F.T.C — Investor Presentation 2019

Aug 22, 2019

2019 Investor Conference

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福懋興業股份有限公司 Stock code: 1434 Formosa Taffeta Co., Ltd. (FTC) August 23, 2019

Disclaimer

• The information provided in the document, other than number and data of financial reports, has not been audited or reviewed by any accountant or any independent third party. FTC 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 FTC expects or anticipates to occur in the future. All statements are based on FTC plans and best knowledge toward the future while subject to various factors and uncertainness beyond FTC’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 FTC.

Agenda

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Corporate Overview Technology- and Intelligenceoriented & Sustainability through Value Creation

Financial Status Operation Orientation

福懋興業股份有限公司 Formosa Taffeta Co., Ltd. (FTC)

2019 Corporate Overview

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Corporate Profile

Global Deployment

5 Plants in 3 Headcount Market Countries Revenue Value Taiwan Douliu Plant 7,074 NT$65.87 billion 2018 Consolidated Zhong-shan Plant Total China 976 (By the end of Revenue Chang-shu Plant 10,268 June of 2019) NT$44.545 billion Long-an Plant Vietnam 2,218 Dong-nai Plant

1

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Establishment of Production Bases

1990

1999

2005

Formosa Taffeta Vietnam Co.,

Formosa Taffeta Chang-shu Co., Ltd.

Formosa Advanced Technology Co., Ltd.

Ltd.

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(FATC) (Long-an Plant)
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1992

2004

2016 Bumblebee Plant

1973.04 Formosa Fiber Co., Ltd.

Formosa Taffeta Zhong-shan CO., Ltd.

Formosa Taffeta Dong-nai Co., Ltd.

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2

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Deployment of Textile Products of 5 Plants in 3 Countries

China

• 1.Advantages of China’s internal trade

• 2.Preferential Tariff Scheme

for the ASEAN Free Trade Area

dyeing & finishing

@ [Chang-shu]

Taiwan

• 1.Logistics Platform

• 2.R&D Center

Weaving, dyeing & finishing @ Zhong-shan

@ Douliu

Vietnam

spinning, weaving, dyeing & finishing, tire cord

• 1.Generalized System of Preferences (GSP)

weaving, dyeing & finishing, tire cord, special textile

• 2.Preferential Tariff Scheme for the ASEAN Free Trade Area

@ Dong-nai @ Long-an Weaving, dyeing & finishing

• 3.Advantageous Locations—located in the hub of Global Textile Industry Cluster _ Maximized Benefits of Local-to-local Supply Chain

3

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Products Breakdowns by Production Bases

Filament Woven Fabrics of 1[st] Business Segment

17.2%

• Wet breathable & waterproof snow coats, jackets, rain coat

• Hats, gloves

• Shields with electromagnetic insulation

31.7%

• Garments, down jackets, sportswear, hunting suits

• Tents, air beds, sails

• Fabrics for special processing

• Umbrellas |parasols, golf umbrellas, beach umbrellas

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Polyamine/Polyester Tire Cord Fabric of 2[nd] Business Segment

• −

• Tire cord fabrics for Puncture resistant fabric for bicycle tires, various vehicles lining

• −

• Chafers for tire-lips Lining canvas or ducks for conveyor belts

Petroleum goods/service of 2[nd] Business Segment

• Diesel, petroleum in 98, 95+, 92

27.3%

• Car wash

• Lubrication, car appliances

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19.7%
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IC Assembly |Testing | Module of FATC

• Services of assembly, testing, module and R&D of any types of IC

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Sales Volume Breakdown of Polyamide/Polyester Filament Fabrics

Sales Volume Breakdown of Filament Fabrics from Jan. to Jun. of 2019 _by Usage & Branded Customers

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Other
21.10%
6.86%
Sports
47.21%
Outdoors
34.40%
18.08%
11.22%
16.31% 5.15%
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Usage	Required Cloth	Functionality
Sports	fabric of flexibility and with multiple functions	moisture absorbent and quick drying, deodorant, and anti-bacterial
Outdoors	fabric with multiple functions, and coating & lamination processes	moisture permeability, waterproof, light- weighted and keeping warm
Fashion & Leisure	fabric as materials and of flexibility, whose hand emphasizes variety of garment styles	natural hand flexibility
Umbrella Fabric	for both sunny and rainy days	UV-cut, shading and cooling-down

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Technology- and Intelligence-oriented & Sustainability through Value Creation

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Application of Intelligent Temperature Module―POLO11

 Intelligent temperature control clothing — Launch press conference on 15 Dec., 2017

 POLO11

— Ralph Lauren’s launch in Jan, 2019; — All functional fabrics for lining that are of water-repllent and tear resistance are made by the FTC’s Taiwan Plant

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American classical fashion brand Ralph Lauren names the down jacket that adopts intelligent temperature control module as “POLO11”. (Reference to Ralph Lauren’s website)

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Product press conference( in Dec. , 2017)

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Exploitation of Recycled Ghost Nets— Realization of Circular Economy

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Fabrics
Yarn Apparel
福 懋
( FCFC ) ( Apparel Firms )
Apparel
Dyeing &
Drawing Spinning
Weaving
Finishing Manufacturing
Recycled Nylon Yarn
American Outdoor
Melting
Raw Material Apparel Brands
Ghost Nets from
Cutting
Countries of South
America, like Sales of Apparel
Chile, Peru, etc. Rinsing
and Caribbean Sea
(coats, shirts, polo shirts)
Recycling
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Application of High Performance Umbrella Fabrics for Both Parasol and Umbrella —Ageless Enabler Umbrella

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• Excellent Water Resistance

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• Fast cooling

• 99% UV cut rate

• Meeting Japanese Industrial Standard (JIS)

• High-tech color coating (non-toxic, eco-friendly processing)

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PRODUCT INNOVATION

1. Fuse Yarn

2. UVoutex[® ] Transparent UV Cut Fabrics 3. Double Weave Baffle-thermal 4. COMOFIT* Polyamide Mechanical Stretch 5. Anti-abrasion Heather Stretch Fabric 6. Trendy Finish – Iridescent Fabrics 7. High performance Umbrella Fabrics for Both Parasol and Umbrella

FTC 2019

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1

Fuse Yarn

New fuse yarn, an imitation natural fabric, is with delicate touch of natural quality and with natural cloth texture, which makes cloth patterns vivid.

Huge orders for this yarn were placed by sports and outdoor brands and an increase of their orders is ongoing.

Application: Lightweight windbreakers, trousers, shirts, casual jackets, sportswear.

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2

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UV CUT
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UVoutex[®] Transparent UV Cut Fabric

UVoutex® fabrics are produced using special yarns and dyeing and finishing techniques, with UV cutting capabilities that break through traditional limits and produce UPF values are over 30 in transparent conditions (AS/NZS 4399:1996). In addition, they are stylish and high performance. With these advantages, they come into favor with the European and American sports branded clients, and orders come one after another.

Application:

Lightweight sunscreen windbreakers, stylish sunscreen trench coats, packable jackets.

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3

The Double Weave Baffle pocket down-proof fabric adopts the Company’s patented fabric design and weaving technology. The finished product is in an “unibody” shape, is able to keep people warm with double-layer down-proof baffle, and further provides enhanced thermal retention through adding special materials.

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COMOFIT
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4 COMOFIT* Polyamide Mechanical Stretch

Mechanical Stretch is with excellent elasticity and comfortable hand-feel even without covered yarn. Multiple products with various fabric specifications have been introduced and received a lot of praise, and “Comofit*” is given as the name for these products of this series.

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5

Anti-abrasion Heather Stretch Fabric

A mix of fabric with strong abrasion resistance, , heather look, and elastic yarn, a breakthrough development of FTC’s outdoor sports fabrics, makes anti-abrasion heather stretch fabric highly anti-abrasion (by Martindale wear test: 30,000 rpm), comfortable and trendy. FTC’s anti-abrasion heather stretch fabric is a trendy urban outdoor product and popular with outdoor clients.

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6

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Iridescent Fabrics

Fabrics are processed with special lamination or transfer printing so that their appearances look shiny, leathery and trendy because of color changes resulting from the varied angles.

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TRENDY
FINISH
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7

These functional umbrella fabrics have excellent water resistance, water repellency. In addition to 99% UV protection, the fabric can also effectively block heat and cooling.

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International Exhibition

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Booth size: 80m[2 ] Time: 2019.06.17~2019.06.20 Location: Denver, USA Main clients:

62 outdoor and sports branded clients, including TNF, MHW, REI, Patagonia, Smartwool, adidas, UA, Lululemon, Canadagoos, etc.

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ISPO WINTER 2019

OR SUMMER 2019

OUTDOOR by ISPO 2019

Booth size: 54m[2 ] Time: 2019.02.03~2019.02.06 Location: Munich, Germany Main clients:

78 well-known branded clients including adidas, lululemon, Eddie Bauer, MAMMUT, GAP, VAUDE, TOMMY SPORTS, MONTURA, Helly Hansen, etc.

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Booth size: 60m[2 ] Time: 2019.06.30~2019.07.03 Location : Munich, Germany Main clients:

58 well-known branded clients, including TNF , VAUDE, MAMMUT, MONTURA, PUMA, etc.

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Financial Status

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Consolidated Statement of Comprehensive Income

Consolidated Statement of Comprehensive Income	Consolidated Statement of Comprehensive Income	Consolidated Statement of Comprehensive Income	Consolidated Statement of Comprehensive Income	Consolidated Statement of Comprehensive Income	Consolidated Statement of Comprehensive Income
Expressed in thousands of NTD Six months ended June 30 Growth rate of 1st half-year 2019 Seasonal growth rate 2019 2018 Q2 Q1 Sales revenue 24,089,595 22,467,681 7.22% 12,370,748 11,718,847 5.56% Gross operating margin 2,999,013 2,861,080 4.82% 1,579,360 1,419,653 11.25% Net margin 12.45% 12.73% 12.70% 12.11% Net operating margin 1,504,277 1,473,116 2.12% 796,395 707,882 12.50% Rate of net operating margin 6.24% 6.56% 6.44% 6.04% Total non-operating income and expenses 2,060,758 1,037,612 98.61% 2,035,510 25,248 Profit before income tax 3,565,035 2,510,728 41.99% 2,831,905 733,130286.28% Profit for the year 2,979,638 1,790,503 66.41% 2,418,245 561,393330.76% Rate of profit for the year 12.37% 7.97% 19.55% 4.79% Basic and diluted EPS (in dollars) 2.12 1.49 42.28% 1.68 0.44281.82%
Six months ended June 30 2019 2018		Growth rate of 1st half-year	2019		Seasonal growth rate
	2018		Q2	Q1
Sales revenue 24,089,595	22,467,681 7.22% 12,370,748			11,718,847 5.56%
Gross operating margin 2,999,013	2,861,080 4.82% 1,579,360			1,419,653 11.25%
Net margin 12.45%	12.73% 12.70%			12.11%
Net operating margin 1,504,277	1,473,116 2.12% 796,395			707,882 12.50%
Rate of net operating margin 6.24%	6.56% 6.44%			6.04%
Total non-operating income and expenses 2,060,758	1,037,612 98.61% 2,035,510			25,248
Profit before income tax 3,565,035	2,510,728 41.99% 2,831,905			733,130286.28%
Profit for the year 2,979,638	1,790,503 66.41% 2,418,245			561,393330.76%
Rate of profit for the year 12.37%	7.97% 19.55%			4.79%
Basic and diluted EPS (in dollars) 2.12	1.49 42.28% 1.68			0.44281.82%

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Sales Revenue in Consolidated Financial Statements

Expressed in ten million NTD

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445.45
428.73
398.49 407.06
240.90
2015 2016 2017 2018 Six months
ended June 30,
2019
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• A rise of 9.4% in sales revenue of 2018, compared to that of 2017, comes from:

• the recovery of the branded clients’ orders as a result of the swelled sales of autumn and winter apparel that result from the growth of apparel consuming market in 2018 and an end of the branded clients’ inventory adjustment, and

• the increased Formosa Petroleum Station’s revenue as a result of the raise of retail prices of oil that derives from the tense situations in the Middle East and from the American sanction on Iranian oil exports in 2018.

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Sales Revenue Breakdown_ by Business

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Sales Revenue
1 [st] Biseness Tire Cord Petroleum IC Packaging/
Six months ended Other
Segment Business Business Testing/Assembly
June 30, 2019 3.61%
NT$ 24.090 billion 36.43% 17.12% 24.39% 18.44%
Sales Revenue 1 [st] Biseness Tire Cord Petroleum IC Packaging/
Six months ended Other
Segment Business Business Testing/Assembly
June 30, 2018 4.17%
34.37% 16.29% 26.14% 19.03%
NT$ 22.468 billion
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Expressed in thousands of NTD

Comparison of revenues of the 1[st] half year of different business 2019 vs. 2018

Expressed in thousands of NTD Comparison of revenues of the 1st half year of different business 2019 vs. 2018	Expressed in thousands of NTD Comparison of revenues of the 1st half year of different business 2019 vs. 2018	Expressed in thousands of NTD Comparison of revenues of the 1st half year of different business 2019 vs. 2018	Expressed in thousands of NTD Comparison of revenues of the 1st half year of different business 2019 vs. 2018	Expressed in thousands of NTD Comparison of revenues of the 1st half year of different business 2019 vs. 2018	Expressed in thousands of NTD Comparison of revenues of the 1st half year of different business 2019 vs. 2018	Expressed in thousands of NTD Comparison of revenues of the 1st half year of different business 2019 vs. 2018	Expressed in thousands of NTD Comparison of revenues of the 1st half year of different business 2019 vs. 2018
		1st Business Segment	Tire Cord Business	Oil Product Business	IC Packaging / Testing /Assembly	Other	Total
Six months ended June 30	2019	8,774,869	4,124,787	5,876,630	4,442,798	870,511	24,089,595
	2018	7,722,775	3,659,007	5,872,819	4,275,071	938,009	22,467,681
Difference		1,052,094	465,780	3,811	167,727	-67,498	1,621,914
Growth rate (%)		13.62%	12.73%	0.06%	3.92%	-7.20%	7.22%

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Stable Profitability and Dividends Distribution

Profit before income tax, EPS, and cash dividends THOUSANDS OF NTD EXPRESSED IN for the last 5 years

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DOLLARS/SHARE
7,000,000 3.5
3.12
6,000,000 2.66 3
5,000,000 2.24 2.5
2.12
1.8
4,000,000 2
2.1
1.9
3,000,000 1.5
1.5
1.4
2,000,000 1
1.2
1,000,000 0.5
4,171,970 3,761,297 4,474,799 5,276,484 6,280,361
0 0
2014 2015 2016 2017 2018
Profit before income tax EPS Cash dividends
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Summarized Statement of Cash Flows

	Expressed in thousands of NTD	Expressed in thousands of NTD
	Six months ended June 30
	2019	2018
Cash at beginning of period	3,391,896	4,942,919
Net cash flows from operating activities (A)	1,483,887	419,381
Capital Expenditures (B)	(1,261,711)	(1,130,639)
Financial assets	(69,570)	174,659
Bank borrowings	289,330	564,493
Dividends paid	0	0
Other	(53,564)	10,972
Cash and cash equivalent at end of period	3,780,268	4,981,785
Free cash flow (A-B)	222,176	(711,258)

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Operation Orientation

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Operation Orientation

Technology- and Intelligence-oriented & Sustainability through Value Creation

• ─ Application of technology and cross-field collaboration

Continuously obtaining branded customers' recognition

─ Cooperation Cross- Development of innovative textiles with industry ─ Circular Economy_ Branded Intelligent recycling Ghost nets Customers R&D

• ─ adidas considers FTC a Top Player of its suppliers

• ─ Nike recognizes FTC’s eco-friendly products

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Deepen the value of taking quality as the core by strengthening techniques

Promotion of added value and differentiation of products

Designing functionand eco-oriented products

Homogenization of product quality of 5 Plants in 3 countries

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Operation Orientation

Taiwan Vietnam China — Logistics Platform — The Global Textile Industry Cluster R&D Center Deep cultivation of — _ Benefits of Local-to-local Supply Chain Operations Center its domestic market Capacity after Expansion Expanded/ Annual capacity increased items after expansion gray Weaving plants 192 million yards filament fabrics D&F plants 139.2million yards tire cord yarn Tire cord plants 25,800 tons Long

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Operation Orientation

 To carry out the corporate social responsibility, emphasize environmental protection and strive for sustainable development

• Completed conservation projects of 6 months ended June 30 in 2019 _Taiwan Plant

Reduced Accumulated Investment Conserved Conserved Conserved Conserved Emissions Amount Amount Steam Water Electricity Fuel of CO2 (Thousands of (Thousands (MT/HR) (MT/Day) (KW) (KG/HR) (Tons/Year) NTD/Year) of NTD) 0.36 75.7 128.01 0 2,010.11 6,352.76 18,889.6

• Planned effluent recycling projects of 5 Plants in 3 countries in 2019:

• Estimated Invested amount: NT$ 238 million

• Anticipated recycling rate: 65%

• Anticipated completion time for all effluent recycling projects: by 2019

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Q & A