Slide 1: Analyst Briefing – Half year results presentation pack
11 February 2010 Office of the Company Secretary For personal use only The Manager Level 41 242 Exhibition Street Company Announcements Office MELBOURNE VIC 3000 Australian Securities Exchange AUSTRALIA 4th Floor, 20 Bridge Street General Enquiries 08 8308 1721 SYDNEY NSW 2000 Facsimile 03 9632 3215
Slide 2: 2010 Half Year Financial Results / Disclaimer
For personal use only 2010 Half Year Financial Results David Thodey, CEO 11 February 2010 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, perfor
Slide 3: Financial Results; Challenging market conditions
Financial Results For personal use only Reported Adjusted* $ Billions 1H09 1H10 % % Sales Revenue 12.64 12.32 -2.5 -0.7 Free Cash Total Revenue 12.71 12.34 -2.9 -1.1 Flow Operating Expenses 7.43 7.07 -4.8 -2.1 +37.0% EBITDA 5.33 5.32 -0.3 +0.2 EBITDA Margin (%) 42.2 43.1 +0.9pp EBIT 3.08 3.13 +1.7 +
Slide 4: Key segment results – sales revenue; PSTN headwinds have increased
Key segment results – sales revenue For personal use only 2H09 1H10 2H10 • Promotion of new bundles and Consumer +3.2% - 0.2% pricing Business +2.2% - 0.4% • Whole of Business propositions Enterprise & Govt^ +5.1% -1.6% • Building on contract wins • Continued growth in ULL, LSS and Wholesale -6.1% -
Slide 5: Fixed broadband market maturing; The path back to growth
Fixed broadband market maturing For personal use only Fixed broadband SIO net additions (‘000) Mobile-only households 600 9% 400 7% 200 0 5% 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10 Dec 07 Dec 08 Dec 09 -200 Telstra Fixed Retail Broadband Telstra ULL & LSS Source: Roy Morgan Telstra Wh
Slide 6: Driving mobile growth; Guidance for Fiscal Year 2010
Driving mobile growth New Offerings WBB Product Differentiation For personal use only Smartphones ARPU • ARPU premium Enterprise • Strong data growth differentiation WBB Core WBB BigPond® Wireless Telstra products Mobile Gateway Broadband • Fixed BB substitute volume • Leverages Next G™ capabilities
Slide 7: National Broadband Network; Telstra strategy – your connection to the future
National Broadband Network For personal use only Terms of Engagement agreed Negotiations continue 11 Telstra strategy – your connection to the future Telstra “Create a world of solutions that are simple, easy and valued by our customers” Unmatched Extraordinary portfolio of Clear scale Deep engineer
Slide 8: Financial Results - Reported (CFO)
For personal use only 2010 Half Year Financial Results John Stanhope, CFO 11 February 2010 Financial Results - Reported $ Billions 1H09 1H10 % Sales Revenue 12.64 12.32 -2.5 Free Cash Flow Total Revenue 12.71 12.34 -2.9 Operating Expenses 7.43 7.07 -4.8 +37% EBITDA 5.33 5.32 -0.3 EBITDA Margin (%) 4
Slide 9: Financial Results - Adjusted; Key products to drive growth in H2
Financial Results - Adjusted Adjustments For personal use only (H1 2010 impact compared to H1 2009) YoY change Sale of KAZ • Revenue -$132m Sales Revenue -0.7% • EBIT +$3m Total Revenue -1.1% FX Changes Operating Expenses -2.1% • Revenue -$98m • EBIT -$13m EBITDA +0.2% EBIT +2.0% Fair Value adjustme
Slide 10: Telstra Consumer; Telstra Business
Telstra Consumer For personal use only Sales Revenue (-0.2%) Refresh of GTM strategy • Innovative communication & entertainment packages $5.2b $5.1b $5.2b • New FBB & WBB bundles driving sales • Enhanced bundles to follow with Telstra T-Box™ and +19% +11% +1% Telstra T-Hub™ +9% +9% +6% ARPUs growing
Slide 11: Telstra Enterprise & Government; Sensis
Telstra Enterprise & Government For personal use only Sales Revenue (-1.6%)* $2.3b $2.3b $2.2b Growth in key products • Mobiles: Revenue +8.1% ,3G SIOs +43%, • IP Access Revenue +21% to $346m -2% +11% +3% +20% +5% New strategic partnerships +7% • Catholic Education, NSW Education Department, Visy +9
Slide 12: CSL New World; Drivers of operating expenses decline
CSL New World For personal use only Tough operating conditions 1H10 % Change HK$ A$ • Intense price competition • Weak handset upgrade demand Sales Revenue -15.5% -24% Operating Expenses (ex D&A) -19.4% -28% Tight expense control EBITDA contribution -4.8% -12.5% • Strong cost management:HK$ Opex -19
Slide 13: Operating expenses - selected adjusted KPIs; Capital expenditure and D&A
Operating expenses - selected adjusted KPIs For personal use only Labour Productivity SARC Control maintained Tight control of Expenses $192 $177 Adjusted $156 $160 $152 Discretionary Labour costs $142 costs $135 -4% -21% 1H07 2H07 1H08 2H08 1H09 2H09 1H10 Blended average SARC rate Double digit % de
Slide 14: Interest & Financial Parameters; Free cashflow - growth trajectory continues
Interest & Financial Parameters For personal use only Interest Financial Parameters Actual Actual 1H09 1H10 Change ($) Change (%) Target (includes IFRS) (adjusted for IFRS & other) Borrowing Costs $664m $508m -$156m -23.5% Debt 1.7 – 2.1x 1.43x 1.49x Servicing Other (incl IFRS -$261m $12m $273m adj)
Slide 15: Guidance for Fiscal Year 2010
Guidance for Fiscal Year 2010 For personal use only Measure Guidance Sales revenue Low single digit decline EBITDA growth Low single digit growth EBITDA Margin (on sales revenue) Maintained D&A ~$4.5b EBIT growth Low single digit growth Accrued Capex to sales revenue Around 14% FCF* $6 billion * inc
Slide 16: Domestic retail performance; Offshore performance
Domestic retail performance For personal use only 1H09 2H09 1H10 Sales Revenue Growth 4.3% 3.4% -0.6% • Mobile services 11.3% 8.3% 4.8% • Fixed (excluding Internet) -1.4% -3.5% -5.8% • Fixed Internet 16.8% 10.1% 0.7% • Data & IP 11.1% 8.1% 3.1% Operating Contribution Growth 5.4% 2.8% -1.9% Operating
Slide 17: Telstra Consumer; Telstra Business
Telstra Consumer For personal use only 1H09 2H09 1H10 Sales Revenue Growth 3.0% 3.2% -0.2% • Mobile services 8.5% 8.9% 5.5% • Fixed (excluding Internet) -2.6% -3.0% -6.2% • Fixed Internet 18.8% 10.8% 0.6% • Data & IP 22.3% 43.3% -7.9% Operating Contribution Growth 5.0% 1.8% -2.4% Operating Contribut
Slide 18: Telstra Enterprise & Government; Market share
Telstra Enterprise & Government For personal use only 1H09* 2H09 1H10 Sales Revenue Growth 4.9% 5.1% -1.6% • Mobile services 19.9% 6.9% 5.0% • Fixed (excluding Internet) -0.7% -4.5% -6.9% • Fixed Internet 1.5% -5.9% -14.8% • Data & IP 9.5% 6.6% +2.4% Operating Contribution Growth 4.6% 3.8% -1.5% Ope
Slide 19: Superannuation contributions; Current Credit Ratings
Superannuation contributions For personal use only Statement of Financial Position 30 June 09 31 Dec 09 Defined Benefit Asset $8m $9m Defined Benefit Liability $414m $259m Movement -$156m 2H09 1H10 Superannuation Contributions* $217m $230m * Excludes payroll tax 35 Current Credit Ratings* Long Term