INX — Interim / Quarterly Report 2012

Feb 26, 2013

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4Q 2012 Earning Results

February 2013

Innolux Corporation’s statements of its current expectations and estimates are forwardlooking statements subject to significant known and unknown risks and uncertainties and actual results may differ materially from those contained or implied in the forward looking statements. These forward-looking statements are not guarantees of future performance and therefore you should not place undue reliance on them. Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise .

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r Quarter
Quarter ove
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Notes:
Year
Year over
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Sales Operating Income EBITDA
(NT$ Bn) (NT$ Bn) (NT$ Bn)
129.6 129.6
3.1
-2.2
23.9
18.9
3Q12 4Q12
3Q12 4Q12 3Q12 4Q12
Panel System
(NT$ Bn) (NT$ Bn) (NT$ Bn)
501
481
-18.9
-63.0
67.0
34.8
2011 2012 2011 2012 2011 2012
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1. EBITDA = Operating Income + Depreciation & Amortization

2. All figures are unaudited, prepared by Innolux Corporation.

3. All figures presented refer to results from other TFT-LCD related subsidiaries in which Innolux Corporation has 50% or more ownership, and already eliminates inter-company transactions between Innolux Corporation and these companies to avoid double-counting.

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4Q 2012 Combined Income Statement	4Q 2012 Combined Income Statement	4Q 2012 Combined Income Statement	4Q 2012 Combined Income Statement	4Q 2012 Combined Income Statement	- QoQ	- QoQ
NT$ million
Except Per Share Data		4Q12			3Q12		QoQ %	4Q11
Net Sales		129,603	100.0%		129,552	100.0%	0.0%	130,409	100.0%
	Cost of Goods Sold	120,137	92.7%		125,306	96.7%	(4.1%)	141,073	108.2%
Gross Profit		9,466	7.3%		4,246	3.3%	122.9%	(10,664)	(8.2%)
	Operating Expenses	6,328	4.9%		6,460	5.0%	(2.0%)	6,539	5.0%
Operating Income		3,138	2.4%		(2,214)	(1.7%)	-	(17,202)	(13.2%)
Net Non-operating Income (Exp.)		(6,389)	(4.9%)		(1,655)	(1.3%)	-	(4,693)	(3.6%)
Income before Tax		(3,251)	(2.5%)		(3,869)	(3.0%)	-	(21,895)	(16.8%)
EBITDA(1)		23,876	18.4%		18,860	14.6%	26.6%	5,753	4.4%
Net Income		(3,219)	(2.5%)		(3,720)	(2.9%)	-	(19,988)	(15.3%)
	Net Income-Parent	(3,218)	(2.5%)		(3,721)	(2.9%)	-	(19,992)	(15.3%)
	Basic EPS(NT$)(2)	(0.43)			(0.51)			(2.73)

Notes:

1. EBITDA = Operating Income + Depreciation & Amortization

2. Basic EPS = Net Income-Parent / Weighted Average of Outstanding Common Shares

3. Capital Stock (common): NT$79.13 billion

4. All figures are unaudited, prepared by Innolux Corporation.

5. Combined figures presented refer to results from other TFT-LCD related subsidiaries in which Innolux Corporation has 50% or more ownership, and already eliminates inter-company transactions between Innolux Corporation and these companies to avoid double-counting .

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2012	Combined Income Statement	Combined Income Statement	- YoY	- YoY
	NT$ million
	Except Per Share Data	2012			2011		YoY %
	Net Sales	480,913	100.0%		501,135	100.0%	(4.0%)
	Cost of Goods Sold	475,982	99.0%		537,383	107.2%	(11.4%)
	Gross Profit	4,931	1.0%		(36,248)	(7.2%)	-
	Operating Expenses	23,831	5.0%		26,750	5.3%	(10.9%)
	Operating Income	(18,900)	(3.9%)		(62,998)	(12.6%)	-
	Net Non-operating Income (Exp.)	(10,970)	(2.3%)		(6,505)	(1.3%)	-
	Income before Tax	(29,871)	(6.2%)		(69,503)	(13.9%)	-
	EBITDA(1)	67,004	13.9%		34,760	6.9%	92.8%
	Net Income	(29,271)	(6.1%)		(64,440)	(12.9%)	-
	Net Income-Parent	(29,270)	(6.1%)		(64,440)	(12.9%)	-
	Basic EPS(NT$)(2)	(4.04)			(8.76)
	Depreciation & Amortization	85,904			97,758
	Capital Expenditure	17,138			44,585

Notes:

1. EBITDA = Operating Income + Depreciation & Amortization

2. Basic EPS = Net Income-Parent / Weighted Average of Outstanding Common Shares

3. Capital Stock (common): NT$79.13 billion

4. All figures are unaudited, prepared by Innolux Corporation.

5. Combined figures presented refer to results from other TFT-LCD related subsidiaries in which Innolux Corporation has 50% or more ownership, and already eliminates inter-company transactions between Innolux Corporation and these companies to avoid double-counting.

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Operating Income (Loss)

EBITDA & EBITDA Mar in g

(NT$Bn)

3.1 -2.2 -7.7 -12 1.

-17.2

4Q11 1Q12 2Q12 3Q12 4Q12 Note:

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(NT$Bn) Margin (%)
18.4%
23.9
14.6%
18.9
12.7%
14.3
9.1%
4.4% 10.0
5.8
4Q11 1Q12 2Q12 3Q12 4Q12
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(NT$Bn)

1. EBITDA = Operating Income + Depreciation & Amortization

2. All figures are unaudited, prepared by Innolux Corporation.

3. All figures presented refer to results from other TFT-LCD related subsidiaries in which Innolux Corporation has 50% or more ownership, and already eliminates inter-company transactions between Innolux Corporation and these companies to avoid double-counting.

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Revenue[(1)] 5 Panel System EBITDA Margin Gross Margin EPS(NT$) (NT$Bn) -0.51 -0.43 3000 ~~-1.89 -1.78~~ -2.36 -2.73 ~~-1.75 -1.35~~ 18 4%. 14.6% 12.7% (5) 9.3% 10.0% 9.1% 7.3% 4.3% 4.4% 3.3% -1.7% 200(10) ~~-5.3% -5.4% -6.2%~~ -8.2% -9.9% (15) 130.4 129.6 129.6 124.3 121.7 124.7 109.2 112.5 (20) 100 (25) (30) 0 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12

Notes:

1. All figures are unaudited, prepared by Innolux Corporation.

2. All figures presented refer to results from other TFT-LCD related subsidiaries in which Innolux Corporation has 50% or more ownership, and already eliminates inter-company transactions between Innolux Corporation and these companies to avoid double-counting.

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4Q	2012 Combined Balance	2012 Combined Balance	Sheet Highlights	Sheet Highlights
	NT$ million		2012.12.31	2012.9.30	2011.12.31
	Cash & Short Term Investment		39,056	52,672	59,449
	Inventory		42,035	50,304	59,540
	Total Assets		574 689 ,	599 093 ,	668 479 ,
	Short Term Debt(1)		117,183	88,635	275,081
	Long Term Debt(2)		152,100	199,316	49,377
	Shareholders’ Equity(3)		170,547	175,134	196,181
	Net Debt to Shareholders’ Equity		135.0%	134.3%	135.1%
	Depreciation & Amortization		20,738	21,076	22,955
	Capital Expenditure		5,882	4,567	8,736

Notes:

1. Short term debt = (short-term bank loan + commercial papers + current portion of long term loan + obligations under capital leases)

2. Long term debt = (long-term bank loan + corporate bonds + obligations under capital leases)

3. Capital Stock (common): NT$79.13 billion; Book value per common stock: NT$ 21.55

4. All figures are unaudited, prepared by Innolux Corporation.

5. Combined figures presented refer to results from other TFT-LCD related subsidiaries in which Innolux Corporation has 50% or more ownership, and already eliminates inter-company transactions between Innolux Corporation and these companies to avoid double-counting.

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Total Debt and Debt Ratios
Total Debt [(1)]
Total Debt Debt to Equity Net Debt to Equity
(NT$Bn)
500 186.3%
179 5%.
165.4% 164.4%
158.8% 157.9%
153.2%
148.9% 147.7%
135.1% 134.3% 135.0%
131.9%
126.5%
400
118.0%
105.1%
300
345 1. 344 3.
324.5 329 2. 324.1
311.8
288.0
269.3
200
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
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Notes:

1. Total Debt = short term debt + long term debt

2. All figures are unaudited, prepared by Innolux Corporation.

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Net Inventory [(2)] Turnover [(1) ]
Net Inventory Inventory Turnover
(NT$Bn) (Days)
120 60
49 49
47
45 45
90 41 41 45
35
60 30
67.7 68.8 65.8
30 59.5 61.0 61.1 15
50.3
42.0
0 0
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
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Notes:

1. Inventory turnover days = 365 / (annualized cost of goods sold / average inventory)

2. All figures are unaudited, prepared by Innolux Corporation.

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Large-size Unit Shipments and ASP Trends
Shipment [(2)] Unit ASP [(1)(2)]
Panel System ASP
(Million) (US$)
80 120
101
95
90 89 89
86 87
84
60 90
40.7
38.4
40 35.8 37.0 35.4 35.3 60
32.5 32.4
20 30
0 0
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
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Notes:

1. Exchange rate based on the prevailing market rate at the end of each quarter.

2. All figures are unaudited, prepared by Innolux Corporation.

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Small & Medium-Size Unit Shipments and Sales Trends
Revenue [(1)]
Shipment [(2)]
Shipment Revenue (NT$ Billion)
(Million)
34.2 40
28 7. 28.0 27.7
180
25.9 25.6 30
23.4
21.3
150 20
115 114 10
120 110 108
101
95 95
90 0
90
-10
60
-20
30
-30
0 -40
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
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Notes:

1. Exchange rate based on the prevailing market rate at the end of each quarter.

2. All figures are unaudited, prepared by Innolux Corporation.

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Touch Module and Sensor Shipment by Application
Shipment [(1)]
Small & Medium Mobile PC
(Million)
25
23.3
20 18.4
17.1
15.4 15.5
15
12.5
10.5
9.8
10
5
0
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
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Notes: All figures are unaudited, prepared by Innolux Corporation.

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<10” 10 to <20” 20 to <30” 30 to <40” 40”+

100% 40% 60% 80% 0% 20%																							19% 19% 16% 19% 27% 4Q12	19% 19% 16% 19% 27% 4Q12
		12%			15%			15%			15%			14%			16%			19%			19%
		~~18%~~			15%			~~11%~~			~~12%~~			~~14%~~			17%			16%			16%
								~~27%~~			~~25%~~
		~~24%~~			27%									~~27%~~			23%			21%			19%
		22%			23%			20%			~~18%~~			17%			21%			19%			19%
		24%			20%			27%			30%			28%			23%			25%			27%
		1Q11			2Q11			3Q11			4Q11			1Q12			2Q12			3Q12

Notes: All figures are unaudited, prepared by Innolux Corporation.

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TV Desktop Mobile PC Small & Medium Others

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100%
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40% 60% 80% 0% 20%		5%			~~3%~~			~~2%~~			~~2%~~			~~4%~~			5%			~~2%~~			~~4%~~
		23%			19%			23%			26%			24%			19%			20%			21%
					9%			12%									13%			16%			14%
		6%									10%			11%
		29%			30%			28%			28%			25%			24%			19%			19%
																				~~43%~~			~~42%~~
		~~37%~~			~~39%~~			35%			34%			~~36%~~			~~39%~~
		1Q11			2Q11			3Q11			4Q11			1Q12			2Q12			3Q12

Notes: All figures are unaudited, prepared by Innolux Corporation.

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2012 Sales b A lication y pp

Small & Medium

Mobile PC

(NT$ Bn) (NT$ Bn)

YoY -12%

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YoY 42%
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114
Others, 4% 100
Small &
65
Medium, 45
21%
TV, 40% 2011 2012 2011 2012
Desktop TV
(NT$ Bn) (NT$ Bn)
Mobile YoY -28% YoY 8%
PC, 13%
195
181
144
Desktop, 104
22%
Total NT$480.9Bn
Note: All figures are unaudited, prepared by Innolux Corporation. 2011 2012 2011 2012
Panel System
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TFT LCD	TFT LCD	Fabs Update	Fabs Update
	Generation	Site		Substrate size (mm2)	Dec-12 (K/month)	Dec-13 (K/month)	Main Products	Technology
	G3.5 LTPS	Jhunan, Taiwan		620 x 750	70	85	Small/Medium	LTPS, OLED
	G3.5	Tainan, Taiwan		620 x 750	55	55	Small/Medium
	G4.5	Jhunan, Taiwan		730 x 920	45	45	TFT and Touch Panel Compatible	Touch panel
	G4	Tainan, Taiwan		680 x 880	80	80	Small/Medium
	G5	Jhunan, Taiwan		1,100 x 1,300	70	70	Small/Medium, MNT	TN, IPS, Touch
	G5	Tainan, Taiwan		1,100 x 1,300	130	130	Mobile PC, MNT	TN, IPS
	G5	Tainan, Taiwan		1,100 x 1,300	180	195	Mobile PC, TV	TN, IPS
	G5.5	Tainan, Taiwan		1,300 x 1,500	170	195	MNT, TV
	G6	Jhunan, Taiwan		1,500 x 1,850	105	110	MNT, TV	VA
	G6	Tainan, Taiwan		1,500 x 1,850	200	240	MNT, TV	VA
	G7.5	Tainan, Taiwan		1,950 x 2,250	100	120	TV	VA
	G8.5	Kaohsiung, Taiwan		2,200 x 2,500	42	58	TV	VA

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Touch Sensor Fabs Update	Touch Sensor Fabs Update	Touch Sensor Fabs Update	Touch Sensor Fabs Update
	Generation	Site	Substrate size (mm2)	Dec-12 (K/month)	Dec-13 (K/month)	Main Products
	G4 5 .	Jh T i unan, a wan	730 920 x	45	45	T bl t a e
	G4.5	Tainan, Taiwan	730 x 920	150	150	Tablet
	G5	Jhunan, Taiwan	1,100 x 1,300	20	20	NB

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Q&A

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