NPC — Annual Report 2020

Mar 30, 2020

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Nan Ya Plastics Year 2019 Operations & Performance

Mar. 2020

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Agenda

• Overview

• Financial Highlights

• Capacity Expansion Plan

• Q & A

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Overview Highlights

• Market Capitalization NT$ 540.0 billion (Feb. 2020)

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

• NT$ 286.3 billion*

• (Y2019, not include Nanya Tech. Co.)

• Sales breakdown

Sales

Revenue

• -15% in plastics

• -25% in chemicals

• -39% in electronics

• -19% in polyesters

Market Capitalization

• Total number of

• Plants 102

Worldwide

• -59 in Taiwan

Distribution

• -36 in China

• -7 in US

• Number of Employees 31,899

(The number of Plants and Employees includes the consolidated financial reporting company)

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Overview

Leading market positions for capacity

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1 2 3 4
 Plastics processing  Copper foil  Copper clad  EG
 Epoxy resin laminate
 Glass yarn
 Glass fabrics
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※ Polyester products ranked 8[th] .

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Overview History

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Nan Ya USA Chemicals Plastics Processing &America Co. Nanya Tech Co.  Texas  Louisiana 1958 1979 1995 1999  South Carolina Electronics Investing in  Xiamen  Guangzhou Polyesters & Nan Ya PCB Co. China  Nantong  Huizhou 1969 1986 1996  Kunshan  Ningbo

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Overview Major Businesses

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15%

Plastics

PVC Sheeting, PVC Rigid China & Others 29% Film, PU Leather, PVC USA 11% Rigid Pipe & Fittings, Window & Door Frames, Films, Engineering and PVC Taiwan 60% Compounds, PP Synthetic Paper

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25%

Chemicals

EG, BPA, 1,4BG, China 10% USA 5% Plasticizer, PA, 2EH, INA, MA Taiwan 85%

Sales breakdown in 2019(Unaudited number)

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Electronics 39%

Glass Yarn, Glass Fabrics, Epoxy Resin, Copper Foil, China 58% Copper Clad Laminate, Printed Circuit Board Taiwan 42%

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19%

Polyesters

China & Others 5% Polyester Staple Fiber, PET Resin, Filament, USA 49% PET Film Taiwan 46%

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Financial Highlights Consolidated Revenue (IFRS)

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(NT$ billion )
333.1
400
286.3
300
200
77.7
71.6
100
0
2018 2019 4Q18 4Q19
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 Revenue in 2019 decreased 14.0% YoY due to:

Under the circumstance that the market supply increased or remained steady, the product price facing strict competition, causing the revenue to decrease. Revenue of chemical products like EG and BPA dropped the most, and polyester also had a decline.

 Revenue in 2019 4Q decreased 7.8% YoY due to :

Global economic growth slowed down and the feed stock price kept dropping leading the decline in revenue of chemical and polyester products

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Financial Highlights Pre-tax Income

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(NT$ billion )
61.53
80
60
26.69
40
5.78 5.02
20
0
2018 2019 4Q18 4Q19
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 2019 pre-tax income decreased 56.6% YoY due to ：

1. The decrease came mainly from chemical product (EG and BPA the most). Electronic materials, polyester products and plastics products declined as well

2. Equity income decreased NT$14.3bn YoY :

3. (1) FPCC -NT$5.4bn (2) Nanya Tech -NT$8.7bn

 2019 4Q pre-tax income decreased 13.1% YoY due to ：

1. Operating profit decreased 13.1% YoY mainly due to the significant decline in profit of chemical product.

2. Equity income decreased NT$0.4bn YoY :

3. (1) FPCC +NT$2.6bn (2) Nanya Tech -NT$2.0bn

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Financial Highlights Revenue Breakdown

2019 Sales Breakdown* by Geography

2019 Net Sales NT$ 286.3 billion*

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Others 1.5%
Plastics
14.9%
Polyesters
19.3%
Chemicals
25.2%
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Others 3.7%
EU 2.2%
Other Aisa
13.3%
China
Electronics 39.0%
39.2%
America
13.0%
Domestic
28.8%
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• Under the circumstance that the market supply increased or remained steady, the product price facing strict competition, causing the revenue to decrease. Revenue of chemical products dropped the most, and polyester also had a decline.

• Revenue in the next few years is still mainly driven by chemicals product and electronic materials

• Mainland China remains the most important market, accounting for 55% of total overseas in 2019

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Financial Highlights Revenue Breakdown by Product Segment

2018 4Q Net Sales NT$ 77.7 billion

2019 4Q Net Sales NT$ 71.6 billion*

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Others
Others 1.4%
2.0%
Plastics Plastics
14.3% 14.9%
Electronics
35.5%
Electronics
41.8%
Polyesters
Polyesters
17.8%
20.5%
Chemicals Chemicals
27.7% 24.1%
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 Revenue in 2019 4Q decreased 7.8% YoY

• Global economic growth slowed down and the feed stock price kept dropping leading the decline in revenue of chemical and polyester products

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Financial Highlights Operating Profits Breakdown by Product Segment

Operating Margins

Operating Profits -100.0% -50.0% 0.0% 50.0% 100.0% 150.0% 200.0% 4Q18 1Q19 2Q19 3Q19 4Q19* 49.3% 27.0% 59.6% 95.4% 76.3% 28.5% 17.2% -17.4% -55.4% -19.9% 16.6% 14.8% 22.4% 16.5% 12.3% 13.2% 25.2% 36.0% 33.5% 21.5% -7.6% 15.8% -0.6% 10.0% 9.8% Electronics Chemicals Polyester Plastics Others -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%			Operating Margins
		6.8% 2.5% 4.9% 6.4% 8.5% 5.1% 1.9% 4.0% 2.4% 3.5% 2.4% 3.2% 4.6% 5.6% 7.6% 6.2% 6.7%
		-2.3% -6.3% -3.8%
	4Q18 1Q19 2Q19 3Q19 4Q19* Electronics Chemicals Polyester Plastics

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Business Overview Capacity Expansion Plan

Area	Product	Unit	Annual Capacity	Annual Capacity	Annual Capacity	Completion Date
			**Current **	**Expansion **	Increase%
Taiwan	PPSynthetic Paper	KMT	65	22	34	2020/2
	Long Fiber-Reinforced Thermoplastics	KMT	0	5	100	2021/1
	Copper Foil	KMT	34	18	53	2021/1
	Polyester Film	KMT	94	13	14	2020/11
	Polyester Release Film (4thcoatingmachine )	KM2	240,000	120,000	50	2020/6
	Polyester Release Film (5th set)	KM2	240,000	123,600	52	2021/1
Mainland China	PVC Leather	KYD	34,200	9,000	26	2020/12
	Aluminum LaminatedFoil	KM2	0	13,536	100	2020/6
	PVCDecorativeFilm	KYD	24,000	19,200	80	2021/9
	CopperCladLaminate	KSH	12,000	13,200	110	2022/12
	Prepreg	KM	24,000	28,800	120	2022/12
	GlassFabrics	KM	0	102,000	100	2022/10
	PCB	KSF	17,304	271	2	2021/2
	BPA	KMT	130	130	100	2021/10
USA	FlexiblePVC Sheeting	KMT	0	14	100	2021/11
	EG	KMT	360	828	230	2020/7

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THE END

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