TSRC — Investor Presentation 2021

Nov 9, 2021

2021 TSRC – Global Specialty Polymers 2[nd] Investor Conference, Nov. 9[th, ] 2021

Disclaimer

The information presented and referred herein are based upon the information obtained internally and externally from our company. Forward-looking operational results, financial condition and business results might be different from those information expressly or impliedly presented herein due to various factors, including but not limited to market risks, supply chains, market demand and our upcoming high-quality products. We undertake no obligation to publicly update or revise any statements regarding those information presented and referred herein in the event of any further changes or updates to the information presented herein.

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2021 TSRC Confidential and Proprietary

AGENDA

• 1. Introduction Thomas Lin, Deputy Spokesperson

2. 2021 Business Performance and

• Joseph Chai, CEO

Key Initiatives

• 3. 2021 YTD Sep Financial Edward Wang, CFO

Performance

4. Summary

• Joseph Chai, CEO

5. Q&A

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2021 TSRC Confidential and Proprietary

Introduction Thomas Lin, Deputy Spokesperson [1]

2021Business Performance & Key Initiatives [2] Joseph Chai, CEO

2021Business Performance & Key Initiatives

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Strongest Financial Performance over the Past Decade

Confronting Challenges and Disruptions with Tenacity

Building for Future Growth and Sustainability

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2021 TSRC Confidential and Proprietary

Strongest Financial Performance Over the Past Decade

• Grew volume and profitability leveraging on strong demand recovery, supply disruptions, and healthy unit spread

• Solid growth across 3 main regions in 2021

• Effective execution and timely response to market and customer needs

• JVs in India and mainland China delivered outstanding financial results

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2021 TSRC Confidential and Proprietary

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SRD is on a Strong Earning Cycle

• Healthy NR-BD spread near historic high

• Balance BD supply, despite some volatilities, keeping BD pricing at “acceptable” range

• Synthetic rubber’s demand and supply projected to be relatively balanced

• No excess supply of natural rubber is expected in the near term

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2021 TSRC Confidential and Proprietary

Confronting Challenges with Tenacity

• Supply chain disruptions and escalating freight cost

• BCP (Business Continuity Plan) with multiple production lines across different regions

• Advance planning on logistic and lead time

• Partnership approach in customer engagement

• COVID-19 pandemic and increased competition posed significant impact on Vietnam

• Early planning and actions enable production continuity without shutdown

• Expedite product qualification at multiple global brands

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2021 TSRC Confidential and Proprietary

Confronting Challenges with Tenacity

• Energy and emission regulatory control in mainland China

• Back up support from other production sites

• Stay agile on turnaround schedule and inventory planning

• Longer term measures to improve energy efficiency and back-up

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2021 TSRC Confidential and Proprietary

Building for Future Growth and Sustainability

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Strengthen TSRC global technology
capability with establishment of new
Global R&D Center in Houston, USA
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Implement TSRC Sustainability
Initiatives in ESG
(Environment, Social, Governance)
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2021 TSRC Confidential and Proprietary

TSRC Global R&D Center in Houston, USA

• Advanced R&D capability and talents for new materials and formulations

• Proximity to US/EU customers to accelerate global application development

• Integrated commercialization model in combination with Americas regional office

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2021 TSRC Confidential and Proprietary

Sustainability has always been TSRC’s DNA

• For TSRC, sustainability is not a project, it is an evolution of our DNA

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Double Waste Recycling %

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Recycle Friendly TPE Material

Achieved 2025 GHG emission reduction goal ahead

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Education Program “Chemistry in Daily Life”

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Sustainability has always been TSRC’s DNA

• Evolve and adapt to today’s ESG context

• Dedicated effort and focus team underway to implement the ESG initiatives

• Target to disclose and share TSRC’s ESG goals and implementation plan with our stakeholders in 1Q2022

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2021 TSRC Confidential and Proprietary

YTD Sep 2021 Financial Performance [3] Edward Wang, CFO

3Q21 Financial Results

• Quarterly revenue and profit declined due to macro headwinds, such as Delta variant outbreak in mainland China/Southeast Asia and automotive supply chain disruption, while industry demand-supply remains favorable compared to last year.

• Disposal of land in Kaohsiung resulted in gain of NT$909M. Excluding land disposal, 3Q21 net income and EPS would be NT$533M and NT$0.65 per share, respectively.

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In NT$M 3Q21 2Q21 3Q20 QoQ YoY
Revenue 7,673 8,521 5,607 (10%) 37%
Gross Profit 1,125 1,978 764 (43%) 47%
Operating Profit 423 1,247 238 (66%) 78%
Non-Operating 1,274 257 (379) 396% 436%
Income before Tax 1,697 1,504 (141) 13% 1,304%
Net income 1,442 1,002 (231) 44% 723%
EPS (NT$) 1.75 1.21 (0.28)
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2021 TSRC Confidential and Proprietary

3Q21 Revenue by Geography

• Decline in revenue reflected lower sales volume, especially in Asia, due to mainland China softened SBR demand and Southeast Asia Delta variant outbreak. Lockdown measures in Vietnam and competition also restricted sales for Advanced Shoe Materials.

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8,521
7,673
803
791
1,227 Others
5,607 1,293
567 Europe
781
Americas
6,291
5,420
Asia
4,117
3Q20 2Q21 3Q21
Amount in NT$M
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2021 TSRC Confidential and Proprietary

3Q21 Major Equity Investment

• ISRPL continued benefiting from demand recovery and India government’s stimulus plan since 2H20.

• Performance for ARL-TSRC remained stable along with mainland China’s demand recovery.

• APED faced declining profit given narrowing margin amid surging coal price.

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ISRPL ARL-TSRC APED
243
219
40 45 44
26
21
38
(8)
3Q20 2Q21 3Q21
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Amount in NT$M

Note: numbers shown as TSRC’s investment income of each investee.

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2021 TSRC Confidential and Proprietary

YTD 2021 Financial Results

• Leveraging favorable industry dynamics including demand recovery, supply constrain and healthy NR-BD gap, YTD profitability grew significantly.

• Strong performance from equity investment companies, especially ISRPL.

• Excluding land disposal gain, YTD September EPS would be NT$2.95 per share.

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In NT$M YTD Sep’21 YTD Sep’20 YoY
Revenue 24,410 17,637 38%
Gross Profit 5,108 2,140 139%
Operating Profit 2,967 540 450%
Non-Operating 1,719 (449) 483%
Income before Tax 4,687 91 5,070%
Net income 3,340 (289) 1,254%
EPS (NT$) 4.05 (0.35)
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2021 TSRC Confidential and Proprietary

Leveraging Favorable Industry Dynamics

• Despite a jump in BD price in July-Aug’21, NR-BD gap remained in the positive territory, providing supports to over synthetic rubber demand.

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US$/MT
2,000 1,000
1,800
800
1,600
600
1,400
400
1,200
1,000 200
800
0
600
(200)
400
(400)
200
0 (600)
Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21
NR-BD price gap (RHS) ICIS BD CFR NEA (LHS)
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Summary Joseph Chai, CEO [4]

Summary

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2 Solid Business Execution

3 Key Initiatives for Future Growth

1 2021 YTD Sep Business Performance

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Strongest financial performance over the past decade

Effective execution in capturing values leveraging on favorable market factors

Key Initiatives to support future growth and continued transformation

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Q&A

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THANK YOU

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