Slide 1: ASX cover letter: Telstra Investor Day 2016
2 May 2016 Office of the Company Secretary Level 41 The Manager 242 Exhibition Street For personal use only MELBOURNE VIC 3000 AUSTRALIA Market Announcements Office Australian Securities Exchange General Enquiries 08 8308 1721 4th Floor, 20 Bridge Street Facsimile 03 9632 3215 SYDNEY NSW 2000 ELECTR
Slide 2: Telstra Investor Day 2 May 2016 and Disclaimer
For personal use only TELSTRA INVESTOR DAY 2 MAY 2016 ANDREW PENN, CEO DISCLAIMER • These presentations include certain forward-looking statements that are based on information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performance or achievemen
Slide 3: Agenda; Our Purpose, Vision and Strategy
AGENDA For personal use only 1 Becoming a world class technology company Andrew Penn 2 Capital Management Warwick Bray 3 Q&A Andrew Penn, Warwick Bray 4 Network Resilience Kate McKenzie 5 Q&A Andrew Penn, Kate McKenzie, David Williams Page 3 OUR PURPOSE, VISION AND STRATEGY Purpose: To create a bril
Slide 4: Strategic Pillars: Improve Customer Advocacy, Drive Value and Growth
STRATEGIC PILLAR: IMPROVE CUSTOMER ADVOCACY For personal use only Strategy: Improve customer Drive value & growth Build new growth advocacy from the core businesses Personalised and easy to Simplifying and digitalising the Helping our customers access forms of customer connection experience connect
Slide 5: Strategic Pillar: Build New Growth Businesses
STRATEGIC PILLAR: BUILD NEW GROWTH BUSINESSES For personal use only Strategy: Improve customer Drive value & growth Build new growth advocacy from the core businesses Building the Telstra brand in Asia Connecting the • Strengthened capabilities through Pacnet healthcare system acquisition through Te
Slide 6: Technology Creates an Opportunity for Growth by Leveraging Our Network
TECHNOLOGY CREATES AN OPPORTUNITY FOR GROWTH BY LEVERAGING OUR NETWORK For personal use only World class customer experiences Unified Applications and services Digital Media Communications Cloud Connected home Managed network services Software and technology solutions World class networks Page 9 OUR
Slide 7: Summary; Warwick Bray, CFO
SUMMARY For personal use only Our strategy Our customers remain at the heart of remains the same everything we do We are lifting our aspirations to be a world class technology company Technology creates an Our investments and partnerships opportunity for growth by develop and expand our leveraging o
Slide 8: Capital Management Framework
CAPITAL MANAGEMENT FRAMEWORK For personal use only FISCAL DISCIPLINE 1 2 3 OBJECTIVES MAXIMISING MAINTAINING RETAIN RETURNS FOR FINANCIAL FINANCIAL SHAREHOLDERS STRENGTH FLEXIBILITY 1. Maintain balance sheet settings consistent with a single-A credit rating PRINCIPLES 2. Ensure dividend remains full
Slide 9: Ordinary Dividends Based on Long Term Sustainable Earnings
ORDINARY DIVIDENDS ARE BASED ON THE BOARD’S PRINCIPLE 2 ASSESSMENT OF LONG TERM SUSTAINABLE EARNINGS For personal use only We are focused on the long-term “exit run rate” of earnings post NBN rollout In a particular year, ordinary dividends Sustainable earnings are not the same as may be >100% of ea
Slide 10: Economics Influenced by Mix Change in Major Products
OUR ECONOMICS ARE INFLUENCED BY THE MIX CHANGE IN OUR MAJOR PRODUCTS PRINCIPLE 2 For personal use only Revenue CAGR FY13 – FY15 +25.3% +23.6% +7.6% +6.7% -2.6% -7.3% Global NAS3 Mobile Fixed Data Data & IP1 Fixed Voice Connectivity3 FY15 revenue $2.4b $0.8b $10.7b $2.4b $2.9b $3.7b EBITDA margin Sin
Slide 11: Raising the Bar on Customer Advocacy and Productivity
WE ARE RAISING THE BAR ON CUSTOMER ADVOCACY AND PRODUCTIVITY PRINCIPLE 2 For personal use only Last 5 years Now Over the last 5 years we Continue with 1. Customer advocacy led productivity including: have achieved annual gross previous • Digitalisation productivity of $1 billion, progress including
Slide 12: Summary of Sustainable Earnings Drivers
SUMMARY OF SUSTAINABLE EARNINGS DRIVERS PRINCIPLE 2 For personal use only Change in mix of existing products Total impact of shift in product mix Long-term net The impact of NBN recurring EBITDA impact of negative Sustainable $2-3 billion Earnings Decline in underlying Productivity fixed costs Long-
Slide 13: Cumulative Excess Free Cash Provides Flexibility
CUMULATIVE EXCESS FREE CASH PROVIDES FLEXIBILTY PRINCIPLE 4 For personal use only Cumulative 4.7 excess free 1.0 1.7 2.8 2.2 Cumulative excess free cash cash $b FY12 FY13 FY14 FY15 1H16 incl. sale of Sensis and CSL incl. sale of TelstraClear Included cash Net operating cash flow inflows $b 8.7 9.3 8
Slide 14: Majority of Investments Close to Core
MAJORITY OF INVESTMENTS BY VALUE HAVE BEEN CLOSE TO CORE AND ALL HAVE MET INVESTMENT PRINCIPLE 5 For personal use only CRITERIA Further from core1 Telstra Health: $218m Telstra Software Group: $514m Dr Foster Videoplaza FRED IT iCare Nativ Health Connex Cloud 9 Ooyala Other4 Telstra has invested $1.
Slide 15: Balanced Approach Towards M&A; Telstra Ventures
WE WILL CONTINUE TO TAKE A BALANCED APPROACH TOWARDS M&A PRINCIPLE 5 For personal use only We expect the most significant investments to be closely aligned to our core We will continue to pursue external opportunities where our existing investment guidelines are met, including M&A that is better tha
Slide 16: Ventures Providing Value to the Core Business
VENTURES PROVIDING VALUE TO THE CORE BUSINESS PRINCIPLE 5 For personal use only Examples of our Ventures investments and how they have contributed to our core business: Investment What do they do? Value added to core business Whispir is a cloud based software provider that helps Telstra and Whispir
Slide 17: Q&A; Kate McKenzie, COO
For personal use only Q&A NOW ON iPHONE, iPAD AND ANDROID TELSTRA INVESTOR DAY 2 MAY 2016 KATE MCKENZIE, COO 16
Slide 18: Our Mobile Network Is Australia's Best
OUR MOBILE NETWORK IS AUSTRALIA’S BEST For personal use only Australia’s largest Australia’s fastest Making it better • Our 4G network will reach • Based on a national • Over the three years to 98% of the population by average of 3G and 4G June 2017 we will have June 2016 and 99% by speeds invested
Slide 19: Network Review: Actions
NETWORK REVIEW: ACTIONS For personal use only 01 Identified and addressed the root causes of the disruptions 02 Increase investment in world leading network monitoring and tools - $25 million 03 Improve network recovery time for customers to be world class - $25 million Page 35 LEADING THE MARKET IN
Slide 20: Q&A
For personal use only Q&A NOW ON iPHONE, iPAD AND ANDROID 19