Acer Global Data

Acer Inc.

Acer Inc.- Financial and Strategic Analysis Review

Reference Code: GDTC27000FSA

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Acer Inc. - Financial and Strategic Analysis Review Publication Date: 24-Jan-2013


Company Snapshot Key InformationAcer Inc., Key InformationWeb Address www.acer-group.comFinancial year-end DecemberNumber of Employees 8,018TPE 2353Source : GlobalData

Key RatiosAcer Inc., Key Ratios

P/E NA

Return on Equity (%) -8.72

Debt/Equity (%) 32.76

Operating profit margin (%) -1.35

Dividend Yield NA

Note: Above ratios are based on share price as of 22-Jan-2013

Source : GlobalData

Share DataAcer Inc., Share DataShare Price (TWD) as on22-Jan-2013 24.70

EPS (TWD) -2.52

Market Cap (million TWD) 67,735

Enterprise Value (million TWD) 5,367

Shares Outstanding (million) 2,742

Source : GlobalData

Performance ChartAcer Inc., Performance Chart (2007 - 2011)

Source : GlobalData

Company Overview Acer Inc.(Acer) conducts marketing of informationtechnology products across the world. The companymarkets Acer brand products including smartphones anddesktop personal computers, servers and storage systems,digital cameras, LCD monitors, projectors, andhigh-definition TVs, peripherals and e-business solutionsthroughout the world. The company operations focus onmainstream information technology markets. Acer hascollaborated with Scuderia Ferrari with engineeringexcellence, stunning design and technological prestige.The company markets its products under four brands,namely, Acer, Gateway, Packard Bell and eMachines.

SWOT Analysis Acer Inc., SWOT Analysis

Strengths Weaknesses Strong Market Position

Broad Product Portfolio

Multi Brand Strategy

Weak OperationalPerformance

Opportunities Threats New Product Launches andAgreements

Benefits from Partnership inOlympic

Demand for Smartphones

Risk from Gray Market

Competitive Pressure

Rapid Technological Changes

Source : GlobalData

Financial Performance The company reported revenues of (Taiwanese Dollars)TWD 475,341.99 million during the fiscal year endedDecember 2011, a decrease of 24.44% from 2010. Theoperating loss of the company was TWD 6,396.20million during the fiscal year 2011, as against anoperating income of TWD 17,825.74 million during 2010.The net loss of the company was TWD 6,601.97 millionduring the fiscal year 2011, as against a net profit ofTWD 15,118.00 million during 2010.

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Acer Inc. - Key FactsAcer Inc., Key FactsCorporate Address 7F.-5, No.369, Fuxing N. Rd.,

Taipei City, Taipei, 105, TaiwanTicker Symbol, StockExchange

2353 [Taiwan Stock Exchange]

Telephone +886 2 27195000 No. of Employees 8,018Fax +886 2 87125519 Fiscal Year End DecemberURL www.acer-group.com Revenue (in USD Million) 16107.83Industry Technology Revenue (in TWD Million) 475341.99Locations Australia, Austria, Belgium, Brazil, Bulgaria, Canada, China, Croatia, Czech Republic, Denmark,

Estonia, Finland, France, Germany, Gibraltar, Greece, Hong Kong Special Administrative Region ofChina, Hungary, India, Indonesia, Israel, Italy, Japan, Latvia, Lithuania, Malaysia, Mexico, NewZealand, Norway, Philippines, Poland, Portugal, Romania, Russian Federation, Serbia, Singapore,Slovakia, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, The Netherlands, Turkey,Ukraine, United Kingdom, United States, Vietnam

Source : GlobalData

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Acer Inc. - Business Description Acer Inc.(Acer) is a global IT solutions provider. The company manufactures and markets information technology productsall across the world. The companys main business is to markets its Acer branded mobile and desktop PCs, servers andstorage, LCD monitors and high-definition TVs and peripherals. The company operates through four brands, namely, Acer,Gateway, Packard Bell and eMachines. Acer conducts research, design, manufacture and distribution of computers and mobile phones. The product portfolioincludes PC notebooks, desktops, monitors, server and storage systems, peripherals devices, digital devices. Its majorcustomers include government, business, education and home users. The company utilizes Channel Business Model(CBM), which involves working with first class PC industry suppliers and channel partners, thereby fortifying brand value,proper management of global logistics, worldwide business channels and customer service. Gateway offers PC systems, notebooks and displays systems. Gateway develops, manufactures, supports and marketshardware for computers, personal computers, computer monitors, servers, and computer accessories. The companysproducts are sold exclusively by leading retailers, e-tailers and channel partners in the Australia, Austria, Belgium, Canada,France, Germany, Japan, Netharlands, Mexico, Luxemburg, Newzealand, Sweden, Switzerland and the UK. eMachines focuses on providing desktops, displays and all-in-one PC systems. The companys products are targeted atbudget conscious consumers who want full-featured systems at low cost. The company markets its products throughleading e-tailers, retailers and channel partners in the US and through selected international partners outside the US. Packard Bell conducts the design, manufacture and marketing of IT products. The product portfolio of the companycomprises desktops, notebooks, net books, tablet, monitors and software. The companys products are customizedaccording to customers needs and designed to reflect their personality. Its products are marketed through online shoppingin select regions and through retailers in 27 countries. The company principally focuses on the European market. Inaddition, the company operates in Africa, Latin America, and the Middle East. The company also holds contracts with leading companies including Microsoft Inc. (software license agreement), IBMCorporation (patent license agreement), Lucent Technologies GRL, LLC (patent license agreement), MPEG LA, LLC(patent license agreement), ID SoftCapital Inc (consultant service agreement), and Citibank N.A. (credit facility agreement).Acer has collaboration with Scuderia Ferrari, for sponsoring of Scuderia Ferrari. In 2011, Acer also conducts R&D related activity. Its R&D activity focusing on the user interface, industrial design, cloudtechnology, and ICT related hardware and software. The company spent NTD1.2 billion on for the fiscal year ended 2011which accounted for 0.25% of total revenue of the company. The company classifies its geographical operations into four regions namely, Europe,MiddleEast and Africa, Pan America,Asia and Taiwan. For the fiscal year ended December 2011, the company accounted for 35% of the total revenue fromEMEA, followed by Asia with 33%, Pan America with 26% and Taiwan with 6%. In July 2012, Acer declared its intention to provide key services for athletes. The Acer Internet Lounges provide athleteswith fully-equipped computing stations which provide broadband Internet access, printer capabilities and social networkingapplications, available 24/7 during both Olympic and Paralympic Games. In June 2012, Acer introduced worlds first 6,000lumens professional projector, the P7215, using a single lamp. This projector is very eco-friendly, delivering light for up to2,000 hours while using 350 watts, reducing power consumption and maintenance costs.

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Acer Inc. - Major Products and ServicesAcer focuses on the manufacture and marketing of information technology products. The company's key products includethe following: Acer Inc., Major Products and ServicesProducts:

Desktops,

Notebooks,

Tablet PCs,

Severs and Storage,

Handhelds,

Monitors,

Projectors,

DSC,

LCD TV,

Displays,

Softwares

Brands:

Acer,

Gateway,

Packard Bell,

eMachines.

Source : GlobalData

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Acer Inc. - History

Acer Inc., History

2012 Management Changes Acer appointed He Yihua as chief financial officer instead of Wang Meili whowas serving as acting CFO

2011 Acquisitions/Mergers/Takeovers Acer announced its intention to acquire iGware Inc.

2011 Contracts/Agreements In January 2011, the company signed an agreement with Ducati to become

official partner of Ducati. Under the terms of agreement, the company willsupply hardware including Acer branded clients and Gateway servers for aterm of two years.

2011 Divestiture Acer divested holdings in E-LIFE MALL CORPORATION for NTD610.67m

2011 Divestiture Acer's subsidiary E-TEN Information Systems Co., Ltd sold buildings with a

total area of 7,408.83 pings and land measured 1,027.17 pings to DeltaElectronics, Inc. The total contract was worth NTD2.53 billion

2011 Management Changes Acer appointed Wang Meili as chief financial officer instead of Du Zhemin

2011 New Products/Services In May, the company announced that Acer ICONIA SMART, the next

generation smartphone received Best Choice and Design & Innovationawards at Computex 2011 held in Asia.

2010 Contracts/Agreements Acer and Founder Tech strengthened their long term PC business cooperation.

2010 Corporate Awards The company won four iF product design awards for its Acer Aspire 8943G

notebook, Acer C20 pico projector, Packard Bell EasyNote Butterfly s notebookand Gateway FHD2303L monitor.

2010 Corporate Awards The company's Acer Aspire 3820T/TG notebook and Aspire X Series desktop

won Computex Taipei Design & Innovation awards. Further its Aspire 8943Gnotebook won Gold award.

2010 Corporate Changes/Expansions The company expanded its operation by establishing global IT manufacturing

center in Chongqing, China. The expansion will enhance Acers presence inChina and will help in boost the companys competitiveness along with itsleadership in the mobile-PC market.

2010 New Products/Services The company launched beTouch E110, Acer beTouch E400, Acer neoTouch

P300 and Acer neoTouch P400.

2009 Corporate Awards Acer's Aspire Gemstone "blue" series notebooks won the industry awards.

2009 New Products/Services The company introduced android based Aspire One netbook. It will providefaster internet connections and enhanced efficiency.

2009 New Products/Services The company introduced the new mobile computing Aspire Timeline series.

2009 New Products/Services The company launched four new smartphones Acer M900, F900, X960 and

DX900. The phones are targeted at persons who want to utilize bettertechnology both for their personal and their professional needs.

2009 Other The company joined the Open Handset Alliance to co-develop the Android

platform.

2008 Contracts/Agreements Acer joined Electronics Industry Citizenship Coalition.

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2008 New Products/Services The company introduced a new line of PCs called 'Aspire PREDATOR' forpassionate gamers.

2008 New Products/Services The company introduced Aspire "one", its first mobile Internet device.

2007 New Products/Services Acer AT3705-MGW LCD TV became the world's first digital TV to pass Intel

Viiv technology verification and Acer introduced Windows Vista with full rangeof Vista-certified LCD monitors.

2002 New Products/Services TravelMate C100 the first Convertible Tablet PC was launched

2002 Plans/Strategy Acer Aspire was launched.

1997 Acquisitions/Mergers/Takeovers The company acquired Texas Instruments' mobile computing business in 1997.

1992 New Products/Services Acer introduced world's first 386SX-33 chipset

1991 New Products/Services First time Acer introduced ChipUp technology to the world.

1990 Acquisitions/Mergers/Takeovers The company acquired Altos in 1990.

1989 Contracts/Agreements Acer made a Joint venture with Texas Instruments.

1988 Stock Listings/IPO IPO Launched by Acer Inc.

1986 Other Acer beats IBM with 32-bit PCs.

1982 New Products/Services Microprocessor-II first 8-bit home computer in Taiwan was introduced.

1981 New Products/Services Microprocessor-I first branded product introduced by Acer.

1976 Incorporation/Establishment Acer was founded as Multitech, with trade and product design operations

1879 New Products/Services Taiwans first mass produced computer for export were designed by Acer.

Source : GlobalData

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Acer Inc. - SWOT Analysis SWOT Analysis - OverviewAcer undertakes the design, manufacture, and selling of a wide range of Information Technology products. Its productportfolio includes Notebooks, Tablet PCs, Servers & Storage devices, Handhelds, Monitors, Projectors, DSC, andTelevisions. The operations of Acer are spreads across the world. It could leverage its broad product portfolio, strongmarket position and multi brand strategy to garner higher revenue and gain a competitive edge over its peers. The growingdemand for smartphones and LCD market, and new product launches and agreements of the company will enhance itsperformance and position in the market. However the intense competition in the market and gray market risk and rapidtechnological changes could adversely affect its future business operations. Acer Inc. - StrengthsStrength - Strong Market PositionAcer has a strong presence in Europe, the Middle East, Africa, Asia, and North America. It has a network of sales andsubsidiaries in 60 countries. The company has a large distribution network, which covers 100 countries. The company wasranked No. 2 for notebooks and No. 4 for total PC shipments by Gartner data, 2011. Regionally, its rank and market sharein Asia-Pacific for total PCs was No. 2 and 11.1%; while China ranked No. 3 and accounted 8.8% of market share. Acerreached the third place in the worldwide projector market and achieved a 7.2% market share in the first quarter of 2011. In2010, Acer showed strong growth in the global PC market as a leading global vendor of IT products and ranked third with42.4 million shipments and 12% market share in the global PC market. According to Gartner and IDC, as of April 29, 2010Acer reached 1st place in worldwide notebook shipments. As per the fourth quarter of 2010, Acer ranked in second placeworldwide, with shipments of 11.9 million units. In addition, the US PC market reported Acer derived 11% share and rankedNo. 3, while in Asia Pacific it derived 8.7% market share and ranked No. 4. The strong growth of the company enabled it toemerge as the fastest-growing vendor. Its wide geographical presence and innovative business models mitigate the risksfrom any economic downturn or concentration of business. It also helps in serving a large number of customers. Strength - Broad Product PortfolioThe company operates through four brands, namely, Acer, Gateway, Packard Bell and eMachines. The company isengaged in the manufacture and sale of a wide range of Information Technology (IT) products. It also provides computersoftware and maintenance services. The IT product range of the company includes computer systems (desktops,notebooks, handhelds), servers and storage products, cathode ray tube (CRT) monitors, liquid crystal display (LCD)monitors, peripherals, digital video disc (DVD) players, Internet appliances (IA) and personal multimedia, projectors, LCDtelevisions (TV) and digital still cameras (DSC). The large variety of products offered by the company enable it to serve adiverse range of consumer markets. Moreover, it also enables the company to mark its presence across the value chainand minimizes the risk from diversification of portfolio. Strength - Multi Brand StrategyAcer markets its products through four brands, namely, Acer, Gateway, Packard Bell and eMachines. Each of its brandssignifies a unique customer base, based on individual identity and personality. Acer is perceived as innovative, Gatewayand Packard Bell are always related with style and trend, whereas eMachines is associated with efficient and convenientPC systems. The company targets various segments of population with its portfolio of different brands for higher economiesof scale. The multi-brand strategy enables it to communicate in a proper manner with all the social-demographic groups.Acer utilizes the positive awareness of the companies, which it acquired over a period of time. The company tries tocapture maximum market share by taking advantage of their unique customer base, based on the individual identity andpersonality of all brands. The multi-brand strategy helps the company in identifying and satisfying specific user segmentswith their specific needs. Further, the strategy enables the company to increase the overall customer base. Acer Inc. - WeaknessesWeakness - Weak Operational PerformanceAcers declining financial performance is a major cause for concern, as a healthy cash balance is essential to augment itsoperational activities and business expansion plans. Declining revenue could adversely affect the companys businessoperations. During the fiscal year ended December 2011, the company generated revenue of TWD4,753,41.99m, reflectinga decrease of 24.4% over TWD6,290,58.97m in 2010. The company posted operating loss of TWD6,396.20m during fiscalyear 2011, as compared to an operating profit of TWD17,825.74m in 2010. It reported net loss of TWD6,601.97m duringfiscal year 2011, as compared to a net income of TWD15,118m in 2010. Weakening financial position could be a majorhindrance for the companys future business operations and profitability. Declining revenues affect not only the financialhealth, but also the future business expansion and business development initiatives of the company.

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Acer Inc. - OpportunitiesOpportunity - New Product Launches and AgreementsCompanies operating in internet businesses need to update their product range regularly in order to stay abreast with thelatest trends and designs. In 2012, Acer introduced P7215, the worlds first 6,000 lumens professional projector using asingle lamp; Windows 8-based products, which includes ultrabooks, tablets, and AIO desktops; premium Windows 8Ultrabook devices - the Aspire S7 Series; the Aspire V5 Series, the new range of thin and light notebooks; new Full HDtablet, the ICONIA TAB A700, which delivers Full HD experiences in a highly mobile package; the ICONIA TAB A510Olympic Games Edition; the K520 Hybrid LED-Laser Projector; V3 Series notebooks in 14-, 15.6- and 17.3-inch models;two new Windows 8 all-in-one (AIO) PCs and Aspire Timeline Ultra M3. Besides in 2012, the company advanced its serverline with a whole new line up of refreshed server products featuring Intel Xeon processor E3-1200 v2 product family. Besides in August 2012, Acer entered into a global alliance with Devon IT, a world-leading thin client hardware/softwareprovider, to address the increasing needs of commercial IT customers. The agreement enables it to offer a broad solution,which addresses the needs for next generation cloud computing, featuring security, manageability and affordability. Thesenew launches and agreements could help the company in attracting more customers and in turn help in its top-line growth. Opportunity - Benefits from Partnership in OlympicAcer was selected as the Worldwide TOP Partner of the Olympic Movement in the official computing equipment productcategory for the 2010 Olympic Winter Games in Vancouver and has been selected for the 2012 Olympic Games in London.In 2012, Acer launched the ICONIA TAB A510 Olympic Games Edition. It also created a special edition of the Aspire 1410,Aspire 4810T notebooks and Gxx5H LCD displays for the Olympic Games. Further, the companys Veriton 1000 andTravelMate 6592 will support the whole Olympic Games IT infrastructure. Acer provided approximately 6500 computingequipment and over 100 engineers and technicians to support the management of Olympic Games to ensure a flawlessflow of the sporting event. The companys equipment ran continuously in harsh weather and stress till the end of the event.The selection of the companys products shows its capability in performance and reliability for seamless, error-freeoperation. The company would be perceived as a reliable brand which will enhance its brand image as well as marketposition. Opportunity - Demand for SmartphonesThe company could capitalize on the growing demand for smartphones, which is emerging as a major growth opportunityfor mobile device manufacturers. According to industry analysts, the global market for smartphones, is predicted to reachmore than 460 million units in 2011, an increase of approximately 50% over 2010, more than 650 million units(approximately 35%) in 2012, more than 900 million units (approximately 35%) in 2013, and surpass one billion by 2014.The global smartphone market is dominated by Android, with 61% market share and iOS with 20.5% of the globalsmartphone market in 2012. The growth would be driven by factors including lower product cost, improved handset designand functionalities, the expansion of global mobile email and browsing services, the emergence of 3G and 4G networktechnologies, and the standardization and upgrades of operating systems. It is also estimated that consumer awarenessabout the advantages offered by these devices, especially email and e-transactions, among others, would drivesmartphone business growth even during tough economic times. Considerable demand is expected from developingcountries, particularly the Asia-Pacific region, besides North America. Emerging countries including China, India and Brazilis expected to witness significant usage in smartphones other than the US and the UK. Opportunity - Growth in LCD MarketThe LCD market growth is driven by LED, OLED, 3D, and Touch. Future growth in the LCD sales could increase thecompany's profitability and performance. The LCD TV panel revenue is expected to reach $65 billion in 2013. The increasein LCD sales is due to the rising demand and the shift to larger-sized displays, the accelerating sales higher-value panelsand increased manufacturing efficiency. The higher-value panels sport features including LED backlighting, fullhigh-definition resolution and faster refresh rates of 120Hz and 240Hz. The overall LCD TV unit shipment is estimated toincrease with a CAGR of 18% from 2010 to 2012. The company operates its major portion of the business with liquidcrystal display (LCDs). The demand for LCD is increasing. The large area LCD panels are forecasted to grow at more than 12% in 2011. Thedemand for flat panel LCDs is expected to grow in the coming years. As per industry analysts, the world shipments of LCDTVs would to double from approximately 141 million in 2009 to 278 million units by 2014. The increase in demand for flatpanel LCD will be primarily from North America, Europe and emerging markets. The increase in demand for flat panel LCDproducts would lead to increase in the overall sales and performance of the company. Acer Inc. - ThreatsThreat - Risk from Gray MarketAcer faces the risk of its products being sold in the gray market. The company markets and sells its products through

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various channels namely, original equipment manufacturers (OEMs) and original design manufacturers (ODMs), personalcomputer (PC) and network communications products users, and other manufacturers. However, several of the companysproducts are diverted from authorized distribution channels and sold in the gray market. The products that enter the graymarket are discounted heavily and sold to customers. The cheap availability of products in such markets adversely affectsthe demand for the companys products. Moreover, the products sold in gray markets are damaged, mishandled or altered.The sale of such products under companys brand name may have a negative impact on its brand image. Inability to controlsales of its products in the gray market could have an adverse affect on the company. Threat - Competitive PressureAcer faces intense competition from other leading players such as Apple, HP, Dell Inc, and Intel Corporation. The majorforce behind stiff competition in the computer industry is rapid and sustained technical progress. Each year, severalelectronic components and technologies become better, faster, and cheaper providing opportunities to improve existingcomputers as well as to design new kinds. Cut-throat competition in the industry poses a threat to the position of thecompany. In most of the segments, competitors are engaged in price cutting measures, as a mean to expand their marketshares. For instance, Kodak has competitively priced its printer ink price, even though HP and Epson increased theirprices. The fierce competition in the various markets served by the company, may adversely affect its business and marketposition. Unless the company upgrades, innovates and adopts the latest technology for bringing new products to markets,its performance will be adversely affected. Threat - Rapid Technological ChangesThe company's offerings are characterized by rapid technological changes, which may affect its business operations. Tocompete effectively with its peers, the company should continually introduce new products that meet and exceed thecustomers requirements. The introduction of products using new technologies or the adoption of new industry standardscould make existing products, or products under development, obsolete or unmarketable. Inability to study the evolvingtechnological landscape may impact the companys competitive position. NOTE:* Sector average represents top companies within the specified sectorThe above strategic analysis is based on in-house research and reflects the publishers opinion only

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Acer Inc. - Key Competitors Acer Inc., Key Competitors

Name HeadquartersASUSTeK Computer Inc. TaiwanAU Optronics Corp. TaiwanDell Inc. United StatesHewlett-Packard Company United StatesHuawei Technologies Co., Ltd. ChinaJabil Circuit, Inc. United StatesLenovo Group Limited Hong Kong Special Administrative Region of ChinaMTN Group Limited South AfricaShuttle Inc TaiwanGlobalData

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Acer Inc. - Key Employees Acer Inc., Key Employees

Name Job Title Board Level Since Age

J.T. Wang Chairman, Chief ExecutiveOfficerExecutive Board

2011 58

Gianfranco Lanci Director Non Executive Board Walter Deppeler Director Non Executive Board Stan Shih Director Non Executive Board Hsin-I Lin Director Non Executive Board Hung Rouan Director Non Executive Board Philip Peng Director, Legal Representative Non Executive Board Julian Michael Hornsmith Director Non Executive Board F.C. Tseng Director Non Executive Board Jim Wong President Senior Management 54Yihua He Chief Financial Officer Senior Management 2012

Walter Deppeler Chief Marketing Officer, SeniorVice PresidentSenior Management

2011

Yongren LinChief Technology Officer,Deputy General Manager,Business Division

Senior Management

Xianlang LinGeneral Manager, BusinessDivision , Senior Vice President,Global

Senior Management

2011

Oliver AhrensGeneral Manager, OverseasBusiness , Vice President,Global

Senior Management

2009

Ruomeng FuGeneral Manager, OverseasBusiness Division , VicePresident, Global

Senior Management

2011

Bowen Jiang General Manager, BusinessDivision , Vice President, GlobalSenior Management

2007

Yiwan LinGeneral Manager, OverseasBusiness Division , VicePresident, Global

Senior Management

2007

Source : GlobalData

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Acer Inc. - Company Statement A statement by Mr. J. T. Wang, the chief executive officer and the chairman of Acer Inc. is given below. The statement has been takenfrom the company's 2011 annual report. Looking back to our business performance on 2011, Acer Inc.encountered many difficulties. Mainly due to the high channel inventory inEMEA operations, complex products and brand strategy, high level personnel readjustment and reorganization, Europe and USeconomic slowdown, the business performance have been impacted significantly. In 2011, Acers consolidated revenue was NT475.3B (US15.7B), declining 24.4% year-on-year (YOY), and operating loss reachedNT$6.4B (US$212M). Profit-after-tax (PAT) was -NT6.6B (-US$219M) andearnings-per-share (EPS) was -NT$2.52. For this result, we would like to express our sincere apology to all shareholders. Shipments wise, according to leading market research company, Gartner Dataquest, last year Acer was ranked No.4 for total PCs andNo. 2 for notebook worldwide. Regionally, Acer held No.2 position for total PCs in the Asia Pacific, No.3 in China, representing anobvious growth in the emerging markets in comparison with EMEA and US. After the resignation of Mr. Gianfranco Lanci, Acers former CEO and President, Acer soon discovered high channel inventory anddisputed accounts receivable in EMEA operations. In order to solve the issue, the management team decided to write-off itsoperational loss one time. Together with the compensation for reorganization, Acer has suffered a huge loss for which we deeply feelsorry. Since the second half of last year, Acer has extended the inventory management to channel side so to accurately access to thechannel sell-out information. In the past few years, our corporate strategy is maximizing volume growth via multi-brands. However, front and back-end operationbecome too complicated to manage because of the redundant brands and product models. Hence, Acer has implemented a new policy simplification. By following this principle, we are simplifying our brands, product models, and the entire operation in pursuit of betterdesign, quality, performance, and operation speed and efficiency, which will restore our competitiveness. Currently, PC is Acers core business. Our strategy is to simplify multibrands, yet to continue of seeking larger economies of scale. Weneed to ensure there must be a differentiation among product positioning and create value for our customers. With this mindset, we willplan the various product models for different brands. Concurrently, for the development of tablets PCs and mobile devices, Acer isfocusing strategically on a limited selection of models to pursue business performance. Looking towards 2012, although PCs have been impacted by the new challenges arise from the remarkable transformation of ICTindustry, there are still promising opportunities to be seized. The two utmost are Ultrabook and Windows 8. Currently, Acer is leading inthe Ultrabook trend, and we foresee that in the next few years, thin and light, instant on, instant connect, and long battery life willbecome standard on all notebooks. Windows 8, which will launch in the second half of the year, can be applied to Ultrabooks andmobile devices. We expect that it could bring about substantial business opportunity and will pose a favorable situation for us. Last year, with the objective of mid-to long-term cloud deployment, Acer acquired a US-based iGware Inc. In early 2012, Acer alreadyachieved a visible result. AcerCloud can connect all personal devices including different form factors, and supports across platforms. Itallows users to securely transfer digital content in a safe personal space for anytime,anywhere access. We are shipping Acersconsumer PCs bundling with AcerCloud, which is expected to become a key element to create differentiation for Acer products and toenhance our brand value. Acers key priorities in the future are to strengthen product innovation from users point of view, create value for our customers, andenhance brand positioning. By following these principles, we will naturally increase our market shares and profits. Moreover, we willsolidify our position as a world-leading vendor of notebook PCs, operate the mobile devices business pragmatically, further expand intokey emerging markets, boost our presence in the commercial PC, and continue to reinforce globalization. After a significant reorganization and personnel readjustments, Acers new management is ready with a clear set of strategies to graspthe new opportunities. Meanwhile, we will also continue strengthen corporate governance. Acers current business operation is becoming more stable and is back to the right track. With persistent hard work, 2012 will be theyear of returning to growth and profitability again. Finally, on behalf of Acer, Id like to thank each shareholders long-term support andwish we can continue to build a mutually winning future.

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Acer Inc. - Locations And Subsidiaries Head OfficeAcer Inc.7F.-5, No.369Fuxing N. Rd.Taipei CityTaipeiZIP: 105TaiwanTel: +886 2 27195000Fax: +886 2 87125519 Other Locations & Subsidiaries Acer Inc., SubsidiariesAcer America Corp.333 W. San Carlos StreetSuite 1500San JoseCAUnited StatesTel: +1 408 533 7700Fax: +1 408 533 4555Url: www.acer.com/us

Acer Sales & Services Sdn. BhdLevel 24, Bangunan AmFinanceNo. 8 Jalan Yap Kwan SengKuala LumpurMalaysiaTel: +60 3 2162 1388Fax: +60 3 2162 4949Url: www.acer.com.my

Acer Computer (Shanghai) Ltd.3F, Headquarters BuildingNo. 168, Xizang Middle Rd.ShanghaiChinaTel: +86 21 5117 8999Fax: +86 21 6352 8628

Acer India (Pvt) Ltd.1F, George Thangiah Complex (East)80 ft. Road, IndiranagarBangaloreKarnatakaIndiaTel: +91 80 25219520Fax: +91 80 25219535Url: www.acer.co.in

Acer Africa (Pty) LtdAcer HouseNaivasha Road, Sunninghill, Ext. 85sandtonSouth AfricaTel: +27 11 233 6100Fax: +27 11 233 6200Url: www.acer.co.za

PT Acer IndonesiaWisma 46-Kota BNI,Suite 1508JlJendral Sudirman Kav. 01JakartaIndonesiaTel: +62 21 574 5888Fax: +62 21 574 6263Url: www.acer.co.id/

Acer Japan Corp.18F, Nishi Shinjuku Mitsui Bldg.6-24-1,Nishi-Shinjuku, Shinjuku-kuTokyoJapanTel: +81 3 5324 2788Fax: +81 3 5324 2786Url: www.acer.co.jp/

Acer Computer New Zealand LtdGround Floor, 407Great South RoadGreenlane AucklandNew ZealandTel: +64 9 969 5600Fax: +64 9 526 5002Url: www.acer.co.nz/

Acer Philippines, Inc.Unit 3401 34/F PBCom Tower 6795

Acer Computer Co., Ltd191/62-63, 16th Floor

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Ayala Avenue corner V.A. Rufino St.Salcedo VillageMakati CityPhilippinesTel: +63 815 3388Fax: +63 815 4940Url: www.acer.com.ph/

CTI Tower, Rachadapisek RdKlongtoey,BangkokThailandTel: +66 661 9700Fax: +66 661 9721Url: www.acer.co.th/

Acer Latin America, Inc.3750 N.W. 87th Ave.,Suite 640MiamiFLUnited StatesTel: +1 305 392 7000Fax: +1 305 392 7020Url: www.acer.com/latinoamerica

Acer Austria GmbHEuroparing F15Brunn am GebirgeAustriaTel: +43 2236 3075 200Fax: +43 2236 3075 250Url: www.acer.at/

Source : GlobalData

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Acer Inc. - Financial Ratios Financial Ratios - Capital Market RatiosAcer Inc., Ratios based on current share price

Key Ratios 22-Jan-2013Enterprise Value/Sales 0.11Enterprise Value/Total Assets 0.22Note: Above ratios are based on share price as of 22-Jan-2013, the above ratios are absolute numbersSource : GlobalData

Financial Ratios - Annual RatiosAcer Inc., Annual Ratios

Key Ratios Unit/Currency 2007 2008 2009 2010 2011Equity Ratios EPS (Earnings per Share) TWD 5.13 4.56 4.25 5.57 -2.52Dividend per Share TWD 3.51 1.98 3.10 3.60 Dividend Cover Absolute 1.46 2.30 1.37 1.55 Book Value per Share TWD 30.98 31.12 34.68 35.07 28.83Cash Value per Share TWD 15.3 8.37 20.13 25.61 22.11

Profitability Ratios Gross Margin % 10.26 10.49 10.16 10.25 8.12Operating Margin % 2.2 2.25 2.57 2.83 -1.35Net Profit Margin % 2.8 2.15 1.98.00 2.40 -1.39Profit Markup % 11.44 11.72 11.31 PBT Margin (Profit Before Tax) % 3.27 2.71 2.61 3.07 -1.56Return on Equity % 16.87 14.26 12.29 16.13 -8.72Return on Capital Employed % 10.14 13.03 13.29 15.11 -6.25Return on Assets % 5.33 4.82 3.90 5.39 -2.66Return on Fixed Assets % 19.72 21.50 25.09 32.57 -12.17Return on Working Capital % 20.88 33.09 28.28 28.20 -12.87

Growth Ratios Sales Growth % 31.71 18.22 5.07 9.60 -24.44Operating Income Growth % 57.48 20.45 20.47 20.61 -135.88EBITDA Growth % 11.52 -2.00 1.19 29.01.00 -138.41Net Income Growth % 26.82 -9.39 -3.31 33.16 -143.67EPS Growth % 15.22 -2.64 -10.31 27.34 -144.47Working Capital Growth % -4.9 -24.00 40.96.00 20.93 -21.38

Cost Ratios Operating Costs (% of Sales) % 97.8 97.75 97.43 97.17 101.35Administration Costs (% of Sales) % 7.98 7.81 7.34 7.16 9.22

Liquidity Ratios Current Ratio Absolute 1.34 1.25 1.29 1.39 1.34Quick Ratio Absolute 1.1 0.98 1.01.00 1.14 1.07Cash Ratio Absolute 0.29 0.15 0.30 0.42 0.40

Leverage Ratios Debt to Equity Ratio % 30.69 17.59 14.16 30.63 32.76Net Debt to Equity Absolute -0.19 -0.09 -0.44 -0.42 -0.44Debt to Capital Ratio % 23.47 15.39 11.77 24.35 24.27

Efficiency Ratios

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Asset Turnover Absolute 1.9 2.24 1.97.00 2.24 1.91Fixed Asset Turnover Absolute 53.5 58.51 66.16 108.12 70.28Inventory Turnover Absolute 12.26 12.22 10.07 13.69 10.92Current Asset Turnover Absolute 2.41 2.93 2.47 2.79 2.43Capital Employed Turnover Absolute 6.02 6.64 6.21 6.71 6.28Working Capital Turnover Absolute 9.47 14.73 10.98.00 9.95.00 9.57Revenue per Employee TWD 59,686,337Net Income per Employee TWD -828,976Capex to Sales % 0.12 0.11 0.13 0.18 0.20R&D to Sales % 0.08 0.10 0.15 0.19 0.24Source : GlobalData

Financial Ratios - Interim RatiosAcer Inc., Interim Ratios

Key Ratios Unit/Currency Sep-2011 Dec-2011 Mar-2012 Jun-2012 Sep-2012Interim EPS (Earnings per Share) TWD 0.44 -2.58 -0.42 0.04 0.12Book Value per Share TWD 35.72 29.18 29.39 28.83 29.04Gross Margin % 10.32 3.10 8.96 9.15 9.38Operating Margin % 1.49 -6.94 -1.12 0.06 0.12Net Profit Margin % 0.93 -6.65 -0.93 0.07 0.29Profit Markup % 11.51 3.20 9.84 10.07 10.35PBT Margin (Profit Before Tax) % 1.17 -7.44 -0.91 -0.19 0.54Operating Costs (% of Sales) % 98.51 106.94 101.12 99.94 99.88Administration Costs (% of Sales) % 8.53 9.68 9.78 9.04 8.70Current Ratio Absolute 1.45 1.25 1.29 1.34 1.31Quick Ratio Absolute 1.19 0.98 1.01 1.07 1.01Debt to Equity Ratio % 30.29 32.31 32.59 32.76 30.79Net Debt to Equity Absolute -22.39 -33.79 -16.48 -43.93 -44.47Debt to Capital Ratio % 24.07 26.31 26.36 24.27 23.06Source : GlobalData

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Financial Ratios - Ratio Charts

Acer Inc., Ratio ChartsEPS Operating Margin

Return on Equity Return on Assets

Debt to Equity Ratio Current Ratio

Source : GlobalData

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AppendixThe data and analysis within this report is driven by GlobalData.GlobalData gives you key information to drive sales, investment and deal making activity in your business.The key industries include Alternative Energy, Construction, Oil & Gas, Clean Technology, Technology andTelecommunication, Healthcare, Power, Financial Services, Retail & Consumer Packaged Goods and Transport. MethodologyGlobalData company reports are based on a core set of research techniques which ensure the best possible level of qualityand accuracy of data. The key sources used include:Company WebsitesCompany Annual ReportsSEC FilingsPress ReleasesProprietary Databases Currency Codes

Currency Code CurrencyTWD Taiwanese DollarsGlobalData

Ratio Definitions

Capital Market RatiosCapital Market Ratios measure investor response to owning a company's stock and also the cost of issuingstock.Price/EarningsRatio (P/E)

Price/Earnings (P/E) ratio is a measure of the price paid for a share relative to the annualincome earned per share. It is a financial ratio used for valuation: a higher P/E ratiomeans that investors are paying more for each unit of income, so the stock is moreexpensive compared to one with lower P/E ratio. A high P/E suggests that investors areexpecting higher earnings growth in the future compared to companies with a lower P/E.Price per share is as of previous business close, and EPS is from latest annual report.

Calculation: Price per Share / Earnings per ShareEnterpriseValue/Earningsbefore Interest, Tax,Depreciation &Amortization(EV/EBITDA)

Enterprise Value/EBITDA (EV/EBITDA) is a valuation multiple that is often used inparallel with, or as an alternative to, the P/E ratio. The main advantage of EV/EBITDAover the PE ratio is that it is unaffected by a company's capital structure. It compares thevalue of a business, free of debt, to earnings before interest. Price per share is as ofprevious business close, and shares outstanding last reported. Other items are fromlatest annual report.Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / (Net Income +

Interest + Tax + Depreciation + Amortization)EnterpriseValue/Sales

Enterprise Value/Sales (EV/Sales) is a ratio that provides an idea of how much it costs tobuy the company's sales. EV/Sales is seen as more accurate than Price/Sales becausemarket capitalization does not take into account the amount of debt a company has,which needs to be paid back at some point. Price per share is as of previous businessclose, and shares outstanding last reported. Other items are from latest annual report.

Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / SalesEnterpriseValue/OperatingProfit

Enterprise Value/Operating Profit measures the company's enterprise value to theoperating profit. Price per share is as of previous business close, and shares outstandinglast reported. Other items are from latest annual report.

Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Operating Income

EnterpriseValue/Total Assets

Enterprise Value/Total Assets measures the company's enterprise value to the totalassets. Price per share is as of previous business close, and shares outstanding lastreported. Other items are from latest annual report.

Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Total AssetsDividend Yield

Dividend Yield shows how much a company pays out in dividends each year relative toits share price. In the absence of any capital gains, the dividend yield is the return oninvestment for a stock.Calculation: Annual Dividend per Share / Price per Share

GlobalData

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Equity RatiosThese ratios are based on per share value.Earnings perShare (EPS)

Earnings per share (EPS) is the portion of a company's profit allocated to eachoutstanding share of common stock. EPS serves as an indicator of a company'sprofitability.Calculation: Net Income / Weighted Average Shares

Dividend perShare

Dividend is the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Dividend Cover

Dividend cover is the ratio of company's earnings (net income) over the dividend paid toshareholders.Calculation: Earnings per share / Dividend per share

Book Value perShare

Book Value per Share measure used by owners of common shares in a firm to determinethe level of safety associated with each individual share after all debts are paidaccordingly.Calculation: (Shareholders Equity - Preferred Equity) / Outstanding Shares

Cash Value perShare

Cash Value per Share is a measure of a company's cash (cash & equivalents on thebalance sheet) that is determined by dividing cash & equivalents by the total sharesoutstanding.Calculation: Cash & equivalents / Outstanding Shares

GlobalData

Profitability RatiosProfitability Ratios are used to assess a company's ability to generate earnings, based on revenues generatedor resources used. For most of these ratios, having a higher value relative to a competitor's ratio or the sameratio from a previous period is indicative that the company is doing well.Gross Margin

Gross margin is the amount of contribution to the business enterprise, after paying fordirect-fixed and direct-variable unit costs.Calculation: {(Revenue-Cost of revenue) / Revenue}*100

OperatingMargin

Operating Margin is a ratio used to measure a company's pricing strategy and operatingefficiency.Calculation: (Operating Income / Revenues) *100

Net ProfitMargin

Net Profit Margin is the ratio of net profits to revenues for a company or businesssegment - that shows how much of each dollar earned by the company is translated intoprofits.Calculation: (Net Profit / Revenues) *100

Profit Markup

Profit Markup measures the company's gross profitability, as compared to the cost ofrevenue.Calculation: Gross Income / Cost of Revenue

PBIT Margin(Profit BeforeInterest & Tax)

Profit Before Interest & Tax Margin shows the profitability of the company before interestexpense & taxation.Calculation: {(Net Profit+Interest+Tax) / Revenue} *100

PBT Margin(Profit BeforeTax)

Profit Before Tax Margin measures the pre-tax income over revenues.Calculation: {Income Before Tax / Revenues} *100

Return onEquity

Return on Equity measures the rate of return on the ownership interest (shareholders'equity) of the common stock owners.Calculation: (Net Income / Shareholders Equity)*100

Return onCapitalEmployed

Return on Capital Employed is a ratio that indicates the efficiency and profitability of acompany's capital investments. ROCE should always be higher than the rate at which thecompany borrows; otherwise any increase in borrowing will reduce shareholders'earnings.Calculation: EBIT / (Total Assets Current Liabilities)*100

Return on Return on Assets is an indicator of how profitable a company is relative to its total assets,the ratio measures how efficient management is at using its assets to generate earnings.

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Assets

Calculation: (Net Income / Total Assets)*100

Return on FixedAssets

Return on Fixed Assets measures the company's profitability to its fixed assets (property,plant & equipment).Calculation: (Net Income / Fixed Assets) *100

Return onWorking Capital

Return on Working Capital measures the company's profitability to its working capital.Calculation: (Net Income / Working Capital) *100

GlobalData

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Cost RatiosCost ratios help to understand the costs the company is incurring as a percentage of sales.Operating costs(% of Sales)

Operating costs as percentage of total revenues measures the operating costs that acompany incurs compared to the revenues.Calculation: (Operating Expenses / Revenues) *100

Administrationcosts (% ofSales)

Administration costs as percentage of total revenue measures the selling, general andadministrative expenses that a company incurs compared to the revenues.Calculation: (Administrative Expenses / Revenues) *100

Interest costs (%of Sales)

Interest costs as percentage of total revenues measures the interest expense that acompany incurs compared to the revenues.Calculation: (Interest Expenses / Revenues) *100

GlobalData

Liquidity RatiosLiquidity ratios are used to determine a company's ability to pay off its short-terms debts obligations. Generally,the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-termdebts. A company's ability to turn short-term assets into cash to cover debts is of the utmost importance whencreditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratiosto determine whether a company will be able to continue as a going concern.Current Ratio

Current Ratio measures a company's ability to pay its short-term obligations. The ratiogives an idea of the company's ability to pay back its short-term liabilities (debt andpayables) with its short-term assets (cash, inventory, receivables). The higher the currentratio, the more capable the company is of paying its obligations. A ratio under 1 suggeststhat the company would be unable to pay off its obligations if they came due at that point.Calculation: Current Assets / Current Liabilities

Quick Ratio

Quick ratio measures a company's ability to meet its short-term obligations with its mostliquid assets.Calculation: (Current Assets - Inventories) / Current Liabilities

Cash Ratio

Cash ratio is the most stringent and conservative of the three short-term liquidity ratio. Itonly looks at the most liquid short-term assets of the company, which are those that canbe most easily used to pay off current obligations. It also ignores inventory andreceivables, as there are no assurances that these two accounts can be converted tocash in a timely matter to meet current liabilities.Calculation: {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}

GlobalData

Leverage RatiosLeverage ratios are used to calculate the financial leverage of a company to get an idea of the company'smethods of financing or to measure its ability to meet financial obligations. There are several different ratios, butthe main factors looked at include debt, equity, assets and interest expenses.Debt to EquityRatio

Debt to Equity Ratio is a measure of a company's financial leverage. The debt/equity ratioalso depends on the industry in which the company operates. For example,capital-intensive industries tend to have a higher debt-equity ratio.Calculation: Total Liabilities / Shareholders Equity

Debt to CapitalRatio

Debt to capital ratio gives an idea of a company's financial structure, or how it is financingits operations, along with some insight into its financial strength. The higher thedebt-to-capital ratio, the more debt the company has compared to its equity. Thisindicates to investors whether a company is more prone to using debt financing or equityfinancing. A company with high debt-to-capital ratios, compared to a general or industryaverage, may show weak financial strength because the cost of these debts may weighon the company and increase its default risk.Calculation: {Total Debt / (Total assets - Current Liabilities)}

InterestCoverage Ratio

Interest Coverage Ratio is used to determine how easily a company can pay interest onoutstanding debt, calculated as earnings before interest & tax by interest expense.Calculation: EBIT / Interest Expense

GlobalData

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Efficiency RatiosEfficiency ratios measure a company's effectiveness in various areas of its operations, essentially looking atmaximizing its use of resources.Fixed AssetTurnover

Fixed Asset Turnover ratio indicates how well the business is using its fixed assets togenerate sales. A higher ratio indicates the business has less money tied up in fixedassets for each currency unit of sales revenue. A declining ratio may indicate that thebusiness is over-invested in plant, equipment, or other fixed assets.Calculation: Net Sales / Fixed Assets

Asset Turnover

Asset turnover ratio measures the efficiency of a company's use of its assets ingenerating sales revenue to the company. A higher asset turnover ratio shows that thecompany has been more effective in using its assets to generate revenues.Calculation: Net Sales / Total Assets

Current AssetTurnover

Current Asset Turnover indicates how efficiently the business uses its current assets togenerate sales.Calculation: Net Sales / Current Assets

InventoryTurnover

Inventory Turnover ratio shows how many times a company's inventory is sold andreplaced over a period. A low turnover implies poor sales and, therefore, excessinventory. A high ratio implies either strong sales or ineffective buying.Calculation: Cost of Goods Sold / Inventory

Working CapitalTurnover

Working Capital Turnover is a measurement to compare the depletion of working capitalto the generation of sales. This provides some useful information as to how effectively acompany is using its working capital to generate sales.Calculation: Net Sales / Working Capital

CapitalEmployedTurnover

Capital employed turnover ratio measures the efficiency of a company's use of its equityin generating sales revenue to the company.Calculation: Net Sales / Shareholders Equity

Capex to sales

Capex to Sales ratio measures the company's expenditure (investments) on fixed andrelated assets' effectiveness when compared to the sales generated.Calculation: (Capital Expenditure / Sales) *100

Net income perEmployee

Net income per Employee looks at a company's net income in relation to the number ofemployees they have. Ideally, a company wants a higher profit per employee possible, asit denotes higher productivity.Calculation: Net Income / No. of Employees

Revenue perEmployee

Revenue per Employee measures the average revenue generated per employee of acompany. This ratio is most useful when compared against other companies in the sameindustry. Generally, a company seeks the highest revenue per employee.Calculation: Revenue / No. of Employees

Efficiency Ratio

Efficiency Ratio is used to calculate a bank's efficiency. An increase means the companyis losing a larger percentage of its income to expenses. If the efficiency ratio is gettinglower, it is good for the bank and its shareholders.Calculation: Non-interest expense / Total Interest Income

GlobalData NotesThe financial and operational data reported for the company is as per the industry defined standardsRevenue converted to USD at average annual conversion rate as of fiscal year end About GlobalDataGlobalData is a premium business information brand specializing in industry and company analysis. DisclaimerAll Rights ReservedNo part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means,electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData.The data and analysis within this report is driven by GlobalData from its own primary and secondary research of public andproprietary sources and does not necessarily represent the views of the company profiled.

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The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that thefindings, conclusions and recommendations that GlobalData delivers will be based on information gathered in good faithfrom both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As suchGlobalData can accept no liability whatsoever for actions taken based on any information that may subsequently prove tobe incorrect.

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