TWM — Interim / Quarterly Report 2020

Nov 8, 2019

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Taiwan Mobile Co., Ltd. 1Q20 Results Summary April 30, 2020

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Disclaimer

The information contained in this presentation, including all forward-looking information, is subject to change without notice, whether as a result of new information, future events or otherwise, and Taiwan Mobile Ltd. undertakes no Co., (the “Company”) obligation to update or revise the information contained in this No or either or presentation. representation warranty, expressed is in relation to the or implied, provided accuracy, completeness reliability of the information contained herein, nor is the information intended to be a complete statement of the Company, markets or developments referred to in this presentation.

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Business Overview

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1Q20 Operational Highlights

YoY EBIT growth in Readying for 5G all businesses

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Stay-at-home economy booms amid COVID-19

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Versatility in Telecom Business

1Q20 results

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Double Play bundles Mobile Data Fixed Broadband

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+36% YoY IoT connections

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Early bird migration

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+36% YoY ICT/IoT/Cloud service revenue

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Resilience in Pay-TV Business

1Q20 Basic TV Subscribers

1Q20 Penetration Rate

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(‘000) Subscribers YoY(%)
TFNM 553 -1.7%
Top 4 MSO 3,518 -2.3%
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Source: Market intelligence

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47.8%
46.3%
38.8%
34.6%
Top 4 Top 4
TFNM MSO TFNM MSO
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BB DTV
Source: Market intelligence
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D&A EBIT
+10% YoY
(NT$mn) (NT$mn)
295 559
-38% YoY
182
506
1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20
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momo – the Growth Engine

Satellite E-commerce Average Warehouses (#) Customer Order (#)

1Q19 1Q20 2.87 3.27 +14% YoY (+8.5% in 4Q19)

1Q19 1Q20 1Q19 1Q20 5 15 2.87 3.27 +10 YoY +14% YoY (+8.5% in 4Q19) Total Revenue EBIT YoY (NT$m) (NT$m) YoY 15,106 +29% 562 +24% 1,485 -12% Total 11,736 454 154 Others 1,681 -11% 172 13,621 +35% E-commerce 10,055 408 +45% 282

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1Q19

1Q20

1Q19

1Q20

Superior Overall Performance

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Total Revenue EBIT Net Income
YoY Change YoY Change YoY Change
7.9%
6.6%
6.0%
1.2%
CHT TWM FET CHT TWM FET CHT TWM FET
-0.4%
-2.7%
-3.3%
-6.2% -6.9% 1Q20 Achievement Ratio
105% 104%
95% 101% 97% 112% 106% 112% 103%
~109% ~108%
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Financial Overview

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Performance by Business

NT$bn	Revenue	EBIT
	Telecom CATV momo Total1	Telecom CATV momo Total1
1Q20	15.62 1.54 15.11 31.85	3.29 0.56 0.56 4.48
% of total	49% 5% 47% 100%	73% 12% 13% 100%
1Q20 YoY	-6% -1% 29% 7%	2% 10% 24% 6%
4Q19 YoY	-1% -6% 28% 8%	1% 6% 15% 2%

1. The sum of each account of telecom, CATV and momo does not equal to the consolidated total number due to other revenue and inter company eliminations.

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Results Summary

NT$bn	1Q20	1Q20	1Q20
	Amount	YoY	% of 1Q guidance
Revenues 31.85 7% 101%
Cash Cost & Expense (23.75) 11% 99%
Operating Income 4.48 6% 112%
Non-op. Income (Exp.) (0.15) 11% 81%
Pre-tax Income 4.33 6% 114%
Net Income 3.31 8% 112%
EPS1 (NT$) 1.18 4% 112%
EBITDA 8.10 -4% 105%

1. EPS is based on share count of 2.811bn.

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Balance Sheet Analysis

NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19
Total Assets	178.73	153.92	155.21	Liabilities	102.56	79.74	82.53
Current Assets	30.69	29.91	28.60	Current Liabilities	51.60	44.52	39.41
- Cash & Cash Equivalents	9.10	8.66	7.84	- ST Debts	26.63	18.47	13.60
- Receivable & Contract Assets	13.49	14.07	14.43	- Accounts & Notes Payable	7.70	7.80	7.03
- Inventories	3.77	5.67	3.96	- Current Lease Liabilities	3.58	3.53	3.41
- Other Current Assets	4.32	1.50	2.38	- Other Current Liabilities	13.69	14.72	15.37
Non-current Assets	148.05	124.01	126.60	Non-current Liabilities	50.96	35.22	43.12
- Long-term Investment	3.00	6.72	6.43	- Long-term Borrowings	40.42	24.49	32.29
- Property and Equipment	38.35	39.17	40.66	- Non-current Lease Liabilities	5.93	6.12	6.37
- Right-of-use Assets	9.54	9.66	9.87	- Other Non-current Liabilities	4.61	4.61	4.46
- Concession	67.66	37.71	39.82	Shareholders' Equity	76.18	74.18	72.68
- Other Non-current & Contract Assets	29.50	30.76	29.82
				Paid-in Capital	35.09	35.09	34.34
				Capital Surplus	20.28	20.27	13.47
1Q20 4Q19 1Q19
				Legal Reserve	28.92	28.92	27.56
Current Ratio	59%	67%	73%	Treasury Shares	(29.72)	(29.72)	(29.72)
Net Debt to Equity	76%	46%	52%	Un-appropriated Earnings	0.49	0.49	3.39
Net Debt to EBITDA (x)	1.81	1.03	1.13	Non-controlling Interest	6.40	6.16	6.37
ROE1 (annualized)	18%	18%	17%	Retained Earnings & Others2	14.71	12.95	17.27

1. ROE = Accumulated Net Income (Annualized) /Average Shareholders' Equity

2. Including accumulated profits and other equity items.

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Cash Flow Analysis

NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19	NT$bn 1Q20 4Q19 1Q19
Operating	9.24	2.88	8.44
Investing	(31.79)	(2.88)	(2.09)
Financing	22.99	(4.36)	(6.02)
NT$bn 1Q20 4Q19 1Q19
Pre-IFRS 16 Operating1	8.21	1.90	7.47
Cash CAPEX2	(1.65)	(1.62)	(2.02)
Free Cash Flow2	6.56	0.28	5.45

1. “Lease expenses” previously under operating activities was reclassified into financing cash flow and investing cash flow (to a lesser extent) in accordance with IFRS 16 in 2019.

2. Excluding 5G License Fees

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Event Updates

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Event Updates

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2019 Earnings Distribution

On April 30, 2020, TWM’s board meeting approved the proposal to distribute NT$13.4bn in cash dividends, translating into around 4.5% yield to shareholders.

Dividend per share is NT$4.75 on 2.81bn shares, excluding treasury shares held by 100%-owned subsidiaries. Post earnings distribution, there will be NT$39.5bn excess reserves available.

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Awards and Recognition

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The only telecommunications company in Taiwan that received the top grade “ A ” from the CDP in its “Climate Change 2019 Program”.

Received a Silver Class award in SAM’s “2020 Sustainability Yearbook” for three consecutive years. The only telecommunications company in Taiwan that was honored with “ 2019 Critical Infrastructure Protection Award ”.

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Key Message

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B2C e-commerce as well as subscription-based wireless, broadband and enterprise solutions are increasingly essential to everyday life under this new normal. As such, we are better poised for the extended stress on the economy caused by COVID-19. Investing in critical areas like 5G, broadband, and e-commerce remains our top priority as we accelerate growth and our transformation into a “Tech+Telco” group. At the same time, we will strive to resume FCF stability in a sound manner so that we could uphold our commitment to shareholders.

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IR Website

Q & A

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