Analyst Briefing Integrated Micro-electronics Inc. November 3, 2017 The Tower Club CONFIDENTIAL AND PROPRIETARY Any use or dissemination of this material without the expressed written permission of AC Industrial Technology Holdings Inc. is strictly prohibited.
Section Global Economy Our Portfolio Updates Overall Financials Updates per Region I II III IV V 2
GLOBAL ECONOMY Source: International Monetary Fund, October 2017 3
OUR PORTFOLIO 814 843 795 14% 10% 10% 19% 19% 14% 10% 8% 19% 16% 18% 17% Revenue Share by Operating Region (2017 9M) Philippines...25% China. 25% Europe... 25% 42% 45% 41% Mexico...8% VIA.14% 2015 2016 2017 9M STI..3% Auto Industrial Consumer Telecom Others Source: Integrated Micro-Electronics, Inc.
MARKET TRENDS Automotive Electronics 8.5% CAGR 2016-2024 ADAS 19.9%, CAGR 2016-2021 Head-up-Display 28.5% CAGR 2020-2025 Electronic Control Unit 6.6% CAGR 2017-2024 Battery Management System 22.17% CAGR 2016-2020. Industrial Electronics 4.5% CAGR 2016-2021 Electronic access control system 9.3% CAGR 2016-2024 IoT 13.2% CAGR 2016-2023 Smart electric meter close to 9% CAGR 2016-2021 Aerospace/Defense 4.2% CAGR 2016-2021 Avionics 6.9% CAGR 2016-2022 Remote Satellite Sensing 5.6% CAGR 2017-2021 Source: Global Market Insights, Research and Markets, Transport and Market Research, Esticast Research, NVR, Research Nester and Technavio 5
MARKET DISRUPTIONS Rise of the EV Age of Industry 4.0 Oil Disruption MOBILITY CONNECTIVITY SMART ENERGY DRIVERLESS CARS 62% CAGR 2020-30 INTERNET of THINGS 17% CAGR 2020-25 16.6% CAGR / 2016-25 Source: 6
RIDING MEGATRENDS Electric and/or autonomous vehicle technologies within IMI Next Generation Displays Steering/Braking Gear ECU Modules EV Charging Modules Mirror Technology LED Lighting Sensing Camera Power Converters Power Modules Engine Controls Powertrains Source: Integrated Micro-Electronics, Inc. Battery Management Existing programs New wins ADAS Controls PCBA Sub-assembly Sensors Controller $61.6 M EV and ADAS 20% of Total Automotive Sales YTD Sep 17 7
AUTOMOTIVE ELECTRONICS $ KEY TRENDS MARKET DRIVERS FORECAST PERFORMANCE Autonomous driving Connectivity Ride Sharing Electrification Technological advancement Green Energy Implementation of regulations Advanced driver assistance system 19.9% CAGR from 2016-2021 YTD Sept revenues at $323M, increased 16% y-o-y Automotive 41% of Total IMI revenues Source: Global Market Insights 8
INDUSTRIAL ELECTRONICS $ KEY TREND MARKET DRIVERS FORECAST PERFORMANCE Integration of access control systems Sensor technology and access control as service (ACaaS) Development of applications using smartphones Growing demand for security solutions Technological advancement Adoption of IoT-based systems Rise of Industry 4.0 Electronic access control system 9.3% CAGR 2016-2024 YTD Sept revenues at $132M, increased 16% y-o-y Industrial 17% of IMI Total revenues Source: Research and Markets and Technavio 9
AEROSPACE $ KEY TREND MARKET DRIVER FORECAST PERFORMANCE Satellite communication systems are becoming more capable User terminals becoming smaller Low-cost satellite communication devices Increase in demand by various end-use industries Remote sensing satellite 5.59% CAGR 2017-2021 Aerospace YTD Sep 17 revenue at $13M, 2% of Total IMI revenues Source: Future Market Insights 10
YEAR-TO-DATE SEPT WINS $580M 1% 1% New Business Wins by Segment Automotive +217% 8% 6% 84% Industrial Communication $183M Medical Consumer YTD Sep 16 YTD Sep 17 ARP: Annual Revenue Potential Notable Wins (Q3) Segment Manufacturing Site Controls & Sensors Automotive China (JX) Steering/Breaking ECU Automotive Mexico Mirror technology Automotive Bulgaria Power Module Industrial / Automotive Laguna Battery management Industrial / Automotive China (CD) Source: Integrated Micro-Electronics, Inc. 11
OVERALL FINANCIAL 12
100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0-30.0 25.0 20.0 15.0 10.0 5.0-12. 0% 10. 0% 8.0 % 6.0 % 4.0 % 2.0 % 0.0 % 3.5 % 3.0 % 2.5 % 2.0 % 1.5 % 1.0 % 0.5 % 0.0 % 35.0 30.0 25.0 20.0 15.0 10.0 60.0 55.0 50.0 45.0 40.0 35.0 30.0 25.0 20.0 5.0 % 3.0 % 1.0 % -1.0% -3.0% -5.0% 8.0 % 7.0 % 6.0 % 5.0 % 4.0 % 3.0 % 2.0 % 1.0 % 0.0 % Year on Year Profit Growth Gross Profit +24.6% 11.6% 11.2% Operating Income 4.7% +4.1% 3.8% 71.5 89.2 28.8 30.0 2016 9M 2017 9M Gross Profit GP% 2016 9M 2017 9M Operating Income OI% Net Income 3.4% +15.7% 3.0% EBITDA +15.2% 7.7% 6.9% 20.8 24.1 47.3 54.5 2016 9M 2017 9M Net Income NIAT% 2016 9M 2017 9M EBITDA EBITDA% Source: Integrated Micro-Electronics, Inc. 13
Capital Structure Long-Term Debt 25% Short-Term Debt 25% Common Shares 50% (US$ s) Sept 2017 Short-term debt 128.5 Long-term debt 133.8 Total Bank Debts 257.2 Cash 62.6 Net Debt 194.6 Common Equity 256.5 Key financial ratios Sept 2017 Current ratio 1.22 Bank Debt/Equity 1.00 Book value/share ($) 0.138 Return on common equity (TTM) 12.6% P/E (TTM) @ 18.6 18.7 Source: Integrated Micro-Electronics, Inc. 14
Disciplined Capital Investments 52.2 46.3 35.8 0.8 1.4 5.3 9.7 3.4 1.9 11.0 10.6 2.6 0.7 0.3 0.2 9.8 10.4 $46M 2017 9M 9.6 17.6 14.3 9.0 7.7 8.0 2015 2016 2017 9M Philippines China Europe Mexico PSI VIA STI Others Machinery & equipment..55% Construction in progress..27% Furniture & fixtures........7% Buildings & improvements. 4% PPE - Others...7% Source: International Monetary Fund, October 2017 15
UPDATE BY REGION Source: 16
PHILIPPINES REVENUE $191 3.4% $197 Growth fueled by industrial / automotive applications Start of Power Module mass production to drive further growth Received Excellence Awards from IMI customer of security products Recommended to IATF16949:2016; Passed ISO9001:2015 $9.6 CAPEX $8.7 AUTOMOTIVE YTD Sep 16 YTD Sep 17 NEW WINS 4 $1 ARP M MAJOR PROJECTS ADAS Body Control Anti Fogging 2016 YTD Sep 2017 Source: Integrated Micro-Electronics, Inc. 17
CHINA REVENUE $196 1.2% $198 5G pilot rollout to start slow in late 2017 Government push to increase adoption in EV On-going transfer of Liantang plant to Pingshan in Shenzhen NEW WINS ARP AUTOMOTIVE MAJOR PROJECTS $17.6 CAPEX $14.3 ADAS Power Train YTD Sep 16 YTD Sep 17 15 $20 M Control and Sensors Body Control 2016 YTD Sep Lightings 2017 Ignition Control Source: Integrated Micro-Electronics, Inc. 18
EUROPE REVENUE $180 11.5% $201 Strong demand by Top 3 automotive customers in Europe IMI (BG) recognized as 2 nd Most Profitable Company in the Machines Sector of Bulgaria On going construction of Serbia facility $10.6 CAPEX $10.4 AUTOMOTIVE YTD Sep 16 YTD Sep 17 NEW WINS ARP 10 $20 M MAJOR PROJECTS ADAS Body Control Lightings 2016 YTD Sep 2017 Engine Control Source: Integrated Micro-Electronics, Inc. 19
MEXICO REVENUE $49 28.3% $63 Start mass production in industrial segments to complement automotive growth New Product Introduction Automotive plastic molds for headrest and central console Nano Ignition Coils, Body Controls and Oil pumps IMI (MX) won the 2017 National Exportation Award $11 CAPEX $9.8 YTD Sep 16 YTD Sep 17 NEW WINS 3 $13 ARP AUTOMOTIVE MAJOR PROJECTS M Body Control Steering/Braking 2016 YTD Sep 2017 Source: Integrated Micro-Electronics, Inc. 20
VIA REVENUE YTD Sep 17 Optical bonding Touch capabilities Display head assembly Automotive CAPEX YTD Sep 17 $115 Industrial & Commercial Consumer $0.3 2016 full year level already reached for the 1H of 2017 Top 2 customers in consumer segment performed the highest production volume in 2017 Added 4 new customers in automotive display with ARP of $8M Source: Integrated Micro-Electronics, Inc. 21
STI REVENUE YTD Sep 17 Satellite Communications Wireless Technologies Aerospace & Defense CAPEX YTD Sep 17 $21 Industrial & Commercial Research & Development $0.2 New quotations ongoing for electric car chargers New business won for Smart Metering Large automotive opportunity for Electronic Logging Device (ELD) Program Ongoing integration with IMI Source: Integrated Micro-Electronics, Inc. 22
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