IRF — Investor Presentation 2016

Jun 20, 2016

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Stock Code: 2228.TW/2228 TT

Jun. , 2016

Disclaimer

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• This report and released message contains information about corporate prospects, inancia up f l d ates an d sa es orecasts, esta l f bl is h e d on t h e asis o b f internal resources and external reference sharing. The actual performance may be different from expressed or implied predictions due to uncontrollable and/or unpredictable risks.

• All prospects reflect Iron Force’ s expectations toward the future, and may be subject to change and Iron Force reserves the right to alter, update and change relevant information from time to time without prior notice.

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Index

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1. About Iron Force

2. Industry Overview

3. Updating and planning

4. Competitive Advantages

5. Performance

3

About Iron Force

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Establishment April 27, 1977

The Board of directors

	Employees	1,740+(including subsidiaries in China and Germany)	Titles	Names	Main Experience
	Share capital when listed	NT$ 735,050,400	Chairman	Alan Huang	Founder of Iron Force Industrial Co., Ltd.
	Management	Chairman Alan Huang President Hank Huang : ; :	Director	Hank Huang	Sales manager/GM/President of Iron Force Industrial Co., Ltd
	Main business Earnings	(1) Auto parts (2) Display Fixtures 2015 consolidated revenue of NT$3.9bn / net profit of NT$620 mn	Director Director	Alex Chang Edward Way	Previously, Chief Manager, Investment, Industrial Technology Investment Corporation; Senior VP, DelSolar Co., Ltd. Previously, Chairman, Deloitte Taiwan & Chairman, Wei Yung Tu CPAs Office Currently, Chairman, YCSY Co., Ltd
		Shareholding structure
			Independent	Theresa	Previously, Partner, PwC Taiwan
			Director	Wu	Currently, Chairman, Fate Design
			Independent	Yaotsu	Previously, Chairman, Fu Sheng Industrial Co., Ltd;
			Director	Shih	VP, Lancer Systems
	Others, 39%		Independent	Judy
			Director	Chang
		Chairman's
		family, 61%

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Apr., 2016

About Iron Force – Company Structure

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Iron Force
President Office (PO)
Auto Parts Division (APD)
Display Fixtures and Housewares Division (DHD)
100% 100%
Cortec GmbH
Transtat Investment Ltd.
DHD in Germany (DHDG)
100% 100%
Huzhou Iron Force Zhejiang Iron Force
APD in China (APDC) DHD in China (DHDC)
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About Iron Force – Milestones

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2013 Listed on TAIEX

2012 Registered on Taiwan Emerging Stock Exchange

2011 APDC completed a new factory in Huzhou.

2005 DHDC factory was moved and expanded in Huzhou. Merged Cortec GmbH, Germany. (DHDG established) APD completed a new factory and started operating in June.

Set up auto parts production line in DHDC factory. (APDC established)

1993 Entered airba g inflator business and built a factor y in Nantou , Taiwan. ( APD established ) Moved display fixtures production lines to Changhua. Built a new factory in Hangzhou. (DHDC established)

1987 Founded YiQun company and established factories in Yingge, and produced display fixtures and various hardware.

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1977 Founded IRON FORCE by Mr. Alan Huang, in Taiwan and started import/ export business. (DHD established)

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About Iron Force –

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Main Product ： Airbag inflator parts

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Side/Curtain Driver’s seat

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Side/Knee passenger’s seat
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About Iron Force –

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Main Product ： Airbag inflator parts

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8

About Iron Force –

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Main Product ： Airbag inflator parts

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9

About Iron Force –

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Main Product ： Seat belt pre-tensional tube

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10

About Iron Force –

Main Product ： Precision tubes for electrically powered steering

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• Advantages of electrically powered steering (EPS) :

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Lower fuel consumption / CO2 emission reduction Tunable steering assistance characteristics 'End of line' calibration, plus built-in diagnostics Flexible packaging in vehicle Simplified vehicle logistics Simplified supplier chain logistics

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Industry Overview – Auto parts industry

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Upstream midstream Mid/downstream downstream
Iron & Steel System
Car safety
Electrics
Components
Industry
Electronics
Petrochemical
Iron Force
Textile
Inflator parts
Steel
-
plate/tube seat belt pre tensional
Seat belt module
tube
Electrical
Item
Igniter
parts
Vehicles
Electronic
ECU, SENSOR
components
Pyrotechnic
Pyrotechnics Airbag module
material
Man-made
Airbag/seat belt
fiber
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Industry Overview –

Display fixtures and housewares industry

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Upstream Midstream Mid/downstream Downstream
Retailer
Hardware
Iron & Steel
processing Apparel/Boutique
Hanger stores
Industry Glass Electroplating manufacturing Convenience
Wood store
Textile processing Display fixture Wholesaler
manufacturing
PMMA
Department
Wood
processing store
Iron Force
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Updating & Planning –

Operating overview ： Product mix breakdown

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Auto parts division continues to grow and has become the growth driver for Iron Force Display fixtures division provides steady cash flow

Auto Parts Division (APD)

• Developing and building specialized automated machines in house to possess key manufacturing processes/equipments

• Highly trusted by clients

• Strict q ualit y control s y stem

• Continuous improvement

Display Fixtures and Housewares Division (DHD)

• Factories equipped with cost-effective facilities for all kinds of surface processing

• Logistic services covering Taiwan, China and Europe

• Certified supplier for many major chain stores

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Relative Market Share (Cash Generation)
H Stars Question Mark L
APD
Cash Cows Dogs
DHD
L
(Cash Usage)
e
Market Growth Rat
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Revenue break down (%) for Iron Force
NTD Mn
4,000
3,500
34 7%.
3,000 34.7%
36.6%
2,500 42.6%
47.9% 65.3%
2,000
65.3%
66.3% 49.1%
1,500 63.4%
56.6% 57.4%
1,000 52.1% 28.0%
50.9%
500 72.0%
33.7% 43.4%
-
2008 2009 2010 2011 2012 2013 2014 2015 16Q1
DHD 1,298 896 1,093 1,225 1,221 1,102 1,215 1,368 307
APD 659 686 1,134 1,334 1,648 1,911 2,284 2,576 790
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Market Updating & Planning –

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Global airbag market is expected to reach 555 million units by 2020

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600
555
Number of airbag (million units)
CAGR = 10.8% 501
500
452
408
400 368
332
300
300 270
244
200
100
0
2012 2013 2014 2015F 2016F 2017F 2018F 2019F 2020F
Data Source ： GIA
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Average number of airbag per vehicle is expected to reach 5.20 units by 2020

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7
Average number of airbag per vehicle (units)
6
CAGR = 7.3% 5.20
4.87
5 4.57
4.28
4.01
3.76
4 3.52
3.30
2.97
3
2
1
0
2012 2013 2014 2015F 2016F 2017F 2018F 2019F 2020F
Data Source ： GIA 、 IHS
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Market Breakdown Updating & Planning –

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NTD (sales ； % of autoparts division sales )
A T Z Others Total
16Q1 48 Mn 6.1% 16Q1 185 Mn 23.4% 16Q1 61 Mn 7.8% 16Q1 26 Mn 3.3% 16Q1 320 Mn 40.5%
2015 118 Mn 4.6% 2015 620 Mn 24.1% 2015 204 Mn 7.9% 2015 109 Mn 4.2% 2015 1,051 Mn 40.8%
Airbag inflator parts 2014 115 Mn 5.0% 2014 644 Mn 28.2% 2014 146 Mn 6.4% 2014 141 Mn 6.2% 2014 1,047 Mn 45.8%
2013 129 Mn 6.7% 2013 568 Mn 29.6% 2013 156 Mn 8.1% 2013 129 Mn 6.7% 2013 982 Mn 51.3%
2012 150 Mn 9.1% 2012 592 Mn 35.9% 2012 144 Mn 8.7% 2012 112 Mn 6.8% 2012 998 Mn 60.6%
16Q1 262 Mn 33.2% 16Q1 64 Mn 8.1% 16Q1 69 Mn 8.7% 16Q1 395 Mn 49.9%
2015 867 Mn 33.7% 2015 232 Mn 9.0% 2015 179 Mn 7.0% 2015 1,279 Mn 49.6%
Seat belt
2014 761 Mn 33.3% 2014 161 Mn 7.1% 2014 152 Mn 6.7% - 2014 1,074 Mn 47.0%
Pre-tensional tube
2013 620 Mn 32.4% 2013 105 Mn 5.5% 2013 94 Mn 4.9% 2013 819 Mn 42.7%
2012 481 Mn 29.2% 2012 84 Mn 5.1% 2012 13 Mn 0.8% 2012 578 Mn 35.1%
16Q1 71 Mn 8.9% 16Q1 71 Mn 8.9%
Precision tubes for 2015 226 Mn 8.8% 2015 226 Mn 8.8%
- - 2014 135 Mn 5.9% - 2014 135 Mn 5.9%
EPS 2013 104 Mn 5.4% 2013 104 Mn 5.4%
2012 71 Mn 4.3% 2012 71 Mn 4.3%
16Q1 3 Mn 16Q1 2 Mn 16Q1 5 Mn
2015 21 M n 2015 0 . 9 M n 2015 22 M n
Others - - 2014 28 Mn 2014 28 Mn
2013 11 Mn 2013 11 Mn
2012 0.8 Mn 2012 0.8 Mn
% of autoparts group 39.2% 31.4% 25.8% 3.6%
790 Mn
sales (2016 Q1) 310 Mn 248 Mn 204 Mn 28 Mn
% of autoparts group 38.2% 33.1% 24.4% 4.3%
2,577 Mn
sales (2015) 986 Mn 852 Mn 630 Mn 110 Mn
% of autoparts group 38.34% 35.28% 20.20% 6.18%
2,284 Mn
sales (2014) 876 Mn 806 Mn 461 Mn 141 Mn 16
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Updating & Planning – New factory planning

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Old factory area
，
(40 acres 1 floor)
New factory area
，
(40 acres 2 floors)
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Thank You

Deputy speaker: Terry Lin Email: terrylin@irf.com.tw Website: www.ironforce.com.tw

Disclaimer

This presentation may contain statements that express management‘s expectations about future events or results rather than historical facts. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected forward-looking statements , the company cannot give assurance that such statements will prove correct. For additional information on factors that could cause company’s actual results to differ from expectations reflected in forward-looking statements, please see audited reports filed with the Taiwan Stock Exchange corp.