YFY — Interim / Quarterly Report 2021

Nov 12, 2021

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YFY

3Q21 Earnings Results

2021/11/12

Disclaimer

This presentation is prepared according to the reviewed financial statements by CPA and the financial numbers hereby are based on IFRS, please refer to the published financial statements for full content.

The presentation may contain forward-looking information and may differ materially from the actual results. YFY does not warranty as to the accuracy or completeness of such information and nor assume any undertaking further information becomes available or in light of changing circumstances. You shall not place undue reliance on any forward-looking information.

The presentation and its contents may not be reproduced to a third party without the prior written consent of YFY.

3Q21 Financial Results

(NTD $M )	3Q21	Y/Y	3Q21YTD	Y/Y
Sales	19,786	+5.3%	63,651	+21.6%
Gross Profit	3,810	-0.5%	14,869	+44.2%
Operating Profit	1,348	-10.4%	7,251	98.4%
Profit Attributable to Owners	1,301	-41.3%	4,546	+10.4%
EPS (NTD)	0.78		2.74
OP Margin	6.8%	-1.2%	13.5%	+4.4%

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None-Operating Income/Expenses

(NTD $M)	3Q21	3Q21YTD
Finance Costs	-142	-404
Interest Income	27	82
Share of Profit of Associates	190	742
FX Gains/Losses	-96	-266
Dividend Income	872	909
Other Income	132	424
Total	984	1,487

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Segment Information

The YFY Group classifies its products and services into five segments in accordance with the business characteristics, as follows：

(1.) Forest, Pulp and Fine Paper Business Groups

Including pulp, cultural papers, packaging paper, specialty paper and cardboard.

(2.) Containerboard and Packaging Business Groups

Including industrial cardboard containers, colored cases and food containers.

(3.) Consumer Product Business Groups

Household products including tissue paper, napkins, detersives and cosmetics (4.) Specialty Materials Business Group

Products of Specialty materials.

(5.) Others Business

Products other than paper including RFID, packaging designs and other services.

(The performance of segments is measured at operating profits of the business. Revenue and profit between segments have been adjusted; these adjustments include the elimination of intrasegment transactions to reconcile the segment information with that reported for the Group as a whole.

Revenue Trend By Operating Segments

(NTD: $M)

Others Specialty Materials Consumer Products Containerboard& Packaing Forest, Pulp&Paper

Others Specialty Materials Consumer Products Containerboard& Packaing Forest, Pulp&Paper

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Y/Y Y/Y
63,651
13% +19.3%
19,786 8,309
18,789 52,326
11%
+121.7%
2,557 13% -0.9% 7,005
2,577 6,967
1,271 2,079 11% +78.6% 3,159 7,232 11% -2.9%
2,440 2,223 11% -9.1% 7,444
43% +18.0%
27,641
8,624 43%
8,725 -1.3% 23,423
21%
+18.8%
3,776 4,303 22% +14.4% 11,333 13,464
3Q20 3Q21 3Q20YTD 3Q21YTD
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Realized Investment Income to Increase Profitability

NT$ M	3Q21 3Q20 3Q21YTD 3Q20YTD	3Q21 3Q20 3Q21YTD 3Q20YTD	3Q21 3Q20 3Q21YTD 3Q20YTD	3Q21 3Q20 3Q21YTD 3Q20YTD
Forest, Pulp & Paper	13	-209	586	-376
Containerboard & Packaging	98	694	1,614	1,529
Consumer Products	189	361	972	1,182
Specialty Materials	1,111	597	4,044	1,153
Others	-63	61	35	166
Non-operating Incomes
The share of profit of associates accounts Eink and others	190	134	743	434
Dividend income from SinoPac and others	873	85	909	756
Total	1,348	1,723	5,902	4,844

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Performance Summary 3Q2021

• The consolidated revenue of YFY Inc., was 19.786 billion in 3Q21. Due to the pandemic in the Eastern China and Southeastern Asia, and the Energy Consumption and Intensity Dual Control Policy in China, some of our subsidiaries operation was impact. Therefore, the 3Q21 revenue declined compared with 3Q20. However, resulted from the imbalance of supply and demand which has driven the increase cost of goods then pushed the selling price hike, the revenue increased by 5.3% Y/Y. The operating profit income in the 3Q21 was 1.348 billion and the operating profit margin has decreased by 1.2ppt Y/Y caused by the rising costs of raw materials, coal, and logistics. The non-operating income was benefit by recording higher amount from the share of profit of associates accounts resulted from the better performance of invested businesses and dividend income from SinoPac and other investments. Therefore, the consolidated net profit after-tax attributable to the parent company of 3Q21 was 1.301 billion, and the Company recorded NT$0.78 EPS.

3Q21YTD

• Even though the revenues from some of the invested businesses were impacted by the pandemic, the investment portfolios of YFY Inc. were diversified. The consolidated revenue of the 3Q21 YTD was 63.651 billion attributed by most of the businesses were benefited from stable market demand as well as the increase of shipment volumes and prices. With an annual increase of 21.6%, it has reached record high consolidated revenue of the same period. Benefit from Forest Pulp and Paper business group turned profitable and the profit growth of Containerboard & Packaging in Taiwan and Vietnam, as well as the substantial growth in the medical gloves for Specialty Materials business group, the consolidated operating profit of the first three quarters was 7.251 billion which was nearly double the annual growth.

• In terms of non-operating income, the Company recorded the share of profit of associates accounts from E Ink Holdings Inc. and other invested companies of 743 million plus the dividend income from SinoPac and other invested companies of 909 million. If we exclude the one-off profits from disposal of land assets in the prior year from comparison, the non-operating income growth Y/Y. The net profit after-tax attributable to the parent company in the 3Q21YTD was 4.546billion, which raised 10.4% Y/Y. The EPS of 3Q21YTD was NT$2.74 that has became the new record high in the same period.

Outlook

• The peak season for paper industries is in 4Q21; however, the rapid changes in the global epidemic situation makes it hard to predict the operational risks of supply chain in raw materials, labor supply and logistics. On top of that, ESG issues have become much more important for the market since climate change has always been an urgent challenge. YFY Inc., has been dedicated in circular economy in the business operations, hence the Company will continually develop biogas and other renewable energy associated with SRF to achieve energy transformation in the daily operation. We will ensure the sustainable development for the invested businesses and continually deliver reasonable shareholders values for investors.

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Thank you