NPC — Interim / Quarterly Report 2016

Sep 21, 2016

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Nan Ya Plastics 2016 1H Operations & Performance

Aug. 2016

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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 7th largest private company in Taiwan in terms of market capitalization

• 2015 consolidated annual revenue of NT$ 299.8 billion with 4 major businesses: sales breakdown - 16% in plastics, 27% in chemicals, 31% in electronic materials, and 19% in fibers

� Market capitalization of NT$ 494 billion(Aug. 2016) 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 fibers

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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 2015 decreased 7.9% YoY due to:

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

• Revenue in 2016 1H decreased 17.2% YoY due to :

Mainly affected from sales price dropped down driven by lower oil price

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Financial Highlights Pre-tax Income

(NT$ billion)

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• 26.6% YoY increase in 2015 pre-tax earnings due to:

• Main contribution from sales volume increase of chemicals

• Equity income increased by NT$4.1bn YoY :

  • (1) FPCC +NT$8.9bn (2) Nanya Tech -NT$4.3bn

• 2016 1H pre-tax income decreased by 36.7% YoY due to ：

• Core business profit decreased by 51.7% YoY mainly from chemicals annual maintenance and catalyst replacement

• Equity income decreased by NT$1.0bn YoY :

  • (1) FPCC +NT$2.4bn (2) Nanya Tech -NT$3.2bn

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Financial Highlights Revenue Breakdown

2015 Net Sales NT$ 299.8 billion

2015 Sales Breakdown by Geography

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Others
Mainland
7.1%
Plastics China
Polyester 16.0% 35.7%
19.1% Overseas American
73.9% 14.3%
Domestic
26.1%
Other Asia
Chemicals 16.4%
26.9%
Electronics Other
30.9% Others America
6.0% 1.5%
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• Revenue ratio of chemicals decreased 11% YoY in 2015 worsening price mainly affected by global oil 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 48% of total overseas in 2015

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Financial Highlights Revenue Breakdown by Product Segment

2015 1H Net Sales NT$ 161.5 billion

2016 1H Net Sales NT$ 133.7 billion

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Others
7.9%
Plastics
Polyester 15.1%
18.3%
Chemicals
29.0%
Electronics
29.7%
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• Revenue in 2016 1H decreased 17.2% YoY

• Chemicals production and sales volumes decrease due to annual maintenance and catalyst replacement

• Prices of products generally went down driven by lower oil price

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Financial Highlights Operating Profits Breakdown by Product Segment

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Operating Profits Operating Margins
20.0%
200.0%
47.5% 16.8%
15.0%
150.0%
12.3%
11.6%
8.0% 28.4% 18.7% 14.1% 10.0% 9.7%
10.0% 8.5%
100.0% 34.4%
12.8%
6.6%
10.7% 5.8% 15.5% 23.1% 6.0%
18.5%
10.1% 4.4%
11.6% 5.0% 4.0%
50.0% 19.2% 19.2% 8.2% 3.5%
52.4% 3.5% 1.8%
70.2% 4.0%
2.9%
38.2% 36.5% 43.0%
16.1% 0.0% 1.6% 1.6%
0.0% -4.3% 0.4%
-0.5%
-57.8%
-5.0%
-50.0% -5.6%
-10.0%
-100.0%
2Q15 3Q15 4Q16 1Q16 2Q16
2Q15 3Q15 4Q15 1Q16 2Q16
Plastics Chemicals
Plastics Chemicals Electronics
Electronics Polyester
Polyester Others
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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	25,200 KYD		7,200 KYD	02/2018	29%
PCB
Kun Shan	16,332,000 SQFT		4,548,000 SQFT	09/2016	28%
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