Slide 1: ASX cover letter - Analyst Briefing half year results
12/02/2004 The Manager Company Announcements Office Australian Stock Exchange 10th Floor, 20 Bond Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam Office of the Company Secretary Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA Telephone 63 9634 6400 Facsimile 03 9632 3215 Re
Slide 2: Telstra Corporation Limited 1H2004 Results
Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 3: Highlights
_ Highlights* gin Up 2% ovel » Mobile revenue growth acce ~ Subscribers up 1987% to 50 - Successful Buy-back, increased ordina Zeistra “underlying: Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 4: Sales Revenue
Sales Revenue Domestic Sales Revenue Operatirig Expenses EBITDA EBIT NPAT & Ml EBITDA Margin (%)' Free Cash Flow? | Telstra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 5: 1H 2004 Financial Outcomes
4H 2004 Financial Outcomes $millions 2003 2004 EBITDA Margint 2003 2004 EPS! Ordi Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 6: Telstra's Market Share Remains Strong
Telstra’s Market Share Remains Strong Sensis Advertising Subscription TV. {main media)” : 13% a oo FF Telstra share: Dither Resoid Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 7: Significant Regulatory Settings
ngs i Significant Regulatory Set + Regulated prices for wholesale services USO/CSG review * Safe harbour for Foxtel digital investment Mobile termination report Price caps review Digital HFC ; Investment Separation reports’ Termination USO Exemption released (inal report) Review Regulatory risk: Tel
Slide 8: Revenue Growth - Both Organic and Acquisitive
_ Revenue Growth _ _— Both Organic and Acquisitive _ Maximise traditional revenues Rebalancing Value Added Services Increase utilisation Price innovation Customer service Redtice costs / improve margin Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 96
Slide 9: A Paradigm Shift
A Paradigm Shift Fixed network ' aq) Broadband 4 and services ; Be ES everywhere Ubiquitous {¢ ; wireless |j Mobile network ‘ . g and services Internet network / Multi-access and services wks) access innovative devices Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor
Slide 10: CSL-China + Low Capital Intensity Growth
CSL-China + Low Capital ee é : Earnings cote: __filensily Growth a ae ne Diversity + Strategic “Connection” Grow Our Knowledge, Capability and Leadership Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 11: Telstra Path to Value Creation
Telstra Path to Value Creation —_ + Wireless + Broadband + Advertising + Digital Entertainment Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 12: Outlook
Outlook Costs will grow less than revenues Underlying EBIT and EBITDA margins will > Invest in the core > Actretive Acquisitions > Return Capital Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 13: Zeistra
Ai SI Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 14: Financial Highlights
Financial Highlights Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 15: Reported Results
[Reported Results ‘Sales Revenue EBIT NPAT & MI" EPS (cents) Operating CAPEX Ordinary DPS (cents) Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 16: Underlying Results
Underlying Results Sales Revenue Underlying Domestic Sales Revenue Operating Expenses EBITDA EBIT NPAT & MI EBITDA Margin (%)! Free Gash Flow? Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 17: Underlying Domestic Operations
Underlying Domestic 0; erations Underlying Sales Revenue : 10,468 10, Less International Domestic Sales Revenue Less; NDC/Cable wery ( Underlying Domestic Sales Revenue 9,528 9,708 Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 96
Slide 18: Underlying Sales Revenue
Underlying Sales _ Zotal mobiles Intemet& IP solutions Other Sales & Service HK CSL Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 19: Mobiles trends improving
Mobiles trends improving Postpaig Sep-02. Dec-02 Mar-03 Jun03 Sep-03— Dec-03 Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 20: Mobiles inclusive of Terminating Revenues
__ Mobiles inclusive of Terminating Revenues Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 21: Data and Airtime drive Mobiles Revenue growth
Data and Airtime drive _ Mobiles Revenue growth Zeistra * Mobile originating Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 22: Broadband Revenues On Track
Broadband Revenues: On Track : Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 23: PSTN rebalanced products grow
PSTN rebalanced products grow +1 5% ARPU* up 1% to $66/month Access Lines Fon minutes) Zeistra * Excludes inibisns Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 24: Improved call completion rates
___ Improved call completion rates Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 25: Sensis (advertising & directories) - continuing growth story
Sensis {advertising & directories) _ = continuing growth story / ‘Online/Electronic White Pages® print Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 26: Other revenues
tho 240s Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 27: Revenues impacted by various factors
Revenues impacted by various factors __- Controlled entities : her sales and service : information? Cable Card Recovery Services FX Movt => ontrolled entities and Other sales:& xeance: entre Wa es Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 80
Slide 28: Operating expenses
‘Accounted: losses $28m : Pay increases : _ Pigher overim S101 | > prior year on > Efficiency gains Increased projech COsis exps! Higher marketing costs Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 29: Cost Savings vs One-Offs Cost Pressures
ANOS) => One-Offs Cost ‘Savings. Pressures Cost Reductions _ Zeistra 1 i Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 30: Product & Pricing Simplification
: roduct & Pri ' Simplification _ TTP Organisatior Review _ Network Platform -\ Rationalisation _ Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 31: Depreciation & Amortisation
_ Depreciation & Amortisation $1,703m 0 - feos 209 2000, 2001 20 Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 32: EBITDA
EBITDA cSt Reach TelstraGigar Other Cons. & Equity Ace. Gp. 88 868 720 4. Cefeying value on Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 33: TelstraClear
TelstraClear a _ + Leading Challenger i in New Zealand + Solid fevenue growth > Retail 6% = Wholesale - rate reductions:in- inférnational market + Continging operational efficiencies and Total revenue improved:cash management driving opex. Total opex reductions of 2% + Leadership in Internet Propene
Slide 34: CSL Hong Kong
‘Market condition was adversely: SARS and ongoing price war. : However, CSL continued its leadership is key vaiie-performance metrics Launches EDGE service in September Closer Economic Partnership'Acangements (CEPA) with Chinese goverment aie Tolal revenue expected to bring new oppoffanities CSL: ha
Slide 35: Asset Lifecycle Management
Asset Llecyole Mgt Eiicenay, Retention New Revenue Grow Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 36: Free Cash Flow & Dividends Up
Free Cash Flow & Dividends Up Asset: a 4HO3 1HO2. 8 AHO3 Free Cash Flow Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 37: Premium Balance Sheet Retained
“Premium Balance Shet Retained Long term > 1 year aa. EOS Gross Debt Net Debt (defined as Gross Debt less interes! beat Shareholders funds ee Net Debt to Market Value Net debt/Shareholders funds Net debt /Book capitalisation Interest cover (EBITDA/ Net Interest®) Telstra Corporation Limited 1H2004 R
Slide 38: Times
Times 18 Zeistra * Not measured at 1H 04 Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 39: Financial Priorities
Fi inancial Priorities: Free Cash Flow & evenue Growth _ + Gross & Net Debt to E = : » EBITD, e Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189
Slide 40: Outlook
Outlook Zeistra Telstra Corporation Limited 1H2004 Results February 2004 Telstra Investor Relations Tel: +6 1-3 9634 8014 Fax: +61-3 9634 1189