Telstra Group Limited · ASX:TLS
Telstra — Debt Investor Presentation (August 2022)
20 slides from Telstra's debt investor presentation, August 2022
Slide 1: Telstra August 2022 Debt Investor Update
Telstra August 2022 Debt Investor Update Guy Wylie – Finance Executive, Group Treasurer Nathan Burley – Head of Investor Relations Brent Luetjens – Investor Relations Susie Maiuto – Treasury Simon O’Brien - Treasury
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation includes forward-looking statements. The forward-looking statements are based on assumptions and information kl◊wn by Telstra as at the date of this presentation. The forward-looking statements are provided as a general guide only and are not g
Slide 3: T22 achievements
T22 achievements 10.2m services on 20 simplified C&SB in market plans 4.5m Telstra Plus members T22 scorecard metrics Simplification C&SB digital sales increased to 48% and digital service interactions ~80% metrics completed & increased to 77% 71% reduction in annual contact centre calls sin
Slide 4: Financial headlines
Financial headlines FY22 Reported FY22 Guidance basis1 Total income: $22.0 billion, -4.7% Underlying EBITDA3: $7.3 billion, +8.4% In-year nbn headwind3: ~$340 million (LTD ~$3.6 billion) EBITDA: $7.3 billion, -5.0% EBITDA lease adjusted2: $7.3 billion, -2.5% Underlying EPS3: 14.4 cents, +48.5% NPAT:
Slide 5: Operating highlights
Operating highlights Continuing to deliver growth Mobile service net adds Fixed service net adds Mobile: +2.9% postpaid handheld ARPU growth, +14.2% +155k retail postpaid handheld services -87k retail fixed prepaid handheld services revenue growth, +6.4% total including +121k branded +34k Belo
Slide 6: Underlying EBITDA growth
Underlying EBITDA growth Underlying EBITDA – halves Underlying EBITDA – full year T25 $m $m ambition2: FY23 guidance1: mid-single $7.8-8.0b 4000 9000 digit CAGR FY21-25 8000 3500 7000 3000 6000 2500 5000 1H21 2H21 1H22 2H22 FY21 FY22 FY23 FY25 Guidance Ambition 1.This guidance excludes material one-
Slide 7: EBITDA by product
EBITDA by product1 FY21 CHANGE $m FY22 CHANGE Mobile $3,297m 700 $3,997m 21.2% Service revenue growth, plan structure, hardware and productivity Fixed - C&SB $139m -84 $55m -60.4% Revenue reduction, growing nbn costs, partly offset by cost out Fixed - Enterprise $645m 15 $660m 2.3% NAS growth offset
Slide 8: Product highlights: mobile momentum and growth
Product highlights: mobile momentum and growth Mobile service revenue growth Mobile handheld net adds $m k Prepaid handheld UUs +6.4% Postpaid handheld 7400 All products and segments 400 7200 growing 300 215 SIO growth across all 7000 Mid-single digit growth ambition 200 segments including strong 68
Slide 9: Product highlights: Infrastructure
Product highlights: Infrastructure InfraCo Fixed revenue nbn recurring revenue growth $m -4.4% $m +3.3% +3.1% growth in core access revenue for 2500 1000 2000 fibre, network sites & ducts Average 1500 Legacy network disposals 800 contracted period 1000 of 25 years 500 Offset by nbn commercial works
Slide 10: Product highlights: Fixed - Enterprise
Product highlights: Fixed - Enterprise NAS growth offsetting DAC declines1 Revenue/$m EBITDA/$m DAC NAS DAC NAS 4000 800 Fixed - Enterprise revenue Fixed - Enterprise EBITDA growth 3000 decline -0.7%1 600 +2.3% or $15m 2000 Including NAS revenue growth 400 Including NAS EBITDA growth 1000 +4.6%1 200
Slide 11: Product highlights: Fixed - C&SB has bottomed
Product highlights: Fixed - C&SB has bottomed Fixed - C&SB EBITDA – 2H22 grew sequentially on 1H22 $m 100 nbn migration of data SIOs ~99% complete in nbn fixed footprint 80 nbn reseller EBITDA margin 5% in FY22 with target for >8% by FY23 60 Improvements in experience and productivity from new stack
Slide 12: Operating expenses
Operating expenses1 FY21 CHANGE $m FY22 CHANGE Total operating expenses1 declined 5.8% Sales costs - nbn payments $1,975m 106 $2,081m 5.4% nbnTM network payments increased driven by higher tier-mix and Connectivity Virtual Circuit (CVC) charges Sales costs - other $6,209m -170 $6,039m -2.7% Sales co
Slide 13: Inflation and mitigants
Inflation and mitigants Operating expenses FY22 Components Actively addressing cost challenges with mitigants $b 8 Network 6 Payments • Network payments generally not inflationary and largely pass through Sales costs – nbn payments $2,081m • Hardware COGS largely pass through 4 Hardware Sales costs
Slide 14: FY23 guidance
FY23 guidance FY23 guidance1 FY22 (includes Digicel Pacific) Total Income $22.0b $23.0b to $25.0b Underlying EBITDA2 $7.3b $7.8b to $8.0b Capex3 $3.0b $3.5b to $3.7b (incl. strategic investment) Free cashflow after lease payments (FCFaL)4 $4.0b $2.6b to $3.1b (incl. strategic investment) 1. This gui
Slide 15: Our strategy: T25
To build a connected future so everyone can thrive Our purpose and values We are changemakers We are better together We care We make it simple Our An exceptional customer experience Leading network & technology solutions Sustained growth and value strategy: Our you can count on that deliver your
Slide 16: Capital position
Capital position FY21 1H22 FY22 Gross debt $16.4b $14.9b $13.8b Net debt declined ~$2.6b in FY22 supported by our free cashflow and Cash and cash equivalents $1.1b $1.7b $1.0b proceeds from disposal of interest in our Towers business Net debt $15.3b $13.2b $12.7b Average gross borrowing cost1 3.8% 3
Slide 17: Update on Corporate Restructure
Update on Corporate Restructure Te lstra shareholders would receive one new Telstra Gmup Limited Share, for each of their ex isting 1 Telstra Shares. Intercom pa ny agreem ents developed On track to finalise legal restructure Dividends and debt servicing will We have a demonstrated long track
Slide 18: Fiscal discipline
Fiscal d1sc1pline A Maximise ireturns ~ Maintain ~ Retain L-ffl for shareholders. L@I financial stre,ngth ~ financiial flex bi lity 1. Com1miit ted to balance sheet settings consistent with an A band cred it rating 2. Maxim 1 se f ully-franked diividlend and s,eelk to, gro.w over time1 3. Ongoing bu
Slide 19: Update on Debt Structure
Update on Debt Structure Telstra shareholders Existing external debt will initially remain in Telstra Corp Ltd (to become InfraCo Fixed), with refinancing of existing external debt (including by transfer, substitution or New and otherwise) and new debt raising expected at Telstra HoldCo Transitione
Slide 20: Glossary
Glossary Term Definitio11 (u11less separatelydefi111edl in the sliide footnotes) Capex, Accrued Capex Capex 1is measu red on an accrned basis and excludes spec· rum and guidanc,e,adjustments, externally funded capex, and capitalised ~ases Free cash ·flow after lease 'o perati1ng cash flows• ess ' in
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