LUCKY CEMENT — Call Transcript 2021

Nov 11, 2021

Lucky Cement CorporationEarnings Call November 11, 2021

Disclaimer

This presentation is based on our audited or reviewed financial statements, which have been prepared in accordance with IFRS reporting standards. For complete details and data, please refer to the Company's financial statements.

The information provided in this presentation may contain forward-looking statements that are subject to risks and uncertainties. Actual results may differ from these forward-looking statements. This presentation makes no express or implied representation or warranty as to its accuracy or completeness and does not claim to be a complete statement of subsequent material developments with respect to the Company or related industries.

The Company assumes no responsibility in updating or revising the information in this presentation.

The Story of the Logo

The founder, Mr. Chen Liang-Chuan, started his nascent career in construction, hoping that every young person who wanted to start a family could own a house and feel warm and happy in life. Therefore, to produce high quality and reasonably priced cement for sturdy houses is Mr. Chen's lifelong ambition and goal.

Table of Contents

Market Overview

• 03 Business Sustainability
• 04 Dasheng
• Development Co., Ltd.

05Q&A

01

Overview of Cement Supply and Demand in Taiwan

0

100

200

300

400

Kg

Building Construction Licenses and Construction Commencement Total Floor Area Statistics

Source: Construction and Planning Agency, Ministry of the Interior

Table of Contents

01Market Overview

• 02 Business Performance
• 03 Business Sustainability
• 04 Dasheng
• Development Co., Ltd.
• 05Q&A

Cement Market Share

Source: Taiwan Cement Manufacturers' Association

The Company's revenue by product forthe past five years

Ye a r	2 0 1 7	%	2 0 8 1	%	2 0 9 1	%	2 0 2 0	%	J S 2 0 2 1 a n e p, -	%
C t e m e n	1, 9 3 3	5 6	1, 8 2 6	5 5	1, 8 0 5	4 8	2, 0 7 4	4 6	1, 4 2 6	4 9
C Pr du t t e m e n o c s	0 6 5	1 5	6 8 9	2 1	2 3 1, 4	3 3	6 6 9 1,	3 7	9 7 1	3 3
S M ia ls t t o ne a e r	3 5 4	6 1	3 2 8	0 1	2 8 2	8	3 2 3	7	2 3 9	9
O he t rs	6 4 1	3 1	8 8 4	1 4	0 2 4	1 1	6 4 4	0 1	2 6 9	9
To l t a	3, 3 4 4	0 0 1	3, 3 3 1	0 0 1	3, 3 2 7	0 0 1	3 0 4, 5	0 0 1	2, 9 0 5	0 0 1

P&L 2017 to 2021

f o s	\$ U i N T t n :	i l l i m o n
t e n m e	1, 0 0 0						營 業 毛 利 G P f r o s s r o	營 業 O i t p e	損 益 i t r a n g	本 O 淨 期 i t p e r a	利 N t n g e
m o c e	8 0 0							I n c o	m e	P f i t r o
n t a I t e S	6 0 0
v i d s	4 0 0
e n t e a h d	2 0 0
e i l r o	0
p s m n
o o C C	( 2 0 0 )	2 0 1	7	2 0 1	8	2 0 9 1		2 0 2 0		2 0 2	Q 2 1
	( 0 0 ) 4	2 0 1 7	%	2 0 8 1	%	2 0 9 1	%	2 0 2 0	%	2 0 2 Q 2 1	%
Re ve i l l io m	\$ ( in N T nu e ) n	3, 4	3 4 1	0 0 3, 3 3	1 1 0 0	3, 7 3 2	1 0 0	4, 5 3 0	1 0 0	2, 0 7 4	1 0 0
G ro s i l l io m	Pr f i ( in N t s o ) n	\$ T 1	2 9	4 4	1 7	2 9 9	8	1 7 7	1 6	2 8 5	1 4
O p e ( in N	in In t ra g c o m \$ T i l l io ) m n	e 1 ( 0	0 )	1 ( 3 ) ( 5 5	) ( 5 )	7 8	2	4 4 7	1 0	1 7 9	8
O p e ( in m	in Ne Pr t t ra g o i l l io ) n	f i t ( 1 0	3 )	( 3 ) ( 2 0 2	) ( 6 )	4 6	1	3 9 2	9	1 3 4	6
S E P	\$ ( N T )	( 0. 2	5 )	( 0. 4 4	)	0. 1 1		0. 9 7		0. 3 3

Balance Sheet 2017 to 2021

Unit:NT\$ million

	2 0 1 7	%	2 0 8 1	%	2 0 9 1	%	2 0 2 0	%	2 0 2 1 J 3 0 u n e	%
C t r r e n u A t s s e s	5, 1 2 1	7 1 %	4, 9 3 9	6 8 %	5, 0 8 7	6 9 %	5, 2 5 9	6 6 %	5, 0 6 0	6 3 %
P t r o p e r y, P l d t a n a n E i t q u p m e n	1, 6 4 9	2 3 %	1, 8 7 7	2 6 %	1, 1 7 2	2 3 %	2, 2 2 3	2 8 %	2, 2 4 8	2 8 %
O h A t t e r s s e s	4 6 7	6 %	4 7 8	7 %	5 3 0	7 %	5 4 5	7 %	7 1 8	9 %
T l A t t o a s s e s	7, 2 3 7	1 0 0 %	7, 2 9 3	1 0 0 %	7, 3 2 9	1 0 0 %	8, 0 2 7	1 0 0 %	8, 0 2 6	1 0 0 %
C t r r e n u L i b i l i i t a e s	1, 9 2 5	2 7 %	1, 3 6 7	2 4 %	1, 6 1 7	2 2 %	2, 1 1 5	2 7 %	2, 1 5 5	3 2 %
N t o n- c u r r e n L i b i l i i t a e s	8 8 3	1 2 %	1, 3 3 0	1 8 %	1, 3 9 1	1 9 %	1, 2 1 9	1 5 %	9 5 0	1 2 %
T l t o a L i b i l i i t a e s	2, 8 0 8	3 9 %	3, 0 6 6	2 % 4	3, 0 0 8	1 % 4	3, 3 0 7	2 % 4	3, 0 1 5	% 4 4
S h h l d ' a r e o e r s E i t q u y	4, 4 2 9	6 1 %	4, 2 2 7	5 8 %	4, 3 2 1	5 9 %	4, 6 5 7	5 8 %	4, 5 2 5	5 6 %

Consolidated Statements of Comprehensive Income

Table of Contents

01Market Overview

• 02 Business Performance
• 03 Business Sustainability
• 04 Dasheng
• Development Co., Ltd.

05Q&A

Business Sustainability

Industry Dedication

Focus on our main business

Logistics Optimization

• 1. In Q3 2021, the Company completed the refurbishment of 128 cement and stone trucks.
• 2. Purchased 40 new stone trucks, with the first sample truck being put on pilot trial in August 2021, and the whole project is expected to be completed by the end of 2022.

Channel Deployment

• 1. In January 2021, our leased Xinfu Ready-Mixed concrete Sanxia Plant was put into operation.
• 2. In March 2021, the construction permit application for our new Xinfu Ready-Mixed Concrete Shulin Plant was submitted for approval, production expected to commence in Q4, 2022.。

"The Midas Touch"

The He-Ren mine is the largest manufactured sand production plant in Taiwan, and production and development are done through direct shaft feed to protect the environment.

Enhance production process technologies

• 1. Raw material substitution
• 2. Fuel substitution
• 3. Process improvement
• 4. Lighting improvement
• 5. Fuel consumption control
• 6. Renewable Energy
• 7. Tree planting and greening to reduce carbon emissions

ESG

• • Energy ConservationGoal: 1% annual energy savings
• • Water ResourcesThe Company achieved the target of recycling more than 80% of water from the washing platform every year, and the recycling rate of water from the washing platform reached 96% in FY2020.
• • Planting and Greening11.229 hectares of greenery planted at the He Ren Mine.

Environmental ProtectionCarbon Reduction Roadmap

• • Enhance production processes and technologies to reduce energy consumption by cement production units.
• • Substitution of raw materials
• Alternative Fuels

•

• • Improve clinker quality and reduce clinker coefficient of cement
• • Development of Renewable Energy

CO2 Emission Reduction from Energy Efficiency Measures in FY2020

Re du io M t c n e a su re s	E le ic i t ty c r S in ( k W h ) av g s	E le ic i t ty c r D is ha c rg e C f f ic ie t o e n	C O 2 du io t re c n ( ) t o ns	C l s in o a g ( av ) t o ns	Cu ize d t s o m C f f ic ie t o e n s	C O du io 2 t re c n ( ) t o ns	To l ( ) t t a o ns
1. 2 Co l-m i l le d l in ing bo ds # a ar	5 0 5, 8 9 0	0. 5 0 9	2 5 7. 5	-	-	-
2. Pa ka ing Ro ha d c g om c ng e C leg ip D t to ac y eq u me n inv ir te er r a co m p re ss or	0 0 0 0 1 5,	0. 0 9 5	3. 5 4	-	-	-
C l in ke in de 3. r g r r fu b is hm t re r en	2 6 7, 3 0 0	0. 5 0 9	1 3 6. 1	-	-	-
No ha do i l s lu dg 4. n- za r us o e d w i l m ix te tu an as o re A l ive fu ls te t rn a e	-	-	-	2, 9 2 6	2. 5 5 4	3. 0 0 7, 4 7	3, 8 1 7 1 7. 5
Or ic lu dg 5. g an s e a s a n l ive fu l s te t a rn a e ou rc e	-	-	-	2, 2 0 7	2. 5 5 4	9 8 5, 7 7. 5
	8 7 8, 1 9 0	-	4 4 7. 0	5, 1 9 6	-	1 3, 2 7 0. 5 8

PowerPoint PresentationTotal 13,717.58 (tons) CO2 = equivalent to 1,143,130 tree emissions reduction

Renewable energy (solar power)

Solar power generation equipment will be installed on the other suitable locations for use at Dong'aoplant rather than Dong'aoplant and the roof of dormitories.

Current situation of the plant/additional corrugated sheets areaArea covered is about 5,365 m2

Circular Economy

Raw material preparation

Alternative raw materials:Construction waste soil, recycled granules, incineration slag, coal ash, bottom ash, waste foundry sand, inorganic sludge, calcium fluoride sludge, general fly ash, general business waste.

Alternative raw materials totaled 194,987 tons in FY2020

Clinker Formation

Alternative fuels:Organic sludge, waste oil mixture, non-hazardous oil sludge, waste fiber, waste wood.

Alternative fuels totaled 13,671 tons in FY2020

Cement productionGypsum:

Desulfurization gypsum, chemically derived gypsum, ground-granulated blastfurnace slag, fly ash.

ESG

• • Community Care and Outreach(1)Emergency assistance for villagers
• (2)Senior-friendly Canteen
• (3)Road maintenance
• (4)Community environmental cleaning
• (5)Beach cleanups

•

• • Humanities Education and Culture(1)Scholarships
• (2)Sponsorship of various school activities
• (Sports Day, archery team training)
• (3)Indigenous cultural performances outside the county(Indigenous dance)
• (4) Atayal Flying Fish Season Activities
• Care for the Indigenous CommunityIncreasing employment opportunities for indigenous people

Social Philanthropy

• • Head of Corporate Governance appointed in June 2021
• • Nominating Committee established in June 2021
• • On May 2021, the CSR Committee was renamed the Corporate Sustainability Committee and the CSR Report was renamed the Corporate Sustainability Report.
• TOP21%-35% in Corporate Governance Evaluation on 2020
• • Corporate Social Responsibility Committee established in 2017
• • Corporate Social Responsibility Report published since 2014

Social Philanthropy

ESG

Table of Contents

01Market Overview

• 03 Business Sustainability
• 04 Dasheng
• Development Co., Ltd.

05Q&A

Keelung City Daitian Temple Phase I Private Sponsored Urban Land Readjustment ProjectEstimated work progress

1	2 0 1 2	9 2 2 0 2 1 3	0 2 0 4	5	2 0 2 2 6	7
C d l t a a s r a s u r v e y i l i t t m p e m e n a o n l p a n	L d R i a n e z o n n g P j t r o e c C l i t o m p e o n D i r a w n g s b i d f t t s u m e o r i d r e v e w a n t a c c e p a n c e	A l l i f t o c a o n o l d t r e s u s a n h d l i f a n n g o b j i t o e c o n s	C d l t a a s r a d s u r v e y a n i i t t r e g s r a o n	L d a n T f r a n s e r d a n S l t t t e e m e n	C i f ic f t t e r a e o To l Re in t a zo n g C fo t o s s r Ap l ic io f t p a n o La d n Re d j t t a u s m e n	A l i i t p p c a o n f o r C i t t o n s r u c o n P i t e r m
E i d t t s m a e k o r w p r o g r e s s 2 0 1 9 / 1 2 i l l 2 0 2 1 / 1 1 t	E i d t t s m a e k w o r p r o g r e s s 2 0 2 1 / 1 2 i l l 2 0 2 2 3 / t	E i d t t s m a e k w o r p r o g r e s s 2 0 2 2 / 1 i l l 2 0 2 2 2 / t	E i d t t s m a e k w o r p r o g r e s s 2 0 2 2 / 3 i l l 2 0 2 2 / t 4	E i d t t s m a e k w o r p r o g r e s s 2 0 2 2 / 4 i l l 2 0 2 2 / 5 t	E i d t t s m a e k o r w p r o g r e s s 2 0 2 2 / 5 i l l 2 0 2 2 / 6 t	E i d t t s m a e k w o r p r o g r e s s 2 0 2 2 / 7

Keelung City Daitian Temple Phase 2 Private Sponsored Urban Land Readjustment ProjectEstimated work progress

1	2	3	2 0 2 1 4	2 0 2 0 5	6	7	8	2 0 2 2 9	1 0
Re in zo n g Pr j t o e c io t t c o ns ru c n in t t c o n ra c g, t a c c e p a nc e d a n in t m a e na nc e	C d l t a a s ra su rv ey im le t t p m e n a io la n p n	C ha f ng e o b la u r a n p n ( S ho l s i t c o e d j ) t t a u s m e n	Pr d e- a n t p o s in re zo n g la d n lu io t va a n d a n t a s s e s s m e n	C lc la io t a u n f c d t o o s s a n l lo io t a c a n d ig e s n	An no nc e m u f t e n o l lo io t a c a n l d t re su s a n ha d l in f n g o b j io t o e c ns	C d l t a a s ra d su rv ey a n is io t t re g ra n	La d n Tr fe d a ns r a n S le t t t e m e n	Ap l ic io t p a n fo r C io t t o ns ru c n Pe i t rm	C i f ic f t t e r a e o To l Re in t a zo n g C fo t o s s r Ap l ic io f t p a n o La d n Re d j t t a s m e n u
Es im d t t a e k w o r p ro g re s s 2 0 1 9 / 1 i l l 2 0 2 3 / 6 t	Es im d t t a e k w o r p ro g re s s 2 0 1 9 / 1 1 i l l 2 0 2 3 / 1 2 t	Es im d t t a e k w o r p ro g re s s 2 0 2 0 / 5 i l l 2 0 2 2 2 t / 1	Es im d t t a e k w o r p ro g re s s 2 0 2 3 / 2 1 i l l 2 0 2 3 / 6 t	Es im d t t a e k w o r p ro g re s s 2 0 2 4 / 1 i l l 2 0 2 4 / 3 t	Es im d t t a e k w o r p ro g re s s 2 0 2 4 / 3 i l l 2 0 2 4 / 4 t	Es im d t t a e k w o r p ro g re s s 2 0 2 4 / 3 i l l 2 0 2 4 / 4 t	Es im d t t a e k w o r p ro g re s s 2 0 2 4 / 5 i l l 2 0 2 6 4 / t	Es im d t t a e k w o r p ro g re s s 2 0 2 / 6 4	Es im d t t a e k w o r p ro g re s s 2 0 2 / 6 4 i l l 2 0 2 4 / 7 t

Thank you for your attentionQ & A