Spark New Zealand Limited · NZX:SPK
Spark New Zealand — Spark New Zealand Ltd Ord — H1 FY25 Earnings Presentation
26 slides from Spark New Zealand's earnings presentation, Feb 21, 2025
Slide 1: H1 FY25 Results Presentation
KORA Spark: hello tomorrow Spark New Zealand H1 FY25 Results Presentation Jolie Hodson, Chief Executive Officer Stewart Taylor, Chief Financial Officer
Slide 2: Disclaimer
Spark New Zealand | Copyright ©️ 2025 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 infor
Slide 3: H1 25 financial snapshot
Spark New Zealand | Copyright ©️ 2025 H1 25 financial snapshot $1,939m $448m $56m 1.9% decrease vs. H1 24 15.5% decrease vs. H1 24 64.3% decrease vs. H1 24 REVENUE(1) ADJUSTED EBITDAI(2)(3) ADJUSTED NPAT(2)(4) $252m $77m 12.5 cps 11.9% decrease vs. H1 24 67.4% increase vs. H1 24 1.0 cps decrease vs.
Slide 4: H1 results summary
Spark New Zealand | Copyright ©️ 2025 H1 25 results summary Challenging conditions persist; decisive action being taken to improve performance, which is building momentum into H2 • Revenue of $1,939 million, down 1.9% YoY, driven by mobile services, IT services, and continued decline of legacy voice
Slide 5: Strategic priorities
Spark New Zealand | Copyright ©️ 2025 Strategic priorities Clear focus on four strategic priorities to drive improved underlying performance and sustained competitive advantage over the longer-term 1. 2. 3. 4. Market momentum Simplified Transformed Long-term in telco core portfolio cost base value c
Slide 6: 1. Market momentum in telco core: mobile
Spark New Zealand | Copyright ©️ 2025 1. Market momentum in telco core Mobile performance predominantly impacted by cessation of insurance product in consumer, and reducing mobile fleets and price competition in business $491m TOTAL MOBILE MARKET PERFORMANCE1 3.7% decrease vs. H1 24 • Total market s
Slide 7: 1. Market momentum in telco core: new products and pricing
Spark New Zealand | Copyright ©️ 2025 1. Market momentum in telco core Rolling calendar of new product development, campaign activity, and pricing driving consumer mobile momentum in H2 CONSUMER AND SME • Pay monthly plan refresh (end Oct) introduced big data caps for customers, with positive impact
Slide 8: 1. Market momentum in telco core: broadband, IT, IoT
Spark New Zealand | Copyright ©️ 2025 1. Market momentum in telco core Macro-economic conditions continue to impact broadband and IT, while IoT growth remains strong $302m $336m $41m 2.3% decrease vs. H1 24 1.5% decrease vs. H1 24 17.1% increase vs. H1 24 BROADBAND REVENUE TOTAL IT REVENUE(1) HIGH-T
Slide 9: 2. Simplified portfolio
Spark New Zealand | Copyright ©️ 2025 2. Simplified portfolio Review of non-core assets and portfolio simplification supporting focus on telco core, while further strengthening balance sheet • On 12 December 2024 Spark announced the sale of its remaining 17% stake of mobile towers business Connexa t
Slide 10: 3. Transformed cost base
Spark New Zealand | Copyright ©️ 2025 3. Transformed cost base Significantly expanded SPK-26 Operate Programme to deliver a materially leaner, more competitive business • Significant progress made to improve operating model effectiveness and efficiency across the business • Enterprise and Government
Slide 11: 3. Transformed cost base: technology delivery model
Spark New Zealand | Copyright ©️ 2025 3. Transformed cost base Significant transformation of technology and network operations, leveraging several strategic partnerships New technology Benefits Progress delivery model • Leveraging global investment • IT infrastructure and services partnership • Movi
Slide 12: 3. SPK-26 Operate Programme benefits
Spark New Zealand | Copyright ©️ 2025 3. Transformed cost base Significantly expanded SPK-26 Operate Programme will deliver materially higher benefits over the next three years 1. In-year benefits • Net labour and opex reduction expected to deliver $80m-$100m o $50m labour target exceeded o Cost ben
Slide 13: 4. Long term value creation: data centres
Spark New Zealand | Copyright ©️ 2025 4. Long term value creation Data centre business continues to build momentum as capacity delivered in previous periods increases billing H1 25 performance on track • Revenue and EBITDAI growth reflect increased billing of current capacity (22MW) and increased pa
Slide 14: 4. Data centre capacity and development pipeline
Spark New Zealand | Copyright ©️ 2025 4. Long term value creation Total planned capacity of ~140 MW with 118+ MW1 development pipeline in Auckland Existing operational capacity (MW)1 Future potential capacity (MW)1 All development land owned or under agreement Advanced plans with utility providers f
Slide 15: Toitū sustainability performance
Spark New Zealand | Copyright ©️ 2025 Toitū sustainability performance Continued focus on maturing ESG practices and maintained inclusion in Dow Jones Best-In-Class Index (Australasia) ECONOMIC DIGITAL SUSTAINABLE TRANSFORMATION EQUITY SPARK Not-for-profit broadband product, Skinny Spark awarded the
Slide 16: Financial summary
Financial summary
Slide 17: H1 financial summary
Spark New Zealand | Copyright ©️ 2025 H1 25 financial summary REPORTED1 REPORTED CHANGE ADJUSTED CHANGE H1 24 H1 25 H1 25 $m $m $m Operating revenues and other gains 1,976 1,939 (1.9%) 1,939 (1.9%) Operating expenses (1,446) (1,520) (5.1%) (1,491) (3.1%) EBITDAI 530 419 (20.9%) 448 (15.5%) Finance i
Slide 18: Revenue and opex performance summary
Spark New Zealand | Copyright ©️ 2025 Revenue and opex performance summary Lower revenue driven by challenging market conditions, while higher operating costs driven by supplier cost inflation, with labour cost benefits to fall predominantly in H2 $1,939m $1,491m 1.9% decrease vs. H1 24 3.1% increas
Slide 19: Capital expenditure
Spark New Zealand | Copyright ©️ 2025 Capital expenditure Disciplined management of capital expenditure, focussed on telco core and data centre growth strategy • H1 25 capital investment of $252m, or 13.0% Spark NZ Capex Profile of revenue, reflects a reduction in spend maintenance capex growth cape
Slide 20: Free cash flow
Spark New Zealand | Copyright ©️ 2025 Free cash flow Significant improvement in H1 25 FCF through disciplined capital expenditure and changes in working capital • Free cash flow (FCF) increased 67% to $77 million in Free cash flow calculation H1 FY24 H1 FY25 Change Change H1 25 versus H1 24 ($m) ($m
Slide 21: Debt and capital management
Spark New Zealand | Copyright ©️ 2025 Debt and capital management Net debt will reduce with progress on sale of non-core assets and improvement in EBITDAI Net Debt1 at 31 December increased by $297m to $2,735m Spark NZ Net Debt1 and Leverage Ratio2 Net debt at end of period ($m) Net debt/EBITDAI (x)
Slide 22: Outlook
Outlook
Slide 23: FY25 indicators of success
Spark New Zealand | Copyright ©️ 2025 FY25 indicators of success An update to FY25 KPIs (to June 2025) presented earlier in FY25 Measure August 2024 October 2024 Trading Update H1 25 Update1 • Total market mobile service revenues were flat in H1 25 vs IDC forecast of 3% growth in FY252 • In Enterpri
Slide 24: FY25 guidance
Spark New Zealand | Copyright ©️ 2025 FY25 guidance1 The primary driver of the change in EBITDAI guidance is the Enterprise and Government division, which has been impacted by: • IT spending cuts across corporates and Government entities; • Changes in product mix; and • Aggressive price competition
Slide 25: Appendix
Appendix
Slide 26: FY25 net debt metrics
Spark New Zealand | Copyright ©️ 2025 FY25 net debt metrics H1 FY24 FY24 H1 FY25 Net debt ($m) ($m) ($m) Net debt at hedged rates $1,557 $1,636 $1,796 Net debt at hedged rates including lease liabilities1 $2,408 $2,438 $2,735 Debt ratios Borrowing costs (annualised) 5.9% 6.1% 5.7% Weighted average d
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