LUCKY CEMENT — Earnings Release 2019

Dec 26, 2019

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Lucky Cement Corporation

Earnings Conference 2019/12/26

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Disclaimer

The contents of this presentation are based on the financial statements reviewed or audited by the accountants. The financial statements are prepared in accordance with IFRS. Please refer to the financial statements of Lucky Cement Co., (the Company) for the complete contents and data.

The forward-looking statements contained in this presentation are subject to risks and uncertainties and actual results may be different. This presentation is not expressly or implicitly expressed or warranted to be correct and complete, nor does it represent a complete discussion of the Company's subsequent or consequential significant developments. The Company is not responsible for the updating and revising of any forward-looking statements.

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A nda ge

Company Profiles Products & Circular Economy Market Performance Review CSR

Future Development Q&A

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Lo o Stor g y

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Mr. Chen Liang-Chuan, the founder started his business in housing construction. He hopes that every young person who wants to get married could have a house, and their life could feel warm and happy. Therefore, the life's goal of Mr. Chen Liang-Chuan is to produce cement with high quality and reasonable price to build a house.

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Com an Profiles p y

• Stock Code : 1108

• Company Name : Lucky Cement Corporation

• Date of Establishment : May 7, 1974

• Listed Date : June 6, 1990

• ：

• Paid-in Capital NT$4,047,380,490

• Chairman：Mr. Chen Liang-Chuan

• Head Office : 15F, 237 Songjiang Rd., Taipei, Taiwan

• • Plants：Dongao Plant, Puxin Plant, Horen Plant

• Employees：409 Head Count

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Com an Milestone p y

• 1974 Lucky Cement Co., established

• 1981 Dongao Plant started to operate

• 1990 Listed on TWSE

• 1992 Merged Puxin Plant

• 1996 Launch Slag Powder product in market

• 2000 Started Circular Economy

• 2008 Horen plant Completed phase 2 expansion

• 2008 ISO9001:2008 Certified

• 2017 ISO9001:2015 Certified

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Subsidiaries

Fuyu Development Company

Luckicon Ready-mixed Concrete Factory Co., Ltd

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Lucky Cement Corp., 7 ~~Japan~~

Dasheng Enterprise Co., Ltd.

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Luckyship Marine ~~Co., Ltd~~

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Production Plants

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Dongao Plant	Puxin Plant	Horen Plant
Clinker & Cement	Cement & SlagPowder	Limestone,& Aggregate
Clinker 2M ton / Year	Grinding1.4M Ton / Year	6.2M Ton / Year

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Service Offices

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Cement Sale % (108.1~11)
North：71.6%(Tappei, Taoyuan, Yilan) Taipei
31.0%
Taoyuan
38.0% Yilan
2.6%
Taichung Hualien
14.6 %
12.2 %
Kaohsiung
1.6 %
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Products & Circular Econom y

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Cement: Portland I & II

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limestone Stone Aggregates

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Slag Powder

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Quicklime

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Circular Economy : Replace fuel and raw materials

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Product & Industry Relationship

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Horen Plant
Limestone
Construction
Clay
Dongau Plant
Silica Infrastructure
Cement
Raw Mill Clinker
Pyrite
Cement
Circular
Economy Alternative material or fuel
Stone Concrete
Slag Powder Puxin Plant Luckicon Ready-Mixed
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Sales Revenue Proportion

Periods from Jan to Nov, 2019

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Circular Stone
Economy 22%
7%
Quicklime
Cement
2%
66%
Slag
Powder
3%
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~~Resource: Sales Department~~

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Cement Supply & Demand

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Million Ton 2019 Jan~Oct domestic cement demand YoY 4.24%
domestic supply YoY 5.35%，Imported cement supply YoY 0.12%
20
Porduction
16.8
15.8 16.6 Consumption
14.6
15 13.4
12.6 12.1
12.3 12.0 12.2
11.7
10.8 10.9 10.7
10.2 10.2
10 9.2 9.3
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 Jan~Oct
Year
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Resource : Taiwan Cement Manufacturers’ Association

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Average Cement Consumption

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kg/person
1,400
1,332
● 1993 is the highest per person
consumption 1,332 kg
1,200
● 2017 is the lowest perperson
consumption 432kg
1,000
800
600 531 516 524 536
496
523 435 432 453
400
200
0
1977 1993 2011 2012 2013 2014 2015 2016 2017 2018
Year
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The Statistics of Building License ~~and Construction License~~

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2019 Jan~Oct Building Permit YoY 9.98%
45.00
39.76
38.63
40.00
34.15 33.98
35.00 32.88 32.60
31.34
29.88 29.92
28.69
30.00 26.89 26.24 26.26
25.29 25.35
23.22
25.00 22.48
20.82
20.00
15.00
10.00
5.00
-
2011 2012 2013 2014 2015 2016 2017 2018 2019
Jan~Oct
Building License Construction License
million m2
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Resource : Construction and Planning Agency, Ministry of the Interior

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The Statistics of Building License ~~Floor Area~~

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Unit: m2
35,000,000 40.00
29,918,386
35.40% 35.00
30,000,000
27,203,643
30.00
25,000,000
25.00
20,000,000
21.75%
20.00
15,000,000 17.78%
15.00
10,000,000
9.98% 5,861,325 10.00
4,700,104
4,976,621 4,631,396
5,000,000 3,420,480 3,860,395 5.00%
0 0.00%
Total MetroTaipei TaoYuan TaiChung
2019 Jan~Oct 2018 Jan~Oct
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	Year	Taipei	TaoYuan	TaiChung
Area Sale %	2019 Jan~Oct	31.0%	38.0%	14.6%
	2018	29.7%	36.4%	15.4%

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Resource : Construction and Planning Agency, Ministry of the Interior

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Cement Market Share

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Lucky Imported
30%
25.24% 2011.5.30 ～ 2022.2.19
25% Twiwan impose an anti-damping tax
91.58% on cement import from China
21.29%
20%
20.35%
19.74%
19.58%
18.42%
15% cement damping
from China
14.00%
11.42% 11.26% 11.72%
12.34%
11.84%
10%
9.65% 9.51% 9.57% 9.68%
8.72% 8.75%
8.16%
7.51% 7.35% 7.34% 8.46% 7.72%
5%
0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Jan~Oct
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Com an Cement Sale Trend p y

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Unit:10,000 Ton
140.0
120.0 111.6
99.2
89.1
100.0 87.2
2019 expected 88..3
(YoY 1.26 %)
80.0
79.8
60.0
40.0
20.0
0.0
2015 2016 2017 2018 2019 Jan~Oct
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Source : Lucky Cement - Sale Department

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Com an Stone Sale Trend p y

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2019 Jan~Nov Stone sale YoY 11.87%
North(Keelong、Taipei Port) Import Stone YoY -36.63%
450
422
400
Unit: 10,000 Ton
350
310
300
250
180
200
2019 expect 130
150 119 (YoY 9.24 % )
100 118
50
0
2015 2016 2017 2018 2019 Jan~Oct
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Source : Lucky Cement - Sale Department

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Company Circular Disposal Volumes Trend

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Unit : 10,000 Ton
12.0
11.3
9.6
10.0
9.4
8.0
6.7
6.0 6.0
4.0
2.0
0.0
2015 2016 2017 2018 2019 Jan~Oct
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Circular Revenue Sale vs Total ~~Revenue %~~

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12%
10%
10%
8%
7%
6% 7%
6%
5%
4%
3%
2%
2%
2%
0%
2012 2013 2014 2015 2016 2017 2018 2019 Jan~Oct
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Source : Lucky Cement - Sale Department

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O eratin Performance p g

			Operating Performance	Operating Performance	Operating Performance	Operating Performance	Operating Performance	Operating Performance	Operating Performance
Consolidate PnL	(400) (200) 0 200 400 600 800 1,000		Currency : Million NTD
		(400) (200) 0 200 400 600 800 1,000	單位:新台幣百萬元 2014 2015 2016 2017 2018 2019 Q1~Q3 Gross Profit Operating Profit(Loss) Net Income(Loss) Total Comprehensive income(Loss)
				2014	2015	2016	2017	2018	2019 Q1~Q3
	Revenue			5,099	5,021	4,251	3,434	3,331	2,660
	Gross Profit			739	906	662	129	47	186
	Operating Profit(Loss)			441	624	426	(100)	(155)	20
	Net Income(Loss)			367	463	315	(103)	(202)	(1)
	Total Comprehensive income(Loss)			379	463	304	(129)	(197)	40

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O eratin Performance p g

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Currency : Million NTD
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100
80
Gross Profit
60
40
20
0
(20)
2019 Q1 2019 Q2 2019 Q3
(40)
(60)
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	2019 Q1	2019 Q2	2019 Q3
Revenue	834	901	925
GrossProfit	27	70	89
Operating Profit(Loss)	(26)	15	32
NetIncome(Loss)	(30)	14	15
Total Comprehensive income(Loss)	(13)	33	20

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O eratin Performance p g

Consolidated Balance Sheet	Currency : Million NTD 2016 % 2017 % 2018 % 2019 Sep 30 %
	Current Assets 5,361 69% 5,121 71% 4,939 68% 5,051 68%
	Property, Building & Equipment 1,900 25% 1,649 23% 1,877 26% 1,750 24% Other Assets 492 6% 467 6% 478 7% 596 8%
	Total Assets 7,753 100% 7,237 100% 7,293 100% 7,397 100%
	Current Liability 2,605 34% 1,925 27% 1,736 24% 1,932 26% Non-Current Liability 346 4% 883 12% 1,330 18% 1,198 16%
	Total Liability 2,951 38% 2,808 39% 3,066 42% 3,130 42%
	Equity 4,802 62% 4,429 61% 4,227 58% 4,267 58%

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CSR

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Employee
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Society
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Circular
Economy
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Environment
Protection
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Value
Chain
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Cor orate Sustainabilit - Cor orate Governance p y p rank top 20% among Taiwan public listing companies.

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CSR

1. The Company has fair salary system, employee benefits policies, labor safety and health system, and implements the concept ,"respect for life and pursuit Zero disaster ", to create a harmonious labor relations.

2. ISO45001 Certified on 2019/8/26

3. Various staff education and training, enhance staff skills, and fulfill human resource development

4. Diverse complaints mechanism ensure labor rights.

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CSR

1. Assist local resident and native people in employment

2. Provide Lucky cement scholarship and sponsor a variety of school activities

3. Emergency assistance for villagers 4. Volunteer for community services including road maintenance and beach clean

4. Assist community building activities

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CSR

Appreciation of recognition from our Sponsored people

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CSR

1. Greening in plants

2. Improve air pollution Prevention by replacing old equipment

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清水
貯水池
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1. Implement energy-saving policies by upgrading production equipment.

2. 4 Use recycling water in production process and carwash.

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CSR

Suppliers： We work with suppliers to improve corporate social responsibility, promote sustainable development of the environment, improve labor rights, safety and health, to safeguard basic human rights.

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Customers：

With professional services and excellent product quality, we establish customer-oriented quality system to pursue a win-win goal for customers and the Company. Customer Service Satisfaction is 93.73 % in 2018.

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Future Develo ment p

Optimize Logistic

Upgrade cement & stone transporting
vehicles to enhance dispatching
capacity.

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Future Develo ment p

Rearrange Facilities

Rearrange grinding
plant and ready
mixed plants to
optimally utilize
assets and serve
customers.

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Future Develo ment p

The Midas Touch

With improvement highway system and
foreseeable market demand, Horen plant
will boom its productivity to create more
profits.

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Future Develo ment p

Circular Economy

Cement industry is the
heart of circular
economy. Through 1400℃
of high temperature and
other characteristics,
the production process
can reduce Toxic gas
(such as dioxin). It
will be helpful to
reduced  Greenhouse
effect.

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Future Develo ment p

Activate Assets

The Puxin plant was established in 1992 in YangMay county with a land lot about 43,000 m2. it serves cement and concrete customers surrounding TaoYuan. With YangMay city developing for the past decades, resident & commercial buildings dominate city development. Company plans to relocate grinding and concrete plants. The land lot of Puxin plant will be rezoned for real estate development.

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Land Development – DaGanLin Project

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~~Land Development~~

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Phase 1, , area 4.04
hectare, infrastructure
development was
completed in 2018.
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Land Development

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Phase II, area 13.47 hectare, is on grading & reclaiming stage. Soil erosion work is 80% complete.

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