NPC — Annual Report 2016

Mar 28, 2017

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Nan Ya Plastics Year 2016 Operations & Performance

Mar. 2017

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Agenda

• Overview

• Financial Highlights

• Capacity Expansion Plan

• • Q & A

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Overview Highlights

• Member of the Formosa Plastics Group (FPG)

• The 8th largest private company in Taiwan in terms of market capitalization

• 2016 consolidated annual revenue of NT$ 275.3 billion with 4 major businesses: sales breakdown - 17% in plastics, 26% in chemicals, 35% in electronic materials, and 19% in fibers

� Market capitalization of NT$ 592 billion(Feb. 2017) Manufacturing plant numbers: 49 in Taiwan, 42 in China, and 5 in the USA.

• Leading market positions

• World’s #1 manufacturer of secondary plastics

• World’s #2 manufacturer of copper clad laminates

• World’s #4 manufacturer of Mono ethylene glycol

• World’s #6 manufacturer of polyester

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Overview History

Incorporation PU leather 1974 1971 1969 1958 Polyester staple Textured	BOPP film 1976 1981 PVC	Glass fiber yarn, cloth and POY Nan Ya America China Investment (Plastics) 1984 1985 1989 1994 PCB 1995 Nanya 6th Naphtha Cracker Project 1998 2003 Started Vietnam Investment 2000 China China 2004 2006 China and Vietnam polyester plant commissioned 2009 Glass Fiber 2010 CCL in Hui Zhou, China startup 2013 China BPA in Ningbo, China startup 2015	Glass fiber yarn, cloth and POY Nan Ya America China Investment (Plastics) 1984 1985 1989 1994 PCB 1995 Nanya 6th Naphtha Cracker Project 1998 2003 Started Vietnam Investment 2000 China China 2004 2006 China and Vietnam polyester plant commissioned 2009 Glass Fiber 2010 CCL in Hui Zhou, China startup 2013 China BPA in Ningbo, China startup 2015
First PVC sheet yarn	Rigid	established & CCL Technology Investment Investment Cloth-3 in Investment
production	film	established (Electronics) (Polyester) China startup (Chemicals)

• 1950’s - 1960’s : Production of PVC secondary plastics in Taiwan

• 1970’s :Began manufacturing polyester fiber, expanding scale and varieties of plastics processing products

� 1980’s :Entered electronics business, growth in polyester and plastics

• 1990’s : Plastics and polyester facilities in the US commissioned, manufacturing of plastics initiated in China, construction of specialty chemicals in No. 6 Naphtha Cracker Project completed, and subsidiary for DRAM manufacturing started production

• 2000’s : Production facilities for electronic materials in China commissioned, and started mass production of polyester in China and Vietnam

• 2013’s : Chemicals facility in China commissioned, and started mass production of plasticizer

• 2015’s : Started mass production of BPA in China

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Financial Highlights Consolidated Revenue (IFRS)

(NT$ billion )

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� Revenue in 2016 decreased 8.2% YoY due to:

Sales price of chemicals and polyesters fell , mainly affected by global oil average price dropped

• Revenue in 2016 4Q increased 8.6% YoY due to :

Increasing of products prices driven by the rising of oil and materials prices

• *Unaudited number

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Financial Highlights Pre-tax Income

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(NT$ billion)
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• 23.4% YoY increase in 2016 pre-tax income due to:

• Sales volume increase of electronics, gain on disposal of investment shares

• Equity income increased by NT$8.0bn YoY :

  • (1) FPCC +NT$6.5bn

    • (2) Nanya Tech +NT$1.5bn

• 2016 4Q pre-tax income increased by 374.1% YoY due to ：

• Sales prices increase of chemicals and electronics, gain on disposal of investment shares

• Equity income increased by NT$8.6bn YoY :

  • (1) FPCC +NT$2.3bn (2) Nanya Tech +NT$6.0bn

• *unaudited number

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Financial Highlights Revenue Breakdown

2016 Net Sales NT$ 275.3 billion*

2016 Sales Breakdown* by Geography

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Mainland
China
37.9%
Overseas
71.4%
America
13.6%
Domestic
28.6%
Other Asia
13.8%
Other
Others America
4.9% 1.2%
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• Revenue ratio of chemicals decreased 12% YoY in 2016 due to sales price fell affected by global oil average price dropped

• Main revenue contribution in the next few years is still driven by chemicals and electronic materials

• Mainland China remains the most important market, accounting for 53% of total overseas in 2016

* Unaudited number

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Financial Highlights Revenue Breakdown by Product Segment

2015 4Q Net Sales NT$ 66.9 billion

2016 4Q Net Sales NT$ 72.7 billion*

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• Revenue in 2016 4Q increased 8.6% YoY

• Prices of chemicals and electronics increased because of oil and feedstock price raised up

• Revenue of others decreased due to engineering services in Vietnam have been completed

• Unaudited number

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Financial Highlights Operating Profits Breakdown by Product Segment

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Operating Profits Operating Margins
14.0%
200.0% 12.3%
11.6%
12.0%
47.5%
9.7% 9.7%
150.0% 10.0% 9.2%
33.9%
8.0%
1.2% 6.8%
18.7% 14.1%
6.0%
100.0% 34.4% 6.0%
40.8% 4.4% 6.4%
4.0%
5.8% 15.5% 23.1% 12.1%
4.0%
10.1% 11.6% 22.2% 4.0% 2.2%
1.8%
50.0% 19.2% 8.2% 46.3% 2.0%
70.2%
36.5% 43.0% 46.7% 0.4% 1.6% 1.6%
0.0%
20.1% 0.4%
0.0%
-14.9%
-2.0%
-8.4%
-2.0%
-57.8%
-4.0%
-50.0%
-5.6%
-6.0%
-8.0%
-100.0%
4Q16 1Q16 2Q16 3Q16 4Q16
4Q15 1Q16 2Q16 3Q16 4Q16
Plastics Chemicals
Plastics Chemicals Electronics
Electronics Polyester
Polyester Others
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• Unaudited

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Business Overview Ca acit Ex ansion Plan p y p

Main Products	Capacity		Expansion	Completion	Capacity
	(p.a.)		(p.a.)	Date	Increase
					(%)
PVC Leather
Nantong	32,400 KYD		7,200 KYD	08/2018	22%
EG
USA	360,000	MT	828,000 MT	07/2018	230%
Composite PVC Door	Frame
USA		－	4,300 MT	05/2017	100%

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THE END