WDT first half revenue grows 18% and earnings improve

® is a registered Trade Mark ofWellington Drive Technologies Ltd in New Zealand
Wellington Drive Technologies LtdWT9069
21 Arrenway Drive, Rosedale, North Shore City 0632, New Zealand
PO Box 302-533, North Harbour, North Shore City 0751, New Zealand
Telephone: +64 9 477 0415Facsimile: +64 9 479 5540
Email:info@wdtl.comWebsite:www.wdtl.comPage1of3
15August 2018
Market Announcement
For Immediate Release
First half revenue grows 18% and earnings improve
Wellington Drive Technologies (WDT), a leading provider of Internet ofThings (“IoT”) solutions and energy
efficient motors to the retail food and beverage industry,today announced strong financial results for the six
months ended 30 June 2018.
Wellington CEO Greg Allen stated “The increasing diversity ofthe markets weserveandourgrowing customer
base for IoT solutions and ECR2 motors helped deliver strong revenue in the first half.We were particularly
pleased with our record second quarter revenue and winning our first dairy products customer. We are building
an IoT platform to help food and beverage brands, cooler manufacturers and retailers collect and use data from
their point of sale equipment, enabling them to sell moreproductsand improve their store operational
performance. We have exciting innovations in the pipeline, expanding both our IoT product range and EC
motor platforms and we continue to explore new market opportunities.”
Highlights for the first half 2018 include:
Significant revenue growth
New Zealand dollarrevenue for the first half was $28.1 million, an 18% increase compared to the same period
last year.This compared to previous guidance of around 10%.Revenue in the second quarter was $16.3
million, compared to $11.1 million forthe same quarter in 2017, a 47% increase.Second quarter revenue was
the largest single quarter revenue in the company’s history.
Wellington’s US$ revenue for the Americas region grew by 28% due to strong sales of ECR2 motors and the
SCS Connect IoT platform.Asia-Pacificrevenue was flat year-on-year asregionalcustomers moved more
slowly than expected towards IoT adoption and brands reduced their cooler placements.EMEA region US$
revenue was down 12%, driven by lower volumes from bottle cooler customers in markets impacted by macro-
economic difficulties, suchas Turkey and Southern Europe.The Company also decided nottocompete where
bottle-cooler motor price pressure became excessive.EMEA did, however, see significant growth in its
supermarket display customer base as ECR2 motor US$ revenues increased by 83% over the comparable period
in 2017.
Revenue growth continues to be driven by IoT and ECR2 motor product sales.In first quarter 2018,motors
represented 66% of the company’s US$ revenue while IoT solutions were 29%.In second quarter,motors were
64% of the company’s total US$ revenue while IoT solutions were 32%.
Wellington is continuing to diversify beyond its historic reliance on the bottle cooler EC motor market. SCS
Connect hardware sales were 45% higher than for the comparableperiod in 2017. SCS Data revenues continued
to grow with US$0.7 million invoiced in the half, an 88% increase versus 2017. The ECR2 motor unit sales
were 46% higher and they now surpass ECR01 motor volumes, which while lower than ECR2, did increase by
12%.Sales to the company’s two largest supermarket and food service refrigeration customers continued to
grow-they togethercontributed 31% of total ECR2 motor sales.
Gross margin
Gross Margin at 25% was consistent with the 25% recorded in first half 2017.The company came under price
pressure in its EC motor business towards the end of 2017 and generallyresponded to remain competitive.
Additional one-time costs of $0.2million, a 0.9% impact on gross margin, were incurred to successfully manage
the global electronic component shortage situation. These incremental spot buying costs ensured alternate

® is a registered Trade Mark of Wellington Drive Technologies Ltdin New Zealand
Wellington Drive Technologies LtdWT9069
Email:info@wdtl.comWebsite:www.wdtl.comPage2of3
components were secured and that all customer demand in the period was met.Component shortages are easing
somewhat but are expected to continue well into 2019.
Operating Costs
Operating costs for the period amounted to $5.9 million, or 21% ofrevenue, compared to $5.1m and 21% of
revenue last year.Operating spending increased as the company continued to invest in the skills and
infrastructure required to support a broadening product range and diversifying customer base.This has required
additional personnel in areas such as customer management, marketing and software development.Profitability
wasalso affected by capitalisation ofdevelopment time reducing by $0.4 million as some development
engineers were redeployed to modifying existing products toresolve component shortage issues rather than
development of future products.
Profit Improvement
EBITDA
1
for the first half improved to $1.1 million compared to $1.0 million for the same period in 2017. This
result was in line with previousEBITDA
1
guidanceof around $1 million.EBIT improved to $0.3 million
compared to $0.2 million in 2017. The company made a net loss of $0.2 million for the half, an improvement
on the $0.5 million loss for the same period last year.The improvement in netloss is higher than the relative
EBITDA
1
improvement due to the cessation of preference share interest costs in May 2017.
Working Capital
The company generated cash in the first half.Cash at 30 June 2018 was $2.6 million compared to $1.6 million
at 31December 2017.Net debt at 30 June was $0.6 million versus net debt of $1.0 million at December 2017.
Operating cash flows for the six months amounted to $1.8 million,up from$0.3 million for the corresponding
period in 2017. Netoperating and investing cash flowsamountedto $0.5millionfor the six months, a $1.4
million improvement.
Inventory management continued to be a highlight with 7.6 inventory turns achieved in the six months,
compared to 4.6 turnsfor the same period last year.However, several customers have recently mandated higher
levels of locally held inventory to support shorter lead-times and increased product mix, which will increase
Wellington’s stock levels during the second half of theyear.In the second quarter, one of the company’slarger
customers decided to extend payment terms for all its suppliers, as a result of beverage brands extending their
terms.This extended payment cycle is expected to continue for the foreseeable future.
The US$0.6m loan from Meta Capital Limited was repaid on 31 May 2018. A new loan for US$0.6m from
Meta Capital was advanced on 29 June 2018 to partially fund the iProximity acquisition settlement and support
extended terms with selected customers.
Acquisition of iProximity
The acquisition of iProximity, an Australian-based digital marketing company, was completed on 2 July 2018.
Several field trials are underway usingiProximity’s solutions, including working with large global food brands
to deliver proximity based information to retailers and shoppers.Wellington’s SCS Connect is being integrated
with the iProximity digital marketing toolset to manage fleets of beacons installed in customer coolers, deliver
asset management tools to food and beverage brands and supermarkets and deliver product promotions to
consumers.
Customer wins
The company added its first dairy products customer to the portfolio, withdeliveries of theSCS ConnectIoT
platformstartingin the first quarter.This customer is expected to have reached US$1 million of revenue by
early 2019 and is an indicator of how Wellington’s IoT solutions are being used beyond carbonated soft drink
brands.The dairy sector is an important target market for the company’s IoTplatform.This platformwill help
improve management of in-store dairy coolers and also facilitate improved management of food quality and loss
for the industry.
2018 guidance
Revenue for the second half of 2018 is expected to be consistent with the first half, with EBITDA
1
around $1
million.The previous guidance of EBITDA
1
between $2 to 4 million is being narrowed tobetween$2 to $3
million, and the achievement of a net profit remains a target.Wellington should generateapositive operating

® is a registered Trade Mark of Wellington Drive Technologies Ltdin New Zealand
Wellington Drive Technologies LtdWT9069
Email:info@wdtl.comWebsite:www.wdtl.comPage3of3
cash flow in FY2018. However the extension of customer payment terms, the increased demand for higher
levels of locally-held inventory, the opportunity to accelerate investment in several high growth IoT projectsand
repayment of existing debtis causing the board to explore a range of funding alternatives to ensure continued
significant growth rates.
About Wellington Drive Technologies
Wellington is a leading global provider of IoT solutions, cloud-based fleet management platforms, energy-
efficient electronic motors and connected refrigeration control solutions for the retail food and beverage
markets.Through its iProximity brand in Australia it provides proximity-based marketing for Smart Cities.
Wellington’s SCS Connect IoT products, iProximity digital marketing solutions, and ECR motors serve some of
the world’s leading food and beverage brands and refrigerator manufacturers with advanced products and
solutions that improve product sales, reduce operating costs and reduce energy consumption.Wellington is
headquartered in Auckland, New Zealand, and is listed on the New Zealand stock exchange under the ticker
symbol NZ:WDT
Notes
WDTexpects to release itsfull2018interimresulton29August 2018. All amounts are stated in New Zealand
dollars unless otherwise stated. The results announced today are unaudited and are subject to any adjustment
required from adoption of new accounting standards for revenue recognition (NZ IFRS15) and financial
instruments (NZIFRS9) that take effect from 1 January 2018. The impact on revenue and earnings once the
new accounting standards are adopted is currently being assessed but is not expected to be significant.
Note 1-EBITDA is Earnings before Interest, Taxation,Depreciation, Amortisation and Impairment. Wellington
has always reported the EBITDA result because this is the profit performance measure that avoids the
distortions caused by differences in amortisation and impairment policies.
For further information, please visitwww.wdtl.com.
Contact:
Greg AllenHoward Milliner
Chief Executive OfficerChief Financial Officer
Phone +6427-777-9025+64 27-587-0455