TWM — Interim / Quarterly Report 2019

Apr 30, 2019

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Taiwan Mobile Co., Ltd. 1Q19 Results Summary April 30, 2019

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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 Co., Ltd. (the “Company”) undertakes no obligation to update or revise the information contained in this presentation. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or 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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Increase in Free Cash Flow

1Q19 Telecom Service Revenue

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-11% YoY
-11% YoY
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1Q19 Telecom EBITDA

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+2% YoY -11% YoY
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Reported

Pre-IFRS

Reported

Pre-IFRS

Operating Cash Flow Free Cash Flow (NT$bn) (NT$bn)

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8.0
7.5
1Q18 1Q19
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5.2 5.5
1Q18 1Q19
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Note: Cash flows and pre-IFRS numbers of telecom service revenue & EBITDA are under pre-IFRS 15&16 basis.

Versatility

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YoY +7ppts % of mobile sign-ups via TWM’s own channels

YoY -2ppts SAC as % of ARPU

YoY +5ppts

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+26% YoY IoT connectivities

% of non-handset bundle plan as main differentiation

+5% YoY

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ICT, cloud, internet and data access revenue

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Diversification

EBIT Contribution

Decline in Telecom

Decline factors

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2019Q1
23%
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Cable TV

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+
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momo

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19%
2018Q1
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• $499 frenzy

-16%[YoY in EBIT ]

• Domestic roaming

• MOU

Resilience in Cable TV

Growth drivers

• Fixed Broadband

+4%[YoY in EBIT ]

• Digital TV

• Depreciation

Stellar momentum in momo

Growth drivers

+15%[YoY in EBIT ]

• e-commerce

• 3C electronics sales

• # of transaction

• Average ticket size

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momo – Crown Jewel

Total Revenue (NT$bn)

Total Pre-IFRS 16 EBITDA

(NT$bn)

+15% YoY

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11.74
10.18
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1Q18 1Q19
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+17% YoY
0.54
0.46
1Q18 1Q19
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B2C e-commerce

B2C e-commerce

Average ticket size

(NT$)

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+5% YoY
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2,163
2,060
1Q18 1Q19
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# of Transaction

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(mn)
+14% YoY
4.64
4.08
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1Q18
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1Q19
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Financial Overview

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Performance by Business

	Performance by	Business
NT$bn	Revenue	Pre-IFRS16 EBITDA Telecom CATV momo Total1 6.02 0.79 0.54 7.45 81% 11% 7% 100% -11% -3% 17% -9% -5% 5% 15% -2% 3%
	Telecom CATV momo **Total1 **
1Q19	16.57 1.55 11.74 29.87
% of total	55% 5% 39% 100%
1Q19 YoY	-10% -3% 15% -1%
4Q18 YoY	-13% 1% 25% -1%
	1Q19 YoY (Reported)

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

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Results Summary

NT$bn	1Q19	1Q19	1Q19
	Amount	YoY	% of 1Q guidance
Revenues 29.87 -1% 100%
Operating Costs (21.68) 1% 100%
Operating Expenses (3.96) -5% 93%
Operating Income 4.23 -11% 108%
Non-op. Income (Exp.) (0.14) -22% 74%
Pre-tax Income 4.09 -10% 109%
Net Income 3.07 -12% 108%
EPS1 (NT$) 1.13 -12% 109%
EBITDA 8.41 3% 103%
EBITDA Pre-IFRS 16 7.45 -9%

1. EPS is based on share count of 2.729bn.

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Balance Sheet Analysis

NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18
Total Assets	155.21	147.67	155.27	Liabilities	82.53	79.67	82.76
Current Assets	28.60	29.07	31.22	Current Liabilities	39.41	41.88	52.14
- Cash & Cash Equivalents	7.84	7.50	7.66	- ST Debts	13.60	18.57	28.27
- Receivable & Contract Assets	14.43	15.21	15.51	- Current Lease Liabilities1	3.41	0.00	0.00
- Inventories	3.96	3.95	3.98	- Other Current Liabilities	22.40	23.31	23.88
- Other Current Assets	2.38	2.42	4.06	Non-current Liabilities	43.12	37.79	30.62
Non-current Assets	126.60	118.60	124.05	- Long-term Borrowings	32.29	33.31	26.32
- Long-term Investment	6.43	6.20	5.88	- Non-current Lease Liabilities1	6.37	0.00	0.00
- Property and Equipment	40.66	41.86	43.42	- Other Non-current Liabilities Shareholders' Equity	4.46 72.68	4.48 67.99	4.30 72.51
- Right-of-use Assets1	9.87	0.00	0.00
- Concession	39.82	40.53	42.92
- Other Non-current & Contract Assets	29.82	30.01	31.82	Paid-in Capital	34.34	34.24	34.21
				Capital Surplus	13.47	12.58	13.94
1Q19 4Q18 1Q18
				Legal Reserve	27.56	27.56	26.14
Current Ratio	73%	69%	60%	Treasury Shares	(29.72)	(29.72)	(29.72)
Net Debt to Equity	52%	65%	65%	Un-appropriated Earnings	3.39	3.39	3.98
Net Debt to Pre-IFRS 16 EBITDA (x)	1.28	1.40	1.44	Non-controlling Interest	6.37	6.11	6.07
				Retained Earnings & Others3 17.27 13.83 17.89
ROE2 (annualized)	17%	21%	20%

1. New items included in accordance with IFRS 16 accounting treatment of leases 3. Including accumulated profits and other equity items. 2. ROE = Accumulated Net Income (Annualized) /Average Shareholders' Equity

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Cash Flow Analysis

NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18	NT$bn 1Q19 4Q18 1Q18
Operating	8.44	7.31	7.96
Investing	(2.09)	(2.01)	(2.16)
Financing	(6.02)	(3.74)	(4.76)
NT$bn 1Q19 4Q18 1Q18
**Pre-IFRS 16 Operating1 **	7.47	7.31	7.96
**Cash CAPEX2 **	(2.02)	(1.87)	(2.76)
**Free Cash Flow2 **	5.45	5.44	5.20

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 4G License Fees

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Event Updates

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Event Updates

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2018 Earnings Distribution

On April 30, 2019, TWM’s board meeting approved the proposal to distribute NT$15.4bn in cash dividends, translating into a 113% payout to shareholders. Dividend per share is NT$5.6 on 2.74bn shares, excluding treasury shares held by 100%-owned subsidiaries.

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Awards and Recognition

Recognized as one of the “Sustainability Leaders” in the global telecommunication industry by RobecoSAM in its “The Sustainability Yearbook 2019” and has been awarded the Silver Class distinction for 2 consecutive years.

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Key Message

The group will strive to leverage our thriving ecosystem and accelerate our transformation into a regional enterprise following the 5”G”+ guidelines:

1. Gift – digital transformation based on in-house big data, user base, and online-offline channel operations

2. Group – more synergy with momo, AppWorks, and other strategic partners

3. Grit – long-term vision of an ecosystem beyond 5G 4. Green – environmental awareness and corporate sustainability

4. GSEA (Greater South East Asia) – expanding footholds in South East Asia to become a regional enterprise

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Q & A

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