TPK — Interim / Quarterly Report 2016

Nov 15, 2016

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Disclaimer Statement

This presentation and release may contain ‘forward-looking statements’ which may include projections on future results of operations, financial condition and business prospects based on our own information and other sources.

The actual results of operations, financial condition and business prospects may differ from those explicitly or implicitly indicated in those forward-looking statements for a variety of reasons, including but not limited to market demand, price fluctuations, competition, supply chain issues, global economic conditions, exchange rate fluctuation and other risks and factors beyond TPK’s controls.

The forward-looking statements in this presentation, if any, only reflect the current view of TPK Holding Co., Ltd. as of the date of its release. TPK undertakes no obligation to update those forward-looking statements for events or circumstances that occur subsequently.

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Disclosure Notice

公告原則

• All financial numbers are prepared in accordance with IFRS which is approved by regulators in Taiwan

• All financial numbers are unaudited

• 本公司財務報表係依照臺灣主管機關認可之國際財務報 導準則編製

• 所有財務數字均為本公司自結數

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3Q16 Result Summary 2016年第三季營運簡報

NT$	Revenues	Net Profits	EPS
3Q16	26.2 bn	684 mn	1.97

• 3Q sequential revenue growth was primarily attributed to new product ramp-ups and seasonality for 2H.

• Operating profit driven by higher utilization, favorable product mix and effective operating cost control.

• New product launches and seasonal demand shall continue in 4Q subject to end demand.

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3Q16 Profit & Loss

2016年第三季損益表

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季損益表
Profit & Loss	QoQ 3Q15 YoY 3Q16 2Q16	2
(NT$ million) Revenues COGS Gross Profits Operating Expenses SG&A R&D Operating Profits Non-Op Inc/(Exp) Int Inc/(Exp) FX Gain/(Loss) Invest Inc/(Loss) Others Earnings Before Tax Income Tax Net Income (Parent) EPS (Parent) EBITDA	53.2% 34,235 (23.6%) (45,508) (11,272) (6,408) (5,855) (553) (17,680) (1,068) (104) (153) (50) (761) (18,748) (709) (19,390) (55.15) n.m. 1.97 (7.28) 3,444 (259) 990 (2,675) (299) 161 684 (2,499) (52) 60 56 69 (58) 131 (2,743) (284) 68 (230) (192) 26,168 17,085 (23,654) (18,673) 2,514 (1,588) (1,240) (1,155) (1,015) (944) (226) (211) 1,274
Margin: GM OM NM Op Exp	(32.9%) (51.6%) (56.6%) (18.7%) 4.9% (16.1%) 2.6% (14.6%) (4.7%) (6.8%) 9.6% (9.3%)

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Quarterly Sales

季營收

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NT$ mm
50,000
40,000
34,235 34,438
28,949
30,000
26,168
23,741
21,239
20,000
17,085
10,000
0
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
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Sales by Form Factors

營收結構

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＜ 7" 7" ≦ X ＜ 11" 11" ≦ X ＜ 16" X ≧ 16" Others
100%
11%
17%
17%
80% 26% 25%
30% 33%
21%
16%
24%
60%
18% 19%
29% 24%
40%
61% 61%
51% 49% 50%
20%
34%
30%
0%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
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3Q16 Balance Sheet

2016年第三季資產負債表

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alance Sheet 資產負債表
Balance Sheet	2016/9/30 2016/6/30	5
(NT$ million) Cash Equivalents Debt Inv with no active market Receivables Inventories Current Assets Long-term Investments Property, Plant and Equipment Total Assets ST Loans Payables Current Liabilities Convertible Bonds LT Loans Total Liabilities Common Shares Non-Controlling Interest Total Shareholder's Equities	19,688 18,022 1,961 2,065 9,331 7,050 7,843 6,598 41,864 36,462 547 503 42,895 45,771 89,956 87,515 32,961 33,935 12,190 8,216 51,578 48,043 6,349 6,489 1,346 1,955 61,626 58,910 3,466 3,466 233 514 28,331 28,605
Ratio Analysis: Quick Ratio Current Ratio ROE (YTD Annualized) Net Debt to Equity	0.66 0.62 0.81 0.76 (7.9%) (16.5%) 0.74 0.85

Note: PP&E includes prepayments.

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FOR IMMEDIATE RELEASE

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TPK REPORTS UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2016

Taipei, Taiwan, November 1[st] , 2016 – TPK Holding Co., Ltd (TWSE: 3673) (“TPK” or the “Company”) today announced 2016 third quarter operating results. Company reported net profit of NT$684 million, or earnings per share of NT$1.97 for the quarter.

3Q2016 Operating Results

Consolidated revenues in 3Q16 were NT$26,168 million, up 53.2% quarter-on-quarter and down 23.6% versus same period last year. The sequential growth in revenues was primarily attributable to new product ramp-ups and seasonality for 2H. Gross profit amounted to NT$2,514 million and gross margin reached 9.6% on the backdrop of higher utilization and favorable product mix.

Within the cost-of-goods-sold items, raw material cost was NT$18.7 billion, up from NT$13.8 billion in the previous quarter, and labor cost was NT$2.0 billion, up from NT$1.7 billion in 2Q16, driven primarily by increased business activities in 3Q16. Depreciation expenses amounted to NT$2.0 billion in the third quarter.

Despite the strong sequential growth in 3Q revenues, operating expenses totaled to NT$1.2 billion, flat quarter-on-quarter, reflecting company’s success in maintaining an effective expense control. Net interest expenses for the quarter totaled NT$230 million and foreign exchange loss of NT$52 million was recorded for the quarter. Due to damages caused by Typhoon Meranti from September 15, 2016, TPK accrued loss of approximately NT$254 million in 3Q16. Insurance claims for the incident are in progress. As of September 30, total number of employees was 27,490, down from 29,737 in the previous quarter.

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Balance Sheet and Cash flow

Capital expenditures during the third quarter amounted to NT$538 million on accrual basis, the lowest quarter so far in 2016. As of September 30, 2016, Company had cash or cash equivalent of NT$19.7 billion. Total bank borrowings totaled NT$32.0 billion, of which NT$30.6 billion was short-term bank loans and NT$1.3 billion was long-term bank loans. TPK has NT$2.3 billion of short-term RMB bond, and NT$6.3 billion of convertible bond due in 2020, outstanding. Total unused bank facilities amount to NT$40.6 billion.

Note: All financial numbers are prepared in accordance with IFRS which is approved by regulators in Taiwan.

IR Contact: Freddie Liu, Chief Financial Officer Kevin Wang, Director Tel: +886.2.7727.1196

ir@tpk.com

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ABOUT TPK

TPK was founded solely for touch solutions in 2003. We are the inventor of transparent glass-based projected capacitive (P-Cap) touch solutions and the first company for mass production. Since 2Q 2010, TPK has expanded its touch product offering into PET-film based solutions. Our production sites are located in Xiamen City of Fujian Province, China. TPK is completely and vertically integrated for one-stop shopping for touch solutions.

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3Q16 PROFIT & LOSS

Profit & Loss	QoQ 3Q15 YoY 3Q16 2Q16
(NT$ million) Revenues COGS Gross Profits Operating Expenses SG&A R&D Operating Profits Non-Op Inc/(Exp) Int Inc/(Exp) FX Gain/(Loss) Invest Inc/(Loss) Others Earnings Before Tax Income Tax Net Income (Parent) EPS (Parent) EBITDA	53.2% 34,235 (23.6%) (45,508) (11,272) (6,408) (5,855) (553) (17,680) (1,068) (104) (153) (50) (761) (18,748) (709) (19,390) (55.15) n.m. (23,654) (18,673) 2,514 (1,588) (1,240) (1,155) (1,015) (944) (226) (211) 1,274 26,168 17,085 (2,743) (284) 68 (230) (192) (52) 60 56 69 (58) 131 990 (2,675) (299) 161 684 (2,499) 1.97 (7.28) 3,444 (259)
Margin: GM OM NM Op Exp	(32.9%) (51.6%) (56.6%) (18.7%) 9.6% (9.3%) 4.9% (16.1%) 2.6% (14.6%) (4.7%) (6.8%)

3Q16 BALANCE SHEET

3Q16 BALANCE SHEET
Balance Sheet	2016/9/30 2016/6/30
(NT$ million) Cash Equivalents Debt Inv with no active market Receivables Inventories Current Assets Long-term Investments Property, Plant and Equipment Total Assets ST Loans Payables Current Liabilities Convertible Bonds LT Loans Total Liabilities Common Shares Non-Controlling Interest Total Shareholder's Equities	19,688 18,022 1,961 2,065 9,331 7,050 7,843 6,598 41,864 36,462 547 503 42,895 45,771 89,956 87,515 32,961 33,935 12,190 8,216 51,578 48,043 6,349 6,489 1,346 1,955 61,626 58,910 3,466 3,466 233 514 28,331 28,605
Ratio Analysis: Quick Ratio Current Ratio ROE (YTD Annualized) Net Debt to Equity	0.66 0.62 0.81 0.76 (7.9%) (16.5%) 0.74 0.85

Note: PP&E includes prepayments.

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