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AUO Interim / Quarterly Report 2018

Jul 26, 2018

52062_rns_2018-07-26_80f22c6e-e2e8-4d8d-9800-5639b1899293.pdf

Interim / Quarterly Report

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AU Optronics Corp. Second Quarter 2018 Results Investor Conference 友達光電 2018 年第二季法人說明會

Jul. 26, 2018

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 Income(Expenses)
Profit before Tax
Net Profit
Net Profit Attributable to Owners of Company
Basic EPS (NT$)
(a)
Amount : NT$ Million		 75,054
100.0%
(67,780)
(90.3%)
7,274
9.7%
(5,174)
(6.9%)
2,100
2.8%
145
0.2%
2,244
3.0%
40
0.1%
1,252
1.7%
0.13
2Q18		 74,445
100.0%
(66,303)
(89.1%)
8,141
10.9%
(5,188)
(7.0%)
2,953
4.0%
1,191
1.6%
4,144
5.6%
4,027
5.4%
4,309
5.8%
0.45
1Q18		 QoQ %
0.8%
84,412
100.0%
2.2%
(67,292)
(79.7%)
(10.7%)
17,121
20.3%
(0.3%)
(5,445)
(6.5%)
(28.9%)
11,676
13.8%
(87.8%)
(32)
(0.0%)
(45.8%)
11,644
13.8%
(99.0%)
8,946
10.6%
(70.9%)
9,830
11.6%
(71.1%)
1.02
2Q17
Operating Profit + D&A 10,163
13.5%		 11,414
15.3%		 (11.0%)
20,682
24.5%
Display Segment Information:
Net Sales
Operating Profit
OperatingProfit + D&A		 69,457
100.0%
2,519
3.6%
10,260
14.8%		 70,590
100.0%
3,184
4.5%
11,315
16.0%		 (1.6%)
79,914
100.0%
(20.9%)
11,804
14.8%
(9.3%)
20,389
25.5%
Unit Shipments (mn)
(b)
Large Size Panels
Small & Medium Size Panels		 28.0
45.3		 28.6
46.6		 (2.1%)
26.8
(2.7%)
38.7

a) Basic EPS in 2Q18 and 1Q18 were calculated based on the weighted average outstanding shares of the first half of 2018 (9,624m shares); Basic EPS in 2Q17 was calculated based on the weighted average outstanding shares of 2017 (9,624m shares). b) Large size refers to panels that are 10 inches and above

  • © 2017 AU Optronics Corporation – Proprietary and Confidential

3

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		 2Q18
82,324
26,164
29,096
65,309
215,454
427,790		 1Q18
97,123
24,792
14,935
93,252
230,271
435,508		 QoQ %
(15.2%)
5.5%
94.8%
(30.0%)
(6.4%)
(1.8%)
Inventory Turnover (Days)
(c)
Net Debt to Equity
(d)		 34
5.6%		 34
4.8%		 35
10.4%

  • a) Excluding time deposit with maturity longer than 3 months (NT$0m in 2Q18, 1Q18 and 2Q17 )

  • 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)		 2Q18
9,565
2,244
8,064
(332)
(10,985)
(8,350)
(14,199)
(14,199)
(14,799)		 1Q18
8,463
4,144
8,461
(3,741)
(10,325)
(10,562)
(5,969)
(5,968)
(7,898)		 QoQ
1,102
(1,900)
(397)
3,409
(660)
2,212
(8,230)
(8,231)
(6,901)
  • 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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==> picture [654 x 379] intentionally omitted <==

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

100%
80% 38%
42%
47% 45%
49%
TV
60% Monitor
16%
15% Mobile PC
14%
13%
14%
40%
Mobile Device
20%
18%
17%
18%
17% Commercial
6% and Others
20% 4% 6% 6%
4%
18% 18% 19% 20%
16%
0%
2Q17 3Q17 4Q17 1Q18 2Q18
----- 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, medical equipment, and etc.

6

© 2017 AU Optronics Corporation – Proprietary and Confidential

Display Revenue Breakdown by Size

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==> picture [649 x 407] intentionally omitted <==

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

100%
25%
27%
31% 30% 30%
80%
10%
11% >=50"
12%
14%
15%
60% 39"<=size<50"
18%
17%
20"<=size<39"
15%
15%
16%
10"<=size<20"
40%
size<10"
29%
25% 27%
26%
24%
20%
18% 18% 18%
14% 15%
0%
2Q17 3Q17 4Q17 1Q18 2Q18
----- 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
(US$)
(K m [2] )
500
7,000
$415
$395
400 $373
$363 $361
3,500
6,187 6,689 6,563 6,416 6,268
300
0 200
2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18
----- 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 [702 x 262] intentionally omitted <==

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

Shipments in square meter Revenues
(K m [2] )
(NT$ bn)
450
20
16
12.9
300 12.0 12.1 12.3
11.1
12
400.2 404.0 409.4 398.1
8
332.5
150
4
0 0
2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18
----- 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, 2018 and 2017 and March 31, 2018

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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%
(11.1)
0.7
(57.5)
(5.0)
(82.0)
－
(80.7)
(18.3)
(99.6)
－
－
(87.3)
37.3
(99.6)
(95.4)
112.0
－		 Sequential Comparison Sequential Comparison Sequential Comparison
USD
2,466
2,227
239
170
69
5
74
(72)
1
(27)
(26)
41
(40)
1
:
18
(44)
(26)
0.004
0.043		 NTD
75,054
67,780
7,274
5,174
2,100
145
2,244
(2,205)
40
(832)
(793)
1,252
(1,212)
40
537
(1,329)
(793)
0.13
1.30
9,624
2Q18		 %
100.0
90.3
9.7
6.9
2.8
0.2
3.0
(2.9)
0.1
(1.1)
(1.1)
1.7
(1.6)
0.1
0.7
(1.8)
(1.1)		 2Q17
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		 USD
2,466
2,227
239
170
69
5
74
(72)
1
(27)
(26)
41
(40)
1
18
(44)
(26)
0.004
0.043		 NTD
75,054
67,780
7,274
5,174
2,100
145
2,244
(2,205)
40
(832)
(793)
1,252
(1,212)
40
537
(1,329)
(793)
0.13
1.30
9,624
2Q18		 %
100.0
90.3
9.7
6.9
2.8
0.2
3.0
(2.9)
0.1
(1.1)
(1.1)
1.7
(1.6)
0.1
0.7
(1.8)
(1.1)		 1Q18
NTD
QoQ%
74,445
0.8
66,303
2.2
8,141
(10.7)
5,188
(0.3)
2,953
(28.9)
1,191
(87.8)
4,144
(45.8)
(117)
1,788.7
4,027
(99.0)
1,012
－
5,040
－
4,309
(70.9)
(282)
329.9
4,027
(99.0)
5,063
(89.4)
(24)
5,535.4
5,040
－
0.45
4.48
9,624

Note: (1) Amounts in New Taiwan dollars were translated into US dollars at the exchange rate of NTD 30.43 per USD as of June 30, 2018 © 2017 AU Optronics Corporation – Proprietary and Confidential 11 (2) 1 ADS equals 10 common shares

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Condensed Statements of Comprehensive Income

For the Period Ended June 30, 2018 and 2017

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

(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 over Year Comparison Year over Year Comparison
USD
4,913
4,406
507
341
166
44
210
(76)
134
6
140
183
(49)
134
184
(44)
140
0.02
0.19		 NTD
149,499
134,084
15,415
10,362
5,053
1,336
6,389
(2,321)
4,067
180
4,247
5,562
(1,494)
4,067
5,600
(1,353)
4,247
0.58
5.78
9,624
1H 2018		 %
100.0
89.7
10.3
6.9
3.4
0.9
4.3
(1.6)
2.7
0.1
2.8
3.7
(1.0)
2.7
3.7
(0.9)
2.8		 1H 2017
NTD
YoY%
172,969
(13.6)
138,416
(3.1)
34,554
(55.4)
10,860
(4.6)
23,693
(78.7)
(100)
－
23,594
(72.9)
(5,213)
(55.5)
18,381
(77.9)
(1,431)
－
16,950
(74.9)
19,309
(71.2)
(928)
61.1
18,381
(77.9)
18,513
(69.8)
(1,563)
(13.4)
16,950
(74.9)
2.01
20.06
9,624

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

Note: (1) Amounts in New Taiwan dollars were translated into US dollars at the exchange rate of NTD 30.43 per USD as of June 30, 2018

12

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

June 30, 2018 and 2017

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

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

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
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
%
2,705
82,324
19.2
1,459
44,396
10.4
56
1,716
0.4
860
26,164
6.1
209
6,349
1.5
5,289
160,950
37.6
453
13,772
3.2
7,399
225,165
52.6
917
27,904
6.5
8,769
266,841
62.4
14,058
427,790
100.0
77
2,335
0.5
1,829
55,651
13.0
879
26,761
6.3
10
296
0.1
1,497
45,541
10.6
304
9,243
2.2
4,595
139,828
32.7
2,146
65,309
15.3
237
7,199
1.7
2,383
72,508
16.9
6,978
212,336
49.6
3,163
96,242
22.5
2,008
61,101
14.3
1,390
42,298
9.9
8
242
0.1
512
15,572
3.6
7,080
215,454
50.4
14,058
427,790
100.0
June 30, 2018		 NTD
%
NTD
%
102,801
23.3
(20,476)
(19.9)
44,912
10.2
(516)
(1.1)
508
0.1
1,208
237.6
25,540
5.8
624
2.4
7,409
1.7
(1,060)
(14.3)
181,170
41.1
(20,221)
(11.2)
9,657
2.2
4,114
42.6
216,105
49.0
9,060
4.2
34,211
7.8
(6,306)
(18.4)
259,973
58.9
6,868
2.6
441,143
100.0
(13,353)
(3.0)
2,160
0.5
175
8.1
52,855
12.0
2,796
5.3
16,872
3.8
9,889
58.6
251
0.1
45
18.1
36,577
8.3
8,964
24.5
9,537
2.2
(294)
(3.1)
118,252
26.8
21,576
18.2
105,676
24.0
(40,367)
(38.2)
6,071
1.4
1,128
18.6
111,746
25.3
(39,238)
(35.1)
229,998
52.1
(17,662)
(7.7)
96,242
21.8
0
0.0
60,022
13.6
1,079
1.8
38,160
8.7
4,137
10.8
(18)
0.0
259
－
16,738
3.8
(1,166)
(7.0)
211,145
47.9
4,309
2.0
441,143
100.0
(13,353)
(3.0)
June 30, 2017
YoY
USD
2,705
1,459
56
860
209
5,289
453
7,399
917
8,769
14,058
77
1,829
879
10
1,497
304
4,595
2,146
237
2,383
6,978
3,163
2,008
1,390
8
512
7,080
14,058

© 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 30.43 per USD as of June 30, 201813 (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, 2018 and 2017

==> 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:
Acquisitions of Financial Assets Measured at Fair Value
Proceeds from Disposal of Financial Assets Measured at Fair Value
Acquisitions of Financial Assets Carried at Cost
Acquisitions of Equity-Accounted Investees
Acquisitions of Property, Plant and Equipment
Proceeds from Disposal of Property, Plant and Equipment
Decrease(Increase) in Other Financial Assets
Decrease(Increase) in Intangible Assets
Decrease(Increase) in Other Assets
Net Cash Increase(Decrease) Resulting from Change in Consolidated Entity
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 and Cash Equivalents
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 2017
USD
NTD
NTD
210
6,389
23,594
543
16,525
19,017
(4)
(120)
(88)
(134)
(4,073)
(154)
(23)
(692)
(456)
592
18,028
41,912
(144)
(4,370)
0
2
59
0
0
0
(14)
(21)
(635)
0
(621)
(18,912)
(18,216)
109
3,303
504
1
15
22
0
0
(193)
(7)
(205)
(393)
(19)
(565)
(0)
(700)
(21,310)
(18,290)
(38)
(1,146)
1,634
(625)
(19,022)
(599)
(0)
(0)
(44)
0
0
11
(663)
(20,168)
1,002
25
753
(2,015)
(746)
(22,696)
22,609
3,451
105,021
80,191
2,705
82,324
102,801
1H 2018
USD
210
543
(4)
(134)
(23)
592
(144)
2
0
(21)
(621)
109
1
0
(7)
(19)
(700)
(38)
(625)
(0)
0
(663)
25
(746)
3,451
2,705

14

  • © 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 30.43 per USD as of June 30, 2018

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