TPK — Interim / Quarterly Report 2016

Apr 1, 2016

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TPK Proprietary & Copyright © All Rights Reserved

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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1Q16 Result Summary

2016年第一季營運簡報

NT$	Revenues	Net Profits/Loss	EPS
1Q16	21.2 bn	52 mn	0.15

• 1Q/2016 revenues below original forecast, primarily attributed to weaker demand in smart phone and tablet, especially from China.

• Margin also below plan due to lower utilization and unfavorable product mix change.

• 2016 will be back-end loaded, fueled by various new product

• introduction in 2H.

• OLED shall be a game changer for the entire display and touch

• industry.

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1Q16 Profit & Loss

2016年第一季損益表

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季損益表
Profit & Loss	QoQ 1Q15 YoY 1Q16 4Q15
(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	(38.3%) 28,949 (26.6%) (27,054) (57.2%) 1,895 (47.7%) (1,805) (1,499) (306) 90 (1,192) (28) (6) (53) (1,104) (1,102) 95 (1,014) (3.06) 1,633 2,443 2,172 92 1,268 52 1,016 0.15 2.12 52 67 528 (330) (76) (265) (615) (182) (119) (117) (232) 21,239 34,438 (20,248) (32,123) 991 2,314 (1,348) (1,964) (1,128) (1,745) (219) (218) (357) 350 280
Margin: GM OM NM OpExp	6.5% 0.3% (3.5%) (6.2%) 0.2% 2.9% (6.3%) (5.7%) 4.7% 6.7% (1.7%) 1.0%

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Quarterly Sales

季營收

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Gross Profits

營業毛利

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Operating Profits

營業利益

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Sales by Form Factors

營收結構

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1Q16 Balance Sheet

資產負債表

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Balance Sheet	2016/3/31 2015/12/31
(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	15,165 16,393 5,222 16,787 6,752 12,270 8,051 8,737 39,276 61,034 376 326 47,265 49,282 91,616 115,228 33,722 46,740 9,579 14,956 49,338 68,417 6,519 7,850 2,457 4,829 60,732 83,701 3,466 3,516 412 423 30,884 31,527
Ratio Analysis: Quick Ratio Current Ratio ROE (YTD Annualized) Net Debt to Equity	0.63 0.76 0.80 0.89 0.7% (52.3%) 0.89 1.36

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Note: PP&E includes prepayments.

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FOR IMMEDIATE RELEASE

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

Taipei, Taiwan, April 28[th] , 2016 – TPK Holding Co., Ltd (TWSE: 3673) (“TPK” or the “Company”) today announced 2016 first quarter operating results. Company reported net profit of NT$52 million, or earnings per share of NT$0.15.

1Q2016 Operating Results

Consolidated revenues in 1Q16 were NT$21,239 million, down 26.6% versus same period last year and down 38.3% quarter-on-quarter. The sequential decline in revenues was primarily attributable to slower seasonality in first quarter and inventory adjustment for smartphone. Gross profit amounted to NT$991 million and gross margin was 4.7% on the backdrop of lower capacity utilization and unfavorable product mix. Within the cost-of-goods-sold items, raw material costs were NT$15.2 billion, down from NT$25.5 billion in the previous quarter, and labor cost was NT$1.9 billion, down from NT$2.8 billion in 4Q15, due to seasonal decline in top-line in the first quarter of 2016. Depreciation expenses amounted to NT$1.9 billion for the first quarter.

Operating expenses totaled to NT$1.3 billion, down 31.4% quarter-on-quarter from NT$2.0 billion in the fourth quarter of 2015, reflecting the company’s continued efforts on effective expense control. As of March 31 2016, total number of employees was 31,357, down from 37,478 in the previous quarter.

Net interest expenses for the quarter totaled NT$182 million. Company recorded NT$117 million in foreign exchange losses, mainly caused by RMB fluctuation. During the first quarter of 2016, TPK purchased notional amount of US$40 million of its convertible bond and realized gain of NT$175 million from cancellation on the bonds. Net income for the first quarter of 2016 was NT$52 million, or earnings per share of NT$0.15. EBITDA for 1Q16 amounted to NT$2.4 billion.

Balance Sheet and Cash flow

Capital expenditures during the first quarter amounted to NT$1.2 billion on accrual basis. As of March 31, 2016, Company had cash or cash equivalent of NT$15.2 billion. Total bank borrowings totaled NT$36.2 billion, of which NT$33.8 billion was short-term bank loans and NT$2.5 billion was

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long-term bank loans. TPK has NT$6.5 billion of convertible bond outstanding which is due in 2020. Total unused bank facilities amount to NT$62.1 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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1Q16 PROFIT & LOSS

1Q16 PROFIT & LOSS
Profit & Loss	QoQ 1Q15 YoY 1Q16 4Q15
(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	(38.3%) 28,949 (26.6%) (27,054) (57.2%) 1,895 (47.7%) (1,805) (1,499) (306) 90 (1,192) (28) (6) (53) (1,104) (1,102) 95 (1,014) (3.06) 1,633 2,443 2,172 92 1,268 52 1,016 0.15 2.12 52 67 528 (330) (76) (265) (615) (182) (119) (117) (232) 21,239 34,438 (20,248) (32,123) 991 2,314 (1,348) (1,964) (1,128) (1,745) (219) (218) (357) 350 280
Margin: GM OM NM Op Exp	6.5% 0.3% (3.5%) (6.2%) 0.2% 2.9% (6.3%) (5.7%) 4.7% 6.7% (1.7%) 1.0%

1Q16 BALANCE SHEET

1Q16 BALANCE SHEET
Balance Sheet	2016/3/31 2015/12/31
(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	15,165 16,393 5,222 16,787 6,752 12,270 8,051 8,737 39,276 61,034 376 326 47,265 49,282 91,616 115,228 33,722 46,740 9,579 14,956 49,338 68,417 6,519 7,850 2,457 4,829 60,732 83,701 3,466 3,516 412 423 30,884 31,527
Ratio Analysis: Quick Ratio Current Ratio ROE (YTD Annualized) Net Debt to Equity	0.63 0.76 0.80 0.89 0.7% (52.3%) 0.89 1.36

Note: PP&E includes prepayments.

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