CHROMA — Interim / Quarterly Report 2015

Sep 8, 2015

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CHROMA ATE INC.

2015.2Q Investor Conference

Paul Ying, CFO Leo Huang, Chairman & CEO

31[th] July, 2015

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Disclaimer

This presentation contains some forward-looking statements that are subject to substantial risks and uncertainties. Typically, these statements contain words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “plan”, “forecast”, “project”, “predict”, “potential”, “continue”, “may”, “should”, “will”, and “would” or similar words. You should consider these forward-looking statements carefully because such statements are only our expectations or projections about future events, and actual results may differ materially from those expressed or implied by such statements. The forward-looking statements in this presentation include, but are not limited to, growth rates for various markets estimated by third party sources, future products and technology development, widespread market acceptance of the hosted delivery model, future revenue growth and profitability. You should be cautioned that the forwardlooking statements are no guarantee of our future performance. The forward-looking statements contained in this presentation are made only as of the date of this presentation and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances, except as required by law. This presentation and the information contained herein are the property of Chroma Ate Inc.

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Agenda

• Corporate Profile

• • Financial Review

• • Operation Highlights

• • Q&A

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CORPORATE PROFILE

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Corporate Profile

• Chroma Group founded in 1984, a world leading

own brand turnkey test & automation solution provider, specialized in electronics test and measurement instruments and ATS (auto test system). Businesses cover test and measurement instruments and ATS for various industries, and a turnkey solution as an integration of Test and Measurement , Automation and MES (manufacturing execution system).

• Key success: Precision, Reliability, Innovation

• Chroma group encompass business unit of Chroma Ate Inc., Modular Assembly System (MAS) and Chroma New Material Corp (CNMC).

• 2014 Consolidated Sales : NT$10.31 billion

• 2014 Net Income: NT$1.32 billion

• Chroma Group total of 2,286 employees (as June,

2015)

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Consolidated Chroma Ate Sales Others Consolidated CNMC Sales Consolidated MAS Sales

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14,886
14,148
11%
8%
11,644
5% 10,307
10,171
7%
47% 48%
15%
48% 29%
34%
40% 41% 44% 47% 60%
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2010

2011

2012

2013 2014

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Financial Performance

Consolidated Sales

Gross Margin

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Sales Revenues Gross Margin R&D Expenses R&D Expenses in % of Sales Revenues

Parent Only

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Consolidated
14,886
5,640 55%
54% 54%
14,148
5,338
55% 5,135
52%
11,644 37% 39%
4,174
3,926
10,307
10,171
29% 29%
28%
16%
15% 15%
12%
11%
755
603 630 637 631
Chroma Employees ： 1,352  (R&D 39%)
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
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Financial Performance

ROE

Dividend

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EPS Cash dividend
Stock dividend
5.05
25%
Payout ratio
4.06
19% 3.80
3.51
3.21
15%
14%
2.52 2.60
2.50 2.50
12%
2.00
0.40
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2010 2011 2012 2013 2014
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2010 2011 2012 2013 2014

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Chroma Global Network

Global Employees ： 2,286  , Branch Offices x16, Distributors x65, Subsidiaries x6

Europe : Netherlands

US : Hong Kong : Neworld Irvine / Foothill Ranch, CA Tempe, AZ Japan: Shin Yokohama

China : Shenzhen / Dongguan / Xiamen / Suzhou

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FINANCIAL REVIEW

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Year 2015.1H Condensed Consolidated Income Statement

	Condensed Consolidated P&L (In Million NTD, except for EPS in NTD)		2015.1H %		2014.1H % YoY %
	Net Sales		4,633 100%		4,633 100% -
	Consolidated Sales of Testing Business		2,434 53%		2,557 55% (5%)
	Consolidated Sales of MAS		825 18%		272 6% 203%
	Consolidated Sales of New Material		1,158 25%		1,578 34% (27%)
	Others		216 4%		226 5% (4%)
	Cost of Goods Sold		(2,696) (58%)		(2,876) (62%) (6%)
	Gross Profit		1,937 42%		1,757 38% 10%
	Operating Expenses: General & Administration Research & Development		(975) (21%) (414) (9%)		(896) (19%) 9% (381) (8%) 9%
	Operating Income		548 12%		480 11% 14%
	Non-Operating Income (Expenses), net		41 1%		109 2% (62%)
	Income (Loss) Before Tax Income Tax		589 13% (104) (2%)		589 13% - (89) (2%) 17%
	Net Income		485 11%		500 11% (3%)
	Other Comprehensive Income (Losses)		(175) (4%)		(35) (1%) n/a
	Comprehensive Income		$ 310 7%		$ 465 11% (33%)
	Net Income (Losses) Attributable To: Shareholders of the Parent Noncontrolling Interests		505 11% (20) -		512 11% (1%) (12) - 67%
			$ 485 11%		$ 500 11% (3%)
	EPS (Basic)		$ 1.34		$ 1.36 (1%)
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Balance Sheet Highlights & Financial Ratio

	Consolidated (In Million NTD) Balance Sheet Highlights Cash & Short Term Investments Inventory Short Term Debt Long Term Debt Shareholders Equity		2015. June 5,157 1,581 406 2,405 8,748	2014. Dec + / - % 4,129 25% 1,605 - 1% 426 - 5% 2,488 - 3% 9,373 - 7%
	Total Assets		15,716	14,970 5%
	Inventory Turnover (Day) AR Turnover (Day) AP Turnover (Day) Net Debt to Equity (%)		107 116 93 -	91 108 76 -
	ROE (%)		11%	14%
	ROA (%)		7%	9%
	Cash Position EBITDA Cash Flow from Operation	2015.1H 770 1,366	2014.1H 743 825	YoY 4% 66%
	Free Cash Flow	922	(1,105)	n/a

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All ROE + ROA has been annualized.

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Free Cash Flow = Net Cash Provided by Operating Activities + (Net Cash used by Investing Activities)

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Quarterly Highlights

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Sales Revenues Gross Margin
Operating Margin
1,604
1,345
1,249
57% 1,126
56%
55% 53% 51% 53%
937
864
24%
23%
18%
16% 16%
13%
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2015.2Q Key Points

• Sales Revenue: $ 1,126 million,

up 30% QoQ, down 10% YoY

• Gross Margin: 53%

• Operating Margin: 16%

• Net Income: NT$ 381 million,

• up 210% QoQ, up 14% YoY

• 2015.2Q Highlights:

 The second quarter sales revenues mainly contributed from Test Measurements and ATS

sector, represented a growth of 22% QoQ and 7% YoY

respectively.

2014.1Q 2014.2Q 2014.3Q 2014.4Q 2015.1Q 2015.2Q

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Year 2015.2Q Condensed Income Statement

	Condensed P&L– Parent Only (In Million NTD, except for EPS in NTD)		2015.2Q %		2015.1Q % QoQ %	2014.2Q % YoY %
	Net Sales		1,126 100%		864 100% 30%	1,249 100% (10%)
	Cost of Goods Sold		(524) (47%)		(369) (43%) 42%	(546) (44%) (4%)
	Gross Profit		602 53%		495 57% 22%	703 56% (14%)
	Operating Expenses: General & Administration Research & Development		(229) (19%) (198) (18%)		(210) (24%) 9% (176) (20%) 13%	(236) (19%) (3%) (179) (14%) 11%
	Operating Income		175 16%		109 13% 61%	288 23% (39%)
	Non-Operating Income (Expenses), net		225 20%		31 4% 626%	91 7% 147%
	Income (Loss) Before Tax		400 36%		140 16% 186%	379 30% 6%
	Income Tax		(19) (2%)		(17) (2%) 12%	(46) (4%) (59%)
	Net Income		$ 381 34%		$ 123 14% 210%	$ 333 26% 14%
	Other Comprehensive Income		(122) (11%)		(51) (6%) 139%	(83) (6%) 47%
	Comprehensive Income		$ 259 23%		$ 72 8% n/a	$ 250 20% 4%
	EPS (Basic)		$ 1.01		$ 0.33 206%	$ 0.88 15%
	EPS (Diluted)		$ 0.96		$ 0.32 200%	$ 0.86 12%

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Non-operating Income included 100% owned subsidiaries’ income - New Material: 9m (QoQ ↓ 18%, YoY ↓ 25%), MAS: 164m

(QoQ ↑ 413%, YoY ↑ 720%, ).

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Year 2015.1H Condensed Income Statement

	Condensed P&L– Parent Only (In Million NTD, except for EPS in NTD)		2015.1H %		2014.1H % YoY %
	Net Sales		1,990 100%		2,186 100% (9%)
	Cost of Goods Sold		(894) (45%)		(967) (44%) (8%)
	Gross Profit		1,096 55%		1,219 56% (10%)
	Operating Expenses: General & Administration Research & Development		(438) (22%) (374) (19%)		(419) (19%) 5% (340) (16%) 10%
	Operating Income		284 14%		460 21% (38%)
	Non-Operating Income (Expenses), net		256 13%		122 6% 110%
	Income (Loss) Before Tax		540 27%		582 27% (7%)
	Income Tax		(35) (2%)		(70) (4%) (50%)
	Net Income		$ 505 25%		$ 512 23% (1%)
	Other Comprehensive Income		(174) (8%)		(35) (2%) n/a
	Comprehensive Income		$ 331 17%		$ 477 21% (31%)
	EPS (Basic)		$ 1.34		$ 1.36 (1%)
	EPS (Diluted)		$ 1.28		$ 1.33 (4%)

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Non-operating Income included 100% owned subsidiaries’ income - New Material: 20m (YoY ↓ 31%), MAS: 196m (YoY ↑ 576%).

Balance Sheet Highlights & Financial Ratio

	Parent Only (In Million NTD) Balance Sheet Highlights Cash & Short Term Investment Inventory Short Term Debt Long Term Debt Shareholders Equity		2015. June 2,482 1,236 144 2,304 8,606	2014. Dec 2,168 1,257 151 2,361 9,271	+ / - % 14% - 2% - 5% - 2% - 7%
	Total Assets		13,401	13,290	1%
	Inventory Turnover (Day) AR Turnover (Day) AP Turnover (Day) Net Debt to Equity (%)		251 191 106 -	186 141 71 5%
	ROE (%)		11%	15%
	ROA (%)		8%	11%
	Cash Position EBITDA Cash Flow from Operation	2015.2Q 447 188	2015.1Q 186 419	QoQ 140% (55%)	2015.1H YoY 633 (4%) 607 (5%)
	Free Cash Flow	(5)	224	n/a	219 n/a

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All ROE + ROA has been annualized.

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Free Cash Flow = Net Cash Provided by Operating Activities + (Net Cash used by Investing Activities)

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OPERATION HIGHLIGHT

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Chroma Ate Inc. Sales Breakdown by Testing Solutions

(Unit: Million NTD) Test Instruments & ATS Semiconductor Test Solutions Turnkey Solutions Service & Others		2015.2Q % QoQ 787 70% 22% 184 16% 21% 105 10% 275% 50 4% 32%		2014.2Q % YoY 735 59% 7% 260 21% (29%) 202 16% (48%) 52 4% -		2015.1H % 1,433 72% 336 17% 133 7% 88 4%		2014.1H % YoY 1,328 61% 8% 418 19% (20%) 349 16% (62%) 91 4% (3%)
Total		1,126 100% 30%		1,249 100% (10%)		1,990 100%		2,186 100% (9%)

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Chroma Ate. Inc. Sales Mix Breakdown (YTD)

A Turnkey Solution and Intelligent Automation Line Provider

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Parent Only 5,338 4,174 3,926 5,135 1,990
7% 6% 5% 4% 4%
9% 7%
Others 10% 18%
21%
17%
17% 21%
Turnkey Solutions
9% 21%
Semiconductor Test Solutions
Test Instruments & ATS
63% 67% 65% 57% 72%
2011 2012 2013 2014 2015.1H
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Sales Breakdown by Consolidated Entities

(Unit: Million NTD) Chroma Ate. Inc. included overseas affiliates MAS New Material Others		2015.2Q % QoQ 1,369 51% 29% 665 25% 313% 563 21% (5%) 112 4% 9%		2014.2Q % YoY 1,476 56% (7%) 176 7% 278% 850 32% (34%) 125 5% (10%)		2015.1H % 2,434 53% 825 18% 1,158 25% 216 4%		2014.1H % YoY 2,557 55% (5%) 272 6% 203% 1,578 34% (27%) 226 5% (4%)
Consolidated Sales		2,709 100% 41%		2,627 100% 3%		4,633 100%		4,633 100% -

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Year 2015 Guidance

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Heading into peak season, the Chroma parent sales revenues in second quarter presented a growth of 30% QoQ. The growth drivers are mainly coming from Turnkey Solutions and Test Instruments & ATS which presented a growth of 275% and 22% QoQ respectively.

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The US, Europe and Japan markets penetration have reached 28% of Chroma parent sales in first half 2015 through increasing recognition from global top-tier customers.

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Industrial Automation (IA) remains strong, the Company expected IA related businesses (Turnkey Solutions + MAS) to reach over 20% of the group consolidated sales compared to 16% in 2014. The first half 2015 have reached . 21% of group consolidated sales

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The Company expected the 2015 second half results will be better than first half due to delivery of new applications of Turnkey Solutions and increasing demand from clean tech related power testing businesses.

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Test Instruments & ATS (1/2)

TECHNOLOGY

System Integration Automated AC Type: 10KW, SAE J1772 Testing DC Type: 10~50KW, IEC61851 Parallel, High Efficiency, Regenerative 60~300kW, >85% Power Bi-direction, AC/DC, AC/AC Testing Ultra High Measurement Accuracy High Transient Linear Load: 10us Voltage: 0.015%+0.015%F.S. High Power Density: 6kW@4U Current: 0.04%+0.04%F.S. ‘15 ‘16 MARKET Server/ Telecom Power/ DD Converter/ Grid/ Green Energy/ Electric Vehicle/ Power Battery Pack High Power DC Load 150~1200V,4~24kW, 632XXA Regenerative Grid Simulator Regenerative Battery Pack Tester 0~400Vac,30~60kVA, 61800 0~200V, 0~2600A, 0.6W~50kW, 17020 EV Charging ATS 8000

SOLUTION

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Test Instruments & ATS (2/2)

TECHNOLOGY

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High Speed CSP (Chip-Scale
LED Testing Packaged) ; UPH : 25k
High Density Burn-in Module
Optical Testing
128ch/module; 10sec/DUT
Passive Impedance Measurement Impulse & Hi-pot test with Vacuum
Comp. Testing Wide Freq. Range: 60Hz~5MHz 7 in 1 (ACW/DCW/IR/IWT/DCR/L/Q Phase)
4K x 2K@60Hz
Video Testing
5.4Gbps Lane Rate
‘15 ‘16
MARKET HD Display/ Fiber Communication/ High Power Components/ LED/ Motor
FPD Tester 040201
HF LCR Meter Programmable HF
11050-5M AC Tester 11805-20-20
Motor Stator
Test System 1920
LD CoC Characterization LD CoC Burn-In Test
Test System 58620 System 58601/58603
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LED Tester & Tapper 58280

SOLUTION

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Semiconductor Test Solutions

TECHNOLOGY

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Thermal Engine
IC Testing
Nitro-TEC (Liquid Nitrogen)
Handler
Multi-site Testing Integrated Digital/ Mixed
Logic Testing
1024 digital pins, 200Mbps Signal Testing
High Power/High Accuracy
Analog Testing
VI 45/100/200; 4A Max; 0.05%
‘15 ‘16
MARKET IC – SoC/ MCU/ PMIC/ Sensors (touch-screen, fingerprint) / Connectivity (WiFi, BT)
Analog/power
Instruments
VI45/PVI100
SoC Test System VLSI Test System Full Range Active
3650-EX 3380-D Thermal Control
Handler 3160-F
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SOLUTION

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Turnkey Solutions

TECHNOLOGY

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Collaborative Robotic Application
Automation
Smart Conveyance System
Configurable/Scalable/Reusable
Battery Cell Regenerative CH/DCH System
Testing 5V/10A,20A,50A, 100A Tester
Real-Time
MES Multi Protocol Interface
Mobile Production Report
‘15 ‘16
MARKET
Industry 4.0 – Battery Cell Formation/ Battery Pack Auto Assembly/ IT/ICT Auto Test Line/ Smart Factory
Battery Cell Formation
System 17000
Battery Pack Automatic
Assembly Line
Smart Conveyer 5703
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SOLUTION

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www.chromaate.com

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let’s make a better world.

Thank You!

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