4Q 2018 Performance Results INDUSTRIES, INC.
Contents 1. Overview 1 Results Overview P.3 & 4 2. 4Q18 Performance 2_1 Divisional Results 2_2 Non-operating Profit/Loss 2_3 Debt & Financial Ratio P.5 P.10 P.11 3. Appendix 3_1 Statement of Income_Consolidated 3_2 Statement of Financial Position/Cash Flow 3_3 Group Structure P.12 P.13 P.14 All 4Q 2018 management performance and financial data in this report are consolidated or parent earnings results based on K-IFRS. The operating profit in this report was rewritten considering the changes made in 'indicating financial statements' of financial accounting standards 1001. This report has been drawn up for investors without receiving complete external auditing. It must be considered that some data may be revised in the process of external auditing. The data contains prospective information for the future, including the company s business prospect in the 1Q 2019 and further on. The prospective information has been drawn up considering the current market condition and the company s business strategy at present. Accordingly, it should be taken into consideration that this information may be modified depending on the environmental changes of markets and the company s strategic alteration.
1 Percentage of Sales Fashion Percentage of Sales Results Overview Industrial Material Percentage of Sales Chemical 22% 20% Film/electronic materials Percentage of Sales 12% 38% 1,669 1,759 1,740 1,719 1,786 1,274 1,019 817 874 900 615 502 474 500 558 1,249 1,152 1,137 1,097 1,046 144 145 118 84 91 117 91 104 95 84 0-7 -3-14 -21 63 60 55 48 40 Functional fibers - Polyester tire cord, airbag cushion, technical yarn High performance fibers - Aramid Non-woven fabrics - Artificial leather, spunbond, membrane filter Subsidiary( GLOTECK, PLASTICS) - Fabric & yarn for car seat, Engineering plastic Hydrocarbon resin - For glue, paint, diaper, sanitary towel Phenolic resin - For industrial glue, cast, abrasive cloth, paint Epoxy resin - For electronic circuit, epoxy molding compound Polyester Film - For packaging, optical film, solar protect film, industrial use film Electronic materials - Light diffuser film/plate, prism film, dry film resist, Outdoor, sports, golf - SPORT, HEAD, ELORD, Jack Nicklaus, HONMA Men wear, casual - CAMBRIDGE MEMBERS, Customellow, Series Accessory, women wear - COURONNE, Suecomma Bonnie, Lucky Chouette Fashion material, etc Percentage of Sales 10% 531 425 395 418 463-27 -37-42 -62-56 Polyester chip Subsidiary( FASHION MATERIAL) - Polyester yarn and fabric for clothes - Nylon yarn and fabric for clothes Etc 3
4 1 Results Overview 4Q17 1Q18 2Q18 3Q18 4Q18 (Wbn) Sales 1,247 1,127 1,166 1,133 1,327 Operating Profit (OPM) 52 (4.2%) 38 (3.4%) 54 (4.6%) 22 (1.9%) 31 (2.3%) Pre-tax profit 30 51 45-2 -3 Net profit 11 37 29-4 -19 Sales were up QoQ and YoY from seasonality factor of fashion division along with sales increase in industrial material and film division. OP increased QoQ from seasonality factor of fashion division but decreased YoY from increased one-off expenses. Pre-tax profit loss and net profit loss temporarily increased due to asset impairment loss.
5 2_1 Divisional Results Industrial materials Consolidated earnings (Kolon Industries, Kolon Glotech, Kolon Nanjing Co.,LTD, Kolon Plastics, Kolon Vietnam, etc) (Wbn) 491 444 449 438 409 1,786 1,759 1,740 1,719 1,669 84 144 145 118 92 5.2% 23 4.8% 20 6.1% 27 5.5% 25 4.2% 21 4Q17 1Q18 2Q18 3Q18 4Q18 Sales OP OPM 4Q18 sales were up QoQ and YoY due to increased sales of major products along with gradual increase in ASP. However, OP declined due to increased one-off expenses and raw material costs.
6 2_1 Divisional Results Chemical Consolidated earnings (Kolon Industries, (SUZHOU) COMPANY LIMITED) (Wbn) 237 220 217 224 221 1,274 1,019 817 874 900 91 117 104 95 84 24 10.8% 23 21 20 9.5% 9.8% 9.1% 20 9.0% Hydrocarbon resin 4Q17 1Q18 2Q18 3Q18 4Q18 Phenolic resin Sales OP OPM Profit in 4Q18 declined QoQ and YoY due to impact of regular maintenance along with reduced hydrocarbon resin spread and epoxy resin profitability. Epoxy resin
2_1 Divisional Results Film/Electronic Materials Consolidated earnings (Kolon Industries, KIN, KHC, etc) (Wbn) 615 502 474 500 558 126 131 140 144 143 0-7 -3-21 -14-2.7% -1.8% -3.6% -2.2% -7.9% -10-4 -3-5 -3 4Q17 1Q18 2Q18 3Q18 4Q18 DFR PET Film Sales OP OPM Loss in 4Q18 reduced QoQ and YoY as a result of increase in film sales and earnings improvement of subsidiaries. 프리즘필름 CPI Film 7
8 2_1 Divisional Results Fashion Consolidated earnings (Kolon Industries, etc) (Wbn) 1,249 1,152 1,137 1,097 1,046 363 354 8.1% 246 3.4% 249 5.4% 197 7.0% 63 60 55 48 40 (Ⅰ) Outdoor 30 8 13-6 -3.3% 25 (Ⅱ) Sports & Golf 4Q17 1Q18 2Q18 3Q18 4Q18 (Ⅲ) Man Sales OP OPM (Ⅳ) Casual 4Q18 earnings were up QoQ due to seasonality factor, but slightly decreased YoY due to increased marketing expenses as well as the impact of warm weather. (Ⅴ) Accessory&Woman
9 2_1 Divisional Results Fashion material, etc Consolidated earnings (Kolon Industries, Kolon Fashion Material, etc) (Wbn) 95 104 121 119 119 531 425 463 395 418-15.0% -8.5% -4.0% -9.5% -27-37 -42-62 (Ⅰ) Kolon Industries -56-25.9% -14-9 -5-11 -31 4Q17 1Q18 2Q18 3Q18 4Q18 (Ⅱ) Kolon Fashion Material Sales OP OPM Loss in 4Q18 increased due to the low seasonality factor of subsidiaries and increased one-off expenses.
10 2_2 Non-operating Profit & Loss (Unit: Wbn) 2014 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18 4Q18 2018 Operating Profit 169 281 86 78 48 65 277 46 54 46 52 198 38 54 22 31 145 Other income(losses) -38-386 -3-1 -5-30 -39-3 6 1-18 -14 2 13-3 -36-24 Finance income(losses) -68-61 -14-7 -4-15 -39-16 -13-12 -16-57 -12-15 -17-9 -54 Gain (loss) on disposal of investments in associates and joint ventures 40 29 7 12 11 10 40 10 22 8 12 52 23-8 -3 10 23 Pre-tax Profit 103-138 76 82 50 30 239 36 70 43 30 179 51 45-2 -3 90 Other expenses increased in 4Q18 from asset impairment losses. Equity Method Income(losses) on Investments (Unit: Wbn) SKC PI (Share : 27.0%) 1.3 2.6 0.7 HANA Capital (Share : 42.6% 0.0%) 8 - completed disposal of HANA Capital stake in February 2018-4Q17 3Q18 4Q18 4Q17 3Q18 4Q18
11 2_3 Debt and Financial Ratio Changes in borrowings / Net Debt Ratio Consolidated (Wbn) Kolon Industries: Non-consolidated(Wbn) 2,103 2,146 2,026 2,070 2,242 2,155 Total Debt 1,555 1,551 1,539 1,537 1,601 1,606 87% 87% 98% 4Q17 3Q18 4Q18 Net Debt Net Debt Ratio 88% 78% 86% 4Q17 3Q18 4Q18 Financial Ratio Interest Coverage Ratio (times) 4Q17 3Q18 4Q18 Debt ratio (%) Capital ratio (%) 143% 139% 152% 41% 42% 40% 3.2 2.3 2.1 Total borrowings and bonds payable to total assets (%) 37% 38% 40% 4Q17 3Q18 4Q18
3_1 Income Statement (Consolidated) 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18 4Q18 2018 (Wbn) Sales 4,857 1,151 1,134 1,037 1,240 4,562 1,150 1,124 1,086 1,247 4,607 1,127 1,166 1,133 1,327 4,753 Ind. Materials 1,759 453 438 400 450 1,740 428 423 424 444 1,719 409 438 449 491 1,786 Chemical 1,019 216 200 196 205 817 234 204 217 220 874 237 217 224 221 900 Film 502 118 119 122 115 474 122 121 131 126 500 131 140 144 143 558 Fashion 1,152 263 275 230 370 1,137 258 264 211 363 1,097 246 249 197 354 1,046 Others 425 101 103 90 101 395 108 111 103 95 418 104 121 119 119 463 Operating profit 281 86 78 48 65 277 46 54 46 52 198 38 54 22 31 145 Ind. Materials 144 39 41 31 34 145 27 32 35 23 118 20 27 25 21 92 Chemical 117 29 27 25 24 104 23 23 25 24 95 23 21 20 20 84 Film -3 3 0-1 -3 0-4 -3-4 -10-21 -4-3 -5-3 -14 Fashion 60 15 16-2 26 55 10 12-3 30 48 8 13-6 25 40 Others -37 0-7 -5-16 -27-11 -10-7 -14-42 -9-5 -11-31 -56 Other income(losses) Finance income(losses) Equity method income(losses), losses on Sale of equity securities -386-3 -1-5 -30-39 -3 6 1-18 -14 2 13-3 -36-24 -61-14 -7-4 -15-39 -16-13 -12-16 -57-12 -15-17 -9-54 29 7 12 11 10 40 10 22 8 12 52 23-8 -3 10 23 Pre-tax profit -138 76 82 50 30 239 36 70 43 30 179 51 45-2 -3 90 Net profit -145 56 64 30 26 176 22 57 32 11 123 37 29-4 -19 43 EBITDA 474 475 399 356 12
3_2 Statement of Financial Position/Cash Flows(Consolidated) IFRS (Consolidated) 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Total Assets 4,749 4,986 5,249 5,662 5,574 Beginning 124 62 94 147 77 Current assets 1,938 1,945 2,068 2,095 1,957 Net Profit 40-145 176 123 43 Non-current assets 2,811 3,041 3,182 3,567 3,618 Depreciation 189 188 189 191 196 Liabilities 2,740 3,022 3,124 3,340 3,366 Amortization 3 6 10 10 11 Current liabilities 1,744 1,828 1,953 2,126 2,326 Non-current liabilities 996 1,193 1,171 1,213 1,040 Acquisitions of Tangible Acquisitions of Intangible -246-202 -243-455 -383-40 -16-9 -8-26 Equity 2,009 1,964 2,125 2,322 2,208 Dividends Paid -17-15 -15-32 -33 Controlling Shareholders' Equity 1,884 1,832 1,981 2,183 2,096 Others 10 215-54 101 212 Capital 139 139 140 142 149 Ending 62 94 147 77 87 Capital Surplus 907 907 912 930 991 Consolidated Retained Earnings Accumulated Other Comprehensive Income 891 742 879 976 988-52 -59-52 34-31 Hybrid Bond 0 103 103 103 0 Non-Controlling Shareholders' Equity 125 132 144 139 112 13
3_4 3_3 Group structure 47.4% CHAIRMAN CORPORATION Manufacturing company Audi Dealer Pharmaceutical company IT service company Environmental company Construction & trading company 31.5% 99.3% 20.4% 48.1% 27.5% 51.0% 80.6% 75.2% INDUSTRIES AUTO LIFE SCIENCE PHARM TissueGENE BENIT ECO ONE GLOBAL 88.9% 90.0% NANJING(KNC) SUZHOU INDUSTRIES equity structure As of December 31, 2018 78.8% 79.8% PT INA GLOTECH 49.9% Common Share 26,978,840 32.0% CORPORATION National Pension Service KB Asset Management 66.7% PLASTICS(KPL) 6.0% 12.1% Other 66.7% FASHION MATERIAL(KFM) 14