TECO — Interim / Quarterly Report 2020

Jun 4, 2020

TECO Electric & Machinery Co., Ltd.

==> picture [435 x 68] intentionally omitted <==

==> picture [435 x 67] intentionally omitted <==

==> picture [435 x 68] intentionally omitted <==

==> picture [435 x 68] intentionally omitted <==

==> picture [435 x 68] intentionally omitted <==

2020 First Quarter Earnings Conference

May 22, 2020

==> picture [721 x 65] intentionally omitted <==

Safe Harbor Statement

• This Presentation contains certain forward-looking statements that are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

• Except as required by law, we undertake no obligation to update any forward – looking statements, whether as a result of new information, future events or otherwise.

2

Agenda

I. 1Q20 Financial Results II. Recap of Recent Major Events

3

Statements of Comprehensive Income – 1Q20

(In NT Millions)	1Q20		4Q19	QoQ 1Q19		YoY
Operating Revenue	10,665		12,059	-11.6% 11,707		-8.9%
- Recurring Operating Revenue	10,584		12,032	-12.0% 11,619		-8.9%
- Gain(Loss) on financial assets at fair value through profit or loss Net Gross Profit Operating Profit Non-operating Income Income Before Tax Income Tax Net Income **	81 2,647 809 (171) 638 (99) 447		27 2,485 660 165 825 (168) 635	200.0% 88 6.5% 2,905 22.6% 926 -203.6% 43 -22.7% 969 -41.1% (263) -29.6% 635		-8.0% -8.9% -12.6% -497.7% -34.2% -62.4% -29.6%
EPS(NT$)	0.23		0.32	-28.1% 0.32		-28.1%

• Excluding non-controlling interest

4

Financial Highlights – 1Q20

(In NT Millions)	1Q20 4Q19 QoQ	1Q20 4Q19 QoQ	1Q19	YoY
Net sales -Recurring *	10,584	12,032 -12.0%	11,619	-8.9%
Gross Margin - Recurring *	24.2% 20.4% 380bps		24.2% -
Operating Margin - Recurring*	6.9% 5.3% 160bps		7.2%	-30bps
EPS (NT$)	0.23	0.32 -28.1%	0.32 -28.1%
ROE (%) **	3.2%	4.5% -130bps	4.6% -140bps
ROA (%) **	1.8%	2.6% -80bps	2.7% -90bps

• Excluding gain(loss) on financial assets at fair value through profit or loss

• ** Annualized number and excluding non-controlling interests

5

NT$ Billion

Recurring Operating Revenue vs. Gross Margin

==> picture [571 x 292] intentionally omitted <==

----- Start of picture text -----

14 30%
25.8%
24.6%
24.2%
24.2%
12
25%
20.4%
10
20%
8
15%
12.5
6 12.0
11.6 11.6
10.6
10%
4
5%
2
0 0%
1Q19 2Q19 3Q19 4Q19 1Q20
Recurring Operating Revenue Gross Margin
----- End of picture text -----

• Recurring Operating Revenue = Operating Revenue – financial assets at fair value through profit or loss ** Gross Margin = Recurring Gross Profit / Recurring Operating Revenue *** Recurring Gross profit excludes financial assets at fair value through profit or loss

6

Recurring Operating Profit vs. Operating Margin

NT$ Million

==> picture [590 x 236] intentionally omitted <==

----- Start of picture text -----

8.1%
1,200 9.0%
8.0%
7.2%
8.0%
1,000 6.9%
7.0%
5.3%
800 6.0%
5.0%
600
4.0%
1,000 942
400 838 3.0%
728
633
2.0%
200
1.0%
0 0.0%
1Q19 2Q19 3Q19 4Q19 1Q20
----- End of picture text -----

Recurring Operting Profit Operating Margin

• Recurring Operating Profit excludes financial assets at fair value through profit or loss ** Operating Margin = Recurring Operating Profit / Recurring Operating Revenue

7

Revenue Breakdown

==> picture [641 x 337] intentionally omitted <==

----- Start of picture text -----

In 1Q 2020, total
consolidated topline
down 8.9% YoY
Others
Others
18.7%
21.0%
Electrification
Electrification
Products
46.7% TECOM Products
TECOM 3.8% 50.8%
2.3%
1Q20 Energy & 1Q19
Engineering
Energy & 7.7%
Engineering
10.3%
Home
Home Appliance
Automation & 11.8% Automation
Appliance
12.2% Intelligent & Intelligent
7.5% 7.2%
----- End of picture text -----

8

Sales on Major Business Lines

NT$ Billions

==> picture [625 x 275] intentionally omitted <==

----- Start of picture text -----

8
6.1
6.0 5.9 5.9
6
5.0
4
2 1.4 1.5 1.3 1.2 1.3 1.1 1.3 1.6 1.1
0.8 0.9 0.8 0.9 0.8 0.9
0
Eletrification product Automation & Home Appliance Energy & Engineering
Intelligent System
1Q19 2Q19 3Q19 4Q19 1Q20
----- End of picture text -----

9

Balance Sheets – March 2020

( In NT$ 1,000)	Amount % Mar. 2020	Amount % Mar. 2020	Amount % Dec. 2019	Amount % Dec. 2019	Mar. 2019年	Mar. 2019年
					Amount %
Cash & Cash Equivalent	23,759,597	23%	19,111,371	19%	17,519,287	18%
Receivable	9,941,792 10%		10,711,774 11% 9,853,585 10% 99,094,404 100% 1,857,637 2% 11,954,866 12% 6,673,954 7% 1,000,000 1% 37,389,614 38% 61,704,790 62% -10.0% 3.21 1.57 2.17 4.59		10,705,587 11%
Inventories	9,832,914	10%	9,853,585		11,492,629 12%
Total Assets	102,023,782 100%				98,873,049 100%
Short-term Borrowings	6,083,959	6%	1,857,637		1,947,764 2%
Payable	12,508,412 12%				11,304,481 11%
Long-term Borrowings	7,116,574	7%	6,673,954		7,286,112 7%
Corporate Bond Payable	1,000,000 1%				4,000,000 4%
Total Liabilities	42,647,561	42%	37,389,614		38,335,980 39%
Equities					60,537,069 61%
					4.47
					2.88
					2.49
					1.73
					-5.2%

11

Agenda

I. 1Q20 Financial Results II. Recap of Recent Major Events

11

Recent Major Events

-Corporate Governance

Ranked in the top 5% of corporate governance evaluations for six consecutive years, and only 12 of all listed companies have this honor. -Important Resolution of 2020 AGM

• Amend the company's articles of incorporation to reduce the total number of board seats to 7~ 11 seats, with at least 3 independent directors, to continuously enhance the level of corporate governance.

• Issue cash dividend of NT$0.99 per share and payout ratio reaches 60% with historical high in the past five years.

==> picture [611 x 137] intentionally omitted <==

----- Start of picture text -----

NT$
Earnings per Share Cash Dividend per Share
2.50
50.0% 50.0% 55.1% 56.6% 60.0%
2.00 1.76
1.60 1.56 1.59 1.65
1.50
0.99
1.00 0.80 0.88 0.86 0.9
0.50
0.00
2015 2016 2017 2018 2019
----- End of picture text -----

13

Http//www.teco.com.tw ir@teco.com.tw

==> picture [721 x 65] intentionally omitted <==