Telstra Group Limited · ASX:TLS
Telstra — Hong Kong CSLA conference (September 2004)
21 slides from Telstra's conference presentation, Sep 14, 2004
Slide 1: International Investor Roadshow presentation - Hong Kong CSLA conference
14 September 2004 The Manager Company Announcements Office Australian Stock Exchange 4" Floor, 20 Bridge Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam Office of the Company Secretary Level 44 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA Telephone 03 8634 6400 Facsimile 03 9632
Slide 2: Highlights of 2003/04
TTT} Hil illlilill elstrar Telstra Corporatio Highlights of 2003/04 Telstra’s fundamentals are strong
Slide 3: Telecommunications is a Growth Industry
Telecommunications is a Growth Industry " Hithe consumer market (appiax $14) gia) 5% next year ($700m), Telco shure of HDI only drow 0.196 d ‘Equivalent to each household hi BYD per month Offering customers value wilt grow our share of wallet Our Strategy Tae FeV: Customier service lncrease utilisat
Slide 4: A Progressive Incumbent Telco
A Progressive Incumbent Telco So far in 2004: Telstra is pro-active, y not reactive A paradigm shift is underway Fixed network and services Mobile network q and services ps IP NETWORK Internet network Gad senices The shift to IP is being managed effectively
Slide 5: Integrated Consumer Communications Vision
Integrated Consumer Communications Visio Navowband, Broadband Media seer j cd 0009 Retail ar Resale Option) Building stronger Customer relationships 4 Business & Government Segment — Evolving from Carriage to Services Carriage Carlage, Solgtions Business & Services Business Cartidae and Major Devers
Slide 6: Improving Customer Satisfaction
Improving Customer Satisfaction improved customer service is our top commercial priority gy el etl 4 Broadband Full Service Model ' is a competitive advantage
Slide 7: Regulatory Issues
Regulatory Issues Mobile Federal Election Termination October 9th Pricing Broadband Competition Notice Regulatory risks being proactively managed LU Underlying Results | oles Revenue | a Underlying Domestic $a EBITDA a Steady irnprovement across key financial metrics
Slide 8: Underlying Sales
Underlying Sales Growth in key products : Underlying Operating Expenses $3,915m. $3012 FY 03 Continued cost focus allowing Oe investment in service and growth
Slide 9: Incumbent Telco comparison
cumbent Telco comparison Solid performance versus peers Effective Capital Management * EPS improvement to 32.4cps (422%) & ROE improvement to 27% (+3%) ® Net Gearing 42% Stabie Moody’s Ai Stable Fitch Ay Stable Significant cash returns for shareholders
Slide 10: Outlook
Outlook Company financial focus: profitable revenue, margin & cash flow
Slide 11: Financial Highlights
Financial Highlights Business Growth Cost Management Capital Management Strong free cash flows supporting capital management program Free Cash Flow funding operations with modest movement in_ Free cash flow generation y provides flexibility 4 10
Slide 12: Reported Results
Reported Results profits and dividends PSTN Rebalanced Products Rebalancing Bundling ' Feature penetration Call completion 53,08am Optimising returns from fixed network 11
Slide 13: Mobile Revenues (includes termination)
Mobile Revenues (includes termination) $4,705 $322 700. $3455 Solid performance in increasingly competitive market Mobiles Subscriber Base Changing = Increasing portion of prepaid base " Lower blended ARPUs Alignment of deactivation criteria, additional 202,000 SIOs included in Prepaid Mobile Data A
Slide 14: 3G Infrastructure Sharing with Hutchison
3G Infrastructure Sharing with Hutchison ® Signed Heads of Agreement 4 August ® Cost A$450m over 3 Years for 50% share 0 " Additional ae A&200rm for Core Ne Strategic alliance is capital efficient 3G Network Share — How it Works Messaging: Biling “Content Dake Svatch Swatch HIE 13
Slide 15: Mobile Data
Mobile Data Opportunity to grow ; education is critical ff Strong Growth in Broadband = H2 Stats: 1 46% Net adds Retail » ARPU.- Retail $71 c ARPU - Wholesale $46 BigPond retail market share 42% Minimal impact on Dial-up base Competitive plans stimulating take up 14
Slide 16: Broadband Drives Online Commercial Activity
Broadband Drives Online Commercial Acti Seerds Online Onine banking shopping Print " FullHalffOtr page ads i New Local directories © Regional colour Online " Increasing paid customer base a i Innovation driving growth 15
Slide 17: Sensis business structure and strategy
Sensis business structure and strategy * Tl dich anid M&A igh Future: i chanel Ah ena ee Bret Online Vo Sensis - Trading Post Acquisition Print and online general, automotive and collectibles cquired March 2004 « Consideration A363om » A high perlormance business AUN Onl synero) giowih o © Expected
Slide 18: Service Solutions — KAZ Acquisition
Service Solutions — KAZ Acquisition Value Added Datacom Services ddd AAR VER infrastructure / Network semvigns. Grek Moule yetae Combined capabilities provide a strong platform for growth Cost Drivers Noni tecurting/Non controllable Prior Year Cable recovery REACH pricing $10,330m FY 03 Base charges
Slide 19: Capital Expenditure
Capital Expenditure Customer Bemiand. $1,466m SAS3tN: Capital allocation process driving targeted capex spend Key International Operations Increasingly cormpetitive market « One-offs impacting FY 02 EBITDA Hi§234m CHM se 18
Slide 20: Capital Management Program
Capital Management Program | Format of ee distribution: Ne, FY 05 Target. Zo 19
Slide 21: Telstra — A Strong Performer
Telstra — A Strong Performer » Telstra has an impressive dividend yield, ROIC, EBITDA ® 14th largest telco globally by market capitalisation » Strong Free Cash Flows « Fully Integrated model » Robust balance sheet « Rigorous CAPEX management Attractive yield and strong rati