WALSIN — Call Transcript 2024

Nov 8, 2024

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2024 Third Quarter Investor Conference

November 08, 2024

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Safe Harbor Notice

• Walsin’s statements of its current expectations are forward looking subject to significant risks and uncertainties, and actual results may differ materially from these forward-looking statements.

• Except as required by law, Walsin assumes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

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Agenda

▪ 3Q24 Financial Results

▪ 4Q24 Outlook

▪ Q&A

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Income Statement

In NT$ billions unless otherwise noted 3Q24 2Q24 3Q23 3Q24 over 2Q24 3Q24 over 3Q23	In NT$ billions unless otherwise noted 3Q24 2Q24 3Q23 3Q24 over 2Q24 3Q24 over 3Q23	In NT$ billions unless otherwise noted 3Q24 2Q24 3Q23 3Q24 over 2Q24 3Q24 over 3Q23
	3Q24
Operating Revenue	43.8	48.3 46.3 (9%) (5%)
Gross Margin	5.9%	8.5% 8.4% (2.6%) (2.5%)
Operating Expenses	2.4	2.5 1.9 (5%) 21%
Operating Margin	0.5%	3.4% 4.2% (2.9%) (3.7%)
Non-Operating Income and Expenses Net Profit Attributable to Owners	(0.1) 0.4	1.0 0.6 (113%) (123%) 2.2 2.0 (84%) (82%)
Profit Margin	0.8%	4.5% 4.3% (3.7%) (3.5%)
EPS (NT Dollar) EBITDA1	0.09 3.0	0.55 0.49 (0.46) (0.40) 4.0 4.3 (25%) (31%)

1 EBITDA= Operating Income + Depreciation+ Amortization + Cash Dividend from Investment under Equity Method

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3Q24 Operating Revenue by Business Groups (BG)

60 70	(In NT$ billions) Sta S 8.4% 5.6% 6.4% 8.5% 5.9% 5% 10% 15%	(In NT$ billions) Sta S 8.4% 5.6% 6.4% 8.5% 5.9% 5% 10% 15%	(In NT$ billions) Sta S 8.4% 5.6% 6.4% 8.5% 5.9% 5% 10% 15%
		Sta S 5% 10%		.03) (2.56) 0.39 (0.34) (0.01) Wire and Cable 3Q2 4 Over 2Q24 Copper Wire Borrego inless teel Resources
- 10 20 30 40 50 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%	46 43 41 48 44 50% 50% 57% 51% 52% 23% 22% 17% 20% 17% 24% 25% 23% 26% 28%	- - - 0	(2 15% 10% 5% %
		- - -	Sta S 30% 25% 20%
	3Q23 4Q23 1Q24 2Q24 3Q24 Stainless steel Resource Wire and cable Oth G i
			(
	ers ross margn
		(3.20)

(3.20)

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3Q24 Operating Revenue and Gross Margin by BG

(In NT$ billions)

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Stainless steel Resource Wire and cable
40 25 25
11%
35 10% 10% 10%
9%
5% 7% 5% 20 19% 20
30 4% 4%
9%
25 5% 15
15 3%
1%
20
10
10
15
10
5
5
5
0
0 0 3Q23 4Q23 1Q24 2Q24 3Q24
3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24
Copper wire revenue Cable revenue
Revenue Gross margin Revenue Gross margin Gross margin
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3Q24 Net Profit by BG

(In NT$ billions)

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Manufacturing Segment Long-Term Investments and Others
1.4
1.4
1.2
1.2
1.0
1.0
.8 .8
.6 .6
.4 .4
.2 .2
.0 .0
(.2) (.2)
(.4) (.4)
(.6)
(.6)
(.8)
(.8)
(1.0)
(1.0)
3Q23 4Q23 1Q24 2Q24 3Q24
3Q23 4Q23 1Q24 2Q24 3Q24
Stainless Steel Wire and cable Resource Long-term Investment Others
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Balance Sheets & Key Indices

SelectedItems from Balance Sheets	3Q24	2Q24 3Q23
(In NT$ billions)	Amount %	Amount % Amount %
Cash and cash equivalents Accounts Receivable Inventory 1 Long-Term Investments2 Property, Plant, and Equipment3	8.5 3% 15.5 6% 44.5 17% 61.7 24% 114.6 44%	12.1 5% 13.5 5% 19.4 7% 22.5 8% 43.2 16% 39.7 14% 62.7 23% 68.0 25% 114.4 43% 110.2 40%
Total Assets	262.3 100%	269.1 100% 274.8 100%
Current Liabilities Long-term Interest-bearing Debts	53.7 20% 44.1 17%	55.7 21% 53.2 19% 46.4 17% 49.5 18%
Total Liabilities	112.6 43%	116.6 43% 116.5 42%
Total Shareholders’ Equity	149.7 57%	152.5 57% 158.3 58%
Key Indices Average Collection Days Average Turnover Days Current Ratio Ratio of Long-Term Capital to Non-Current Assets 4	36 89 1.5 1.1	35 43 79 74 1.5 1.7 1.1 1.1

• 1 Inventory includes prepayment for purchases

• 2 Long-term investments includes prepayments for investments

• 3 Property, Plant, and Equipment (PPE) includes intangible assets

4 Ratio of long-term capital to Non-Current Assets = (Total Shareholders’ Equity + Non-Current Liabilities) / Non-Current Assets

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Cash Flows

(In NT$ billions)	3Q24	2Q24 3Q23
Beginning Balance	12.1	12.3 24.3
Cash from Operating Activities Capital Expenditure Equity Investments Acquisition of Subsidiaries Earn-out from Disposal of Borrego Long and Short-Term Borrowing Cash Dividends Paid Others	1.5 (3.2) (0.7) - - 3.2 (4.4) -	0.5 2.3 (1.9) (4.0) 0.6 - (0.8) (5.9) - - 1.0 0.6 - (6.7) 0.4 2.9
Ending Balance	8.5	12.1 13.5

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4Q24 Outlook

▪ Stainless Steel BG

• Both the European and U.S. markets were impacted by the holiday season in 3Q24, with recovery expected in 4Q24. In Taiwan, performance is projected to remain consistent with 3Q24 levels, while demand in China’s stainless steel market continues to appear sluggish.

• We plan to invest in a new stainless steel wire rod manufacturing plant with an annual production capacity of 300,000 tons. This facility is designed to enhance our cost competitiveness in key Southeast Asian and South Asian markets. Construction is expected to complete by 2Q26, with mass production slated to begin in 1H27.

▪ Resource BG

• Indonesia's approvals for nickel ore mining production quotas (RKAB) are gradually increasing. While high ore premiums for nickel are expected to stabilize, their impact on production costs is likely to be delayed until 4Q24.

• Market supply and demand integration is still pending under the new government, but improvements are expected by 1Q25.

▪ Wire and Cable BG

• Demand for the Taipower for Grid Resilience Strengthening Construction Plan remains strong in 4Q24.

• Demand for power cables in the private sector shows a mild decline, despite high construction activity in the technology industry.

▪ 4Q24 is anticipated to maintain steady profitability overall.

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Please dial +886 2 3396 1191

then press 1416508 # to join our Q&A session

Thank you

IR@walsin.com http://www.walsin.com/

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