4Q 2017 Performance Results INDUSTRIES, INC. February 9, 2018 All 4Q 2017 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 2018 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.
CONTENTS 1. Performance results overview P.3 2. 4Q 2017 Performance 2_1 Divisional Results 2_2 Non-operating Profit & Loss 2_3 Debt and Financial ratio P.5 P.10 P.11 3. Appendix 3_1 Statement of Financial Position 3_2 Statement of Income(Consolidated) 3_3 Statement of Income(Non-consolidated) 3_4 Cash Flows 3_5 Group Structure P.12 P.13 P.14 P.15 P.16 2
1. Results overview Industrial Material Percentage of Sales Chemical Film/electronic materials Fashion 1,315 1,249 1,152 1,137 1,097 Percentage 24% of Sales Fashion material, etc 9% Percentage of Sales 1,573 1,669 1,759 1,740 1,719 37% 1,039 1,274 1,019 Percentage of Sales 817 874 19% 652 615 Percentage 502 474 500 of Sales 11% 684 531 425 395 418 144 145 118 85 84 117 84 91 104 95 13 14 15 16 9M17 22-7 -3 0-21 13 14 15 16 9M17 79 63 60 55 48-38 -62-37 -27-42 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, overcoat Outdoor, sports, golf - SPORT, HEAD, ELORD, Jack Nicklaus, HONMA Men wear, casual - CAMBRIDGE MEMBERS, Customellow, Series Accessory, women wear - COURONNE, Suecomma Bonnie, Lucky Chouette Polyester chip Subsidiary( FASHION MATERIAL) - Polyester yarn and fabric for clothes - Nylon yarn and fabric for clothes Etc 3
1. Results overview 4Q16 1Q17 2Q17 3Q17 4Q17 Sales 1,240 1,150 1,124 1,086 1,247 OP (OPM) 65 (5.2%) 46 (4.0%) 54 (4.8%) 46 (4.2%) 52 (4.2%) Pre-tax profit 30 36 70 43 30 Net profit 26 22 57 32 11 Sales increased QoQ mainly from seasonality factor in Fashion division. Operating profit improved QoQ on the back of expanded sales of Fashion division, but declined YoY due to rising raw material prices, FX effects, and sluggish earnings of subsidiaries. 4
5 2_1. Divisional Results Industrial materials Consolidated earnings (Kolon Industries, Kolon Glotech, Kolon Nanjing Co.,LTD, Kolon Plastics, etc) 450 428 423 424 443 1,759 1,740 1,719 1,669 1,573 85 84 144 145 118 7.5% 34 6.4% 27 7.6% 32 8.3% 35 5.2% 23 4Q16 1Q17 2Q17 3Q17 4Q17 Sales OP OPM Operating profit decreased QoQ and YoY from Kolon Glotech s sluggish earnings, high raw material prices, and KRW depreciation.
6 2_1. Divisional Results Chemical Consolidated earnings (Kolon Industries, (SUZHOU) COMPANY LIMITED) 234 217 220 205 204 1,274 1,039 1,019 817 874 84 91 117 104 95 24 23 25 23 24 11.5% 9.9% 11.4% 11.5% 10.8% Hydrocarbon resin 4Q16 1Q17 2Q17 3Q17 4Q17 Sales OP OPM Phenolic resin Sales remained flat QoQ but OP fell slightly due to rise in epoxy resin raw material price and KRW depreciation. Epoxy resin
2_1. Divisional Results Film/Electronic Materials Consolidated earnings (Kolon Industries, KIN, KHC, etc) 652 615 502 474 500 115 122 121 131 126 22-7 -3 0-21 -2.3% -2.6% -2.8% -3.5% -3-4 -3-4 -10 4Q16 1Q17 2Q17 3Q17 4Q17 DFR PET Film Sales OP OPM -7.9% Loss in 2017.4Q increased due to sluggish market conditions and increased one-off expenses. 프리즘필름 CPI Film 7
8 2_1. Divisional Results Fashion Consolidated earnings (Kolon Industries, etc) 1,315 1,249 1,152 1,137 1,097 370 363 7.1% 258 264 211 8.1% 79 63 60 55 48 26 3.9% 4.5% 30 10 12-3 -1.6% 4Q16 1Q17 2Q17 3Q17 4Q17 Sales OP OPM (Ⅰ) Outdoor (Ⅱ) Sports & Golf (Ⅲ) Man 2017.4Q earnings were up QoQ and YoY from strong seasonality along with increased padded jumper sales. (Ⅳ) Casual (Ⅴ) Accessory&Woman
9 2_1. Divisional Results Fashion material, etc Consolidated earnings (Kolon Industries, Kolon Fashion Material, etc) 108 111 101 103 95 684 531 425 395 418-38 -62-37 -27-42 -15.4% -9.7% -9.2% -7.1% -15.0% (Ⅰ) Kolon Industries -16-11 -10-7 -14 4Q16 1Q17 2Q17 3Q17 4Q17 Sales OP OPM (Ⅱ) Kolon Fashion Material Loss increased in 2017.4Q due to increased inventory disposals and one-off expenses along with weak seasonality factor from Kolon Industries.
10 2_2. Non-operating Profit & Loss (Unit: Wbn) 2014 1Q15 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 Operating Profit 169 70 76 62 72 281 86 78 48 65 277 46 54 46 52 198 Other income(losses) -38-362 -1-8 -16-386 -3-1 -5-30 -39-3 6 1-18 -14 Finance income(losses) -68-15 -17-17 -13-61 -14-7 -4-15 -39-16 -13-12 -16-57 Gain (loss) on disposal of investments in associates and joint ventures 40 8 10 8 3 29 7 12 11 10 40 10 22 8 12 52 Pre-tax Income 103-299 69 46 47-138 76 82 50 30 239 36 70 43 30 179 Other income(losses) fell QoQ due to inventory disposals. Equity Method Income(losses) on Investments (Unit: Wbn) SKC PI HANA Capital (Share : 27.0%) (Share : 42.6%) 1 3 1 8 7 8 4Q16 3Q17 3Q17 4Q16 3Q17 4Q17
11 2_3. Debt and financial ratio Change in borrowings / Net Debt Ratio Consolidated Kolon Industries 1,919 1,772 2,118 2,103 2,038 2,026 Total Debt 1,372 1,353 1,531 1,528 1,555 1,551 83% 91% 87% Net Debt Net Debt Ratio 81% 88% 88% 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Financial ratio 4Q16 3Q17 4Q17 Interest Coverage Ratio(Times) Debt ratio (%) 147% 146% 143% Capital ratio (%) 40% 41% 41% 4.4 3.1 3.2 Total borrowings and bonds payable to total assets (%) 37% 39% 37% 4Q16 3Q17 4Q17
12 3_1. Statement of financial position IFRS (Consolidated) 2013 2014 2015 2016 2017 Total Assets 4,720 4,749 4,986 5,249 5,662 Current assets 1,938 1,938 1,945 2,068 2,095 Non-current assets 2,782 2,811 3,041 3,182 3,567 Liabilities 2,774 2,740 3,022 3,124 3,340 Current liabilities 1,686 1,744 1,828 1,953 2,126 Non-current liabilities 1,088 996 1,193 1,171 1,213 Equity 1,946 2,009 1,964 2,125 2,322 Controlling Shareholders' Equity 1,818 1,884 1,832 1,981 2,183 Capital 139 139 139 140 142 Capital Surplus 906 907 907 912 930 Treasury Stock -138 0 0 0 0 Consolidated Retained Earnings 876 891 742 879 976 Accumulated Other Comprehensive Income 34-52 -59-52 34 Hibrid Bond 0 0 103 103 102
13 3_2. Income Statement (Consolidated) 2014 1Q15 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 Sales 5,338 1,201 1,235 1,148 1,274 4,857 1,151 1,134 1,037 1,240 4,562 1,150 1,124 1,086 1,247 4,607 Ind. Materials 1,669 421 451 428 460 1,759 453 438 400 450 1,740 428 423 424 444 1,719 Chemical 1,274 272 260 263 225 1,019 216 200 196 205 817 234 204 217 220 874 Film 615 129 125 127 122 502 118 119 122 115 474 122 121 131 126 500 Fashion 1,249 277 276 230 369 1,152 263 275 230 370 1,137 258 264 211 363 1,097 Others 531 102 123 101 99 425 101 103 90 101 395 108 111 103 95 418 Operating profit 169 70 76 62 72 281 86 78 48 65 277 46 54 46 52 198 Ind. Materials 84 33 38 36 38 144 39 41 31 34 145 27 32 35 23 118 Chemical 91 29 29 30 29 117 29 27 25 24 104 23 23 25 24 95 Film -7 1-2 1-3 -3 3 1-1 -3 0-4 -3-4 -10-21 Fashion 63 13 15 1 30 60 15 16-2 26 55 10 12-3 30 48 Others -62-6 -4-6 -22-37 0-7 -5-16 -27-11 -10-7 -14-42 Other income(losses) -38-362 -1-8 -16-386 -3-1 -5-30 -39-3 6 1-18 -14 Finance income(losses) -68-15 -17-17 -13-61 -14-7 -4-15 -39-16 -13-12 -16-57 Equity method income (losses), losses on Sale of Equity Securities 40 8 10 8 3 29 7 12 11 10 40 10 22 8 12 52 Pre-tax profit 103-299 69 46 47-138 76 82 50 30 239 36 70 43 30 179 Net profit 40-243 33 33 31-145 56 64 30 26 176 22 57 32 11 123 EBITDA 360 474 475 3,99
3_3. Income Statement (Non-consolidated) 2014 1Q15 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 Sales 3,906 854 837 799 892 3,381 781 771 719 855 3,126 793 770 753 894 3,210 Ind. Materials 728 182 184 182 188 736 189 184 176 183 732 188 187 192 182 748 Chemical 1,241 267 252 256 218 993 211 194 190 200 795 228 198 210 213 849 Film 566 114 110 115 109 447 106 106 107 97 416 106 109 114 110 440 Fashion 1,210 269 266 220 354 1,108 252 264 220 350 1,085 247 254 208 362 1,070 Others 161 23 25 25 25 98 24 23 26 25 97 25 22 28 27 103 Operating profit 151 60 62 54 64 240 73 58 40 54 224 49 49 49 59 206 Ind. Materials 45 20 25 24 22 90 24 23 20 24 91 21 24 31 20 96 Chemical 90 29 29 30 28 115 29 26 24 24 103 23 23 25 24 95 Film 0 2-1 2 1 4 4 3-1 -3 3-5 -3-2 -8-18 Fashion 70 15 16 2 29 63 15 17-1 23 53 10 12-3 30 49 Others -54-6 -7-4 -15-31 1-10 -2-15 -26 - -8-2 -6-16 Other income(losses) -37-361 -2-7 -6-376 -4-2 -8-22 -36-4 3-3 -12-16 Finance income(losses) -41-8 -13-13 -10-43 -5-4 -1-11 -20-2 -10-8 -13-34 Equity method income (losses), losses on Sale of Equity Securities 12 - - - - - - - - -6-7 - -5 - -38-44 Pre-tax profit 84-309 47 35 49-178 63 52 31 14 161 42 36 39-4 113 Net profit 45-234 16 27 36-155 45 42 16 15 119 30 28 29-13 73 14
15 3_4. Cash Flows(Consolidated) 14 15 16 17 Beginning 124 62 94 147 Net Profit 40-145 176 123 Depreciation 189 188 189 191 Amortization 3 6 10 10 Acquisitions of Tangible -246-202 -243-455 Acquisitions of Intangible -40-16 -9-8 Dividends Paid -17-15 -15-32 Others 10 215-54 101 Ending 62 94 147 77
3_5. Group structure CHAIRMAN 47.4% CORPORATION Manufacturing company Audi Dealer Pharmaceutical company IT service company Environmental company Construction & trading company 32.2% 99.3% 20.3% 48.1% 27.5% 51.0% 99.5% 75.2% INDUSTRIES AUTO LIFE SCIENCE PHARM TissueGENE BENIT ECO ONE GLOBAL 88.9% 90.0% NANJING(KNC) SUZHOU INDUSTRIES equity structure 78.8% 79.8% PT INA GLOTECK 48.6% Common Share 25,659,908 31.5% CORPORATION National Pension Service KB Asset Management (As of 9 th Feb, 2018) (As of 30 th Dec, 2017) (As of 31 th Dec, 2017) 66.7% PLASTICS(KPL) 6.3% 13.6% Other 66.7% FASHION MATERIAL(KFM) 16