ctci corporation the 1st investor

CTCI Corporation

The 1st Investor

Conference, 2020

2020.03.27

Copyright © 2016 CTCI All Rights Reserved.

Disclaimer

The consolidated financial statement is hereby based on International

Financial Reporting Standards (IFRS) and audited by CPA.

This presentation may include forward-looking statements with respect

to the operations and business of the company other than the

historical results. The actual results may differ from those indicated

forward-looking statements due to unknown risks and uncertainties.

Investors should make their own judgement and control the

investment risk.

Agenda

• Covid-19 Impact

• Operation Review – Year 2019

• Business Outlook

• Financial Highlights – Year 2019

3

Covid-19 Impact

4


Covid-19 Epidemic PreventionGroup Coronavirus Prevention Center(GCPC) and information platform set up on Jan.29 initiating anti-

epidemic measures and enterprise continuous operation planning.

GCPC

Measures

• Attendance and travel

management

• Visitor control and

environment clean

• Health management &

care

Info and Supplies

• Epidemics(Site and

subsidiaries)• Personnel/good restrictions

• Government regulations

• Coordination of epidemic

prevention

materials

Care Bulletin

• Caring for home

quarantine

• Health tracking

IT Operations

• Information platform.

• Hardware and

software settings for

epidemic prevention

Operations

• Track impact on projects

• Contract rights protection

• Insurance claim evaluation

• Fiscal and tax relief

CTCI Group’s Enterprise Continuous

Operation Standards Planning Sheet

LVL Activate Timing PH LVL

AForeign cases of human-to-

human transmission is

reported, but not in domestic

Epid

em

ic

Pre

ventio

n P

hases

CPT

BImported infections and

confirmed cases at workplaceGCPC

C

C1 Confirmed cases of

Domestic human to human

transmission in workplace’s

country

Fe

w c

om

mu

nity

infe

ctio

ns

GCPC

BCPPlanning

Drills

C2 Confirmed cases of

Community infection in the

workplace’s country

C3 All employee at workplace

had a close contact with

infected patients

DHas 1 employee confirmed

case(Emergency response

commence) Com

munity

Spre

ad

GCPC

BCP

Activate

E

Some employees were

diagnosed as suspected cases

(shutdown suspected cases

office area/floors)

F

Medical center continues to

report that the employees was

diagnosed as COVID-19

(Workplace temporarily closed )


Short-term Impacts of Covid-19 Epidemic

0% infection

Operation

Short-term Impacts:

• Mainland China equipment suppliers delay delivery of

equipment by 0.5 to 2 months

• Quarantine and lockdown measures have affected the

construction work and be be suspended around 2

months.

• Revenue and gross profit deferred

Response

• Protection by force majeure clause

• Government bailout subsidy policy (Taiwan, China.,

Macao, Malaysia, Thailand, USA, etc.)

• Clients subsidy and compensation

Employee care

Cared employees accumulated

up to Mar 20 : 175 person-times

Home

quarantine

Self-Health

Management20

115

22

18

已完成持續中Completed Continuous

133

42

Operation Review – Year 2019

7


Company Honors

• Winners of 2019

Taiwan Corporate

Sustainability

Awards (TCSA)

• Global Corporate

Sustainability

Awards (GCSA)

• Total 17 awards

Global Corporate

Sustainability Awards

• CSR Award -People

Development

Excellence

• ISO 9001 Plus Award

-QMS Knowledge

Management

Benchmark

• ISO 45001 Plus Award

- OHS Performance

Management

SGS

Award

CommonWealth

Magazine 2019

Excellence in CSR

Award Top100

• CTCI: 25th in Large

Enterprise

• ECOVE and CTCI

ASI: 1st and 7th in

Medium-sized

Enterprise

CSR

Award

• A member of DJSI

component for 5

consecutive years.

• Ranked 3rd in the

global engineering

industry

DJSI

Liwa project

Breaks Safety

Record of 70

million man-hours

without lost time

Injuries

Safety

Record

Three listed

companies of CTCI

Group evaluated as

Top 5% of the 5th

Corporate

Governance

Evaluation

Corporate

Governance

Evaluation


Group Subsidiaries Grow Strongly

• The first Taiwan solar photovoltaic

facility investor to participate and obtain

Green-e® Energy certification

• Obtained the world's first BS 8001

circular economy standard verification

certificate

• Stable profit and steady rise in stock

prices

ECOVE EnvironmentCTCI Beijing CTCI Machinery

• The 1st pressure equipment and

steel structure manufacturing plant

in Taiwan with European and

American dual-gauge manufacturing

technology and service capabilities

(three certifications by TÜ V Rhein

Group in Germany)

• Offshore wind turbine business

opportunities

• First time to award ten billion-level

turnkey project independently.


Group Integration Synergy

CTCI Americas

to be Regional

P&L Center

Regional P&L strategy in the

States. Target for US market

through local team and fuel up

energy to global expansion

CTCI Beijing

Acquired CTCI

Shanghai

Integration of

resources in China and

become local

engineering the leader

Wholly owned

Sub. in Vietnam

To have wholly-owned

subsidiary, CIMAS, as the

key for market development

in Vietnam where become

the major supplier in global

market.

CTCI ASI

Acquired CTCI REI

Strengthen the core business in

Intelligent Solutions,

In Smart Factory, Intelligent Traffic,

Smart Buildings

and Smart Parks


Unit: NT$, Billion

11

New Contracts and Breakdown

✽ As of February 29, 2020, the new contract amount

reached NT$30.5 billion.

Taiwan 44%

China29%

Southeast Asia 12%

India 11%

US 2%

Middle East 2%

Hydrocarbon52%

Power 31%

Environmental 15%

Others 2%

64.5

85.6

44.4

101.7

46.3

0

20

40

60

80

100

120

2015 2016 2017 2018 2019


Backlog and Breakdown

12

Taiwan 64%

Southeast Asia16%

China 10%

India 5%

US 3%

Middle East 2%

Environmental37%

Hydrocarbon33%

Power 12%

General Industry9%

Transportation 6%

Others 3%

Unit: NT$, Billion

191

203

166

208

195

0

50

100

150

200

250

2015 2016 2017 2018 2019

✽ As of February 29, 2020, the backlog amount

reached NT$219 billion.

Business Outlook

13


Global Engineering Market Trends and Strategies - 1/2

The demand for gas-fired power plants and LNG terminals risen due to government

energy policy

Developing renewable energy policy promotes new business opportunities including

offshore wind, geothermal and energy storage.

Business opportunities for air pollution improvement projects for power plants,

decommissioning of incinerators, and water resources following the environmental

protection requirements.

Increased demand for wastewater, liquid waste and energy management for

semiconductor industry

New business from large-scale international enterprises database center in Taiwan

Taiwan

Global

Market

OutlookUS

Middle Eastern petrochemical giants(such as Sabic) intend to increase investment in

Ethane Crackers and related downstream plants in the United States.

Formosa Plastics Group continues to expand U.S. production capacity (investment

of US$10 billion US$)

Hon Hai Flying Eagle Project (investment of US$10 billion over next four years)

Taiwan downstream petrochemical companies are evaluating new investments in the

United States


Global Engineering Market Trends and Strategies - 2/2

Southeast Asia

Focusing on the new southbound policy, combining resources from government and

Taiwanese firms to strengthen presence in Southeast Asia

Indonesian stated-owned oil company, Pertamina , initiates tender of expansion for

several refineries.(CTCI Indonesia subsidiary has been established)

CPC plans to relocate current refineries to Southeast Asia.

New LNG terminals, gas power plants and cogeneration plants in numerous countries

In response to release foreign investment restrictions in China, major international oil

companies (Exxon, BASF, Aramco, Sabic, etc.) and Taiwanese firms are preparing the

next wave of investment plans.

Coronavirus hits mainland economy, follow-up effects must be continuously traced.

Mainland China

Global

Market

Outlook

Middle East

Major petrochemical companies have carefully evaluated the cost-effectiveness of new

investment due to oil prices fallen. They are seeking for the feasibility in investing in the

United States or Asia countries due to lower cost compare to local construction

New launched plans of natural gas and solar power plants


Global Clean Energy Trends

European Energy Policy(Target 2030)• Greenhouse gas emissions reduced at least 40% compared to 1990

• Green energy is not less than 32%

• Energy efficiency increase at least 32.5%

Taiwan Energy Policy(Target 2025)• Renewable energy power generation accounts for 20% of total power generation

• New solar capacity of 20 GW, offshore wind capacity at least 5.7GW

• No new coal-fired units and gas-fired instead.

Banks support Paris agreement• World Bank suspend investment and financing for fossil fuel

power plant after 2020

• HSBC and Standard Chartered Bank stopped their investments

and reduced financing to coal-fired power plants from 2018

• BNP, coal-fired power plant financing below 20% in 2018 and

target renewable energy investment to $ 18 billion

Giants lead the trend• Google reached 100% renewable energy target in 2017

• Apple announced 100% renewable sources in 2018 and

its goal of implementing 4 GW renewable energy to its

supply chains by 2020.


Business Opportunities of Clean Energy

Sources: IEA, Last updated 29 Jan 2020

Installed power generation capacity by source in the Stated Policies Scenario, 2000-2040

Solar PV

Gas

Wind


Worldwide Opportunities – 1/3

Projects won in 2019

(Around NT$14.5 Billion)

22 Solar Plants up

to 26MW(GDDC)

Opportunities in 2020

(Around NT$113 Billion)

Domestic Clean Energy Engineering Opportunities

Ho-Ping Power Station

HP-2 Coal-Fired Boilers

AQCS Upgrade Project

WPD Yun Lin phase II

Offshore Wind Farm

CIP Chang Fang & Xidao

Offshore Wind Farm

Offshore Wind Farm projects

are for wind turbine foundation

fabrication work. (Including

transition piece and pin pile

fabrication)

Other Stage II

Offshore Wind Farm to come

CPC 3rd LNG Receiving terminal and related

facilities(signed contract)

CSC Zhong Neng Offshore Wind

Farm (preferred bidder agreeent)

Orsted Great Chang Hua

Offshore Wind Farm (signed LOI)

Gas Fired Cogen plant Project

Gas Fired Turnkey Project

LNG Receiving terminal and related facilities

Coal-Fired Boilers AQCS Upgrade Project


Worldwide Opportunities – 2/3

Potential Projects of NT$100Bn

Taiwan

• Petrochemical and Petroleum Product

Storage and Transportation Facilities

• Metro Line Extension Plan - System E&M

and Trackworks

• Metro MCT Line - System E&M and

Trackworks

• Refuse Incineration Revamping and

Operation

• Industrial Waste Incineration

• Municipal Waste Water Treatment Plant

(DBO)


Worldwide Opportunities - 3/3

• India Petrochemical Plants in

Gujarat

• Thailand & Malaysia City

Metro and LRT System E&M

Projects

• Thailand & Malaysia IPP and

SPP Co-Generation Power

Plants

• Indonesia General Industry

Projects

• Qatar Gas Field Expansion

• Qatar Petrochemical Plant

• Qatar Waste Heat Recovery

System

• Louisiana Petrochemical

Complex

• Texas Petrochemical Plants

• Louisiana Carbon Black Plant

Air Pollution Control System

and Energy Center

• High-Tech Clean Room

Southeast Asia ＆ India Middle East & North Africa

Potential Projects of NT$41Bn Potential Projects of NT$68Bn

Potential Projects of NT$450 Billion

US

Potential Projects of NT$128Bn

Financial Highlights – Year 2019

21


Unit: NT$, Billion

Consolidated Revenue and Breakdown

22

Taiwan 34%

Southeast Asia 34%

US 11%

China 11%

Middle East 7%

India 3%

Hydrocarbon 49%

Power 18%

Environmental13%

General Industry 11%

Transportation 5%Others4%

67.170.5 71.6

64.1

58.2

0

10

20

30

40

50

60

70

80

2015 2016 2017 2018 2019


Unit: NT$, Thousand

2019/12/31 2018/12/31 YOY

Sales Revenues 58,211,022 100% 64,069,542 100% -9.1%

Operating Costs (54,219,327) -93.1% (59,469,789) -92.8% -8.8%

Gross Profit 3,991,695 6.9% 4,599,753 7.2% -13.2%

Operating expenses (1,823,545) -3.1% (1,883,975) -2.9% -3.2%

Operating income 2,168,150 3.7% 2,715,778 4.2% -20.2%

Total non-operating

income and expenses62,165 0.1% 349,495 0.5% -82.2%

Profit before income

tax2,230,315 3.8% 3,065,273 4.8% -27.2%

Income tax expense (555,990) -1.0% (765,210) -1.2% -27.3%

Profit for the period 1,674,325 2.9% 2,300,063 3.6% -27.2%

Profit attributable to

Owners of the parent1,177,011 2.0% 1,827,537 2.9% -35.6%

Total basic earnings

per share1.54 2.40 -35.8%

23

2019 Consolidated Income Statement


2019 Consolidated Balance Sheet

Unit: NT$, Thousand

2019/12/31 2018/12/31

Current assets* 49,174,593 71% 56,534,559 74%

Non-current assets 20,319,918 29% 19,962,774 26%

Total assets 69,494,511 100% 76,497,333 100%

Current liabilities 36,184,472 52% 51,420,086 67%

Nun-current liabilities 13,963,042 20% 4,451,088 6%

Total Liabilities 50,147,514 72% 55,871,174 73%

Equity attributable to owners of

The parent16,156,443 23% 17,458,729 23%

Non-controlling interest 3,190,554 5% 3,167,430 4%

Total equity 19,346,997 28% 20,626,159 27%

Total liabilities and equity 69,494,511 100% 76,497,333 100%

*Cash and cash equivalents: NT$ 20.8 billion

24


Dividend Payout

2.91 3.22 3.32

2.22 2.51

2.69 2.92

3.68

2.40

1.54

2.42

2.76 2.84

1.99 2.23

2.40 2.60

3.23

2.26 2.00

83% 86% 85%90% 89% 89% 89% 88%

94%

130%

0%

20%

40%

60%

80%

100%

120%

140%

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

每股稅後盈餘每股現金股利現金股息發放率(%)

The unappropriated retained earnings is fully distributed, and the difference is covered by legal reserve.

EPS Dividend Cash Dividend yield(%)


19.4

15.1

20.8

4.8

(4.4)

8.9

2017 2018 2019

Cash and cash equiv. Net cash flow from operating activities

Solid Financial Liquidity

Increase cash position,

strengthen financial structure

• Strong cash inflows from operating

activities

• New high in cash and cash

equivalents

• Support operating activities with

long-term stable funding

(Issuance of five-year unsecured

corporate bond of NT$6 billion)

Unit: NT$, Billion

ctci corporation the 1st investor

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