IRF — Investor Presentation 2017

Aug 15, 2017

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Stock Code: 2228.TW/2228 TT

Aug. , 2017

Disclaimer

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• This report and released message contains information about corporate prospects, financial updates and sales forecasts, established on the basis of 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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About Iron Force

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Establishment April 27, 1977

The Board of directors

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||||||
|---|---|---|---|---|
|Employees|1,900+ (including subsidiaries in China and Germany)|Titles|Names|Main Experience|
|Alan|
|Share capital|NT$ 757,802,810|Chairman|Founder of Iron Force Industrial Co., Ltd.|
|Huang|
|Hank|Sales manager/GM/President of Iron Force|
|Management|Chairman: Alan Huang ; President: Hank Huang|Director|
|Huang|Industrial Co., Ltd|
|(1) Auto parts|
|Main business|Previously, Chief Manager, Investment, Industrial|
|Alex|
|(2) Display Fixtures|Director|Technology Investment Corporation; Senior VP,|
|Chang|
|2016 consolidated revenue of NT$4.46bn /|DelSolar Co., Ltd.|
|Earnings|
|net profit of NT$688 mn|
|CPA|
|Edward|Previously, Chairman, Deloitte Taiwan & Chairman,|
|Director|
|Way|Wei Yung Tu CPAs Office|
|Currently, Chairman, YCSY Co., Ltd|
|Shareholding structure|
|CPA|
|Independent|Theresa|
|Previously, Partner, PwC Taiwan|
|Director|Wu|
|Currently, Chairman, Fate Design|
|Others,|Independent|Yaotsu|Previously, Chairman, Fu Sheng Industrial Co., Ltd;|
|39%|Director|Shih|VP, Lancer Systems|
|Chairman|
|Independent|Judy|
|family,|Director|Chang|[CPA ]|
|61%|

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Aug., 2017

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About Iron Force – Company Structure

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Iron Force
Administration Division (AMD)
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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4

Operating overview ： Product mix breakdown

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Revenue break down (%) for Iron Force

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•OEM and ODM of
customized store
display fixtures
•Clothes hangers with a 25%
variety of different 27%
materials
35%
•Complete retail store
35%
design
37% 63%
65%
2013
65%
2014
73%
2015
75%
2016
2017 H1
Autoparts
Display
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• Airbag inflators and precision metal parts for automotive safety systems

• High precision metal tubes for seatbelt retractor / pretensioner systems

• Steering columns/shafts and related components for the EPS systme

About Iron Force –

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Main Autoparts Product

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Autoparts Revenue (NT Thousand)

1,800,000.00 1,600,000.00 1,400,000.00 1,200,000.00 1,000,000.00 800,000.00 600,000.00 400,000.00 200,000.00 0.00 Airbag Seat belt EPS others 2013 2014 2015 2016 2017/H1

Revenue break down (%) for Autoparts

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100.00%
5.00% 6.00% 9.00% 9.00% 9.00%
80.00%
43.00%
47.00%
49.00% 51.00% 51.00%
60.00%
40.00%
51.00%
46.00%
20.00% 41.00% 40.00% 40.00%
0.00%
2013 2014 2015 2016 2017/H1
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Airbag Seat belt EPS others

Performance – Income Statement

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2013-2017/H1 Income Statement

Units： Thousand dollars ；％；NT

	Y2013	Y2013	Y2014	Y2014	Y2015	Y2015	Y2016	Y2016	Y2017/H1	Y2017/H1
		%		%		%		%		%
Gross Sales	3,020,479	100.00%	3,506,989	100.00%	3,944,842	100.00%	4,461,014	100.00%	2,183,662	100.00%
Cost of Goods Sold	2,186,128	72.38%	2,422,852	69.09%	2,697,479	68.38%	3,037,565	68.09%	1,543,721	70.69%
Gross Profit	834,351	27.62%	1,084,137	30.91%	1,247,363	31.62%	1,423,449	31.91%	639,941	29.31%
Operating Expense	437,499	14.48%	514,661	14.68%	542,808	13.76%	543,232	12.18%	300,471	13.76%
Operating Profit	396,852	13.14%	569,476	16.24%	704,555	17.86%	880,217	19.73%	339,470	15.55%
Non-Operating Income (Expense)	59,918	1.98%	54,850	1.56%	119,545	3.03%	49,586	1.11%	1,468	0.07%
Pre-Tax Income	456,770	15.12%	624,326	17.80%	824,100	20.89%	929,803	20.84%	340,938	15.61%
Income Tax	123,635	4.09%	137,761	3.93%	204,057	5.17%	242,112	5.43%	130,933	6.00%
Net Income	333,135	11.03%	486,565	13.87%	620,043	15.72%	687,691	15.42%	210,005	9.62%
EPS(NTD)	5.09		6.79		8.55		9.09		2.77

Performance – Profitability index analysis

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35.0%
32.5% 31.6%
31.9%
29.3%
28.2% 29.3%
30.0%
27.6%
30.9%
30.0%
25.0%
26.6%
19.7%
20.0% 17.9%
15.6%
14.3%
13.4%
15.0%
11.9%
16.2%
9.4%
13.1%
10.0%
11.8%
5.0%
0.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1
Gross profit rate Net profit rate
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About Iron Force –

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Main Product ： Airbag inflator parts

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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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According Stratview Research forecasted that the automotive airbag inflators market promises good growth opportunity and is likely to grow at a CAGR of 3.8% during the forecast period of 2016 to 2021 to reach $4.8 billion in 2021. Expected growth in automotive production, introduction of more bags per car, growth in Asia Pacific, and increasing safety standards across the globe are the major drivers of airbag inflators market.

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6.00
5.00
4.00
3.00
2.00
1.00
0.00
2016 2017 2018 2019 2020 2021
Unit: billion/US$
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Source: Stratview Research ---Global Automotive Airbag Inflators Market by Vehicle Type (Compact Car, Midsize Car, Large Car, MPV and LCV, SUV, and Others), by Airbag Type (Front Airbag, Side Airbag, Knee Airbag, and Curtain Airbag), by Inflator Type (Pyrotechnic, Stored Gas, and Hybrid), by Region (NA, Europe, APAC, ROW), Trend, Forecast, Competitive Analysis, and Growth Opportunity: 2016 – 2021

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About Iron Force –

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Main Product ： Seat belt pre-tensional tube

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About Iron Force –

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Main Product ： Seat belt pre-tensional tube

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According the research Persistence’s the newest report, that the global automotive seat belt market is estimated to be valued at US$ 11,987.6 Mn by the end of 2015. The market is expected to register a CAGR of 8.4% between 2015 and 2021. In terms of volume, the market accounted for 433,480 thousand units in 2014, and is expected to increase at a CAGR of 6.8% over the forecast period to reach 684,555 thousand units by 2021 and by value to Account for US$ 19.5 Bn by 2021.

By technology type, pretensioner segment was valued at US$ 3,913.4 Mn in 2014 and is expected to increase at a CAGR of 8.0% over the forecast period to account for US$ 6,717.4 Mn by 2021.

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8000
Seat belt pre-tensional
7000
6000
5000
4000
3000
2000
1000
0
2014 2015 2016 2017 2018 2019 2020 2021
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Unit: million/US$

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Source: Persistence--Global Market Study on Automotive Seat belt: 3 Point Seat Belt Segment to Witness High Growth by 2021

About Iron Force –

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Main Product ： Precision tubes for electrically powered steering

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• Advantages of electrically powered steering (EPS) :

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

Penetration rate

	Japan	Europe and America	China
2015	90%	75%	38%

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About Iron Force –

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Main Product ： Precision tubes for electrically powered steering

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According Research and Markets’s report that forecasted the electric power steering (EPS) system market is projected to grow from 16.82 billion to 23.92 billion at a CAGR of 7.29% from 2016 to 2021

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30
25
20
15
10
5
0
2016 2017 2018 2019 2020 2021
Unit: billion/US$
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Source: Research and Markets--Automotive Electronic Power Steering System Market By Type, By Components, Vehicle Type and Region - Global Trends and Forecast to 2021

Updating & Planning – New factory planning

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Old factory area
，
(40 acres 1 floor)
New factory area
，
(40 acres 2 floors)
Before Expansion After Expansion
Plant area 14,590m [2 ] 42,570m [2 ]
Employee 1,000 1,600~
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TAKATA事件影響性

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 TAKATA日本提出民事再生(含當地3家子公司) & TAKATA美國提出申 請Chapter 11 (美國及墨西哥12家子公司)

劍	客戶別	宣告破產日	申請法院	條款
	Takata 美國	2017/6/25	Delaware Court	Chapter 11
	Takata 日本	2017/6/26	Tokyo Court	Civil Rehabilitation Act
	麟分別與TAKATA 德國、中國、波蘭、羅馬尼亞、美國、日本 往 73% 27% Autoparts Display 35% 65% T- Japan & United T- Others 約佔集 8% 31% 69% TAKATA Others 2016 2016

、  劍麟分別與TAKATA 德國、中國、波蘭、羅馬尼亞、美國 日本 往來

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約佔集團營收
8%
35%
65%
T- Japan & United
T- Others
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2016

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TAKATA事件影響性

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• 、

• 劍麟集團於TAKATA美國 日本 申請破產保護當天應收帳款餘額：

麟集團於TAKATA美國、日本 申請破產保護當天應收帳款餘額	麟集團於TAKATA美國、日本 申請破產保護當天應收帳款餘額	麟集團於TAKATA美國、日本 申請破產保護當天應收帳款餘額	麟集團於TAKATA美國、日本 申請破產保護當天應收帳款餘額
Unit : USD
Customer	Takata 美國	Takata 日本	合計
宣告破產保護日前債權	994,551	29,580	1,024,131
其中 優先債權	513,323	0	513,323
其中 一般債權	481,228	29,580	510,808
截至7月底未收回債權	994,551	9,860	1,004,411

• 劍麟在客戶宣告破產保護日後仍維持正常出貨，並持續關注未來發展。

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TAKATA未來發展

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non-PSAN安全氣囊、 安全帶等其他產品， 2018 Q1後將由KSS完成 併購持續營運

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TAKATA
2018 Q1
KSS TAKATA
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PSAN安全氣囊相關產 品，2018 Q1後將由 TAKATA另外設立一家公 司持續營運至所有產品 EOP為止

• 2018 Q1前，劍麟出貨及收款對象仍維持為TAKATA各子公司

• 2018 Q1後，non-PSAN安全氣囊及預縮式安全帶相關產品，將與被 KSS併購的TAKATA交易(名稱不確定會不會改)；PSAN安全氣囊相關 產品則與TAKATA新設立的公司交易 (目前還在跟客戶確認那些是 。

• PSAN)

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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.