Telstra Group Limited · ASX:TLS
Telstra — Debt Investor Presentation (June 2005)
72 slides from Telstra's debt investor presentation, Jun 14, 2005
Slide 1: Fixed Income Investor Presentation
, elstra 14 June 2005 Office of the Company Secretary The Manager Level 44 242 Exhibition Street Company Announcements Office MELBOURNE VIC 3000 Australian Stock Exchange AUSTRALIA th . 4° Floor, 20 Bridge Street Telephone 03 9634 6400 SYDNEY NSW 2000 Facsimile 03 9632 3215 ELECTRONIC LODGEMENT Dear
Slide 2: Telstra Corporation Limited
elstra cA Tes EA cE, 7 oT MMI rporatio : ited a 21h iTS “a yD OE nn HON Chief Financ cel ET
Slide 3: Financial information publicly released
Telstra ior “a iia ee tio a a a ial inf icly released 31 Decemb @ The financ publ
Slide 4: Privatisation and Financial agenda
8 a 2 = ee eS 2 = Ce — ee — oe Se < SRE 8 EE BE ES — oo — —— Se oe = = 2 = 2 = 2 = = 2 = 2 = 2 = 2 = = 2 = = = # Privatisation ® Financial
Slide 5: A cE — ie TE Ve —————— ee oT ATT LMM MiTAC NN NANA:
A cE — ie TE Ve —————— ee oT ATT 33 LMM MiTAC NN NANA: a TN
Slide 6: Who we are
a — eS Sl — pe SS | i — oo = = & who are w [stra Te
Slide 7: Organisation structure
CEO Solomon Trujillo Customer Business Units Corporate Enabling Units Staff: 13k Revenue $b p.a. Main Functions No. OF Employees (Approx)* Finance & Admin: Ma.A, IT, Risk (Approx) Consumer & Marketing GUahn Stanhope} Mngt & Audit, La Infrastructure Services (David Moffatt) 53 : Finance Services, (Mi
Slide 8: Strength from full service
Strength from full ser Internet C2 ii i ee | i
Slide 9: Ownership
Ownership _ Governmentof _ ; y 5; cL : oe ae ee ye Ace ie a Australia | fetal inestetons Lo, 3 - full privatisation planned for 2006
Slide 10: AAI
AAI A LL. MTN ey _ a TN
Slide 11: T3 - possible timeline
T3 - possible timeline iT A si it in Wii : ie EE ee eT et cimTiTTTRITRTTTITITG TL | u ‘ae / TT nit nas T3 depends on new legislation, market conditions & other factors
Slide 12: Scoping and structuring
Sl = ee ee — a a — Scoping & Stru = [3 possible but no 13
Slide 13: T3 decision and government issues
oe - Oe 8 | — oe Css to proc ed So = W 5 one oa, Yn co) mn = decision - Scop ® Government Issues T3
Slide 14: LCCC
LCCC A : a Cc NAT TC TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 15: Strategy
Strategy e customer Improv.
Slide 16: Market share
s market share Q [stra Te lr ee 0 2 SS Se Se — oe Basic Access — | Se :
Slide 17: =. == SS > a en Ce — — var vu oO. S (2)
=. 2 == SS > a en Ce — — 2 var vu oO. S (2) OU + a) a _ Oo = Optus/
Slide 18: Data and internet revenue
lr r— ee | . trec Data & internet Iverse fevenue $ D
Slide 19: Integrated IP future
Integrated IP future Yesterday Peed netwe and services Mobile genom and services lovernet network I ag and services si Shift to IP can be managed effectively
Slide 20: Broadband
fts-off l Broadband Se oh = | es SO ak I a fat abel
Slide 21: FOXTEL Pay TV JV
— co FOXTEL Pay TV JV- = Foxtel Pay TV - a’ ce — . a So oe — a Oo . . 2. a — = Interactive con
Slide 22: Wireless and mobility expansion
Wireless & mobility expansion Broadband |P wireless 3GSM network ready second half 2005 Strategic Position |) GD Retaining option ©. not currently pursuing
Slide 23: Wireless capability
Oo — - = — ess Capability | irel Ww
Slide 24: New growth - commercial search for Sensis
ee Oh ey a y Z Ce : : ED ee i q eee a) a a ji N a a a Hy TATU A ne New growt Cormmercial search is the future for Sensis icici ee
Slide 25: PSTN Voice - managing the migration
PSTN Voice — managing the migration - Challenges mobile ; “competitive regulatory “substitution Pressures intervention | Response |. SSA icon eN AN coo TTA still a significant cash flow generator
Slide 26: Total revenue
— So SS oO oe oe SS ternational ope In In Ma Total revenue _
Slide 27: Financials
oT iii A Financials iui. a ay TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 28: Financial summary
inancial sum 5 year f Total revenue RO — : : ee —— — — S| = SS — SSeSoS — it after Profi aula ji
Slide 29: Underlying operating results
x — — oo — oo — oS _ oo = . Se i i oo — i Ca — i oS — i _ Se l ing resu ing Dome. ing Exp Soles Revenue Underly Qperat Underly
Slide 30: PSTN voice
Wa 8 oe pic << — ee — — So — : oe oo. ice produc cas PSTN vo
Slide 31: Mobiles - continuing to deliver
Mobiles — continuing to deliver Oy MMMM I 5 oO li d p e rfo FPnAGnce A AL NMI i ncreo sj n g ly com p et it i ve mor ket on i | a
Slide 32: Sensis - consistent growth story
Sensis — consistent growth story Revenue Underlying Growth Sensis One Chen Sensis - delivering on strategy pons LOU ie | | —— ——J Ih ATM an HT
Slide 33: Underlying sales drivers - 1H05
Underlying sales drivers- 1H05 Movement ASM Strong growth in Mobiles, Internet & iP as PSTN voice falls
Slide 34: Underlying operating expenses
Underlying operating expenses eam 45.547m Equity Accounted lo Cost growth largely demand driven — TT TT Bie mt kat
Slide 35: Capital expenditure and depreciation
Capital expenditure & depreciation CAPEX 1H O05 Total = $1,774 Capex allocated tomeet demand... 1H 04 Total = $1,332m E Domestic core (pdudi C TB New Revenu: bone FY05 capex guidance. $3.3 billion including 3G
Slide 36: Capital management
oo Sos - . Ue Q y 7 — oo = | oe i i on il management tal 3 Ss — =F a c oS os —_ S ~~ o 2. cS) Q — a = i) a Cap
Slide 37: Target financial parameters
Target financial parameters ut Ratio (0) 6 Deda) Weaker Jeon: Target Zone 80%: i dug 00 Jun0l Jun G2 oe BON OF Dee Target parameters provide flexibility for the future with further capital returns of $1.5b pa over next 2 years
Slide 38: AAA
AAA A -— 22: eee TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 39: Industry/Regulatory framework
Industry/Regulatory framework Australia has well developed competitive telco environment
Slide 40: Australian regulatory environment
Australian regulatory environment - 1992 — competition intreduced (2 network carrier licences 3 mobiles) © 1997 open compelition (Unlimited entry) Social fequictio! a Telstra has demonstrated track record of effectively managing regulation
Slide 41: Regulatory issues
© eS Oe Rees = ee ee > — — —— ee atory issues ice CDS Tevien l Regu Current ® Mobile tern Pr fo
Slide 42: TTI
A CT | TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 43: Long term debt maturity
i / Long term debt mat
Slide 44: Funding requirement 05/06
a _. - i a ce / ROR oe — iin i rem. ing requ 05/06 fund Funding Requ
Slide 45: Debt facilities at June
— — rl a i / — ilities at Jur Debt fac
Slide 46: Key debt parameters
: oe a - un a nee =. a — — — Key debt parameters (year end June 30) Gross Debt Net Debi!
Slide 47: Telco credit ratings (May 05)
Telco credit ratings (May 05) | Le | Non investmne HAA averice el Oulioor Uv oo ae Telstra remains among the strong telcos
Slide 48: Telstra credit rating
stra credit rating l Te Standard & Poo oO — oS — — —— Ce a HOE
Slide 49: LMT
LMT A Fe MMMM NANA NNT 2 ue a Cy TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 50: Investment highlights
Investment highlights Full service and fully integrated telco - strong range of products & services Diversity — from an AUstralian investmen Regulatory risk relatively low. well develo} 6 ition in all seg a Successfully managed dereq # Proven cost control & Capex control Strong cash flows : Opportun
Slide 51: TEU AUME TEEN EUU USUI EEUU cee
A TEU AUME TEEN EUU USUI EEUU cee GC il Le ee Lo ay Hn , oi iii ii TTT TIT: OO es es LMM MiTAC NN NANA: ae a TN
Slide 52: Appendix
A Acc a TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 53: Australia - key statistics
il ee cn Ss — cn i il - key stati id jon l istics: Variable Land Mass Are Populat Key Stat GDP Austra
Slide 54: Australia - key statistics
Australia — key statistics GROWTH IN MAJOR ECONOMIES COC” i‘ , yp | eons pay oo Real GOP Growth over Year to March 2005 ng Ue Avioli U fay NOMINAL GDP pe: CADITA (2004) a SUS K per annum a: Australian economy - some key comparables oe
Slide 55: ACCC CH CC RO
A Y ee ACCC CH CC RO nT Te ecm TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 56: Telstra appoints new CEO
9 June 2003 108 TELSTRA APPOINTS NEW CEO The Chairman of Telstra Corporation, Donald MeGauchie AO, today announced that the Board had appointed Solomen (Sei) Prujillo as Chief Executive Officer and as an executive director of the company. Mr Frajillo will take up his positien on [| July 2003, He wil
Slide 57: New CEO cont
New CEO cont “Mir Trujillo has seeceastully led a namber of major cultural and business change programs. We believe Telstra will similarly benefit from his pragmatic innovation, strategic and tactical thinking and outstanding implementation. “He has the proven ability to deliver substantial top-line
Slide 58: New CEO cont
New CEO cont Mr Trujillo is currently sitting on the boards of Pepsi, Target. Gannett, (the newspaper chain) and EDS. He will leave all but one of these board positions. Me Trujillo will receive a fixed remuneration package of $3 million per annum. He will also receive an annual short term incentive
Slide 59: icin
icin A Ly i CANN MMi NNN: L TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 60: Key comparables
SF ——— SS r—“‘“(“Ci<“<i‘“‘(“‘ Shmhmh—™sé<i<—~<CesS . — — | — oc Ss oS So . — : — r—s— —— — — — = | | oo _ key compar Telstra
Slide 61: Integrated consumer communications
Integrated consumer communicatio Household Servic SMM OO Lic Objective — building stronger customer relationships
Slide 62: MMMM NITE
MMMM NITE a ce | ae TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 63: New growth - Sensis
oo. new growth IS- Sens t Prin s ne irecto =D oS a = = Z a a e 2 oS — oF = a — < < -— A
Slide 64: Sensis' network - well placed to succeed
Sensis’ network - well placed to succeed Yellow Pages" a Yellow Pages i Directory White Pages’ aI White Pages’ Assistance Directories | accownndanin sien “me - a Accommodates rier Search i sensis (234) Location & ; age cts 2 » | Sensis’ (23 Navigation ; { a
Slide 65: iii
A iii TTI CEC ee LMM MiTAC NN NANA: a TN
Slide 66: Cautionary statement
tatem ionary s Caut = [he figures presented [ERS = A = All amounts are of adopt ing tea ect IERS proj March 2005 be relied uy 7 —
Slide 67: A-IFRS at Telstra - key messages
A-IFRS at Telstra — key messages Focus on free cash flows is not compromised
Slide 68: A-IFRS implementation
lementatio imp A-IFRS ™ IFRS project tea = First set of A-IFR ended 31 D: — — = - — —— = oe L | 7. ee ae ay oe i nin cn
Slide 69: Key transition impacts
ition impa Key trans ® Known estimable ial statements os SS oS oO. year finance oo OC ee ~ : ee . oe il
Slide 70: Ongoing impacts
ing impac Ongo t-fi Se 8S r——“—sSSSs—s—s—“‘“‘<“‘“‘“‘“‘“‘“‘“ ‘EU 31 December 2004 . oo 3 — — cnet iG
Slide 71: Target financial parameters and payout ratio
— oe ee — — | - - — : a 0 ~ oo <s < eo : inancial pa Pauout ratio dividends dec Target f:
Slide 72: oo lL
oo lL — ee oe se = = oF — — oe Css — a