Wellington Drive Technologies update on Coranavirus

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is a registered Trade Mark of Wellington Drive Technologies WT 9339 02/20

Wellington Drive Technologies Ltd
P: +64 9 477 4500 E: info@wdtl.com
21 Arrenway Drive, Rosedale, Auckland 0632
PO Box 302-533 North Harbour, Auckland 0751, New Zealand
www.wdtl.com
13 February 2020
Wellington Drive Technologies update on the impacts of Coronavirus

Wellington Drive Technologies (Wellington) is closely monitoring the impact of the 2019 Novel Coronavirus
(nCov) on its supply chain operations. Wellington supplies motors and IoT hardware to customers that are
manufactured by its supply partners East West Vietnam and Match-Well China.
The company’s supply chain is global in nature and components that suppliers need for production are
sourced globally, and from across Asia, including China, which is the predominant or sole source of certain
componentry. As a result of the nCoV emergency and measures put in place in China by local and central
government, Wellington is expecting an impact on product supply. This is due to government restrictions on
factory openings, restrictions in movement of people and port and logistics facility closures.
Some known impacts are as follows:
• Wellington’s East West Vietnam factory is open; however, production will be impacted by China-
sourced component supply shortages.
• Wellington’s China-based supplier, Match-Well, had its post New Year factory opening delayed by
local authorities. As of February 11
th
, the factory partially opened with reduced staff. Several China-
based component suppliers for Connect SCS and ECR2 motors remain closed with minimal
visibility on opening dates and supply recovery plans;
• Chinese ports and shipping companies have restricted throughout. There is limited feedback from
these Chinese ports and customs departments on incoming and outgoing deliveries or release of
shipments currently in transit. Logistics generally across the Asia region are being delayed by
related restrictions; and,
• There are significant constraints put on movement of people and goods between Chinese
provinces and within cities; couriers and deliveries have been restricted, and in some cases
cancelled.
Wellington is in the process of switching more production to East West’s Vietnamese factory until products
can resume shipment into and out of China. In addition, the company is working with alternate sources for
some components to mitigate some of the supply risk.
The company has implemented travel restrictions to and within mainland China and is reducing international
travel generally in order to protect employees. It is following travel and health guidance provided by
international governments and authorities.

2020 forecast
There are some indications from authorities that factory production in China will restart towards the end of
February and into March. Initial forecast scenarios are being prepared that assume the company is only able
to supply product from existing inventory until such a time as the China component supply chain situation is
resolved. Wellington is currently assuming resumption of normal production and shipping around the end of

WT 9339 02/20

April 2020. These initial forecasts indicate a potential risk to revenue of approximately US$3.6m (around
NZ$6m) from February to April. The company does not expect that all of this delayed supply will be
perishable, so some catch up later in Q2 currently appears likely. Forecasting the full loss of this revenue
would take 2020 forecast sales to around NZD$65m, which would be below our existing guidance for
revenue growth of around 15% over 2019.
The company will continue to update its forecast scenarios as further information about nCoV becomes
available. If necessary, Wellington can defer planned incremental expansion spending, which would
somewhat mitigate the flow through impact on the forecast 2020 profit.

2019 results update
The company expects to release its 2019 results by the end of February 2020. There is no impact to 2019
as a result of NCov related issues with revenue and profits expected to be consistent with guidance, which
was for EBITDA between $3.5m and $4.0m and a net profit.

About Wellington Drive Technologies:
Wellington is a leading provider of IoT solutions, cloud-based fleet management platforms, proximity
marketing solutions, energy-efficient electronic motors and connected refrigeration control solutions. It
serves some of the world’s leading food and beverage brands and refrigerator manufacturers and offers
proximity-based marketing solutions for global food and beverage brands as well as Smart City projects in
the Australian market. Wellington’s products and services improve sales, decrease costs and reduce
energy consumption. Headquartered in Auckland with a global reach, Wellington is listed on the New
Zealand stock exchange under the ticker symbol NZ:WDT
For further information visit www.wdtl.com

Contact:

Greg Allen Howard Milliner
Chief Executive Officer Chief Financial Officer
Phone +1-778-238-6494 +64 27 587-0455