INX — Interim / Quarterly Report 2017

Jul 26, 2017

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2Q 2017 Earning Results

July 2017

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 mp i li e d i n t h e orwar f d - oo l ki ng statements. Th ese orwar f d - oo l ki ng 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

Selected Items from Statements of Comprehensive Income

	(NT$ million) Net Sales C t f G d S ld os o oo s o Gross Profit Operating Expenses Operating Income (Loss) Net Non-operating Income (Exp.) Income (Loss) before Tax Net Income (Loss) Basic EPS(NT$)(1)(2) EBITDA(3)	2Q 2017 84,509_100.0% 63 464 75 1% , . 21,045_24.9% 5,222 6.2% 15,823_18.7% 361 _0.4% 16,184_19.2% 12,118_14.3% 1.22 24,006_28.4%_	1Q 2017 86,026_100.0% 65 681 76 4% , . 20,345_23.6% 5,713 6.6% 14,632_17.0% 722 _0.8% 15,354_17.8% 11,858_13.8% 1.19 23,108_26.9%_	QoQ % 2Q 2016 -1.8% 66,805_100.0% 3 4% 65 251 97 7% - . , . 3.4% 1,554 _2.3% -8.6% 4,592 6.9% 8.1%(3,039)-4.5% -50.0% 168 0.3% 5.4%(2,871)-4.3% 2.2%(3,476)-5.2% (0.35) 3.9% 7,408_11.1%_

Notes:

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

2. Capital Stock (common): NT$99.5billion as of June 30, 2017

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.

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(NT$ million) 2017.6.30 2017.3.31 2016.6.30 Cash & Short Term Investment 56,220 35,881 39,599 Inventory 29,661 24,878 25,395 T t l A t 383 083 359 566 349 288 Combined Balance Sheet Highlights o a sse s , , , Short Term Debt(1) 35,531 35,498 21,612 Long Term Debt 843 835 35,468 Shareholders’ Equity(2) 249,031 235,547 214,685 Current Ratio 113% 101% 113% Debt to Equity 15% 15% 27% Net Debt to Equity -8% 0% 8% Depreciation & Amortization 8,183 8,476 10,446 Capital Expenditure 4,355 5,804 6,858

Notes:

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

2. Capital Stock (common): NT$99.5billion; Book value per common stock: NT$ 25.02 as of June 30, 2017

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

Shipment (‘000 m[2] )

TFT Panel TFT Panel ASP (US$ / m[2] )

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12,000
390 399 395
379
333 330
298 289
8,000 7,383 7,412
7,091 7,003 6,968 6,814 6,957
5,629
4,000
0
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
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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 in accordance with the International Financial Reporting Standards as endorsed in R.O.C. (TIFRS).

5

TFT Panel Revenue (NT$ Billon)

Shipment (Million Units)

Area Shipment (‘000 m[2] )

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569 8.
551.5
542.1 539.8 532.4
517.7
472.8
382.4
69
65
61 62 62
59
55
47
18.4 17.8 16 8. 16 9. 16 6.
15 2.
13.0 13.1
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
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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

TV

Desktop

Mobile PC

Mobile & CP

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100%
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23% 25% 25% 24% 21% 22% 22%
28%
80%
14% 13% 16% 15% 16%
15% 17%
14%
60%
10% 10% 11% 10% 11%
11% 12% 12%
40%
53% 52% 52% 53% 51%
47% 48% 47%
20%
0%
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
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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).

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

100% 40% 60% 80% 0% 20%																							45% 14% 19% 21% 2Q17	45% 14% 19% 21% 2Q17
		21%			22%			23%			20%			21%			19%			20%			21%
		18%			17%			19%			20%			21%			19%			18%			19%
		17%			16%			16%			15%			18%			13%			12%			14%
		~~43%~~			44%			~~42%~~			45%						48%			49%			45%
														~~39%~~
		3Q15			4Q15			1Q16			2Q16			3Q16			4Q16			1Q17

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

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Q&A

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