TELSTRA GROUP LIMITED — Annual Report 2012

Aug 8, 2012

==> picture [100 x 41] intentionally omitted <==

9 August 2012

The Manager

Company Announcements Office Australian Securities Exchange 4[th] Floor, 20 Bridge Street SYDNEY NSW 2000

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

General Enquiries 08 8308 1721 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Full Year 2012 Financial Results – CEO/CFO Analyst briefing presentation

In accordance with the Listing Rules, I enclose a presentation for release to the market.

This Announcement has been released simultaneously to the New Zealand Stock Exchange.

Yours faithfully

==> picture [134 x 53] intentionally omitted <==

Damien Coleman Company Secretary

Telstra Corporation Limited ACN 051 775 556 ABN 33 051 775 556

==> picture [596 x 94] intentionally omitted <==

==> picture [596 x 656] intentionally omitted <==

----- Start of picture text -----

TELSTRA FULL YEAR RESULTS
ANNOUNCEMENT 2012
DAVID THODEY, CHIEF EXECUTIVE OFFICER
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, performance or achievements could be significantly different from those expressed in, or implied
by, these forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and
unknown risks, uncertainties and other factors, many of which are beyond the control of Telstra, which may cause actual results to differ
materially from those expressed in the statements contained in these presentations. For example, the factors that are likely to affect the results of
T e stra nc u l i l d e genera econom c con l i di t ons n ustra i i A li a; exc h ange rates; compet t on n t i i i h e mar k ets n w i hi c h T e stra w l ill operate; t h e n i h erent
regulatory risks in the businesses of Telstra; the substantial technological changes taking place in the telecommunications industry; and the
continuing growth in the data, internet, mobile and other telecommunications markets where Telstra will operate. A number of these factors are
described in Telstra’s Financial Report dated 9 August 2012 and 2011 Debt Issuance Prospectus lodged with the ASX and available on Telstra’s
Investor Centre website www.telstra.com/investor.
• All forward-looking figures in this presentation are unaudited and based on A-IFRS. Certain figures may be subject to rounding differences. All
market share information in this presentation is based on management estimates based on internally available information unless otherwise
indicated.
• All amounts are in Australian Dollars unless otherwise stated.
® ™ Registered trademark and trademark of Telstra Corporation Limited (ACN 051 775 556) and its subsidiaries. Other trademarks are the
property of their respective owners.
2
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
----- End of picture text -----

investor.relations@team.telstra.com

WE HAVE DELIVERED

==> picture [596 x 298] intentionally omitted <==

----- Start of picture text -----

1. WE HAVE DELIVERED ON OUR COMMITMENTS
2. OUR BUSINESS HAS PROVED RESILIENT
3. OUR BALANCE SHEET REMAINS STRONG
4. OUR STRATEGIC PRIORITIES ARE DELIVERING
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
----- End of picture text -----

==> picture [596 x 289] intentionally omitted <==

----- Start of picture text -----

HIGHLIGHTS FOR FISCAL YEAR 2012
1 . OUR FOCUS ON 2 . OUR MOBILES
CUSTOMER SERVICE PERFORMANCE
3. CAPITAL AND PORTFOLIO 4. FINALISATION OF THE
MANAGEMENT NBN AGREEMENTS
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 4
----- End of picture text -----

investor.relations@team.telstra.com

==> picture [596 x 94] intentionally omitted <==

==> picture [596 x 656] intentionally omitted <==

----- Start of picture text -----

TELSTRA FULL YEAR RESULTS
ANNOUNCEMENT 2012
ANDREW PENN, CHIEF FINANCIAL OFFICER
AGENDA
1. GROUP RESULTS
2. PRODUCT PERFORMANCE
3. PRODUCTIVITY
4 . CAPITAL MANAGEMENT
5. GUIDANCE
6
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
----- End of picture text -----

investor.relations@team.telstra.com

GROUP RESULTS

	GROUP RESULTS	GROUP RESULTS	GROUP RESULTS	GROUP RESULTS	GROUP RESULTS	GROUP RESULTS	GROUP RESULTS	GROUP RESULTS
		$ Billions		FY11	FY12	Growth (reported basis)	Growth (guidance basis1)
		Total Revenue		25.1	25.4	1.1%	1.3%
		EBITDA		10.2	10.2	0.8%	2.1%
		EBIT		5.7	5.8	2.3%
		Attributable NPAT		3.2	3.4	5.4%
		Earnings per share (cents)		26.1	27.5	5.4%
		Accrued Capex		3.4	3.6
	TELSTRA TEMPLATE 4X3 BLUE BETA	TELPPTV4
		Free Cash Flow		5.5	5.2
		Ordinary DPS (cents)		28.0	28.0
	$25,368m REVENUE BY PRODUCT +$139m PRODUCT PERFORMANCE TOP LINE GROWTH SUSTAINED
	$25,093m -$484m -6.1%		-$252m -9.6% +1.1% +$679m +8.5% +$120m +10.5% -$25m +$98m +7.0%
	TELSTRA TEMPLATE 4X3 BLUE BETA	TELPPTV4 FY11 Fixed 1. Other includes increased d		FY12 Media Mobiles NAS Data & IP -0.8% Other1 International istributions from Foxtel (+$38m) and Government NBN payments (+$67m) 8

investor.relations@team.telstra.com

PRODUCT PERFORMANCE - FIXED

FIXED BROADBAND PARTLY OFFSETS DECLINE IN PSTN

|FIXED
FY11
FY12
Growth
Revenue
$8.0bn
$7.5bn
-6.1%
• MOBILE VOICE ONLY HOUSEHOLDS
PRODUCT PERFORMANCE - FIXED
FIXED BROADBAND PARTLY OFFSETS DECLINE IN PSTN
- PSTN
$5.4bn
$4.8bn
-10.0%
- Fixed BB
$2.0bn
$2.0bn
+2.9%
EBITDA Margin - PSTN
59%
60%
+1pp
• FIXED RETAIL BB CUSTOMERS UP 203,000
TO 2.6 MILLION
INCREASED 2% TO 14% NATIONALLY
• RETAIL PSTN LINES DECLINED BY 281,000
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
EBITDA Margin – Fixed BB
31%
37%
+6pp
PSTN Customers – retail
7.2m
6.9m
-0.3m
Fixed BB Customers – retail
2.4m
2.6m
+0.2m
• BUNDLED CUSTOMERS UP 336,000 TO
1.4 MILLION
9|FIXED
FY11
FY12
Growth
Revenue
$8.0bn
$7.5bn
-6.1%
• MOBILE VOICE ONLY HOUSEHOLDS
PRODUCT PERFORMANCE - FIXED
FIXED BROADBAND PARTLY OFFSETS DECLINE IN PSTN
- PSTN
$5.4bn
$4.8bn
-10.0%
- Fixed BB
$2.0bn
$2.0bn
+2.9%
EBITDA Margin - PSTN
59%
60%
+1pp
• FIXED RETAIL BB CUSTOMERS UP 203,000
TO 2.6 MILLION
INCREASED 2% TO 14% NATIONALLY
• RETAIL PSTN LINES DECLINED BY 281,000
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
EBITDA Margin – Fixed BB
31%
37%
+6pp
PSTN Customers – retail
7.2m
6.9m
-0.3m
Fixed BB Customers – retail
2.4m
2.6m
+0.2m
• BUNDLED CUSTOMERS UP 336,000 TO
1.4 MILLION
9|FIXED
FY11
FY12
Growth
Revenue
$8.0bn
$7.5bn
-6.1%
• MOBILE VOICE ONLY HOUSEHOLDS
PRODUCT PERFORMANCE - FIXED
FIXED BROADBAND PARTLY OFFSETS DECLINE IN PSTN
- PSTN
$5.4bn
$4.8bn
-10.0%
- Fixed BB
$2.0bn
$2.0bn
+2.9%
EBITDA Margin - PSTN
59%
60%
+1pp
• FIXED RETAIL BB CUSTOMERS UP 203,000
TO 2.6 MILLION
INCREASED 2% TO 14% NATIONALLY
• RETAIL PSTN LINES DECLINED BY 281,000
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
EBITDA Margin – Fixed BB
31%
37%
+6pp
PSTN Customers – retail
7.2m
6.9m
-0.3m
Fixed BB Customers – retail
2.4m
2.6m
+0.2m
• BUNDLED CUSTOMERS UP 336,000 TO
1.4 MILLION
9|FIXED
FY11
FY12
Growth
Revenue
$8.0bn
$7.5bn
-6.1%
• MOBILE VOICE ONLY HOUSEHOLDS
PRODUCT PERFORMANCE - FIXED
FIXED BROADBAND PARTLY OFFSETS DECLINE IN PSTN
- PSTN
$5.4bn
$4.8bn
-10.0%
- Fixed BB
$2.0bn
$2.0bn
+2.9%
EBITDA Margin - PSTN
59%
60%
+1pp
• FIXED RETAIL BB CUSTOMERS UP 203,000
TO 2.6 MILLION
INCREASED 2% TO 14% NATIONALLY
• RETAIL PSTN LINES DECLINED BY 281,000
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
EBITDA Margin – Fixed BB
31%
37%
+6pp
PSTN Customers – retail
7.2m
6.9m
-0.3m
Fixed BB Customers – retail
2.4m
2.6m
+0.2m
• BUNDLED CUSTOMERS UP 336,000 TO
1.4 MILLION
9|FIXED
FY11
FY12
Growth
Revenue
$8.0bn
$7.5bn
-6.1%
• MOBILE VOICE ONLY HOUSEHOLDS
PRODUCT PERFORMANCE - FIXED
FIXED BROADBAND PARTLY OFFSETS DECLINE IN PSTN
- PSTN
$5.4bn
$4.8bn
-10.0%
- Fixed BB
$2.0bn
$2.0bn
+2.9%
EBITDA Margin - PSTN
59%
60%
+1pp
• FIXED RETAIL BB CUSTOMERS UP 203,000
TO 2.6 MILLION
INCREASED 2% TO 14% NATIONALLY
• RETAIL PSTN LINES DECLINED BY 281,000
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
EBITDA Margin – Fixed BB
31%
37%
+6pp
PSTN Customers – retail
7.2m
6.9m
-0.3m
Fixed BB Customers – retail
2.4m
2.6m
+0.2m
• BUNDLED CUSTOMERS UP 336,000 TO
1.4 MILLION
9|FIXED
FY11
FY12
Growth
Revenue
$8.0bn
$7.5bn
-6.1%
• MOBILE VOICE ONLY HOUSEHOLDS
PRODUCT PERFORMANCE - FIXED
FIXED BROADBAND PARTLY OFFSETS DECLINE IN PSTN
- PSTN
$5.4bn
$4.8bn
-10.0%
- Fixed BB
$2.0bn
$2.0bn
+2.9%
EBITDA Margin - PSTN
59%
60%
+1pp
• FIXED RETAIL BB CUSTOMERS UP 203,000
TO 2.6 MILLION
INCREASED 2% TO 14% NATIONALLY
• RETAIL PSTN LINES DECLINED BY 281,000
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
EBITDA Margin – Fixed BB
31%
37%
+6pp
PSTN Customers – retail
7.2m
6.9m
-0.3m
Fixed BB Customers – retail
2.4m
2.6m
+0.2m
• BUNDLED CUSTOMERS UP 336,000 TO
1.4 MILLION
9|
|---|---|---|---|---|---|
||FIXED
Revenue|FY11|FY12|Growth|•MOBILE VOICE ONLY HOUSEHOLDS|
|||$8.0bn|$7.5bn|-6.1%||
||- PSTN
- Fixed BB
EBITDA Margin - PSTN||||
• FIXED RETAIL BB CUSTOMERS UP 203,

INCREASED 2% TO 14% NATIONALLY
• RETAIL PSTN LINES DECLINED BY 281,|
|||$5.4bn|$4.8bn|-10.0%||
|||$2.0bn|$2.0bn|+2.9%||
|||59%|60%|+1pp||
||||||TO 2.6 MILLION|
|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4|
EBITDA Margin – Fixed BB
31%
37%
+6pp
PSTN Customers – retail
7.2m
6.9m
-0.3m
Fixed BB Customers – retail
2.4m
2.6m
+0.2m
• BUNDLED CUSTOMERS UP 336,000 TO
1.4 MILLION|31%|37%|+6pp||
|||7.2m|6.9m|-0.3m||
|||2.4m|2.6m|+0.2m||
|||||||

• RETAIL PSTN LINES DECLINED BY 281,000

• FIXED RETAIL BB CUSTOMERS UP 203,000 TO 2.6 MILLION

9

PRODUCT PERFORMANCE - MOBILES ANOTHER STRONG YEAR FOR MOBILES

	MOBILES	FY11	FY12	Growth
	Revenue	$8.0bn	$8.7bn	+8.5%
	- Postpaid handheld	$4.4bn	$4.7bn	+6.0%
	EBITDA Margin	33%	36%	+3pp
	Customers	12.2m	13.8m	+1.6m
	Postpaid Handheld ARPU ex. MRO	$65	$65	+0.1%
TELSTRA TEMPLATE 4X3 BLUE BETA	TELPPTV4	Postpaid Handheld ARPU inc. MRO Postpaid Handheld Churn	$64 13.4%	$62 12.2%

==> picture [208 x 194] intentionally omitted <==

----- Start of picture text -----

CONTINUED REVENUE & EBITDA GROWTH
Revenue EBITDA
$8.7b
$3.1b
$8.0b
$2.6b
$2.5b
$7.3b
FY10 FY11 FY12 FY10 FY11 FY12
----- End of picture text -----*

==> picture [192 x 8] intentionally omitted <==

----- Start of picture text -----

* FY10 EBITDA has not been adjusted for product hierarchy changes 10
----- End of picture text -----

investor.relations@team.telstra.com

PRODUCT PERFORMANCE – DATA & IP STRONG IP ACCESS OFFSET DECLINES IN LEGACY

|DATA & IP
FY11
FY12
Growth
IP ACCESS REVENUE
8 9% AS
PRODUCT PERFORMANCE – DATA & IP
STRONG IP ACCESS OFFSET DECLINES IN LEGACY
Revenue
$3.1bn
$3.1bn
-0.8%
- IP Access
$1.0bn
$1.1bn
+8.9%
- Legacy Data
$0.4bn
$0.3bn
-14.9%
-ISDN
$0 9bn
$0 8bn
-5 8%
•
+ .
PENETRATION OF IP SOLUTIONS INCREASE
• KEY ENABLER OF NAS GROWTH IN
ENTERPRISE AND GOVERNMENT
• MARKET SHARE GROWTH CONTINUES
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
.
.
.
EBITDA Margin
64%
64%
-
11
• NAS UPTAKE DRIVES IP GROWTH IN
BUSINESS SEGMENT|DATA & IP
FY11
FY12
Growth
IP ACCESS REVENUE
8 9% AS
PRODUCT PERFORMANCE – DATA & IP
STRONG IP ACCESS OFFSET DECLINES IN LEGACY
Revenue
$3.1bn
$3.1bn
-0.8%
- IP Access
$1.0bn
$1.1bn
+8.9%
- Legacy Data
$0.4bn
$0.3bn
-14.9%
-ISDN
$0 9bn
$0 8bn
-5 8%
•
+ .
PENETRATION OF IP SOLUTIONS INCREASE
• KEY ENABLER OF NAS GROWTH IN
ENTERPRISE AND GOVERNMENT
• MARKET SHARE GROWTH CONTINUES
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
.
.
.
EBITDA Margin
64%
64%
-
11
• NAS UPTAKE DRIVES IP GROWTH IN
BUSINESS SEGMENT|DATA & IP
FY11
FY12
Growth
IP ACCESS REVENUE
8 9% AS
PRODUCT PERFORMANCE – DATA & IP
STRONG IP ACCESS OFFSET DECLINES IN LEGACY
Revenue
$3.1bn
$3.1bn
-0.8%
- IP Access
$1.0bn
$1.1bn
+8.9%
- Legacy Data
$0.4bn
$0.3bn
-14.9%
-ISDN
$0 9bn
$0 8bn
-5 8%
•
+ .
PENETRATION OF IP SOLUTIONS INCREASE
• KEY ENABLER OF NAS GROWTH IN
ENTERPRISE AND GOVERNMENT
• MARKET SHARE GROWTH CONTINUES
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
.
.
.
EBITDA Margin
64%
64%
-
11
• NAS UPTAKE DRIVES IP GROWTH IN
BUSINESS SEGMENT|DATA & IP
FY11
FY12
Growth
IP ACCESS REVENUE
8 9% AS
PRODUCT PERFORMANCE – DATA & IP
STRONG IP ACCESS OFFSET DECLINES IN LEGACY
Revenue
$3.1bn
$3.1bn
-0.8%
- IP Access
$1.0bn
$1.1bn
+8.9%
- Legacy Data
$0.4bn
$0.3bn
-14.9%
-ISDN
$0 9bn
$0 8bn
-5 8%
•
+ .
PENETRATION OF IP SOLUTIONS INCREASE
• KEY ENABLER OF NAS GROWTH IN
ENTERPRISE AND GOVERNMENT
• MARKET SHARE GROWTH CONTINUES
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
.
.
.
EBITDA Margin
64%
64%
-
11
• NAS UPTAKE DRIVES IP GROWTH IN
BUSINESS SEGMENT|DATA & IP
FY11
FY12
Growth
IP ACCESS REVENUE
8 9% AS
PRODUCT PERFORMANCE – DATA & IP
STRONG IP ACCESS OFFSET DECLINES IN LEGACY
Revenue
$3.1bn
$3.1bn
-0.8%
- IP Access
$1.0bn
$1.1bn
+8.9%
- Legacy Data
$0.4bn
$0.3bn
-14.9%
-ISDN
$0 9bn
$0 8bn
-5 8%
•
+ .
PENETRATION OF IP SOLUTIONS INCREASE
• KEY ENABLER OF NAS GROWTH IN
ENTERPRISE AND GOVERNMENT
• MARKET SHARE GROWTH CONTINUES
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
.
.
.
EBITDA Margin
64%
64%
-
11
• NAS UPTAKE DRIVES IP GROWTH IN
BUSINESS SEGMENT|DATA & IP
FY11
FY12
Growth
IP ACCESS REVENUE
8 9% AS
PRODUCT PERFORMANCE – DATA & IP
STRONG IP ACCESS OFFSET DECLINES IN LEGACY
Revenue
$3.1bn
$3.1bn
-0.8%
- IP Access
$1.0bn
$1.1bn
+8.9%
- Legacy Data
$0.4bn
$0.3bn
-14.9%
-ISDN
$0 9bn
$0 8bn
-5 8%
•
+ .
PENETRATION OF IP SOLUTIONS INCREASE
• KEY ENABLER OF NAS GROWTH IN
ENTERPRISE AND GOVERNMENT
• MARKET SHARE GROWTH CONTINUES
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
.
.
.
EBITDA Margin
64%
64%
-
11
• NAS UPTAKE DRIVES IP GROWTH IN
BUSINESS SEGMENT|
|---|---|---|---|---|---|
||DATA & IP|FY11|FY12|Growth|
|
||Revenue|$3.1bn|$3.1bn|-0.8%|IP ACCESS REVENUE
8 9% AS
•
+ .
PENETRATION OF IP SOLUTIONS INCREASE
• KEY ENABLER OF NAS GROWTH IN
ENTERPRISE AND GOVERNMENT
• MARKET SHARE GROWTH CONTINUES|
||- IP Access|$1.0bn|$1.1bn|+8.9%||
||- Legacy Data|$0.4bn|$0.3bn|-14.9%||
|||||||
||-ISDN|$09bn|$0 8bn|-58%||
|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4||
.|
.|
.||
||EBITDA Margin|64%|64%|-||
|||||||

11

PRODUCT PERFORMANCE – NAS NAS CONTINUES TO GROW

==> picture [596 x 227] intentionally omitted <==

----- Start of picture text -----

FY2012 NAS REVENUE +10.5% STRONG GROWTH IN NAS PORTFOLIO
Unified Comms Cloud Services
$1.26b
14.4% 42.2%
$1.14b
9.4%
$1.03b
18.5%
FY10 FY11 FY12 FY11 FY12 FY11 FY12
SIGNIFICANT CONTRACT SIGNINGS IN 2012 DEPENDABLE ANNUITY STREAM IN 2013
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 12
----- End of picture text -----

investor.relations@team.telstra.com

SEGMENT RESULTS EXTERNAL INCOME

	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME	SEGMENT RESULTS EXTERNAL INCOME
			$ Billions				FY11	FY12	Growth
			Consumer				9.9	10.3	3.6%
			Business				4.7	4.7	-0.9%
			Enterprise and Government				4.1	4.3	4.4%
			Telstra Retail				188	193	26%
							.	.	.
	TELSTRA TEMPLATE 4X3 BLUE BETA	TELPPTV4
			Telstra Wholesale				2.2	2.1	-4.2%
	MEDIA MARKETING SERVICES PRODUCT PERFORMANCE – MEDIA SENSIS AND DIGITAL MEDIA ADAPTING TO CHANGE MEDIA ENTERTAINMENT SERVICES & CONTENT
		SENSIS FY11 FY12 Growth Revenue $1.8bn $1.5bn -17.7% - Print $1.2bn $1.0bn -22.1% • >5 MILLION BIGPOND MOVIE DOWNLOADS • MEDIA REVENUE +4.7% EX-SENSIS & ADVERTISING • FOXTEL SALES VIA TELSTRA +3.1% TO $602M
		SENSIS		FY11	FY12	Growth
		Revenue		$1.8bn	$1.5bn	-17.7%
		- Print		$1.2bn	$1.0bn	-22.1%
	TELSTRA TEMPLATE 4X3 BLUE BETA	TELPPTV4	- Digital		$0.4bn	$0.4bn	+4.5%
		EBITDA Margin		56%	47%	-9pp

investor.relations@team.telstra.com

PRODUCT PERFORMANCE – MEDIA FOXTEL

|FOXTEL1
FY11
FY12
Growth
• INCREASED TAKE UP OF FOXTEL PRODUCTS
FOXTE
iQ MU TI ROOM AND HD DIGITA
PRODUCT PERFORMANCE – MEDIA
FOXTEL
Revenue
$2.1bn
$2.2bn
+3.6%
EBITDA
$551m
$598m
+8.5%
Customers - metro
1,652k
1,676k
+24k
iQ HD P
t
ti
31%
42%
11
• $108 MILLION DISTRIBUTION RECEIVED2
–
L
,
L
-
L
• AUSTAR ACQUISITION COMPLETED 23 MAY
• FOX SPORT PENETRATION >80%; PREMIUM
PLATINUM SERVICE >40%
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
ene ra on
+
pp
2012
15
1.
Stand alone Foxtel results (excluding Austar)
2.
Foxtel not consolidated in Telstra’s accounts - however distributions are included in Telstra EBITDA|FOXTEL1
FY11
FY12
Growth
• INCREASED TAKE UP OF FOXTEL PRODUCTS
FOXTE
iQ MU TI ROOM AND HD DIGITA
PRODUCT PERFORMANCE – MEDIA
FOXTEL
Revenue
$2.1bn
$2.2bn
+3.6%
EBITDA
$551m
$598m
+8.5%
Customers - metro
1,652k
1,676k
+24k
iQ HD P
t
ti
31%
42%
11
• $108 MILLION DISTRIBUTION RECEIVED2
–
L
,
L
-
L
• AUSTAR ACQUISITION COMPLETED 23 MAY
• FOX SPORT PENETRATION >80%; PREMIUM
PLATINUM SERVICE >40%
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
ene ra on
+
pp
2012
15
1.
Stand alone Foxtel results (excluding Austar)
2.
Foxtel not consolidated in Telstra’s accounts - however distributions are included in Telstra EBITDA|FOXTEL1
FY11
FY12
Growth
• INCREASED TAKE UP OF FOXTEL PRODUCTS
FOXTE
iQ MU TI ROOM AND HD DIGITA
PRODUCT PERFORMANCE – MEDIA
FOXTEL
Revenue
$2.1bn
$2.2bn
+3.6%
EBITDA
$551m
$598m
+8.5%
Customers - metro
1,652k
1,676k
+24k
iQ HD P
t
ti
31%
42%
11
• $108 MILLION DISTRIBUTION RECEIVED2
–
L
,
L
-
L
• AUSTAR ACQUISITION COMPLETED 23 MAY
• FOX SPORT PENETRATION >80%; PREMIUM
PLATINUM SERVICE >40%
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
ene ra on
+
pp
2012
15
1.
Stand alone Foxtel results (excluding Austar)
2.
Foxtel not consolidated in Telstra’s accounts - however distributions are included in Telstra EBITDA|FOXTEL1
FY11
FY12
Growth
• INCREASED TAKE UP OF FOXTEL PRODUCTS
FOXTE
iQ MU TI ROOM AND HD DIGITA
PRODUCT PERFORMANCE – MEDIA
FOXTEL
Revenue
$2.1bn
$2.2bn
+3.6%
EBITDA
$551m
$598m
+8.5%
Customers - metro
1,652k
1,676k
+24k
iQ HD P
t
ti
31%
42%
11
• $108 MILLION DISTRIBUTION RECEIVED2
–
L
,
L
-
L
• AUSTAR ACQUISITION COMPLETED 23 MAY
• FOX SPORT PENETRATION >80%; PREMIUM
PLATINUM SERVICE >40%
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
ene ra on
+
pp
2012
15
1.
Stand alone Foxtel results (excluding Austar)
2.
Foxtel not consolidated in Telstra’s accounts - however distributions are included in Telstra EBITDA|FOXTEL1
FY11
FY12
Growth
• INCREASED TAKE UP OF FOXTEL PRODUCTS
FOXTE
iQ MU TI ROOM AND HD DIGITA
PRODUCT PERFORMANCE – MEDIA
FOXTEL
Revenue
$2.1bn
$2.2bn
+3.6%
EBITDA
$551m
$598m
+8.5%
Customers - metro
1,652k
1,676k
+24k
iQ HD P
t
ti
31%
42%
11
• $108 MILLION DISTRIBUTION RECEIVED2
–
L
,
L
-
L
• AUSTAR ACQUISITION COMPLETED 23 MAY
• FOX SPORT PENETRATION >80%; PREMIUM
PLATINUM SERVICE >40%
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
ene ra on
+
pp
2012
15
1.
Stand alone Foxtel results (excluding Austar)
2.
Foxtel not consolidated in Telstra’s accounts - however distributions are included in Telstra EBITDA|FOXTEL1
FY11
FY12
Growth
• INCREASED TAKE UP OF FOXTEL PRODUCTS
FOXTE
iQ MU TI ROOM AND HD DIGITA
PRODUCT PERFORMANCE – MEDIA
FOXTEL
Revenue
$2.1bn
$2.2bn
+3.6%
EBITDA
$551m
$598m
+8.5%
Customers - metro
1,652k
1,676k
+24k
iQ HD P
t
ti
31%
42%
11
• $108 MILLION DISTRIBUTION RECEIVED2
–
L
,
L
-
L
• AUSTAR ACQUISITION COMPLETED 23 MAY
• FOX SPORT PENETRATION >80%; PREMIUM
PLATINUM SERVICE >40%
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
ene ra on
+
pp
2012
15
1.
Stand alone Foxtel results (excluding Austar)
2.
Foxtel not consolidated in Telstra’s accounts - however distributions are included in Telstra EBITDA|
|---|---|---|---|---|---|
||FOXTEL1|FY11|FY12|Growth|• INCREASED TAKE UP OF FOXTEL PRODUCTS




|
||Revenue|$2.1bn|$2.2bn|+3.6%|FOXTE
iQ MU TI ROOM AND HD DIGITA
• $108 MILLION DISTRIBUTION RECEIVED2
–
L
,
L
-
L

• FOX SPORT PENETRATION >80%; PREMIUM
PLATINUM SERVICE >40%|
||EBITDA|$551m|$598m|+8.5%||
||Customers - metro|1,652k|1,676k|+24k||
|||||||
||

||||•AUSTAR ACQUISITION COMPLETED 23 MAY|
|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4|iQ HD P
t
ti
ene ra on|31%|42%|11
+
pp||
|||||||

15

PRODUCT PERFORMANCE – INTERNATIONAL INTERNATIONAL PORTFOLIO +7%

	PRODUCT PERFORMANCE – INTERNATIONAL INTERNATIONAL PORTFOLIO +7%	PRODUCT PERFORMANCE – INTERNATIONAL INTERNATIONAL PORTFOLIO +7%	PRODUCT PERFORMANCE – INTERNATIONAL INTERNATIONAL PORTFOLIO +7%	PRODUCT PERFORMANCE – INTERNATIONAL INTERNATIONAL PORTFOLIO +7%	PRODUCT PERFORMANCE – INTERNATIONAL INTERNATIONAL PORTFOLIO +7%	PRODUCT PERFORMANCE – INTERNATIONAL INTERNATIONAL PORTFOLIO +7%
		INTERNATIONAL (AUD)	FY11	FY12	G th row
						• STRONG GLOBAL PLATFORM TO SUPPORT NAS OPPORTUNITIES • CSL CUSTOMER GROWTH +475K • CSL EBITDA MARGIN +4PP TO 26%
		Revenue – Total	$1,398m	$1,496m	+7.0%
		- Hong Kong (CSL)	$814m	$860m	+5.7%
		- China digital media	$176m	$128m	-27.3%
	TELSTRA TEMPLATE 4X3 BLUE BETA	TELPPTV4	- Global connectivity & NAS	$408m	$508m	+24.5%

investor.relations@team.telstra.com

==> picture [596 x 94] intentionally omitted <==

==> picture [596 x 375] intentionally omitted <==

----- Start of picture text -----

PRODUCTIVITY
$1.1 BILLION IN PRODUCTIVITY BENEFITS
GROWTH OTHER PRODUCTIVITY
+$0.2b
+$0.1b -$0.1b
+$0 4b. -$0.1b
-$1.1b
+$0.3b
+$0.3b
$15.3b
$15.2b
FY11 DVCs Inflation Business Bond rate Impairments MTA Redundancy Productivity FY12
OPEX Growth impact Benefits OPEX
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 17
----- End of picture text -----

==> picture [596 x 289] intentionally omitted <==

----- Start of picture text -----

CAPITAL MANAGEMENT
STRATEGIC FRAMEWORK
FISCAL DISCIPLINE
1. 2. 3.
MAXIMISING
MAINTAINING RETAIN FINANCIAL
OBJECTIVES RETURNS FOR FINANCIAL STRENGTH FLEXIBILITY
SHAREHOLDERS
1. Maintain balance sheet settings consistent with a single-A credit rating
2. Ensure dividend remains fully-franked and increase over time. FY12 and FY13
dividend will be 28c, fully-franked [1]
PRINCIPLES 3. Target medium-term capex/sales ratio ~14% subject to NBN roll-out, excluding
spectrum payments
4 . Over a full year we will not borrow to pay the dividend or fund capital returns
5. Maintain flexibility for portfolio management and to make strategic investments
Excess Free Cashflow at 30 June 2012: $1 billion
Excess Free Cashflow (3 years): $2 – $3 billion
1. Any dividend is subject to the Board’s normal approval process for dividend declaration and there being no unexpected material events. 18
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
----- End of picture text -----

investor.relations@team.telstra.com

CAPITAL MANAGEMENT

BALANCE SHEET SETTINGS AS AT 30 JUNE

	CAPITAL MANAGEMENT BALANCE SHEET SETTINGS AS AT 30 JUNE	CAPITAL MANAGEMENT BALANCE SHEET SETTINGS AS AT 30 JUNE	CAPITAL MANAGEMENT BALANCE SHEET SETTINGS AS AT 30 JUNE	CAPITAL MANAGEMENT BALANCE SHEET SETTINGS AS AT 30 JUNE	CAPITAL MANAGEMENT BALANCE SHEET SETTINGS AS AT 30 JUNE	CAPITAL MANAGEMENT BALANCE SHEET SETTINGS AS AT 30 JUNE	CAPITAL MANAGEMENT BALANCE SHEET SETTINGS AS AT 30 JUNE	CAPITAL MANAGEMENT BALANCE SHEET SETTINGS AS AT 30 JUNE
			FY11	FY12		Debt Maturities Due:
		Gross Debt1	$16.2bn	$17.2bn		Less than 1 year	$3.0bn
		Liquidity	$26bn	$39bn		1 – 3years	$48bn
			.	.			.
		Net Debt	$13.6bn	$13.3bn		4 – 7 years	$4.0bn
		Avg. Borrowing Costs	7.2%	7.0%		8 – 10 years	$4.7bn
		Financial Parameters	Comfort Zones	Actual		> 10 years	$0.2bn
		Debt Servicing	1.5 – 1.9x	1.3x
		Gearing	50% to 70%	53.2%
	TELSTRA TEMPLATE 4X3 BLUE BETA	TELPPTV4	Interest Cover	7x >	10 3x .		19
		Credit Ratings	Long Term	Short Term
		S&P (Outlook)	A (stable)	A1
		Moody’s (Outlook)	A2 (stable)	P1
		Fitch (Outlook)	A (stable)	F1
		CAPITAL MANAGEMENT PORTFOLIO MANAGEMENT INVESTMENTS DIVESTMENTS
		*
	TELSTRA TEMPLATE 4X3 BLUE BETA	TELPPTV4	20 Subject to regulatory approvals TOTAL ~$500 MILLION TOTAL ~$660 MILLION*

investor.relations@team.telstra.com

2013 GUIDANCE[1]

==> picture [596 x 598] intentionally omitted <==

----- Start of picture text -----

FY12 FY13
Measure FY12 Reported ex TelstraClear Guidance
Total Income $25.5bn $25.0bn Low single digit growth
EBITDA $10.2bn $10.3bn Low single digit growth
Capex ~15% of sales
Free Cash Flow $5.2bn $5.1bn $4.75 – $5.25 bn
Dividend [2] 28 cps fully franked
1. Guidance assumes wholesale product price stability, no impairments to investments (including the foreign exchange impairment on Telstra Clear expected on completion) and
excludes any proceeds on the sale of businesses and the cost of spectrum purchases
2. Dividend subject to the Board’s normal approval process for dividend declaration and there being no unexpected material events 21
SUMMARY
DELIVERED ON COMMITMENTS
A STAND OUT YEAR IN MOBILES WITH GROWTH IN FIXED
RETAIL BROADBAND , NAS AND INTERNATIONAL
PSTN DECLINED IN LINE WITH EXPECTATIONS AND A
CHALLENGING YEAR FOR SENSIS
SIMPLIFICATION PROGRAMME DELIVERED $1.1 BILLION OF
PRODUCTIVITY BENEFITS
ACTIVE CAPITAL & PORTFOLIO MANAGEMENT
MOMENTUM IN BUSINESS TO CONTINUE IN FY13
22
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
----- End of picture text -----

investor.relations@team.telstra.com

==> picture [596 x 94] intentionally omitted <==

==> picture [596 x 415] intentionally omitted <==

----- Start of picture text -----

TELSTRA FULL YEAR RESULTS
ANNOUNCEMENT 2012
DAVID THODEY, CHIEF EXECUTIVE OFFICER
OUR STRATEGIC PRIORITIES ARE DELIVERING
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
----- End of picture text -----

==> picture [485 x 39] intentionally omitted <==

==> picture [596 x 94] intentionally omitted <==

==> picture [496 x 95] intentionally omitted <==

----- Start of picture text -----

TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 24
----- End of picture text -----

investor.relations@team.telstra.com

IMPROVE CUSTOMER SATISFACTION

Initiatives:

One Step (one Online support Website order, one available 24/7 Thirteen apps redesign for appointment to via Facebook, for tablets and easier activate PSTN Livechat, smartphones navigation and and ADSL) CrowdSupport transactions

Outcomes:

C ompany-w id e 26% decrease 21% decrease Net Promoter in Level 1 TIO in consumer System (NPS) complaints call volumes deployment

==> picture [8 x 6] intentionally omitted <==

----- Start of picture text -----

25
----- End of picture text -----

RETAIN AND GROW THE NUMBER OF CUSTOMERS

==> picture [494 x 224] intentionally omitted <==

----- Start of picture text -----

Number Of Mobile Customers
•
13.8m 1.6 million new domestic mobile
13.2m
12 2. m customers
11.5m •
375,000 4G devices sold
•
203,000 new retail fixed broadband
customers
•
Dec-10 Jun-11 Dec-11 Jun-12 336 , 000 new customers on a bundled p lan
Handheld • 193,000 T-BOX [®] sales
Mobile broadband
•
Machine to machine 148,000 T-HUB [®] sales
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 26
----- End of picture text -----

investor.relations@team.telstra.com

SIMPLIFY THE BUSINESS

==> picture [596 x 385] intentionally omitted <==

----- Start of picture text -----

Labour and Labour Substitution Expense
$4.95bn • $1.1 billion in productivity benefits
$4 86b. n
•
1.6 million customers now receive a digital bill
-1.8%
•
1 million customers registered for direct debit
•
Over $100 million in online bill payments
received per month
•
Our new online shop is up and running
Service
•
24x7 LiveChat
FY11 FY12 Service
Excludes impact of bond rate on labour expenses in FY12 27
BUILD NEW GROWTH BUSINESSES
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
----- End of picture text -----

==> picture [596 x 236] intentionally omitted <==

----- Start of picture text -----

MEDIA
ASIA
NAS
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 28
----- End of picture text -----

investor.relations@team.telstra.com

SENSIS – DIGITAL STRATEGY

• Our digital transition continues

==> picture [33 x 5] intentionally omitted <==

==> picture [32 x 21] intentionally omitted <==

==> picture [33 x 21] intentionally omitted <==

==> picture [34 x 21] intentionally omitted <==

==> picture [32 x 21] intentionally omitted <==

• Strong growth in third party networks

==> picture [32 x 22] intentionally omitted <==

• Growth in usage:

==> picture [30 x 16] intentionally omitted <==

==> picture [30 x 19] intentionally omitted <==

• Yellow Pages Digital visits +16%

==> picture [35 x 27] intentionally omitted <==

==> picture [32 x 25] intentionally omitted <==

==> picture [30 x 18] intentionally omitted <==

• White Pages Mobile visits + 47%

• Focus on churn reduction , penetration of digital products and management of print decline

29

SUMMARY

WE HAVE MET OUR COMMITMENTS

OUR STRATEGIC PRIORITIES ARE DELIVERING

OUR STRATEGY REMAINS UNCHANGED

30

investor.relations@team.telstra.com

==> picture [596 x 94] intentionally omitted <==

==> picture [596 x 656] intentionally omitted <==

----- Start of picture text -----

APPENDIX
GROUP RESULTS
REPORTED TO GUIDANCE RECONCILIATION
TOTAL REVENUE EBITDA FREE CASHFLOW
+$170m $10,367m
+$75m -$67m
$25,424m
+$48m +$48m -$18m -$67m +$48m -$18m +$443m $5,285m
$10,234m $5,197m -$385m
$25,368m
+1.3% +2.1%
Reported ACCC MTA [2] NBN Guidance Reported ACCC MTA NBN Impairments Guidance Reported ACCC MTA NBN Foxtel Guidance
FAD [1] FAD FAD shareholder
loan
1. ACCC Final Access Determination (FAD) pricing for fixed services 32
2. Re-pricing of mobile terminating rates from 9 cents to 6 cents
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
----- End of picture text -----

investor.relations@team.telstra.com

33

PRODUCT PERFORMANCE PRODUCT PROFITABILITY

		EBITDA Margin1, 2	FY11	FY12	1H12	2H12
		Mobiles	33%	36%	34%	39%
		Fixed BB	31%	37%	35%	38%
		PSTN	59%	60%	60%	60%
		Data & IP	64%	64%	63%	64%
		Sensis	56%	47%	25%	60%
	E BETA	TELPPTV4	Telstra Group	40.6%	40.6%	38.3%	42.8%

1. Product EBITDA margins are for selected portfolios which are reflective of Telstra’s domestic business. These EBITDA margins are based on management estimates and are calculated in accordance with AASB 8 and reconcile with segment information.

2. Includes minor adjustment to historic numbers to reflect changes in product hierarchy

==> picture [596 x 375] intentionally omitted <==

investor.relations@team.telstra.com

Telstra FY12 Annual Results Announcement Speech

David Thodey - CEO

SLIDE 1:

Good morning everyone. Welcome to Telstra’s full-year results for fiscal year 2012.

We’re going to cover three things this morning:

1. Firstly, I’m going to give a quick introduction, looking at some highlights for the year;

2. Andy Penn will take you through the numbers in more detail;

3. I will then return to give you a brief update on our strategic priorities.

SLIDE 2: Disclaimer

SLIDE 3:

We have had a strong year and we have delivered on our commitments:

• We have met the guidance we set 12 months ago and delivered total revenue of $25.4 billion.

• On a guidance basis total revenue increased by 1.3% and EBITDA increased by 2.1%.

Our business has proved resilient in a mixed economic climate:

• We achieved top and bottom line growth;

• We won share in key products;

• We grew profitability in key products; and

• We were able to offset the declines we had in Sensis and Telstra Business with our performance in our core domestic business.

Our balance sheet remains strong and we have a clear capital management framework.

Our strategic priorities are delivering results. We are:

• Improving customer satisfaction;

• Retaining and growing the number of customers;

• Simplifying the business; and

• Building new growth businesses.

This is reflected in our key achievements.

SLIDE 4:

It has been an eventful year. I would like to discuss four of the key achievements that stand out for me.

1. As you know, we are focused on putting the customer at the centre of everything we do. We are working hard to build a culture of real customer service. Over the past 12 months our efforts to improve customer satisfaction are starting to pay dividends.

2. While there is more work to be done, our internal and external measures continue to show improvement. Lead indicators (such as TIO complaints; activation and assurance improvements;

1

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

billing and billing query improvements; shop and online improvements) show that we are making progress. But, as I said, we still have a long way to go.

• We recently took the significant step of introducing the Net Promoter System into our business to support further gains in this area. We want to turn customers into advocates by giving them the best possible service.

• The second achievement is our mobiles performance ─ both in terms of the net number of SIOs added and the quality of our networks.

• This year we added 1.6 million domestic mobile customers. This brings the total number of domestic mobile customers to 13.8 million. This includes 6.6 million postpaid handheld customers; 3.3 million prepaid handheld customers and 3.1 million mobile broadband customers.

• We also added 475,000 mobile customers in Hong Kong, bringing the total number on our CSL network to 3.5 million customers.

• As for the performance of our network here in Australia, our 3G network received a number of awards this year, including awards from JD Power; Frost & Sullivan; Gizmodo; and Lifehacker.

• The third achievement is the work we have done in relation to capital and portfolio management.

• In April we announced our capital management strategy to the market.

• Last month, we announced the sale of Telstra Clear in New Zealand as part of our portfolio management activities.

• Lastly, we finalised the NBN agreements with the Commonwealth and NBN Co, including ACCC acceptance of our Structural Separation Undertaking.

• At our Annual General Meeting last October (nine months ago), shareholders voted overwhelmingly in favour of Telstra’s participation in the rollout of the NBN. This was an important milestone, delivering greater certainty for our shareholders.

• The NBN Agreements are now in place and Telstra is committed to delivering on those agreements. We are NBN ready and focused on leveraging the opportunities arising from the NBN.

• In March we received $321 million from the Government as part of the Information Campaign and Migration Deed.

• Then in June we received a further $100 million from the Government for the Retraining Funding Arrangement.

• We recently handed over stage 1 of the transit network build to NBN Co (dark fibre and exchange rack spaces) under the Infrastructure Services Agreement. We continue to seek opportunities to collaborate positively with NBN Co on the building of its access network.

• Recognising the benefits arising from the NBN agreements, we have decided to accelerate our NBN transit build.

• We have also launched retail and wholesale services over the NBN following successful trials in the early release sites.

Let me pause here and hand over to Andy who will take you through the results in more detail.

2

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

Andrew Penn – CFO

SLIDE 5:

Thank you David and good morning.

SLIDE 6:

I am going to cover five topics in my presentation this morning.

Firstly, I will take you through the group results and comment on how we tracked relative to guidance. Secondly, I will take you through the performance of our key product groups - Fixed, Mobile, Data and IP, and our growth businesses, NAS, Media and International.

Thirdly, I will comment on the continued progress we are making in our productivity programme and the efficiencies we are delivering through operating expenses.

Fourthly, I will provide you with an update of our capital position against the background of the capital management framework I outlined in April.

And finally, I will conclude with some comments on the outlook for fiscal year 2013, including guidance.

SLIDE 7:

As David has already mentioned, we are pleased to have delivered another set of results in line with our commitments to the market and in line with guidance.

For the financial year ended 30 June 2012, on a reported basis, revenue was up 1.1% to $25.4bn. EBITDA was up 0.8% to $10.2bn. This included a $130m impairment in relation to the sale of TelstraClear in New Zealand. Earnings per share were up 5.4% to 27.5c per share.

On a guidance basis, total revenue was up 1.3% and EBITDA was up 2.1%.

The guidance basis excludes the impact of impairments, regulated wholesale price changes and payments

received from the Government in relation to NBN. A reconciliation of these impacts is provided in the appendix to my presentation.

Accrued capital expenditure for the year was $3.6bn or 14.2% of sales. During the year we generated $5.2bn of free cash flow, further strengthening our capital position.

The Board has declared a final dividend of 14.0c per share. This brings the total dividend for the year to 28.0c per share fully franked.

SLIDE 8:

Looking across the business, reported revenue was up 1.1% to $25.4bn.

Fixed revenues declined 6.1% as expected whilst Sensis experienced significant declines in print revenues and this was the main cause of the 9.6% decline in Media.

It is against this background that our revenue growth was particularly pleasing with Mobile revenue up $679m or 8.5%, NAS revenue up $120m or 10.5% and International revenue up $98m or 7.0%, collectively adding almost $1bn.

I will now take you through the performance of our products in more detail starting with Fixed.

3

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

SLIDE 9:

Total Fixed revenue declined 6.1% to $7.5bn.

PSTN revenue declined 10% due to a 281,000 reduction in retail PSTN lines and lower ARPU. Recent research has indicated that approximately 2% of households moved to mobile only households during the year with the total now standing at 14% nationally.

Partly offsetting the decline in PSTN revenue was strong growth in our Fixed Retail Broadband business. Revenue was up 8.5% to $1.6bn driven by strong customer growth, up 203,000 to 2.6m. This strong result highlights the success of our bundles strategy with continued strong growth in existing customers taking multiple products for the first time. We now have more than 1.4m customers on a bundled plan with 336,000 added in 2012.

We also achieved a 6 percentage point improvement in our Fixed Retail Broadband margin to 37% following capital investments and productivity improvements.

Going forward we expect the revenue mix to continue to shift from PSTN to Fixed Broadband with increased penetration of bundled plans and the rollout of the NBN.

SLIDE 10:

2012 was a standout year for our Mobiles business.

Revenues were up 8.5% to $8.7bn and Mobiles now represent more than one third of our total revenue base. We continued to win market share during the year with the acquisition of a further 1.6m Mobile customers. These results were supported by the superiority of our networks including the launch of our 4G Network in September 2011. We have sold more than 375,000 4G devices since the launch.

In the post paid handheld market, customer growth was up 8.8% and revenue was up 6.0% to $4.7bn. ARPU declined 3.8%, mainly due to the impact of the mobile repayment option. Excluding this, post paid handheld ARPUs were broadly flat over the year, while the post paid handheld deactivation rate improved to 12.2%. 2012 has therefore represented another very strong year for our Mobiles business with EBITDA up 21% to $3.1bn.

SLIDE 11:

Turning to Data and IP.

Overall revenue declined 0.8%. However the portfolio continued to deliver strong EBITDA margins at 64%. IP access revenue grew 8.9% to $1.1bn as we continued to grow market share.

This was offset by declines in legacy Data products down 14.9% and ISDN revenues down 5.8%.

IP Access continues to act as a strong platform for our Network Application Services (NAS) business in the Enterprise and Government sector. NAS products such as cloud and IP telephony are also a platform for extending IP products into the small business sector.

SLIDE 12:

In this regard we have seen strong growth in NAS over the last couple of years and revenue was up again in 2012, 10.5% to $1.26bn.

This was supported by strong growth in Unified Communications up 14.4%, and Cloud Computing up 42.2%.

4

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

We saw growth in NAS across most market segments, particularly in Enterprise & Government, and the large business market. During the year we signed a number of important contracts with the Department of Human Services, Australia Post, NAB and Origin. These large long term contracts will underpin our growth in the coming year.

SLIDE 13:

Looking at our core Australian telco business through the customer segment lens, total retail revenue grew by 2.6% to $19.3bn.

We saw strong growth in consumer, up 3.6% to $10.3bn and Enterprise and Government up 4.4% to $4.3bn. Telstra Business declined slightly, down 0.9% to $4.7bn, reflecting the challenging economic environment for small business. Wholesale declined 4.4% to $2.1bn, mainly due to regulatory pricing changes, migration from resale products to lower ARPU infrastructure products and declining PSTN usage.

SLIDE 14:

Turning to Media.

There are three aspects to our Media portfolio – Media Marketing Services (which is Sensis), Media

Entertainment Services and Content (this includes BigPond, content arrangements and the resale of FOXTEL via Telstra); and finally FOXTEL itself.

David will talk a little later on Sensis, but it has clearly been a challenging year as we transition from a print to a digital marketing services business.

Sensis revenue was down 17.7% to $1.5bn with print revenue down 22.1% partly offset by growth in Digital, up 4.5%.

Notwithstanding the challenging year, Sensis’s margins remained attractive, albeit declined 9 percentage points to 47%.

In Media Entertainment Services and Content, revenue was up 4.7%. This included FOXTEL sales via Telstra, up 3.1% to $602m.

During the year we also saw a number of positive signs that point towards the continued growth of this business.

• We have now sold close to 400,000 TBoxes. Over 5 million BigPond movies have been downloaded via a TBox since its launch.

• There are now over 2.3 million billed transactions per month across the BigPond portfolio, including movies, music, games and shopping; and

• There have been more than 600,000 downloads of the AFL app and 8.1 million online video streams.

SLIDE 15:

Turning to FOXTEL.

5

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

On a stand alone basis FOXTEL revenue was up 3.6% in 2012 to $2.2bn, EBITDA was up strongly, 8.5% to $598m. These numbers exclude AUSTAR which was acquired in late May.

Customer numbers were up 24,000 to 1.7m and FOXTEL also saw improvements in the take up of a number of important products. These included FOXTEL IQ, multi room and the high definition digital offerings.

Penetration of FOXTEL’s IQ HD service increased from 31% to 42%, while over 80% of subscribers now take up FOXTEL’s sports package and more than 40% take up the Premium package.

Telstra’s 50% economic interest in FOXTEL is not consolidated into the results. However the distribution of $108m received during the year was included in Telstra’s EBITDA result.

SLIDE 16:

Finally, turning to International.

International had a positive year with revenue up 7% to $1.5bn.

For CSL NewWorld, our Mobiles business in Hong Kong, revenue was up 5.7% to $860m. On a local currency basis revenue was up 10% following strong growth in customer numbers, up 475,000.

This performance supported strong growth in CSL’s EBITDA margin, up 4 percentage points to 26%.

While we saw a 27% decline in revenue in China, this largely followed the sale of Soufun in 2011, LMobile and ChinaM in 2012 as we refocussed our portfolio on the successful Autohome business.

During the year we also completed the Reach integration. Following this, the global connectivity business grew 24.5% to $508m.

The reintegration of Reach and the further expansion of our regional cable business provides an excellent platform from which to grow our domestic NAS business into the region.

SLIDE 17:

I would now like to make a few comments on our ongoing productivity and simplification programme. During the year direct variable costs increased approximately $400m due to increased mobile sales. The impact of inflation was approximately $300m and other business growth as a consequence of our growing portfolio and transaction volumes increased expenses by approximately $400m.

Expenses were also impacted by the fall in the Government Bond rate and impairments and regulatory changes to mobile termination rates.

Against this Project New delivered $1.1bn in productivity benefits in 2012 with total operating expenses for the

group, including impairments, up only 0.8% to $15.3bn. Excluding impairments, operating expenses were broadly flat.

SLIDE 18:

Turning to Capital Management.

In April I presented to the market our strategic framework for Capital Management. At that time I indicated our excess free cash flow at 30 June 2012 was expected to be between $0.5bn to $1bn. We ended the year with excess free cash flow of $1bn, at the top end of this range.

Against this we have a significant debt refinancing programme in 2013 and significant spectrum commitments.

6

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

Also, as you will hear from David shortly, we will be investing an additional $500m over the next two years to bring forward investments in our 4G Mobile Network and the NBN Transit Networks. This will extend our Mobile Network advantage and bring forward the benefits from the NBN Agreements.

These investments will increase our capex to sales ratio to approximately 15% per annum over 2013 and 2014. This number is then expected to reduce below 14% in 2015.

I indicated in April that we expected our excess free cash to grow to $2bn-$3bn over the next three years, subject to the timing of the NBN rollout. This did not include the proceeds for the sale of TelstraClear or the additional capex I have just mentioned and based on the NBN revised roll out announced yesterday, I can nonetheless confirm our outlook of $2bn-$3bn over the next three years.

The other parameters of our capital management framework remain unchanged and Telstra is not contemplating capital management initiatives at this time.

SLIDE 19:

Consistent with this framework we continue to target a Single A Credit Rating. All of the major rating agencies have recently confirmed this.

We are currently operating at the conservative end of our balance sheet parameters with gearing at 53.2% and debt servicing at 1.3 times.

In addition, we are carrying almost $4bn of liquidity as at 30 June. This positions us well for the significant debt refinancing programme that I mentioned we will be undertaking this year. We have debt maturities of $3.0bn in 2013 in addition to spectrum commitments.

SLIDE 20:

We have also been active in terms of portfolio management as part of our overall capital management strategy. Subject to the regulatory approval of the TelstraClear transaction, approximately $660m will have been raised through the divestments of TelstraClear, LMobile and China M, with most of this being redirected into a range of investment opportunities. These included minority stakes in IPscape, Dimi, Mandoe and Oooyala, increasing our economic holding in Autohome and finally, supporting FOXTEL in the purchase of AUSTAR.

In summary we finished the year in a strong capital position with a better performing portfolio of businesses.

SLIDE 21:

Before closing I will make a few comments on guidance for 2013.

As the decommissioning payments from the roll out of NBN will be treated as Other Income we intend to guide based on total income in 2013 to capture these. We have also excluded the impact of the sale of TelstraClear on guidance. This includes the FX impairment expected to be realised in 2013.

On this basis we expect to see continued low single digit growth in both total income and EBITDA.

We expect our capex to sales ratio in 2013 to be approximately 15% as we support accelerated investments into our Mobile Network and the NBN Transit Network.

7

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

Free cash flow is expected to be between $4.75bn and $5.25bn taking into account this additional capex. Unlike previous years the free cash flow guidance does not make any provision for investing capex. We will update guidance on free cash flow for investments if and when appropriate.

Finally, subject to the Board’s normal approval process for dividend declaration, and there being no unexpected material events, we expect to pay a fully franked dividend of 28c per share in fiscal year 2013.

SLIDE 22:

Before handing back to David let me summarise:

• 2012 was a year of strong performance delivering on our commitments and results in line with guidance;

• We achieved a standout performance in Mobiles with EBITDA up 21% and 1.6m new customers.

• In Fixed Retail Broadband we added 203,000 new customers, and we grew revenue in NAS, up 10.5% and International, up 7.0%.

• Notwithstanding the continued decline in PSTN as expected, and a very challenging year for Sensis, we delivered top line and bottom line growth in relatively tough economic conditions.

• Project New delivered $1.1bn of productivity benefits and made a significant impact on improving our customer experience.

• We have put in place a clear capital management framework and have been actively managing our capital position and undertaking appropriate portfolio management.

• We ended the year with excess free cash of $1bn and confirmed our outlook of $2bn-$3bn over three years, notwithstanding the revised NBN roll out announced yesterday.

• And we expect the momentum in our business to continue into 2013.

Thank you and I would now like to hand back to David.

David Thodey – CEO

SLIDE 23: TITLE SLIDE

SLIDE 24:

I would like to give an update on each of our strategic priorities ─ improving customer satisfaction; retaining and growing the number of customers; simplifying the business; and building new growth businesses. Our priorities are all delivering results and remain our key focus areas.

SLIDE 25:

Improving customer satisfaction is core to our strategy.

There still remains a lot to do. But each day we continue to change how we interact with customers.

We have introduced many new customer service initiatives over the year. Let me highlight just a few:

• We launched One Step which provides a one order, one appointment process for customers to activate their PSTN and ADSL services. This means only one truck roll and allows customers to get online sooner.

8

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

• Customers can now get online service support, 24 hours a day, seven days a week. We are using social media services to support our customers, including Facebook and LiveChat. And, we have 60 people monitoring social media sites.

• Customers can now connect with us online via one of thirteen applications we have developed for iPad, iPhone and Android devices.

• Our website has been redesigned with a world class online shop and we have made it is easier to navigate through the site.

I am pleased to say we are seeing improvement. We have seen TIO level 1 complaints relating to Telstra reduce by 26% over the year. But they are still too high. However, they are heading in the right direction. We have reduced the overall percentage of Telstra related complaints handled by the TIO by over 30% over the last three

years.

As a result of the service improvements we have made, including new online services, fewer calls are being made to our call centres. This year consumer call volumes reduced by 21%.

The introduction of the Net Promoter System (or NPS) is the next stage in improving customer satisfaction. As I said previously, we want to turn customers into advocates by giving them the best possible service. Every day we receive around 20,000 pieces of feedback from our customers. Our staff and partners listen to and learn from this feedback. This is one of the biggest change programmes ever undertaken by Telstra. We have asked every Telstra employee to treat our customers the way they would like to be treated themselves.

SLIDE 26:

We are grateful for the many customers who chose Telstra this year.

The quality of our mobile network is helping to drive growth in our business and is a key differentiator. This fiscal year we recorded one of our best ever years in mobile growth, with 1.6 million domestic mobile customers added. Over the past two years we have acquired over three million domestic mobile customers. Our domestic mobile business now accounts for more than one-third of our revenues.

In September 2011, we were the first Australian company to launch a commercial 4G LTE mobile network. Since then we have sold more than 375,000 4G devices. Our 4G network now covers more than 40% of the Australian population.

This year we invested $800 million in our mobile network. To maintain our network advantage, we will be investing $1.2 billion in fiscal year 2013 as part of the incremental capital investment that Andy mentioned earlier. As Andy also mentioned, our fixed broadband portfolio grew by 8.5% this year as more customers took-up one of our competitive bundled offers. 336,000 customers signed up to a bundle offer, taking the total number of customers to 1.4 million customers on a bundle.

The increased availability of content over our T-Box and T-Hub (and the recently launched T-Hub2) saw sales of these products more than double in fiscal year 2012, with many customers taking up these products as part of our bundled plans. This year we sold 148,000 T-Hubs and 193,000 T-Boxes. Products like the T-Box and T-Hub are connecting customers to the digital world and, of course, are NBN compatible.

SLIDE 27:

9

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

Simplifying our business is critically important. We have delivered a decline in our labour and labour substitution costs which is due to the impact of our efforts to simplify the business. To achieve a 1.8% decline at a time when demand for our services continues to grow strongly, and, at the same time as improving customer satisfaction, is a great result. The result is testament to the hard work of all the people who work at Telstra.

This fiscal year we delivered $1.1 billion in productivity benefits across the business.

1.6 million customers now access their bill digitally (via PDF or online). One million customers have registered for direct debit. We receive over $100 million in online bill payments per month. I believe this is just the beginning. Our new online shop is up and running. It has exclusive offers; free delivery for mobiles; and provides 24x7 support to customers. The introduction of LiveChat means customers can contact our sales consultants and talk to them live, and, our sales consultants can proactively reach out to customers.

We see significant opportunity to provide innovative support to our customers using new digital technology and services.

SLIDE 28:

The fourth element of our strategy is building our new growth businesses of media, Asia and Network Applications and Services. Our growth initiatives continue to build on our core competencies. They are a natural complement to our core business and reflect the trends and developments emerging in the industry.

Under the umbrella of our media business, we recently announced an exclusive arrangement between Telstra and MOG (a next generation music media company) to deliver a high-quality streaming music service across a range of devices (e.g. smartphones, tablets, wireless HiFi systems), giving subscribers access to a massive catalogue of music.

We think partnering with companies such as MOG makes a lot of sense and allows us to offer customers compelling content to suit their needs.

The year has also seen the acquisition of Austar by Foxtel; continued growth from our IPTV platform; and the rollout of new content services, such as our exclusive live streaming of AFL games to mobile devices. I will specifically discuss Sensis in more detail on the next chart.

Before I do, let me turn to Asia and NAS. Last month, we announced our investment in a NSW based company called IPscape, which provides cloud based call centre solutions to Telstra global customers.

Telstra Global now provides managed network services; international data and voice; satellite across Asia Pacific, China, India, Europe and Africa; and has a total of 14 carrier licences worldwide.

As Andy mentioned, our international business has performed well this year, delivering 7% growth in product revenue. CSL revenue grew by 10% in local currency. Global connectivity and NAS products (which includes assets acquired from Reach), grew by 24.5% to $508 million.

Recently we announced the appointment of David Burns as Head of NAS. David has a proven track record in leading highly profitable global services businesses and will be a great asset as we expand our NAS business. As Andy mentioned, this year we signed many new customers to NAS services and the pipeline for this business looks very strong.

10

Check Against Delivery

Telstra FY12 Annual Results Announcement Speech

Part of our ambition to grow NAS includes servicing our regional customers. Paul McManus, the former Head of NAS, has been appointed head of our Asian NAS business.

SLIDE 29:

Let me turn to Sensis. As we have talked about previously, Sensis has had a challenging few years as we move the business from print to the online world.

We are confident that our strategy is right, and that we will successfully make the transition to a digital media marketing services company.

We are now in the second year of digital sales in our major Yellow canvasses. We have seen good customer demand and shorter selling cycles, enabling us to focus on growing the customer base.

As foreshadowed, we have also focussed on aligning the cost base at Sensis with the new business model. Full year EBITDA margin was 47% ─ a good testament to those efforts.

I am pleased that John Allan has joined us to lead Sensis through this transition. John brings a wealth of media industry experience to the role. It is also good to have Rick Ellis, an experienced media executive, now managing our total media portfolio.

We are now a year into our three year transition. We expect double-digit revenue declines in fiscal year 2013, then by fiscal years 2014 and 2015 we expect the business to have stabilised.

SLIDE : 30

Before I finish, let me summarise today’s full year results:

• We have delivered on our commitments:

• We have met guidance.

• Our business has proved resilient.

• Our balance sheet remains strong.

• Our strategic priorities are delivering:

• We achieved top and bottom line growth.

• We expect the business will continue to grow at the top and bottom line in fiscal year 2013.

• • Our strategy remains unchanged.

Thank you for your time this morning. Andy and I would be happy to take your questions.

[END]

11

Check Against Delivery