Slide 1: ASX cover letter: Full Year 2009 Financial Results presentation
13 August 2009 Office of the Company Secretary For personal use only Level 41 Company Announcements Office 242 Exhibition Street Australian Stock Exchange MELBOURNE VIC 3000 4th Floor, 20 Bridge Street AUSTRALIA SYDNEY NSW 2000 Telephone 03 9634 6400 Facsimile 03 9632 3215 ELECTRONIC LODGEMENT Dear
Slide 2: Full Year 2009 Financial Results – Disclaimer
For personal use only Full Year 2009 Financial Results David Thodey, CEO 13 August 2009 Disclaimer • These presentations include certain forward-looking statements that are based on information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performa
Slide 3: Strong Financial Results for 2009
Strong Financial Results for 2009 FY09 $ billions (except margins & DPS) FY08 FY09 % For personal use only Guidance EBIT Sales Revenue 24.7 25.4 S +2.9 Total Revenue 24.8 25.5 S +2.7 3-4% +5 3% +5.3% Operating Expenses 14.6 14.7 S +0.6 EBITDA - reported 10.4 10.9 S +5.1 5-6% EBITDA Margin (%) 42.2 4
Slide 4: Key products driving Telstra's growth
Key products driving Telstra’s growth FY09 Product Sales Revenue Growth For personal use only +10 0% +10.0% +15 9% +15.9% Mobile bil Services i Fixed i d Retail il Broadband db d +8.1% +5.3% IP & Data Access Managed Network Services +9.8% PSTN -4.9% Media and Content The market demand remains strong
Slide 5: Next Generation Networks making a difference; priorities for 2010
Next Generation Networks making a difference (Next G and Next IP) Domestic Sales Revenue Mix For personal use only $23.2bn $22.7bn $21.0bn 44% 41% 34% 3 Year Revenue CAGRs FY06 FY08 FY09 • Domestic Sales +3.4% • Mobiles, Fixed Retail BB, IP & Data Mobiles, Fixed Retail BB, IP & Data access access +1
Slide 6: IT programme now largely business as usual
IT programme now largely business as usual… For personal use only Software Enhancements Software Enhancements Customer Software in Production Consumer Pre-Paid Care & Consumer Fixed, Post Paid Mobile, BigPond, Pay TV Extend product range and integration of Mobile products onto Billing products onto
Slide 7: Differentiating and integrating the experience; NBN and regulation
Differentiating and integrating the experience... For personal use only Consistent User Experience ...across different devices and networks NBN and regulation… ...protecting shareholder value 6
Slide 8: Guidance and Summary
Guidance For personal use only Measure FY 2009 Actual FY 2010 Guidance R Revenue growth th 2 7% 2.7% L Low single i l digit di it EBITDA growth 5.1% Low single digit EBITDA margin 43.2% Maintained EBIT growth 5.3% Low single digit FCF $4 4b $4.4b $6b NOTE: Excludes the impacts of any Government regu
Slide 9: Financial Results – CFO
For personal use only Full Year 2009 Financial Results John Stanhope, CFO 13 August 2009 Financial Results FY09 Total $ billions (except margins & DPS) FY08 FY09 % Guidance Revenue* Sales Revenue 24.7 25.4 S +2.9 Total Revenue 24.8 25.5 S +2.7 3-4% +3.0% Operating Expenses 14.6 14.7 S +0.6 EBITDA -
Slide 10: Fiscal Year 2010 Guidance; FY09 product mix drivers
Guidance Fiscal Year 2010 For personal use only Measure Guidance Sales Revenue growth Low single digit growth EBITDA growth Low single digit growth EBITDA Margin (on sales revenue) Maintained D&A ~$4.5b EBIT growth Low single digit growth Accrued Capex <$3.8b FCF* $6b *FCF includes pension funding o
Slide 11: Competitive Advantage in Mobile Data & IP Access; Telstra Consumer
Competitive Advantage in Mobile Data & IP Access Mobile Data Revenue IP Access Revenue For personal use only $2,030m +31% $667m $1,546m +25% $896m $534m +44% +28% $321m $1,073m +21% $416m +38% $740m $233m $163m $615m $547m +19% +19% $216m $459m $182m $134m $372m +69% $587m $119m $119m +10% $130m $34
Slide 12: Telstra Business; Telstra Enterprise and Government
Telstra Business Sales Revenue +4.7% For personal use only $1.93b Operating Leverage Emerging $1.86b $1.80b $1.82b • Expense Growth 1% < Sales Rev Growth 4.7% +15% +14% +12% +17% +15% +18% +8% +22% Strong Data & Mobile Growth • Double digit fixed internet, data and IP growth • Mobile data = 28% of m
Slide 13: International businesses performance; Opex growth
International businesses performance For personal use only Revenue Local EBITDA Local Currency Currency (A$) Ch Change YoY Y Y Ch Change YoY Y Y (A$) Ch Change YoY Y Y Ch Change YoY Y Y CSL New World $989m +8% -11% $239m -8% -24% TelstraClear $547m -3% +2% $108m +1% +6% China $251m +56%* +29%* $109m
Slide 14: Labour cost declining; DVC growth
Labour cost declining For personal use only Labour Growth: -0.6% FY09 Labour Expense: -2.3% $4 158m -$154m $4,158m $154m (ex FY09 LSL Bond Rate change) +$44m $4,131m +$67m +$19m -$3m 2H09 Labour Expense: -4.2% vs pcp Headcount reduced by 11,665 since 2005* FY08 Volume Price LSL Redundancy Miscellane
Slide 15: SC&A and Other Expenses declined; Capex and D&A
SC&A and Other Expenses declined Other Expenses Growth: -0.4% For personal use only +$50m +$10m -$14m -$78m $5,246m +$11m $5,225m SC&A: -2% in second half of FY09 $2,339m $2,389m Discretionary costs: -12% to $373m $1,028m $1,038m $361m $347m $457m $379m $1,061m $1,072m Bad & Doubtful Debts: +15% FY0
Slide 16: NBN: Impact of Functional Separation; Free cash flow growing
NBN: Impact of Functional Separation Increasing Separation For personal use only 1 2 3 4 5 No Separation S ti Operational Operational ‘TCNZ style’ ‘BT style’ Operational Separation + Separation + Functional Functional Separation Internal Adjudicator Separation Separation Contracts Cost: 0 cps <1 cps
Slide 17: Financial Parameters & Interest
Financial Parameters & Interest For personal use only Financial Parameters Interest Actual Actual Target (includes (adjusted Change Change FY08 FY09 IFRS) for IFRS) ($) (%) Debt Borrowing Costs $1,238m $1,199m -$39m -3.2% 1.7 – 2.1 times 1.43 times 1.48 times Servicing Gearing 55% to 75% 55.2% 57.2%
Slide 18: Appendix: Domestic Retail performance
For personal use only Appendix Domestic Retail performance 1H08 2H08 FY08 1H09 2H09 FY09 pcp pcp pcp pcp pcp pcp Sales Revenue growth 7.6% 4.3% 5.9% 4.1% 2.6% 3.4% - Mobile M bil SServices i 13 0% 13.0% 10 0% 10.0% 11 5% 11.5% 11 3% 11.3% 8 3% 8.3% 9 8% 9.8% - Fixed (excluding Internet) -0.5% -1.6%
Slide 19: Telstra Consumer; Telstra Business
Telstra Consumer 1H08 2H08 FY08 1H09 2H09 FY09 pcp pcp pcp pcp pcp pcp For personal use only Sales Revenue growth 8.4% 3.7% 6.0% 3.0% 3.2% 3.1% - Mobile Services 9.0% 5.1% 7.0% 8.5% 8.9% 8.7% - Fixed Fi d ((excluding l di IInternet)) 0 5% 0.5% -1.8% 1 8% -0.7% 0 7% -2.6% 2 6% -3.0% 3 0% -2.8% 2 8% -
Slide 20: Telstra Enterprise & Government; Market Share
Telstra Enterprise & Government 1H08 2H08 FY08 1H09 2H09 FY09 pcp pcp pcp pcp pcp pcp For personal use only Sales Revenue growth 4.5% 2.7% 3.6% 3.9% 1.9% 2.9% - Mobile Services 19.3% 23.6% 21.5% 19.9% 6.9% 13.2% - Fixed Fi d ((excluding l di IInternet) t t) -5.2% 5 2% -4.5% 4 5% -4.9% 4 9% -1.4% 1 4
Slide 21: Long-term management objectives reconciliation
Long-term management objectives reconciliation For personal use only Implied Measure 2010 Guidance Prior FY10 LTMO measures Old LTMOs reconciliation Sales revenue growth Low single digit n/a n/a n/a Total revenue growth n/a Revenue 05-10 ~3-3.5% 3-4% EBITDA growth Low single digit EBITDA growth 05-1