Slide 1: Investor presentation – European roadshow
Chorus Limited Level 10, 1 Willis Street P O Box 632 Wellington New Zealand Email: company.secretary@chorus.co.nz STOCK EXCHANGE ANNOUNCEMENT 24 March 2025 For personal use only Investor presentation – European roadshow The attached Chorus presentation will be referenced during investor meetings in
Slide 2: For personal use only
For personal use only
Slide 3: Disclaimer
Disclaimer This presentation: • Is provided for general information purposes and does not constitute investment advice or an offer of or invitation to purchase Chorus securities. • Includes forward-looking statements. These statements are not guarantees or predictions of future performance. For pers
Slide 4: Kia ora from Chorus
Kia ora from Chorus New Zealand’s largest fixed line communications business For personal use only • wholesale only business with ~90 retail service provider customers • Chorus fibre passes 1.5m addresses, built under public-private-partnership • ~72% uptake today, striving for 80% fibre uptake by 2
Slide 5: New Zealand's fibre footprint
New Zealand’s fibre footprint 87% of population covered by fibre to the premises For personal use only • NZ government supported fibre rollout from 2011-2022 • requirement that fibre companies be wholesale only in return for government financing • Chorus received ~NZ$1.3bn in low-cost, long-term gov
Slide 6: New Zealand's largest digital infrastructure 'neutral host'
New Zealand’s largest digital infrastructure ‘neutral host’ NATIONAL REACH ACCESS EXTENSIVE ASSET BASE For personal use only ~22,000km 400Gbps 62 ~180,000km 1-10Gbps ~60,000km 211,000 TRANSPORT FIBRE 400GBPS CAPABLE DWDM MESH NODES ACCESS FIBRE LAYER 2 ACCESS NATIONWIDE DUCT POLES TRANSPORT NETWORK
Slide 7: FY24 overview
FY24 overview For personal use only INVESTOR ROADSHOW MARCH 2025 6
Slide 8: Covid and economic slowdown has proven fibre's utility value
Covid and economic slowdown has proven fibre’s utility value • Covid caused a long period of high inflation and the NZ CPI (YoY) Reserve Bank NZ (RBNZ) responded with strong cash 6.00% rate increases For personal use only 5.00% • NZ experienced a subsequent economic slowdown 4.00% impacting discreti
Slide 9: Our Road to 2030
Our Road to 2030 Growth, Simplicity & Efficiency For personal use only PURPOSE Unleashing potential through connectivity. Enabling better futures for Aotearoa. ASPIRATION Simplified all fibre business with 80% uptake by 2030. BUSINESS Efficient Network Market Infrastructure MODEL Operator Challenger
Slide 10: Our market context
Our market For personal use only context INVESTOR ROADSHOW MARCH 2025 9 INVESTOR ROADSHOW MARCH 2025 9
Slide 11: The New Zealand broadband market
The New Zealand broadband market NZ broadband market – by retailer NZ broadband market – by technology 2,000,000 2,000,000 16% For personal use only 12% 17% 14% 5% 5% 8% 1,500,000 1,500,000 15% 19% 19% 19% 1,000,000 1,000,000 24% 19% 39% 54% 500,000 500,000 39% 33% 28% 4% 0 - Spark One 2degrees (inc
Slide 12: Record data use at 644GB and more peak events
Record data use at 644GB and more peak events • monthly average data usage on fibre increased strongly to 644GB (June: 623GB) • For personal use only the proportion of fibre connections using more than 1 terabyte of data was 17.5% (June: 16%) • HY25 average daily peak traffic 10% higher than HY24 •
Slide 13: Fibre growth continues in slower market
Fibre growth continues in slower market • 71.7% fibre uptake across Chorus fibre area (FY24: 71.4%; target: 80% by 2030) For personal use only • mass market fibre connections up 15k in HY25, with slowing tailwind from copper migration • fibre footprint +14k in HY25 to 1,520,000 addresses passed Fibr
Slide 14: 80% uptake requires ~240k connections
80% uptake requires ~240k connections Path to 240kGrowth connections FY25 opportunity pools Net Connection FY25-FY30 (overlapping) 300 ~110k For personal use only Premises already passed ~180k 250 90 240 Under-penetrated segments 200 ~130k ~220k New build 20 Fixed wireless 150 120 8 and HFC 100 Any
Slide 15: Moving from one size fits all to tailor offers for RSPs
Moving from one size fits all to tailor offers for RSPs Chorus Fibre Market Share ~580k power ~430k fibre customers customers For personal use only 10% Pure RSPs 15% ~450k power ~340k fibre Bundlers customers customers MNO's 75% ~940k ~245k fibre customers customers Note: numbers are NZ wide Consume
Slide 16: Entry level plan meets cost-of-living need
Entry level plan meets cost-of-living need • mass market fibre ARPU $55.34 (Dec 2024) • For personal use only Home Fibre Starter (50Mbps) plan growing in response to offnet demand and cost-of-living • 88% of business connections are on 500Mbps or faster; 25% of residential plans are on 1Gbps or fast
Slide 17: Wholesale broadband pricing
Wholesale broadband pricing Fibre plan - consumer Current wholesale price Price before 1 Jan 2025 Notes Voice line $30.59 $29.11 For personal use only Home starter $38 $35 Wholesale price applies where retail price is $65. 50/10Mbps 50/10Mbps upgrades to 100/20Mbps from end FY25. 50/10Mbps $53.96 $5
Slide 18: Fast track to an all-fibre future
Fast track to For personal use only an all-fibre future INVESTOR ROADSHOW MARCH 2025 17 17
Slide 19: Driving digital infrastructure revenue growth
Driving digital infrastructure revenue growth • Infrastructure revenues $77m in HY25 (target: annual $180m-$200m by 2030) • ‘greenfield’ property activity stabilising back at pre-Covid levels (~20k-25k lots p.a.) For personal use only • steady growth in data connectivity demand (e.g. smart locations
Slide 20: Exploring a range of new revenue options
Exploring a range of new revenue options Option 1: Option 2: Option 3: IoT Solutions Scale EdgeCentres Trans-Tasman Ring For personal use only Option 4: Option 5: Option 6: Fibre Expansion Copper recovery Property optimisation INVESTOR ROADSHOW MARCH 2025 19
Slide 21: Exploring option 3: Tasman Ring subsea network
Exploring option 3: Tasman Ring subsea network • proposed ~6,000km subsea network to underpin NZ’s growing data centre ecosystem and leverage South Island hydro capacity For personal use only • launched to prospective customers at Pacific Telecom Conference in January • investment subject to pre-bui
Slide 22: Our regulatory framework
Our regulatory framework • Chorus is required to provide wholesale services to retailers on a non-discriminatory basis For personal use only • Chorus fibre access services, excluding fibre in other fibre company areas, operate under a Regulated Asset Base (RAB) building blocks regime. The Commerce C
Slide 23: Regulatory certainty on fibre to 2029
Regulatory certainty on fibre to 2029 • final MAR decision (December) defers $256m of core fibre asset depreciation from PQP2 (2025-2028) For personal use only • we expect opening core RAB to grow from $4.99bn (Commission forecast at 13 Dec 2024) to ~$5.4bn through PQP2, based on final capex allowan
Slide 24: Copper retirement is coming into focus
Copper retirement is coming into focus • shutdown of copper in Chorus fibre areas now expected by end FY26; fewer than 28k lines in service • 21% reduction in non-fibre area copper lines since HY24 (target: copper shutdown by 2030) For personal use only • 1.5k remote radio customers: ~30% of address
Slide 25: Fibre enables a greener, more resilient future
Fibre enables a greener, more resilient future • Fibre broadband has a much lower fault rate than copper (~5% vs ~30% per annum) and is widely recognised as the most energy efficient broadband technology For personal use only • Chorus carried 8% more data traffic in FY24, but reduced electricity usa
Slide 26: Copper cost outlook
Copper cost outlook Tight cost control keeps direct copper revenues and costs FCF positive For personal use only • Copper capex, net of contributions, $15m (FY24) and declining as activity transitions to fibre • Direct copper opex of ~$54m (FY24) steps down as copper customers migrate to other netwo
Slide 27: Opportunities from copper retirement
Opportunities from copper retirement International copper retirement progress (% of incumbent network lines on fibre vs copper) • copper recovery (Option 5): cable trial underway; For personal use only Portugal expect ~3-7 year programme with $30m-$50m net Sweden proceeds Spain New Zealand • propert
Slide 28: Financial Performance
Financial For personal use only Performance INVESTOR ROADSHOW MARCH 2025 27
Slide 29: Capital management principles and policy
Capital management principles and policy A digital infrastructure business maximising long-term value and returns Dividend policy: pay an ordinary dividend of 70% to 90% (on average, over time) of net cash flow from For personal use only operating activities less sustaining capital expenditure Capit
Slide 30: HY25 dividend and FY25 guidance (unchanged)
HY25 dividend and FY25 guidance (unchanged) • HY25 interim dividend • FY25 EBITDA $700m to $720m* For personal use only o 23cps, unimputed o tracking to lower half of range • record date: 18 March 2025 o original guidance excluded exploratory opex for subsea cable • payment date: 15 April 2025 o fib
Slide 31: Income Statement
Income Statement H1 H2 H1 FY25 FY24 FY24 For personal use only $m $m $m Operating revenue 500 507 503 decline in legacy revenues offsetting fibre growth Operating expenses (154) (154) (156) legacy costs reducing, but savings partly offset by inflation and spend to explore new revenue opportuniti
Slide 32: Revenue
Revenue H1 H2 H1 FY25 FY24 FY24 $m $m $m For personal use only Fibre broadband 361 356 341 growing uptake; ARPU: $55.34 (Dec 2024) vs $55.71 (June 2024) due to (GPON) growth of entry level plan and delay of fibre price changes to 1 Jan 2025 Fibre premium (P2P) 32 34 35 growing demand for mobile
Slide 33: Expenses
Expenses H1 H2 H1 FY25 FY24 FY24 $m $m $m For personal use only Labour 43 41 39 45% capitalisation rate (HY24: 48%) as fibre investment reduces; $1m change costs Network maintenance 25 26 27 reducing fault volumes partly offset by service company CPI increases IT 20 21 23 reducing as legacy sy
Slide 34: Capex
Capex Gross capex H1 H2 H1 Sustaining vs growth capex For personal use only FY25 FY24 FY24 250 $m $m $m Sustaining capex* 94 88 117 200 115 Discretionary growth capex 105 107 115 150 105 107 Gross capex 199 195 232 Less Third-party contributions** (24) (25) (30) 100 Net capex 175 170 202 117 50 88 9
Slide 35: Capex
Capex H1 H2 H1 H1 H2 H1 RAB capex* FY25 FY24 FY24 Non-RAB capex FY25 FY24 FY24 $m $m $m $m $m $m For personal use only Extending the network – growth 45 26 29 Copper - growth 2 4 1 Installations – growth 54 70 81 Copper - sustaining 4 6 12 IT & Support - sustaining 27 33 31 Other - growth 4 7 4 Netw
Slide 36: Leverage: 4.54x net debt/EBITDA
Leverage: 4.54x net debt/EBITDA As at 31 Dec 2024 ($m) Debt maturity profile For personal use only Borrowings 2,774 900 + PV of CIP debt securities 314 NZ $M 800 (senior) 700 112 + Net leases payable 166 600 105 Sub total 3,254 500 - Cash 83 400 820 364 Total net debt 3,171 325 300 514 500 207 Net d
Slide 37: Appendices
Appendices For personal use only INVESTOR ROADSHOW MARCH 2025 36 INVESTOR ROADSHOW MARCH 2025 36
Slide 38: For personal use only
For personal use only INVESTOR ROADSHOW MARCH 2025 37
Slide 39: For personal use only
For personal use only INVESTOR ROADSHOW MARCH 2025 38
Slide 40: Chorus fixed line connections
Chorus fixed line connections 30 Sept 31 Dec 31 March 30 June 30 Sept 31 Dec For personal use only 2023 2023 2024 2024 2024 2024 Baseband 64,000 57,000 51,000 45,000 40,000 34,000 copper (no broadband) Copper ADSL 75,000 68,000 62,000 56,000 49,000 44,000 Copper connections (includes naked) declined
Slide 41: Connection changes by zone
Connection changes by zone (indicative as at 31 December) Quarterly change (’000s) by zone For personal use only -15 -5 5 15 Other fibre Copper lines (no broadband) 6,000 Local Fibre Company and fixed wireless provider company (LFC) activity is driving a gradual decline in copper Q2 FY24 -2 -2 zone
Slide 42: Interest rate hedges and Crown financing summary
Interest rate hedges Crown financing summary For personal use only Amount Current hedge profile Crown 30 30 30 30 Bond (NZ$m) securities June June June June $m 2025 2030 2033 2036 TOTAL EMTN 2026 514 100% fixed for life of bond at 3.39% Equity securities 85.3 197.0 404.0 768.5 768.5 NZD 2027 200 100
Slide 43: Accelerated copper depreciation rolls off rapidly
Accelerated copper depreciation rolls off rapidly 100 For personal use only 90 80 70 NPAT impact 60 reduces by $m ~$50m in FY26 50 40 30 20 10 0 FY22 FY23 FY24 FY25e FY26e FY27e Cables: CNU area Cables: LFC area Duct: LFC area Poles: LFCarea Cables: rural Poles: rural Estimate INVESTOR ROADSHOW MARC
Slide 44: Fibre RAB settings
Fibre RAB settings Final building blocks revenue components 2025 2026 2027 2028 ($m, nominal) Total return on capital 255.1 270.4 269.4 266.1 For personal use only Return on assets (RAB x WACC), Core fibre assets 384.6 396.6 404.3 408.5 Return on assets (RAB x WACC), Financial loss assets 74.0 63.8