EMC — Interim / Quarterly Report 2023

Dec 7, 2023

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Elite Material Co., Ltd. Global leader of high end eco-friendly laminates

Presentation October, 2023

Disclaimer

This presentation may contain “forward-looking statements” which may include projections on future results of operations, financial condition, and business prospects based on our own information and other sources.

The actual results of operations, financial condition, and business prospects may differ from those explicitly or implicitly indicated in those forward-looking statements for a variety of reasons, including but not limited to market demand, price fluctuations, competition, supply chain issues, global economic conditions, exchange rate fluctuation and other risks and factors beyond EMC’s controls. The forward-looking statements in this presentation, if any, only reflect the current view of EMC as of the date of its release. EMC undertakes no obligation to update those forward-looking statements for events or circumstances that occur subsequently.

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Agenda 3Q23 Financial result P.4 Capacity update P.7 Industry overview P.9 Executive summary P.12 Q&A P.17

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Financial Highlights

• Net revenue was NT$11.88 billion, representing an 29.3% increase from NT$9.18 billion in 2Q23 and an 20.2% increase from NT$9.88 billion in 3Q22.

• Gross margin was 30.2%, 2.7 percentage points higher than 2Q23 and 4.4 percentage points higher than 3Q22.

• Operating margin was 21.1%, up 3.5 percentage points from 2Q23 and up 4.9 percentages point from 3Q22.

• Net income attributable to shareholders of the parent company was

• NT$2.02 billion, up 101.3% from 2Q23 and up 53.7% from 3Q22. Net profit margin was 17.0% and diluted EPS was NT$6.04

• Gross profit margin was 30.2%, operating profit margin was 21.1%, and the net profit margin was 17.0%, all hit a record high in a single quarter. The profit reached NT$2.02 billion, a significant quarter-on-quarter growth of 101.3%.

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3Q23 P&L summary

3Q23 results Unit: NT$ million

Unit: NT$ million
Revenue Gross profit Operating profit Income before tax Tax expenses Net income EPS (NT$) - basic Gross margin (%) Operating margin (%) Net margin (%)	3Q23 11,875 3,584 2,506 2,574 (552) 2,022 6.04 30.2% 21.1% 17.0%	2Q23 9,180 2,525 1,619 1,588 (588) 1,000 3.00 27.5% 17.6% 10.9%	QoQ 29.3% 41.9% 54.8% 62.1% -6.1% 102.2% 101.3%	3Q22 9,883 2,549 1,598 1,630 (322) 1,308 3.93 25.8% 16.2% 13.2% 0.0%	YoY
					20.2% 40.6% 56.8% 57.9% 71.4% 54.6% 53.7%

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3Q23 Abstracted Balance Sheet

	Unit:NT$ million Cash & Equivalent A/R+N/R Inv PPE Total Assets	3Q23 Amount % 10,582 20.4% 15,658 30.2% 5,598 10.8% 17,036 32.8% 51,913 100.0%	2Q23 3Q22 Amount % Amount % 13,951 29.1% 7,526 18.1% 11,657 24.3% 13,309 31.9% 3,980 8.3% 4,710 11.3% 15,385 32.1% 13,742 33.0% 47,962 100.0% 41,688 100.0% 8,103 16.9% 4,730 11.3% 7,180 15.0% 6,880 16.5% 4,292 8.9% 3,969 9.5% 20,293 42.3% 20,948 50.2% 47,962 100.0% 41,688 100.0%
	Short term Debt A/P Long term Debt	7,928 15.3% 10,195 19.6% 2,388 4.6%
	Shareholders' Equity	24,865 47.9%
	Total Debt and Equity	51,913 100.0%

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Manufacturing Locations and Monthly Capacity

EMC (KS) Kunshan CCL: 1.35kk sheets PP: 3.3kk meters Manpower: 1,400+ +300K SHT/M in 2Q, 2023 +450K SHT/M in 4Q,2023 EMC (HS) EMC (TW) Huangshi Taoyuan CCL: 900k sheets CCL: 400k sheets PP: 4.8kk meters PP: 1.4kk meters Manpower: 650+ Manpower: 900+ EMC (TW) Hsinchu CCL: 150k sheets PP: 1.1kk meters Mass Lam: 800k ft2 Metal Core: 40k pnls Manpower: 150+ EMC (ZS) Zhongshan CCL: 950k sheets PP: 2.1kk meters Manpower: 900+

EMC’s SEA investment situated in Penang Science Park North, Malaysia, phase one capacity of 450K sheets schedules to mass production in early 2025 EMC Confidential

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World #1 HF material supplier in 2022

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Trend of 5G infrastructure development: HF, HDI, High Speed, High Frequency

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Halogen Free
HDI
High Speed AAU
AiP MIMO [RRU]
Phone-5G High Frequency BBU
mmWave
Phone-4G
ADAS
Phone-3G
77GHz
AI Server
Switch-800G
26.56 GHz
Server- PCIe5 Infotainment
NB- USB4.0 Switch-400G
16GHz
14GHz
E-Mobility
NB- USB3.0
Switch-100G ECU
Server- PCIe4
12.89GHz
8GHz
Server- PCIe3 Switch-40G
4GHz 5GHz
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High-end CCL(HDI & High-speed/ frequency)

• High-end CCL market grows at 27% CAGR (2023-2025)

• Overall CCL market grows at 10% CAGR (2023-2025)

• EMC expects to outgrow high-end CCL market

Overall CCL Market

High-end CCL Market

Source: Goldman Sachs Global Investment Research, Oct 2023

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EMC Momentum in High speed CCL – from Nothing to 19% Global Share Driven by HSD and HDI requirement

Source: Goldman Sachs Global Investment Research, Oct 2023

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Executive Summary

• Leader in HDI technology, with a global mobile phone market share of ~70%, and a 5G mobile phone market share of ~ 90%.

• The global market share of switch products has risen from ~10% of 100G to ~30% for mainstream 400G products.

• AI server, with a market share of ~60%.

• Our first Southeast Asia plant in Malaysia

• Our partnership with Insulectro across North America

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Steadily Sales Growth

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NTD ： Billion
40.0
2002 ： 1.9Bn  2022 ： 38.7 Bn
35.0
2002 ~ 2022, CAGR=16.2%
30.0
25.0
20.0
15.0
10.0
5.0
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 20112012 2013 2014 2015 20162017 2018 2019 2020 20212022
Revenue
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Sustainable Operation Performance

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History of Cash dividend and Payout ratio

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The Corporate Social Responsibility Report

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Q & A

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