Trading Update

®
is a registered Trade Mark of Wellington Drive Technologies WT 9493

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



28 January 2021

For immediate release
Wellington Drive Technologies trading update

2020 performance

Wellington Drive Technologies Limited (Wellington) revenue for the fourth quarter of 2020 (3 months ended
31 December 2020) was around $10.4m, consistent with guidance provided on 28 October 2020. This is a
significant and trending improvement over the rates of decline in second and third quarters. The Company
believes this trend improvement may indicate returning confidence in the food and beverage market.

The year’s revenue was $36.9m, well down on $61.7m in 2019 due to the previously disclosed impacts of
COVID-19 on customer demand.

Quarterly revenue performance:
Q1 – 31 March Q2 – 30 June Q3 – 30 Sept Q4 – 31 Dec
2020 Year $15.4m $5.1m $6.0m $10.4m
2019 Year $15.8m $17.5m $12.6m $15.8m
Year-on-year change -2.5% -70.9% -47.6% -34.2%

Cash at 31 December 2020 was $4.6m with $1.9m of unused debt facilities, which is sufficient on current
expectations to meet 2021 operating needs.

The trading result for the year is currently being finalised. Audited financial statements are expected to be
released on 24 February 2021.

Outlook

2021 will be an important year for Wellington, as the Company launches three new products in the IoT and
Motor space. Wellington will commence the first volume shipments from its recently announced relationship
with Imbera Cooling and continue progressing initiatives to expand the Connect IoT range of solutions
beyond its core ‘bottle cooler’ market segment.
The decision in 2020 – to continue to develop new products and maintain business development despite
COVID-19– has already started to pay off. Wellington has increased market share for its ECR motor in
Europe and created new wins for its Connect IoT with South American customers. The Company is also
increasing electronic assembly capacity at East West’s factory in Vietnam to ensure it can support increases

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in demand. It is anticipated that these developments will provide the opportunity to deliver additional revenue
streams in 2021 that will somewhat mitigate ongoing COVID-related risks.
Although Wellington’s revenue doubled when comparing Q4 2020 to Q2 2020, and demand is further
strengthening in Q1 2021, market conditions remain uncertain and volatile. This volatility could cause rapid
changes in demand between quarters and in the event of further restrictions by local governments, order
delays or cancellations.
The current business planning assumption is that beverage cooler customers will take around two years to
fully recover to the revenue levels seen in 2019. The 2021 financial forecast reflects that recovery timing
assumption, with revenue expected to improve materially compared to 2020.
Wellington’s current US dollar revenue forecast for 2021 is in the range US$37m to US$42m. The higher end
of that range would be in line with 2019 and approximately 75% ahead of 2020. Q1 2021 revenue is forecast
to be approximately US$11-12m compared to US$10.4m in Q1 2020, and a sequential improvement from
Q4 2020 of US$7.1m.
With 2021 US dollar revenue in this range, the Company is targeting EBITDA earnings of around NZ$2.0-
2.5m which would deliver a modest pre-tax loss. Forecasts have been prepared at a 0.70 US$/NZ$
exchange rate and are sensitive to the US$/NZ$ exchange rate (i.e. each 1c movement has an estimated
$0.2m impact on EBITDA).
Items that could impact the current forecast are:
o The Company considers that Q1 demand may be front end loaded as customers look for early delivery
of coolers in case of further COVID-related shutdowns. This front-loading of Q1 makes the Company
cautious about Q2 and Q3 sustaining the same pace.
o COIVD outbreaks continue to be more serious in some geographic markets. While vaccination programs
are starting, there is risk of either more lockdowns or other supply chain impacts that result in end
customers reducing investment later in the year.
o The new variants of COVID-19 that are being reported could set-back the global response to COVID-19,
and the Company remains cautious that the short-term improvement trend could be negatively impacted
as countries and business may return to more restrictive practices. It is important to note that while New
Zealand appears to be managing through the pandemic relatively well, Wellington is a global business
that operates in countries that are more seriously impacted.
o Wellington is experiencing significant disruption to its global supply chain. These include well reported
global constraints in shipping container and airfreight capacity, significant increases in logistics costs and
component supply shortages as a result of suppliers reducing capacity and inventories during 2021.
While the Company is currently navigating this disruption successfully, conditions could worsen rapidly
with knock-on impacts to revenue and cost of goods.
o The Company is continuing its COVID-19 policy of effectively supporting staff health, safety, and well-
being. Travel restrictions and flexible office working will remain in place for the foreseeable future. It is
possible that those restrictions and in particular reduced travel could impact the ability to support
customers.
Wellington’s CEO, Greg Allen commented “We are pleased with the way 2020 finished; with a healthy cash
balance, reduced debt usage and signs that revenue is returning. We are cautiously optimistic with how Q1
2021 demand is shaping up, but retain a degree of caution around the outlook for the balance of the year.

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We will find the right middle ground in a planning sense to ensure we are ready to deliver while not
overextending on inventory investment. It would seem that confidence around global vaccination programs
and a need to restart cooler installations after nine months of restrictions is driving the current strength in
demand. Cash management remains our priority, with customer demand delivery a close second”.
CEO transition update
The board has progressed to the next stage of the CEO election process. A shortlist of suitable candidates
has been selected and initial board-level interviews will commence in February. The board is pleased with
the level of candidates seen so far. With the current CEO stepping down at the end of March, the board
believes it is unlikely a new CEO will be in place by that date. Appropriate internal interim management may
be appointed to bridge any major gap in timing.
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