2018 2 nd Quarter Results July 24, 2018 2012 ~2017 Top 30 of Excellence in CSR Award FROM Taiwan's CommonWealth Magazine 2015 ~2018 Top 5% in the Corporate Governance Evaluation from TWSE 2017 Earned 2017 TCSA "Corporate Sustainability Report Awards-Gold Award" 2013 ~2015 Earned A++ rating in Information Disclosure Evaluation from TWSE
Disclaimer Except for historical information contained herein, the matters set forth in this presentation are forward-looking statements that are subject to significant risks and uncertainties and actual results may differ materially from those contained in any forward-looking statements. The forward-looking statements in this release reflect the current belief of Coretronic as of the date of this release and Coretronic undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date.
Agenda 2018 2 nd Quarter Financial Results (Franck Ho) Visual Solutions Business Report (SY Chen) Energy Saving Business Report (Sarah Lin) Q & A (Franck Ho)
4 Statement of Comprehensive Income (Consolidated) - QoQ Amount: NT$ Million Except Per Share Data 2Q'18 1Q'18 QoQ 2Q'17 YoY Net Sales 13,946 100% 12,375 100% 12.7% 11,932 100% 16.9% Cost of Goods Sold (11,409) (81.8%) (10,393) (84.0%) (9.8%) (9,881) (82.8%) (15.5%) Gross Profit 2,538 18.2% 1,982 16.0% 28.0% 2,051 17.2% 23.7% Operating Expenses (1,996) (14.3%) (1,822) (14.7%) (9.5%) (1,770) (14.8%) (12.8%) Operating Income 542 3.9% 160 1.3% 238.7% 281 2.4% 92.6% Non-operating Income, Net 156 1.1% 145 1.2% 7.9% 99 0.8% 58.1% Income Before Tax 698 5.0% 305 2.5% 129.1% 380 3.2% 83.6% Net Income 482 3.5% 203 1.6% 137.4% 243 2.0% 98.1% Shareholders of the Parent Company 455 3.3% 193 1.6% 135.3% 260 2.2% 75.1% Minority Interests 27 0.2% 10 0.1% 181.5% (17) (0.1%) 260.3% Basic EPS (NT$) (a) 1.04 0.45 0.60 EBITDA 934 6.7% 545 4.4% 71.5% 651 5.5% 43.5% Prepared by Coretronic on a consolidated basis (a) Basic EPS was calculated based on the total weighted average outstanding shares of each quarter (434m shares in 2Q'18, 1Q'18 and 2Q'17)
5 Statement of Comprehensive Income (Consolidated) - YoY Amount: NT$ Million Except Per Share Data 1H'18 1H'17 YoY Net Sales 26,321 100% 24,157 100% 9.0% Cost of Goods Sold (21,801) (82.8%) (20,149) (83.4%) (8.2%) Gross Profit 4,520 17.2% 4,008 16.6% 12.8% Operating Expenses (3,818) (14.5%) (3,467) (14.4%) (10.1%) Operating Income 702 2.7% 541 2.2% 29.7% Non-operating Income, Net 301 1.1% 183 0.8% 64.2% Income Before Tax 1,003 3.8% 724 3.0% 38.4% Net Income 685 2.6% 482 2.0% 42.2% Shareholders of the Parent Company 649 2.5% 537 2.2% 20.8% Minority Interests 36 0.1% (55) (0.2%) 165.5% Basic EPS (NT$) (a) 1.49 1.24 EBITDA 1,479 5.6% 1,263 5.2% 17.1% Prepared by Coretronic on a consolidated basis (a) Basic EPS was calculated based on the total weighted average outstanding shares (434m shares in 1H'18 and 1H'17)
6 Balance Sheet Highlight (Consolidated) Amount: NT$ Million 2Q'18 1Q'18 QoQ 2Q'17 Cash and Cash Equivalents 18,386 17,028 8.0% 15,790 Notes & Accounts Receivable, Net (including related) 13,521 12,702 6.4% 12,652 Accounts Receivable Sold 0 0-0 Inventory 7,143 8,186 (12.7%) 7,160 Short Term Debt (a) 7,576 6,970 8.7% 6,481 Long Term Debt 376 418 (10.0%) 24 Equity 23,380 24,083 (2.9%) 21,888 Total Assets 48,905 47,783 2.3% 45,425 Inventory Turnover (Days) (b) 61 71 66 Debt to Assets 52% 50% 52% Return on Equity (C) 8% 4% 5% Net Worth Per Share (NT$) (d) 49.1 50.9 46.0 Prepared by Coretronic on a consolidated basis (a) Short term debt = short term bank loan + current portion of long term loan (b) Calculated by dividing the average inventory into the annualized cost of goods sold during such period, then multiplying by 365 days (c) Calculated by dividing the average shareholders' equity of parent company into the annualized net income during such period (d) Based on the outstanding shares of the balance sheet date: 2Q'18(434m shares), 1Q'18(434m shares), 2Q'17(434m shares)
7 Consolidated Sales Breakdown (By Revenue) 11% 18% 7% EMS BLU/MIB 28% 22% 14% ODM Business Visual Solutions Optoma Young Optics Others 2Q 18 Consolidated Sales : NT$14 Billion 8% 8% EMS BLU/MIB 28% 17% 20% 19% ODM Business Visual Solutions Optoma Young Optics Others 1Q 18 Consolidated Sales : NT$12 Billion
Visual Solutions Business Report SY Chen July 24, 2018
2Q18 Visual Solutions Business Review 9 2Q18 total sales of NT$4,693M with 13% QoQ increase and 19% YoY growth Both QoQ and YoY revenue increase results from tender and product combination optimization 4K projector growth continues Mainstream projector sales increase due to FIFA Increase in high value product portfolios
10 Visual Solutions Sales Breakdown (By Revenue) Lamp SSI Large Venue Solutions New Business 6,000 0.9% 4,000 1.0% 7% 10% 19% 1.4% 2% 12% 22% 6% 13% 22% 0.7% 4% 8% 19% 0.9% 3% 11% 22% 2,000 63% 62% 58% 68% 63% - Sales (NT$ Million) 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 $3,933 $4,765 $5,381 $4,170 $4,693
Business Outlook for 3Q18 and Beyond 11 Business growth is expected in Q3 Tender and product combination optimization Education season 4K UHD SSI products Large venue Continuously focus on value-driven solutions and new applications 4K UHD SSI solid-state light source Education/Enterprise total solutions AI smart design Home/Entertainment solutions
Energy Saving Business Report Sarah Lin July 24, 2018
2Q18 Energy Saving Business Review 13 The overall sales revenue of Energy Saving Business was NT$6,227 million in 2Q18, with 3% QoQ increase in slow season, due mainly to more high-end, larger size TV LCM business from panel customers. The overall shipment in 2Q18 was 11.5 million units, up 2% QoQ. 2Q18 Revenue Summary: - EMS BLU/MIB revenue up 14% QoQ. - ODM business with 14% QoQ decrease. - Components increase 2% QoQ.
14 Energy Saving Sales Breakdown (By Revenue) EMS BLU/MIB ODM Business Components(Others) 100% 7% 6% 6% 7% 7% 80% 40% 50% 57% 36% 30% 60% 40% 20% 53% 44% 37% 57% 63% 0% 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 Sales (NT$ Million) $5,889 $6,940 $6,835 $6,053 $6,227 Prepared by Coretronic on a combined basis (Taiwan & China)
15 Energy Saving Sales Breakdown (By Revenue) TV Monitor NB Tablet Others 100% 80% 60% 9% 9% 8% 8% 7% 5% 40% 38% 36% 12% 11% 5% 6% 37% 31% 40% 14% 14% 14% 14% 18% 20% 29% 32% 37% 32% 34% 0% 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 Sales (NT$ Million) $5,889 $6,940 $6,835 $6,053 $6,227 Prepared by Coretronic on a combined basis (Taiwan & China)
2Q18 Business Portfolios 16 Components LGP Injection parts Film etc. NT$417M 7% 7%, flat Components EMS BLU/MIB EMS BLU/MIB Business from TFT makers Traditional BLU, MIB TV LCM NT$3,913M 57% 63%, +6% ODM Business ODM Business (customized one-stop LCMt) Automotive Industrial NB HU TV/MNT Display Head NT$1,898M 36% 30%, -6%
3Q18 Business Outlook 17 All applications with growth in Q3, especially TV, Monitor and Tablet demand with double digit increase QoQ due to peak season. Components is with slightly shipment decline in Q3. Expecting the overall demand of Energy Saving business with around 10% QoQ growth due to seasonal factors in third quarter. More LCM/MIB module business.
Market Update 18 Overall market volume do not have much difference. Industry application is another growing market. With TV market slow, might shift some volume to Monitor to increase the production utilization rate. Seeing Monitor & NB with more and more high end product lines to get value-add and high ASP. More discussion about mini LED but still take time to go MP with volume production.
Q&A Franck Ho CFO SY Chen President Visual Solutions BG Sarah Lin President Energy Saving BG
Thank you Any further questions, please feel free to e-mail: ir@coretronic.com