58
			Net Income 501 438 207 14.4% 141.9%
			Net Margin (%) 2.9% 2.2% 1.5% 0.7% 1.4%
			Net income attributed to Primax 505 367 276 37.6% 83.2%
			EPS (NTD) 1.13 0.82 0.62 82%

INVESTOR RELATIONS & BUSINESS OUTLOOK I 7

PRIMAX | PRIVATE & CONFIDENTIAL

PRIMAX BALANCE SHEET

==> picture [200 x 302] intentionally omitted <==

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

Current Ratio & Leverage (%)
120% 118% 120% 126% 126%
71% 70% 71% 67% 70%
1Q20 2Q20 3Q20 4Q20 1Q21
Current Ratio Total Liabilities-To-Assets Ratio
1Q 2021 Balance Sheet Key Indices (days)
AR Turnover AP Turnover
78 120
Inventory Days Cash Conversion Cycle
56 14
----- End of picture text -----

ET
(NTD million)	Q1 2021	Q4 2020	Q3 2020	Q2 2020	Q1 2020
Cash	6,167	6,935	10,839	10,958	15,639
Notes & Accounts Receivable	12,145	13,579	14,807	11,967	11,016
Inventory	10,242	10,247	8,790	7,241	8,840
Total Current Assets	39,547	35,110	37,470	33,569	38,139
Fixed Assets	6,497	6,542	6,505	6,389	6,447
Total Assets	52,646	47,307	50,179	46,251	51,012
Notes & Accounts Payable	15,205	19,001	17,114	12,557	15,974
S-T Borrowings	8,662	905	6,530	7,678	9,152
CPLTD	121	75	0	0	0
Total Current Liabilities	31,316	27,941	31,201	28,406	31,877
L-T Borrowings	1,334	681	364	222	151
Total Liabilities	36,707	31,806	35,403	32,516	36,445
Total Equity	15,939	15,501	14,776	13,736	14,566

INVESTOR RELATIONS & BUSINESS OUTLOOK I 8

PRIMAX | PRIVATE & CONFIDENTIAL

PRIMAX STATEMENT OF CASH FLOWS

==> picture [200 x 302] intentionally omitted <==

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

Operating Cash Flow (NTD million)
6,628
3,961
3,412
2,268
1,787
2016 2017 2018 2019 2020
Capital Expenditure (NTD million)
3,485
2,689
1,913
1,202
1,034
2016 2017 2018 2019 2020
----- End of picture text -----

	(NTD million)	Q1 2021YTD	Q4 2020YTD	Q3 2020YTD	Q2 2020YTD	Q1 2020YTD
	From Operations	(8,572)	3,961	2,049	(647)	2,088
	- Income Before Tax	634	2,478	1,931	868	266
	- Depreciation & Amortization	515	2,230	1,682	1,135	590
	- Notes & Accounts Receivable	1,434	5,630	4,413	7,246	8,601
	- Notes & Accounts Payable	(3,796)	(4,744)	(6,630)	(11,188)	(7,771)
	- Inventory	14	(39)	1,416	3,080	1,549
	- Other Operating Sources (Uses)	(7,373)	(1,594)	(763)	(1,788)	(1,146)
	From Investment	(517)	(2,796)	(2,131)	(1,378)	(1,047)
	- Fixed Assets	(533)	(2,689)	(2,008)	(1,305)	(993)
	- Other InvestingSources(Uses)	17	(107)	(123)	(73)	(53)
	From Financing	8,390	(975)	4,330	6,485	7,976
	- S-T Borrowings	7,757	(187)	5,438	6,586	8,060
	- L-T Borrowings	700	577	186	44	(28)
	- Cash Dividend		(1,077)	(1,077)
	- Other Financing Sources (Uses)	(66)	(288)	(216)	(145)	(56)
	Net Cash Position Change	(699)	190	4,247	4,460	9,018
	Effect of Foreign Currency	(70)	44	(109)	(203)	(79)
	Cash At Beginning of Year	6,935	6,701	6,701	6,701	6,701
	EndingCash Balance	6,167	6,935	10,839	10,958	15,639

INVESTOR RELATIONS & BUSINESS OUTLOOK I 9

PRIMAX | PRIVATE & CONFIDENTIAL

PRIMAX 2021 STRATEGY AND OUTLOOK

Primax Targets & Strategy

Deepen 3 senses In 1 strategy

Continue to expand new smart devices to inject growth momentum, increase high value-add new products to the mix each year, such as AIoT and Smart Access products.

Profit growth over revenue growth

Due to a continuous effort of optimizing our product and customer mix, gross margin and operating margin would likely see an improvement in the future. Primax is now adopting a profit over revenue growth strategy to optimize profitability and shareholders’ return.

==> picture [49 x 49] intentionally omitted <==

==> picture [48 x 48] intentionally omitted <==

==> picture [49 x 49] intentionally omitted <==

Intelligence Interface Segment

PC and gaming peripheral demand remain robust thanks to WFH (work from home). High growth is also expected from new businesses such as smart homes, docking, and wireless charging.

Visual Technology Segment

EV and ADAS demand would likely show strong growth in the coming years thanks to an US-based customer. Primax also aims to increase margins on its nonsmartphone camera module mix.

Audio Segment

Growth would mainly come from consumer audio and video conference demands, coupled with new projects kick-off, Primax’s audio profitability should improve significantly on a YoY basis.

==> picture [48 x 49] intentionally omitted <==

==> picture [48 x 48] intentionally omitted <==

==> picture [49 x 49] intentionally omitted <==

Increase High Value-Add Products

Primax’s strategy of gradually increasing commercial and industrial contribution from AIoT (ie. law enforcement body camera) and smart home (smart locks and smart doorbell), should be growth drivers in the future.

Upgrade Manufacturing Capabilities

Primax is pushing ahead towards Smart Manufacturing and Industrial 4.0 concept, with aims of increasing efficiency and lowering costs for the company.

Diversifying Capacity

With aims of mitigating country risks, Primax’s Thailand manufacturing site is currently uder construction and will be ready for production by 2021 yearend.

INVESTOR RELATIONS & BUSINESS OUTLOOK I 10

PRIMAX | PRIVATE & CONFIDENTIAL

PRIMAX 2Q 2021 OUTLOOK

Sales Outlook

Covid-19 Demand

Car Electronics

Home Audio & Conference

Primax Sales Outlook

Primax As a result of the ongoing anticipates pandemnic, work from a positive home (WFH) demand is YoY revenue translating to overall growth in growth in the PC / gaming / consumer segments, which Primax is expecting T double digit YoY growth.

Q2 2021, but the growth rate could be affected by component shortages in the market.

Car electronics demand would continue to grow robustly (ADAS camera module applied to EV and advanced driving assistance), however smartphone camera module revenue and mix would decrease.

Home audio and conference products should see continued growth, and new professional audio projects would be another boost. Revenue is expected to Text grow slightly QoQ, but higher margin revenue mix will increase substantially.

==> picture [40 x 41] intentionally omitted <==

Primax Profit Outlook

Gross and operating margin expected to increase QoQ

==> picture [38 x 91] intentionally omitted <==

Interface

Primax’s profitability from interface related products should remain stable compared to past quarters thanks to intact PC / gaming demand in Q2 2021.

Visual

Profit growth in Q2 2021 would come mainly from an increase of car ADAS contribution, and Primax’s net profit from its visual business would likely see substantial YoY growth.

Audio

Profit growth for Primax’s audio business would come from two parts, namely Improvement in customer structure and an increase of high-end premium audio mix, which should translate into a significant QoQ growth.

INVESTOR RELATIONS & BUSINESS OUTLOOK I 11

PRIMAX | PRIVATE & CONFIDENTIAL

Primax Electronics Headquarter

Taipei City

No. 669, Ruiguang Road, Neihu District 114 Taipei City, Taiwan +(886 2) 2798 9008 IR@primax.com.tw

About Primax Electronics

Primiax Electronics was founded in 1984 and is a leading supplier of IT, electronic and consumer solutions. The company is headquartered at Neihu Technology Park in Taipei City. Guided by the principle of "Global Operations with R&D and Smart Manufacturing in Taiwan", Primax now operates across Asia, The Americas and Europe. Highly-efficient production sites have been established in Taiwan, China and Thailand and the company has over 10,000 employees worldwide.

Seeing the potential of cloud technology and IoT, Primax has successfully developed human-machine interface products with touch, voice control, gesture recognition and wearable functions. Vision and video products have achieved notable successes in smart surveillance systems, mobile devices, smart homes, and advanced driver assistance systems. Our insistence on maintaining high yields as well as high quality in manufacturing and development is backed by our technical expertise. Our implementation of smart system engineering has also made us an indispensable partner for leading international brands and has allowed us to build up the energy needed for future growth. For the latest news from Primax Electronics, visit our website or follow us on

Safe Harbor And Disclaimer

Primax’s presentation contains forward-looking statements subject to significant risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In this context, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.

==> picture [63 x 21] intentionally omitted <==

Actual results may differ materially from those contained in the forward-looking statements due to risk and uncertainties resulting from a number of important factors. Such factors include, but are not limited to: our highly competitive environment; the cyclical nature of our business; our ability to develop new products; and our successful execution in new business developments, and etc. All forward-looking statements in this presentation are based on information available to us as of the date hereof, we undertake no obligation to update these forward-looking statements for new information, future events, otherwise, or update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

Copyright © 2021 Primax Electronics