Kt Corporation · KRX:030200

Kt — Q1 2019 Earnings Presentation

29 slides from Kt's earnings presentation, May 2019

1. Slide 1: KT IR Presentation

   KT IR PRESENTATION 2019. 05 | Investor Relations

2. Slide 2: Disclaimer

   Disclaimer This presentation has been prepared by KT Corp.(the “Company”) in accordance with K-IFRS. This presentation contains forward- looking statements, which are subject to risks, uncertainties, and assumptions. This presentation is being presented solely for your information and is subject to

3. Slide 3: Agenda: Business Overview, Financial Highlights, Appendix

   2 Financial Highlights 3 Appendix 3

4. Slide 4: Revenue up by 2.2% on increase in prime subscribers of core MIT Biz

   (Unit: KRW billion) (Consolidated) 1Q18 4Q18 1Q19 QoQ YoY Operating Revenue 5,710.2 5,994.5 5,834.4 -2.7% 2.2% Operating Expense 5,313.1 5,898.7 5,432.3 -7.9% 2.2% Operating Income 397.1 95.8 402.1 319.8% 1.3% Net Income 224.1 18.1 259.8 1,337.0% 15.9% EBITDA 1,228.9 908.2 1,309.5 44.2% 6.6%  Reven

5. Slide 5: Mobile, Internet and IPTV revenue and subscribers

   Mobile Internet IPTV YoY 0.2% YoY 1.3% YoY 18.4% QoQ 1.1% QoQ 4.2% QoQ 1.7% 1,617 1,610 1,599 362 377 1,596 357 356 1,582 474 474 480 473 471 319 7.97 7.78 7.85 21.3 8.73 8.78 7.67 21.1 8.70 7.57 20.9 8.66 20.7 8.65 20.4 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 * Mo

6. Slide 6: Wireless subscribers and ARPU

   (Unit: thousand) Excluding one-off item (Unit: KRW billion, Standalone) ARPU(\) 20,662 20,920 21,120 21,333 20,378 32,283 32,320 32,028 31,867 31,496 3,698 3,711 3,755 3,584 3,644 31,450 YoY 0.2 % 3,066 3,254 3,416 3,529 2,876 QoQ 1.1% 1,617 1,610 13,918 13,952 13,968 13,993 14,049 1,596 1,582 1,599

7. Slide 7: Data ON Plan, MNP, churn and data traffic

   Average MNP per Day Internal Migration Ratio Churn Rate (Unit: in thousand) 55% 56% 53% 1.7% 1.7% 15.9 51% 1.6% 1.5% 14.5 46% 47% 47% 1.4% 1.4% 1.5% 10.8 10.5 11.1 11.0 11.0 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Average Data Traffic

8. Slide 8: Unlimited Rate Plans and Device Exchange Program

   Unlimited Rate Plans Device Exchange Program Leading 5G market and Offering financial options acquiring quality subs to lengthen subscription period 48-Month 130K Installment Plan ‘Super Change’ 100K After 24 months, 89K KRW 80K guarantee up to LTE 69K 49K 55K 62K KRW & 50% (max) 33K of handset pric

9. Slide 9: Industry's 1st 5G Coverage Map and Nationwide 5G

   Industry’s 1st 5G Nationwide 5G The world’s 1st 5G Coverage Map 10 Edge Centers Battery-saving Tech. Building customers’ trust with Offering low latency through Increasing battery usage transparent communications Immediate data processing time up to 25 % (# of base stations, equipment manufacturers,

10. Slide 10: The world's 1st 5G for B2B and 5G Smart Factory

    The world’s 1st 5G for B2B (4.30) 5G Smart Factory Powerful security and 5G network to platform differentiated QoS Smart Factory Services Customized Network CCTV Collaborative IoT Neckband AR Glass Robotics Characteristics for B2B Speed Control Speed Control 5G B2B Flexible Rate per Line per Service

11. Slide 11: Broadband/IPTV growth offsets Telephony decrease

    (Unit: KRW billion, KT Standalone) ▶ Broadband/IPTV growth offsets Telephony decrease 274.6 277.9 253.8 135.1 91.8 64.6 FY2014 * FY2015 * FY2016 * FY2017 * FY2018 '19.1Q -37.8 -120.6 -218.4 -259.6 -291.1 -356.3 Broadband + IPTV revenue change Telephony revenue change * Applied K-IFRS 1018 (Old Stand

12. Slide 12: GiGA Proportion Exceeding 50% and GiGA Subscriber

    (Unit: in thousand) (Unit: KRW billion, KT Standalone) GiGA Proportion GiGA Subscriber Exceeding 50% Bypassing 5mn 8,653 8,659 8,698 8,729 8,782 YoY 1.3% QoQ 1.7% 3,983 3,840 3,725 4,422 4,165 GiGA Proportion 57.6% 54.2% 56.0% 48.9% 51.9% 473.5 474.2 473.4 471.3 479.5 4,715 4,889 5,057 4,231 4,495 1

13. Slide 13: Strengthening attraction of High Value Customer

    ▶ Strengthening attraction of High Value Customer Industry’s 1st 10GiGA 10GiGA Launch Spreading of 500M 1GiGA 1GiGA 100M Industry’s 1st GiGA Launch 1GiGA 500M Launch of Industry’s 1st GiGA FTTH Launch 10GiGA 100M 2007 2014 2017 2018 2014 2015 2016 2017 2018 2019(E) 1998 2015 2019 2020 2020 13

14. Slide 14: Proportion of Platform Revenue and OTV

    (Unit: in thousand) (Unit: KRW billion, Consolidated) Proportion of Platform Revenue 10,253 10,448 10,559 48.5% 47.6% 47.9% 46.0% 10,125 10,368 45.4% 2,592 2,596 2,594 2,553 2,580 YoY 12.9% QoQ 0.9% 1,720 1,666 1,647 1,795 1,759 5,914 6,055 6,186 6,319 508.0 512.7 5,778 487.3 493.2 454.3 1Q18 2Q18 3

15. Slide 15: Customer-focused Media Platform

    Customer- Enhancement of content focused Media offerings, including movies not Platform released in Korea and contents for Strategy kids and seniors Development of new business Evolution to AI models - voice based shopping, Media Platform banking, education, etc. < TV15 Collaboration Promotion > Exp

16. Slide 16: No.1 AI Speaker Subscribers in Korea

    No.1 AI Speaker Subscribers in Korea Strengthening Platform BM 1,540K subscribers (’FY19 1Q) Service into Commerce sector : 1,540K Strengthening pay-tv contents (‘19.03) 1,390K (‘18.12) 1,000K 800K (‘18.07) 700K (‘18.05) 500K (‘18.03) (‘18.01) Discovering New AI Space Extending AI Device Line-up Exp

17. Slide 17: Real estate asset portfolio transformation and hotel opening schedule

    (Unit: KRW billion, Consolidated) 128.5 For Development 97.1 95.8 46% Asset Value 8.3 tn For Telecom (KRW) 54% 1Q18 4Q18 1Q19 [ Portfolio Transformation ] [ Hotel Opening Schedule ] 6% Rental Housing 4% 2% ‘18.07 ‘19.09 ’21.06 ’22.04 Hotel 28% 44% (2% 28%) Dongdaemun Office 22% Sinsa-dong Songpa-gu

18. Slide 18: Subsidiary results: Op Income rebounded QoQ

     Op Income rebounded QoQ due to one-off effect in 4Q18  Revenue declined YoY due to lower level of development  FY 19, Op Income to be at similar level by pioneering new sales growth momentum, such as simple payment process  Focus on increasing cash inflow with rental income (KRW billion) ‘18.1Q

19. Slide 19: 2019 Guidance

    Wireless ▲ 23.5 24tn (KT Standalone) 2018(A)* 2019(E) Over KRW 24tn Revenue -2.2% Slight Increase Subs Net adds 920K Increase Net adds 2018 2019 Broadband Revenue (KT Standalone) 2018(A) 2019(E) Revenue + 2.1% Similar level ▲ 3.3tn GiGA Subs 4,900K Net adds of 970K 2.0 Approx. KRW 3.3tn IPTV (KT Sta

20. Slide 20: Financial Highlights

    1 Business Overview 2 Financial Highlights 3 Appendix 20

21. Slide 21: Financial Highlights: Income Statement

    K-IFRS / Consolidated 2-1 Financial Highlights Income Statement (Unit: KRW billion) □ Operating Revenue 1Q18 4Q18 1Q19 QoQ YoY KRW 5.83tn, YoY +2.2%  Service Revenue Operating Revenue 5,710.2 5,994.5 5,834.4 -2.7% 2.2% KRW 4.96tn, YoY +1.9% Service Revenue 4,863.6 5,021.1 4,955.5 -1.3% 1.9% Merchan

22. Slide 22: Financial Highlights: Operating Expenses

    K-IFRS / Consolidated 2-2 Financial Highlights Operating Expenses (Unit: KRW billion) □ Operating Expenses 1Q18 4Q18 1Q19 QoQ YoY KRW 5.43tn, YoY +2.2%  Labor Cost Operating Expenses 5,313.1 5,898.7 5,432.3 -7.9% 2.2% KRW 983.8bn, YoY +6.7% Labor Cost 922.1 1,006.1 983.8 -2.2% 6.7%  General Expens

23. Slide 23: Financial Highlights: Financial Position

    K-IFRS / Consolidated 2-3 Financial Highlights Financial Position (Unit: KRW billion) □ Debt Position 1Q 18 4Q 18 1Q 19 QoQ YoY  Borrowings: KRW 6.79tn Assets 30,618.1 32,188.8 33,247.8 3.3% 8.6%  New Debt: KRW 4.03tn Cash & Cash Equivalents 1,777.5 2,703.4 2,765.0 2.3% 55.6% Liabilities 16,474.1

24. Slide 24: Financial Highlights: CAPEX

    K-IFRS / Standalone 2-4 Financial Highlights CAPEX (Unit: KRW billion) Access Network □ 1Q19 CAPEX 3,711 Backbone Network  KRW 552.1bn executed B2B 3,313 Others  Focused on access network investment for 5G 2,514 2,397 □ CAPEX Breakdown 2,475 2,359 2,250 1,870  Access Network: KRW 417.3bn 1,977 

25. Slide 25: Appendix

    1 Business Overview 2 Financial Highlights 3 Appendix 25

26. Slide 26: K-IFRS Income Statement

    3-1 K-IFRS Income Statement (Unit: KRW billon) Consolidated 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 KT Separate 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 Operating revenue 5,710.2 5,806.9 5,948.5 5,994.5 5,834.4 Operating revenue 4,297.2 4,283.0 4,358.2 4,418.2 4,334.3 Service revenue 4,863.6 5,003.6 5,096.9 5,021.1 4,95

27. Slide 27: K-IFRS Balance Sheet

    3-2 K-IFRS Balance Sheet (Unit: KRW billion) Consolidated 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 KT Separate 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 Asset 30,618.1 30,118.3 32,794.8 32,188.8 33,247.8 Asset 24,790.1 24,528.5 24,958.9 26,010.9 26,837.7 Current assets 11.078.6 10,847.2 13,812.8 11,894.3 12,396.1 Current

28. Slide 28: Subscribers

    K-IFRS / Standalone 3-3 Subscribers Wireless 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 QoQ YoY 1) Subscribers (Unit: 1,000) Total (LTE+WCDMA) 20,378 20,662 20,920 21,120 21,333 1.0% 4.7% Net additions 363 284 258 200 213 6.3% -41.3% Gross additions 1,211 1,160 1,200 1,179 1,181 0.2% -2.5% 2) Deactivation 848 87

29. Slide 29: Thank you

    Thank you

KT — Q1 2019 Earnings Presentation on 6ix