WT — Interim / Quarterly Report 2019

Nov 11, 2019

2019 Third Quarter Investor Conference Presented by Cheryl Yang November 11, 2019

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.

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Agenda

1. Overview

2. Financial Update

3. Business Outlook

4. Questions and Answers

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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

• 2018 revenues of NT$273bn, up 44% YoY

• 48 offices in Asia (33 offices in China and 15 offices in Korea, Taiwan, and South Asia) with over 9,000 customers

• Over 2,300 headcounts (over 700 sales, 250 PMs, and 500 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

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1. Overview

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Harbin China Offices (33)
Korea Offices (2)
Shenyang
Dalian
Offices Across Asia Seoul
Beijing
Tianjin
Qingdao Taiwan Offices (4)
Yantai
Zhengzhou Taipei, Headquarters
Jinan
Hsinchu
Xian
Ningbo Taichung
Shanghai
Wuxi Tainan
Suzhou
Nanjing South Asia Offices (9)
Hangzhou
Wenzhou New Delhi, N. India
Hefei
Chengdu Mumbai, N. India
Mianyang
Chongqing Pune, N. India
Changsha
Wuhan Vietnam (2)
Fuzhou
Fuqing Bangalore, S. India
Xiamen
Nanning Bangkok, Thailand
Dongguan
Foshan Penang, Malaysia
Guangzhou
Zhuhai Singapore
Hong Kong
Shenzhen
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1. Overview

NR (Net Revenue)

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CAGR(2016~2018)=34%
NT$B
300
273
250
200 189
144
150
114
108
100 88
80
71
64
47
50 34 39 41
30
21
5 9 10 14
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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2. Financial Update

Statement of Comprehensive Income

Unit: NT$M

K t	3Q19	3Q19	2Q19 QQ	3Q18	YY
ey accouns	Amount %	Guidance	Amount % o	Amount %	o
Net Operating revenues Gross profit Operating expenses Operating income Financing costs Others Earning before tax	96,191 100.00% 2,977 3.09% (1,428) -1.48% 1,549 1.61% (485) -0.50% (35) -0.04% 1,029 1.07%	87B~93B 3.1%~3.3% 1.5%~1.7%	74,748 100.00% 29% 2,688 3.60% 11% (1,364) -1.82% 5% 1,324 1.78% 17% (486) -0.65% 0% 23 0.02% 861 1.15% 20%	84,771 100.00% 3,096 3.65% (1,392) -1.64% 1,704 2.01% (431) -0.51% (17) -0.02% 1,256 1.48%	13% -4% 3% -9% 13% -18%
Income tax expense Non-Controlling Interests Profit after tax EPS (in dollars)	(212) -0.22% - - 817 0.85% 1.38		(239) -0.32% -11% - - 622 0.83% 31% 1.06	(268) -0.32% - - 988 1.16% 1.79	-21% -17%
Weighted average shares (M shares)	590		588	553

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2. Financial Update

Balance Sheet

Unit: NT$M

Key accounts	3Q19		Amount % 2Q19	3Q18
	Amount %			Amount %
Cash and cash equivalents Accounts receivable Inventory Other current assets Non-current assets	6,421 6 45,438 44 42,768 42 2,959 3 5,199 5		5,018 5 37,211 40 44,285 47 2,317 2 5,268 6	2,818 3 46,421 47 42,894 43 2,706 2 4,890 5
Total Assets	102,785 100		94,099 100	99,729 100
Short-term loans Accounts payable Other current liabilities	31,158 30 42,374 41 3,523 4		33,089 35 31,396 34 4,639 5	25,749 26 47,066 47 5,076 5
Long-term loans	- -		- -	185 -
Other liabilities	2,226 2		2,305 2	571 1
Total Liabilities Total Equity	79,281 77 23,504 23		71,429 76 22,670 24	78,647 79 21,082 21
Indices	3Q19		2Q19	3Q18
Current ratio Debt/Assets ratio Debt/Equity ratio Gearing ratio	127% 77% 337% 1.05		129% 76% 315% 1.24	122% 79% 373% 1.10

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2. Financial Update

NR by Geography (Ship-to Destination)

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QoQ +30%
0.5% 0.7% 0.5% 0.3% 0.3% 0.4% 0.4% 0.3% 90
100% 1.8% 2.6% 3.4% 1.9% 1.9% 2.5% 2.3% 3.0% 80 2Q19
5.7%6.0% 5.9%8.1% 6.1%7.9% 3.0%5.5% 3.5%4.2% 4.5%5.4% 3.6%5.8% 3.2%4.8% 7060 (Left) 3Q19vs.
50
80% (Right )
40
30
20 QoQ +6% QoQ +14%
60% QoQ +68%
10
0
China Taiwan Korea ASEAN
86.0% 89.3% 90.1% 87.2% 87.9% 88.7%
40% 82.7% 82.1%
90 YoY +13%
80
3Q18
20% 70 (Left)
60 vs.
3Q19
50
(Right )
40
0%
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 30
China Taiwan Korea ASEAN Others 20 YoY -1%
YoY +21% YoY +79%
10
0
China Taiwan Korea ASEAN
Revenue (NT$B)
Revenue (NT$B)
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2. Financial Update

NR by Customer Base

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100% 6.4%1.7% 6.3%2.8% 6.6%3.3% 3.4%1.9% 1.7%3.9% 2.1%4.7% 2.0%4.2% 2.0%3.8% 7060 QoQ +41% (Left) 2Q19
50 vs.
22.4% 3Q19
80% 26.5% 30.4% 32.3% 26.7% 40 (Right )
34.1%
34.7% 36.6% 30 QoQ +6%
20
60% 10 QoQ +16% QoQ +29%
0
Taiwan China Korea ASEAN
Customer Customer Customer Customer
40%
72.0%
68.2% 67.5%
57.8% 56.2% 62.8% 61.5% 70 YoY +12%
53.5%
60 3Q18
20%
(Left)
50
vs.
40 3Q19
(Right )
YoY +14%
0% 30
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
20
Taiwan Customer China Customer 10 YoY +27% YoY +19%
Korea Customer ASEAN Customer 0
Taiwan China Korea ASEAN
Customer Customer Customer Customer
Revenue (NT$B)
Revenue (NT$B)
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2. Financial Update

NR by Application

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60
100% 3.4% 3.9% 4.3% 2.5% 2.4% 2.5% 3.4% 3.1% QoQ +58% 2Q19
6.4% 7.3% 7.5% 5.3% 5.4% 5.3% 5.6% 4.9% 50 (Left) vs.
11.4% 9.2% 7.3% 8.4% 10.5% 8.2% 40 3Q19
80% 13.5% 14.0% 13.7% 30 QoQ +3% (Right )
15.9% 15.2% 14.1% 20 QoQ +17%
15.5% QoQ +0%
17.2% 10 QoQ +13%
18.7%
20.1%
60% 18.9% 18.9% 0
20.8% 24.1%
23.7%
19.7%
21.5%
22.9%
40%
3Q18
20% 41.9% 35.1% 46.3% 52.3% 44.5% 41.3% 50.8% 6050 YoY +25% (Left) 3Q19vs.
31.2% 40 (Right )
30
YoY +3%
YoY +1%
0% 20
YoY +1%
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 10 YoY +5%
0
Communication Computing
Consumer Industry & Instrument (I&I)
Automotive Others
Revenue (NT$B)
Revenue (NT$B)
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2. Financial Update

ROE vs. EPS

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EPS
19.2%
2.00 20%
ROE%
15.3%
1.50 14.2% 15%
12.4%
11.6%
11.0%
10.8%
1.00 10%
6.8%
0.50 5%
1.44 1.05 1.12 1.79 1.06 0.67 1.06 1.38
0.00 0%
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
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2. Financial Update

ROWC vs. NWC/Sales

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0.30 25%
NWC/Sales
0.25
20%
ROWC
0.20 16.1%
15%
13.5%
11.4%
0.15 10.6%
9.3% 9.8%
10.6% 10%
0.10
8.2%
5%
0.05
0.17 0.23 0.24 0.12 0.13 0.18 0.17 0.12
0.00 0%
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
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2. Financial Update

Operating Cash Cycle

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AR INV AP Operating cash cycle
90
83
80
65
62
60
60
49
46
46
30
0
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
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3. Business Outlook

We currently expect 4Q19 :

• Revenue : between NT$94 billion ~ NT$100 billion, at a forecast

• exchange rate of 30.5 NT Dollars to 1 US Dollar

• Revenue guidance between 2% QoQ decrease to 4% QoQ

• increase and 10% ~ 17% YoY growth

• Gross profit margin : between 2.9% ~ 3.1%

• Operating profit margin : between 1.4% ~ 1.6%

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Thank You !

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

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