NPC — Interim / Quarterly Report 2018

Jun 26, 2018

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Nan Ya Plastics 2018 1Q Operations & Performance

June 2018

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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

• 2017 consolidated annual revenue of NT$ 306.1 billion with 4 major businesses: sales breakdown - 15% in plastics, 29% in chemicals, 36% in electronic materials, and 19% in fibers

 Market capitalization of NT$ 657 billion(June 2018) Manufacturing plant numbers: 53 in Taiwan, 41 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 #7 manufacturer of polyester

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Overview History

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Nanya BPA in
Printed
Ningbo,
Polyester Nan Ya Nanya Circuit 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 )

• Revenue in 2017 increased 11.2% YoY due to:

Demand for chemicals and electronic materials increased, the sales volume and price raised up

• Revenue in 2018 1Q increased 13.1% YoY due to :

Higher demand for chemicals, prices improved driven by the rising of oil price

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Financial Highlights Pre-tax Income

(NT$ billion)

 16.6% YoY increase in 2017 pre-tax income due to:

1. Profit from chemicals and electronic materials increased significantly

2. Equity income increased by NT$4.0bn YoY :

3. (1) Nanya Tech +NT$5.1bn (2) MLP -NT$0.9bn

 2018 Q1 pre-tax income increased by 21.8% YoY due to ：

1. Core business income increased by 46% YoY, mainly due to sales volume and price increased of chemicals

2. Equity income increased by NT$0.5bn YoY :

3. (1) Nanya Tech +NT$1.1bn (2)FPCC –NT$1.0bn

4. (3) FHC +NT$0.3bn

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Financial Highlights Revenue Breakdown

2017 Net Sales NT$ 306.1 billion

2017 Sales Breakdown by Geography

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Others EU Others
2.0% 2.2% 3.2%
Other Asia
Plastics
12.8% Mainland
14.6%
Electronics China
36.2% 38.5%
Overseas
America 70.0%
13.3%
Polyester
18.5%
Domestic
30.0%
Chemicals
28.7%
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• Revenue of chemicals and electronic materials increased due to the strong demand, the sales volume and price raised up

• 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 55% of total overseas in 2017

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Financial Highlights Revenue Breakdown by Product Segment

2017 1Q Net Sales NT$ 72.7 billion

2018 1Q Net Sales NT$ 82.2 billion

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Others Others
1.5% Plastics 1.5%
Plastics
15.2% 13.4% Electronics
Electronics
34.4%
35.4%
Polyester
20.1%
Polyester
19.3%
Chemicals Chemicals
28.6% 30.5%
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• Revenue in 2018 1Q increased 13.1% YoY

• Prices and sales volume of chemicals rose, mainly due to increased demand and oil price raised up

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Financial Highlights Operating Profits Breakdown by Product Segment

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Operating Profits Operating Margins
20.0%
120.0%
18.4%
0.4% 2.8% 18.0% 17.0%
100.0% 4.6% 4.0% 2.4% 4.7% 8.0% 16.0% 16.6%
14.0%
14.0%
80.0% 36.0% 31.8%
42.2% 48.4% 13.9% 11.9% 12.9%
54.5%
12.0%
60.0% 10.2%
9.6%
10.0%
8.7%
8.3%
8.1%
7.5%
40.0% 8.0%
47.7% 51.0%
41.6%
26.4% 41.2%
6.0% 7.0% 5.3%
4.4%
20.0%
11.3% 16.1% 11.1% 7.5% 9.8% 4.0% 2.8% 2.4%
1.7%
0.0% 2.0% 1.3%
-1.7% -0.6%
-1.0%
0.0%
-20.0%
1Q17 2Q17 3Q17 4Q17 1Q18
1Q17 2Q17 3Q17 4Q17 1Q18
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		9,000 KYD	11/2019	28%
Aluminium Laminated Foil
Nantong		－	13,536 KM2	06/2019	100%
Copper clad laminate
Huizhou	12,000 KSH		13,200 KSH	07/2020	110%
Glass Fabrics cloth
Huizhou		－	102,000 KM	07/2020	100%
EG
USA	360,000 MT		828,000 MT	12/2019	230%
Composite PVC Door Frame
USA		－	8,600 MT	12/2018	100%
Pepa Synthetic Paper
Taiwan	65,000 MT		22,000 MT	10/2018	34%
Copper Foil
Taiwan	36,000 MT		18,000 MT	07/2019	50%
PET Film
Taiwan	108,000 MT		13,000 MT	02/2020	12%
Polyester Release Film
Taiwan	144,000	KM2	156,000 KM2	06/2019	108%

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THE END