FCFC — Call Transcript 2021

Apr 27, 2021

FORMOSA CHEMICALS &

FIBRE CORPORATION

2020 Result Conference

==> picture [71 x 34] intentionally omitted <==

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

FCFC
----- End of picture text -----

==> picture [62 x 31] intentionally omitted <==

APR 28,2021

Disclaimer

• The information provided in the document, other than number and data of financial reports, has not been audited or reviewed by any accountant s or any independent third parties. FCFC does not ensure the fairness, completeness and accuracy of the information.

 This document may contain forward-looking statements, including but not limited to statements that address activities, events or developments that FCFC expects or anticipates to occur in the future. All statements are based on FCFC’s plan and best knowledge toward the future while subject to various factors and uncertainness beyond FCFC’s control. Therefore, the actual results may differ materially from those contained in the forward-looking statements.

 This document does not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments.

• This material must not be copied, reproduced, distributed or passed to others at any time, in whole or in part, without the prior written consent of FCFC.

2

Consolidated Financial Performance

(Amount: NT$ billion)	2020	2019	YoY	4Q2020	3Q2020	QoQ
Sales Revenue	253.3	315.4	(19.7%)	72.7	60.2	20.8%
COGS	(223.8)	(283.4)		(59.4)	(51.6)
Gross Profits	29.5	32.0	(7.8%)	13.3	8.6	54.7%
Gross Margin	11.6%	10.1%		18.3%	14.3%
Operating Expense	(14.2)	(15.6)		(3.7)	(3.5)
Operating Profit	15.3	16.4	(6.7%)	9.6	5.1	88.2%
Operating Margin	6.0%	5.2%		13.2%	8.5%
Non-Operating Profit (Loss)	9.5	20.7	(54.1%)	3.1	9.0	(65.6%)
Profit Before Tax	24.8	37.1	(33.2%)	12.7	14.1	(9.9%)
Net Profit	21.6	34.4	(37.2%)	10.5	13.5	(22.2%)
Net Profit Margin	8.5%	10.9%		14.4%	22.4%
EPS(NTD)	3.34	4.89		1.67	2.26

3

Change in Consolidated Revenue –QoQ

(In NT$ billion)

 Sales Revenue

 Operation Income

Consolidated revenue increased 12.5bn in 4Q2020, up 20.8% compared to 3Q2020.

72.7

60.2

9.6

5.1

3Q2020 4Q2020

 Price variance+6.5bn :

Due to the strong demands for the petrochemical and plastic products, as well as the raw material prices raise and the competitors’ abnormal production, the average . selling price of 4Q were higher than it in 3Q  Volume variance+6.0bn :

Sales volume increased in 4Q 2020 due to the strong demand for petrochemical and plastic products in Taiwan and China such as PTA, PIA, PP, SM, Phenol a nd acetic acid. FTC and FIC also benefited from the increased operation rate of their downstream manufacturers. As well as PC plant resumed production from its Q3 turnover.

4

Change in Consolidated Revenue –YoY

(In NT$ billion)

 Sales Revenue

Consolidated revenue decreased 62.1bn in 2020 compared to in 2019, representing 19.7% decline rate.

 Operation Income

 Price variance -54.9bn

315.4

253.3

16.4

15.3

2019 2020

Except the price of acetone went up because of its strong demand from the downstream such as manufacturers of hand sanitizers, most of petrochemicals, plastics and textiles products price drop as the demand shrank .  Volume variance-7.2bn

The sales volume of ABS, PTA, PC, FCNB, FIC and FTC decreased due to the epidemic. Also, the production scale of Nylon and rayon shrank. The company increased the self-use ratio of SM, reducing the outward sales. Rest of major products such as aromatic product, phenol, aceto ne, PIA, PS, PP, and acetic acid increased compared with last year.

5

- Change in Profit Before Tax - QoQ

(In NT$ billion)

Profit Before Tax decreased 1.4bn(-9.9%) in 4Q2020 compared to 3Q2020.

 Sales Revenue

 Profit Before Tax

60.2

72.7

 Operating income+4.5bn Driven by the export and domestic demand of mainland China, petrochemical and plastic products enjoyed a price raise, contributing to Company’ positive operating margin.

 Non-Operating income-5.9bn 1.Cash dividend decreased 4.04bn.

14.1

3Q2020

12.7

4Q2020

2.Equity income decreased 1.66bn. (Equity income from FIPC and Mai-Liao Power corp. decreased 0.82bn and 0.77bn respectively.)

6

- Change in Profit Before Tax - YoY

(In NT$ billion)

 Sales Revenue

 Profit Before Tax

Profit Before Tax decreased 12.3bn in 2020 compared with 2019, representing 33.2% decline rate.

315.4

37.1

253.3

24.8

2020

 Operating income decreased 1.1bn Although operating income in 2H2020 benefited from the economy recovery of mainland China and the strong well as quarantine business, it still generated a demand of producing anti-epidemic merchandises as YoY decline of 6.7% in 2020.  Non-Operating income decreased 11.2bn 1.Equity income decreased 5.4bn. 2.Dividends income decreased 4.9bn. 3.Gain on disposal of investment decreased 2bn. 4.Gain on disposal of asset increased 0.8bn.

2019

7

Revenue Breakdown by Segment

==> picture [663 x 281] intentionally omitted <==

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

2019 2020
Petrochemicals 41.60% 38.90%
Plastics 31.80% 35.30%
Others 18.00% 17.40%
Formosa Taffeta
8.60% 8.40%
Co., Ltd.
----- End of picture text -----

 Petrochemical : Sales of petrochemical products in 2020 amounted to 98.5bn(38.9% of consolidated revenue) and showed a decrease of 22.8bn compared to 2019 due to the impact of pandemic and oil prices drop.

 Plastics: Sales of plastic products in 2020 amounted to 89.4bn, the amount showed a decrease of 109bn from 100.2bn of 2019, while the percentage of 35.5% showed a increase from 2019 due to demand rise from anti-epidemic new lifestyle.

• Sales of petrochemical and plastics products accounted for 74.2%, represented the largest contributor to Company’s consolidated revenue in 2020. 8

Revenue Breakdown by Geography

2019

Sales Revenue:NT$315.4billion

2020

Sales Revenue:NT$253.3billion

China(HK, Mac included):45.3% Rest of Asia:15.4% Americas:1.2% Europe:0.2% Others:0.3% Overseas:62.4%

China(HK,Mac included):43.9% Rest of Asia:15.2% Americas:1.6% Europe:0.3% Others:1.1% Overseas:62.1%

==> picture [262 x 152] intentionally omitted <==

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

TW,
37.6%
Overseas
, 62.4%
----- End of picture text -----

==> picture [276 x 150] intentionally omitted <==

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

TW,
37.9%
Overseas
, 62.1%
----- End of picture text -----

 China(Hong Kong and Macau included) is still our primary market, accounted for 45.3% in 2019 and 43.9% in 2020 of total sales.

9

Operating Profits Breakdown by Division

Operating Profit %

% change in Operating Margin

==> picture [683 x 339] intentionally omitted <==

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

51.8% 7.5%
19.3%
150%
25%
8.7%
29.2%
20.5%
19.1%
100% 4.2%
20%
34.9% 109.4%
50% 93.9% 93.1% [71.5%] 15%
60.7%
10.8%
35.9%
0% -1.9% [20.9%] 10%
-28.7%
-45.7%
5.2%
5.1%
4.3%
-50% 5%
2.7% 2.4%
0.8% 1.1%
-164.9% 1.4% 0.4% 0.1%
-100% 0%
0.9%
-0.7% -0.3%
-150% -5% -3.4%
-6.5%
-10%
-200%
3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
----- End of picture text -----

Petrochemicals Plastics Others

Petrochemicals Plastics Others

10

Capacity Expansion Plans

China(Ningbo)

MX/PIA Capacity: Addition 135 KT/200 KT Completion date:2021/Q2

PTA Capacity: Current 1,200 KT Addition 1,500 KT Completion date:2023/Q2

ABS Capacity: Current 500 KT Addition 250 KT Completion date:2022/Q2

11

Q&A

To Learn more about FCFC, Please visit www.fcfc.com.tw

==> picture [780 x 39] intentionally omitted <==