Advantech Marks 40th Year Anniversary with Succession Plan and Next Era Globalization Reform to be a Centennial Corporation

Advantech (TWSE: 2395), a global leader in industrial IoT, is holding an online investor conference today (March 1). Advantech’s 2022 revenue and profits both hit historic highs, reaching year-on-year growth of 17% and 30%, respectively. The annual gross margin reached 38.0%, the consolidated net income after tax was NT$10.76 billion, while the annual EPS reached NT$13.85. Meanwhile, Advantech proposed a record dividend per share of NT$11 (including $10 cash dividend and $1 stock dividend) based on last year’s strong earnings. The dividend proposal was approved by the Board of Directors last week and is subject to final approval by the 2023 annual shareholders meeting.

Global Energy Transformation and Opportunities, 1Q23 Growth Momentum Expected to be Maintained

Eric Chen, President of General Management and CFO stated, “Though economic slowdown and market uncertainty will still exist in 1H2023, Advantech is well-positioned to embrace the global trend toward energy transformation and net-zero carbon emissions by consolidating product design capability and on-site technical team focus in key verticals such as factory automation, renewable infrastructure, EV batteries and charging stations, and smart medical. It is estimated that revenues will fall in the range of US$550 to US$570 million, and the gross margin ratio will be 37.0% to 39.0%.”

Meanwhile, Advantech’s North American office has made a decision to lease a property in Tustin, California in Q2 this year, with an eye to fulfilling its growth at home and executing its expansion plan. This new office will be developed in several phases, with a six-story office building and a one-story production facility to be built in the first phase. Advantech will move to a new HQ base (spanning around 187,779 ft2 in total floor area) in the second half of 2025. This new base will perfectly embody the company’s brand image, IoT expertise, and North American ambition. The visual design of the new office will be the same as the Advantech AIoT Campus in HQ.

Launching the Next-Era Globalization Transformation with a Sector-Driven Mindset for Progress

According to Linda Tsai, President of Industrial-IoT Group, Advantech has executed two successful transformations throughout its history, in which the company went global and achieved stable expansion leveraging a matrix management structure. Today, Advantech announces a plan to usher in a third transformation—one that will take place on a global scale and is characteristically sector-driven. This transformation will begin with a focus on five sectors, including embedded design-in systems, industry systems, industrial automation, smart Healthcare, and IoTMart and e-commerce. It will involve investing resources in six key geo-regions, including North America, China, Europe, Emerging markets, Japan, and South Korea.

Miller Chang, President of Embedded IoT Group, attributes the success of Advantech’s transformation to a thorough gap analysis, explaining that for the past several months the company has addressed weaknesses within its operations—an act that demonstrates its resolve to transform. By introducing a sector-driven organizational structure, Advantech will optimize its resource allocation and talent strategy, engage in cross-domain marketing, regional market development, and talent empowerment. At the same time, exploring opportunities from emerging industries and ultimately fulfilling the needs of markets and customers.

Equipped to be a Centennial Corporation through a Professional Manager System and Internal/External Growth

Chairman KC Liu is passionate when stating that Advantech has been around for 40 successful years. With revenues topping US$2.3 billion and a market capitalization of around US$9 billion, the sustainability-focused company has positioned itself to become a centenarian business. As Advantech looks to expand its operations, Mr. KC Liu stresses that a succession plan based on a “professional manager system” has been introduced, with a focus on achieving internal and external growth. Specifically, the plan involves accelerating the company’s internal development and seeking external talent, opportunities, and co-creation partners. Long-term performance and incentive policies are in place to encourage talent to assume the mantle of leading Advantech’s development over the long run, creating a foothold in emerging industries, embracing mergers and acquisitions and external partnerships, and maximizing the outcomes of these collaborative efforts. We hope that through this dual growth approach, Advantech can create a virtuous cycle of sustainable operations for further growth.