INX — Interim / Quarterly Report 2016

Jul 29, 2016

2Q 2016 Earning Results

July 2016

==> picture [735 x 43] intentionally omitted <==

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

Disclaimer
----- End of picture text -----

Innolux Corporation’s statements of its current expectations and estimates are forward-looking 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 one 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.

2

==> picture [686 x 50] intentionally omitted <==

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

Statements of Comprehensive Income
----- End of picture text -----

Selected Items from Statements of Comprehensive Income

(NT$ million) Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income (Loss) Net Non-operating Income (Exp.) Income (Loss) before Tax Net Income (Loss) Net Income (Loss) - Parent Basic EPS(NT$)(1)(2) EBITDA(3)	2Q 2016 66,805_100.0% 65,251_97.7% 1,554 2.3% 4,592 6.9% (3,039) -4.5% 168 0.3% (2,871) -4.3% (3,476) -5.2% (3,476) -5.2% (0.35) 7,408_11.1%_		1Q 2016 56,417_100.0% 60,455_107.2% (4,038) -7.2% 4,365 7.7% (8,402) -14.9% (131) -0.2% (8,534) -15.1% (8,582) -15.2% (8,582) -15.2% (0.86) 3,046 5.4%	QoQ % 18.4% 7.9% - 5.2% - - - - - 143.2%	2Q 2015
					93,755_100.0% 78,173_83.4% 15,583_16.6% 6,190 _6.6% 9,393_10.0% (2,047) -2.2% 7,345 _7.8% 5,406 5.8% 5,406 5.8% 0.54
					23,123_24.7%_

Notes:

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

2. Capital Stock (common): NT$99.5billion as of June 30, 2016

3. EBITDA = Operating Income + Depreciation & Amortization

4. All figures are unaudited, prepared by Innolux Corporation in accordance with the International Financial Reporting Standards as endorsed in R.O.C. (TIFRS).

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

3

==> picture [735 x 43] intentionally omitted <==

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

Combined Balance Sheet Highlights
----- End of picture text -----

(NT$ million) Cash & Short Term Investment Inventory Total Assets Short Term Debt(1) Long Term Debt Shareholders’ Equity(2) Current Ratio Debt to Equity Net Debt to Equity Depreciation & Amortization Capital Expenditure		2016.6.30 39,599 25,395 349,288 21,612 35,468 214,685 113% 27% 8% 10,446 6,858		2016.3.31 36,462 29,164 351,258 19,251 35,445 222,810 118% 25% 8% 11,448 7,459	2015.6.30
					40,724 33,221 401,083 16,355 51,790 236,085
					125% 29% 12%
					13,731 3,783

Notes:

1. Short term debt = (short-term bank loan + current portion of long term loan)

2. Capital Stock (common): NT$99.5billion; Book value per common stock: NT$ 21.57 as of June 30, 2016

3. Net debt to shareholders’ equity = (short term debt + long term debt – cash & short term investment) / shareholders’ equity

4. All figures are unaudited, prepared by Innolux Corporation in accordance with the International Financial Reporting Standards as endorsed in R.O.C. (TIFRS).

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

4

==> picture [735 x 43] intentionally omitted <==

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

Area Shipments and TFT LCD ASP Trends
----- End of picture text -----

==> picture [749 x 366] intentionally omitted <==

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

Shipment
TFT Panel TFT Panel ASP (US$ / m [2] )
(‘000 m [2] )
12,000
469
457 450
417
390
333
298
289
8,272
8,040
7,383
8,000 7,238
7,014 7,091 7,003
5,629
4,000
0
3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
----- End of picture text -----

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 in accordance with the International Financial Reporting Standards as endorsed in R.O.C. (TIFRS).

5

==> picture [717 x 43] intentionally omitted <==

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

Small & Medium-Size Shipments and Sales Trends
----- End of picture text -----

TFT Panel Revenue (NT$ Billon)

Shipment (Million Units)

Area Shipment (‘000 m[2] )

==> picture [769 x 295] intentionally omitted <==

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

551.5
534.3
517.4 517.7
472.8
442.4
448.2
382.4
78 77
69
65
62
56 55
47
22.7
21.2
18.7 18.4 17.8
16.5
13.0 13.1
3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
----- End of picture text -----

Notes: All figures are unaudited, prepared by Innolux Corporation in accordance with the International Financial Reporting Standards as endorsed in R.O.C. (TIFRS).

6

==> picture [735 x 43] intentionally omitted <==

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

Sales Breakdown by Application
----- End of picture text -----

TV

Desktop Mobile PC Mobile & CP

==> picture [785 x 296] intentionally omitted <==

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

100%
18% 18% 19% 20%
23% 25% 25%
28%
80%
17% 17% 15% 13%
14%
13% 15%
14%
10%
60% 12%
15% 14% 10% 10%
12%
11%
40%
57%
50% 51% 54% 53% 52% 47% 48%
20%
0%
3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
----- End of picture text -----

Notes:

1. Mobile PC includes Notebook and Tablet panels.

2. Mobile & CP includes panels for mobile phone, automobile, industrial, medical, etc.

3. All figures are unaudited, prepared by Innolux Corporation in accordance with the International Financial Reporting Standards as endorsed in R.O.C. (TIFRS).

7

==> picture [735 x 43] intentionally omitted <==

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

Sales Breakdown by Size
----- End of picture text -----

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

0% 20% 40% 60% 80% 100%
	19%			20%			19%			18%			21%			22%			23%			20%
	21%			21%			19%			17%			18%			17%			19%			20%
	19%			18%			21%			~~2%~~ 20%			~~1%~~ 17%			~~1%~~ 16%			16%			15%
	~~4%~~			~~3%~~			~~2%~~			~~43%~~			~~43%~~			44%			~~42%~~			45%
	~~37%~~			~~38%~~			~~39%~~
	3Q14			4Q14			1Q15			2Q15			3Q15			4Q15			1Q16			2Q16

Notes: All figures are unaudited, prepared by Innolux Corporation in accordance with the International Financial Reporting Standards as endorsed in R.O.C. (TIFRS).

8

Q&A