Slide 1: Chairman's speech and presentation, 2012 Annual Meeting
Chorus Limited Level 9 Datacom House 68‐86 Jervois Quay 31 October 2012 P O Box 632 Wellington STOCK EXCHANGE ANNOUNCEMENT For personal use only New Zealand Email: company.secretary@chorus.co.nz Chorus Limited Chairman’s speech and presentation delivered at the 2012 Annual Meeting, Illott Theatre, W
Slide 2: Introduction of directors
Directors, will you each please stand as I introduce you and ensure that our shareholders know who you are. I will first introduce the three who you will hear from later in the proceedings as they are standing for election as a Director of Chorus. For personal use only Jonathan Hartley. Jon is a Cha
Slide 3: Chairman background and executive team
For my part, I was appointed a Director of Chorus in July 2011 and have been Chairman since we demerged on 1 December 2011. I am a professional company director, former president of the New Zealand Institute of Chartered Accountants and was made a Companion of the New Zealand Order of Merit for serv
Slide 4: Formalities: quorum, proxies and voting
Proxies have been appointed for the purposes of this meeting in respect of approximately 230 million shares. This represents approximately 60% of the total number of shares – which is a significant proportion of our shareholders and I’d like to thank shareholders for their level of participation in
Slide 5: Focus on governance and disclosure
• working closely with local communities as we roll out world leading infrastructure for New Zealand. As a new company, one of the things we sought to do with the annual report was to provide shareholders with as much insight as possible into what makes up the Chorus business. That is reflected in a
Slide 6: Focus on building a fibre future
SLIDE 7: FOCUS ON BUILDING A FIBRE FUTURE Second, the company is focused on rolling out the new ultra-fast broadband – or UFB – and rural broadband initiative – or RBI – networks. The Chorus Board For personal use only and the Chorus Executive Team are especially mindful of our role as a cornerstone
Slide 7: Dividend policy and regulatory decisions
SLIDE 9: DIVIDEND POLICY Fourth, and related to our investment focus, the Board is acutely aware of the significance that several upcoming Commerce Commission decisions will have for For personal use only the achievement of New Zealand’s fibre vision. While Chorus is funding and building the new fib
Slide 8: Dividend reinvestment plan and a big first year
I should also note that some of you have been asking about the availability of a dividend reinvestment plan. Chorus is actively considering a dividend reinvestment plan that might apply from the FY13 dividend onward. Such a plan must be considered in the light of Chorus’ overall capital structure. F
Slide 9: Chorus AGM October 2012
Chorus AGM For personal use only 31 October 2012
Slide 10: Agenda
Agenda For personal use only > Chairman’s introduction, Sue Sheldon > CEO address address, Mark Ratcliffe > General business and questions > Resolutions R l ti > Morning tea
Slide 11: Your directors
Your directors For personal use only Sue Sheldon Prue Flacks Jonathan Hartley Mark Ratcliffe Keith Turner Anne Urlwin Clayton Wakefield
Slide 12: Chorus Executive team
Chorus Executive team For personal use only Ed Beattie Sara Broadhurst Andrew Carroll GM Infrastructure Operations GM Human Resources CFO Victoria Crone Chris Dyhrberg Irene Lovejoy GM Marketing & Sales GM Network Build Executive Assistant Vanessa Oakley Ewen Powell Nick Woodward General Counsel & C
Slide 13: Formalities
Formalities For personal use only > Notice of meeting > Quorum > Proxies P i
Slide 14: Chairman's address: Focus on governance
Chairman’s Chairman s address For personal use only Focus on governance > Balancing stakeholder expectations t ti > Support customer transition to fibre f > Working with communities > High level of disclosure in Annual Report
Slide 15: Focus on building a fibre future
For personal use only Focus on building F b ildi a fibre future Satisfactory rollout progress in first year, but a long way to go to end of 2019
Slide 16: Focus on efficient investment
Focus on efficient investment For personal use only > FY12 Operating revenue $613 million > FY12 Gross capital expenditure $346 million Common capex $23m 7% Copper capex C 14% $49m Fibre capex $274m 79%
Slide 17: Dividend policy
Dividend policy For personal use only > Expect FY13 dividend to be fully imputed 25.5 cents per share subject to no material adverse change in outlook > Commerce Commission decisions pending: ▪ Copper access (UCLL) pricing – 23 November ▪ Broadband access (UBA) pricing - May 2013 (applies from Dec 2
Slide 18: A big first year
For personal use only A big g first y year
Slide 19: A new company, a fresh start
A new company, company a fresh start For personal use only
Slide 20: A path with challenges
A path with challenges For personal use only > 5,500 UFB cabinets, each a major project > 17,000km of fibre > down 44,000 streets > across 24 cities and towns > passing a premises every minute > until the end of 2019 > And installing fibre from the street into i the h premises, i on demand
Slide 21: We're up for the challenge
We’re We re up for the challenge For personal use only > Successful demerger > 690 people > Aon Hewitt Australasia best employer: 85% fully engaged > Backed by our service company partners: ▪ Downer ▪ Transfield Services ▪ Visionstream > Now 240 field crews building UFB
Slide 22: Deliver UFB and RBI agreements
Deliver UFB and RBI agreements • Moving from start-up phase to focus on faster, more For personal use only efficient deployment • Target of $2,500 to $2,700 average cost per premises passed for FY13 UFB > 1,179km of fibre laid by 30 June > 42,000 42 000 premises i passedd > 57,000 end users within r
Slide 23: Transition to a fibre world
Transition to a fibre world • Working closely with customers to develop and trial fibre services For personal use only • Initial rollout focus is on businesses, hospitals and schools > More than 30 RSPs signed up for UFB > Retaill offers ff launched l h d in market: k Callplus, ll l Inspire, Kiwilin
Slide 24: Drive copper and fibre network efficiencies
Drive copper pp and fibre network efficiencies For personal use only • 99% of connections remain on existing copper network • Cost minimisation for efficient network operations > Proactive maintenance delivering results with best ever network performance > Technology T h l choices h i th thatt suppo
Slide 25: Seven months performance
7 months performance For personal use only > EBITDA $399 million > Fixed line connections largely static: 1 776 000 1,776,000 > 50,000 broadband connections added > 1,040,000 1 040 000 wholesale h l l bbroadband db d connections > NZ broadband penetration at 27 per 100 inhabitants; ahead of OECD ave
Slide 26: FY12 Revenue (7 months)
FY12 Revenue ((7 months)) For personal use only Revenue category $m Basic copper 399 2012 $m $ Enhanced copper 89 Fibre 28 Value Added Network Services 18 Field Services 47 Infrastructure 14 Other 18 Total revenue $ $613m
Slide 27: Aligning regulation with the road to fibre
Aligning g g regulation g with the road to fibre For personal use only 2013 Telecommunications 2013: Telecomm nications Service Se ice Obligations review e ie 2016: General industry review
Slide 28: What are you going to do with yours?
What are you going to do with yours? ©) chorus fisre network
Slide 29: General business and questions
General business and questions For personal use only
Slide 30: Resolutions
For personal use only Resolutions
Slide 31: Ordinary business: Resolution
Ordinary business: Resolution 1 For personal use only > That Ms Prudence Flacks be elected as a director of Chorus
Slide 32: Ordinary business: Resolution
Ordinary business: Resolution 2 For personal use only > That Mr Jonathan Hartley be elected as a director of Chorus
Slide 33: Ordinary business: Resolution
Ordinary business: Resolution 3 For personal use only > That Mr Mark Ratcliffe be elected as a director of Chorus
Slide 34: Ordinary business: Resolution
Ordinary business: Resolution 4 For personal use only > That KPMG be appointed as auditors of Chorus to: (a) hold office from the conclusion of this meeting to the conclusion of the next annual meeting; and (b) audit Chorus’ financial statements (and group financial statements) for the financial yea
Slide 35: Ordinary business: Resolution
Ordinary business: Resolution 5 For personal use only > That the directors be authorised to fix the remuneration of KPMG as auditor for the ensuing gyyear.
Slide 36: Ordinary business: Resolution
Ordinary business: Resolution 6 For personal use only > That the maximum aggregate remuneration able to be paid to all Directors ((in their capacity p y as Directors)) be fixed at $980,000 per annum.
Slide 37: Thank you for attending
Thank you for attending For personal use only Chorus AGM 31 October 2012
Slide 38: Disclaimer
Disclaimer For personal use only Forward-Looking Statements > This presentation may contain forward-looking statements regarding future events and the future financial performance f off Chorus, Ch i l di including fforward d llooking ki statements t t t regarding di iindustry d t ttrends, d strategi