6-K 1 d603212d6k.htm FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2018

Commission File Number 1-14926

KT Corporation

(Translation of registrant’s name into English)

90, Buljeong-ro,

Bundang-gu, Seongnam-si,

Gyeonggi-do,

Korea

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 3, 2018
KT Corporation
By: |  | /s/ Seunghoon Chi
Name: |  | Seunghoon Chi
Title: |  | Vice President
By: |  | /s/ Youngkyoon Yun
Name: |  | Youngkyoon Yun
Title: |  | Director

KT ‘18 2Q Earnings Release

Disclaimer This presentation has been prepared by KT Corp.(the Company”). 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 change without notice. No presentation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, actuality, fairness, or completeness of the information presented. KT Corp has applied new accounting standard of ‘K-IFRS 1115’ as of Jan 1st, 2018. Accordingly, we have elected the modified retrospective approach which will recognize the cumulative impact of the new standard as an adjustment to retained earnings as at January 1 2018, the period of initial application. That said, there are no obligation to apply the new standard to previous financial statements. In this material, despite the new accounting standard, we have included the restated figures for 2018 prepared under IFRS 1018 (old- standard) for investors’ understandings. The restated figures are followed by ‘*’ marking. However, please be noted that these restated figures have not been audited or reviewed by external auditors. If you have any related questions to this material, please contact IR department. Tel : 82-2-3495-3512, 3254, 3564, 3976, 5343 Fax : 82-2-3495-5917

Contents 1 2Q18 Highlight 2 Financial Highlights 3 Business Overviews 4 Q&A 5 Appendix

Contents 1 2Q18 Highlight 2 Financial Highlights 3 Business Overviews 4 Q&A 5 Appendix

1 2Q18 Highlight ïƒ¼ Sustained revenue and subscriber growth with new data plan and differentiated service offerings ïƒ¼ Service development in platform businesses (energy, security, AI, connected car, etc.) for securing long-term growth momentum preparing for the upcoming 5G era High-quality subscriber growth supported by tailored services and high network quality—Introducing new pricing plans ‘Data ON’ and ‘Roaming ON’ based on data usage pattern (5.31) MNO net adds of 220K with positive response on new plans—over 500K subscribers in 1 month—GiGA penetration of 52% with broadband revenue up by 3.7% YoY (stand-alone, old std.) Gearing up for long term growth on media platform with GiGA Genie subscribers of 1M—Creating profit opportunities with cross-industry integration of AI apartment, AI hotel, education, etc., along with increase of high ARPU IPTV subscriber base—IPTV net adds of 200k in 1H18, with revenue up by 17.2% YoY (stand-alone, old std.) Expansion of platform business (eg. GiGA Drive, GiGA Energy Manager, GiGA Eyes)—Launched connected car platform, GiGA Drive, achieved subscribers of 650K (YoY +34%) collaborating with carmakers—Enhanced service competitiveness through upgrading energy and security solutions 4

Contents 1 2Q18 Highlight 2 Financial Highlights 3 Business Overviews 4 Q&A 5 Appendix

K-IFRS / Consolidated 2-1 Financial Highlights Income Statement (Unit: KRW bn) 2Q17* 1Q18* 2Q18* QoQ YoY 1Q18 2Q18 QoQ Operating Revenue KRW 5.88tn, YoY +0.7% Operating revenue 5,842.5 5,837.9 5,882.4 0.8% 0.7% 5,710.2 5,806.9 1.7% Service Revenue Service revenue 5,069.1 4,921.7 5,050.2 2.6% -0.4% 4,863.6 5,003.6 2.9% KRW 5.05tn, YoY -0.4% Merchandise revenue 773.3 916.1 832.2 -9.2% 7.6% 846.6 803.4 -5.1% Operating Income Operating expense 5,395.2 5,402.7 5,505.4 1.9% 2.0% 5,313.1 5,407.8 1.8% KRW 376.9bn, YoY -15.7% Operating income 447.3 435.1 376.9 -13.4% -15.7% 397.1 399.1 0.5% Margin (%) 7.7% 7.5% 6.4% -1.0%p -1.2%p 7.0% 6.9% -0.1%p Net Income Deficit Deficit Deficit Non-operating income(loss) -131.4 -47.2 -14.6 -44.1 -7.9 KRW 256.9bn, YoY -0.4% Decreased Decreased Decreased Income before taxes 315.9 388.0 362.4 -6.6% 14.7% 353.0 391.2 10.8% EBITDA Net income 258.1 252.5 256.9 1.7% -0.4% 224.1 280.7 25.2% KRW 1.20tn, YoY -6.9% Margin (%) 4.4% 4.3% 4.4% 0.1%p 0.0%p 3.9% 4.8% 0.9%p EBITDA 1,288.3 1,266.9 1,199.0 -5.4% -6.9% 1,228.9 1,221.2 -0.6% Margin (%) 22.1% 21.7% 20.4% -1.3%p -1.7%p 21.5% 21.0% -0.5%p * IFRS 1018 applied (old-standard) : Restated figures have been provided for investors’ understanding. The figures have not been audited or reviewed by external auditors. (applies to other slides) 6

K-IFRS / Consolidated 2-2 Financial Highlights Operating Expenses (Unit: KRW bn) Operating Expenses 2Q17* 1Q18* 2Q18* QoQ YoY 1Q18 2Q18 QoQ KRW 5.51tn, YoY +2.0% Operating expense 5,395.2 5,402.7 5,505.4 1.9% 2.0% 5,313.1 5,407.8 1.8% Labor Cost KRW 989.6bn, YoY +13.5% Labor cost 872.1 923.5 989.6 7.2% 13.5% 922.1 987.5 7.1% General expense 2,442.3 2,363.6 2,466.6 4.4% 1.0% 2,353.1 2,454.6 4.3% General Expense KRW 2.47tn, YoY +1.0% Cost of service provided 661.6 649.7 609.8 -6.2% -7.8% 649.7 609.8 -6.2% Cost of Merchandise Selling expense 575.6 521.4 530.5 1.7% -7.8% 443.7 447.8 0.9% KRW 908.2bn, YoY +7.7% Cost of merchandise 843.5 944.4 908.2 -3.8% 7.7% 944.4 908.2 -3.8% (Unit: KRW bn) Marketing Expenses 2Q17* 1Q18* 2Q18* QoQ YoY KRW 674.6bn, YoY +1.6% Marketing expenses 663.6 615.6 674.6 9.6% 1.6% KT Separate, Profit from handset sales adjusted / Selling expenses + Advertising expenses 7

K-IFRS / Consolidated 2-3 Financial Highlights Financial Position (Unit: KRW bn) Equity increase on IFRS15 2Q 17* 1Q 18 2Q 18 QoQ YoY initial application Assets 27,825.5 30,467.8 29,968.0 -1.6% 7.7%—Cumulative impact reflected st Cash & cash equivalents 1,656.5 1,777.5 2,249.7 26.6% 35.8% in Jan 1 , 2018 retained earnings Debt 14,771.1 16,458.0 15,665.2 -4.8% 6.1% Borrowings 6,524.9 6,689.3 6,604.5 -1.3% 1.2% Debt Position Equity 13,054.4 14,009.8 14,302.8 2.1% 9.6% Borrowings: KRW 6.60tn Capital stock 1,564.5 1,564.5 1,564.5 0.0% 0.0% Net Debt: KRW 4.35tn Net debt 4,868.5 4,911.8 4,354.8 -11.3% -10.6% Debt / Equity 113.2% 117.5% 109.5% -7.9%p -3.6%p Debt Ratio Net debt / Equity 37.3% 35.1% 30.4% -4.6%p -6.8%p Debt to Equity: 109.5% 135.5% Net Debt to Equity: 30.4% 121.1% 126.2% 113.2% 117.5% 109.5% Debt to Equity 41.8% 37.3% 35.2% 36.4% 35.1% 30.4% Net Debt to Equity 1Q17 * 2Q17 * 3Q17 * 4Q17 * 1Q18 2Q18 8

K-IFRS / Separate 2-4 Financial Highlights CAPEX (Unit: KRW bn) Access Network 1H 2018 CAPEX 3,313 Backbone Network B2B KRW 644.7bn executed Others 28.0% executed as of 1H18 2,514 2,397 2,359 CAPEX Breakdown 2,250 2,300 1,870 Access Network: KRW 324.1bn 1,362 1,133 Backbone Network: KRW 123.4bn 1,316 1,143 1,196 B2B: KRW 127.9bn 466 Others: KRW 69.3bn 452 428 444 241 492 497 645 2018 Guidance KRW 2.3tn 394 517 402 736 362 298 330 258 259 311 227 2013 2014 2015 2016 2017 2018 1H18 Guidance 9

Contents 1 2Q18 Highlight 2 Financial Highlights 3 Business Overviews 4 Q&A 5 Appendix

K-IFRS / Consolidated 3-1 Business Overview Wireless (Unit: KRW bn) Wireless up by 0.3% YoY 2Q17* 1Q18* 2Q18* QoQ YoY 1Q18 2Q18 QoQ Service revenue declined on Wireless 1,781.4 1,777.9 1,786.2 0.5% 0.3% 1,740.8 1,763.7 1.3% increased take-up rate of ‘selective Service 1,679.5 1,660.2 1,667.2 0.4% -0.7% 1,623.1 1,644.7 1.3% tariff discount’ and uplifted tariff Interconnection 101.9 117.7 119.0 1.1% 16.7% 117.7 119.0 1.1% discount rate, YoY -0.7% [Wireless Subscriber] (Unit: 1,000) 20,378 20,662 19,521 19,795 20,015 Net additions and LTE penetration 18,892 19,234 18,678 continues Wireless net adds of 284k 77.2% 77.9% 78.5% 75.5% 75.9% 76.2% 76.7% Net subscriber addition continues 74.5% with successful launch of new pricing plan ‘Data ON’ LTE penetration reached 78.5% 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Subscribers % of LTE 11

K-IFRS / Consolidated 3-2 Business Overview Wireline (Unit: KRW bn) Wireline down by 2.4% YoY 2Q17* 1Q18* 2Q18* QoQ YoY 1Q18 2Q18 QoQ Wireline 1,226.1 1,212.4 1,196.3 -1.3% -2.4% 1,198.8 1,181.5 -1.4% Telephony 461.4 437.6 433.2 -1.0% -6.1% 436.9 432.5 -1.0% Telephony Broadband 501.1 516.7 508.9 -1.5% 1.6% 503.9 494.7 -1.8% Revenue down by 6.1% YoY on cord-cutting and usage drop Line lease 263.6 258.0 254.2 -1.5% -3.6% 258.0 254.3 -1.5% [Broadband Subscriber] (Unit: 1,000) Broadband 8,640 8,708 8,758 8,653 8,659 8,478 8,516 8,573 Revenue up by 1.6% YoY with GiGA subscribers expansion despite 48.9% 51.9% 44.9% interconnection rate decline 41.5% 37.5% 33.0%—Revenue up by 3.7% YoY excluding 28.5% 24.1% interconnection 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Subscribers % of GiGA 12

K-IFRS / Consolidated 3-3 Business Overview Media / Contents (Unit: KRW bn) Media / Contents up by 7.6% YoY 2Q17* 1Q18* 2Q18* QoQ YoY 1Q18 2Q18 QoQ Media / Contents 561.4 561.7 604.2 7.6% 7.6% 554.2 595.2 7.4% Media Media 457.1 461.5 495.3 7.3% 8.4% 454.3 487.3 7.3% IPTV net adds of 100k in 2Q18 Contents 104.3 100.2 108.9 8.7% 4.3% 99.9 107.9 8.0% Media revenue up by 8.4% YoY on high-quality subscriber expansion [IPTV Subscriber] (Unit: 1,000) and platform revenue increase 7,573 7,672 7,397 7,472 7,161 7,280 6,928 7,042 Contents Up by 4.3% YoY on T-commerce (KTH) 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Number of IPTV subscribers differ from MSIT’s release that applies “Combined Market Share Regulation” under the IPTV law. (KT’s average(6-month average) pay TV subscribers as of 2H17 are 6,339,759) 13

K-IFRS / Consolidated 3-4 Business Overview Finance and others (Unit: KRW bn) Finance down by 5.2% YoY 2Q17* 1Q18* 2Q18* QoQ YoY 1Q18 2Q18 QoQ Finance revenue declined Finance 914.7 832.7 866.7 4.1% -5.2% 832.7 866.7 4.1% on decreased ‘Union-Pay’ card Other service 585.5 537.0 596.8 11.1% 1.9% 537.1 596.5 11.1% transactions IT/Solution 260.6 235.5 261.6 11.1% 0.4% 235.5 261.6 11.1% Real estate 114.0 97.1 107.7 10.9% -5.6% 97.1 107.7 10.9% Other Service up by 1.9% YoY Others 210.9 204.4 227.5 11.3% 7.9% 204.4 227.3 11.2% Other revenue up on IDC and security business expansion (Unit: KRW bn) Merchandise up by 7.6% YoY 2Q17* 1Q18* 2Q18* QoQ YoY 1Q18 2Q18 QoQ Merchandise 773.3 916.1 832.2 -9.2% 7.6% 846.6 803.4 -5.1% 14

Contents 1 2Q18 Highlight 2 Financial Highlights 3 Business Overviews 4 Q&A 5 Appendix

Contents 1 2Q18 Highlight 2 Financial Highlights 3 Business Overviews 4 Q&A 5 Appendix

5-1 K-IFRS Income Statement Consolidated 2Q 17* 3Q 17* 4Q 17* 1Q 18* 2Q 18* 1Q 18 2Q 18 Operating revenue 5,842.5 5,826.6 6,106.6 5,837.9 5,882.4 5,710.2 5,806.9 Service revenue 5,069.1 5,047.2 5,058.2 4,921.7 5,050.2 4,863.6 5,003.6 Wireless 1,781.4 1,816.6 1,811.4 1,777.9 1,786.2 1,740.8 1,763.7 Fixed line 1,226.1 1,218.0 1,202.6 1,212.4 1,196.3 1,198.8 1,181.5 Media/Contents 561.4 572.6 584.8 561.7 604.2 554.2 595.2 Finance 914.7 873.9 892.8 832.7 866.7 832.7 866.7 Others 585.5 566.2 566.6 537.0 596.8 537.1 596.5 Merchandise rev. 773.3 779.3 1,048.4 916.1 832.2 846.6 803.4 Operating expense 5,395.2 5,449.3 5,972.8 5,402.7 5,505.4 5,313.1 5,407.8 Service expense 4,551.7 4,524.9 4,804.7 4,458.3 4,597.3 4,368.6 4,499.6 Labor expense 872.1 848.5 978.0 923.5 989.6 922.1 987.5 General expense 2,442.3 2,481.1 2,536.4 2,363.6 2,466.6 2,353.1 2,454.6 Cost of svc provided 661.6 603.3 676.4 649.7 609.8 649.7 609.8 Selling expense 575.6 592.1 613.8 521.4 530.5 443.7 447.8 Merchandise cost 843.5 924.4 1,168.1 944.4 908.2 944.4 908.2 Operating income 447.3 377.3 133.7 435.1 376.9 397.1 399.1 N-OP income (loss) -131.4 -60.5 -247.3 -47.2 -14.6 -44.1 -7.9 N-operating income 53.7 120.7 235.6 128.7 210.5 130.0 211.3 N-operating expense 185.9 183.7 469.1 174.9 226.3 173.2 220.5 Equity method (G/L) 0.8 2.4 -13.9 -1.0 1.2 -1.0 1.2 Income bf taxes 315.9 316.7 -113.6 388.0 362.4 353.0 391.2 Income tax 57.8 114.1 9.9 135.4 105.4 128.9 110.5 Income from con. Op 258.1 202.6 -123.5 252.5 256.9 224.1 280.7 Income from discon. op 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net income 258.1 202.6 -123.5 252.5 256.9 224.1 280.7 NI contribution to KT 222.2 179.9 -126.1 227.5 229.5 197.0 251.0 EBITDA 1,288.3 1,215.1 968.8 1,266.9 1,199.0 1,228.9 1,221.2 EBITDA Margin 22.1% 20.9% 15.9% 21.7% 20.4% 21.5% 21.0% * K-IFRS 1018 (old-standard) (Unit: KRW bn) KT Separate 2Q 17* 3Q 17* 4Q 17* 1Q 18* 2Q 18* 1Q 18 2Q 18 Operating revenue 4,292.6 4,312.0 4,575.3 4,418.4 4,344.7 4,297.2 4,283.0 Service revenue 3,588.2 3,607.5 3,570.0 3,555.1 3,622.7 3,501.5 3,581.4 Wireless 1,759.5 1,791.2 1,782.5 1,751.3 1,758.9 1,713.8 1,735.5 Fixed line 1,212.6 1,210.1 1,186.5 1,197.9 1,189.3 1,186.5 1,176.4 Media 308.8 311.6 317.6 323.1 361.9 318.7 357.2 Other service 307.2 294.7 283.4 282.8 312.7 282.5 312.3 Merchandise rev. 704.4 704.5 1,005.3 863.3 722.0 795.6 701.6 Operating expense 3,991.2 4,040.6 4,514.9 4,078.8 4,067.5 3,992.2 3,975.4 Service expense 3,253.8 3,278.5 3,473.3 3,227.9 3,348.5 3,141.3 3,256.4 Labor expense 502.5 491.0 575.3 526.9 599.0 526.9 599.0 General expense 1,655.8 1,687.6 1,779.0 1,633.4 1,671.2 1,627.8 1,658.8 Cost of svc provided 510.1 509.2 507.6 519.0 518.1 519.0 518.1 Selling expense 585.4 590.7 611.3 548.5 560.2 467.6 480.5 Merchandise cost 737.3 762.0 1,041.7 850.9 718.9 850.9 718.9 Operating income 301.4 271.4 60.4 339.6 277.2 305.0 307.7 N-OP income (loss) -127.7 -46.2 -205.2 124.3 -27.9 127.3 -21.3 N-operating income 45.5 106.6 200.8 283.5 185.2 284.8 186.0 N-operating expense 173.2 152.7 406.0 159.2 213.1 157.5 207.2 Income bf taxes 173.7 225.3 -144.8 463.9 249.3 432.2 286.4 Income tax 13.0 77.3 -14.8 123.9 66.6 115.4 76.5 Net income 160.7 148.0 -130.1 340.0 182.8 316.8 209.9 EBITDA 1,057.4 1,021.8 805.7 1,081.3 1,009.0 1,046.6 1,039.4 EBITDA Margin 24.6% 23.7% 17.6% 24.5% 23.2% 24.4% 24.3% 17

5-2 K-IFRS Balance Sheet Consolidated 1Q 17* 2Q 17* 3Q 17* 4Q 17* 1Q 18 2Q 18 Asset 30,102.6 27,825.5 29,373.0 29,580.6 30,467.8 29,968.0 Current assets 9,858.1 7,592.8 9,354.1 9,522.1 10,928.3 10,696.9 Cash & cash equi. 2,002.1 1,656.5 2,168.6 1,928.2 1,777.5 2,249.7 Trade & other rec 3,196.7 3,384.9 3,440.8 3,555.9 3,486.4 3,589.8 Inventories 499.0 420.0 346.7 457.7 716.0 594.5 Other current asset 4,160.2 2,131.6 3,398.0 3,580.4 4,948.5 4,262.9—Prepaid_Contract cost — — 987.2 1,037,8—Contract assets — — 313.1 298.4 Non-current assets 20,244.5 20,232.7 20,018.9 20,058.5 19,539.5 19,271.1 Trade & other rec 609.6 647.8 629.8 800.6 689.2 770.1 P.P.E 13,865.5 13,409.7 13,288.5 13,562.3 13,161.7 13,000.0 Other current asset 5,769.4 6,175.2 6,100.5 5,695.6 5,688.5 5,501.0—Prepaid_Contract cost — — 343.5 362.6—Contract assets — — 74.0 79.3 Liabilities 17,319.3 14,771.1 16,085.9 16,504.3 16,458.0 15,665.2 Current liabilities 9,714.6 7,275.8 8,815.7 9,458.1 9,437.6 9,101.5 Trade & other payables 7,384.0 5,626.9 6,672.0 7,355.5 6,972.4 6,197.7 Short-term borrowings 1,647.5 988.7 1,586.0 1,573.5 1,534.3 1,940.0 Others 683.1 660.2 557.6 529.1 931.0 963.8—Contract liabilities — — 270.8 281.0 Non-current liabilities 7,604.7 7,495.4 7,270.2 7,046.1 7,020.4 6,563.7 Trade & other payables 886.9 894.1 900.6 893.1 667.9 661.0 Long-term borrowings 5,697.7 5,536.3 5,262.2 5,110.2 5,155.0 4,664.5 Others 1,020.0 1,065.0 1,107.5 1,042.8 1,197.5 1,238.2—Contract liabilities — — 52.1 45.8 Equity 12,783.3 13,054.4 13,287.1 13,076.4 14,009.8 14,302.8 Retained earnings 9,657.9 9,877.3 10,056.5 9,854.2 10,726.0 10,973.6 * K-IFRS 1018 (old-standard) (Unit: KRW bn) KT Separate 1Q 17* 2Q 17* 3Q 17* 4Q 17* 1Q 18 2Q 18 Asset 23,677.2 22,881.3 23,381.9 23,334.9 24,639.8 24,378.2 Current assets 4,502.2 3,954.2 4,603.1 4,379.6 6,312.7 6,266.7 Cash & cash equi. 1,102.6 911.6 1,323.8 1,166.4 1,064.1 1,464.3 Trade & other rec 2,563.5 2,617.5 2,601.6 2,740.3 2,847.6 2,827.7 Inventories 287.2 205.3 142.3 232.2 450.7 360.4 Other current asset 548.8 219.7 535.4 240.6 1,950.3 1,614.4—Prepaid_Contract cost — — 1,005.8 1,048.7—Contract assets — — 289.1 274.7 Non-current assets 19,175.1 18,927.1 18,778.9 18,955.4 18,327.1 18,111.6 Trade & other rec 541.7 581.7 556.8 735.7 624.1 705.1 P.P.E 11,538.2 11,117.3 11,074.7 11,375.0 11,008.2 10,777.8 Other current asset 7,095.2 7,228.1 7,147.3 6,844.6 6,694.9 6,628.7—Prepaid_Contract cost — — 331.4 336.9—Contract assets — — 64.0 69.3 Liabilities 12,492.0 11,533.4 11,878.7 12,023.8 12,304.3 11,853.1 Current liabilities 5,636.5 4,741.9 5,338.2 5,596.7 5,883.2 5,927.6 Trade & other payables 3,842.5 3,653.6 3,733.4 4,109.5 4,074.7 3,602.2 Short-term borrowings 1,433.4 712.4 1,336.6 1,298.5 1,230.1 1,688.7 Others 360.6 376.0 268.3 188.6 578.4 636.7—Contract liabilities — — 274.4 280.0 Non-current liabilities 6,855.5 6,791.5 6,540.5 6,427.2 6,421.1 5,925.5 Trade & other payables 942.9 945.0 946.3 958.2 728.4 711.1 Long-term borrowings 5,370.6 5,278.5 5,006.7 4,914.4 5,007.5 4,515.1 Others 542.0 568.0 587.4 554.6 685.2 699.4—Contract liabilities — — 47.6 41.7 Equity 11,185.2 11,347.9 11,503.2 11,311.1 12,335.5 12,525.1 Retained earnings 9,242.1 9,400.9 9,548.3 9,344.5 10,380.4 10,587.3 18

K-IFRS / Separate 5-3 Subscribers Wireless 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 QoQ YoY Subscribers (Unit: 1,000)1) Total (LTE+WCDMA) 19,234 19,521 19,795 20,015 20,378 20,662 1.4% 5.8% Net additions 342 287 274 220 363 284 -21.8% -1.1% Gross additions 1,243 1,225 1,270 1,264 1,211 1,160 -4.2% -5.3% Deactivation2) 901 938 996 1,043 848 876 3.3% -6.6% Churn rate 1.6% 1.6% 1.7% 1.7% 1.4% 1.4% -0.0%p -0.2%p LTE 14,608 14,869 15,179 15,462 15,867 16,224 2.3% 9.1% LTE Penetration rate 75.9% 76.2% 76.7% 77.2% 77.9% 78.5% 0.7%p 2.4%p ARPU (KRW)3) 34,537 34,554 34,608 34,077 32,993 32,7334) -0.8% -5.3% Note 1) Subscribers: MSIT’s new guidelines for subscriber disclosure (Retroactively applied from 1Q14, MVNO included) Note 2) Deactivation: Mandatory deactivation included Note 3) ARPU = Wireless revenue* / Wireless subscribers** * Wireless revenue(3G, LTE and IoT included):Revenue of Voice and Data usage (Interconnection/Subscription fee excluded), VAS, Contract/ Bundled Discounts, and etc. included ** Wireless subscribers: Based on MSIT’s guidelines for average billed subscribers in quarter Note 4) ARPU based on old standard (New standard wireless ARPU 32,320) Wireline 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 QoQ YoY Subscribers (Unit: 1,000) Telephony 16,129 16,045 15,815 15,610 15,478 15,343 -0.9% -4.4% PSTN 12,679 12,576 12,376 12,201 12,080 11,949 -1.1% -5.0% VoIP 3,450 3,469 3,439 3,409 3,398 3,394 -0.1% -2.2% Broadband 8,573 8,640 8,708 8,758 8,653 8,659 0.1% 0.2% IPTV (OTV+OTS) 7,161 7,280 7,397 7,472 7,573 7,672 1.3% 5.4% Number of IPTV subscribers differ from MSIT’s release that applies “Combined Market Share Regulation” under the IPTV law. (KT’s average(6-month average) pay TV subscribers as of 2H17 are 6,339,759) 19

PEOPLE TECHNOLOGY. KT