Wellington achieves $0.7m profit on 19% revenue growth

®
is a registered Trade Mark of Wellington Drive TechnologiesWT9227
Wellington Drive Technologies Ltd
P:+64 9 477 4500E:info@wdtl.com
21 Arrenway Drive, Rosedale, Auckland 0632
POBox 302-533 North Harbour, Auckland 0751, New Zealand
www.wdtl.com
WTxxxx
29 August 2019
MediaRelease
Forimmediaterelease
Wellington achieves$0.7millionprofiton19% revenue growth
Wellington Drive Technologies (Wellington), a leading provider of Internet of Things (IoT) solutions and
energy efficient motors to the retail food and beverage industry, today released itsunaudited financial
statements for thesix monthsended 30 June 2019(“H1 2019”).The company’s interim report, with
management discussion and analysis, can be found on the NZX website, under the Ticker NZX:WDT at
https://www.nzx.com/instruments/WDT
Revenue for H1 2019 was $33.3m, a 19% increase over H1 2018.The company achieved anEBITDA
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surplus of $2.45mforthe period, a98% increase. EBIT was $1.27m ($0.31m last year) and thenetprofit
was $0.72m,a $0.92m improvementon the prior year.
Wellington’s strategyis focused oninvesting in and growing its IoT business with large food and beverage
customers, accessing new markets with its IoT and digital marketing solutions anddeveloping customers
for its ECR2 motorplatform.Itssalesinitiatives, developed tofindadjacent markets for its IoTand EC
Motorproducts,haveresulted inmorenewcustomer wins, aidedby the rapid global adoption of IoT
solutions.
CEO Greg Allen commented,“Our businesscontinues to diversify, with a deliberate and sustained focus
on growing our IoT solutions and finding new customers for ECR2 motors.Weare pleased to report a
maideninterimnet profitandarecontinuing to focus ondeveloping anddelivering newIoT and ECR2
products for our customers.It is exciting to be working on severalnewIoT projectsthatsupport our five-
year growth vision of $100m in revenues.We areseeing a faster thanexpected decline in our legacy
motors, however thoseare becoming less important toour five-year planalthough they create a short-term
headwind to growth.We arecontinuing to invest in the resourcesto support IoTsolutionsand ECR2
productexpansion, both of whichwe expecttocontinue todeliver financial improvementsfor the company.”

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Key Highlights
Strong revenueand profitgrowth:Revenue increased19% to $33.3m.The company achieved
EBITDAof $2.45m, at the top end of its$2.0m to $2.5mguidance range.It achievedamaiden
net profit after taxfor the periodof $0.72m.
IoTbusinessgrowth:WellingtonConnect SCShardwarevolume grew44%.Total IoT revenue
(hardware, data and softwareservices) was $13.4m, an increase of52% compared to H1 2018.
Data and software services growth:Data and services billings for the period increased to
$1.7m, from $1.0m in 2018 as sales of IoT hardware and data packages continued to grow.
ECR2 motor growth:ECR2 motor volumes grew 36% in the first half versus last year with
402,000 shipped in the half.
Legacy motorsdeclined:Legacy ECR1 and ECR92 motor volumes reduced 29%. In total
motor volumes were 6% lower than for H1 2018, taking intoaccount both legacy and ECR2.The
Company is seeing a faster than expected transition away from the older legacy motors and
towards its new ECR2 platform and IoT business–both of which are growing rapidly.
Gross profit improvement:Gross Profit performance was $8.6m, an increase in $1.7m over last
year. Margins increased slightly to 25.8% from 24.7% in 2018.
Trading bank financeand net debt:In December 2018 the company secured a $1.5m debt
facility with the Bank of New Zealand. The BNZ agreed to increase this facility to $2.0m in May
2019.At 30 June, the company has net debt of $4.76m.
NZD (unless otherwise stated)
30 June (6 months)
20192018Change
Revenue$33.3m$28.0m+19%
Wellington Connect IoT Revenue
$13.4m$8.9m+52%
Wellington ECR Motors
$18.8m$18.0m+4%
ECR2Motor Revenue
$11.2m$7.7m+49%
LegacyECR Motor Revenue$7.6m$10.5m-28%
Gross profit$8.6m$6.9m+24%
Grossmargin %25.8%24.7%+1.1%
EBITDA
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$2.45m$1.23m+98%
EBIT$1.27m$0.31m+312%
Profit (loss)$0.72m($0.20m)+$0.92m
Operating cash flows
$1.11m$1.88m-41%

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2019 outlook
Wellington’s business mix is changing; sales efforts are targeted almost entirely towards both thenew
generation ECRmotor platform and higher margin IoT products, where revenues are expected to continue
growing.Oursales oflegacy EC motors to bottle cooler customers has declined more rapidly than expected,
negatively impacting overall company revenues in the short-to-medium term.We expect this to continue into
2020 with the legacy motor business constituting a relatively minor percentage of total revenue.
The company will continue its strategy to focus its investments on expanding and improving its IoT offeringto
the carbonated soft drinks segment as well as extending the product platform to adjacent market segments
including beer, ice-cream and food service refrigeration.As part of this strategy, the Wellington team are
developing a new IoT business opportunity, that would provide IoT hardware and data services to one of the
largest manufacturers of commercial coolers in the Americas. Wellington has been verbally advised it has
been awarded the business, although some risk remains as a formal commercial agreement has not yet
been reached.This opportunity will require a new Connect SCS product and customer specific applications
to be developed, with development and support costs in the range of $1.0 to $1.5m.At scale, this project
could potentially deliver growth of around100,000 Connect SCS devices per year with dataservices and
open the opportunity for retrofit devices.If successful, programmerevenuesfrom this projectwould likely
startduring2020.
Due to the wide range of opportunitiesunder development, Wellington is accelerating its investment and
assessing both resource and funding requirements.Future investment is likely to require resources to
accelerate sales growth, development capability to expand the IoThardware and software roadmap, as well
as funding to supportseveralnew customer opportunities.This growth investment need, coupled with
upcoming debt maturities means the company will exploreall funding options available to ensure it maintains
the capability to continue delivering strong growth and improving financialperformance.
The changing sales mix is likely to accelerate during H2, with legacy motor volumes decliningmore rapidly,
and seasonal revenue volatility expected to continue, resulting in the company’s total revenuein 2019
expected to be at similar levels to 2018.This decline in legacy motor volumes along with a higher level of
operating cost to support new business and development activity,means the company anticipatesEBITDA
will bearound$3.0m, with net profit and operating cashflow somewhat higher in 2019 in comparison to 2018.
About Wellington Drive Technologies:
Wellington is a leading provider of IoT solutions, cloud-based fleet management platforms, energy-
efficient electronic motors and connected refrigeration control solutions. It serves some of the world’s
leading food and beverage brands and refrigeratormanufacturersand offers proximity-based marketing
for Smart Cities to the Australian market.Wellington’s services and products improve sales, decrease

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costs and reduce energy consumption.Headquartered in Auckland with a global reach, Wellington is
listedon the New Zealand stock exchange under the ticker symbol NZ:WDT
For further information visitwww.wdtl.com
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EBITDA (i.e. Earnings before interest, taxation, depreciation, amortisation and impairment) is anon-GAAP earnings figure that equity
analysts tend to focus on for comparable company performance analysis. Wellington considers that it is a useful financial indicator
because it avoids the distortions caused by differences in amortisation and impairmentpolicies.
Contact:
GregAllenHowardMilliner
ChiefExecutiveOfficerChief FinancialOfficer
Phone+1-778-238-6494+64 27587-0455