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WT Interim / Quarterly Report 2018

Aug 10, 2018

52269_rns_2018-08-10_0b727446-fd15-4ccb-b3f8-7975342477ef.pdf

Interim / Quarterly Report

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2018 Second Quarter Investor Conference Presented by Cheryl Yang August 8, 2018

Safe Harbor Statement

  • WT’s forward-looking statements, which may include statements regarding its results of operations, financial condition or business prospects, are subject to significant risks and uncertainties and are based on WT’s current expectations.

  • Actual results may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including, among other things: the cyclical nature of our industry; our dependence on introducing new products on a timely basis; our dependence on growth in the demand for our products; our ability to compete effectively; our dependence on key personnel; general economic and political conditions; possible disruptions in commercial activities caused by natural and human-induced disasters, including terrorist activity and armed conflict; and fluctuations in foreign currency exchange rates.

  • In addition, any financial information contained here within is presented in conformity with International Financial Reporting Standards (IFRSs).

  • Except as required by law, our release of financial forecasts and forward-looking statements at any particular time does not create any duty of disclosure, and we expressly disclaim any obligation to publicly update or revise any forecasts or forward-looking statements, whether as a result of new information, future events or otherwise.

2

Agenda

1. Overview

2. Financial Update

3. Business Outlook

4. Recap of Recent Major Events

5. Questions and Answers

3

1. Overview

Strong secular growth with economies of scale

  • A leading Asian semiconductor distributor, founded in 1993 and listed in 2000 (ticker: 3036 TT)

  • Strategic focus on Asia region and Automotive & Internet of Things (IoT) applications

  • 2017 revenues of NT$189bn, up 31% YoY

  • 45 offices in Asia (30 offices in China and 15 offices in Korea, Taiwan, and South Asia) with over 8,000 customers

  • Over 2,000 headcounts after Maxtek acquisition in 4Q17 (over 650 sales, 200 PMs, and 450 FAEs)

  • Completion of warehouse semi automation (total 6 warehouses in Taiwan, HK, Shenzhen China, Shanghai China, Korea, and Singapore)

  • Completion of B2B service platform for major vendors and customers

4

1. Overview

China Offices (30)

Korea Office (1)

Harbin Shenyang Offices Across Asia Seoul Dalian Beijing Taiwan Offices (4) Qingdao Zhengzhou Taipei, Headquarters Jinan Xian Hsinchu, R&D Ningbo Taichung Shanghai Wuxi Tainan Suzhou Kunshan South Asia Offices (10) Nanjing Hangzhou New Delhi, N. India Wenzhou Hefei Mumbai, N. India Chengdu Chongqing Pune, N. India Changsha Wuhan Vietnam Fuzhou Fuqing Bangalore, S. India Xiamen Dongguan Bangkok, Thailand Shunde Guangzhou Penang, Malaysia Zhuhai Hong Kong Singapore Shenzhen

5

1. Overview

NR (Net Revenue)

==> picture [642 x 329] intentionally omitted <==

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

YoY=31%
NT$B
YoY=27%
200 189
180
CAGR(2011~2015)=12%
160
144
CAGR(2006~2010)=16%
140
120 114
108
100
88
80
80 71
64
60
47
39 41
34
40 30
21
20 9 10 14
5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
----- End of picture text -----

6

2. Financial Update

2Q18 result highlights

  • Net revenue in line with guidance, up 7% QoQ and 31% YoY

  • Gross margin and operating profit margin outperformed guidance

  • Net profit up 7% QoQ and 14% YoY

7

2. Financial Update

Statement of Comprehensive Income

Unit: NT$M

K t 2Q18 2Q18 1Q18 QQ 2Q17 YY
ey accouns Amount
%		 Guidance Amount
%		 o Amount
%		 o
Net Operating revenues
Gross profit
Operating expenses
Operating income
Financing costs
Others
Earning before tax
Income tax expense
Non-Controlling Interests
Profit after tax
EPS (in dollars)		 53,248
100.00%
2,560
4.81%
(1,332)
-2.50%
1,228
2.31%
(383)
-0.72%
41
0.07%
886
1.66%
(266)
-0.50%
-
-
620
1.16%
1.12		 49,635
100.00%
2,288
4.61%
(1,247)
-2.51%
1,041
2.10%
(346)
-0.70%
18
0.04%
713
1.44%
(133)
-0.27%
-
-
580
1.17%
1.05		 7.28%
+0.2ppt
-0.01ppt
+0.21ppt
+0.02ppt
24.26%
100.00%
6.90%
6.67%		 40,364
100.00%
1,924
4.77%
(1,015)
-2.52%
909
2.25%
(208)
-0.51%
12
0.03%
713
1.77%
(167)
-0.42%
-
-
546
1.35%
1.15		 31.92%
+0.04ppt
-0.02ppt
+0.06ppt
+0.21ppt
24.26%
59.28%
13.55%
-2.61%

8

2. Financial Update

Statement of Comprehensive Income

Unit: NT$M

Key accounts 1H18 Amount
%
2H17		 HoH Amount
%
1H17		 YoY
Amount
%
Net Operating revenues
Gross profit
Operating expenses
Operating income
Financing costs
Others
Earning before tax
Income tax expense
Non-Controlling Interests
Profit after tax
EPS (in dollars)		 102,883
100.00%
4,848
4.71%
(2,579)
-2.50%
2,269
2.21%
(729)
-0.71%
59
0.06%
1,599
1.56%
(399)
-0.39%
-
-
1,200
1.17%
2.17		 110,677
100.00%
4,701
4.25%
(2,509)
-2.27%
2,192
1.98%
(550)
-0.49%
135
0.12%
1,777
1.61%
(306)
-0.28%
-
-
1,471
1.33%
2.66		 -7.04%
+0.46ppt
+0.23ppt
+0.23ppt
+0.22ppt
-10.02%
30.39%
-18.42%
-18.53%		 78,742
100.00%
3,721
4.73%
(1,994)
-2.54%
1,727
2.19%
(413)
-0.52%
14
0.02%
1,328
1.69%
(279)
-0.36%
-
-
1,049
1.33%
2.21		 30.66%
-0.02ppt
-0.04ppt
+0.02ppt
+0.19ppt
20.41%
43.01%
14.39%
-1.81%

9

2. Financial Update

Balance Sheet

Unit: NT$M

Key accounts 2Q18 Amount
%
1Q18		 2Q17
Amount
%		 Amount
%
Cash and cash equivalents
Accounts receivable
Inventory
Other current assets
Non-current assets		 2,283
3
35,865
43
38,500
46
2,321
2
4,926
6		 2,542
3
31,765
41
35,426
46
2,929
4
4,837
6		 2,178
4
24,001
42
25,441
44
1,684
3
4,135
7
Total Assets 83,895
100		 77,499
100		 57,439
100
Short-term loans
Accounts payable
Other current liabilities
Long-term loans		 33,033
39
24,039
29
4,513
5
494
1		 29,385
38
22,239
29
3,451
4
670
1		 19,118
33
18,262
32
2,576
4
-
-
Other liabilities 1,806
2		 1,703
2		 1,550
3
Total Liabilities
Total Equity		 63,885
76
20,010
24		 57,448
74
20,051
26		 41,506
72
15,933
28
Indices 2Q18 1Q18 2Q17
Current ratio
Debt/Assets ratio
Debt/Equity ratio
Gearing ratio		 128%
76%
319%
1.56		 132%
74%
287%
1.37		 133%
72%
261%
1.06

10

2. Financial Update

NR by Geography (Ship-to Destination)

0
10
20
30
40
50
60
Revenue (NT$B)
Revenue (NT$B)
0
10
20
30
40
50
60		 China
Taiwan
Korea
ASEAN
1Q18
(Left)
vs.
2Q18
(Right)
QoQ +40%
QoQ +11%
QoQ +5%
QoQ +7%
China
Taiwan
Korea
ASEAN
2Q17
(Left)
vs.
2Q18
(Right)
YoY +104%
YoY -1%
YoY +23%
YoY +34%
0%
20%
40%
60%
80%
100%		 79.9%
84.7%
79.8%
80.7%
81.7%
86.0%
82.7%
82.1%
7.2%
6.4%
9.2%
8.5%
7.1%
6.0%
8.1%
7.9%
10.5%
7.0%
8.1%
8.1%
8.5%
5.7%
5.9%
6.1%
1.7%
1.5%
2.3%
2.2%
2.0%
1.8%
2.6%
3.4%
0.7%
0.4%
0.6%
0.5%
0.6%
0.5%
0.7%
0.5%
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
China
Taiwan
Korea
ASEAN
Others

11

2. Financial Update

NR by Customer Base

0%
20%
40%
60%
80%
100%		 51.4%
60.2%
55.6%
52.7%
50.7%
57.8%
56.2%
53.5%
35.7%
30.4%
33.1%
36.5%
38.5%
34.1%
34.7%
36.6%
11.2%
7.8%
9.3%
8.6%
8.8%
6.4%
6.3%
6.6%
1.7%
1.6%
2.0%
2.2%
2.0%
1.7%
2.8%
3.3%
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
Taiwan Customer
China Customer
Korea Customer
ASEAN Customer
Revenue (NT$B)
0
5
10
15
20
25
30
0
5
10
15
20
25
30
Revenue (NT$B)		 Taiwan
Customer
China
Customer
Korea
Customer
ASEAN
Customer
QoQ +2%
QoQ +13%
QoQ +12%
QoQ +26%
1Q18
(Left)
vs.
2Q18
(Right)
Taiwan
Customer
China
Customer
Korea
Customer
ASEAN
Customer
2Q17
(Left)
vs.
2Q18
(Right)
YoY +34%
YoY +32%
YoY +1%
YoY +98%

12

2. Financial Update

NR by Application

==> picture [676 x 345] intentionally omitted <==

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

20 QoQ -5%
100% 1Q18
2.9% 3.0% 3.7% 4.0% 4.2% 3.4% 3.9% 4.3% 18
(Left)
6.9% 6.2% 7.2% 7.8% 6.6% 6.4% 7.3% 7.5% 1614 QoQ +14% vs.
QoQ +15%
12.8% 10.9% 11.4% 12 2Q18
80% 13.4% 14.9% 13.8% 13.5% 14.0% 10 QoQ +11% (Right )
8
15.5% 6 QoQ +10%
17.1% 17.2% 4
17.7% 16.4% 18.7% 2
19.5% 20.1%
0
60%
19.2%
19.0% 19.7%
18.9% 21.3%
21.5%
22.6% 22.9%
40%
2Q17
YoY +32%
18 (Left)
45.2% 16 vs.
20% 41.3% 39.1% 31.2% 37.7% 41.9% 35.1% 31.2% 1412 YoY +34% YoY +36% 2Q18 (Right )
10 YoY +24%
8
0% 6 YoY +27%
4
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
2
0
Communication Computing
Consumer Industry & Instrument (I&I)
Automotive Others
Revenue (NT$B)
Revenue (NT$B)
----- End of picture text -----

13

2. Financial Update

ROE vs. EPS

==> picture [648 x 204] intentionally omitted <==

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

EPS
6.00 ROE% 18.82% 20%
16.03%
5.00
14.05% 15.28%
13.42% 15%
4.00 12.88% 12.01% 11.56% 12.38%
10.67%
9.55%
3.00 10%
2.00
5%
1.00 4.69%
0.00 0%
2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
----- End of picture text -----

ITEM 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
ROE% 14.05% 12.88% 9.55% 10.67% 16.03% 4.69% 12.01% 13.42% 18.82% 15.28% 11.56% 12.38%
EPS 5.18 4.49 0.90 0.93 1.40 0.42 1.06 1.15 1.61 1.43 1.05 1.12

14

2. Financial Update

ROWC vs. NWC/Sales

==> picture [642 x 204] intentionally omitted <==

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

0.30 NWC/Sales 25%
ROWC
0.25
20%
0.20
14.83%
15%
12.04%
0.15
9.04% 10.91% 10.57% 9.76%
8.81% 8.72% 11.64% 11.66% 10%
0.10 9.26%
5%
0.05
4.54%
0.00 0%
2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
----- End of picture text -----

ITEM 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
NWC/Sales 0.15 0.25 0.25 0.24 0.19 0.18 0.18 0.19 0.18 0.17 0.23 0.24
ROWC 14.83% 8.81% 8.72% 9.04% 10.91% 4.54% 11.64% 11.66% 12.04% 10.57% 9.26% 9.76%

15

2. Financial Update

Operating Cash Cycle

Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle Operating Cash Cycle
0
20
40
60
80
100		 52
72
93
85
67
65
73
68
61
60
80
83
2014
2015
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
AR
INV
AP
Operating cash cycle
Turnover days 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
AR 43 58 78 72 57 58 59 50 48 48 59 58
INV 50 54 59 59 49 46 58 59 52 50 66 67
AP (41) (40) (44) (46) (39) (39) (44) (41) (39) (38) (45) (42)
Operating cash cycle 52 72 93 85 67 65 73 68 61 60 80 83

16

3. Business Outlook

We currently expect 3Q18 :

  • Revenue : between NT$74 billion ~ NT$78 billion, at a forecast

  • exchange rate of 30.6 NT Dollars to 1 US Dollar

  • Gross profit margin : between 3.7% ~ 3.9%

  • Operating profit margin : between 1.9% ~ 2.1%

17

4. Recap of Recent Major Events

 WT set August 6 as ex-dividend date and August 31 as cash dividend issue date.

  • WT was ranked as 2017 APAC Best Performance Distributor from STMicroelectronics.

  • WT was ranked as 2017 APAC Best Distributor Partner from ON Semiconductor.

18

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==> picture [71 x 93] intentionally omitted <==

==> picture [68 x 92] intentionally omitted <==

19

Thank You !

WT Microelectronics Co., Ltd. Website : www.wtmec.com

20

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