INX — Interim / Quarterly Report 2016

Mar 17, 2017

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4Q 2016 Earning Results

February 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$million) Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income (Loss) Net Non-operating Income (Exp.) Income (Loss) before Tax Net Income (Loss) Basic EPS(NT$)(1)(2) EBITDA(3)	4Q 2016 89,382_100.0% 69 580 77 8% , . 19,802_22.2% 5,806 6.5% 13,996_15.7% (1,135) -1.3% 12,861_14.4% 10,869_12.2% 1.09 23,665_26.5%	3Q 2016 74,485_100.0% 65 713 88 2% , . 8,772_11.8% 4,912 6.6% 3,859 5.2% (323) -0.4% 3,536 4.7% 3,058 4.1% 0.31 13,714_18.4%_	QoQ % 4Q 2015 20.0% 81,464_100.0% 5 9% 78 938 96 9% . , . 125.8% 2,525 _3.1% 18.2% 5,424 6.7% 262.6%(2,899) -3.6% -(3,727) -4.6% 263.7%(6,626) -8.1% 255.4%(6,723) -8.3% (0.68) 72.6% 9,639_11.8%_

Notes:

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

2. Capital Stock (common): NT$99.5billion as of December 31, 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

Selected Items from Statements of Comprehensive Income

	(NT$ million) Net Sales Cost of Goods Sold G P fit ross ro Operating Expenses Operating Income Net Non-operating Income (Exp.) Income before Tax Net Income Basic EPS(NT$)(1)(2) EBITDA(3) Depreciation & Amortization Capital Expenditure	2016 287,089 100.0% 261,000 90.9% 26 090 9 1% , . 19,675 6.9% 6,414 2.2% (1,422) -0.5% 4,992 1.7% 1,871 0.7% 0.19 47,833 16.7% 41,419 44,153	2015 YoY % 364,133 100.0% -21.2% 317,495 87.2% -17.8% 46 638 12 8% 44 1% , . - . 24,206 6.6% -18.7% 22,432 6.2% -71.4% (7,570) -2.1% - 14,862 4.1% -66.4% 10,816 3.0% -82.7% 1.09 75,989 20.9% -37.1% 53,557 24,511

Notes:

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

2. Capital Stock (common): NT$99.5billion as of December 31, 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.

4

(NT$ million) 2016.12.31 2016.9.30 2015.12.31 Cash & Short Term Investment 35,276 32,480 49,014 Inventory 23,399 24,338 30,197 T t l A t 371 480 354 911 387 442 Combined Balance Sheet Highlights o a sse s , , , Short Term Debt(1) 27,965 32,352 16,361 Long Term Debt 28,128 27,282 43,630 Shareholders’ Equity(2) 226,006 215,345 232,265 Current Ratio 109% 96% 124% Debt to Equity 25% 28% 26% Net Debt to Equity 9% 13% 5% Depreciation & Amortization 9,669 9,855 12,537 Capital Expenditure 9,250 20,585 9,863

Notes:

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

2. Capital Stock (common): NT$99.5billion; Book value per common stock: NT$ 22.71 as of December 31, 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 .

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Area Shipments and TFT LCD ASP Trends
Shipment
TFT Panel TFT Panel ASP (US$ / m [2] )
(‘000 m [2] )
12,000
450
417
390
379
333 330
298 289
8,000 7,238 7,383 7,412
7,014 7,091 7,003 6,968
5,629
4,000
0
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
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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).

6

TFT Panel Revenue (NT$ Billon)

Shipment (Million Units)

Area Shipment (‘000 m[2] )

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551.5
517.7 542.1 539.8
472.8
442.4 448.2
382.4
69
65
62 61 62
56 55
47
18 7. 18 4. 17 8.
16.5 16.8
15.2
13.0 13.1
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
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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).

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TV

Desktop Mobile PC Mobile & CP

100%

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19% 20% 23% 25% 25% 24% 21%
28%
80%
15% 13%
14% 16%
13% 15% 17%
14%
10%
60% 12%
10% 10% 11%
11% 12% 12%
40%
57%
54% 53% 52% 52%
47% 48% 47%
20%
0%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
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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%																							48% 13% 19% 19% 4Q16	48% 13% 19% 19% 4Q16
		19%			18%			21%			22%			23%			20%			21%			19%
		19%			17%			18%			17%			19%			20%			21%			19%
		21%			20%			17%			16%			16%			15%			18%			13%
					~~43%~~			~~43%~~			44%			~~42%~~			45%						48%
		~~39%~~																		~~39%~~
		1Q15			2Q15			3Q15			4Q15			1Q16			2Q16			3Q16

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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