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AUO Interim / Quarterly Report 2017

Sep 6, 2017

52062_rns_2017-09-06_ab071581-647d-4e72-83ae-ae6d1a7bf896.pdf

Interim / Quarterly Report

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AU Optronics Corp. Second Quarter 2017 Results Investor Conference 友達光電 2017 年第二季法人說明會

Jul. 26, 2017

Safe Harbor Notice

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  • The statements included in this presentation that are not historical in nature are “forward-looking statements” within the meaning of Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934. These forward-looking statements, which may include statements regarding AU Optronics’ future results of operations, financial condition or business prospects, are subject to significant risks and uncertainties and are based on AU Optronics’ current expectations.

  • Actual results may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including, among other things: the cyclical nature of our industry; our dependence on introducing new products on a timely basis; our dependence on growth in the demand for our products; our ability to compete effectively; our ability to successfully expand our capacity; our dependence on key personnel; general economic and political conditions, including those related to the TFT-LCD industry; possible disruptions in commercial activities caused by natural and human-induced disasters, including terrorist activity and armed conflict; and fluctuations in foreign currency exchange rates.

  • Beginning on January 1, 2013, we have adopted the International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) to the extent endorsed by the ROC Financial Supervisory Commission (“FSC”) (“Taiwan IFRS”) for reporting our annual and interim consolidated financial statements in the ROC in accordance with the requirements of the FSC. All financial information contained herewithin is presented in conformity with Taiwan IFRS. Readers should be cautioned that Taiwan IFRS differs in many material respects from IFRS including to the extent that any new or amended standards or interpretations applicable under IFRS may not be timely endorsed by the FSC.

  • Our release of financial forecasts and forward-looking statements at any particular time does not create any duty of disclosure beyond that which is imposed by law, and we expressly disclaim any obligation to publicly update or revise any forecasts or forward-looking statements, whether as a result of new information, future events or otherwise.

2

© 2017 AU Optronics Corporation – Proprietary and Confidential

Statement of Comprehensive Income

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Selected Items from Statement of Comprehensive Income

Net Sales
Cost of Goods Sold
Gross Profit
Operating Expenses
Operating Profit
Net Non-operating Expenses
Profit(Loss) before Tax
Net Profit(Loss)
Net Profit(Loss) Attributable to Owners of Company
Basic EPS (NT$)(a)
Amount : NT$ Million		 84,412
100.0%
(67,292)
(79.7%)
17,121
20.3%
(5,445)
(6.5%)
11,676
13.8%
(32)
(0.0%)
11,644
13.8%
8,946
10.6%
9,830
11.6%
1.02
2Q17		 88,557
100.0%
(71,124)
(80.3%)
17,433
19.7%
(5,415)
(6.1%)
12,017
13.6%
(68)
(0.1%)
11,950
13.5%
9,435
10.7%
9,479
10.7%
0.98
1Q17		 QoQ %
(4.7%)
80,091
100.0%
(5.4%)
(74,527)
(93.1%)
(1.8%)
5,564
6.9%
0.5%
(5,449)
(6.8%)
(2.8%)
116
0.1%
(52.8%)
(356)
(0.4%)
(2.6%)
(240)
(0.3%)
(5.2%)
(804)
(1.0%)
3.7%
(572)
(0.7%)
4.1%
(0.06)
2Q16
Operating Profit + D&A 20,682
24.5%		 22,028
24.9%		 (6.1%)
9,978
12.5%
Display Segment Information:
Net Sales
Operating Profit(Loss)
Operating Profit + D&A		 79,914
100.0%
11,804
14.8%
20,389
25.5%		 83,448
100.0%
12,387
14.8%
21,974
26.3%		 (4.2%)
73,956
100.0%
(4.7%)
(224)
(0.3%)
(7.2%)
9,173
12.4%
Unit Shipments (mn)(b)
Large Size Panels
Small & Medium Size Panels		 26.8
38.7		 27.2
36.4		 (1.4%)
28.5
6.1%
42.5

  • a) Basic EPS in both 2Q17 and 1Q17 were calculated based on the weighted average outstanding shares of the first half of 2017 (9,624m shares); Basic EPS in 2Q16 was calculated based on the weighted average outstanding shares of 2016 (9,624m shares).

  • b) Large size refers to panels that are 10 inches and above

3

© 2017 AU Optronics Corporation – Proprietary and Confidential

Consolidated Balance Sheet Highlights

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Amount : NT$ Million

Amount : NT$ Million
Cash & ST Investment(a)
Inventory
Short Term Debt(b)
Long Term Debt
Equity
Total Assets		 2Q17
102,801
25,540
19,032
105,676
211,145
441,143		 1Q17
85,484
25,645
18,892
104,547
205,650
425,305		 QoQ %
20.3%
(0.4%)
0.7%
1.1%
2.7%
3.7%
Inventory Turnover (Days)(c)
Net Debt to Equity(d)		 35
10.4%		 34
18.5%		 36
23.2%

  • a) Excluding time deposit with maturity longer than 3 months (NT$0m in 2Q17,1Q17 and 2Q16 )

  • b) Short term debt refers to all interest bearing debt maturing within one year

  • c) Calculated by dividing the average inventory into the annualized cost of goods sold during such period, then multiplying by 365 days

  • d) Net Debt to Equity = (Short Term Debt + Long Term Debt - Cash and ST Investment) / Equity

4

© 2017 AU Optronics Corporation – Proprietary and Confidential

Consolidated Cash Flow Highlights

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Amount : NT$ Million

From Operating Activities
Profit before Tax
Depreciation & Amortization
Net Change in Working Capital
From Investing Activities
Capital Expenditure
From Financing Activities
Net Change in Debt
Net Change in Cash (a)		 2Q17
24,627
11,644
9,006
3,955
(8,750)
(8,264)
1,077
1,088
17,317		 1Q17
17,285
11,950
10,010
(4,109)
(9,540)
(9,953)
(75)
(53)
5,292		 QoQ
7,342
(306)
(1,004)
8,064
790
1,689
1,152
1,140
12,025
  • a) In addition to cash generated from operating, investing and financing activities, net change in cash also include effect on currency exchange of foreign subsidiaries

5

© 2017 AU Optronics Corporation – Proprietary and Confidential

Display Revenue Breakdown by Application

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----- Start of picture text -----

100%
80%
46% 46% 48% 48% 49%
TV
60% Monitor
Mobile PC
14% 15%
15% 16% 14%
40%
Mobile Device
17%
17%
17% 17% 17% Commercial
and Others
20% 4% 5%
5% 5% 4%
19% 17%
15% 14% 16%
0%
2Q16 3Q16 4Q16 1Q17 2Q17
----- End of picture text -----

  • Mobile PC : including Notebook and Tablet displays

  • Mobile Device : including displays for mobile phones and other related products

  • Commercial and Others: including displays for automobile, industrial PC, ATM, point of sale (POS), pachinko, and etc.

6

© 2017 AU Optronics Corporation – Proprietary and Confidential

Display Revenue Breakdown by Size

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==> picture [661 x 403] intentionally omitted <==

----- Start of picture text -----

100%
30% 28% 27% 29% 31%
80%
>=50"
15% 17%
13% 16%
15%
60% 39"<=size<50"
20"<=size<39"
15% 15%
16%
16%
16%
10"<=size<20"
40%
size<10"
26% 26%
25% 24%
24%
20%
16% 16% 15% 15% 14%
0%
2Q16 3Q16 4Q16 1Q17 2Q17
----- End of picture text -----

7

© 2017 AU Optronics Corporation – Proprietary and Confidential

Consolidated Shipments & ASP by Area

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----- Start of picture text -----

Shipments in square meter ASP per square meter
(K m [2] ) (US$)
7,000 500
$421
$413 $415
400 $372
$340
3,500
6,492 6,617 6,458
6,196 6,187
300
0 200
2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17
----- End of picture text -----

  • ASP per square meter in US$ was translated from NT$ based on average exchange rates announced by Customs Administration, Ministry of Finance of each respective quarter

8

© 2017 AU Optronics Corporation – Proprietary and Confidential

Consolidated Small & Medium Panel Shipments by Area & Revenues

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==> picture [694 x 255] intentionally omitted <==

----- Start of picture text -----

Shipments in square meter (NT$ bn) Revenues
(K m [2] ) 20.0
400
16.0
12.6
300 12.6
11.6 12.2
11.1
12.0
200
352.0
334.4 324.0 332.5 8.0
307.1
100
4.0
0 0.0
2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17
----- End of picture text -----

  • Small & Medium size refers to panels that are under 10 inches

9

© 2017 AU Optronics Corporation – Proprietary and Confidential

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www.auo.com [email protected]

10

© 2017 AU Optronics Corporation – Proprietary and Confidential

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Condensed Statements of Comprehensive Income

For the Three Months Ended June 30, 2017 and 2016 and March 31, 2017

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(Expressed in Millions of New Taiwan Dollars (NTD) and US Dollars (USD) except for per share amounts and shares outstanding)

Net Sales
Cost of Goods Sold
Gross Profit
Operating Expenses
Operating Profit(Loss)
Net Non-operating Income(Expenses)
Profit(Loss) before Income Tax
Income Tax Expense
Net Profit(Loss)
Other Comprehensive Income(Loss)
Total Comprehensive Income(Loss)
Net Profit(Loss) Attributable to:
Owners of Company
Non-Controlling Interests
Net Profit(Loss)
Total Comprehensive Income(Loss) Attributable to:
Owners of Company
Non-Controlling Interests
Total Comprehensive Income(Loss)
Basic Earnings Per Share
Basic Earnings Per ADS(2)
Weighted-Average Shares Outstanding ('M)		 Year over Year Comparison Year Comparison YoY%
5.4
(9.7)
207.7
(0.1)
9,992.5
(91.0)
－
378.8
－
－
－
－
282.1
－
－
(28.1)
－		 Sequential Comparison Sequential Comparison Sequential Comparison
USD
2,779
2,215
564
179
384
(1)
383
(89)
294
67
361
324
(29)
294
382
(21)
361
0.03
0.34		 NTD
84,412
67,292
17,121
5,445
11,676
(32)
11,644
(2,698)
8,946
2,023
10,969
9,830
(883)
8,946
11,596
(627)
10,969
1.02
10.21
9,624
2Q17		 %
100.0
79.7
20.3
6.5
13.8
(0.0)
13.8
(3.2)
10.6
2.4
13.0
11.6
(1.0)
10.6
13.7
(0.7)
13.0		 2Q16
NTD
80,091
74,527
5,564
5,449
116
(356)
(240)
(563)
(804)
(1,489)
(2,293)
(572)
(231)
(804)
(1,421)
(872)
(2,293)
(0.06)
(0.59)
9,624		 USD
2,779
2,215
564
179
384
(1)
383
(89)
294
67
361
324
(29)
294
382
(21)
361
0.03
0.34		 NTD
84,412
67,292
17,121
5,445
11,676
(32)
11,644
(2,698)
8,946
2,023
10,969
9,830
(883)
8,946
11,596
(627)
10,969
1.02
10.21
9,624
2Q17		 %
100.0
79.7
20.3
6.5
13.8
(0.0)
13.8
(3.2)
10.6
2.4
13.0
11.6
(1.0)
10.6
13.7
(0.7)
13.0		 1Q17
NTD
QoQ%
88,557
(4.7)
71,124
(5.4)
17,433
(1.8)
5,415
0.5
12,017
(2.8)
(68)
(52.8)
11,950
(2.6)
(2,515)
7.3
9,435
(5.2)
(3,454)
－
5,981
83.4
9,479
3.7
(45)
1,882.3
9,435
(5.2)
6,916
67.7
(936)
(33.0)
5,981
83.4
0.98
9.85
9,624

Note: (1) Amounts in New Taiwan dollars were translated into US dollars at the exchange rate of NTD 30.38 per USD as of June 30, 2017

© 2017 AU Optronics Corporation – Proprietary and Confidential (2) 1 ADS equals 10 common shares

11

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

June 30, 2017 and 2016

(Expressed in Millions of New Taiwan Dollars (NTD) and US Dollars (USD) )

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ASSETS
Cash and Cash Equivalents
Notes & Accounts Receivables
Other Current Financial Assets
Inventories
Other Current Assets
Total Current Assets
Long-term Investments
Net Fixed Assets
Other Non-Current Assets
Total Non-Current Assets
Total Assets
LIABILITIES
Short-term Borrowings
Accounts Payable
Current Installments of Long-term Borrowings
Current Financial Liabilities
Accrued Expense & Other Current Liabilities
Machinery and Equipment Payable
Total Current Liabilities
Long-term Borrowings
Non-Current Financial Liabilities
Other Non-Current Liabilities
Total Non-Current Liabilities
Total Liabilities
EQUITY
Common Stock
Capital Surplus
Retained Earnings
Other Equity
Non-Controlling Interests
Total Equity
Total Liabilities & Equity		 USD
NTD
%
3,384
102,801
23.3
1,478
44,912
10.2
17
508
0.1
841
25,540
5.8
244
7,409
1.7
5,963
181,170
41.1
318
9,657
2.2
7,113
216,105
49.0
1,126
34,211
7.8
8,557
259,973
58.9
14,521
441,143
100.0
71
2,160
0.5
1,740
52,855
12.0
555
16,872
3.8
8
251
0.1
1,204
36,577
8.3
314
9,537
2.2
3,892
118,252
26.8
3,478
105,676
24.0
0
0
0.0
200
6,071
1.4
3,678
111,746
25.3
7,571
229,998
52.1
3,168
96,242
21.8
1,976
60,022
13.6
1,256
38,160
8.7
(1)
(18)
0.0
551
16,738
3.8
6,950
211,145
47.9
14,521
441,143
100.0
June 30, 2017		 NTD
%
NTD
%
72,954
17.5
29,846
40.9
37,424
9.0
7,488
20.0
1,991
0.5
(1,482)
(74.5)
27,754
6.6
(2,214)
(8.0)
5,300
1.3
2,109
39.8
145,423
34.8
35,747
24.6
14,528
3.5
(4,871)
(33.5)
214,059
51.3
2,046
1.0
43,375
10.4
(9,164)
(21.1)
271,962
65.2
(11,989)
(4.4)
417,385
100.0
23,758
5.7
1,576
0.4
584
37.1
57,109
13.7
(4,254)
(7.4)
21,093
5.1
(4,222)
(20.0)
113
0.0
138
122.8
31,277
7.5
5,300
16.9
11,224
2.7
(1,687)
(15.0)
122,392
29.3
(4,140)
(3.4)
94,670
22.7
11,006
11.6
8
0.0
(8)
(100.0)
9,005
2.2
(2,935)
(32.6)
103,683
24.8
8,063
7.8
226,075
54.2
3,923
1.7
96,242
23.1
0
0.0
60,428
14.5
(406)
(0.7)
10,988
2.6
27,172
247.3
3,114
0.7
(3,132)
－
20,536
4.9
(3,799)
(18.5)
191,310
45.8
19,836
10.4
417,385
100.0
23,758
5.7
June 30, 2016
YoY
USD
3,384
1,478
17
841
244
5,963
318
7,113
1,126
8,557
14,521
71
1,740
555
8
1,204
314
3,892
3,478
0
200
3,678
7,571
3,168
1,976
1,256
(1)
551
6,950
14,521

© 2017 AU Optronics Corporation – Proprietary and Confidential Note: (1) Amounts in New Taiwan dollars were translated into US dollars at the exchange rate of NTD 30.38 per USD as of June 30, 201712 (2) Cash and Cash Equivalents excluding time deposit with maturity longer than 3 months

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Condensed Cash Flow Statements

For the Period Ended June 30, 2017 and 2016

==> picture [65 x 24] intentionally omitted <==

(Expressed in Millions of New Taiwan Dollars (NTD) and US Dollars (USD))

Cash Flow from Operating Activities:
Profit(Loss) before Income Taxes
Depreciation & Amortization
Share of Profit of Equity-Accounted Investees
Changes in Working Capital
Changes in Others
Net Cash Provided(Used) by Operating Activities
Cash Flow from Investing Activities:
Acquisition of Property, Plant and Equipment
Proceeds from Disposal of Property, Plant and Equipment
Acquisition of Equity-Accounted Investees and Financial Assets Carried at Cost
Decrease(Increase) in Other Financial Assets
Decrease(Increase) in Intangible Assets
Decrease(Increase) in Other Assets
Net Cash Provided(Used) in Investing Activities
Cash Flow from Financing Activities:
Increase(Decrease) in Short-term Borrowings
Increase(Decrease) in Long-term Borrowings
Increase(Decrease) in Guarantee Deposits
Changes in Non-Controlling Interests and Others
Net Cash Provided(Used) by Financing Activities
Effect of Exchange Rate Changes on Cash
Net Increase(Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period		 1H 2016
USD
NTD
NTD
777
23,594
(5,525)
626
19,017
19,774
(3)
(88)
(160)
(5)
(154)
2,207
(15)
(456)
(1,472)
1,380
41,912
14,824
(600)
(18,216)
(26,355)
17
504
207
(0)
(14)
(67)
1
22
(29)
(6)
(193)
(190)
(13)
(393)
(16)
(602)
(18,290)
(26,450)
54
1,634
(18)
(20)
(599)
8,100
(1)
(44)
(23)
0
11
(1,625)
33
1,002
6,435
(66)
(2,015)
(735)
744
22,609
(5,926)
2,640
80,191
78,881
3,384
102,801
72,954
1H 2017
USD
777
626
(3)
(5)
(15)
1,380
(600)
17
(0)
1
(6)
(13)
(602)
54
(20)
(1)
0
33
(66)
744
2,640
3,384

13

© 2017 AU Optronics Corporation – Proprietary and Confidential Note: (1) Amounts in New Taiwan dollars were translated into US dollars at the exchange rate of NTD 30.38 per USD as of June 30, 2017

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