Yvonne Li President

4904 (TWSE) 2018 2Q Investor Update

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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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Agenda

I. Market Overview

II. 2018 2Q Performance

III. Business Update

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Mobile Market in Taiwan Market Dynamic

2.4 1.0 0.4 0.0 0.0

23.5

16.8

10.56.1

3.8

3.4

11.6

18.122.6 25.2

2014 2015 2016 2017 2018

1H

2G 3G 4G

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Total Mobile Rev in Taiwan(1) Total Mobile Subs in Taiwan(2)

Source: (1) 2014-2017 mobile revenue data from company’s reported financials, and 2018 data from company’s factsheets (2) Mobile subscribers from NCC website.

29.4 29.3 28.9

109.3 107.6

112.6 112.4110.7

2014

1H

2015

1H

2016

1H

2017

1H

2018

1H

28.7

Unit: mn

87%

13%

NCC首頁 > 政府資訊公開 > 業務統計 > 通訊類 > 營運概況 > 行動通信業務 > 綜合資訊 > 行動通信業務(2G、3G、4G)客戶統計數

28.9 -1.5%

YoY

-2.7%

YoY

Unit: NT$bn

-0.2%

YoY

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Agenda

I. Market Overview

II. 2018 2Q Performance

III. Business Update

7.8% 9.3%

11.8%

2017 2018 1H 2018E

Operational Performance New Business Growth

Enterprise ICT Revenue New Business* on Track

*New business includes ICT & IoT, digital business, mobile commerce, smart home..etc.

% of Total Rev

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2017 1H 2018 1H

+37%

YoY

7

7,242 7,1516,810

6,476

7,262

33.0%

26.2%

31.4%31.9%33.1%

2Q17 3Q17 4Q17 1Q18 2Q18

2,854

2,2492,453

2,6782,917

2Q17 3Q17 4Q17 1Q18 2Q18

EBITDA (NT$mn) and Margin % Net Income (NT$mn)

Financial Performance Stable Profitability

Source: Company Data * 2018 financial results and guidance have adopted IFRS 15, but 2017 financial result was not comparatively adjusted.

* *

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Consolidated Financial Result 2Q18 & 1H18 Result vs. Guidance

Item

Unit: NT$ mn, except

for EPS

2Q18

Result* (Relative Fair

Value)

2Q18

Guidance*

Achieve

ment %

1H18

Result* (Relative Fair

Value)

1H18

Guidance*

Achieve

ment %

▶Total Revenue 21,621 21,138 102% 43,287 42,292 102%

▶EBITDA 7,151 7,168 100% 13,961 13,918 100%

▶Pre-tax Income 3,375 3,369 100% 6,466 6,392 101%

▶Net Income 2,678 2,678 100% 5,131 5,082 101%

▶EPS** $0.82 $0.82 100% $1.57 $1.56 101%

Source: Company Data * 2018 financial results and guidance have adopted IFRS 15, but 2017 financial result was not comparatively adjusted. ** EPS was based on current outstanding shares of 3,258,501K

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As of 1Q18 As of 2Q18

Consolidated Financial Result 2Q18 Financial Stats

Cash & Cash Equivalents

Available-for-Sale Financial Assets &

Derivatives

Total Borrowing

Net Debt(1)

Shareholders’ Equity

Net Debt to EBITDA (x)

Free Cash Flow – YTD(2)

Cash-based Capex – YTD

EPS(NT$) – YTD

(NT$ mm unless otherwise stated)

(1) Net Debt= Total Borrowing – (Cash and Cash Equivalent +Available-for-Sale Financial Assets & Derivatives ) (2) Free Cash Flow = Operating Cash flow- acquisition of fixed-asset & intangible asset

14,325

1,256

32,535

16,954

69,702

0.61x

10,546

3,401

$1.57

4,639

1,194

30,124

24,291

79,253

0.87x

4,291

1,715

$0.75

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Agenda

I. Market Overview

II. 2018 2Q Performance

III. Business Update

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Laurelled BEST COMPANIES TO WORK FOR IN ASIA 2018 by HR Asia

Honored CEO of the Year at the Asia Communication Awards 2018.

2018 2Q Honors and Achievements

1st in Taiwan to roll out NB-IoT over 7,500 sites island-wide

Self-organizing network (son) developed by ITRI with FET and Alpha Networks was garnered JUDGES’CHOICE of the Small Cell Forum Awards at the SCWS World 2018

Network & Tech Customer Service

Recognitions

Won Award for Innovation in Customer Service Management, Planning & Practice from Asia-Pacific Stevie Award

Won Customer Relationship Excellence Awards 2018 from APCSC

Garnered Best Service in Taiwan from Commercial Times

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Management Highlight Key Message

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499 flash sale does impact on connectivity revenue,

while we will focus on value creation and cost efficiency

Continue to drive growth in enterprise ICT

Sustain leadership in customer experience including

network and omni channel service delivery

Maintain strong free cash flow position and commit to

sustain dividend policy with 100%+ payout

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Q & A

Websites email

Investor Relations IR@fareastone.com.tw

http://corporate.fetnet.net http://www.fetnet.net

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