Telstra Group Limited · ASX:TLS
Telstra — Investor Day (May 2025)
64 slides from Telstra's investor day presentation, May 27, 2025
Slide 1: Telstra Investor Day
Telstra Investor Day 27 May 2025
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation includes forward-looking statements. The forward-looking statements are based on assumptions and information known by Telstra as at the date of this presentation, are provided as a general guide only and are not guarantees or predictions of fut
Slide 3: Vicki Brady, Chief Executive Officer
Vicki Brady Chie f Exe cut ive Offic e r
Slide 4: Acknowledgement of Country
Acknowledgement of Country@
Slide 5: Today's agenda
Today’s agenda 1 Connected Future 30 Vicki Brady 2 Customer Engagement Brad Whitcomb, Amanda Hutton, Oliver Camplin-Warner 3 Network as a Product Shailin Sehgal, Kim Krogh Andersen 4 Digital Infrastructure Brendon Riley 5 Financial discipline Michael Ackland 6 Q&A session Page 5 Copyright Telstra ©
Slide 6: We are at an inflection point
We are at an inflection point Demand continues to grow and become more complex Customer needs are Demand will only The competitive changing increase environment is changing The connectivity we provide New devices, use cases, and Many players see the needs to become more greater digital activity will
Slide 7: Our ambition is to be the number one choice for connectivity in Australia
Our ambition is to be the number one choice for connectivity in Australia Our three layers and goals Our four enablers Customer Engagement People & culture To lead in how we anticipate and deliver on the connectivity needs of our customers Technology leadership Network as a Product To build and oper
Slide 8: Customer Engagement
Aiming to deliver profitable growth across our segments Consumer Provide a differentiated connectivity experience, simply and efficiently, and being a reliable and safe place to connect Business Become a trusted partner with a premium experience by Customer focussing on core connectivity and lev
Slide 9: Network as a Product
Network leadership Sustain our best network and maintain our mobile coverage lead by investing to improve capacity and efficiency Lead in new tech like satellite-to-mobile and 6G, while maintaining a focus on security and resilience Create an autonomous network that runs, heals and ultimately
Slide 10: Digital Infrastructure
InfraCo Deliver Intercity Fibre and associated revenue objectives Provide solutions supporting the new era of AI and connectivity and explore new growth opportunities with partners Provide a seamless customer experience through digital interfaces exposing dynamic inventory Digital Modernise
Slide 11: Our enablers help deliver our strategy
Work as one Look beyond Make a difference People and culture Technology leadership Our enablers driving high performance through leading AI adoption, modern software investing in new skills and technology, practices, resiliency and security, engaging and enabling our people simplification and decoup
Slide 12: Our value creation is underpinned by levers of growth and cash generation
Our value creation is underpinned by levers of growth and cash generation Growth in core business cashflow Growth in mobile and digital infrastructure Operating leverage with cost and BAU capex efficiency Supports growth in balance sheet capacity Portfolio & investment management Disciplined c
Slide 13: Our key targets
Our key targets People and culture Customer Engagement Maintain top quartile Grow strategic NPS by Top 10 strongest brand Employee Engagement more than 50% by FY301 in Australia Technology leadership Achieve top quartile AI maturity by FY30 Network as a Product Transform our connectivity platform, L
Slide 14: Three things give us conviction
Three things give us conviction We are positioned for success and growth Demand is growing Competitive advantages Disciplined execution Global, local, and industry Our core connectivity business We have a solid track record of trends all indicate that demand is strong, with a unique set of disciplin
Slide 15: Connected Future 30 Video
Connected Future 30 Video Video introducing Connected Future 30 strategy Copyright Telstra © Page 15
Slide 16: Customer Engagement
Connected Future Customer Engagement
Slide 17: Customer Q&A
Customer Q&A Brad Whitcomb Amanda Hutton Oliver Camplin-Warner
Slide 18: Consumer
Consumer Creating customer value Brand Safe strength place AI Premium Differentiated fuelled retailer connectivity Copyright Telstra © Page 18
Slide 19: Business
Business Creating customer value Connectivity Lasting solutions relationships Digitising Optimise Growth our business costs mindset Copyright Telstra © Page 19
Slide 20: Enterprise
Enterprise Creating customer value Customer Network experience leadership uplift Industry value Go to market propositions clarity AI enabled Copyright Telstra © Page 20
Slide 21: Network as a Product
Connected Future Network as a Product
Slide 22: Network leadership and reinventing how we create and capture value
PART 1 with Shailin network PART 2 leadership with Kim reinventing create & capture how we value
Slide 23: We are continuing our leadership through evolutionary new tech
We are continuing our leadership through AI and cloud drives the next evolution of technology and network differentiation evolutionary new tech AI Cloud Our physical assets are core to providing Telstra Autonomous Uses AI to simplify the network interaction with self-configuring, self- connectivity
Slide 24: Network leadership
Sustain our best network Invest & deploy capacity Maintain our mobile coverage lead Continuing 5G Advanced Capabilities our network leadership Capacity to meet evolving needs More efficient networks Future-ready networks and capture Better performance; Ready for ORAN increased value reduced energy T
Slide 25: As we lead with new technologies
As we lead with new technologies security and resilience remains key to maintaining trust Lead in new Focus on security technologies and resiliency Launch satellite-to-mobile (direct-to-handset) Security by design practices Create momentum toward 6G Reduce customer impact minutes Enable world leadin
Slide 26: Autonomous networks ambition
Autonomous networks ambition A paradigm shift today our future Static and manual Dynamic, intent-based Customer optimisation based on optimisation to meet real experience average customer needs time customer needs Predictive monitoring and Security & Manual operations and self-healing to avoid resil
Slide 27: Reinventing how we create and capture value
PART 2 with Kim PART 1 reinventing with Shailin create & capture how we network value leadership
Slide 28: Network as a Product allows us to reinvent our business model
Network as a Product allows us to reinvent our business model Our objectives scalable business automation and model programmability Industry fundamentals Continued growth in demand Greater dependency on networks Increasingly sophisticated customer needs global playbook Copyright Telstra © Page
Slide 29: Potential business models
Potential business models with sophisticated network attributes Scalable business Pay-as-you-go Subscription / Dynamic Revenue models tiered adjustments sharing Indirect models Based directly Based on predefined Live adjustment Agreed % of revenue Emerging indirect on usage inclusions of pricing for
Slide 30: We will capture the value of our network through three key channels
We will capture the value of our network through three key channels End Users Developers/B2B2X Enterprise Software OEMs & systems Carriers & Consumers Businesses Hyperscalers & Govt developers integrators MVNOs Customer Engagement (Retail) Traditional MVNO and Aggregators and emerging including Cons
Slide 31: Global API aggregators like Aduna enable us to capture value
Global API aggregators like Aduna enable us to capture value </> Global API aggregators - e.g. Global Businesses, Enterprise and Telcos like Telstra developers use create standard APIs these APIs to build into their applications Copyright Telstra © Page 31
Slide 32: Digital Infrastructure
Connected Future Digital Infrastructure
Slide 33: Australia's most extensive portfolio
Australia’s most extensive portfolio International assets Domestic assets International International Intercity Inter-exchange Customer access Towers and network links network network network rooftops 400,000km of cables 3 path diversity / 370,000km duct 2 large and 5 small ~160,000 poles for intra-
Slide 34: Diverse and growing customer base
Diverse and growing customer base Underpinning strong, stable, long-term cashflows nbn, Telstra, carriers Hyperscalers New growth Government, industry & wholesalers & major projects Infrastructure and high capacity Bespoke, high-capacity Solutions covering connectivity, Sovereign, scalable and secur
Slide 35: Our plan for growth
Our plan for growth Australia’s leading digital infrastructure provider Targets1 Sustained Cash Strategy & EBIT growth investment Maintain & expand our New and better ways to Modernise our areas Mid-teens IRR on core infrastructure make our assets footprint strategic leadership accessible investment
Slide 36: Australia's largest terrestrial intercity network
Australia’s largest terrestrial intercity network Sydney-Canberra coastal route set to go live on 25 June 2025 Sydney Melbourne to Sydney Haymarket 144 fibre pairs per route with >~60 Tbps capacity per fibre pair1 Standard Ends Wollongong Melbourne-Canberra ILAs Canberra-Sydney ILAs CANBERRA Coastal
Slide 37: Options to suit customer needs
Options to suit customer needs Equipment Optical increments1 Bandwidth2 Products Telstra Managed Intercity Wavelength Service 100Gbps Fully managed 400Gbps Low-mid bandwidth 1/8 FP: ~3.8 Tbps Intercity Direct Spectrum Service Point to point amplification with spectrum hand off 1/4 FP: ~7.6 Tbp
Slide 38: Infrastructure
Shifting to preventative management with emergency works <10% of maintenance regimes Infrastructure Applying AI to efficiently predict and manage Managing costs truck rolls Using automation and AI to streamline critical processes and uplift customer experience Copyright Telstra © Page 38
Slide 39: Amplitel
Amplitel We’ve built Australia’s leading towers business Signed long term The largest digital twin program in agreements with all Australia and NZ with 90% of mobile major MNOs Improved land tenure sites digitised1 and ongoing cost efficiencies Built 300 new sites Processed 5,000 with 400 under proj
Slide 40: We have momentum to deliver
We have momentum to deliver ~3% EBITDAaL CAGR1 ~8% EBITDAaL CAGR2 62% EBITDAaL margin3 64% EBITDAaL margin3 Network Capability and investments Innovation track record New intercity fibre network Achieved a world first of Major programs for copper with >4,000 km of fibre laid 1.6Tb/s through a single
Slide 41: ICF Video
ICF Video Video focused on the Sydney, Melbourne, Canberra routes Copyright Telstra © Page 41
Slide 42: Michael Ackland, Chief Financial Officer
Michael Ackland Chie f Financ ial Offic e r
Slide 43: Our financial goals
Our financial goals Our goal is to deliver consistent growth in shareholder value and returns Grow cash earnings by 10% underlying Disciplined capital and mid-single digit CAGR to FY30 ROIC by FY30 portfolio management supporting sustainable and demonstrating growth underpinned by balance sheet grow
Slide 44: Disciplined allocation of capital helps enable shareholder value creation
Disciplined allocation of capital helps enable shareholder value creation Growth in mobile and digital infrastructure Growth in core 1 business cashflow Operating leverage with cost and BAU capex efficiency Supports growth in balance sheet capacity Strategic capex investments in infrastructu
Slide 45: Core business performance underpins cash earnings growth
Key drivers of core business performance A Strong mobile fundamentals Sustainable mobile growth 1 B Growing demand for digital infrastructure Core business Delivering high-quality long-term returns and growth performance underpins cash C Positive operating leverage Commercial excellence driving grow
Slide 46: Strong fundamentals and demand underpins sustainable mobile growth
1 A Strong fundamentals and demand underpins sustainable mobile growth Demand drivers Tripled ~1-2% p.a. Low High data usage on population growth proportion of utility, importance mobile network in expected1 household spend of connectivity the past 5 years and growing Portfolio that maximises revenu
Slide 47: Growing demand for digital infrastructure drives infrastructure growth
1 B Growing demand for digital infrastructure drives infrastructure growth Demand drivers >25% p.a. Data & tech Valuable Satellite Australian internet Gen AI, cloud- includes assets LEO satellite backbone traffic based processing with long-term, activity growing growth forecast and immersive CPI-lin
Slide 48: Commercial, cost and capex efficiency drives positive operating leverage
1 C Commercial, cost and capex efficiency drives positive operating leverage Commercial excellence BAU capex discipline to drive Cost reduction and driving growth and returns financial momentum efficiency supported by AI Focus on economics and Driving efficient delivery through Strong track re
Slide 49: We have a strong track record in effectively managing cost
1 C We have a strong track record in effectively managing cost $ 3b Cost efficiency will continue to come from Product Digitisation simplification Productivity Active portfolio annual core fixed cost improvements management reduction across T22 and T251 (1) Based on reduction in underlying core fixe
Slide 50: Artificial Intelligence will be transformative
1 C Artificial Intelligence will be transformative We are set up to lead… Investing in getting our Partnered with global Focus on re-inventing fundamental tech and leaders like Accenture and processes and parts of our data right Microsoft business … and unlock potentially transformative benefits, fo
Slide 51: Disciplined portfolio and investment management drives returns
Portfolio discipline supports ROIC growth 2 Disciplined on risk-adjusted returns Disciplined portfolio Pipeline of non-core asset divestments Strong adherence to M&A criteria to drive value creation and investment management drives returns Disciplined on strategic investment Flexibility to inves
Slide 52: Disciplined capital management drives shareholder value
3 Disciplined capital Strong balance sheet management drives Committed to settings consistent with an A band credit rating Optimise capital structure between debt and equity with flexibility shareholder value Balance sheet supported by strength and quality of cashflows Debt servicing comfort
Slide 53: Growing returns to shareholders
Growing returns to shareholders Aim to continue delivering a sustainable and growing dividend 3 Strong preference to continue to fully frank dividends Efficient distribution of franking credits Disciplined capital May consider partially-franked dividends where franking constrained management
Slide 54: We aim to deliver growth and shareholder returns
We aim to deliver Growth and shareholder returns Growth in core Portfolio & investment Disciplined capital Value creation 1 business cashflows 2 management 3 management Deliver Grow cash earnings by growth Incremental growth and returns mid-single digit CAGR to FY30 Strategic investment opportunitie
Slide 55: FY25 guidance
FY25 guidance FY24 1H25 FY25 guidance1 Underlying EBITDA2 $8.2b $4.2b $8.5b to $8.7b Business-as-usual capex3 $3.4b $1.6b $3.2b to $3.4b Strategic investment5 $0.3b $0.1b $0.3b to $0.5b Free cashflow after lease payments (FCFaL)4 $3.2b $1.1b $3.0b to $3.4b before strategic investment5 1.This guidanc
Slide 56: Connected Future
Connected Future
Slide 57: Q&A
Q&A
Slide 58: Appendix and supporting calculations
Appendix and supporting calculations
Slide 59: Our capital management framework
Our capital management framework Fiscal discipline Objectives Maximise returns for Maintain financial Retain financial shareholders strength flexibility 1 Committed to balance sheet settings consistent with an A band credit rating 2 Disciplined BAU capex to support core business growth 3 Sustainable
Slide 60: Cash earnings
Cash earnings Cash earnings FY23 1H24 2H24 FY24 1H25 Underlying EBITDA1 $7,950m $4,016m $4,227m $8,243m $4,248m Lease amortisation $574m $303m $316m $619m $282m Underlying EBITDAaL1 $7,376m $3,713m $3,911m $7,624m $3,966m Grow cash earnings from FY25 by mid-single BAU capex 1 $3,297m $1,795m $1,610m
Slide 61: Operating leverage
Operating leverage % Cha ng e Operating leverage FY23 1H24 2H24 FY24 1H25 vs PCP Underlying income1 $23,173m $11,705m $11,696m $23,401m $11,823m A [A] Underlying operating expenses1 $15,196m $7,674m $7,468m $15,142m $7,561m Lease amortisation $574m $303m $316m $619m $282m BAU capex1 $3,297m $1,795m
Slide 62: Investment criteria
Investment criteria Clear guardrails for Potential to partner with Strategic investment mergers and acquisitions external and private capital opportunities EPS accretive (Year 2) Shared risk Targeting mid-teens IRR Cash earnings accretive (Year 2) Access to specialist capability ROI abov
Slide 63: Glossary
Glossary Term Definition Key targets – non-financial AI maturity Refers to external AI maturity measure against global enterprises “enabled by NaaP” Refers to connectivity products that monetise a sophisticated network feature Network Experience Index Refers to an internal composite metric based on
Slide 64: Glossary cont.
Glossary cont. Term Definition Financial terms cont. International Financial Reporting Standards issued by the IASB. When ‘IFRS’ is used to describe an item of information, that item should be taken IFRS to be prepared in accordance with IFRS IRR Internal Rate of Return Operating leverage Underlying