Far EasTone — Call Transcript 2022

Mar 29, 2022

4904 (TWSE) 2021 4Q Result and FET/APT Merger Investor Call

Chee Ching, President Sharon Lin, CFO & Gary Lai, IR Far EasTone Telecom

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Disclaimer

This presentation contains forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from those expressed or implied by these forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect, or at all. You should not place undue reliance on any forward-looking information.

In preparing the information herein, FET have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to FET or which was otherwise reviewed by FET. Neither FET nor its advisors have made any representation or warranty as to the accuracy or completeness of such information and nor do they assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. None of FET, nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be reproduced to a third party without the prior written consent of FET.

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• FET & APT Merger Summary

AGENDA

• FET 2021 4Q and Full Year Performance Overview

• 2022 Priorities & Guidance

• 2021 Dividend Proposal

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Summary of FET & APT Merger

• FET to issue 356.7mn new shares to merge APT

• FET to be the surviving company

• APT shareholders will receive 0.0934406 FET share for each APT share

• In total, APT shareholders will receive 9.87% stake in FET

• Combined Telecom Subscribers 》 9.2mn

• Merger subjects to approvals of relevant authorities

• Expect ~3bn EBITDA synergy 1 year after merger, and no impact to Net Debt/EBITDA(x)

• Expect Earning Accretive from Year 1

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Merger Synergies

• Match

• 1) Superb Spectrum , with existing equipment and .

• technology, to sustain FET’s leading network positions

• Largest 5G Bandwidth (80+40= 120Mhz ), re-farm 40M 2600Mhz TDD for 5G Bandwidth expansion

• Largest & contiguous 700Mhz bandwidth (25M), the best spectrum to improve network throughput and 5G indoor penetration

• Largest & contiguous 28G Bandwidth (400+400=800MHz), for PN and LEO[(1)] business

• 2) Increased National and Regional Fiber Backbone coverage and reliability

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Note (1): LEO means
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-Earth Orbit
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FET- APT Spectrum Match

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Sub-1G Auction in Y2013 (Effective to Y2030)
25M
700MHz APT(A1) FET(A2) APT A3 TWM(A4)
703~803 (10 MHz) (10 MHz) (5 MHz) (20 MHz)
900MHz G TSTAR(B1) CHT(B2) APT(B3)
880/960 B (10 MHz) (10 MHz) (10 MHz)
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2600MHz Auction in Y2015 (Effective to Y2033)

2500~ TSTAR(D1) CHT(D2) FET(D3) CHT D4 G APT(D5) FET(D6) G 2615 (20 MHz) (20 MHz) (20 MHz) (10MHz) B (20MHz-TDD) (20 MHz-TDD) B 40M Refarm for 5G 5G Spectrum Auction in Y2020 (Effective to Y2040) CA 80+40 =120M 3300 3340 3420 3510 3570 3.5G TSTAR FET CHT TWM

3300~3570 40 MHz 80 MHz 80 MHz 60MHz 800M * To sell to CHT ( ~~under review by Gov Authorities)~~

28G CHT FET APT TWM 27900~29500 600MHz 400MHz 400MHz 200MHz

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Merger Synergies - Cont’d

• 3) Significant Network Capital and Opex savings  Increase Radio capacity without additional capital investment  Combine existing Ericsson equipment for the matching spectrums for reuse  Reduce annual support, maintenance costs and operation expenses costs from network consolidation, Mobile RAN, Core and Transport networks

• Enhance and strengthen fiber backbone network coverage  Reduce IP Transit/Peering Costs for lower unit costs

• 4) Grow telecom revenue with broader customer base for uplift 5) Grow consumer revenue by cross-selling FET’s digital services (friDay Video, Music, Shopping)

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Merger Synergies - Cont’d

6) Grow Enterprise ICT and Fixed Data business

7) More Foxconn & FEG collaboration opportunities

• 8) Improved Customer Experience

9) Improved Environmental Sustainability

• Consolidate two 5G cores into one

• Consolidate two 4G Networks into one

• Greater than 90% of APT cell sites can be consolidated with FET’s

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 FET & APT Merger Summary

AGENDA

• FET 2021 4Q and Full Year Performance Overview

• 2022 Priorities & Guidance

• 2021 Dividend Proposal

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FET 4Q21 and FY2021 Financial Performance

4Q21

Full Year 2021

	Item Unit: NT$ mn, except for EPS	4Q 2021	4Q 2020	YoY%	FY2021	FY2020	YoY%	FY2021 Guidance	Ach. Rate %
	Total Revenue	24,283	22,807	+6.5%	85,320	79,501	+7.3%	82,276	103.7%
	EBITDA	7,253	6,900	+5.1%	28,170	27,599	+2.1%	27,485	102.5%
	Net Income	1,974	1,885	+4.7%	9,124	8,354	+9.2%	8,368	109.0%
	EPS (NT$)	$0.61	$0.58	+4.7%	$2.80	$2.56	+9.2%	$2.57	109.0%

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FET 4Q21 and FY2021 Financial Performance

 Improved Net Debt and Net Debt to EBITDA multiple  Free cash flow remained sound and healthy  FY2021 Capex: 12.1bn, 19% below the guidance of 14.9bn

Item Unit: NT$ mn, unless otherwise stated 3Q 2021 4Q 2021	Item Unit: NT$ mn, unless otherwise stated 3Q 2021 4Q 2021
Net Debt 60,900	56,876
Net Debt to EBITDA(x)(1) 2.19x	2.02x
Free Cash Flow(2) – YTD 11,819	13,397
Cash-based Capex – YTD 9,070 12,123

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Solid Growth on Mobile Postpaid customers

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Mobile Service Revenue [(1)] (NT$mn) 5G
#Postpaid customers (‘000)
Penetration
1.4% 5,449
54,970 >> 20% 5,407
YoY 5,350
50,137
47,730 48,418 5,274
2018 2019 2020 2021 2018 2019 2020 2021
Mobile ARPU (NT$) Postpaid churn rate (%)
5G launch
1.8%
1.4%
1.2%
1.1%
J-20 F-20 M-20 A-20 M-20 J-20 J-20 A-20 S-20 O-20 N-20 D-20 J-21 F-21 M-21 A-21 M-21 J-21 J-21 A-21 S-21 O-21 N-21 D-21 2018 2019 2020 2021
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FET 5G Update

FET 5G penetration >>20% ahead of competition; target 30% by EoY 2022

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> 80% signed up for high rate plan; Average Monthly Fee uplift +20% for renewals

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Deployed 9700+ 5G BTS reached 90%+ coverage by EoY 2021; target 97% by EoY 2022

World class 5G Network performance

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New Economy - the growth engine

2021 FET New Economy Revenue

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▲ 23.4% YoY

Enterprise (53%)

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ICT Revenue  29% YoY

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Cloud service  49% YoY

Consumer (47%)

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Media service  23% YoY

Mobile Commerce  26% YoY Direct Carrier Billing  13% YoY

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Accounted for 17.2% of total revenue, beat the initial board target of 16%

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17%
15%
13%
10%
8%
5%
23.4%
YoY
2016 2017 2018 2019 2020 2021
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% of New Economy Revenue over Total Revenue

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2021 FET New Economy Highlights

Consumer

Enterprise

• Customer Loyalty Program “ FET Mobile Circle ” > 3M app downloads, DAU grew 72%

• “ friDay video ” MAU grew +28%; 2021 #1 Brand Social Mentions among local OTT brands

• “ friDay Shopping ” 2021 total annual revenue up 26% YoY; Double 11 revenue grew 52.7% YoY

• New iPhone launch generated excellent bundled sales, boosted 15% YoY growth for 2021 total merchandise revenue

• 5G Telemedicine: provided 5G Telemedicine service to 23 villages in 10 counties, awarded contract to grow to 50 villages across 14 counties in 2022

• Smart City: deployed Home-grown Energy Management Solutions to~1600 schools in 9 counties; Smart Charging Stations; Smart Meters;

• AI/ Big Data growth in public sector: AI enhanced computer vision for local governments’ law enforcement; Ministry of Justice

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• FET & APT Merger Summary

AGENDA

• FET 2021 4Q and Full Year Performance Overview

• 2022 Priorities & Guidance

• 2021 Dividend Proposal

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2022 Priorities – Scale up to Grow

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Scale up Grow Grow Technology Smart ICT FET’s Team to Grow and 5G Mobile Support Telecom TeleCircle BUs Business Optimize medicine customer experience

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2022 Consolidated Financial Forecast

Item Unit: NT$mn, except for EPS	FY2022 Guidance(1)	FY2021 Result	YoY%
Total Revenue	88,789	85,320	4.1%
EBITDA	30,449	28,170	8.1%
Net Income	9,220	9,124	1.1%(2)
EPS	$2.83	$2.80	1.1%(2)

(1) The above guidance does not take FET/APT merger into account;

• (2) 2021 EPS base included $0.39 gain from one-time sales; if excluded, 2022 net income and EPS forecast would represent 17% growth YoY

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2022 Capex guidance

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Capex (NT$bn)
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12.1
10.9 11.1
9.9
8.8
7.1
6.2
9.6
1.5
2016 2017 2018 2019 2020 2021 2022E
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1.5bn was carried over from 2021*

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Note: the above guidance does not take FET/APT merger into account.
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• FET & APT Merger Summary

AGENDA

• FET 2021 4Q and Full Year Performance Overview

• 2022 Priorities & Guidance

• 2021 Dividend Proposal

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Proposed 2021 Dividend Distribution

Maintain stable dividend

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Dividend per share (NT$)
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3.25 3.25 3.25
2.80
2.68
2.56
2019 2020 2021
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EPS DPS

• 2021 dividend distribution is subject to 2022 AGM’s approval

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Q & A

For Further Information, Websites http://corporate.fetnet.net http://www.fetnet.net

email Investor Relations IR@fareastone.com.tw

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