Aurora — Interim / Quarterly Report 2013

Nov 15, 2013

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We Make Office More Productive Aurora Group Presentation

Date： Nov. 18~19, 2013 By Ernest Ma, Spokesperson

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Disclaimer

 This presentation and its accompanied information include operating forecast, financial condition and business projection, etc. which are predictive information gathered from company's internal and external sources.

 The operating result, financial condition and operating forecast actually created by the company in future may differ from these expressed or implied predictive information. The reasons may include, but not limit to market risk, market demand and the ability which the company can deliver high quality products, etc.

 The forecast mentioned in this presentation reflects the current belief of the company as of the date of this presentation issued. The company undertakes no obligation to remind or update the information for the change or adjustment in the future.

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The Greater China Leader in Integrated Office Solutions

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✔ Taiwan’s No.1 office automation product distributor with 700+ company-operated and dealer stores

✔ Taiwan’s No.1 office furniture brand

✔ Taiwan’s No.1 retailer of telecom products and services with 700+ own and dealer shops

✔ Widely Recognized office furniture brand in China targeting mid-range to high-end segment

✔ The highest Level of Customer Satisfaction digital photocopier brand[1 ] in China with an extensive network of 400 own and dealer stores

• ✔ Industry honors include:

• Famous Trademark in China[2]

• • Winner of IF Design Award China

• • Iconic Brand of China Office Furniture Industry[3 ]

Sources:

1. 2009 J. D. Power Survey

2. Approved by Trademark Office of the State Administration for Industry & Commerce 3. Rated by China Brand Research institute

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Aurora Group Structure

Aurora Corp. 2373 TWSE

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29% 91% 47% 88% 50% 43%
Aurora
Aurora
HUXEN Corp. Aurora Office SIDIZ CHINA Aurora
Development
(Bermuda)
2433 TWSE Automation CO.LTD Telecom
Corp. Investment
100%
100% 100%
Aurora(China)
Investment
HUXEN(CHINA)
Aurora Leasing
CO.LTD
100% 100%
Aurora
Aurora
Furniture Electronic
100%
Aurora
Office
Automation
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China’s OA & Furniture Industries Today

Market Size ~650,000 units Growth 10% growth Potential Toshiba, Konica Minolta,

Branding Canon, Ricoh, Sharp, Kyocera Mita, Xerox… Concentrated and led by Fragmentation Japanese brands 2012 color copier share: 7% * Differentiated from peers Aurora’s through high-quality Position consumable supply and reliable equipment maintenance service

2012 color copier share: 7%

100+ billion RMB

15-20% growth

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Lamex , UB, LOGIC, POSH
Office Systems…
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Highly fragmented 2012 share: 7% (mid-to-high end market: 10bn RMB)

• Efficiency achieved through integrated design, production & distribution system in own factory

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China 2010-2015 MFP Forecast

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(Unit) 767,952
800,000
645,753 [697,339 ] [737,426 ]
700,000 588,005
486,724
600,000
500,000
659,293
400,000 549,278 594,998 628,028 648,514
464,874
300,000
200,000
100,000
88,912 108,659
50,755 69,311
21,850 38,727
0
2010 2011 2012 2013 2014 2015
Color Laser Mono Laser
Laser MFP CAGR (2010-2015)
Mono Laser 7.2%
Color Laser 37.8%
Total 9.6%
Source：IDC
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China Office Furniture Forecast

Year	Market size (RMB billion)	Growth (%)	Domestic consumption (RMB billion)	Growth (%)	Domestic as % of market
2008	80.2	18	51.4	17	64%
2009	92.1	15	59.1	15	64%
2010	108.8	18	70.0	19	64%
2011	129.8	19	83.4	19	64%
2012	160.1	23	99.7	20	62%
Sources：T~~h~~e Nationa~~l~~Bureau o~~f~~Statistics/ C~~h~~ina Furniture Association

Foreign brands 3% China’s Midrange to highHong Kongnese Aurora end furniture Small local and Taiwanese 7% brands brands 20% market: RMB 50% 10 billion Other 13% National mainland Chinese brands 27%

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Earnings Presentation for Q3, 2013

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Profit and loss for 2013

• ✔ Consolidated revenue reached NT$ 2.68 billions, hit the new records(Excluded Telecom)

• Consolidated revenue of Q3, 2013 reached NT$ 2.68 billions, with 13% declination in YoY. (Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from Nov. 2012)

• If the revenue is counted on the same basis (the discrepancy caused by Aurora Telecom is eliminated), the consolidated revenue of Q3, 2013 is 18% growth in YoY.

• The revenue of Q3 in China was counted NT$ 1.79 billions, with 0.4% growth in QoQ and 26% growth in YoY. The share in consolidated revenue is steady growing.

• NT$ 7.82 billions of consolidated revenue in the first three quarters of 2013, NT$ 2.63 billions and 34% in Taiwan, and NT$ 5.19 billions and 66% in China

• ✔ Net income and EPS benefited from excellent performance and steady business running

• The operating income of Q3 was NT$ 215 millions, with 14% grewth in QoQ and 29% grewth in YoY；the operating margin was 8.0%，with 0.9% grewth in QoQ and 2.6% grewth in YoY.

• NT$ 593 millions of operating income in the first three quarters of 2013, 11% grew than the same period of last year；the operating margin was 7.6%，2.1% grew than the same period of last year significantly.

• The net income of Q3 was NT$ 315 millions and EPS was NT$ 1.04; NT$ 3.04 of EPS in the first three quarters of 2013, 14% grew than the same period of 2013

• NT$ 985 millions of consolidated net profit in the first three quarters of 2013, NT$ 614 millions and 62% in Taiwan, NT$ 371 million and 38% in China

Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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Revenue by quarters (counted on the same basis)

(in million NT $)

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3,000
2,500
2,000
1,500
1,000
500
0
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
Consolidated Rev.(Excluded Telecom) 2,531 2,641 2,411 2,527 2,276 2,581 2,468 2,672 2,676
YoY% 8.2% 6.0% 3.3% 5.7% -10.1% -2.3% 2.4% 5.7% 17.6%
QoQ% 5.9% 4.3% -8.7% 4.8% -10.0% 13.4% -4.4% 8.3% 0.1%
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Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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Revenue by Region and Segment

Q3 2013 Rev. by Segment

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Q3 2013 Rev. by Region
Electronic,
Taiwan 10% Taiwan OA,
27%
33%
China China
Taiwan
Furniture,
67% Furniture,
35%
6%
China OA,
22%
Q3 2012 Rev. by Segment
Q3 2012 Rev. by Region
Electronic,
8%
Taiwan Taiwan OA,
China
33%
38% Furniture,
Taiwan
China 35%
Furniture,
62% 5%
China OA,
19%
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Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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Revenue by Segment in Taiwan

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(in million NT$) Full Year 3rd Quarter
2012 2013 YoY 2012 2013 YoY QoQ
Total 5,102 2,632 -48% 1,644 890 -46% 0%
Office
2,193 2,166 -1% 737 734 0% -1%
Automation
Office Furniture 406 466 15% 119 155 31% 2%
Mobile
2,504 0 -100% 788 0 -100%
Technology
(in million NT$)
Full Year 3rd Quarter
-Excluded Telecom
2012 2013 YoY 2012 2013 YoY QoQ
Total 2,599 2,632 1% 856 890 4% 0%
Office Automation 2,193 2,166 -1% 737 734 0% -1%
Office Furniture 406 466 15% 119 155 31% 2%
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Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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Revenue by Segment in China

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(in million RMB) Full Year 3rd Quarter
2012 2013 YoY 2012 2013 YoY QoQ
Total 981 1,077 10% 301 368 22% 0%
Office
297 380 28% 90 123 36% -11%
Automation
Office
503 548 9% 171 191 12% 5%
Furniture
Electronic 181 150 -17% 40 54 34% 14%
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Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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Sales Information by Quarters

(in million NT$)

(in million RMB)

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800
700
600
500 61%
400
300
200
39%
100
0
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
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160
140
120
100
80 46%
60
40
20 54%
0
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
Rev.of MIF in China
Rev.of Copier Machines in China
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Rev.of MIF in Taiwan Rev.of Copier Machines in Taiwan

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(Unit)

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(in million RMB)
210
200
190
180
170
160
150
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
Rev. of Office Fruniturn in China
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148,000
147,000
146,000
145,000
144,000
143,000
142,000
141,000
140,000
139,000
138,000
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
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MIF in Cross-Strait
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Summary of consolidated profit and loss

(In million NT$)

(In million NT$) Net Sales Gross Profit Operating Expense Operating Income Non-op. Income (Expense) Income Before Tax Consolidated Net Income Attributable to: Minority shareholders Shareholders of Aurora Earnings Per Share (NT$) Gross Margin Operating Margin Net Margin	Full Year 3rd Quarter
	2012 2013 YoY 2012 2013 YoY 9,717 7,817 -20% 3,064 2,676 -13% 3,803 3,467 -9% 1,244 1,159 -7% 3,268 2,874 -12% 1,078 944 -12% 536 593 11% 166 215 29% 387 500 29% 198 162 -18% 922 1,093 18% 364 377 4% 861 985 14% 322 336 4% 50 60 19% 16 21 34% 811 925 14% 307 315 3% 2.66 3.04 14% 1.01 1.04 3% 39.1% 44.4% 5.2% 40.6% 43.3% 2.7% 5.5% 7.6% 2.1% 5.4% 8.0% 2.6% 8.3% 11.8% 3.5% 10.0% 11.8% 1.8%

Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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Highlights on consolidated profit and loss

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(in million NT$)
3,064
2,928
2,672 2,676
2,468
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
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Consolidated Net Sales

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(in million NT$)
305 323 315
286
263
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
Net Income Attributable to Aurora
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(NT$)
21.0%
19.9%
1.01 0.94 1.06 1.04 17.1% 17.4% 17.5%
0.88
9.7% 10.1% 10.7% 11.0% 11.2%
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
Earnings per share ROA ROE
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Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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Summary of consolidated Balance Sheet

(in million NT$) Total Assets Current Assets Cash and short-term investments Trade and note receivables, net Inventory, net Long-Term Investments Fixed Assets, Net Total Liabilities Current Liabilities Short-term debt Trade and notes payables Long-term Liabilities Long-term debt Shareholders' Equity	2013 Q3 Q2 QoQ 12,173 12,046 1% 6,531 6,365 3% 1,506 1,504 0% 1,406 1,546 -9% 1,003 925 8% 2,569 2,520 2% 2,612 2,685 -3% 5,282 5,641 -6% 3,959 4,337 -9% 1,347 1,094 23% 1,003 932 8% 700 700 0% 700 700 0% 6,891 6,405 8%	2012
		Q3 YoY 11,711 4% 6,469 1% 2,977 -49% 1,731 -19% 1,147 -13% 1,856 38% 2,775 -6% 5,413 -2% 4,067 -3% 1,539 -12% 1,070 -6% 780 -10% 780 -10% 6,298 9%

Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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Highlights on Balance Sheet

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(in million NT$) (NT$)
12,046 [12,173 ] 21.1
11,711 20.4
19.3
19.0
11,157 [11,283 ] 18.7
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
Total Asset
Net Worth Per Share
172.2% 180.9% 46% 47% 43%
42%
159.1% 165.0% 37%
146.8%
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13
Current ratio Debt ratio
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Note[1] : Aurora Telecom was deconsolidated from Aurora and treated as an equity investment starting from November 2012. Note[2] : All Q3 2013 results provided herein were audited and approved by the board of directors.

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