Slide 1: Disclaimer
Disclaimer ‘This presentation includes forwarc-looking: ‘The forwarctlooking. are based on assumpt known by Telstra as at the date of this presentation, are provided as a general guide only and are not guarantees or predictions of future NE a tigre tira SIA Ola ie Ge Toner BDO eG resentation but ack
Slide 2: Vicki Brady — Chief Executive Officer
Vicki Brady — Chief Executive Officer Half year 2024 results § 1H24 Total income! $11.7b +1.2% Episode NPS Improved +3 last 12 months 1. Refer to definition in the Glossary. 2. Interim dividend of 9.0 cents per share is fully franked. Pages Copyright Telstra® Half year 2026 results
Slide 3: Half year 2024 results highlights
Half year 2024 results PB $ + Mobiles: +$293m or +13% growth * Given NAS performance, we are + Fixed-C&SB: +$55m or +110% growth Ughenting Uneleiying BENEA guidance range to $8.2 to $8.3b + FY24 guidance across other measures reaffirmed + Infrastructure — InfraCo Fixed: +$27m or +3% growth — Amplite
Slide 4: Income statement
Income statement € Continued profitable growth in line with strategy 1H23 1H24 Change Total income! $11.6b $11.7b 1.2% * Underlying EBITDA growth with strong growth in mobile Operating expenses $7.7b $7.7b -0.3% * D&Adown slightly due to timing, outlook for growth due to EBITDA $3.9b $4.0b 3.8% inve
Slide 5: Mobile
Mobile Growth with continued recovery in service revenue § 5), 3 b $2 ° 5 b k (retail yaatae and wholesale) 1H24 Income A4% 1H24 EBITDA 413% +4.6% on PCP | MBF) 2040 2222 Wholesale wu * Mobile service revenue 6.0% growth supported by handheld SIO growth and proposition changes across postpaid, prepa
Slide 6: Fixed - Enterprise
Fixed - Enterprise $1.7b 1H24 Income! 3% $71m 1H24 EBITDA 67% Fixed-Enterprise income decline with DAC, calling and professional services weakness more than offsetting cloud, equipment and other growth Data and Connectivity (DAC) income and EBITDA declined but at a slower with ARPU compression and t
Slide 7: Infrastructure
Infrastructure Growth in revenue and earnings with higher infrastructure demand and CPI indexation InfraCo Fixed 5.1% core access EBITDAaL' growth (excl. commercial & recoverable works and legacy network disposals) driven by higher core access revenue. 3.8% reported growth reflects modestly lower co
Slide 8: Free cashflow reflects investing for growth & seasonality
Free cashflow reflects investing for growth & seasonality € Free cashflow 1H23 1H24 Change Change$m * Free cashflow after lease payments declined 6.5%. FY24 guidance of $2.8b to $3.2b reaffirmed EBITDA $3,861m $4,007m 3.8% * Working capital movement of -$369m due to normal Working capital movement!
Slide 9: FY24 guidance
FY24 guidance Total income $23.2b Underlying EBITDA2 $8.0b 3 Capex stecic investment) $3.6b a Frees asntlom airer, lease payments (FCFALY’ gap $11.7b $4.0b $1.8b $1.0b $22.8b to $24.8b $8.2b to $8.3b $3.6b to $3.7b $2.8b to $3.2b 1.This guidance excludes material one-offs, such as mergers and acquis
Slide 10: Our purpose, behaviours and strategic pillars; customer experience
Our To build a connected future so everyone can thrive purpose and behaviours Look Beyond Work as One Make a Difference An exceptional Leading Sustained customer experience | network & technology solutions | growth and value @ you can count on that deliver your future for our shareholders ur strateg
Slide 11: Network and technology solutions
Network and technology solutions Driven by network expansion including 5G allo Investment in network leadership and resilience Page21 Australia’s largest 5G network with around 87% population coverage 48% mobile traffic on 5G in December 2023 Committed $1.3 billion to mobile spectrum in FY24. Mobile
Slide 12: The place you want to work
The place you want to work Driven by digital leadership and doing business responsibly r5 5 BA @g New ways of working Digital leadership / Al Doing business responsibly * Employee engagement score of * Building reusable Al products — * Contracted renewable energy 79 — in top quartile globally Built
Slide 13: FY24 focus areas
FY24. focus areas — including by 1. finishing the job on migrating our C&SB customers onto our new digital stack — including continued growth 2. in mobile, addressing challenges in NAS, and achieving the large majority of our cost out ambition as 3. well as attracting, retaining and developing the b
Slide 14: Size and scale at a glance
» Size and >1m shareholders A$47b market capitalisation Public ASX20 company scale! ey FY23 A$23b total income A-/A2 investment grade rating from S&P and Moody’s Network! ® ume e 23.4m retail mobile services 3.8m C&SB bundle and | 154k Enterprise data and ‘and people’ 2.2m wholesale mobile unique us
Slide 15: Capital management framework
Capital management framework copyright Telst 29 Committed to balance sheet settings consistent with an A band credit rating Maximise fully-franked dividend and seek to grow over time! Ongoing business-as-usual capex of ~$3b p.a. excluding spectrum? Invest for growth and return excess cash to shareho
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Slide 18: T25 outcomes — progress (cont.)
T25 outcomes — progress (cont.) trategic pillars Commitments & metrics Remain at 90th percentile employee engagement (equivalent to high- performance norm) The place you want to work — Excelling at new ways of working Improve agile maturity of teams, with 70% scoring above 4 by FY25 Halve our time t
Slide 19: Underlying earnings
Underlying earnings’ Total income Operating expenses Equity accounted entities EBITDA D&A EBIT Net finance costs Income tax expense NPAT Non-controlling interests Profit for TLS shareholders! EPS (cents) 1, Refer to definition in the Glossary. $11,583m $7,723m $1m $3,861m $2,260m $1,601m $252m $415m
Slide 20: Dividends and capital management
Dividends € 1H23. 2H23 FY23 1H24 Earnings per share Basic earnings per share (cents) 75 9.2 16.7 8.4 12.0% Underlying earnings! per share (cents) 79 9.6 17.5 8.4 6.3% Dividends (fully franked) Ordinary dividend (cents) 8.5 8.5 17.0 9.0 5.9% Payout Ratios Ordinary dividend as % of underlying earnings
Slide 21: Product framework | Income
Product framework | Income’ € $ Change % Change P| ites | tes | is |e | See Uae? Mobile $5,130m $5,128m $10,258m $5,325m $195m 3.8% Fixed-C&SB $2,264m $2,193m $4,457m $2,211m -$53m -2.3% Fixed-Enterprise? $1,769m $1,867m $3,636m $1,713m -$56m -3.2% Fixed-Active Wholesale $209m $194m $403m $188m -$21
Slide 22: Product framework | EBITDA
Product framework | EBITDA € $ Change % Change Po “ | as “ | mee | Saeco’ | Uae? Mobile $2,217m $2,385m $4,602m $2,510m $293m 13.2% Fixed-C&SB $50m $85m $135m $105m $55m 110.0% Fixed-Enterprise $213m $198m $411m $71m -$142m -66.7% Fixed-Active Wholesale $71m $46m $117m $52m -$19m -26.8% Internationa
Slide 23: Product performance | Fixed - C&SB
Product performance | Fixed - C&SB 1H23. | 2H23 tH2a_ | Change Fixed - C&SB income! $2,264m $2,193m $4,457m $2,211m = -2.3% On-net fixed $179m = $152m_)~—s $331mM_~—s $179m - Off-net fixed $1,651m $1,644m $3,295m $1,630m —-1.3% Consumer content & services $309m $282m $591m $284m = -8.1% Business app
Slide 24: Product performance | International
Product performance | International € Change Change (AUD unless stated) | 123 | 2H23 | Fr2a | 2a | 3 its International reported results impacted by: Constant currency + Digicel Pacific acquisition completed on 13 July 2022 excl. restructuring * Telstra’s corporate restructure. Establishment of Whole
Slide 25: Product performance | Fixed-Active Wholesale
Product performance | Fixed-Active Wholesale € 1H23 FY23 Change + Fixed-Active Wholesale income decline largely due to legacy vs PCP products Fixed-Active Wholesale income $209m $194m $403m $188m —-10.0% * Data & connectivity revenue decline due to SIO & ARPU decline in wideband access products, SIO
Slide 26: C&SB, Enterprise & InfraCo fully allocated segment
C&SB, Enterprise & InfraCo fully allocated segment € Change vs Change vs $4,028m —$4,248m 2.9% $1,722m $1,815m $1,961m 13.9% $2,193m — $2,21Im_— -2.38% $50m $85m — $105M_=— 110.0% $2m $4m $4m n/m $2m $3m $3m n/m $6,394m $6,225m 9 $6,463m 1.1% $1.774m —$1,903m_—$2,069m ~— 16.6% | es $820m = $901M = $
Slide 27: CEO & CFO speech notes, Telstra half year results
CEO & CFO SPEECH NOTES TELSTRA HALF YEAR RESULTS 15 FEBRUARY 2024 VICKI BRADY – CEO Slide – Half year 2024 results – Vicki Brady CEO Good morning and welcome to Telstra’s results announcement for the half year ended 31 December 2023. I am joining today from the lands of the Gadigal people. On behalf
Slide 28: Speech notes: mobile and enterprise performance
Our mobiles business remains central to growth and continues to perform strongly, growing EBITDA almost $300 million in the half driven by more customers, ARPU growth and cost discipline. Our customers are seeing the benefits from our leading mobile network and the continued execution of our T25 str
Slide 29: Speech notes: net finance costs and EBITDA by product
Net finance costs increased around 26%, mostly reflecting higher borrowing costs from floating rates. More than 50% of our borrowings are fixed. Tax was broadly flat. And finally, Earnings Per Share was up 12.0% to 8.4 cents, reflecting higher earnings. SLIDE 8 - EBITDA by product Looking at product
Slide 30: Speech notes: ARPU and Fixed - Enterprise
ARPU grew 2.6% to $81.67 due to price rises that came into effect in November 2023, as well as positive product mix. We continue to see benefits from our investment in customer experience, and have delivered margin expansion through greater cost efficiency. Nbn reseller margins grew to 10%. We conti
Slide 31: Speech notes: International
You'll recall that the implementation of the corporate restructure introduced internal revenue and costs to reporting not reflected in the prior period. Our reported results reflect this restructure as well as foreign exchange impacts and one-offs, so let me talk you through the underlying performan
Slide 32: Speech notes: cost out and free cash flow
We are committed to setting up the business for continued success and delivering on our growth strategy. We expect to achieve the large majority of our T25 $500 million reduction ambition, with most of this in FY25. Given the level of higher ongoing cost pressure, more significant action is going to
Slide 33: Speech notes: guidance and summary
This guidance excludes material one-offs, such as spectrum payments. We do not expect any material cash impact in FY24 or FY25 relating to a final price adjustment from the nbn rollout completion as detailed in our accounts. So, to summarise: • We continue to grow our business, • We are focused on d
Slide 34: Speech notes: Scam Indicator and network
After a successful pilot, we launched our Scam Indicator in partnership with the Commonwealth Bank, to help protect more Australians from phone scams. Through our Cleaner Pipes initiative, we are blocking on average more than 10 million scam calls and 11 million scam SMS’s from reaching customers ea
Slide 35: Speech notes: subsea cables and Enterprise review
Over FY24 we will invest an additional $100 million in subsea cables and satellite landing stations in Asia and the US to support capacity demand for our customers. This is absolutely foundational infrastructure for Australia and the region, and means we are uniquely placed to lead in the digital ec
Slide 36: Speech notes: AI and sustainability
Within Telstra, we are now using AI to improve half of our key processes, including to automatically detect and resolve fixed services faults, and to solve customer issues faster. For example, in the half, we piloted new AI applications including Ask Telstra – an Open AI based solution with Microsof
Slide 37: Speech notes: long-term growth and close
4. And finally, setting up the business for long term growth – including investment in digital infrastructure and active portfolio management to maintain the strength of our balance sheet, optimise returns and unlock value. Slide – Thank you With that let me close out our half year results presentat
Slide 38: Half year results and operations review
Half year results and operations review Half year results and operations review Financial results Summary reported results 1H24 1H23 Change $m $m % Revenue (excluding finance income) 11,425 11,306 1.1 Total income (excluding finance income) 11,720 11,583 1.2 Operating expenses 7,698 7,723 (0.3) Shar
Slide 39: Results on a guidance basis
Half year results and operations review Given the performance in our NAS business, we are tightening our FY24 Underlying EBITDA 4 guidance 5 range to $8.2 to $8.3 billion. FY24 guidance4 across other measures is reaffirmed. We have remained disciplined on reducing our costs, particularly considering
Slide 40: Segment performance and dividend
Half year results and operations review Dividend On 15 February 2024, the Directors of Telstra Group Limited resolved to pay a fully franked interim dividend of 9.0 cents per share representing a 5.9 per cent increase on the prior corresponding period. Shares will trade excluding entitlement to the
Slide 41: Segment commentary: Consumer and Small Business
Half year results and operations review $759 million in Telstra InfraCo (1H23 $666 million) and $196 million in ‘All Other’ (1H23 $46 million). Telstra Consumer and Small Business Telstra Consumer and Small Business provides telecommunications, media and technology products and services to consumer
Slide 42: Product performance: product income 1H24
Half year results and operations review Product performance Product income breakdown (including internal income) 1H24 1H23 0% 5% Mobile 0% 4% 2% 2% Fixed – C&SB 10% 10% Fixed – Enterprise 41% Fixed – Active Wholesale 9% 41% 10% International 2% 2% InfraCo Fixed Amplitel (Towers) 14% 13% One-off nbn
Slide 43: Mobile
Half year results and operations review Mobile Mobile income increased by 3.8 per cent to $5,325 million including 6.0 per cent services revenue growth partly offset by 4.9 per cent hardware decline. Growth in services revenue was achieved across postpaid handheld, prepaid handheld, Internet of Thin
Slide 44: Fixed – Active Wholesale and International
Half year results and operations review Fixed – Active Wholesale Fixed – Active Wholesale income declined by 10.0 per cent to $188 million largely due to legacy product decline. Data and Connectivity revenue decreased by 8.5 per cent to $130 million reflecting decline in wideband products partly off
Slide 45: Expense performance
Half year results and operations review Expense performance Operating expenses 1H24 1H23 Change $m $m $m % nbn payments 1,012 1,030 (18) (1.7) Non-nbn 2,935 2,905 30 1.0 Sales costs 3,947 3,935 12 0.3 Core1 3,343 3,407 (64) (1.9) Other2 384 301 83 27.6 Fixed costs 3,727 3,708 19 0.5 Underlying 7,674
Slide 46: Operating expenses on a statutory reported basis
Half year results and operations review Operating expenses on a statutory reported basis 1H24 1H23 Change $m $m % Labour 2,054 2,046 0.4 Goods and services purchased 4,209 4,221 (0.3) Net impairment losses on financial assets 53 38 39.5 Other expenses 1,382 1,418 (2.5) Total 7,698 7,723 (0.3) Labour
Slide 47: Debt position and debt issuance
Half year results and operations review Free cashflow used in operating and investing activities was $836 million representing an increase of $2,136 million due to increase in net cash provided by operating activities and decrease in net cash used in investing activities. Significant acquisitions in
Slide 48: Financial position
Half year results and operations review Financial position Summary statement of financial position 1H24 FY23 Change $m $m % Current assets 6,561 6,733 (2.6) Non-current assets 38,977 38,296 1.8 Total assets 45,538 45,029 1.1 Current liabilities 9,953 10,092 (1.4) Non-current liabilities 17,866 17,12
Slide 49: Guidance versus reported results
Half year results and operations review Guidance versus reported results This schedule details adjustments made to the reported results for the current and comparative periods to reflect the performance of the business on the basis on which we provided guidance to the market, which excludes material
Slide 50: Executive Variable Remuneration Plan metrics
Half year results and operations review Executive Variable Remuneration Plan (EVP) Metric Additional Detail First half performance against FY24 EVP Performance Measures and Targets All of the following measures have been selected on the basis that they are directly linked to our T25 strategy. FY24 E
Slide 51: Performance measures and responsible business metrics
Half year results and operations review to the end of June 2023 where this provides relevant context to the determination of Threshold, Target and Maximum for FY24. ^^ For the financial metrics only, the 1H24 actuals are calculated on a guidance basis. * Market Guidance means guidance for FY24 as se
Slide 52: Results of operations
Results of operations Half-year ended 31 December 2023 2022 Change Change $M $M $M % Revenue (excluding finance income) 11,425 11,306 119 1.1 Other income (i) 295 277 18 6.5 Total income (excluding finance income) 11,720 11,583 137 1.2 Labour 2,054 2,046 8 0.4 Goods and services purchased 4,209 4,22
Slide 53: Total income by product
Total income Half-year ended 31 December 2023 2022 Change Change $M $M $M % Mobile Postpaid handheld 2,826 2,657 169 6.4 Prepaid handheld 581 556 25 4.5 Mobile broadband 330 337 (7) (2.1) Internet of Things (IoT) 142 139 3 2.2 Mobile wholesale 209 169 40 23.7 Other 10 9 1 11.1 Total mobile services
Slide 54: Total expenses
Total expenses Half-year ended 31 December 2023 2022 Change Change $M $M $M % Salary, associated costs, labour substitution & other 1,982 1,975 7 0.4 Employee redundancy 72 71 1 1.4 Total labour 2,054 2,046 8 0.4 Commissions 258 286 (28) (9.8) Cost of goods sold 1,366 1,408 (42) (3.0) Network paymen
Slide 55: Statement of Cash Flows
Statement of Cash Flows Half-year ended 31 December 2023 2022 Change Change $M $M $M % Cash flows from operating activities Receipts from customers (inclusive of goods and services tax (GST)) 12,489 12,599 (110) (0.9) Payments to suppliers and employees (inclusive of GST) (9,117) (9,427) 310 3.3 Gov
Slide 56: Statement of Financial Position
Statement of Financial Position As at 31 Dec 23 30 Jun 23 Change Change $M $M $M % Current assets Cash and cash equivalents 1,016 932 84 9.0 Trade and other receivables and contract assets 4,205 4,216 (11) (0.3) Deferred contract costs 151 114 37 32.5 Inventories 686 546 140 25.6 Derivative financia
Slide 57: ARPU and services in operation
Average Revenue per Unit (ARPU) ($) Half-year ended Dec 23 vs Dec 22 Dec 23 vs Jun 23 Dec 2023 Jun 2023 Dec 2022 Change Change Change Change $ $ $ $ % $ % Mobile Postpaid handheld 53.18 51.69 50.47 2.71 5.4 1.49 2.9 Prepaid handheld 26.44 24.68 27.40 (0.96) (3.5) 1.77 7.2 Mobile broadband 19.00 18.3
Slide 58: Segment information from operations
Segment information from operations Total income EBITDA contribution Half-year ended 31 December Half-year ended 31 December 2023 2022 Change 2023 2022 Change $M $M % $M $M % Telstra Consumer and Small Business 6,463 6,394 1.1 3,062 2,838 7.9 Telstra Enterprise 3,899 3,851 1.2 1,452 1,615 (10.1) Net
Slide 59: Product profitability - EBITDA
Product profitability - EBITDA ($M) Half-year ended 31 December 2023 2022 Change % Mobile 2,510 2,217 13.2 Fixed - C&SB 105 50 n/m - Data & connectivity 54 103 (47.6) - NAS 17 110 (84.5) Fixed - Enterprise 71 213 (66.7) Fixed - Active Wholesale 52 71 (26.8) International 344 375 (8.3) InfraCo - Fixe
Slide 60: Half-year comparison - Reported lease adjusted
Telstra Group Limited Half-year comparison - Reported lease adjusted (i) Half-year ended 31 December 2023 Summary management reported half-yearly data Half 1 Half 2 Full year Half 1 PCP Half 2 PCP Full year PCP Half 1 PCP Half 2 PCP Full year PCP Half 1 PCP Half 2 PCP Full year PCP Half 1 PCP Half 2
Slide 61: Half-year comparison - selected statistical data
Telstra Group Limited Half-year comparison Half-year ended 31 December 2023 Summary management reported half-yearly data Half 1 Half 2 Full year Half 1 PCP Half 2 PCP Full year PCP Half 1 PCP Half 2 PCP Full year PCP Half 1 PCP Half 2 PCP Full year PCP Half 1 PCP Half 2 PCP Full year PCP Half 1 PCP