2017 revenue growth 22.6% & SCS volumes up by 308%

® is a registered Trade Markof Wellington Drive Technologies Ltd in New Zealand
Wellington Drive Technologies LtdWT8996
21 Arrenway Drive,Rosedale, Auckland0632, New Zealand
PO Box 302-533, North Harbour, North ShoreCity0751, New Zealand
Telephone: +64 9 9 477 0415, Fax: + 64 9 479 5540
Email:info@wdtl.comWebsite:www.wdtl.comPage1of3
26
th
January2018
For Immediate Release
Wellington Drivegrows revenue by 22.6% in2017, grows SCS
volumes by 308%.
Wellingtonexpectstoreleaseitsauditedfinancialstatementsforthe2017yearonFebruary
28
th
.Thesearebeingpreparedcurrentlyandallfiguresstatedinthisreleasearesubjectto
audit.
WellingtoncontinuedtogeneratesignificantrevenuegrowthinFY2017,underpinnedbythenew
SCSandECR2products.However,despiteDecemberbeingthestrongesteverrevenuemonthin
theCompany’shistory,delaysinendofyearseasonalordersforbeveragecoolersfrom
carbonatedsoftdrinkbottlersmeantthatsomeordersfromcoolersuppliersexpectedinlate
FY2017havespilledoverintoQ1FY2018andWellingtonhasfallenmarginallybelowrevenue
guidancefortheyear.
RevenueforQ42017wasUSD8.3mcomparedtoUSD7.4mforthesameperiodlastyear;
anincreaseof13%.Revenueforthe2017yearwasUSD31.2mcomparedtoUSD24.6m
lastyear;anincreaseof26.8%.InNZDtermsrevenuefor2017was$43.3mcomparedto
$35.3mlastyear,anincreaseof22.6%.ECmotorvolumesincreased6%andSCSConnect
volumesincreased308%.
Pleasingly,revenuefromprovidingdataservicesrelatedtoWellington’sSCSsmart
controllersamountedtoUSD713kcomparedtoUSD244kin2016.Theamountofdata
revenueheldonthebalancesheettoberecognisedoverfutureperiodswas$1,050kat31
December2017andtheamountrecognisedintheIncomeStatementfor2017was$228k.
WeviewdigitalservicesrelatedtotheCompany’sInternetofThings(IoT)SCSproductsas
beingacoreelementofourfuturegrowthprospects.
Wellington’sperformanceoverthelastthreeyearshasbeenoneofconsistentquarterover
quarterrevenuegrowth:
2017
USD000’s
2016
USD000’s
2015
USD000’s
CAGR
Q19,3156,1724,90724%
Q27,7946,5625,19414%
Q35,7794,5093,33420%
Q48,3207,3873,93028%
Total31,20824,63017,36522%

® is a registered Trade Mark of Wellington Drive Technologies Ltd in New Zealand
Wellington Drive Technologies LtdWT8996
Page2of3
RevenuefromtheUSA&Canadafor2017increased97%,LatinAmericarose30%and
APACrevenuewasup10%.EMEArevenuewaslowerthan2016,continuingtoreflectthe
difficultpoliticalandcompetitiveenvironmentintheregion.Wearecurrentlyworkingon
thereleaseofanewECR2motorversiontoimprovesalesinEMEA.
Wellington’sguidanceforthe2017year,issuedinitsQ3updatewasthatyearoveryear
growthwouldlikelybeatthelowerendofa25%to35%rangeandpossiblybelowifa
seasonallatesurgeinorderswasdelayed.Thelatesurgewasweakerthananticipated,
resultingin22.6%revenuegrowthfortheyear.
Revenueforthefullyearwasalmost$1mlowerthanpreviousguidance,whichwillimpact
resultingEBITDA
1
earningsforthe2017year.EBITDA
1
earningsfor2017willbean
improvementonthatrecordedforthe2016yearbutwillbebelowtheprojected$1m,which
isdisappointing.WhileDecemberwasarecordmonthforWellingtonintermsofboth
revenueandEBITDA
1
,itwasnotstrongenoughtoreversethepoorQ3resultandreturnusto
previouslyguidedlevels.WealsonotethattheFY2017EBITDA
1
resultwasaffectedbya
salesmixthatorientedtowardsmorelowergrossmarginproductsthantheCompany
expected,andadeliberatedecisionduringtheyeartoincreasecertainoperatingcostsin
supportofourdevelopingIoTbusiness.
AsweenterQ12018weareseeinganadditionalfactorcausingsomeuncertaintyinourabilityto
meetsupplycommitments.Thisresultsfromstrongglobalautomotiveandwirelessdemand
puttingpressureonthesupplyofsomesilicon,withtwomajorsiliconsuppliershavingnotified
usthatcomponentsusedintheSCSConnectandECR2motorproductshaveextendedtheirlead-
timesbeyondtwelvemonths.InonecaseacriticalECR2partwassubjecttoworldwide
allocation,wherethesiliconsupplierhaswithdrawnlead-timecommitmentsduetoover-booked
supplyandsupplypreferenceisbeinggiventolargeTierOneOEMclients.Thishascaused
certaincomponentstonotbedeliveredagainstagreedordersanddeliverydates.Wehave
implementedactionsincludingsourcinganddesigning-inalternativecomponents,placinglong
lead-timeordersouttoQ22019andkeeping50%componentbufferstockonorder.Wehave
beenabletoincreaseourallocationofcomponents,butforECR2itisstillnotatthelevelneeded
tosupportcustomers’short-termdemand.
Wehaveimprovingvisibilityondemandforthefirstquarterandarestartingtoseeordersforthe
secondquarter.Accordingly,WellingtonisexpectingastrongH1,despitethesiliconcomponent
supplyissuesreferredtoabove.H1revenueiscurrentlyforecasttobearound10%abovethe
sameperiodin2017withEBITDA
1
wellabovethe$1mrecordedin2016.Wecurrentlyhave
littlevisibilityonsecondhalfcustomers’requirements.WhiletheCompanyisreaffirming
previousguidanceof2018EBITDA
1
between$2mto$4m,andistargetinganetprofit,the
ongoingdemandvolatilityandlearningfrom2017meanswearesuitablycautiousinourplans.
Nevertheless,achievingthesetargetsmeansWellingtonshouldgeneratepositiveoperatingcash
flowinFY2018.
CEOGregAllencommented,“WearedisappointedbytheshortfallinrevenueinQ4,butmuch
ofitisflowinginto2018anditdoesn'tnegativelyimpactourlong-termgrowthoutlook.Q4was
stilloneofthehighestrevenuequarterswehavehadandDecemberthehighestevermonth,
althoughitwasn’tenoughtoovercometheweakQ3.Wethink300%volumegrowthonboth
SCSandECR2demonstrateshowwelltheseproductsarebeingreceivedinthemarket.The
combinationofWellington’sSCShardware,dataservicesandiProximitydigitalmarketing
solutionsisprovidingtheCompanywithanIoTplatformthatisopeningstrategicoptionswith
newmarkets,customers,partnersandchannels.Nothingchangesintermsofourshort-term

® is a registered Trade Mark of Wellington Drive Technologies Ltd in New Zealand
Wellington Drive Technologies LtdWT8996
Page3of3
targetofachievingnetprofitin2018andlongtermleadershipasanInternetofThingssolutions
providertothefoodandbeveragemarket”.
AboutWellingtonDriveTechnologies
WellingtonDriveTechnologiesisaleadingglobalproviderofenergyefficientelectronicmotors,
airflowssolutionsand‘CloudConnected’refrigerationcontrolsolutionsforthecommercial
refrigerationmarkets.Itservessomeoftheworld’sleadingfoodandbeveragebrandsand
refrigeratormanufacturerswithadvancedproductsandsolutionsthatimprovetheirproductsales,
reducetheircostsandreducesenergyconsumption.WellingtonisheadquarteredinAuckland,
NewZealand,andislistedontheNewZealandstockexchangeunderthetickersymbol
NZ:WDT
Notes:
Note1-EBITDAisEarningsbeforeInterest,Taxation,Depreciation,AmortisationandImpairment.Wellington
hasalwaysreportedtheEBITDAresultbecausethisistheprofitperformancemeasurethatavoidsthe
distortionscausedbydifferencesinamortisationandimpairmentpolicies.
____________________________________________________________________________________________________
Contact:
Greg AllenHoward Milliner
Chief Executive OfficerChief Financial Officer
Phone +1-778-238-6494+64-9-477-4500