Slide 1: Investor Day – Presentations and Q1 Trading Update
23 October 2014 Office of the Company Secretary Level 41 242 Exhibition Street The Manager MELBOURNE VIC 3000 AUSTRALIA Company Announcements Office General Enquiries 08 8308 1721 Australian Securities Exchange Facsimile 03 9632 3215 th 4 Floor, 20 Bridge Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT
Slide 2: CEO Speech: Introduction and Discovery Store
Telstra Investor Day 2014: Growth through Innovation 23 October CEO Speech SLIDE 2: INTRODUCTION Good morning and welcome to Telstra’s Investor Day. Welcome also to those who are viewing the webcast on line. The theme for today is growth through innovation. I would like to start today by talking abo
Slide 3: Telstra Health and the digital world
We also have a dedicated space for business customers to learn more about Telstra’s business offerings, either by speaking directly with a business expert, or by exploring an interactive screen in their own time. The Discovery Store is a major step in our retail evolution with some of the technolo
Slide 4: The digital world across industries
This digital story is playing out across the world in every industry - and effective digital channels are now a characteristic of successful organisations: In the US more than 85 per cent of retail banking transactions are now digital; In its second quarter results, Starbucks reported that its a
Slide 5: Industry landscape
SLIDE 5: INDUSTRY LANDSCAPE So how does this play out in our industry – telecommunications? We see four significant trends shaping our industry landscape and which have also shaped our strategy. Firstly, networks are critical and are the foundation of the digital world. Growing value from the core i
Slide 6: Our purpose, values and strategy
We are responding to these trends with a clear strategy which captures the enormous opportunities presented by a digital world. If we can continually innovate we will maximise these opportunities. SLIDE 6: OUR PURPOSE, VALUES AND STRATEGY Our purpose is to achieve a brilliant connected future for ev
Slide 7: Innovation enables differentiation and growth
We also aim to create new businesses such as e-health, software and expanding our presence in Asia. Our strategy is unchanged: Improve customer advocacy; Drive value from our core business; and Build new growth businesses. SLIDE 7: INNOVATION ENABLES DIFFERENTIATION AND GROWTH The theme of tod
Slide 8: Innovation and network leadership
In GES, we will focus on delivering tailored, end-to-end industry-specific solutions. Our focus is also on defining new markets for mobile within Connected Tablets and machine-to-machine technology. Innovation enables us to maintain our network leadership and simplify the business with leading edg
Slide 9: We are focused on execution
SLIDE 8: WE ARE FOCUSED ON EXECUTION We are very focused on the execution of our strategy and have a clear set of objectives under each strategic pillar that we need to achieve. These highlight our commitment to improving customer advocacy, a focus on continuing to drive value and growth from our co
Slide 10: Improving customer advocacy delivers economic benefits
Building a successful media and IPTV business and using bundles to differentiate our fixed broadband offering; and Building new growth revenue and profit streams such as software opportunities like Ooyala / Videoplaza and our e-Health business. Our preparedness to invest more in growth does not
Slide 11: Q1 trading update and agenda
Overall, in mobiles, market customer growth continues to moderate. We are also seeing some de-activations in our prepaid subscriber base. However, our strong mobile revenue trends have continued. Our fixed portfolio performance is consistent with last year, with continued growth in fixed data custom
Slide 12: Conclusion
SLIDE 11: CONCLUSION In summary: Our strategy is unchanged and positions us well to capture the opportunities presented by a digital world. We will continue to invest in innovation as this delivers differentiation and long term growth for the business. Finally improving customer advocacy deliv
Slide 13: Forward-looking statements
23/10/14 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 achievements could be significantly different from those expressed in, or implied by,
Slide 14: It's how we connect
23/10/14 IT's HOW WE CONNECT TELSTRA DISCOVEF
Slide 15: Industry participants need to continually innovate
23/10/14 NETWORKS ARE DEVICE AND CUSTOMER RAPID GROWTH CRITICAL PLATFORM EXPECTATIONS IN DATA VOLUMES CONVERGENCE ARE INCREASING INDUSTRY PARTICIPANTS NEED TO CONTINUALLY INNOVATE WE HAVE A CLEAR STRATEGY TO CAPTURE THESE OPPORTUNTIES 3
Slide 16: Our purpose, values and strategy
23/10/14 Our Purpose TO CREATE A BRILLIANT CONNECTED FUTURE FOR EVERYONE TRUST EACH MAKE THE SHOW YOU BETTER FIND YOUR Our Values OTHER COMPLEX CARE TOGETHER COURAGE TO DELIVER SIMPLE Our Strategy Strategy Enabler INNOVATION MAINTAIN NETWORK CAPTURE EMERGING PRODUCT AND LEADERSHIP & OPPORTUNITIES AN
Slide 17: Strategy FY15 objectives
23/10/14 Strategy • RIGHT FIRST TIME • BE THE MARKET • CONTINUING TO FY15 • RESPONSIVENESS MAKER IN WIRELESS GROW NAS Objectives • INNOVATIVE • WINNING IN • INVESTING IN ASIA PRICING AND BROADBAND • GROWING IPTV AND BILLING • DRIVE BUNDLES PRODUCTIVITY • EXECUTING • ACCELERATE AGAINST GROWTH GROWTH
Slide 18: Presenter session
23/10/14 Presenter Session Andrew Penn Growth opportunities in Asia Q&A with David Thodey and Andrew Penn followed by a short break Kate McKenzie Network leadership Brendon Riley Enterprise growth through innovation Gordon Ballantyne Retail growth through innovation Q&A with Kate McKenzie, Brendon R
Slide 19: Global Services, Asia and longer term investments
23/10/14 Our Purpose To create a brilliant connected future for everyone Our Strategy Longer term investments Global Services Asia Health, Telstra Software Group (TSG), Telstra Ventures, Digital Media 7
Slide 20: Become a leading provider of enterprise services in Asia
23/10/14 GES Connectivity / Longer term Mobility Become a leading Leverage Telstra’s Leverage our longer provider of core capabilities in term investments enterprise services network excellence such as software to MNCs and large to drive value from into Asia and invest enterprises in Asia connectivi
Slide 21: Telstra's capabilities and footprint in Asia
23/10/14 We have market-leading NAS We have proven capabilities know-how and more We own and operate one of in developing (network sophisticated service the most extensive design and planning), capabilities than many international connectivity managing and operating data incumbents in the Asia netwo
Slide 22: Network investment and proven capabilities in Asia
23/10/14 Storage-as- a-Service Virtual Contact Centre Back-up-as- Software-as- a-Service a-Service IP Virtual Conference Servers Wide Area Network Internet • • Internet Virtual • Desktop • Dedicated Video Servers Conferencing Security-as- Unified-comms- a-Service as-a-Service Opportunity to free up
Slide 23: Autohome IPO
23/10/14 Autohome IPO generated US$133 million through the sale of 7.8 million ADSs at US$17 per ADS Telstra did not sell any of its shares in the IPO, however, Telstra’s shareholding in Autohome decreased from 71.5% to 62.9% due to dilution from the IPO. Exploring Smart City opportunities in China
Slide 24: Network leadership
23/10/14 We do this through: NETWORK LEADERSHIP MEANS WE STAY AHEAD OF OUR COMPETITORS, MEET OUR CUSTOMERS NEEDS AND DRIVE CUSTOMER AND REVENUE GROWTH 12
Slide 25: 4G coverage and speeds
23/10/14 WORLD FIRST 4x2 MIMO Live network 30% increase • Over 1M km2 more in performance 450Mbps data call coverage than other WORLD FIRST networks*. Live network 2.3 MILLION KM2 300Mbps call • Largest 4G coverage WORLD FIRST 450Mbps^ LARGEST COVERAGE AREA area covering 87% 300Mbps^ pop. 150Mbps^ L
Slide 26: Telstra Wi-Fi network and consolidating the network
23/10/14 • AAN provides inbuilt network intelligence and dynamic bandwidth to support application EXTENDING performance NETWORK • Business to Business Video bridging across INTELLIGENCE different vendor technologies in the network AND REACH • Extension of complex network management capability to par
Slide 27: Network innovation trials
23/10/14 SMALL CELL TECHNOLOGY (‘HETNETS’): We are trialling new “small cell” technology for targeted coverage improvements and capacity solutions VOICE OVER LTE (VOLTE): Delivers voice and video calls over an LTE data connection enabling further integration of the multimedia experience SKINETTM TRI
Slide 28: Enterprise customer segments and market shifts
23/10/14 “We need to adapt MNCs Disruptive quickly to changing Technology technologies and Australian Global MNCs Asian MNCs customer needs” MNCs out in out Australian domestic “We will need to drive customers The Asian Century growth in new Asian Tiers markets to be successful” Tier 1 SMB 2+3 Inter
Slide 29: Global Enterprise and Services evolution
23/10/14 2010 2011 2012 2013 2014 Telstra Ventures Group Telstra Software Group Defence TE&G NAS GES Telstra Global + REACH Product and Solutions Industry Integrated Solutions Service Unified Management Comms Managed Network Security Services Cloud Services Networks Business information & Optimal bu
Slide 30: GES FY13-FY14 performance
23/10/14 GES FY13-FY14 performance (A$B) Growth in NAS and Int’l (FY14 YoY %) +4% 5.1 5.3 NAS 28% GES Revenue International 19% FY13 FY14 Highlights Queensland GWN Contract wins Innovation with customers Acquisitions and Telkom JV NPS 18
Slide 31: Co-creating with customers
23/10/14 CO-CREATING WITH CUSTOMERS DELIVERING INNOVATION IN OUR PRODUCTS, SERVICES AND EXPANDING INTO ASIA FOR SUSTAINED GROWTH IT's HOW WE CONNECT GROUP EXECUTIVE RETAIL 19
Slide 32: Retail customer growth and innovation
23/10/14 CONTINUED SOLID GROWTH EXTEND THE CORE AND ADDRESS NEW REIMAGINE HOW AND WHO WE SERVE, AND EMERGING PROFIT POOLS COMPLEMENTING THE CORE CALLS A DAY customer cards handed out from technicians since Online interactions with our customers inception every day. That equates to more than 260 mill
Slide 33: Full year results and growth areas
23/10/14 16.4 Revenue up 3.6% ONLINE CUSTOMER FOR 4G MOBILE TRANSACTIONS 15.8 SPECTRUM up from 40 per cent in FY13 15.3 REDUCED DOMESTIC FY12 FY13 FY14 PROJECTED EXCESS WI-FI MOBILE DATA FULL YEAR RESULTS HOTSPOTS RATES FIXED DATA REVENUE DOMESTIC RETAIL GROWTH 3.5% 3.6% TO $2.2B MOBILE SERVICES (ii
Slide 34: Telstra Health opportunity
23/10/14 RURAL GP SERVICES VS NATIONAL AVERAGE INCREASE IN HEALTH OF PATIENTS OVER 65 RE- SPEND BETWEEN 2010 HOSPITALISED WITHIN A AND 2020 MONTH OF LEAVING AUSTRALIANS MEDICAL ERRORS PHARMACEUTICAL DUE TO HOSPITALISED SCRIPTS WRITTEN INCOMPLETE FOR ACUTE PA - 40% ARE PATIENT CARE EVERY REPEAT INFOR
Slide 35: Presenter session themes
23/10/14 Presenter Session Themes David Thodey Industry overview and investing • Our strategy is unchanged and positions us well for the opportunities presented by in customer advocacy a digital world • Innovation enables differentiation and growth • Improving customer advocacy delivers economic ben