ABILITY — Call Transcript 2013

May 10, 2013

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Ability Enterprise Investor Conference Q1, 2013

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May, 10[th] , 2013

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Agenda

2013 Q1 Financial Result - EMS Pro Forma

Outlook Q&A

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Consolidated IS

EMS Pro Forma (IFRS Adjusted)

Unit ： NT$ in millions (except eps in NT$)

	2013 Q1	2012	Q4	QOQ	2012	Q1	YOY
Agenda Net Sales	Amt % 6,848 100.0	Amt 9,973	% 100.0	% -31.3%	Amt 9,696	% 100.0	% -29.4%
2013 Q1 Financial COGS 6,291 91.9		Result 9,068 90.9		-30.6%	8,939	92.2	-29.6%
Gross Margin	557 8.13	905	9.07	-38.5%	757	7.81	-26.4%
- EMS Pro Forma OP Exp 401 5.9 OP Income 156 2.3		519 386	5.2 3.9	-22.7% -59.6%	443 314	4.6 3.2	-9.5% -50.3%
Outlook Net Non-OP PBT	(25) (0.4) 131 1.9	(83) 303	0.5 4.4	-69.9% -56.8%	74 388	0.8 4.0	-133.8% -66.2%
Q&A Tax Net Income	30 0.4 101 1.5	52 251	0.5 3.8	-42.3% -59.8%	66 322	0.7 3.3	-54.5% -68.6%
IFRS ADJ		131
After ADJ Net Income		382
After-Tax EPS	0.23	0.56		-58.9%	0.72		-68.1%
		0.85		-72.9%
Note：The major difference	between IFRSs and ROC GAAP in 2012 Q4 :
Disposal gain of NT$139M from AVY is recorded under IFRSs.
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ABILITY ENTERPRISE CO., LTD
Con. Non-OP Items- YOY
EMS Pro Forma		Unit：NT$		in millions
	2013	Q1	2012 Q1
	Amt	%	Amt	%
Interest income	5	0.1	4	0.0
Investment income accounted for under the equity method	(24)	(0.4)	(16)	(0.2)
Gain on Exchange	0	0.0	2	0.0
Rental income	9	0.1	9	0.1
Gain on valuation of financial assets	3	0.0	9	0.1
Gain on valuation of financial liabilities	0	0.0	45	0.5
Other income	3	0.0	34	0.4
Total non-operating income	(4)	(0.1)	87	0.9
Interest expense	(1)	(0.0)	(1)	(0.0)
Loss on disposal of property, plant and equipment	(1)	(0.0)	0	0.0
Loss on disposal of investments	0	0.0	(4)	(0.0)
Loss on Exchange	(4)	(0.1)	0	0.0
Other expenses	(15)	(0.2)	(8)	(0.1)
Total non-operating expenses	(21)	(0.3)	(13)	(0.1)
Net Non-Operating	(25)	(0.4)	74	0.8
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Q1 Financial Highlights EMS Pro Forma

Q1 Consolidated Net Sales : -29.4% on YOY; -31.3% on QOQ Q1 GM YOY is -26.4%

Consolidated Gross Margin ： Q1 8.13% Q1 ASP stable & Material cost improved

Q1 Consolidated OP Income: YOY is -50.3% ； QOQ is -59.6% Q1 Consolidated Net income: QOQ is -59.8% After Tax EPS: $0.23

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(6) 2013/3/31 2012/12/31 Amt % Amt % QOQ Total Current Assets 10,418 64.8 13,747 72.1 -24.2% Cash & cash equivalents, short- term investment 4,411 27.4 5,322 27.9 -17.1% Notes & accounts receivable 3,130 19.5 4,715 24.7 -33.6% Inventories 2,615 16.3 3,360 17.6 -22.2% Fund & Investments 1,135 7.1 1,185 6.2 -4.2% Property , Plant & Equipment 3,665 22.8 3,265 17.1 12.3% Total Assets 16,081 100.0 19,068 100.0 -15.7% Total Current Liabilities 5,702 35.5 8,810 46.2 -35.3% Short-term bank loans 75 0.5 0 0.0 Notes & accounts payable 4,413 27.4 5,897 30.9 -25.2% Long-term liabilities -current portion 0 0.0 1,436 7.5 -100.0% Long-term liabilities 0 0.0 0 0.0 Total Liabilities 5,832 36.3 8,868 46.5 -34.2% Common Stock 4,490 27.9 4,488 23.5 0.0% Capital Reserve 1,428 8.9 1,676 8.8 -14.8% Legal Reserve 1,327 8.3 1,327 7.0 0.0% Retained Earnings 3,062 19.0 2,832 14.9 8.1% Total Stockholders' Equity 10,249 63.7 10,200 53.5 0.5% Net Worth / Share (NT$) 22.83 22.73 0.4% Unit：NT$ in millions Consolidated BS-EMS Pro Forma

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2013.03.31 B/S Highlights-EMS Pro Forma

Debt ratio 36% with 77% payables; 14% accrued exp Current Ratio is 183% AP Payment days: 75 days AR Collection days: 52 days Inventory turnover days: 44days Cash conversion cycle is 21 days

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Consolidated IS

Unit ： NT$ in millions (except eps in NT$)

2013 Q1	2012 Q1 YOY
Amt %	Amt % %
Net Sales 7,072 100.0	10,045 100.0 -29.6%
COGS 6,500 91.9	9,263 92.2 -29.8%
Gross Margin 572 8.09	782 7.78 -26.9%
OP Exp 464 6.6	518 5.2 -10.4%
OP Income 108 1.5	264 2.6 -59.1%
Net Non-OP (3) (0.0)	95 0.9 -103.2%
PBT 105 1.5	359 3.6 -70.8%
Tax 30 0.4	65 0.6 -53.8%
Cons. Net Income 75 1.1	294 2.9 -74.5%
Minority interest (26) (0.4)	(28) (0.3) 7.1%
Net Income (After-mi ) 101 1.4	322 3.2 -68.6%
After-Tax EPS 0.23	0.72 -68.1%

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Consolidated BS

Unit ： NT$ in millions

2013/3/31	2012/12/31 Amt % QOQ 14,143 69.5 -23.5% 5,459 26.8 -16.9% 4,869 23.9 -32.9% 3,464 17.0 -21.7% 1,099 5.4 -2.6% 4,877 24.0 -7.8% 20,351 100.0 -14.8% 9,794 48.1 -31.2% 595 2.9 27.4% 6,027 29.6 -27.4% 154 0.8 0.0% 231 1.1 -16.5% 10,161 49.9 -30.4% 4,471 22.0 0.4% 1,425 7.0 0.2% 1,327 6.5 0.0% 2,960 14.5 3.4% 10,190 50.1 0.8% 22.79 0.4%
Amt %
Total Current Assets 10,825 62.4 Cash & cash equivalents, short-term investment 4,539 26.2 Notes & accounts receivable 3,269 18.9 Inventories 2,714 15.7 Fund & Investments 1,070 6.2 Property , Plant & Equipment 4,497 25.9
Total Assets 17,340 100.0
Total Current Liabilities 6,734 38.8 Short-term bank loans 758 4.4 Notes & accounts payable 4,373 25.2 Long-term liabilities -current portion 154 0.9 Long-term liabilities 193 1.1
Total Liabilities 7,067 40.8
Common Stock 4,490 25.9 Capital Reserve 1,428 8.2 Legal Reserve 1,327 7.7 Retained Earnings 3,062 17.7
Total Stockholders' Equity 10,273 59.2
Net Worth / Share (NT$) 22.88
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Q&A Thank You

Ability Enterprise Co., LTD. Tel : +886 (2) 2299-9898 / Fax : +886 (2) 2299-9797 http://www.abilitycorp.com.tw

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Safe Harbor Notice

We have made forward-looking statements in the presentation. Our forward-looking statements contain information regarding, among other things, our financial conditions, future expansion plans and business strategies. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties, and assumptions about us.

We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in the conference might not occur and our actual results could differ materially from those anticipated in these forward-looking statements.

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