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Taiwan Mobile Co., Ltd. Interim / Quarterly Report 2018

Aug 23, 2018

52277_rns_2018-08-23_e54596d7-ed17-4297-bed8-25ab25e6c15d.pdf

Interim / Quarterly Report

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Taiwan Mobile Co., Ltd. 2Q18 Results Summary

July 26, 2018

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.

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Business Overview

3

Telecom Business – Cash Flows Stand Out

Telecom Service Revenue Telecom EBITDA

Pre-IFRS Reported YoY -4% -3%

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2Q17 3Q17 4Q17 1Q18 2Q18

Pre-IFRS Reported

YoY +13% +0.4% 2Q17 3Q17 4Q17 1Q18 2Q18

Operating Cash Flow (NT$bn)

Free Cash Flow (NT$bn)

YoY +1%

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15.4 15.0 15.5
1H17 2H17 1H18
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YoY +7%

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11.0
10.3 10.3
1H17 2H17 1H18
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4

Growth Catalysts

Fixed Broadband Subs (K)

MAU[1] of myVideo (K)

+185%YoY

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+6%YoY
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  1. MAU : monthly active users.

5

momo E-commerce – Crown Jewel

Total Revenue (NT$bn) Total EBITDA (NT$bn)

+30%YoY

+19%YoY

E-commerce as % of Total Revenue

Mobile Commerce[1] as % E-commerce Revenue

6

  1. Mobile commerce : online retail sales made through mobile devices.

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Financial Overview

7

Performance by Business

NT$bn Revenue EBITDA
Telecom
CATV
momo
**Total1 **		 Telecom
CATV
momo
**Total1 **
2Q18 17.23
1.59
9.63
28.54		 6.98
0.80
0.41
8.34
% of
total		 60%
6%
34%
100%		 84%
10%
5%
100%
2Q18
YoY		 -7%
-1%
25%
3%		 0%
-3%
3%
1%
1Q18
YoY		 -6%
-1%
34%
5%		 -5%
-6%
37%
-3%
2Q18 YoY (Pre-IFRS 15) 13%
11%
  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$bn
2Q18
2Q18
2Q18
1H18
1H18
1H18
Amount YoY % of 2Q
guidance		 Amount YoY % of Full
year
guidance
Revenues
28.54
3%
96%
58.85
4%
48%
Operating Costs
(19.59)
4%
93%
(40.97)
6%
47%
Operating
Expenses
(4.00)
0%
93%
(8.19)
1%
47%
Operating Income
4.95
1%
110%
9.68
-3%
54%
Non-op. Income
(Exp.)
(0.12)
52%
200%
(0.29)
18%
51%
Pre-tax Income
4.83
0%
109%
9.39
-3%
54%
Net Income
3.80
-1%
107%
7.28
-7%
54%
EPS1 (NT$)
1.39
-1%
107%
2.67
-7%
54%
EBITDA
8.34
1%
103%
16.51
-1%
51%
  1. EPS is based on share count of 2.722bn.

9

Balance Sheet Analysis

NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17
Total Assets 151.41 155.27 146.58
Liabilities		 90.77
82.76
87.41
Current Assets 29.48
31.22
30.18
Current Liabilities		 48.18
52.14
48.50
- Cash & Cash Equivalents 7.62
7.66
6.18
- ST Debts		 9.77
28.27
10.16
- Receivable & Contract Assets 14.89
15.51
15.72
- Other Current Liabilities		 38.42
23.88
38.34
- Inventories 3.58
3.98
3.08
Non-current Liabilities		 42.59
30.62
38.91
- Other Current Assets 3.39
4.06
5.20
- Long-term Borrowings		 38.27
26.32
34.89
Non-current Assets 121.93 124.05 116.39



- Other Non-current Liabilities
Shareholders' Equity		 4.31
60.64
4.30

72.51
4.02

59.16
- Long-term Investment 5.87
5.88
6.47
- Property and Equipment 43.12
43.42
45.37
- Concession 42.04
42.92
36.53
- Other Non-current & Contract
Assets		 30.90
31.82
28.01
Paid-in Capital		 34.21
34.21
34.21

Capital Surplus		 12.31
13.94
13.92
2Q18
1Q18
2Q17		 Legal Reserve 27.56
26.14
26.14
Treasury Shares (29.72) (29.72) (29.72)
Current Ratio 61% 60% 62%
Un-appropriated Earnings 0.03
0.63
0.63
Net Debt to Equity 67% 65% 66%

Non-controlling Interest		 5.68
6.07
5.51
Net Debt to EBITDA (x) 1.23
1.44		 1.18

Retained Earnings & Others2
10.57
21.25
8.48
ROE1 (annualized) 22% 20% 24%

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

  2. Including accumulated profits and other equity items.

10

Cash Flow Analysis

NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17		 NT$bn
2Q18
1Q18
2Q17
Operating Cash Flow 7.51 7.96 7.87
Investing Cash Flow (0.28) (2.16) (2.84)
Financing Cash Flow (7.28) (4.76) (6.78)
NT$bn
2Q18
1Q18
2Q17
**Cash CAPEX1 ** (1.69) (2.76) (2.43)
**Free Cash Flow1 ** 5.82 5.20 5.43
  1. Excluding 4G License Fees

11

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Event Updates

12

Awards and Recognition

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Honored with the 2018 CSR Model Award in the “Annual . CSR Survey – Service Section” from Global Views Monthly Ranked among the top 5% of listed companies in the “Corporate Governance Evaluation” for the fourth year in a row by the Taiwan Stock Exchange and Taipei Exchange. Recognized as the “Asia's Best CFO (Investor Relations)” and “Best Investor Relations Company (Taiwan)” by Corporate Governance Asia magazine at the 2018 Asian Excellence Awards.

13

Key Message

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The $499 unlimited SIM-only offering led to a customer spending pattern change in 2Q. Enhancing distribution efficiency and continuous rationalization of customer retention & acquisition costs remain our areas of focus. Our significant progress in cloud, AI and IoT businesses revenue provides enterprise growth potential. A faster customer migration to unlimited 4G data also paves the way for our future revenue expansion in OTT-related services. Making all-out efforts to generate steady streams of cash flows and stringent cost control against a lower ARPU are our main aims.

14

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Q & A

15

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