TWM — Interim / Quarterly Report 2018

Apr 30, 2019

==> picture [494 x 87] intentionally omitted <==

Taiwan Mobile Co., Ltd. 4Q18 Results Summary January 31, 2019

1

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.

==> picture [311 x 70] intentionally omitted <==

Business Overview

3

Increase in Free Cash Flows

2018 Telecom Service Revenue 2018 Telecom EBITDA

==> picture [60 x 11] intentionally omitted <==

----- Start of picture text -----

-8% YoY
----- End of picture text -----

==> picture [59 x 11] intentionally omitted <==

----- Start of picture text -----

-8% YoY
----- End of picture text -----

==> picture [43 x 103] intentionally omitted <==

Reported

==> picture [43 x 119] intentionally omitted <==

Pre-IFRS

==> picture [330 x 106] intentionally omitted <==

----- Start of picture text -----

+3% YoY
-5% YoY
Pre-IFRS
----- End of picture text -----

Reported

Operating Cash Flow (NT$bn)

Free Cash Flow (NT$bn)

==> picture [32 x 11] intentionally omitted <==

----- Start of picture text -----

30.3
----- End of picture text -----

==> picture [45 x 85] intentionally omitted <==

==> picture [32 x 12] intentionally omitted <==

----- Start of picture text -----

29.8
----- End of picture text -----

==> picture [45 x 83] intentionally omitted <==

==> picture [182 x 13] intentionally omitted <==

----- Start of picture text -----

20.5 21.3
----- End of picture text -----

==> picture [39 x 60] intentionally omitted <==

==> picture [38 x 58] intentionally omitted <==

2017

2018

2017

2018

4

Cross-Selling Supporting Growth

MAU doubled

Video Streaming ‘18 Performance

Video viewed quadrupled

==> picture [76 x 64] intentionally omitted <==

Revenue +c.20% YoY

==> picture [68 x 65] intentionally omitted <==

Fixed Broadband Subs

(K)

+6% YoY 228 215

==> picture [44 x 72] intentionally omitted <==

==> picture [45 x 68] intentionally omitted <==

2017 2018

Enterprise Business – The Bright Spot ‘18 Revenue Growth

==> picture [114 x 114] intentionally omitted <==

----- Start of picture text -----

+8%
YoY
----- End of picture text -----

==> picture [115 x 114] intentionally omitted <==

----- Start of picture text -----

+14%
YoY
----- End of picture text -----

==> picture [244 x 46] intentionally omitted <==

----- Start of picture text -----

Cloud IoT
----- End of picture text -----

==> picture [45 x 45] intentionally omitted <==

==> picture [115 x 114] intentionally omitted <==

----- Start of picture text -----

+94%
YoY
----- End of picture text -----

==> picture [46 x 46] intentionally omitted <==

==> picture [35 x 14] intentionally omitted <==

----- Start of picture text -----

ICT
----- End of picture text -----

5

momo – Crown Jewel

==> picture [619 x 202] intentionally omitted <==

----- Start of picture text -----

Total Revenue Total EBITDA
(NT$bn) (NT$bn)
+26% YoY +15% YoY
1.74
42.02
1.52
33.24
12.39 0.54
0.47
9.94
4Q17 4Q18 2017 2018 4Q17 4Q18 2017 2018
----- End of picture text -----

B2C e-commerce

B2C e-commerce

==> picture [282 x 184] intentionally omitted <==

----- Start of picture text -----

Average ticket size
+8% YoY
2,205
2,110
2,006
1,945
4Q17 4Q18 2017 2018
----- End of picture text -----

# of Transaction

==> picture [292 x 164] intentionally omitted <==

----- Start of picture text -----

+24% YoY
17.7
14.3
4.3 5.2
4Q17 4Q18 2017 2018
----- End of picture text -----

6

==> picture [311 x 70] intentionally omitted <==

Financial Overview

7

Performance by Business

NT$bn	Revenue	EBITDA Telecom CATV momo Total1 6.14 0.78 0.54 7.62 81% 10% 7% 100% -5% 5% 15% -2% 2% 3% 26.19 3.19 1.74 31.72 83% 10% 5% 100% -5% -3% 15% -3% 3% 3%
	Telecom CATV momo **Total1 **
4Q18	17.50 1.57 12.39 31.57
% of total	55% 5% 39% 100%
4Q18 YoY	-13% 1% 25% -1%
	4Q18 YoY (Pre-IFRS 15)
2018	70.03 6.34 42.02 118.73
% of total	59% 5% 35% 100%
2018 YoY	-9% -1% 26% 1%
	2018 YoY (Pre-IFRS 15)

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.

8

Results Summary

NT$bn	4Q18	4Q18	4Q18	2018	2018	2018
	Amount	YoY	% of 4Q guidance	Amount	YoY	% of Full year guidance
Revenues 31.57 -1% 98% 118.73 1% 96%
Operating Costs (23.16) 0% 99% (84.32) 4% 96%
Operating Expenses (4.14) -5% 93% (16.25) -2% 93%
Operating Income 4.27 -1% 94% 18.16 -5% 101%
Non-op. Income (Exp.) (0.10) -91% 50% (0.47) -68% 82%
Pre-tax Income 4.16 31% 96% 17.69 0% 101%
Net Income 3.09 27% 93% 13.64 -4% 100%
EPS1 (NT$) 1.13 27% 92% 5.01 -4% 100%
EBITDA 7.62 -2% 94% 31.72 -3% 99%

1. EPS is based on share count of 2.723bn.

9

Balance Sheet Analysis

NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17
Total Assets	147.67	147.45	154.52	Liabilities	79.67	82.97	89.01
Current Assets	29.07	26.97	32.35	Current Liabilities	41.88	40.48	56.48
- Cash & Cash Equivalents	7.50	5.94	6.63	- ST Debts	18.57	17.59	30.86
- Receivable & Contract Assets	15.21	15.24	16.47	- Other Current Liabilities	23.31	22.89	25.62
- Inventories	3.95	3.27	4.33	Non-current Liabilities	37.79	42.49	32.53
- Other Current Assets	2.42	2.53	4.92	- Long-term Borrowings	33.31	38.14	28.35
Non-current Assets	118.60	120.47	122.17	- Other Non-current Liabilities Shareholders' Equity	4.48 67.99	4.35 64.48	4.18 65.51
- Long-term Investment	6.20	6.22	6.05
- Property and Equipment	41.86	42.47	44.57
- Concession	40.53	41.29	43.67
- Other Non-current & Contract Assets	30.01	30.50	27.88
				Paid-in Capital	34.24	34.21	34.21
				Capital Surplus	12.58	12.30	13.94
4Q18 3Q18 4Q17
				Legal Reserve	27.56	27.56	26.14
Current Ratio	69%	67%	57%	Treasury Shares	(29.72)	(29.72)	(29.72)
Net Debt to Equity	65%	77%	80%	Un-appropriated Earnings	3.39	3.39	0.63
Net Debt to EBITDA (x)	1.40	1.55	1.60	Non-controlling Interest	6.11	5.87	5.88
ROE1 (annualized)	21%	22%	22%	Retained Earnings & Others2	13.83	10.87	14.44

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

2. Including accumulated profits and other equity items.

10

Cash Flow Analysis

NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	NT$bn 4Q18 3Q18 4Q17	2018 2017	2018 2017
Operating	7.31	7.00	7.99	29.78	30.32
Investing	(2.01)	(1.08)	(9.70)	(5.53)	(17.67)
Financing	(3.74)	(7.60)	2.37	(23.38)	(13.72)
NT$bn 4Q18 3Q18 4Q17				2018 2017
**Cash CAPEX1 **	(1.87)	(2.18)	(2.24)	(8.49)	(9.80)
**Free Cash Flow1 **	5.44	4.82	5.74	21.28	20.52

1. Excluding 4G License Fees

11

==> picture [311 x 70] intentionally omitted <==

2019 Guidance & Event Updates

12

2019 Guidance

NT$bn	2019F	2018A	YoY
Revenues	124.53	118.73	5%
EBITDA	33.41	31.72	5%
D&A	(16.39)	(13.56)	21%
Operating Income	17.02	18.16	-6%
Non-op. (Expense)	(0.71)	(0.47)	50%
Pre-tax Income	16.31	17.69	-8%
Net Income	12.33	13.64	-10%
EPS1 (NT$)	4.50	5.01	-10%
NT$bn	2019F	2018A	YoY
Total Capex	(6.4)	(8.5)	-25%
-Telecom	(5.3)	(7.0)	-25%
-Cable	(0.8)	(0.7)	5%
-momo & others	(0.4)	(0.8)	-49%

1. EPS is based on the share counts of 2.740bn in 2019 and 2.723bn in 2018.

13

Event Updates

==> picture [20 x 17] intentionally omitted <==

==> picture [20 x 16] intentionally omitted <==

==> picture [20 x 17] intentionally omitted <==

==> picture [20 x 16] intentionally omitted <==

==> picture [20 x 16] intentionally omitted <==

==> picture [20 x 16] intentionally omitted <==

The Board resolved to participate in establishing LINE Bank, an online-only bank, with investment amount of NT$500M (5% stake).

Obtained Prime rating by ISS-oekom, the first company received in the telecommunication industry in Taiwan.

Received the internationally renowned Swiss SGS QualiCert certification for its direct stores channel, myfone and customer service for the seventh consecutive year.

Won the top and special awards for “2018 Buying Power –The new product and service of social innovation Purchase Reward Program” by SME Administration, Ministry of Economic Affairs.

Obtained the BS 10012 and ISO/IEC 29100 privacy protection certifications.

Won eight awards at the 2018 Taiwan Corporate Sustainability Awards, and was the only telecom firm to receive the “The Most Prestigious Sustainability Awards-Top Ten Domestic Corporates”.

14

Key Message

With strong footholds in e-commerce and OTT services plus leveraging expanding residential broadband user base on content bundling, Taiwan Mobile is better positioned than other telcos in Taiwan. The growing cloud, AIoT, and ICT businesses, coupled with capex downtrend, will support TWM’s stable free cash flow generation capabilities and future growth.

15

==> picture [494 x 87] intentionally omitted <==

Q & A

16