Telstra Group Limited · ASX:TLS

Telstra — Investor Day (November 2017)

41 slides from Telstra's investor day presentation, Nov 2, 2017

  1. Slide 1: Disclaimer

    2/11/2017 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, performance or achievements could be significantly different from those expressed in, or

  2. Slide 2: Investor Day: Objectives for the day

    2/11/2017 Investor Day ee ’ Andrew Penn _ 2 November Objectives for the day 06 Opportunity to engage with key members of the broader team 2) Position our vision and strategy within the context of changing market dynamics 3) Demonstrate how we are progressing in relation to the 3 pillars of our strat

  3. Slide 3: CEO leadership team and agenda

    2/11/2017 CEO leadership team Cynthia Whelan Group Executive New Businesses Andrew Penn Chief Executive Officer Vicki Brady 1 Group Executive ___ Robyn Denholm Consumer & Small Chief Operations Officer Business f Will Irving Joe Pollard . Group Executive Group Executive Wholesale Media & Marketing.

  4. Slide 4: Our vision is to become a world class technology company that empowers people to connect

    2/11/2017 Our vision is to become a world class technology company that empowers people to connect 1. Traditional worlds of technology and computing are wing, but value is captured at the lay converging i ind services facebook NETFLIX PAGE? Economic headwinds and challenges will increase over next 2

  5. Slide 5: Our purpose, vision and strategy

    2/11/2017 nbn Service Affordability nbn technology choice Activation cVCs Assurance In home experience Other network + CVC/AVC - pricing structure Our purpose, vision & strategy Purpose To create a brilliant connected future for everyone Vision To be a world class technology company that empowers pe

  6. Slide 6: Strategic Investment Program

    2/11/2017 Strategic Investment Program + _ Investing up to $3bn incremental capex to achieve a step change in Customer Experience + Total capex (including spectrum) over 3 years to FY19 to exceed $15bn . Financial benefit of >$500 million per annum realised by FY21 Customer Experience The New Genera

  7. Slide 7: We are making good progress

    2/11/2017 We are making good progress Simplifi Refo ur strategy on new growth and adjacencies ion aimed at lifti Networks Applications & services Repositioni pleted major network resiliency & redundancy id-leading digital Be program ¢ PAGES Driving value Total EBITDA —— Mobile gross contribution New

  8. Slide 8: Over long term, the foundations we are laying today will open up new opportunities for growth

    2/11/2017 Over long term, the foundations we are laying today will open up new opportunities for growth Horizon 1 Horizon 2 er Ventures, Muru-D New 5G use Media ( Page 15 Market context Stephen Elop, Group Executive Technology, Innovation and Strategy

  9. Slide 9: Telstra has capitalised on previous moments of disruption

    2/11/2017 Telstra has capitalised on previous moments of disruption We benchmarked ourselves against 16 telco peers on dimensions of market position, market performance, and levels of investment Our Peer Ranking Result Peer Group Average Market position Mobile Market share1 #3 ~54% ~39% Market EBITD

  10. Slide 10: Global market growth has mainly come from emerging markets, with developed markets stagnating

    2/11/2017 Global market growth has mainly come from emerging markets, with developed markets stagnating Global Telecom Market Size (USD Bn) Emerging1 Developed2 CAGR Total market +1.7% 2008-2016 CAGR 1,386 1,405 1,435 1,328 1,359 1,372 1,253 1,265 1,297 442 470 496 507 516 545 +5.0% 369 396 418 884

  11. Slide 11: BYO plans are an example of a hotly contested battle fought with increased data and inclusions

    2/11/2017 BYO plans are an example of a hotly contested battle fought with increased data and inclusions 2013 BYO $50 2015 BYO $50 2017 BYO $49 Calls $600 $1000 Unlimited Data 1GB 2.5GB 10GB Extra inclusions N/A Free 6 month presto or 12 Free live, data-free AFL, month NRL digital pass or NRL and Ne

  12. Slide 12: Beyond our core there are multiple trends to support new growth

    2/11/2017 Beyond our core there are multiple trends to support new growth Data & Analytics IoT 5G connectivity Addressable market ($B)1 Addressable market ($B)2 Telco addressable market ($B)3 10 10 10 7.5 6.6 5.6 24% p.a. 5 5 5 32% p.a. 78% p.a. From FY19 1.7 1 0 0 0 0 2016 2023 2016 2023 2016 2026

  13. Slide 13: How are others responding to value shifts and technology developments?

    2/11/2017 How are others responding to value shifts and technology developments? Invest in IoT / M2M • Develops solutions through partnerships, research • Acquired Fleetmatics and Telogis to develop centres and open platforms Telematics business Invest in • Developed Flux Vision, a geo-analytics pla

  14. Slide 14: Telstra Enterprise

    2/11/2017 Telstra Enterprise Brendon Riley, Group Executive 14

  15. Slide 15: We have intensified our focus on the Enterprise segment and continue to transform our business model

    2/11/2017 We have intensified our focus on the Enterprise segment and continue to transform our business model Evolution of Telstra Enterprise 2011 - 2017 Global Enterprise Telstra Enterprise & Services Formed Formed Products & Solutions Defence Telstra Enterprise & Government Network Applications &

  16. Slide 16: Rapidly evolving markets create challenges for our Enterprise customers and opportunities for Telstra

    2/11/2017 Rapidly evolving markets create challenges for our Enterprise customers and opportunities for Telstra Non-traditional Disruptive New customer Regulatory & competitors & technologies experience macro- entrants & innovation benchmarks economics Page 31 Telstra Enterprise creates better ways

  17. Slide 17: Telstra Enterprise is focussed on driving four strategic priorities

    2/11/2017 Telstra Enterprise is focussed on driving four strategic priorities Product Market International Digitisation Leadership Engagement Growth and Experience ► Simplify the portfolio ► Transform the Sales & ► Continue to globalise ► Execute B2B ► Focus on fewer, bigger Service model Services c

  18. Slide 18: We see significant potential in Enterprise IoT

    2/11/2017 We see significant potential in Enterprise IoT Rapid Enterprise Australia’s Enterprise use- IoT market largest IoT cases in focus growth network Intelligent Transport 5-6x 5.5B Location of Things 0.8B Smart Metering 2016 2023 Page 35 We continue to grow internationally and expand our capab

  19. Slide 19: Acquisitions continue to accelerate our business offerings and growth

    2/11/2017 Acquisitions continue to accelerate our business offerings and growth in Australia and globally Infrastructure Platforms, Applications and Services Managed data Cloud Mobility Internet of Industry Networks Data centres Security Cloud services networks applications solutions Things solution

  20. Slide 20: We have a powerful combination of unique assets

    2/11/2017 We have a powerful combination of unique assets . Th Pre- Premium Trusted brand and : multi-brand portfolio ; Boomers Store footprint and digital channels The market is fundamentally changing NBN roll-out is inducing churn risks and reshaping economics — ii ai The market will bifurcate wit

  21. Slide 21: Our strategy is to shape the market, outperform in key segments and reset our cost base

    2/11/2017 Our strategy is to shape the market, outperform in key segments and reset our cost base @ ‘Execute on'a multi-brand strategy in Consumer differentiation supported by ‘Better Ways’ Outperform in @ ‘Sustain our leadership key segments on the NBN ‘Whole of Household’ and ‘Whole of Business’ b

  22. Slide 22: 2/11/2017

    2/11/2017 22

  23. Slide 23: Bringing our Whole of Business propositions to life

    2/11/2017 Bringing our Whole of Business propositions to life Better Ways : . Communities to help Best service, advice & support small business thrive . . Hybrid solution with Business grade connectivity mobile backup 2-in-1 mobile computing plans Mobilise your workforce Endpoint device & Secure you

  24. Slide 24: Deliver a great experience on the NBN

    2/11/2017 Deliver a great experience on the NBN Online order tracker Speed expectations ®O® Self install kits a Hybrid =) modem Deliver an exceptional customer experience Personalising and transforming our service model = Telstra Branded Experience = Personalised offers & agent tools = Premium suppo

  25. Slide 25: Reset our cost base

    Reset our cost base and leverage our unique assets to shape the market, and outperformin key segments i 2/11/2017 25

  26. Slide 26: Investor Day November 2017

    2/11/2017 Investor Day 2 November 2017 ( Wi-Fi: @CIC No password required. nce connected, opena bpwcer and click accept. 26

  27. Slide 27: Key Telstra network assets

    2/11/2017 Key Telstra network asse Optical transport network 230,000km of fibre across Austra plus 400,000km of subsea cab! 50+ integrated data centres g Mobile sites — 3G/¢ Over 9,000 mobile Telstra-owned Exchanges and Network of 5,300 e Australia 27

  28. Slide 28:              

    2/11/2017                28

  29. Slide 29: Post NBN and Networks for the Future

    2/11/2017 Post NBN and Networks for the Future Network Networking Con] Plane Monitoring IT (Digitisation) Progress since FY17 Investor Day: Supporting NBN transition 90% of ADSL customers Met the growing demand now have quality video on for ADSL traffic on o demand network Improved customer experien

  30. Slide 30: Progress since FY17 Investor Day: Enhance mobile differentiation

    2/11/2017 Progress since FY17 Investor Day: Enhance mobile differentiation 4G to 99% of the population Up to double the speed of original 4G to 90% of the population Gigabit enabled LTE in CBD locations and high traffic areas* Enhanced calling (e.g. Voice over LTE and WiFi, Video over LTE) Rich Comm

  31. Slide 31: Networks for the Future journey

    Networks for the Future journey Foundations for the transformational years ahead ical SDN/N Coverage we, transmission Built in Automation resiliency and scaleability 2/11/2017 Digitisation focus areas Helping our customers better serve themselves pture in 4 minutes tions: Simplifying and consolidati

  32. Slide 32: Pipeline of digitisation initiatives

    Pipeline of digitisation initiatives New s for field techn misation and dispatch Suite of new tools and automation for fal nline tools. Currently active with 400 Automates proces: nd reduces screens call handling time, 70% fewer truck rolls. New operating support system providing big da by our netwo

  33. Slide 33: Financial strategy

    2/11/2017 Financial strategy Warwick Bray, Chief Financial Officer Our financial strategy supports our corporate strategy Financial strategy Grow our Reset the cost Deliver returns Manage timing Fiscal discipline underlying base on our capital and conversion – Capital businesses investments of cash

  34. Slide 34: Achieving growth by major product

    2/11/2017 Achieving growth by major product Grow our underlying Influences businesses FY17 Income and growth1 Influences FY17 FY17 Mobile Income Income • FY19-20 Opportunities – MMC growth through plan updates $b Growth • Post nbn rollout - 5G and IOT Mobile $10.2b 0.8%  • Risks – competition, pric

  35. Slide 35: We are committed to >$1.5bn reduction in core fixed costs and manage other lines through margins

    2/11/2017 We are committed to >$1.5bn reduction in core fixed Reset the cost base costs and manage other lines through margins Cost management approach FY16-17 operating costs1 Influences Core sales costs - we manage by efficiency. These costs +$466m -$244m include handset costs, NAS CPE and nbn acc

  36. Slide 36: Cost out of $244m delivered in FY17

    2/11/2017 Cost out of $244m delivered in FY17 Reset the cost base Productivity example initiatives Productivity focus Example initiatives Outcomes Improve customer call • Reduced call scripts for most frequent call types e.g. international • Customer benefits: 20-30% faster resolution or 700,000 les

  37. Slide 37: Manage capex to sales down to 14% or below over time

    2/11/2017 Manage capex to sales down to 14% or below over Deliver returns on our capital time investments Capex to sales ratio (%) – Telstra Relative to global peers1 2 FY17-19 expected average ~18% 1 20 3 20 FY13-16 average ~15% Target ~14% 21.25 from FY20 17.8 ~18 ~18 15 15 14.9 15.2 15.8 14.6 13.

  38. Slide 38: Strategic investment program

    2/11/2017 Strategic investment program Deliver returns on our capital investments • Investing up to $3bn incremental capex to achieve a step change in Customer Experience • Total capex (including spectrum) over 3 years to FY19 to exceed $15bn • Financial benefit of >$500 million per annum realised b

  39. Slide 39: We continue to manage the efficiency and timing of converting EBITDA to cash and EPS

    2/11/2017 We continue to manage the efficiency and timing of Deliver returns on our capital converting EBITDA to cash and EPS investments Cash vs accounting and timing Conversion Timing expectations Manage efficiency of converting Manage timing of cash vs accounting … and post nbn rollout completion

  40. Slide 40: Key Telstra network assets and FY18 guidance

    2/11/2017 Key Telstra network assets Fiscal discipline – Capital Management Framework Optical transport network People 230,000 km of fibre across Australia, World renowned expertise and experience plus 400,000km of subsea cables and 50+ in designing, building and operating integrated data centres gl

  41. Slide 41: Summary and Q&A

    2/11/2017 Summary Growth from existing and future businesses Reset the cost base Capital, cash and fiscal discipline Capture option value • Industry structure • Infrastructure • Future opportunities Page 81 Q&A 41

Telstra Group — Investor Day (November 2017) on 6ix