TECO Electric

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TECO Electric Machinery Co., Ltd
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Safe Harbor Statement

• This Presentation contains certain
  forward-looking statements that are based on
  current expectations and are subject to known and
  unknown risks and uncertainties that could cause
  actual results to differ materially from those
  expressed or implied by such statements.
• Except as required by law, we undertake no
  obligation to update any forward looking
  statements, whether as a result of new
  information, future events or otherwise.

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Agenda

• Company Profile
• Business Highlight
• Appendix

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TECO at A Glance

• Established 1956
• Headquarter Taipei, Taiwan
• Employee 3,200
• Sales and Service Branches
• Over 15 international branches covers markets of
  Taiwan, China, Japan, South-East Asia, North
  America, Mexico, West Europe, Mid-East and South
  America
• Manufacturing Facilities
• Taiwan, China, USA, Philippine, Malaysia,
  Indonesia, Vietnam
• 2006 Consolidated Revenue
• NT 41.0 BN (US 1.2 Bn apprx.)
• Capital
• NT 19.2 BN (US 573 mm apprx.)

TECO Headquarter Nankang Software Park, Taipei,
Taiwan
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Global Manufacturing and Sales Network
Canada
England
Germany
Netherlands
Spain
USA Texas
Italy
Korea
Japan
China
Saudi Arabia
Mexico
Taiwan
Vietnam
India
Thailand
Philippine
Singapore
Malaysia
Indonesia
South Africa
Australia
New Zealand
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Business Scope

• Global Leading Provider of Industrial Products
  and Services
• Most comprehensive product and service offerings
• Industrial Motors
• System Automation
• Construction and Engineering Service
• Commercial Air-conditioning Service
• Brand Name Owner of Quality Home Appliances
• Household Air-conditioner
• Home Convenience
• e.g. Fridge, Washer, Dryer, etc.
• Home Entertainment
• - e.g. TV, DVD player,etc
• Others
• - e.g. Smart Card System

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Historical Growth Momentum

Gross Profit/Operating Revenue Gross
profit includes unrealized / realized
inter-company profit
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Historical Revenue Breakdown
NT Million
As of 2006, Industrial Products Business
represented around 60 of total consolidated
revenue.
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Trend of Gross Margin in Business Units
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Motors Where We Build Our Business
High voltage three-phase motor
High efficiency motor
Rolled Steel Frame Motors
Motors (1/4Hp 60,000Hp)
Crane Motors
Vertical Motors
Inverter Duty Motors
Gear motors
Eddy Current Motors
Aluminum Motors
Wound Roter Induction Motors
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Remarkable Projects

• Zimbabwe Refinery Expansion
• Synchronous Horizontal Ball Mill Motor for mining
• (Platinum)(8,177 HP, 34 Poles)

Oil and Gas in Equatorial Guinea Motors for drive
propane compressors (6,000 HP)
Higher Efficiency Motor for Cement Mill (4,500
HP)
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Agenda

• Company Profile
• Business Review
• Appendix

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Financial Highlight - consolidated
Annualized Number
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Operating Revenue with Gross Margin

Gross Profit/Operating Revenue Gross
profit includes unrealized / realized
inter-company profit
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Operating Income with Operating Margin

Operating Income/Operating Revenue
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Operating Expense
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Revenue Breakdown by Business Units
NT Million
As of 1H 2007, Industrial Products Business
dominated almost 70 of total consolidated
revenue.
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Gross Margin of Main Business Units
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Industrial Products Revenue Breakdown
NT Million
As of 1H 2007, Motor Business represented 67 of
total revenue in Industrial Products Business.
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Motor Business Revenue Breakdown - by Geography
Based on 2006 consolidated number
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Home Appliance Revenue Breakdown
NT Million
As of 1H 2007, A/C, Commercial A/C and LCD TV
business were main sources of Home Appliance
revenue.
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Improving Core Business
NT Million
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Highlights of Company Strategy

• Aggressively Expanding Industrial Products
  Business
• Speeding up capacity expansion
• Cost down through product redesign
• Exploring emerging market, eg. Vietnam, Mid-east,
  Mexico.
• Looking for new applications
• Restructuring Home Appliance Business
• Improved profitability rather than top-line
  growth
• Cost down through finished good outsourcing and
  SKD manufacturing
• Adjusting portfolio of product offering
• Continually disposing non-core investment

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Agenda

• Company Profile
• Business Review
• Appendix

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Income Statements
Gross profit includes unrealized / realized
inter-company profit Cumulated effect of
changes in accounting principles
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Balance Sheets
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Cash Flows
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• Http//www.teco.com.tw
• ir_at_teco.com.tw