CHT - Interim / Quarterly Report 2022

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1Q 2022 Operating Results

June 21, 2022 UBS 2022 Taiwan Virtual Conference

© Chunghwa Telecom

Disclaimer

STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION

The unaudited financial information under T-IFRSs in this presentation is preliminary and subject to adjustments and modifications. Adjustments and modifications to the financial statements may be identified during the course of the audit /review work, which could result in significant differences from this preliminary unaudited financial information.

NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This presentation contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forwardlooking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements about Chunghwa’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to the risks outlined in Chunghwa’s filings with the U.S. Securities and Exchange Commission on Forms F-1, F-3, 6-K and 20-F, in each case as amended. The forward-looking statements in this presentation reflect the current belief of Chunghwa as of the date of this presentation and Chunghwa undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date, except as required under applicable law.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

SPECIAL NOTE REGARDING NON-GAAP FINANCIAL MEASURES

A body of generally accepted accounting principles is commonly referred to as "GAAP". A non-GAAP financial measure is generally defined by the SEC as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable U.S. GAAP measure. We disclose in this report certain non-GAAP financial measures, including EBITDA. EBITDA for any period is defined as consolidated net income (loss) excluding (i) depreciation and amortization, (ii) total net comprehensive financing cost (which is comprised of net interest expense, exchange gain or loss, monetary position gain or loss and other financing costs and derivative transactions), (iii) other expenses, net, (iv) income tax, (v) cumulative effect of change in accounting principle, net of tax and (vi) (income) loss from discontinued operations.

In managing our business we rely on EBITDA as a means of assessing our operating performance. We believe that EBITDA can be useful to facilitate comparisons of operating performance between periods and with other companies because it excludes the effect of (i) depreciation and amortization, which represents a non-cash charge to earnings, (ii) certain financing costs, which are significantly affected by external factors, including interest rates, foreign currency exchange rates and inflation rates, which have little or no bearing on our operating performance, (iii) income tax and tax on assets and statutory employee profit sharing, which is similar to a tax on income and (iv) other expenses or income not related to the operation of the business.

EBITDA is not a measure of financial performance under U.S. GAAP or T-IFRSs. EBITDA should not be considered as an alternate measure of net income or income from operations, as determined on a consolidated basis using amounts derived from statements of operations prepared in accordance with U.S. GAAP or T-IFRSs, as an indicator of operating performance or as cash flows from operating activity or as a measure of liquidity. EBITDA has material limitations that impair its value as a measure of a company's overall profitability since it does not address certain ongoing costs of our business that could significantly affect profitability such as financial expenses and income taxes, depreciation, pension plan reserves or capital expenditures and associated charges. These non-GAAP measures are not in accordance with or an alternative for GAAP financial data, the nonGAAP results should be reviewed together with the GAAP results and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.

Committed to Improving Shareholder Value

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Cash Return(a)(b)
NT$ bn
40.00
35.00
30.00
25.00
20.00
34.7 32.8 33.4 35.7
15.00
10.00
5.00
0.00
2019 2020 2021 2022
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2022 AGM resolved to distribute NT$35.7 billion to shareholders

NT$4.608 per share
payout ratio 100%

Note:

a) 1 ADR = 10 common shares
b) The regular dividend has been calculated based on total share number 7,757,446,545.

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Business Overview

Business Overview Mobile Service

(a)(b)

#1 Mobile Revenue Market Share

#1 Mobile Subs Market Share (b)

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CHT
39.1%
Others
60.9%
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APT
7.1%
CHT
FET
36.0%
23.9%
T Star
TWM
9.0%
24.0%
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Source: Company data, NCC statistics, as of Mar. 2022 Note :

a) Revenues are based on T-IFRSs

b) Excluding IoT SIMs

Business Overview Mobile Service

(a) Mobile Service Revenue & 090 Postpaid ARPU

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Monthly fee uplift 090 Postpaid ARPU
▲ 35% YoY ▲ 3.2％
Mobile service revenue
YoY ▲ 4.9％
(Billion)
20 600
499 504 516 516 515
500
15
400
10 300
14.15 14.33 14.74 14.82 14.84 200
5
100
0 0
1Q21 2Q21 3Q21 4Q21 1Q22
Mobile Service Revenue 090 Postpaid ARPU
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Highest 090 Subs & Lowest Churn Rate(b)

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090 Subs
YoY ▲ 0.7 ％
(Thousand)
1.2%
10,000
1.0%
8,000
0.8%
6,000
0.6%
4,000
0.4%
2,000 0.2%
- 0.0%
1Q21 2Q21 3Q21 4Q21 1Q22
CHT Subs TWM Subs FET Subs
CHT Churn % TWM Churn % FET Churn %
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(Thousand)

Source: Company data, NCC statistics, as of Mar. 2022 a) Consolidated Mobile Service Revenue (Including IoT) b) Churn rate for postpaid subscribers

Business Overview Fixed Broadband Service

Consecutive ARPU Growth for 10 Quarters

(a) Fixed Broadband Revenue YoY ▲ 4.4％ Fixed Broadband ARPU YoY ▲ 3.5％

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(Million)
734 742 749 755 760
12,000
700
10,000
600
10,064 [10,223 10,402 10,445 ] [10,511 ]
8,000 500
400
6,000
300
4,000
200
2,000
100
0 0
1Q21 2Q21 3Q21 4Q21 1Q22
Fixed Broadband Revenue Fixed Broadband ARPU
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Note : (a) Revenue is calculated based on T-IFRSs

Higher-Speed Adoption Growth

300M+ Subs YoY ▲ 41％

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(Thousand)
4,339 4,358 4,363 4,354 4,354
11% 12% 14% 15% 16%
30% 31%
31% 31% 31%
42% 41% 40% 39% 38%
17% 16% 15% 15% 15%
1Q21 2Q21 3Q21 4Q21 1Q22
ADSL Fiber (<100M)
Fiber (≥100M~<300M) Fiber (≥300M)
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Segment Reporting

Consumer Business Group (CBG) 1Q22 Financial Summary

Revenue

+2.2 % YoY

12.03 12.62 9.56 9.75 9.13 8.99 1.29 1.36 0 5 10 15 20 25 30 35 1Q21 1Q22 Mobile Services Fixed-line Services Sales Others (Billion) 32.72 32.01	12.03 12.62 9.56 9.75 9.13 8.99 1.29 1.36 0 5 10 15 20 25 30 35 1Q21 1Q22 Mobile Services Fixed-line Services Sales Others (Billion) 32.72 32.01	12.03 12.62 9.56 9.75 9.13 8.99 1.29 1.36 0 5 10 15 20 25 30 35 1Q21 1Q22 Mobile Services Fixed-line Services Sales Others (Billion) 32.72 32.01
	32.01	32.72	32.72
1.29 1.36
9.13 8.99

9.56 9.75

12.03 12.62

1Q21 1Q22 Mobile Services Fixed-line Services Sales Others

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Mobile service revenue of CBG +4.9% YoY due to postpaid subs growth and 5G migration

Fixed-line service revenue of CBG +2.0% YoY driven by the growth of higher-speed service adoption

Other revenue were +5.2% YoY contributed by video business

Consumer Business Group (CBG) 1Q22 Highlights

IPTV/MOD + OTT Business Performance

Largest video platform with steady subscription growth reaching 2.6mn subscribers to date

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Roll out Triple Play (FixedBroadband + Mobile + Wi-Fi) program to enhance overall subscription

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2,588
2,559
2,527
2,499
2,482
1Q21 2Q21 3Q21 4Q21 1Q22
IPTV/MOD+OTT Subscription (Thousand)
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Home Wi-Fi device subscription +29% YoY to sustain homecentric applications

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Popular sport events in every quarter to drive up video business

Enterprise Business Group (EBG) 1Q22 Financial Summary

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Revenue
+2.1% YoY
(Billion) 15.81
15.48
16
2.71 3.16
12
3.90 3.62
8
6.84 6.86
4
2.03 2.17
0
1Q21 1Q22
Mobile Services Fixed-line Services
ICT Business Others
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EBG revenue increased 2.1% year over year mainly due to growing communication usage from enterprise customers in the new normal

Higher-speed fixed-broadband service adoption increased amid strong digital transformation trend to enhance fixed-line service revenue of EBG

ICT Business revenue decreased year over year mainly due to the revenue recognition delay of some projects

Enterprise Business Group (EBG) 1Q22 Highlights

Emerging Enterprise Application Performance Enterprise ICT Business Revenue

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5G private network
YoY 293.0%

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Big Data YoY 8.8% 

YoY 15.3% 

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Cyber Security Mobile ICT YoY  16.5% YoY  24.8%

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Acquired the first 5G Smart Harbor in Taiwan to realize the first harbor unmanned vehicle inspection with joint efforts of subsidiaries

Acquired a large Smart Healthcare ICT project to enhance long-term recurring revenue contribution

International Business Group (IBG) 1Q22 Financial Summary

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Revenue
+13.8%(a) YoY
(Billion)
2.0
1.5
1.0
1.71
1.51
0.5
0.0
1Q21 1Q22
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IBG revenue increased 13.8% mainly due to growing demand of IDC, cloud and ICT services from global clients

Focus on growing integrated business opportunities and providing quadruple service including fixed-line, undersea cable, IDC and HiNet peering

Expand overseas bases to serve Taiwanese companies in the US, Japan, and Southeast Asia with professional ICT capabilities

Note : (a) The calculation of growth rate is based on actual amount

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