EMC — Investor Presentation 2016

Dec 1, 2016

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Elite Material Co., Ltd.

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Investor Conference Presentation

15 December 2016

Innovation Globalization Diversification

Contents

• Company profile

• Current capacity and production sites

• 3Q16 consolidated P&L

• Five-year consolidated P&L

• Long term historical performance

• Dividend payout history

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Company profile – global footprint

• In 2016, EMC is the largest halogen-free laminator and the 5[th] largest overall laminate manufacturer in the world. (Prismark Partners LLC)

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UK
Germany
France
California Ohio
California Alabama Korea Japan
Taoyuan, Taiwan, HQ
Kunshan, China

EMC Group Outline Zhongshan, China Hsinchu, Taiwan
TWSE code: 2383
Established: 992
Manpower: 2,000+
Capacity: 2.8 kk sheets/month (CCL)
7.2 kk meters/month (PP) Production facility
800 k sq ft/month (Mass Lam)
Distributor
40 k panels/month (MCCCL)
Market cap (as of 7 Nov 16): US$870 million Representative Office
Revenue in 2015: US$638 million
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Qualifications: ISO-9001, ISO-14001, TS-16949 QC080000, AS9100C, and Sony Green Partner UL file number: E150504

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Production sites and current monthly capacity

	Total capacity/month CCL 2,800 k sheets PP 7,200 k meters Mass Lam 800 k sq ft Metal Core 40 k panels		EMC (KS) Kunshan	EMC (KS) Kunshan
			CCL	1,350 k sheets
			PP	3,300 k meters
			Manpower	900+
			EMC (TW) Taoyuan
			CCL	500 k sheets
			PP	1,800 meters
			Manpower	550+
			EMC (TW) Hsinchu
			Mass Lam	800 k sq ft
			Metal Core	40 k panels
			Manpower	300+
			EMC (ZS) Zhongshan
			CCL	950 k sheets
			PP	2,100 k meters
			Manpower	650+

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3Q16 consolidated P&L

Unit: NT$ million

Revenue Gross profit Operating profit Interest income (expenses) Other income (expenses) Income before tax Tax expenses Net income EPS (NT$) - basic Gross margin (%) Operating margin (%) Net margin (%)	3Q16 6,103 1,649 1,131 (3) 9 1,138 313 825 2.59 27.0% 18.5% 13.5%	2Q16 5,268 1,372 939 (7) (4) 928 332 596 1.87 26.0% 17.8% 11.3%	QoQ 15.8% 20.2% 20.5% na na 22.6% -5.7% 38.3% 38.3%	3Q15 YoY 6,009 1.6% 1,548 6.5% 1,028 10.0% (5) na 30 -69.0% 1,053 8.1% 282 10.9% 771 7.0% 2.42 7.0% 25.8% 17.1% 12.8%

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Five-year consolidated P&L

Unit: NT$ million Revenue Gross profit Operating profit Interest income (expenses) Other income (expenses) Income before tax Tax expenses Net income EPS (NT$) - basic Gross margin (%) Operating margin (%) Net margin (%)	2011 2012 2013 2014 2015 14,739 15,960 16,873 18,885 20,870 2,424 2,666 2,545 3,431 5,064 1,228 1,246 1,019 1,832 3,249 (54) (53) (50) (47) (36) (5) 37 63 53 117 1,169 1,230 1,033 1,838 3,331 317 97 195 297 938 852 1,132 838 1,542 2,392 2.67 3.55 2.63 4.83 7.50 16.4% 16.7% 15.1% 18.2% 24.3% 8.3% 7.8% 6.0% 9.7% 15.6% 5.8% 7.1% 5.0% 8.2% 11.5%		1-3Q, 16 1-3Q, 15 YoY 16,192 15,844 2.2% 4,217 3,830 10.1% 2,870 2,494 15.1% (2) (23) na (45) 48 -194.5% 2,822 2,518 12.1% 843 724 16.4% 1,979 1,794 10.3% 6.21 5.63 10.3% 26.0% 24.2% 17.7% 15.7% 12.2% 11.3%

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Consolidated revenue of EMC Group

Unit: US$ million

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$ 638
$ 623 million
million
$ 569 29
$ 540 million 33
million
41
42 178
185
39
167
38
158
163
136
30 283
27 264
32
75 243
58 216
35 59 185
169
45
110 120
101
81
59
40 141 148
105 114 124 118
54 65 72 81 87 84
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CCL - TW CCL - KS CCL - ZS Mass Lam
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Reported earnings per share

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8 NT$/share 7.55
7
6
4.91
5
4.30
3.73
4
2.80 2.87
2.69
3
1.78
2 1.52
1.36
1 0.53 0.49
-
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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ROE reached the highest level in the company’s history

ROE reached 26.74% in 2015, the highest level in the company’s history

Despite shareholders equity rose at a steady rate, ROE remained on the upward trend in the long term, resulted from margin expansion and rising asset turnover.

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12,000 NT$mn 26.42% 26.74% 30%
10,000 25%
20.40%
8,000 19.08% 18.83% 20%
16.03%
6,000 12.65% 15%
10.93% 11.72% 10.40%
4,000 10%
2,000 4.17% 3.63% 5%
- 0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Shareholders equity (LHS) ROE (RHS)
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LT gross margin expansion, for:

• More green products used for high-speed/high-frequency applications

• Engineering solutions and technical services provided to customers

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30.0%
24.3%
25.0%
20.0% 18.3% 18.1% 18.2%
16.4% 16.7%
15.1% 15.1%
15.0%
12.3%
11.4%
10.0% 8.8% 9.4%
5.0%
0.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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Asset turnover ratio up from 78% to 120%+

Rising output per factory, higher UT rate and yield, combined with higher blended ASP for more high-end products, led to LT improvement of asset turnover.

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140%
130% 125% 128% 127%
120% 121% 121%
120%
110%
102% 100% 100% 104%
100%
90%
81%
78%
80%
70%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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Conservative financial leverage

Net debt/equity trends lower, as the company is able to generate strong cash flow.

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100%
86.0%
80%
60% 50.4%
44.0%
40% 28.5%
16.2% 17.8% 19.4% 19.7% 18.3% 17.3%
20%
2.2%
0%
-24.4%
-20%
-40%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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Note: Net debt = Interest-bearing debts – cash amount The company has a net cash position at end-2015.

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Dividend payout history

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Average payout ratio around 60%
4.50 NT$ 80%
69%
4.00 66% 67% 70%
63%
3.50 56% 57% 60%
51%
3.00 48%
47%
50%
43%
2.50
40%
4.30
2.00
30%
1.50
2.50
1.75 20%
1.00
0.40 0.20 0.70 1.80 1.80 1.80
10%
0.50
0.20
0.60 0.80 0.50
0.14 0.25
- 0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Share dividends Cash dividend Payout ratio
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