NPC — Interim / Quarterly Report 2017

Sep 4, 2017

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Nan Ya Plastics 2017 1H Operations & Performance

Aug. 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$ 591 billion(Aug. 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

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Nanya BPA in
Printed
Ningbo,
Nan Ya Nanya Circuit
Polyester China
staple Nan Ya USA America Technology Board Production
1969 1979 1989 1995 1997 2015
1958 1971 1986 1996 1999 2003 2013
Incorporation Textured PCB Plastics in EG Electronic Plasticizer
First PVC sheet & CCL China Startup Production Materials in in Ningbo,
yarn Kunshan,China China
production
Production Production
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• 1958 : Company was founded, Starting production of PVC secondary plastics in Taiwan

• 1969 : Began manufacturing polyester fiber

• 1979 : Nan Ya Plastics Corp., USA established in U.S.A., starting production of plastic products

• 1986 : Entered electronics business, production of PCB & CCL

• 1989 : Nan Ya Plastics Corp., America established in U.S.A, production of polyester products

• 1995 : Invested Nanya Technology Corp. starting production of DRAM

• 1996 - 1998 : Starting production of plastics Products in Xiamen, Guangzhou, Nantong, China

• 1997 : Subsidiary Nanya Printed Circuit Board Corp. established

• 1999 : Starting production of EG

• 2003 : Starting production of Electronic Materials in Kunshan, China

• 2013 - 2015 : Starting production of Plasticizer & BPA in Ningbo, 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 2017 1H increased 9.8% YoY due to :

Electronic materials increased demand, and chemicals products prices improved driven by the rising of oil price

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Financial Highlights Pre-tax Income

(NT$ billion)

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� 23.4% YoY increase in 2016 pre-tax income due to:

1. Sales volume increase of electronics, gain on disposal of investment shares

2. Equity income increased by NT$8.0bn YoY :

   • (1) FPCC +NT$6.5bn (2) Nanya Tech +NT$1.5bn

3. 2017 1H pre-tax income increased by 47.1% YoY due to ：

4. Core business income increased by 62.3% YoY mainly from higher prices of chemicals and electronics

5. Equity income increased by NT$0.8bn YoY :

   • (1) Nanya Tech +NT$2.5bn (2) MLP -NT$0.5bn

   • (3) FPCC -NT$0.4bn (4) FIC -NT$0.3bn

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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%
Domestic
28.6%
America
13.6%
Others
Other Asia
EU
3.8%
13.8%
2.3%
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• Revenue 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

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Financial Highlights Revenue Breakdown by Product Segment

2016 1H Net Sales NT$ 133.7 billion

2017 1H Net Sales NT$ 146.8 billion

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• Revenue in 2017 1H increased 9.8% YoY

• Prices of chemicals and electronics increased mainly from oil price raised up and increased demand for electronic products

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

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Financial Highlights Operating Profits Breakdown by Product Segment

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Operating Profits Operating Margins
33.9% 20.0%
120.0%
17.0%
14.1% 4.5% 0.4%
100.0% 4.6% 4.0%
15.0%
40.9% 12.3%
13.9%
80.0%
23.1% 12.1% 42.2%
54.5% 9.7% 11.9%
10.0%
8.6% 8.3%
60.0% 11.6% 22.2% 8.7%
8.2% 6.6%
7.0%
44.1%
40.0% 5.0% 6.0% 6.3%
41.6% 2.8%
26.4% 2.2%
1.8%
46.7%
43.0%
20.0% 1.3%
1.6% 1.7%
19.9% 0.0%
16.1%
11.3%
0.0%
-14.9% -1.0% -2.0%
-9.5%
-5.0%
-20.0%
2Q16 3Q16 4Q16 1Q17 2Q17
2Q16 3Q16 4Q16 1Q17 2Q17
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	32,400 KYD		7,200 KYD	08/2018	22%
Aluminium Laminated Foil
Nantong		－	12,456 KM2	03/2019	100%
EG
USA	360,000	MT	828,000 MT	12/2019	230%
Composite PVC Door Frame
USA		－	4,300 MT	02/2018	100%
Pepa Synthetic Paper
Taiwan	65,000	MT	22,000 MT	06/2018	34%
Copper Foil
Taiwan	90,000	MT	18,000 MT	06/2019	20%

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THE END