Darwin Precisions Corporation Third Quarter 2018 Results Investor Conference

達運精密工業股份有限公司 2018年第三季法人說明會

Nov. 5, 2018

1

2

Agenda

Company Introduction

Financial Report

Business Overview

We have made forward-looking statements in the presentation. Our forward-looking

statements contain information regarding, among other things, our financial

conditions, future expansion plans and business strategies. We have based these

forward-looking statements on our current expectations and projections about future

events. Although we believe that these expectations and projections are reasonable,

such forward-looking statements are inherently subject to risks, uncertainties, and

assumptions about us.

We undertake no obligation to publicly update or revise any forward-looking

statements whether as a result of new information, future events or otherwise. In

light of these risks, uncertainties and assumptions, the forward-looking events might

not occur and our actual results could differ materially from those anticipated in

these forward-looking statements.

Safe Harbor Notice

3

4

Company Introduction

About us

Financial Data Basic Information Operation Overview Management Team

Capital :

TWD 66.56 E

Establishment:

1989/10

Headquarter :

Hukou Township,

Hsinchu County, Taiwan

Offices/Factories:

Taiwan：

Hsinchu 、Taichung

China：

Xiamen、 Suzhou、

Wujiang

Europe：Slovakia

Chairman and CEO:

FC.HSIANG

General manager:

KP. CHU

Number of Employees:

Around 8,000~10,000

Main Products & Services:

SET/Back light Design & CBMS

(Component-Backlight-Module-

SET) Integrated operating mode

PMMA Material Application

Light guide & Component

Industry Display Design &

Integrated Service

Precision Device Application

Precision Mold Design &

Manufacturing

5

6

Our Plant

Darwin Precisions Corporation· Hsinchu

Darwin Precisions Corporation· Taichung

HQ

Darwin Precisions(XM)· Xiamen

Darwin Precisions (SZ)· Suzhou

Fortech Electronics (SZ) Co., Ltd.· Wujiang

Darwin Precisions (Slovakia) s.r.o.· Slovakia

7

Financial Report

8

Comprehensive Income Statement Highlights

Amount : NT$ Thousands, except EPS

QoQ % QoQ %

Net Sales 6,230,503 100% 17% 5,332,676 100% 13% 4,711,893 100%

Cost of Goods Sold (5,707,694) (92%) 15% (4,981,832) (93%) 10% (4,532,605) (96%)

Gross Profit 522,809 8.4% 49% 350,844 6.6% 96% 179,288 3.8%

Operating Expenses (459,264) (7.4%) 5% (436,694) (8.2%) 1% (430,731) (9.1%)

Operating Profit (Loss) 63,545 1.0% 174% (85,850) (1.6%) (66%) (251,443) (5.3%)

Net Non-operating Income 184,292 3.0% 7% 172,581 3.2% (73%) 639,771 13.6%

Profit before Tax 247,837 4.0% 186% 86,731 1.6% (78%) 388,328 8.2%

Net Profit 176,555 2.8% 111% 83,631 1.6% (37%) 132,827 2.8%

Basic EPS (NT$) 0.27 0.13 0.20

Operating Profit + D&A 403,911 6.5% 90% 213,000 4.0% 736% 25,492 0.5%

※They are only reviewed rather than audited.

3Q18 2Q18 1Q18

9

Comprehensive Income Statement Highlights

Amount : NT$ Thousands, except EPS

YoY %

Net Sales 16,275,072 100% 21,872,887 100% (26%)

Cost of Goods Sold (15,222,131) (94%) (20,309,658) (93%) (25%)

Gross Profit 1,052,941 6.5% 1,563,229 7.1% (33%)

Operating Expenses (1,326,689) (8.2%) (1,191,312) (5.4%) 11%

Operating Profit (Loss) (273,748) (1.7%) 371,917 1.7% (174%)

Net Non-operating Income 996,644 6.1% 139,621 0.6% 614%

Profit before Tax 722,896 4.4% 511,538 2.3% 41%

Net Profit 393,013 2.4% 335,143 1.5% 17%

Basic EPS (NT$) 0.59 0.50

Operating Profit + D&A 642,403 3.9% 1,261,392 5.8% (49%)

※They are only reviewed rather than audited.

For the nine-month periods ended September 30

2018 2017

10

Consolidated Balance Sheet Highlights

(1) Financial assets at fair value through profit or loss－current：There are all the structured products that have guaranteed income in the end of Jun. 2018 and Sep. 2018.

(a) Short term debt refers to all interest bearing debt maturing within one year and long term debt maturing within one year.

(b) Calculated by dividing the average accounts receivable into the annualized sales during such period, then multiplying by 365 days.

(c) Calculated by dividing the average inventory into the annualized cost of goods sold during such period, then multiplying by 365 days.

(d) Calculated by dividing the average accounts payable into the annualized cost of goods sold during such period, then multiplying by 365 days.

(e) Financial Debt to Equity = (Short Term Debt + Long Term Debt) / Equity

Amount : NT$ Thousands

QoQ % QoQ %

Cash and cash equivalents 3,730,391 15% (25%) 4,960,867 21% (20%) 6,213,765 26%

Financial assets at fair value

through profit or loss－current (1) 1,617,745 7% 75% 924,106 21% 2421% 36,662 0%

Accounts receivable 6,343,817 26% 13% 5,591,825 23% 29% 4,340,986 18%

Inventories 2,038,369 8% 30% 1,566,529 6% (5%) 1,647,154 7%

Short Term Debt(a) 57,352 0% 0% 57,352 0% 9% 52,572 0%

Long Term Debt 2,763,177 11% 9% 2,527,515 10% 1% 2,491,853 11%

Total Liabilities 12,878,001 52% 6% 12,112,646 50% 8% 11,228,185 48%

Equity 11,791,901 48% (2%) 12,034,386 50% (2%) 12,298,801 52%

Total Assets 24,669,902 100% 2% 24,147,032 100% 3% 23,526,986 100%

AR Turnover (Days)(b) 87 2 85 (6) 91

Inventory Turnover (Days)(c) 29 (1) 29 (3) 32

AP Turnover (Days)(d) 72 1 71 (8) 79

Cash Cycle (Days) 44 0 44 (1) 44

Financial Debt to Equity(e) 24% 2% 21% 1% 21%

※They are only reviewed rather than audited.

Sep. 30, 2018 Jun. 30, 2018 Mar. 30, 2018

11

Consolidated Cash Flow Highlights

Amount : NT$ Thousands

YoY %

From Operating Activities 137%

Profit before Tax 41%

Depreciation & Amortization 3%

Net Change in Working Capital 11%

From Investing Activities 46%

Capital Expenditure (17%)

Increase Investment (1) 33151%

From Financing Activities (98%)

Net Change in Debt (54%)

Cash dividends paid (43%)

Net Change in Cash(2) (42%)

Ended balance of Cash and cash equivalents

※They are only reviewed rather than audited.

3,730,391 4,816,273

For the nine-month periods

ended September 30

(266,222) (186,355)

(2,132,994) (1,505,119)

(1,662,548) (5,000)

9,053 397,086

276,104 594,425

(1,522,096) (1,713,744)

(2,113,762) (1,450,805)

(1,283,300) (1,554,583)

116,951 (312,731)

722,896 511,538

916,151 889,475

2018 2017

(1) Increase Investment：It includes Financial assets at fair value through profit or loss-structured product around NT$1,652,659K,

and the other is non-publicly traded equity investments for the nine-month periods ended September 30, 2018.

(2) In addition to cash generated from operating, investing and financing activities, net change in cash also include effect

on currency exchange of foreign subsidiaries.

12

Business Overview

13

Period:Yearly

Amount : NT$ Millions

Period: Quarterly

14

Amount : NT$ Millions

Period: Quarterly

Amount : NT$ Thousands

Period: Quarterly

Our Business

Darwin 5 Major Operating Directions

15

Precision

Device

Application

Technical

Machining &

Integrated

Service

(IOT)

Precision

Mold Design&

Manufacturing

Material

Application

(PMMA Sheet

/ Resin)

CBMS

(Component /

Backlight /

Module / SET)

16

Business Development:

1. Original Business Optimization : Organization、Operating & Resource optimization。

2. Integrated Service Business Enhancement： Cooperating with the BenQ-AUO Group 、Niche Products。

3. Technology innovation & Value creation：Precision Machining Application、PMMA Material Application。

4. Non-Assembly Business Revenue growth up : Industry Display Integrated Service、Miniature Precision Machining & Material Business.

• LCD Panel Module

• LCD Backlight

Module

• LCD TV Design

• LCD Monitor

Design

• Design Concept

• Mass Production

SET Design Panel Module

• Metal Stamping

• Plastic Injection

• Cosmetic Parts

• Bi-Injection

Component

PRODUCT &

SERVICE

CBMS

(Component / Backlight / Module / SET)

Light Guide

Plate Series

Diffuser Plate

Series

Non-Display

Application

• PP

• PS

• PMMA

• PC

• PS

• MS

• Lenticular structure

• PMMA

• Multi-layer high gloss panel

PRODUCT &

SERVICE

Material Application

(PMMA Sheet/ Resin)

• Car Display Application

• e-Bus

• Outdoor Display

• Bar Display

• PID

System

Application

Smart City

• Medical Display

• Instrument cluster

display

• Step board Series

Safety &

Automotive

Energy Saving

Product • e-Paper Display

• e-Paper Tablet

PRODUCT &

SERVICE

Technical Machining &

Integrated Service (IOT)

• Photomask

• Micro Cup

• Fine Metal Mask

• ITO Film

• VCM Spring

Precision Etching Precision Electroforming

PRODUCT &

SERVICE

Precision Device Application

• CAD (Pro/E)

• CAM (CAMTOOL)

• EDM

• Polishing

• Assembly

• CAD (VISI)

• CAM (VISI)

• Wire EDM

• Heat Treatment

• Assembly

Sheet Metal

Stamping Mold

Plastic

Injection Mold

• Optical Lens (2nd Lens)

• Light guide Plate (LGP)

Precision Optical

Mold

PRODUCT &

SERVICE

Precision Mold Design& Manufacturing

stakeholder@darwinprecisions.com

22

Thank You!

23