WT — Interim / Quarterly Report 2019

Aug 8, 2019

2019 Second Quarter Investor Conference Presented by Cheryl Yang Aug 8, 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

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 Kunshan South Asia Offices (9) Nanjing Hangzhou New Delhi, N. India Wenzhou Hefei Mumbai, N. India Chengdu Mianyang Pune, N. India Chongqing Changsha Vietnam (2) Wuhan Fuzhou Bangalore, S. India Fuqing Xiamen Bangkok, Thailand Dongguan Shunde 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
108 [114 ]
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	2Q19	2Q19	1Q19	QQ	2Q18	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)	74,748 100.00% 2,688 3.60% (1,364) -1.82% 1,324 1.78% (486) -0.65% 23 0.02% 861 1.15% (239) -0.32% - - 622 0.83% 1.06		67,474 100.00% 2,322 3.44% (1,300) -1.93% 1,022 1.51% (527) -0.78% (5) 0.00% 490 0.73% (105) -0.16% - - 385 0.57% 0.67 572	11% 16% 5% 30% -8% 76% 128% 62%	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% 1.12 553	40% 5% 2% 8% 27% -3% -10% 0%
Weighted average shares (M shares)

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2. Financial Update

Statement of Comprehensive Income

Unit: NT$M

Key accounts	1H19		Amount % 2H18	HoH	Amount % 1H18	Amount % 1H18	YoY
	Amount %
Net Operating revenues Gross profit Operating expenses Operating income Financing costs Others Earning before tax	142,222 100.00% 5,009 3.52% (2,663) -1.86% 2,346 1.65% (1,013) -0.71% 18 0.01% 1,351 0.96%		170,533 100.00% 5,797 3.40% (2,812) -1.65% 2,985 1.75% (969) -0.56% 6 0.00% 2,022 1.19%	-17% -14% -5% -21% 5% -33%	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%		38% 3% 3% 3% 39% -16%
Income tax expense Non-Controlling Interests Profit after tax	(344) -0.24% - - 1,007 0.71%		(443) -0.26% - - 1,579 0.93%	-22% -36%	(399) -0.39% - - 1,200 1.17%		-14% -16%
EPS (in dollars)	1.74		2.83	-39%	2.17		-20%
Weighted average shares (M shares)	580		558		553

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2. Financial Update

Balance Sheet

Unit: NT$M

Key accounts	2Q19		Amount % 1Q19	2Q18
	Amount %			Amount %
Cash and cash equivalents Accounts receivable Inventory Other current assets Non-current assets	5,018 5 37,211 40 44,285 47 2,317 2 5,268 6		2,360 3 34,692 38 47,034 51 2,108 2 5,398 6	2,283 3 35,865 43 38,500 46 2,321 2 4,926 6
Total Assets	94,099 100		91,592 100	83,895 100
Short-term loans Accounts payable Other current liabilities	33,089 35 31,396 34 4,639 5		31,921 35 32,055 35 3,091 3	33,033 39 24,039 29 4,513 5
Long-term loans	- -		- -	494 1
Other liabilities	2,305 2		1,245 2	1,806 2
Total Liabilities Total Equity	71,429 76 22,670 24		68,312 75 23,280 25	63,885 76 20,010 24
Indices	2Q19		1Q19	2Q18
Current ratio Debt/Assets ratio Debt/Equity ratio Gearing ratio	129% 76% 315% 1.24		129% 75% 293% 1.27	128% 76% 319% 1.56

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2. Financial Update

NR by Geography (Ship-to Destination)

	0.6%	0.6%	0.6%	0.5%	0.5%	0.5%	0.7%	0.7%	0.7%		0.5%	0.5%		0.3%	0.3%		0.3%	0.3%		0.4%	0.4%	0.4%	0.4%	0.4%		70		QoQ +12%
0% 20% 40% 60% 80% 100%	81.7% 7.1% 8.5% 2.0% 3Q17			86.0% 6.0% 5.7% 1.8% 4Q17			82.7% 8.1% 5.9% 2.6% 1Q18			82.1% 7.9% 6.1% 3.4% 2Q18			89.3% 5.5% 3.0% 1.9% 3Q18			90.1% 4.2% 3.5% 1.9% 4Q18			87.2% 5.4% 4.5% 2.5% 1Q19			87.9% 5.8% 3.6% 2.3% 2Q19			Revenue (NT$B) Revenue (NT$B)	0 10 20 30 40 50 60 20 30 40 50 60 70		China Taiwan QoQ +19% YoY +50%		Korea QoQ -11%	ASEAN 1Q19 (Left) vs. 2Q19 (Right) QoQ +2% 2Q18 (Left) vs. 2Q19 (Right)
			China				Taiwan				Korea				ASEAN					Others						10			YoY +3%	YoY -17%		YoY -5%
																										0
																												China	Taiwan	Korea		ASEAN

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2. Financial Update

NR by Customer Base

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100% 2.0% 1.7% 2.8% 3.3% 1.9% 1.7% 2.1% 2.0%
8.8% 6.4% 6.3% 6.6% 3.4% 3.9% 4.7% 4.2%
22.4%
80% 26.5%
30.4% 32.3%
34.1%
34.7%
36.6%
38.5%
60%
40%
72.0%
68.2%
62.8% 61.5%
57.8% 56.2%
53.5%
50.7%
20%
0%
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Taiwan Customer China Customer
Korea Customer ASEAN Customer
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Revenue (NT$B) 0 10 20 30 40 50 0 10 20 30 40 50 Revenue (NT$B)	Taiwan Customer China Customer Korea Customer ASEAN Customer QoQ +8% QoQ +18% QoQ -1% QoQ +6% 1Q19 (Left) vs. 2Q19 (Right)
	Taiwan Customer China Customer Korea Customer ASEAN Customer 2Q18 (Left) vs. 2Q19 (Right) YoY +61% YoY +24% YoY -11% YoY -15%

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2. Financial Update

NR by Application

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40
100% 4.2% 3.4% 3.9% 4.3% 2.5% 2.4% 2.5% 3.4% QoQ +3% 1Q19
6.6% 6.4% 7.3% 7.5% 5.3% 5.4% 5.3% 5.6% 30 (Left) vs.
80% 13.8% 11.4% 13.5% 14.0% 9.2% 7.3% 8.4% 10.5% 20 QoQ +9% (Right2Q19 )
15.9% 13.7% 15.2% QoQ +13%
15.5% 10
17.2% QoQ +38% QoQ +17%
16.4% 18.7%
20.1%
18.9% 0
60%
20.8% 24.1%
23.7%
19.7%
21.3%
21.5%
22.9%
40%
2Q18
52.3% 40 (Left)
20% 37.7% 41.9% 35.1% 46.3% 44.5% 41.3% 30 YoY +86% vs. 2Q19
31.2% (Right )
20 YoY +45%
YoY +8%
0%
10 YoY +5%
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 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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2.00 18.8% 19.2% 20%
EPS
15.3% ROE%
1.50 15%
12.4%
11.6%
10.8%
11.0%
1.00 10%
6.8%
0.50 5%
1.61 1.44 1.05 1.12 1.79 1.06 0.67 1.06
0.00 0%
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
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2. Financial Update

ROWC vs. NWC/Sales

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0.30 25%
NWC/Sales
0.25
20%
ROWC
16.1%
0.20
15%
12.0%
0.15
10.6% 11.4%
10.6%
9.3%
9.8% 10%
0.10
8.2%
5%
0.05
0.18 0.17 0.23 0.24 0.12 0.13 0.18 0.17
0.00 0%
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
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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
61 60
60
49 46
30
0
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
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3. Business Outlook

We currently expect 3Q19 :

• Revenue : between NT$87 billion ~ NT$93 billion, at a forecast

• exchange rate of 31.3 NT Dollars to 1 US Dollar

• Revenue guidance between 16% ~ 24% QoQ growth and 3% ~

• 10% YoY increase

• Gross profit margin : between 3.1% ~ 3.3%

• Operating profit margin : between 1.5% ~ 1.7%

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Thank You !

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

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