Update on COVID-19

®
is a registered Trade Mark of Wellington Drive Technologies WT 9358

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
16 March 2020

Market Announcement
For immediate release

Wellington Drive market update on impact of COVID-19
Wellington Drive Technologies (Wellington) continues to monitor the impact of the 2019 novel coronavirus
(COVID-19) on both its supply chain operations and forecast customer demand. Wellington supplies motors
and IoT hardware to customers, along with related IoT data and digital marketing services. The company’s
hardware is manufactured for food and beverage brands and refrigeration manufacturers globally, with the
predominant sources of revenue from Latin America and the USA.
The company’s supply chain is global in nature although many components for its hardware products are
sourced from China. As a result of COVID-19 emergency measures put in place by authorities, Wellington
is continuing to experience some impact from both component supply and uncertainty in customer demand.
While the position is evolving, the current status of impacts are:
• The company is following the guidance provided by international authorities. In line with that advice
and to protect our employees, customers and partners, the company has implemented a 4-week
international travel ban, office visit restrictions and staff self-quarantine procedures that will be used
as necessary. The company is also fully prepared and practiced in managing its operations remotely
should its main offices in New Zealand and Mexico be disrupted;
• Wellington’s East West Vietnam factory is fully operating and supplying Connect SCS and Motor
products. Wellington’s China-based supplier, Match-Well, is now open at a reduced capacity;
• There are indications that China-based component supply chains are beginning to improve
although the resumption is early stage and slow, and some supply shortages remain. The company
is seeing improved visibility on component supply;
• Shipping companies globally continue to have restricted throughout. Logistics generally across the
Asia region are being delayed by related restrictions and freight costs are increasing in the
constrained environment;
• There are continued constraints on movement of people and goods between Chinese provinces
and within cities; some couriers and deliveries remain restricted. These constraints have now
expanded beyond China with government mandated travel and assembly restrictions in all the
company’s major markets. In some regions customers are restricting visits to their offices.

2020 forecast

Factory production and component supply has improved somewhat since the company’s market update on
13 February. As a result, Wellington’s first quarter revenue forecast has improved to a level similar to 2019,
albeit somewhat below planned expectations.

WT 9358

Given updated supply and customer demand timelines, Wellington now assumes a longer period before
more normal production and shipping patterns may be possible, with the end of Q2 and into Q3 more likely
for some degree of normalisation. The estimated potential risk to revenue remains around approximately
US$3.6m (around NZ$6m) through Q1 and Q2. The company reiterates that it does not expect all of this
delayed supply will be perishable, so some catch up later in Q2 and into Q3 is possible. Forecasting the full
year reduction of this revenue would take 2020 forecast sales to around NZD$65m, which is below our initial
guidance for FY2020 revenue growth of around 15% but higher than the FY2019 result.
The company cautions that the deteriorating global economic situation and business constraints brought
about by government actions around COVID-19, means that potential volatility around the 2020 forecast
outlook is high. Wellington typically only has around 60 to 90 days forward order visibility of customer
demand so the outlook beyond Q2 has low certainty. Given this backdrop a wide range of revenue and
earnings outcomes is possible.
Wellington will continue to update its forecast scenarios as further information about COVID-19 becomes
available. If necessary, Wellington can defer planned incremental growth spending, which would somewhat
mitigate the impact on forecast 2020 earnings.

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