Telstra Group Limited · ASX:TLS
Telstra — Macquarie Australia Equities Conference 2013
29 slides from Telstra's conference presentation, May 1, 2013
Slide 1: ASX cover letter: Macquarie conference presentation and speech
1 May 2013 Office of the Company Secretary Level 41 242 Exhibition Street MELBOURNE VIC 3000 For personal use only AUSTRALIA The Manager General Enquiries 08 8308 1721 Company Announcements Office Facsimile 03 9632 3215 Australian Securities Exchange th 4 Floor, 20 Bridge Street SYDNEY NSW 2000 ELEC
Slide 2: Telstra Update – Macquarie Australia Equities Conference
For personal use only TELSTRA UPDATE MACQUARIE AUSTRALIA EQUITIES CONFERENCE MARK HALL, DEPUTY CHIEF FINANCIAL OFFICER TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 DISCLAIMER These presentations include certain forward-looking statements that are based on information and assumptions known to date and a
Slide 3: Agenda
AGENDA For personal use only 1 STRATEGIC PRIORITIES 1. 2. CAPITAL MANAGEMENT FRAMEWORK 3. GUIDANCE TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 3 OUR STRATEGIC PRIORITES ARE DELIVERING IMPROVE RETAIN SIMPLIFY BUILD NEW CUSTOMER AND GROW THE GROWTH TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 SATISFACTION
Slide 4: Our strategic priorities are delivering
IMPROVE CUSTOMER SATISFACTION For personal use only WE ARE LISTENING TO OUR CUSTOMERS WHILE CONTINUING TO INVEST $1.2B IN WIRELESS CAPEX FOR FY13 TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 WE ARE CHANGING THE WAY OUR CUSTOMERS TALK ABOUT TELSTRA 5 RETAIN AND GROW THE NUMBER OF CUSTOMERS 2.1M 4G DEVIC
Slide 5: Improve customer satisfaction; retain and grow customers
SIMPLIFY THE BUSINESS For personal use only REDUCE USAGE ALERTS REDUCING CALL BILL SHOCK TRANSFERS REDUCE CALL 14 DAY 24x7 APP HOLDING TIMES CUSTOMER CARD TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 7 BUILD NEW GROWTH BUSINESSES DEPARTMENT OF DEFENCE CONTRACT SIGNED FOR $1.1B OVER SIX NAS AND A HALF Y
Slide 6: Simplify the business; build new growth businesses
CAPITAL MANAGEMENT STRATEGIC FRAMEWORK For personal use only FISCAL DISCIPLINE 1. 2. 3. MAXIMISING MAINTAINING RETAIN FINANCIAL RETURNS FOR FINANCIAL STRENGTH FLEXIBILITY OBJECTIVES SHAREHOLDERS 1. Maintain balance sheet settings consistent with a single-A credit rating 2. Ensure dividend remains fu
Slide 7: Capital management
SUMMARY For personal use only 1 CONTINUED REVENUE 1. REVENUE, PROFIT AND CUSTOMER GROWTH 2. OUR STRATEGIC FOCUS REMAINS UNCHANGED 3. ON TRACK FOR FULL-YEAR GUIDANCE TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 11 6
Slide 8: 2013 Guidance
Macquarie Australia Equities Conference Mark Hall, Deputy Chief Financial Officer 1 May 2013 For personal use only In my presentation I will cover three topics. Firstly, I will touch on our strategy and how we are delivering against it. Secondly, I will provide an update in relation to our capital p
Slide 9: Summary
We will continue to work constructively with the government of the day. Should the government or policy approach change we will sit down to re- For personal use only negotiate if that is needed - our position is that we will act in the best interests of our shareholders and maintain the value of the
Slide 10: Speech: Macquarie Australia Equities Conference
These remain the key focus for us. I will take you through each of these in turn, starting with customer satisfaction. For personal use only You may have heard David Thodey describe improving customer satisfaction as a marathon in which we’ve just got through the first 10 kms. We are improving, but
Slide 11: Speech: strategic priorities
lifestyle, or who want to frequently upgrade their handset. Later this year we will be introducing shared data For personal use only plans. This will enable our customers to pool wireless data allowances across four devices on a single bill. It will be excellent for users with multiple mobile data d
Slide 12: Speech: improving customer satisfaction
The lower frequency of this spectrum improves signal range and depth making it ideal for use in areas where improved range or signal reliability For personal use only is required. We are also trialling the next generation of wireless 4G technology, known as LTE-Advanced with plans to introduce it la
Slide 13: Speech: wireless network investment
And we are also trialling small cell networks – known as heterogeneous networks, or HetNets for short, to expand network capacity in busy For personal use only locations such as city centres and sporting stadiums. This can complement our existing network by targeting high traffic areas where it woul
Slide 14: Speech: LTE-Advanced and HetNets
stay with us for longer, recommend us to their family and friends and buy more products and services. For personal use only To demonstrate how serious we are about customer advocacy, we have now completed our 10 millionth customer survey. Our customers are providing us with rich information on
Slide 15: Speech: customer advocacy
Moving on to our second strategic priority of retaining and growing customer numbers. Mobiles continues to provide a growth engine for For personal use only the company. In the 3rd quarter we have grown net customer numbers across all of our mobile categories. Our 4G network supremacy is delivering
Slide 16: Speech: retaining and growing customers
combination of increased active customer volumes and stronger ARPU. Both the customer growth and the ARPU growth is the result of our For personal use only market leading Pre-Paid Cap Encore offer, and also a differentiated device range which includes 4G. On the fixed side, the number of our fixed b
Slide 17: Speech: prepaid and fixed bundles
On top of this, 500 megabytes of mobile broadband data is now included for the first time on a selection of the new bundles. For personal use only Importantly for us, bundled customers with voice and broadband services are less likely to churn. We expect the new bundles will stimulate increased sale
Slide 18: Speech: simplifying the business
that we describe as Bill Shock. Customers with bill shock have had a negative experience and may phone our contact centres which drives cost For personal use only into our business. So we have simplified billing in these situations by applying new rates for the full billing period. Previously, we sp
Slide 19: Speech: bill shock initiatives
We also recognise that customers sometimes experience bill shock when they return from an overseas trip. Smartphones are an exceptionally For personal use only helpful tool for international travel – providing access to online maps, restaurant reviews, social networking and email for example. But so
Slide 20: Speech: roaming alerts and contact centres
March. This will result in more effective and efficient customer interactions. Other process improvements have seen the For personal use only number of customers waiting on hold for more than two minutes reduce by almost 80%. We have introduced a 14 Day Customer Card which allows our customers to co
Slide 21: Speech: 24x7 app and service improvements
top up their prepaid account and view their bills. In upcoming releases we are planning to release additional functionality allowing customers to For personal use only purchase new services from us. We will start with simple add-ons such as data packs, and progress to more complex transactions. Whil
Slide 22: Speech: productivity savings and headcount
growth businesses which I will now update you on. Our Network Applications and Services business For personal use only is experiencing double digit revenue growth. We recently signed a 6 and half year, $1.1bn contract with the Department of Defence for the provision of services including unified com
Slide 23: Speech: Defence contract and growth businesses
We have also established a new software- focussed Global Applications and Platforms group, which will help us to benefit from growing For personal use only opportunities in the software layer and mobile applications. Growth into Asia is another of our key strategic ambitions. Pleasingly our internat
Slide 24: Speech: Asia growth and media apps
live on a smartphone or a tablet. These have been very successful in market and to date we have had 1.3m AFL app downloads and 800,000 For personal use only NRL app downloads. The apps are available to customers across all mobile providers. At last count we have 100,000 customers who are paying mont
Slide 25: Speech: Sensis and Foxtel
Our media assets also include our 50% stake in the Foxtel business. Foxtel results for the first half of 2013 included a full six months For personal use only contribution from the acquisition of Austar. On a pro-forma basis revenue was up 7.2% to $1.6 billion and EBITDA was up 12.1% to $463 million
Slide 26: Speech: capital management objectives
I will now run through our 5 capital management principles. Firstly, we have been clear on the balance sheet For personal use only settings which we believe are consistent with a single A credit rating from the major agencies. That is to say: o a debt servicing ratio between 1.5 and 1.9 o gearing be
Slide 27: Speech: balance sheet settings
Our second principle is to ensure that our ordinary dividend remains fully-franked and, subject to board approval, seek to increase it For personal use only over time. As we have stated previously, we are constrained from increasing a fully franked dividend at the moment by our franking account bala
Slide 28: Speech: dividend and capex targets
build on our existing capability such as TrueLocal and Ooyala for example. Before I conclude, I would like to re-iterate that For personal use only our guidance for 2013 remains unchanged. This includes low single digit growth for both total income and EBITDA, and a capex to sales ratio of 15%. Cons
Slide 29: Speech: guidance and conclusion
remains unchanged and most importantly we are on track for full year guidance. For personal use only Check against delivery 28
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