Telstra Group Limited · ASX:TLS
Telstra — Credit Suisse First Boston Conference (March 2004)
20 slides from Telstra's conference presentation, Mar 25, 2004
Slide 1: Presentation to Credit Suisse First Boston Conference
25 March 2004 The Manager Company Announcements Office Australian Stock Exchange 10th Floor, 20 Bond Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam Presentation to Credit Suisse First Boston Conference Office of the Company Secretary Level 44 242 Exhibition Street MELBOURNE VIC 3000 A
Slide 2: Ns aie
Oe oo Ns aie Avie ‘mani ) a om WF AAT
Slide 3: Telstra A Strong Performer
‘Telstra A Strong Performer TELSTRA ane © Korea Telecom @ British Telecom @ Verizon @ TONE © Bell South z & 8 zg 3 if 3 ag S 2 xt ® TELEF @ Single © Vedafone ae een Deutsche Telckom. Attractive yield and strong rating
Slide 4: Telstra's Market Share Remains Strong
- Telstra’s Market Share Remains Strong Subscript _ Telstra's full service model “Market Shajes as at Oct 31 2003 6a competitive advantage “Market Shares as at June 2003
Slide 5: Significant Regulatory Settings in Place
_ Significant Regulatory Settings in Place Key regulatory settings now in place: Significant upcoming issues: * Regulated prices for wholesale services USO/CSG review * Safe harbour for Foxtel digital investment || + Mobile termination report Price caps review Dec 2003 Dee 2003 Te hall 2004 hall 200
Slide 6: Financial Highlights
Financial Highlights Boned Sales oie up 2%! Mobiles Revenue up 6%, SIOs up 15% internet & IP Revenue up 18%, Broadband SIOs up 108% Sensis Reverie up 5% Operating Expenses down 4% Margin Growth Underlying EBITDA margin up 2% pts to 50.4% me eee on ioe 7S a Flow up. 18% to 5$1. 38 Operating Capex dow
Slide 7: Reported Results
Reported Results * % calculated on actual numbers Increased 1. Prior year ingludes impact of non cash Re d } Provis and Divicends 2. Excludes 3¢ Special Dividend 1H 03 -
Slide 8: Incumbent Telco comparison
Incum bent Telco comparison. Note: Solid parforitiants Data sourced from mo: released financial reports Vers us pee [s
Slide 9: Underlying Results
Underlying Results NA : EBITDA Margin (%)' Margin expansion driven by Operating cost reductions 1, Absolute change in % calculation 2. Adjusted for large one off asset pe sales in 1H03 ~ Properties $570m
Slide 10: Underlying Sales
_ Underlying Sales FX -$93m Strong Growth in mobiles, Internet & IP. FX impacting riK CSL.
Slide 11: Operating Cost Reduction progress
— Operating Cost Reduction progress $5,512 TelstraClear pro [| Foxtel CSS io _ Cost Reductions on track
Slide 12: Reduced Operating Capital Expenditure
Reduced Operating Capital Expenditure pex to Sales is f CAGR -9% Capital Allocation process driving lower Capex spend
Slide 13: Free Cash Flow & Dividends Up
Free Cash Flow & Dividends Up _ Tt Capex mgt, co e grown free c Continuing strong growth re in 1H02; Properties sa 0 in Tree cash flow icant asset sales in 1HO4
Slide 14: Financial Priorities
inancial Priorities: Free Cash Flow & Revenue Growth . ’ improved EBITDA/EBIT Margin * Process improvement using Six Sigma * light capex management + Customer satisfaction + EPS accretive by year two () ROIC@ * Operational control 7 Incremental in size * Gross 3 Net Debt io sul + EBITDA/Net Interest
Slide 15: Revenue Growth
, Revenue Growth — Both Organic an and Acquisitive Network Services + Relationships + Efficiency = Profitable Growth
Slide 16: Trading Post Group Pty Ltd: A High Performance Acquisition
Trading Post Group Pty Ltd: A nigh Performance Acauisition Meets strict investment criteria and provides enhancement opportunities
Slide 17: A Paradigm Shift
A Paradigm Shift Fixed network and services Mobile network and services Internet network and services ___ The shift to IP : _ can be managed effectively _ Broadband everywhere PSTN access Ubiquitous |¢) wireless Multi-access innovative devices
Slide 18: Telstra International Strategy
Telstra International Strategy Mobility Asia « Core Competency * Direct Origination * Scale CSL - China : Low Capital . ‘Alliances Intensity Growth * Regulatory MUMS Sn Dee See ene ene n ies se sees nee ens sas ececnnnecesnesnessuecescseseenscemsnnasaswen Reach + Strategic ‘Connection’ + Iraffic Con
Slide 19: Telstra Path to Value Creation
-Telstra Path to Value Creation segments growing above industry average L On Track to meet our objectives
Slide 20: Improving Domestic growth
Improving Domestic growth - Mobiles — increase in ARPUs & Market Share ~ Broadband — New plans stimulating demand = Sensis — adverising growth opportunities Continue to increase utilisation of PSTN Revenue growih exceed cost growih — Margin expansion NGCR Ill implemented and on track = Adcitional in
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