Slide 1: ASX cover letter: Analyst Briefing half year results pack
21 February 2008 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 Dea
Slide 2: First Half 2008 Financial Results – Sol Trujillo, CEO
For personal use only First Half 2008 Financial Results Sol Trujillo, CEO 21 February 2008 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, perfo
Slide 3: 6.2% EBIT Growth – Financial Results (Reported)
For personal use only 6.2% EBIT Growth Exceeded Consensus Increased Guidance 3 Financial Results (Reported) $ billions (except margins & DPS) 1H08 1H07 % +5.9% Sales Revenue 12.3 11.6 5.3 EBITDA 5.2 4.9 5.2 Domestic EBITDA Margin (%) 42.2 42.3 0.1pp Revenue EBIT 3.1 2.9 6.2 PAT (post minorit
Slide 4: Strength across the board in products and retail segments
Strength across the board in products…. For personal use only World Class Domestic Revenue Growth Mobile Services +12.5% Telstra 5.9% Verizon 5.9% Telefonica* 4.3% PSTN -2.1% China Telecom* 2.8% AT&T 2.6% +7.8% Sensis France Telecom 1.9% BT 0.8% IP and data access +8.3% -2.9% Telecom New Zealand -4.
Slide 5: New channel strategy
New channel strategy For personal use only T[life]™ Experience Centre 7 3 Tab portal changing the game 8 4
Slide 6: Strength across all retail segments; impact of unbundling
Strength across all retail segments For personal use only 1H08 Absolute Sales Revenue Growth $m 650 +7.6% +8.5% 400 +9.3% 150 +4.5% +7.8% -100 -4.6% TC&C TB TE&G Total Retail Sensis Wholesale (excl Sensis) 9 Assessing the impact of unbundling Retail BB, Wholesale DSL and unbundled SIOs ULL and LSS p
Slide 7: Growing retail broadband in a tough market
Growing retail broadband in a tough market For personal use only Telstra Retail Broadband Market Share BigPond market share increasing despite: Retail BB Market Share Growth YOY (PP) 400+ ISP competitors +4 Telstra Retail BB ARPU YOY Continued price- TeliaSonera Sweden +2 Telefonica driven compe
Slide 8: World class mobile performance
World class mobile performance For personal use only Mobile Services Revenue Growth “The most dramatic recent 12.5% success story among major carriers is Australia’s Telstra, 4.7% 4.2% which has seen a sharp 3.3% acceleration in overall 2.0% 1.7% 1.0% wireless revenue growth, driven by its “Next G”
Slide 9: Voice and data driving revenue growth
Voice and data driving revenue growth For personal use only Postpaid voice elasticity Mobile Data Revenue $716m 0.32 $582m $356m Voice yield per minute ($) $490m 0.30 H1 2007 Voice elasticity of 0.8 $321m H2 2007 $294m $130m 0.28 $103m H1 2008 $120m $230m $158m 0.26 $76m 125 130 135 140 145 1H07 2H0
Slide 10: Sensis delivering strong growth and profitability
Sensis delivering strong growth and profitability For personal use only Print Revenue trends Print as % of Revenue* Sensis Revenue $650m 90% Yellow Print returned to growth $600m $605m Total Print growth of 2.5% $590m $584m Emerging business growth 27% $574m 70% $549m $550m Sensis Transforma
Slide 11: Transformation remains on track
Transformation remains on track For personal use only TR1 Update: On track to complete customer migration by the end of June 2008. TR2 Update: On track to go into production by the end of calendar 08. Next G™ network Continued development… Now covers 99% of population. Plans to upgrade to 21Mbps thi
Slide 12: First Half 2008 Financial Results – John Stanhope, CFO
For personal use only First Half 2008 Financial Results John Stanhope, CFO 21 February 2008 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, perf
Slide 13: Financial Results (reported) and FY08 guidance update
For personal use only Financial Results (reported) $ billions (except margins & DPS) 1H08 1H07 % Sales Revenue 12.3 11.6 5.3 EBITDA 5.2 4.9 5.2 Ahead of EBITDA Margin (%) 42.2 42.3 0.1pp consensus EBIT 3.1 2.9 6.2 PAT (post minorities) 1.9 1.7 13.0 +6.2% Accrued Capex 2.3 2.0 17.5 Free C
Slide 14: Strong EBIT profile; Sales Revenue Drivers
For personal use only Strong EBIT profile 40% +8.5% 10% +3.5% 0% 1H06 2H06 1H07 2H07 1H08 -5.1% -10% -10.2% -20% -16.6% -40% Underlying Reported 5 Sales Revenue Drivers 1H08 1H08 1H08 Growth Movement Actual % $m $m Total Mobiles 14.5 404 3,186 • Mobile Services 12.5 302 2,727 • Mobile Handsets 28.6
Slide 15: Retail Sales Revenue Growth
For personal use only +7.6% Retail Sales Revenue Growth 7 Retail Unit Performance Summary Consumer TB TE&G GROUP Sales Revenue growth 8.5% 9.3% 4.5% 5.3% - Total Mobile 11.4% 23.3% 24.2% 14.5% - Fixed 0.5% 0.8% -4.3% -1.4% - Internet 45.6% 46.0% 73.7% 35.5% - Data and IP n/a 21.5% 6.3% 8.3% Operatin
Slide 16: Telstra Consumer and Channels; Telstra Business
Telstra Consumer and Channels +8.5% For personal use only Revenue growth PSTN revenue 8 consecutive months of growth positive PSTN +1.2% growth $5.0b +8.5% +46% $4.8b H108 average $4.6b SARC falling SARC down 20.4% $4.5b $4.4b +11% 3+ MPH customers MBM strategy +6%, 4+ MPH driving growth customers +
Slide 17: Telstra Enterprise and Government; Sensis
For personal use only Telstra Enterprise and Government +4.5% Revenue growth Driven by Strong core Next G™ $2.29b carriage and Next +4.5% growth IP™ $2.27b +3% $2.23b $2.24b $2.19b ~$1.3b of +24% Strong sales business growth signed in 1H08 +6% Customer satisfaction at all -4% Customer time highs & s
Slide 18: Total Expenses; Labour Expense
Total Expenses +5.6% For personal use only Provisions Raised Balance Balance ($m) FY06 FY07 1H08 $74m $9,359m Redundancy Provision 186 39 22 $7,307m +3.7% $106m Restructurin g Provision 241 193 149 $66m +9.2% R&R 427 232 171 +64.7% Provision $48m $110m +4.6% +4.3% $96m $8,859m +4.8% 1H07 Labour DVC
Slide 19: Directly Variable Costs; Other expenses
For personal use only Directly Variable Costs +4.3% Sales growth/DVC growth SARC Trend (blended) 4.7x $193 $175 3.4x $150 2.3x 0.8x 1H07 2H07 1H08 FY05 FY06 FY07 1H08 15 Other expenses +9.5% $28m $168m $38m 1H07 $2,318m $102m P&A $12m 1H07 Bad & Inventory 1H08 Doubtful Write- Impairment $66m debts d
Slide 20: Accrued Capex; Cash Flow and Financial Parameters
Accrued Capex: $2.3bn For personal use only $3,905m FY08 guidance: $4.6b – $4.9b Major Drivers $2,320m $236m $1,974m IT +$328m $297m $275m Transmission +$108m $189m $455m $458m Wireless Access -$39m $634m $306m Network Core -$36m Fixed Access -$12m $746m $698m 1H07 2H07 1H08 2H08 Fixed Access/Networ
Slide 21: Stable Financial Profile; Long Term Management Objectives
For personal use only Stable Financial Profile Long Term Debt Maturity Profile $bn • Total Net Debt $15b 3.0 • Approx 60% fixed • CP program approx $2b 2.0 • Average maturity of debt portfolio around 5 years 1.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 19 Long Term Management Objective