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TELSTRA GROUP LIMITED Earnings Release 2011

Aug 10, 2011

65927_rns_2011-08-10_fa8e9404-bf4e-42f7-a433-6fe94de44b5c.pdf

Earnings Release

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11 August 2011

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 2011 Financial Results – CEO/CFO Analyst briefing presentation

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

Regards

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Carmel Mulhern

Company Secretary

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

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TELSTRA FULL YEAR RESULTS
ANNOUNCEMENT 2011
Chief Executive Officer, David Thodey
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DISCLAIMER

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  • 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 Telstra include general economic conditions in Australia; exchange rates; competition in the markets in which Telstra will operate; the inherent 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 11 August 2011 and 2010 Annual Debt Issuance Prospectus lodged with the ASX.

  • 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 Ltd. Other trademarks are the property of their respective owners.

2

Telstra
Corpora,on: investor.rela,[email protected]

1

STRONG GROWTH IN SECOND HALF – EXCEEDED GUIDANCE

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REPORTED RESULTS 1H11 2H11 FY11 RESULTS ON
GUIDANCE BASIS		 Guidance* Outcome
Sales Revenue growth -0.5% 1.8% 0.7% Sales Revenue Flattish 1.0%
Total Revenue growth -0.5% 1.9% 0.7% EBITDA High single digit
decline		 -6.0%
EBITDA growth -13.9% 0.7% -6.4% Capex/Sales 14% 13.6%
EBIT growth -24.1% -1.6% -12.4% Free Cash Flow ($b) 4.5 – 5.0 5.2
Attributable NPAT growth -35.6% 0.3% -16.8% Ordinary DPS (cents) 28 28
Free Cash Flow ($b) 2.0 3.5 5.5
Ordinary DPS (cents) 14 14 28
  • Guidance assumed wholesale product price stability, no fiscal 2011 impairments to investments and excludes any proceeds on the sale of businesses or any impact of network restoration work following natural disasters.

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HIGHLIGHTS FOR THE YEAR
GREATER VALUE BUNDLES AND PRICING
>2M MOBILE CUSTOMERS ADDED IN AUST & HK
$622 MILLION IN PRODUCTIVITY BENEFITS
CUSTOMER SERVICE INITIATIVES
NBN DEFINITIVE AGREEMENTS
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Telstra
Corpora,on: investor.rela,[email protected]

2

OUR STRATEGIC PRIORITIES ARE WORKING

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1. IMPROVE CUSTOMER SATISFACTION 2. RETAIN AND GROW CUSTOMERS 3. SIMPLIFYING THE BUSINESS 4. NEW GROWTH BUSINESSES

5

CUSTOMER SATISFACTION IS IMPROVING – WE HAVE MORE TO DO

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SERVICE, PRICE, PRODUCT AND BRAND RESULTS

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CREATION OF CALLS TO KEY SERVICE &
TELSTRA DIGITAL REDUCTION IN CALL SUPPORT NUMBERS FROM
CENTRE VOLUMES A TELSTRA SERVICE IN
AUSTRALIA NOW FREE
“MY OFFER” SUMMARY SO
CUSTOMERS HAVE MORE 80K WEEKEND
CERTAINTY AND CONTROL TECHNICIAN
OF THEIR BILL APPOINTMENTS >5 MILLION CALLS
SINCE GOING 24/7
SIMPLIFIED
PERSONAL SHOPPING PRICE POINTS
APPOINTMENT OF
SHAPING ON MOBILE >$1 MILLION IN CHIEF CUSTOMER
DATA USAGE DONATIONS FOR OFFICER
DISASTER RELIEF
NO EXCESS USAGE CHARGES LAUNCH OF LTE TELSTRA CONNECTED SENIORS
ON BIGPOND
BROADBAND FREEDOM
PLANS CONNECT PLANS T.COM ENHANCEMENTS
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ANNUALISED DEACTIVATION RATES FY10 FY11 Postpaid 12.4% 8.8% handheld Retail Fixed 22.8% 17.3% Broadband PSTN 22.6% 20.5%

  • CUSTOMER SATISFACTION SURVEY

  • • 3% improvement on prior year • 2,500 consumers and 1,250 SME’s sampled each month

  • • Incorporating Net Promoter Score next year

6

Telstra
Corpora,on: investor.rela,[email protected]

3

ANOTHER STRONG HALF FOR CUSTOMER GROWTH

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Product FY10 1Q11 2Q11 3Q11 4Q11 FY11
TOTAL
Net adds (‘000) CUSTOMERS
Bundles 309 215 205 147 92 659 1,043
T-Box®and T-Hub® (sales) 21 94 119 65 86 365 385
Postpaid mobile handheld 83 116 181 197 151 645 6,455
Mobile broadband 616 251 254 206 203 914 2,576
Total mobile SIOs 371 364 555 364 378 1,661 12,223
Retail fixed broadband* -19 59 80 47 -28 158 2,413

*** 4Q11 fixed broadband adds include removal of 65k non-revenue generating services from the base. Excluding this, fixed broadband adds in the year were 223k.**

7

OUR SIMPLIFICATION INITIATIVES ARE DELIVERING RESULTS

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LABOUR PRODUCTIVITY RE-INVESTMENT
NORMALISED DOMESTIC LABOUR &
LABOUR SUBSTITUTION EXPENSE
• NAS investments
PRODUCTIVITY • Sensis Digital Strategy
$1,145m
• DVC’s +15% or $823m
$1,113m
• Telstra Digital business unit
$1,093m formed
$1,068m
• Strong customer growth
1Q11 2Q11 3Q11 4Q11
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8

Telstra
Corpora,on: investor.rela,[email protected]

4

NETWORK APPLICATIONS AND SERVICES GROWTH OF 10.7%

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OFFERINGS HIGHLIGHTS
• Strong sales pipeline with record
sales in Unified Comms &
Conferencing
• Investing more than $800 million
in cloud computing over the next
5 years
• Acquisition of iVision to enhance
video conference capabilities
TELSTRA APPLICATIONS AND VENTURES GROUP ESTABLISHED
9
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INTERNATIONAL – DRIVING VALUE FROM ASIA

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INTERNATIONAL CARRIAGE MOBILES CHINA
• Reach restructure • Local currency revenue • Successful exit of SouFun
successfully completed growth of 19% with $69 million gain on
• Focus in China on • 352k mobile adds sale
International Carriage & •
Impairment at Octave and
•
Managed Network Strong momentum into LMobile
Services FY12
• Access to new markets • Portfolio under review
such as Malaysia & Korea
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10

Telstra
Corpora,on: investor.rela,[email protected]

5

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MEDIA – IPTV, FOXTEL AND BIGPOND
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  • IPTV FOXTEL BIGPOND

  • • 190K T-Box sales • 6% revenue growth and • Growing audience: unique • 25% of new broadband 15% EBITDA growth as visitors to BigPond on-line customers reach over +13% & mobile sites

  • bundle customers take 1.65 million. +66%

  • T-Box

  • • 1.8 million movies • Foxtel remains committed • BigPond Movies now downloaded to Austar acquisition available on over 40

  • • 30 Foxtel channels on different devices T-Box • AFL video streams more than doubled compared to 2010 AFL season

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MEDIA - SENSIS
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35% GROWTH IN
YELLOW PAGES DIGITAL USAGE
100
80
+72% 14
60
40 +30%
68
20
0
FY10 FY11
Yellow Pages Online Yellow Pages Mobile
Annual vists (m)
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12

Telstra
Corpora,on: investor.rela,[email protected]

6

LEADING STRATEGIC PRIORITY SCORECARD

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A. Customer satisfaction Target FY11
1) Improve customer satisfaction 6% improvement year-on-year +3%
2) Reduce TIO complaints 30% reduction year-on-year +6%
3) First contact resolution 75% by 2013 74%
B. Customer growth
4) Fixed broadband share Maintain over 3 years +1pp
5) Wireless customer share Grow over 3 years +3pp
C. Simplification
6) Improving productivity Retail productivity to increase 10% by 2013 +1%
7) Lower transaction costs 35% of transactions online by 2013 23%
D. Growing the business
8) Percentage of revenue from NAS, More than 20% by 2013 19%
media and Asia
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13

MOMENTUM TO CONTINUE IN 2012

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Measure* Fiscal 2012
Total Revenue Low single-digit growth
EBITDA Low single-digit growth
Capex 14% of sales
Free cashflow $4.5 - $5.0 billion
Dividend** 28 cps fully franked

*** Guidance assumes wholesale product price stability and excludes any further impairments to investments and proceeds on the sale of businesses ** Dividend subject to the Board’s normal approval process for dividend declaration and no unexpected material events.**

14

Telstra
Corpora,on: investor.rela,[email protected]

7

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TELSTRA FULL YEAR RESULTS
ANNOUNCEMENT 2011
CHIEF FINANCIAL OFFICER, JOHN STANHOPE
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FINANCIAL RESULTS - REPORTED

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$ Billions FY10 FY11 % Growth % Growth
(Reported basis) (Guidance basis)
Sales Revenue 24.8 25.0 0.7% 1.0%

Total Revenue 24.9 25.1 0.7%
EBITDA 10.8 10.2 -6.4% -6.0% 
EBIT 6.5 5.7 -12.4%
Attributable NPAT 3.9 3.2 -16.8%
Accrued Capex 3.5 3.4 -1.8% 
Free Cash Flow 6.2 5.5 -12.0% -17.2% 
Ordinary DPS (cents) 28 28 - 
 Guidance assumed wholesale product price stability, no fiscal 2011 impairments to investments and excludes any proceeds
on the sale of businesses or any impact of network restoration work following natural disasters.
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Telstra
Corpora,on: investor.rela,[email protected]

1

SALES REVENUE BY PRODUCT - MIX CHANGE CONTINUES

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+$783m -$6m +$111m -$122m
Hardware -0.3% +10.7% -6.4% -$156m
+35.5% $24,983m
$24,813m
-$462m Full Year Growth 0.7%
Services
+7.4%
-7.9%
+0.7%
Second Half Growth 1.8%
+$22m
+1.4%
Mobile Growth offset PSTN decline
FY10 PSTN Fixed Mobiles IP & NAS Sensis Other FY11
Retail Data
Broadband Access
 Other includes ISDN (-$28m), Other fixed internet (-$75m), Other fixed ($64m), Offshore content &
online content (-$59m), CSLNW ($44m), TelstraClear (-$13m), Other offshore services ($6m), Pay
TV ($73m), Other advertising revenue (-$131) and Other (-$37m).
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OUR STRATEGIC PRIORITIES ARE DELIVERING FINANCIAL OUTCOMES
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RETAIL SALES REVENUE GROWTH MOBILE EBITDA MARGIN IMPROVEMENT
+6pp
35% 32%
3.6% 1.8% 1.8% 29%
TC TB TEG 1H11 2H11 FY11
MOBILE REVENUE GROWTH MARKET SHARE GAINS IN FY11
11.4% 43%
10.0%
8.1%
4.7% +3pp 45%
+1pp
1H10 2H10 1H11 2H11 Mobile Fixed
Retail BB
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Telstra
Corpora,on: investor.rela,[email protected]

2

2011 STRATEGIC INVESTMENT HAS DELIVERED WITHIN GUIDANCE

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FY11 direction FY11 outcome
OPEX
Labour ~ $250m $217m
Goods & Services Purchased ~ $650m $823m
Other Expenses ~ $200m -$70m
OPEX increase ~$1bn $970m
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ARPU TRENDS

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BUNDLES: NET MIX REVENUE ACCRETIVE
New customers
$50 Existing customers taking an
additional product
Lower churn from customer base
accepting multi-product discount
Key
Mobile Handheld postpaid
Mobile Handheld prepaid
Mobile Broadband
1H10 2H10 1H11 2H11
Fixed Retail Broadband
PSTN
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Telstra
Corpora,on: investor.rela,[email protected]

3

PRODUCT PROFITABILITY*

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EBITDA MARGIN FY08 FY09 FY10 1H11 2H11 FY11
Mobiles 30% 34% 35% 29% 35% 32%
Fixed Internet 27% 35% 40% 34%*** 32% 33%
PSTN 61% 59% 60% 59% 59% 59%
IP & Data 55% 57% 62% 61% 61% 61%
Sensis** 51% 53% 57% 41% 65% 56%
Total Telstra Group 42.2% 43.2% 43.7% 37.3% 43.8% 40.6%
  • Based on Telstra management estimates ** From FY09, Sensis EBITDA margins exclude China online businesses. *** 1H11 Fixed Internet restated from 33% due to minor adjustments to cost alignment and rounding

RETAIL SEGMENTS

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CONSUMER AND COUNTRY WIDE BUSINESS ENTERPRISE & GOVERNMENT
Sales Revenue Sales Revenue Sales Revenue
+3.6% +1.8% +1.8%
Strategic initiatives delivered Launch of Digital Business Mobile services revenue: +11.8%
strong growth in customer base
Mobile customers: +1.1m IP and NAS Revenue: $300m Key investments in NAS and cloud
computing
Fixed Retail Broadband Mobile postpaid customers: IP Access Revenue: +14.8%
customers: +160k +263k
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Telstra
Corpora,on: investor.rela,[email protected]

4

PRODUCTIVITY BENEFITS REINVESTED IN STRATEGIC INITIATIVES

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+$160m -$622m
+$96m
+$231m
+$277m
+$823m $15,154m
+$93m +$53m -$141m
$14,184m
+6.8%
New
STI Natural Impairments DVCs Price Business Redundancy Programme costs Productivity
FY10 disasters & Other Growth & other Benefits FY11
OPEX OPEX
REPORTED One-offs Growth Productivity REPORTED
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EXPENSES: LABOUR +5.9%

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+$96m -$279m
+$85m $3,924m
+$81m
+$123m
+$93m +$18m Labour Productivity: $279m saved
$3,707m
Domestic labour and labour
substitution expense fell throughout
year on normalised basis
Redundancy costs up 75% due to
the transition to a more customer
focused operating model
Programme
FY10 STI disastersNatural Price Growth Other costs & other Redundancy Productivity FY11
One-offs Growth Productivity
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Telstra
Corpora,on: investor.rela,[email protected]

5

EXPENSES: DVCs +15.4%

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 +2 million new mobile customers (Australia
& Hong Kong)
+$135m +$120m $6,183m
+$568m  +365 thousand T-Boxes [®] and T-Hubs [®]
$5,360m
 +659 thousand Bundled customers
$2,644m
$2,076m
$1,808m $1,943m
Customer acquisition driving COGS and
Network Payments expense increases
$1,476m $1,596m
FY10 COGS Network Other FY11
Payments
Other includes Usage commissions (-$63m), Service Fees ($98m), Managed Services ($17m),
Dealer performance commissions (-$27m), Paper (-$21m) and Other Goods & Services
purchased ($116m)
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EXPENSES: OTHER EXPENSES -1.4%

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+$84m -$28m -$126m
$5,117m $5,047m
Service contracts & other agreements: +3.7%
• Significant investments to retain and grow
customers & improve customer service
$2,275m $2,359m
General & Admin: -3.0%
$930m • IT costs: -18.2%
$902m • Accommodation costs: +8.9%
Other:
$1,912m $1,786m • Bad and doubtful debts: -7.9%
• Property, vehicles, IT: -0.7%
• Promotion & Advertising: -4.3%
Service General & Other
FY10 contracts & Admin FY11 * Other includes Property, motor vehicle & IT rental expense (-$4m), Promotion &
Other Advertising (-$15m), Impairment & Diminution expenses (-$146m) and Other Operating
Agreements expenses (+$39m).
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Telstra
Corpora,on: investor.rela,[email protected]

6

CASHFLOW AND CAPEX

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Free Cash Flow Accrued Capex
$6.2b
$5.5b
$4.9b
$4.4b $4.6b
2H10
$3.9b $3.6b 2H11
$3.5b
$3.5b $3.4b
2H10
2H11
$1.9b
1H10 $1.9b
1H11
$2.6b
$2.0b 1H10 1H11
$1.6b $1.5b
FY08 FY09 FY10 FY11 FY08 FY09 FY10 FY11
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P&L IMPACT OF NBN

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Physicals
Revenues
Expenses
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Telstra
Corpora,on: investor.rela,[email protected]

7

GUIDANCE*

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Measure FY11 Reported FY12 Guidance
Total Revenue $25.09bn Low single-digit growth
EBITDA $10.15bn Low single-digit growth
Capex 14% of sales
Free cashflow $4.5 - $5.0 billion
Dividend 28 cps fully franked
* Guidance assumes wholesale product price stability and excludes any further impairments to investments and proceeds on the sale of businesses
 Dividend subject to the Board’s normal approval process for dividend declaration and no unexpected material events.
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Telstra
Corpora,on: investor.rela,[email protected]

8

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TELSTRA FULL YEAR RESULTS
ANNOUNCEMENT 2011
CHIEF EXECUTIVE OFFICER, DAVID THODEY
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NATIONAL BROADBAND NETWORK AGREEMENTS
KEY BENEFITS
SUSTAINABLE FREE CASHFLOW IN MEDIUM TERM
MORE STABLE REGULATORY ENVIRONMENT
GREATER STRATEGIC FLEXIBILITY
STRONG SHAREHOLDER PROTECTIONS
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Telstra
Corpora,on: investor.rela,[email protected]

1

STRATEGIC OPPORTUNITIES IN AN NBN WORLD

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CONSUMER BUSINESS
• High speed broadband into • NBN-ready Digital Business suite
more channels of products
• Customer-centric service • New products and capabilities in
differentiation key verticals
• Product innovation and bundling
ENTERPRISE & GOVERNMENT WHOLESALE
• Existing fibre capabilities protect • New products in NBN world
from impact of NBN • Greater demand for transmission
• New opportunities to extend capabilities
customer reach • Infrastructure access
arrangements with NBN
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KEY FEATURES OF STRUCTURAL SEPARATION UNDERTAKING
NEW FAST TRACK DISPUTE PROCESS
COMMITMENT TO WHOLESALE ADSL AT A
PREDICTABLE PRICE
EXTENDED SERVICE EQUIVALENCE COMMITMENTS
IMMEDIATE PAY AND FIX FOR NON-PERFORMANCE
NEW BSS EQUIVALENCE COMMITMENTS
LOWER ADMINISTRATIVE COSTS
STRENGTHENED ORGANISATIONAL BOUNDARIES
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Telstra
Corpora,on: investor.rela,[email protected]

2

CONCLUSION EXCEEDED GUIDANCE RETURNED TO EBITDA GROWTH MOMENTUM TO CONTINUE IN FY 2012

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Telstra
Corpora,on: investor.rela,[email protected]

3

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APPENDIX
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DOMESTIC RETAIL PERFORMANCE*

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1
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Revenue Growth (%) 1H10 2H10 1H11 2H11 FY11
Sales Revenue -1.5 -0.3 1.9 3.6 2.7
Mobile services 4.8 7.4 6.9 8.0 7.4
Fixed (ex Internet) -6.0 -8.4 -7.5 -5.6 -6.6
Fixed Internet 0.7 -1.4 -1.0 0.9 0.0
Operating Contribution Growth -1.8 -1.8 -5.7 1.2 -2.3
Operating Contribution Margin
(%)		 66.6 65.9 61.7 64.3 63.0
Change (yoy) -0.2pp -1.0pp -4.9pp -1.5pp -3.2pp
SIO net adds (‘000) 1H10 2H10 1H11 2H11 FY11
PSTN -188 -138 -109 -140 -249
Postpaid mobile 169 278 511 504 1,015
Retail Fixed broadband -30 11 139 19 158
  • Prior period growth rates have been restated due to movement of global business operations to Telstra International and the merging of Telstra Consumer and Telstra Country Wide.

2

Telstra
Corpora,on: investor.rela,[email protected]

1

3

TELSTRA CONSUMER AND COUNTRY WIDE*

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Revenue Growth (%) 1H10 2H10 1H11 2H11 FY11
Sales Revenue -0.5 -1.3 1.7 5.4 3.6
Mobile services 5.0 4.0 3.9 8.6 6.2
Fixed (ex Internet) -6.4 -10.4 -8.9 -5.2 -7.1
Fixed Internet 0.7 -2.7 -3.4 2.9 -0.3
Operating Contribution Growth -2.2 -5.8 -13.7 3.9 -5.2
Operating Contribution Margin
(%)		 59.3 56.9 50.3 56.1 53.2
Change (yoy) -1.0pp -2.7pp -9.0pp -0.8pp -4.9pp
SIO net adds (‘000) 1H10 2H10 1H11 2H11 FY11
PSTN -149 -104 -64 -107 -171
Postpaid mobile 6 50 261 243 504
Retail Fixed broadband -44 -1 114 46 160
  • Prior period growth rates have been restated due to the merging of Telstra Consumer and Telstra Countrywide, and the movement of customers between Telstra Consumer and Country Wide and Telstra Business.

TELSTRA BUSINESS*

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Revenue Growth (%) 1H10 2H10 1H11 2H11 FY11
Sales Revenue 0.4 3.1 2.7 1.0 1.8
Mobile services 4.2 12.3 11.1 4.5 7.7
Fixed (ex Internet) -4.4 -5.5 -6.8 -6.6 -6.7
Fixed Internet 5.8 4.1 5.1 -6.7 -1.0
Operating Contribution Growth -1.4 -0.1 1.5 -1.4 0.0
Operating Contribution Margin
(%)		 72.9 72.9 72.0 71.2 71.6
Change (yoy) -1.3pp -2.3pp -0.9pp -1.7pp -1.3pp
SIO net adds (‘000) 1H10 2H10 1H11 2H11 FY11
PSTN -27 -28 -24 -28 -52
Postpaid mobile 99 107 120 143 263
Retail Fixed broadband 15 11 26 -26 0
  • Prior period growth rates have been restated due to movement of customers between Telstra Consumer and Country Wide and Telstra Business.

4

Telstra
Corpora,on: investor.rela,[email protected]

2

TELSTRA ENTERPRISE & GOVERNMENT*

Revenue Growth (%) 1H10 2H10 1H11 2H11 FY11
Sales Revenue -5.8 -1.4 1.3 2.2 1.8
Mobile services 5.1 11.7 10.8 12.8 11.8
Fixed (ex Internet) -7.5 -6.7 -4.3 -5.3 -4.8
IP & Data 2.7 2.3 0.1 0.6 0.3
Operating Contribution Growth -1.6 3.6 1.7 -0.7 0.5
Operating Contribution Margin
(%)		 77.3 78.7 77.6 76.5 77.0
Change (yoy) 3.3pp 3.8pp 0.3pp -2.2pp -1.0
SIO net adds (‘000) 1H10 2H10 1H11 2H11 FY11
PSTN -9 -6 -21 -5 -26
Postpaid mobile 63 120 130 118 248
IP WAN 12 1 4 2 5
IP MAN 1.5 1.8 1.7 0.9 2.6

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  • Prior period growth rates have been restated due to global business operations now being recorded in Telstra International.

5

OFFSHORE PERFORMANCE

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% change FY11
Reported		 FY11
Local Currency
CSL New World
• Total Income 5.8% 19.1%
• EBITDA contribution -18.9% -9.1%
TelstraClear
• Total Income -3.0% 0.6%
• EBITDA contribution -20% -18.8%
Chinese Online businesses (ex-SouFun)
• Total Income -34.2% -28.9%
Other Offshore Controlled Entities
• Services Revenue -14.9%
Total Offshore
• Total Revenue (excluding SouFun) 4.0%
  • Chinese online business results are from unaudited management accounts converted from local currency into A$.

6

Telstra
Corpora,on: investor.rela,[email protected]

3

7

MARKET SHARE*

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Retail SIOs 1H09 2H09 1H10 2H10 1H11 2H11
Total Mobile 41% 41% 41% 39% 41% 43%
Fixed (ex Internet) 75% 75% 75% 74% 74% 73%
Fixed Retail Broadband 47% 45% 44% 44% 45% 45%
Revenue 1H09 2H09 1H10 2H10 1H11 2H11
Mobile 43% 42% 42% 42% 42% 43%
Fixed (ex Internet) 73% 73% 73% 72% 72% 72%
Fixed Retail Broadband** 52% 51% 49% 48% 47% 48%

  • *Based on Telstra management estimates, subject to competitor reporting.

  • ** Some prior period restatements of Fixed Retail Broadband revenue due to changes in competitor reporting.

INTEREST & FINANCIAL PARAMETERS

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

INTEREST FINANCIAL PARAMETERS
Actual
Comfort Actual
FY10 FY11 Change Change Zones * [4] (includes IFRS) IFRS & other(adjusted for ) [ 3]
Net Borrowing Costs [1] $1,004m $1,059m $55m 5.5% Debt
1.5 – 1.9x 1.34 1.37
Servicing
Other (incl IFRS adj) -$41m $76m $117m
Gearing 50% to 70% 52.5% 53.9%
Net Finance Costs $963m $1,135m $172m 17.9%
Interest
>7x 9.59 9.59
Cover [2]
Avg. Borrowing Costs 6.4% 7.2% +0.8pp
Net Debt
$13,926m $13,595m -$331m -2.4% Debt Servicing = Net Debt/EBITDA
(30 June) Gearing = Net Debt/(Net Debt+Equity)
Interest Cover = EBITDA/Net Int. Exp.
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  • *2 Interest Cover - based on net interest costs and excludes impact of IFRS fair value adjustments, unwinding of discount on liabilities recognised at

  • 1 Net Borrowing Costs is Borrowing Costs less Interest Income present value, interest capitalised and standby fees. 3 Actual (adjusted for IFRS) - adjusted figures representative of economic situation after removing fair value revaluations and other IFRS adjustments

  • [4] Debt Servicing and Gearing comfort zones have been moderately

  • tightened (Previously - Debt servicing 1.7 to 2.1; Gearing 55% to 75%).

8

Telstra
Corpora,on: investor.rela,[email protected]

4

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