Spark New Zealand Limited · NZX:SPK
Spark New Zealand — H1 FY24 Earnings Presentation
22 slides from Spark New Zealand's earnings presentation, 2024
Slide 1: Spark New Zealand H1 FY24 Results Summary
Slide 2: H1 FY24 Financial Snapshot
Spark New Zealand | Copyright © 2024 H1 FY24 Financial Snapshot SPK-26 strategy delivering adjusted revenue and EBITDAI growth $1,976m $530m $157m 1.3% increase vs. adjusted H1 FY23 3.9% increase vs. adjusted H1 FY23 4.8% decrease vs. adjusted H1 FY23 ADJUSTED REVENUE(1)(2) ADJUSTED EBITDAI(2)(3) AD
Slide 3: H1 FY24 Results Summary
Spark New Zealand | Copyright © 2024 H1 FY24 Results Summary Market momentum and cost control underpinning adjusted revenue and EBITDAI growth in challenging environment Top-line growth(1) in challenging economic environment • Delivered adjusted revenue growth of 1.3% to $1,976 million, reflecting s
Slide 4: Telco Market Performance
Spark New Zealand | Copyright © 2024 Telco Market Performance Strong mobile growth and stability in broadband continues $510m MOBILE SERVICE REVENUE $309m MARKET SHARE(1) 0% 21% 6.3% increase vs. H1 FY23 1.3% decrease vs. H1 FY23 MOBILE SERVICE REVENUE BROADBAND REVENUE 44% Service revenue and pay-m
Slide 5: Digital Services Market Performance
Spark New Zealand | Copyright © 2024 Digital Services Market Performance Stabilisation in IT and growth in data centres and high-tech ⎼ $345m $18m $35m $42m flat vs. H1 FY23 Up 38.5% vs. H1 FY23 12.9% increase vs. H1 FY23 Down 8.7% H1 FY23 TOTAL IT DATA CENTRES TOTAL HIGH-TECH DIGITAL HEALTH Cloud r
Slide 6: FY24 Indicators Of Success
Spark New Zealand | Copyright © 2024 FY24 Indicators Of Success Measure Target 30 June 2024 Status Mobile service revenue growth ~5% On Track Additional sites that are 5G capable +180-200 sites On Track Wireless broadband connections +10k-15k Solid Progress IT and procurement revenue growth ~2% On T
Slide 7: SPK-26 Strategy Update
SPK-26 Strategy Update PAGE 7 Spark New Zealand | Copyright © 2024
Slide 8: SPK-26: Operate Programme
Spark New Zealand | Copyright © 2024 SPK-26: Operate Programme Realigning operating model and capital investment to strategic growth areas Accelerated Growth Investment Gross Cost Reduction • Larger share of capital investment in H1 to gain a • H1 focus on operating model redesign to align to FY26 f
Slide 9: Digital Infrastructure Growth Investments
Spark New Zealand | Copyright © 2024 Digital Infrastructure Growth Investments Building on the strength of Spark’s core connectivity assets, data centre and 5G Standalone investments will underpin ongoing competitive advantage Digital infrastructure and new technology investments underpin products a
Slide 10: High-tech Roadmap
High-tech Roadmap Growing returns in mature markets while building growth markets of the future TECH MATURE EMERGING NEW MARKETS EXISTING NEW IoT 5G STANDALONE MATTR • ~1.8m connections • $40-$60m investment FY24-26, enabling • Digital identity market forming • Established and growing – MAEC(1), net
Slide 11: Data Centre Growth Ambition
Spark New Zealand | Copyright © 2024 Data Centre Growth Ambition Data centre investments accelerating in line with strategic ambition Supportive Exponential growth in data, continued migration to the cloud, and the advent of tailwinds generative AI boosting demand for data centre capacity Growth Thr
Slide 12: Data Centre Portfolio Overview
Spark New Zealand | Copyright © 2024 Data Centre Portfolio Overview Total built capacity at 88% contracted utilisation and significant pipeline of potential development opportunities available FACILITY STATUS SITE CAPACITY (MW) DATA CENTRE SITE CAPACITY (MW) 100 Auckland – Takanini Campus Built 12.3
Slide 13: Toitū Sustainability Performance
Spark New Zealand | Copyright © 2024 Toitū Sustainability Performance Continued ESG progress secured ongoing inclusion in the Dow Jones Sustainability Australia Index (DJSI) ECONOMIC DIGITAL SUSTAINABLE TRANSFORMATION EQUITY SPARK 5G live in 95 locations across the country, Over 29,000 households no
Slide 14: Financials
Financials
Slide 15: Financials
Spark New Zealand | Copyright © 2024 Financials REPORTED REPORTED CHANGE ADJUSTED ADJUSTED CHANGE H1 FY23 H1 FY24 H1 FY23 H1 FY24 $m $m $m $m Operating revenues and other gains 2,534 1,976 (22.0%) 1,950 1,976 1.3% Operating expenses (1,492) (1,446) 3.1% (1,440) (1,446) (0.4%) EBITDAI 1,042 530 (49.1
Slide 16: H1 FY24 Operational Performance Summary
Spark New Zealand | Copyright © 2024 H1 FY24 Operational Performance Summary Top line growth maintained with operating costs held broadly flat despite inflationary pressures • Top-line growth driven by standout mobile performance, stabilisation in broadband, and return to growth in IT products • New
Slide 17: H1 FY24 Capital Investment and Free Cash Flow
Spark New Zealand | Copyright © 2024 H1 FY24 Capital Investment and Free Cash Flow Capital investment accelerated in H1 in support of SPK-26, on track to deliver in line with guidance and free cash flow aspiration of ~$490m-$530m • Maintenance capital investment heavily weighted towards H1 to accele
Slide 18: H2 Performance Outlook
Spark New Zealand | Copyright © 2024 H2 Performance Outlook Remain committed to delivering FY24 EBITDAI guidance of $1,215m-$1,260m(1) Ongoing mobile tailwinds, strong growth trajectories in other key markets, and on track to exceed gross cost out target – supporting delivery of EBITDAI guidance MOB
Slide 19: Net Debt
Net Debt Spark New Zealand | Copyright © 2024 Increase in net debt as TowerCo proceeds are returned to shareholders and growth capex is invested Increase in debt levels and interest rates reflecting: H1 FY23 H1 FY24 • On-market share buy-back returning $305m of TowerCo proceeds to shareholders to Ne
Slide 20: Key takeouts for H2
Spark New Zealand | Copyright © 2024 Key takeouts for H2 Spark is well positioned to build further momentum as economic conditions improve 11 Emerging signs of economic conditions improving, with ongoing demand for data supporting core growth engine of mobile 2 2 SPK-26 on track, with key digital in
Slide 21: Guidance
Guidance(1) Spark New Zealand | Copyright © 2024 FY23 Actual FY24 Guidance EBITDAI $1,193m(2) $1,215m-$1,260m Capital expenditure(3) $515m ~$510m-$530m Total 27.0cps Total 27.5cps Dividend per share (100% imputed) (100% imputed) PAGE 21 (1) Subject to no material adverse change in operating outlook
Slide 22: Disclaimer
Disclaimer This announcement may include forward-looking statements regarding future events and the future financial performance of Spark New Zealand. Such forward-looking statements are based on the beliefs of and assumptions made by management along with information currently available at the time