ABILITY — Interim / Quarterly Report 2013

Aug 9, 2013

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Ability Enterprise Investor Conference 1H, 2013

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August, 9[th] , 2013

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Agenda

2013 H1 Financial Result

EMS Pro Forma

Outlook Q&A

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Consolidated IS-Q2 EMS Pro Forma

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

	2013Q2	2013Q2	2013Q1	2013Q1	QOQ	2012Q2	2012Q2	YOY
	Amt	%	Amt	%	%	Amt	%	%
Net Sales	6,307	100.0	6,848	100.0	-7.9%	11,440	100.0	-44.9%
COGS	5,775	91.6	6,291	91.9	-8.2%	10,377	90.7	-44.3%
Gross Margin	532	8.44	557	8.13	-4.5%	1,063	9.29	-50.0%
OP Exp	425	6.7	401	5.9	6.0%	499	4.4	-14.8%
OP Income	107	1.7	156	2.3	-31.4%	564	4.9	-81.0%
Net Non-OP	35	0.6	(25)	(0.4)	240.0%	(38)	(0.3)	192.1%
PBT	142	2.3	131	1.9	8.4%	526	4.6	-73.0%
Tax	36	0.6	30	0.4	20.0%	130	1.1	-72.3%
Net Income	106	1.7	101	1.5	5.0%	396	3.5	-73.2%
After-Tax EPS	0.23		0.23		0.0%	0.89		-74.2%

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Consolidated IS-First Half EMS Pro Forma

			Unit：NT$ in	millions (except eps in NT$)	millions (except eps in NT$)
	Jan~Jun	'2013	Jan~Jun	'2012	YOY
	Amt	%	Amt	%	%
Net Sales	13,155	100.0	21,136	100.0	-37.8%
COGS	12,066	91.7	19,316	91.4	-37.5%
Gross Margin	1,089	8.28	1,820	8.61	-40.2%
OP Exp	826	6.3	942	4.5	-12.3%
OP Income	263	2.0	878	4.2	-70.0%
Net Non-OP	10	0.1	36	0.2	-72.2%
PBT	273	2.1	914	4.3	-70.1%
Tax	66	0.5	196	0.9	-66.3%
Net Income	207	1.6	718	3.4	-71.2%
After-Tax EPS	0.46		1.61		-71.4%

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ABILITY ENTERPRISE CO., LTD
Con. Non-OP Items- YOY
EMS Pro Forma
			Unit：NT$ in millions
	Jan~Jun '2013		Jan~Jun '2012
	Amt	%	Amt	%
Interest income	12	0.1	10	0.0
Investment income accounted for under the equity method	(33)	(0.3)	(62)	(0.3)
Dividend income	15	0.1	6	0.0
Gain on Exchange	45	0.4	0	0.0
Rental income	20	0.1	17	0.1
Gain on valuation of financial assets	0	0.0	34	0.2
Gain on valuation of financial liabilities	0	0.0	28	0.1
Other income	5	0.0	42	0.2
Total non-operating income	64	0.5	75	0.4
Interest expense	0	0.0	(3)	(0.0)
Loss on disposal of property, plant and equipment	(2)	(0.0)	0	0.0
Loss on disposal of investments	(2)	(0.0)	(7)	(0.0)
Loss on Exchange	0	0.0	(18)	(0.1)
Loss on valuation of financial assets	(33)	(0.3)	0	0.0
Other expenses	(17)	(0.1)	(11)	(0.1)
Total non-operating expenses	(54)	(0.4)	(39)	(0.2)
Net Non-Operating	10	0.1	36	0.2
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Q2/H1 Financial Highlights EMS Pro Forma

Consolidated Net Sales : -7.9% on QOQ ； -37.8% on H1 YOY ： Q1:8.13% ； Q2:8.44% ； 1H:8.28% Consolidated Gross Margin Q2 vs Q1 ASP Flat & Material cost continuously improved Consolidated OP Income: H1 YOY is -70.0% ； Q2 YOY is -81.0% 、 QOQ is -31.4%

Consolidated Net income: H1 YOY is -71.2% ； Q2 YOY is -73.2% 、 QOQ is 5.0%

After Tax EPS: $0.46

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(7) Unit：NT$ in millions Consolidated BS-EMS Pro Forma 2013/6/30 2013/3/31 Amt % Amt % QOQ Total Current Assets 10,331 64.9 10,418 64.8 -0.8% Cash & cash equivalents, short-term investment 5,195 32.6 4,411 27.4 17.8% Notes & accounts receivable 2,836 17.8 3,130 19.5 -9.4% Inventories 2,123 13.3 2,615 16.3 -18.8% Fund & Investments 1,129 7.1 1,135 7.1 -0.5% Property , Plant & Equipment 3,591 22.6 3,665 22.8 -2.0% Total Assets 15,919 100.0 16,081 100.0 -1.0% Total Current Liabilities 6,285 39.5 5,702 35.5 10.2% Short-term bank loans 0 0.0 75 0.5 -100.0% Notes & accounts payable 4,055 25.5 4,413 27.4 -8.1% Long-term liabilities -current portion 0 0.0 0 0.0 Long-term liabilities 0 0.0 0 0.0 Total Liabilities 6,414 40.3 5,832 36.3 10.0% Common Stock 4,490 28.2 4,490 27.9 0.0% Capital Reserve 1,428 9.0 1,428 8.9 0.0% Legal Reserve 1,462 9.2 1,327 8.3 10.2% Retained Earnings 1,921 12.1 3,062 19.0 -37.3% Total Stockholders' Equity 9,505 59.7 10,249 63.7 -7.3% Net Worth / Share (NT$) 21.17 22.83 -7.3%

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2013.06.30 B/S Highlights-EMS Pro Forma

Debt ratio 40% with 63% payables; 13% accrued exp Current Ratio is 164% AP Payment days: 75 days AR Collection days: 52 days Inventory turnover days: 42days Cash conversion cycle is 19 days

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Consolidated IS

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

	Jan~Jun '2013	Jan~Jun '2013	Jan~Jun '2012	Jan~Jun '2012	YOY
	Amt	%	Amt	%	%
Net Sales	13,680	100.0	21,824	100.0	-37.3%
COGS	12,537	91.6	19,966	91.5	-37.2%
Gross Margin	1,143	8.36	1,858	8.51	-38.5%
OP Exp	952	7.0	1,119	5.1	-14.9%
OP Income	191	1.4	739	3.4	-74.2%
Net Non-OP	39	0.3	113	0.5	-65.5%
PBT	230	1.7	852	3.9	-73.0%
Tax	66	0.5	217	1.0	-69.6%
Cons. Net Income	164	1.2	635	2.9	-74.2%
Minority interest	(43)	(0.3)	(83)	(0.4)	48.2%
Net Income
(After-mi )	207	1.5	718	3.3	-71.2%
After-Tax EPS	0.46		1.61		-71.4%
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Consolidated BS

Unit ： NT$ in millions

	Unit：NT$ in millions
2013/6/30	2013/3/31 Amt % QOQ 10,825 62.4 -0.7% 4,539 26.2 16.5% 3,269 18.9 -7.1% 2,714 15.7 -18.7% 1,070 6.2 -0.4% 4,497 25.9 -1.0% 17,340 100.0 -1.0% 6,734 38.8 9.4% 758 4.4 -6.3% 4,373 25.2 -4.9% 154 0.9 0.0% 193 1.1 -20.2% 7,067 40.8 8.4% 4,490 25.9 0.0% 1,428 8.2 0.0% 1,327 7.7 10.2% 3,062 17.7 -37.3% 10,273 59.2 -7.4% 22.88 -7.4%
Amt %
Total Current Assets 10,746 62.6 Cash & cash equivalents, short-term investment 5,287 30.8 Notes & accounts receivable 3,037 17.7 Inventories 2,206 12.8 Fund & Investments 1,066 6.2 Property , Plant & Equipment 4,453 25.9
Total Assets 17,173 100.0
Total Current Liabilities 7,366 42.9 Short-term bank loans 710 4.1 Notes & accounts payable 4,159 24.2 Long-term liabilities -current portion 154 0.9 Long-term liabilities 154 0.9
Total Liabilities 7,663 44.6
Common Stock 4,490 26.1 Capital Reserve 1,428 8.3 Legal Reserve 1,462 8.5 Retained Earnings 1,921 11.2
Total Stockholders' Equity 9,510 55.4
Net Worth / Share (NT$) 21.18
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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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