Hanon : Q3 2022 Earnings Release

3Q 2022 Earnings Release

Nov. 9, 2022

Disclaimer

Hanon Systems does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Any information expressed herein on this date is for understanding purposes before the audit, and may be subject to change without notice.

3Q 2022: Key Financial Metrics

(KRW in Billions)
	3Q22	3Q21	YoY %	2Q22	QoQ %
Revenue	2,196	1,704	28.8%	2,107	4.2%
COGS	1,991	1,506	32.3%	1,906	4.5%
% of Sales	90.7%	88.4%		90.5%
SG&A (Incl. R&D)	142	128	11.4%	140	1.5%
% of Sales	6.5 %	7.5%		6.7 %
EBITDA	205	194	5.7%	198	3.2%
Margin (%)	9.3%	11.4%		9.4%
Operating Profit	62	71	-12.5%	60	2.8%
Margin (%)	2.8%	4.1%		2.9%
Net Income	19	53	-63.8%	15	30.7%
Margin (%)	0.9%	3.1%		0.7%

Volume Recovery Seen as Supply Chain Disruptions Gradually Ease; Margins Expected to Improve in 4Q

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3Q YTD 2022: Key Financial Metrics

(KRW in Billions)
	3Q YTD 2022	3Q YTD 2021	YoY Variance
Revenue	6,282	5,425	857	15.8%
COGS	5,699	4,780	919	19.2%
% of Sales	90.7%	88.1%
SG&A (Incl. R&D)	431	380	51	13.4%
% of Sales	6.9%	7.0%
EBITDA	565	640	-75	-11.7%
Margin (%)	9.0%	11.8%
Operating Profit	152	265	-113	-42.5%
Margin (%)	2.4%	4.9%
Net Income	56	212	-156	-73.7%
Margin (%)	0.9%	3.9%

Ongoing Cost Recovery Actions to Improve 4Q Profitability; 2021 Net income Included One-time Gains

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3Q 2022 Highlights

3Q22 Highlights

• Revenue growth in consecutive four quarters on volume recovery; Expect consistent progress in 4Q
• Cost recovery from customers is ongoing; Yearly OPM to improve further due to easing cost pressure
• On track or exceed new business wins target with modules and system orders for battery electric vehicles Sales Breakdown (3Q YTD 2022)

By Region	By Customer
		Others
	Korea	16%
Europe	BMW 4%
27%
30%
Mercedes 3%
	HMG
		Stellantis 4%
		47%
	Asia	GM 6%
	VW
Americas	16%
	8%
27%		Ford

12%

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Quarterly Sales

Consolidated Sales		Comments

(KRW in Billions)
				2,196
2,101				2,107
1,901			1,926	1,980
1,869	1,869
			1,704

3Q20

4Q20

1Q21

2Q21

3Q21

4Q21

1Q22

2Q22

3Q22

• Record-highquarterly sales in company history
• Americas, Europe, China and Korea YoY revenue up by 57%, 27%, 14% and 7% respectively
• Increase in YoY revenue on production recovery with GM (+78%), BMW (+46%), VW (+40%), HMG (+25%), Ford (+19%), Mercedes (+13%) and Stellantis (+12%)
• Gradual recovery from supply-driven disruption, though the normalization is slower than expected with volatility in production

3Q Revenue Increase of 29% YoY Driven as Production Recovery and Favorable Foreign Exchange Rate

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