TELSTRA GROUP LIMITED - Interim / Quarterly Report 2021

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11 February 2021

The Manager

Market 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 03 8647 4838 Facsimile 03 9650 0989 [email protected]

Investor Relations Tel: 1800 880 679 [email protected]

ELECTRONIC LODGEMENT

Dear Sir or Madam

Telstra Corporation Limited - Financial results for the half-year ended 31 December 2020 – CEO/CFO Analyst Briefing Presentation and Materials

In accordance with the Listing Rules, I enclose for immediate release to the market:

a) a presentation;
b) CEO and CFO speeches;
c) Telstra’s Half-Year Results and Operations Review; and
d) financial and statistical tables.

Telstra will conduct an analyst briefing on the half-year results from 9.15am AEDT and a media briefing from 11.00am AEDT. The briefings will be webcast live at https://www.telstra.com.au/aboutus/investors/financial-information/financial-results.

A transcript of the analyst briefing will be lodged with the ASX when available.

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

Authorised for lodgement by:

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Sue Laver Company Secretary

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

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CEO & CFO SPEECH NOTES

TELSTRA HALF YEAR RESULTS 11 FEBRUARY 2021

ANDREW PENN – CEO

Slide 1 – Half year results 2021 - Andrew Penn Telstra CEO

Good morning and welcome to Telstra’s results announcement for the half year ended 31 December 2020.

This morning I will make some introductory remarks and take you through an overview of our results. Vicki will then step you through the numbers in more detail before we move to Q&A.

2021 is a significant year for Telstra. It represents a turning point for the company in our T22 journey. A turning point in our financial outlook.

For the last 4 years, every year, we have had to face the confronting challenge of the financial headwinds which arise from the transfer of a material part of our business to the NBN. This has meant that we have started each of the last four years with our EBIDTA going backwards by up to $800m.

This has been occurring in a market where competition has led to material reductions in both fixed and mobile ARPUs as well as technology disruption and significant structural change across the industry.

In many ways it was these dynamics that provoked our T22 strategy that we announced almost three years ago. It was these dynamics, in conjunction with a conviction about how technology innovation was going to continue to accelerate, that led us to understand that we needed to radically transform.

We are substantially through the T22 program and it is delivering significant benefits leading to our financial turnaround.

That is why I say 2021 is a significant year for Telstra and I will demonstrate this in my presentation shortly.

In summary though, today we are reporting Underlying EBITDA for the first half of FY21 of $3.3b. Against this we are announcing guidance for the second half of $3.3 – 3.6b.

We do not usually provide explicit half year guidance. However, I thought it was helpful to do so this time to illustrate the turning point we are at.

The turning point is also illustrated by our ambitions for FY22 and FY23. These are not guidance but they do demonstrate our aspiration for mid to high single digit growth in Underlying EBITDA for FY22 and for Underlying EBITDA to be in the range of $7.5 – 8.5b in FY23.

This range is important to support a 16c dividend inside our dividend payout ratio and to deliver a ROIC of around 8%.

We know how important this dividend is to our shareholders and that is why and the board expects to pay a total dividend for FY21 of 16c per share including an interim dividend of 8c per share.

We also know how important the Group Restructure that we announced in November is to shareholders. We are therefore committed to progressing it this year, including the monetisation of towers.

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So you can see, the strategies that we have been deploying are paying off. We are performing well in the market and our T22 program is delivering.

After a decade of disruption following the creation of the NBN, and with its rollout now declared complete, we can clearly see the path to underlying growth ahead.

Our investment in innovation and technology, digitisation and networks, improving our customer experience and being disciplined in our capital management, mean that Telstra is in a strong position to grow.

So now let me turn to results.

Slide 2 – Financial headlines

Total Income for the half decreased 10.4 per cent to $12b on a reported and guidance basis.

After adjusting for lease accounting, on a like-for-like basis, EBITDA decreased 11.7 per cent to $4b.

Underlying EBITDA on a guidance basis, which excludes one-off NBN income and restructuring costs, decreased 14.2 per cent to $3.3b.

Excluding the in-year NBN headwind, underlying EBITDA declined by approximately $180m. The estimated financial impact of COVID in the half was $170m.

Our underlying EBITDA in the half was consistent with our full year guidance of $6.5 to $7b. With our guidance for Underlying EBITDA in the second half at $3.3 – 3.6b, it follows our guidance range for the full year has narrowed to $6.6 to $6.9b.

NPAT decreased 2.2 per cent to $1.1b on a reported basis.

Free cashflow was up 88 per cent to $1.9b. This was due to working capital improvements related to reduced handset receivables from lower device sales, improved inventory and creditors.

The lower device sales followed the ongoing trend of customers holding onto their devices for longer as they have become more expensive as well as from lower store traffic from COVID related restrictions. This was also the main reason for lower Income in the period.

The Board has resolved to pay a fully-franked interim dividend of 8 cents per share, returning approximately $950m to shareholders.

As I have already mentioned the Board has also confirmed it expects the total dividend for FY21 to be 16c per share.

Slide 3 – Operating highlights

Turning then to the operating highlights for the half.

We continued to see strong customer growth in mobiles.

We added 80,000 net retail postpaid mobile services including 58,000 branded and 22,000 from Belong. This is the strongest branded performance in several halves and it reinforces the benefits of our clear leadership in 5G.

In Wholesale we added 163,000 services while we added a further 456,000 IOT services.

Importantly, in mobile, we saw our lead indicator – transacting minimum monthly commitment or TMMC, increase by $3.

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Fixed had a more challenging half, we lost 53,000 net new retail bundles including 11,000 from Belong.

While we had negative net adds for the first time, encouragingly Bundle and standalone data ARPU in Consumer & Small Business has stabilised due to our focus on price, higher speed tiers, new add ons, improvements to Wi-Fi and the Telstra Smart Modem.

The Smart Modem is now in over 2.2 million homes – almost 80% of our consumer customer base and it was key to keeping customers connected when working and studying from home last year.

We also launched our Adaptive Networks product in Enterprise during the period to mitigate downside risk from digital disruption and competition from NBN and to support its return to growth.

One sector where we have seen digitisation accelerate dramatically is in healthcare technologies.

Telstra Health is strategically very well positioned in this growing market and income was up 17% in the half with further improvements in EBITDA.

In customer experience, some aspects of our service were impacted in 2020 as a result of workforce capacity challenges. These flowed directly from the COVID related working restrictions, particularly overseas.

Pleasingly service levels were recovered in the second half of the calendar year and Episode NPS improved by three points in the half albeit was down one point when compared to 31 December 2019.

I am very conscious of the delays some customers have experienced in trying to contact us and I want to apologise for those. I also know not all aspects of our customer experience are yet where we need them to be and we have more work to do.

However, I am confident that the many initiatives we have taken under our T22 program, in simplifying the business and digitisation will further improve customer experience.

Also, notwithstanding these specific challenges, Strategic NPS has improved five points in the last six months and 11 points in the last 12 months.

Finally, on our operating highlights, we have made very strong progress in our productivity program. For the half year underlying fixed costs were down $201m and total operating expenses were down $876m.

This brings the total annualised cost reductions achieved under our productivity program to $2b and today we are upgrading our productivity outlook to $450m for FY21 and $2.7b for the T22 program.

Slide 4 – Underlying EBITDA growth ambition

Before I talk more about the progress we have made on our T22 program in the half, let me come back to the point I made in my introduction about being at a turning point.

The progress we have achieved in our T22 program shows that we are building financial momentum.

The left-hand side of this slide shows the evolution of Underlying EBITDA over the last several halves with the guidance provided for the second half of FY21 of $3.3 - 3.6b.

The chart on the right shows the evolution of our full year Underlying EBITDA including guidance for FY21 and the aspirations for mid to high single digit growth in FY22 and to be in the range of $7.5 – 8.5b in FY23.

As I mentioned before, the figures for FY22 and FY23 are not guidance, they are aspirations or ambitions so there are greater risks and uncertainties associated with them compared to our guidance statements.

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Nonetheless the charts clearly demonstrate why I say we are at a turning point.

Slide 5 – Underlying EBITDA growth drivers

I also want to comment on what sits behind this and draw out some of the key underlying operating metrics we have been focussed on improving.

The first is post-paid handheld TMMC, which as you know is the leading indicator for ARPU. TMMC increased by around $3 in the first half and we expect it to increase by a similar amount in the second compared to its prior corresponding period.

We are confident therefore that mobile ARPU has also reached a turning point and will return to growth in the second half of FY21.

Secondly, Consumer & Small Business fixed bundle ARPU’s have stabilised. We expect this to continue into the second half as we focus on building value and achieving mid-teens NBN resale EBITDA margins by FY23.

Thirdly, as I have mentioned, we have continued to make strong progress against our productivity target reducing underlying fixed costs by $201m during the half with another approximately $250m expected in the second half and $450m next year.

Slide 6 – Underlying EBITDA – reducing headwinds

At the same time the major headwinds we have been facing from the migration to the NBN are coming to an end.

The in-year NBN headwinds peaked in the second half of the last financial year, reduced this half and will be substantially less in FY22.

We also expect COVID impacts to reverse over time. After an estimated $200m impact in FY20, we expect a $400m impact in FY21. This will be weighted to the second half with an estimated $170m in the first.

So this is why I am optimistic we are at a turning point financially.

Slide 7 –T22 strategy – Progress [Pillar 1]

With that, let me turn back to this year and comment on our progress with our T22 strategy and initiatives.

We are now on track to deliver more than 80% of our T22 scorecard metrics.

Against the first pillar of T22, we have more than 7.6 million services on our 20 Consumer and Small Business in market plans. We also have 2.8 million members signed up to our loyalty program, Telstra Plus and we are seeing strong engagement from these customers.

For Consumer and Small Business customers, digital sales interactions are up 10 percentage points to 40 per cent compared to FY20 which was already up strongly on the previous year.

Overall digital service interactions now account for more than 70 per cent of all service interactions.

Under our T22 strategy, our aspiration had been to reduce the number of calls to our call centres by two thirds by FY22. With the acceleration to digital we are already at this run rate, more than a year before the end of the program.

That means that over time we will need smaller call centres for these customers and more will work from home. We are on track to have all in-bound calls from our consumer and small business

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customers answered in Australia within the next 18 months and last week we closed our call centre in Cebu in the Philippines.

Today we are also announcing changes to another part of our customer strategy with our intention to transition to full ownership for all of our branded retail stores across Australia.

As more customers interact with businesses online as a result of COVID, we think now is the right time to bring back ownership to ensure a consistent and integrated customer experience across our online channels and entire store network.

At the height of COVID last year we were able to redeploy frontline staff from Telstra owned stores to assist customers through our digital channels or via the phone. It’s this flexibility that we’ll be able to unlock as more retail branded stores are under Telstra’s ownership.

Telstra currently has more than 60 Telstra-owned and operated stores, with another 166 branded stores run by individual licensees and a further 104 stores operated by the Vita Group.

Vita Group and individual licensees have been notified of the plan with discussions and transition arrangements expected to progress over the coming months.

Importantly we know that in many regional and rural towns, the local Telstra store is a valued part of the community providing support and connectivity to a range of businesses and industries. This will not change, and neither will our commitment to ensuring current licensee store customers continue to receive an excellent level of service.

Slide 8 – T22 strategy – Progress Pillar 2 [InfraCo]

Turning to InfraCo.

We have made continued progress in the establishment of InfraCo.

It is now a fully operational business function with separate accountabilities and reporting.

For InfraCo Towers, we are finalising the inter company agreements and are now setting up separate IT systems.

We are also undertaking the necessary significant due diligence across the asset classes to ensure we have fully documented inventories of a standard acceptable to third party investors.

One of the reasons for setting up InfraCo was to provide for an increased level of operational and commercial focus on the assets through a dedicated CEO and management team.

Encouragingly we are starting to see the benefits of this.

In the half, total passive income was up 2.3% to $1.3b, EBITDA after leases was $904m at a 68%

margin.

Our new dark fibre product has been well received by our customers with more than 20 services ordered or complete. We also won two significant Government contracts for tower services in Tasmania and New South Wales.

We have also started simplifying our field infrastructure maintenance with a goal of reducing from more than 20 vendors to 5 and driving operational efficiencies.

On the Group restructure we announced in November, we have commenced detailed consultations with stakeholders including Government, regulators and NBN. We have also appointed key advisers and are working with them on a detailed implementation timetable.

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We anticipate making a further announcement in March to set this out for the market including the major steps we will need to go through to give effect to the restructure.

It remains our intention to complete the restructure by the end of the calendar year.

On towers, as outlined at our November Investor Day, once established InfraCo Towers will own and operate the largest mobile tower network in Australia.

We have been conducting detailed due diligence and documentation to support launching the monetisation process with potential investors in the third quarter of 2021 with binding offers to be submitted in the fourth quarter.

Slide 9 –T22 strategy – Progress [Pillars 3-4 and networks]

Turning to Pillars Three and Four.

Our workforce continues to change significantly. Since June 2018, when we launched T22, we have reduced 22,000 roles including 6,000 from our direct workforce and 16,000 from our indirect workforce.

This needs to be put in the context of a very significant part of our business and associated work being progressively transferred to the NBN over the last few years. Indeed NBN today is itself a very significant employer.

At the same time, we have recruited more than our planned 1,500 new roles with skills in new areas such as software engineering, data analytics and cyber security.

We have also further progressed our journey to introduce agile ways of working and today we have around 11,000 people across the business working in Agile. We anticipate being fully Agile across the business by the end of the calendar year.

Last year we announced a pause on our T22 job reductions to give our people as much certainty as possible during the very challenging time we all experienced through COVID. We extended that pause to February this year which is obviously where we are today and so last week we announced the next wave of proposed organisational changes.

With these, and subject to appropriate consultations, by June we expect to be more than 90 percent through our T22 target to reduce our direct workforce by 8,000 net roles and to have completed it by the end of the calendar year.

In terms of reductions in indirect headcount, it was initially our expectation to reduce by around 25% or 10,000. However, we have already reduced 16,000 and we expect to make further reductions to our indirect workforce due to the significant progress we have made in digitising the business. The majority of these roles have been offshore.

Needless to say these changes have been difficult for our people on top of the challenges presented by COVID particularly as they directly impact members of our team and their families.

I am proud therefore that our employee engagement has remained high with a score of 80 reflecting a concerted leadership effort to support everyone during this time.

Also under pillar four we have now exceeded our target of monetising up to $2b of assets to further strengthen our balance sheet. Announcements in the half included the sale of the Clayton data centre, the Pitt Street Exchange in Sydney and the Velocity and South Brisbane Fibre networks.

We also sold the business of our ecommerce subsidiary Neto which we acquired 6 years ago but no longer fits our strategy and we are currently in the final stages of negotiating contracts for the sale of our remaining stake in Sensis.

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You will also recall we restructured Telstra Ventures through a partnership with Harbour Vest two years ago. That move has paid off with Telstra Ventures performing strongly.

Since inception, the team has completed 73 investments and achieved 25 liquidity events which have increased the value of the portfolio substantially. In the past half year, some of the portfolio highlights include the BigCommerce, Crowdstrike and Skillz IPOs as well as the Rancher investment and Cumulus Networks’ acquisitions.

The valuation of the investments held by Telstra Ventures is recorded in reserves. We recorded a $187m increase in the valuation of these investments for the half year period.

On 5G we are not just leading in Australia but we are also among the leaders globally.

We have expanded our 5G rollout to selected areas in more than 100 cities and towns across Australia and the network now provides 5G coverage to more than 50% of the population. It is our intention to increase that to 75% by June.

Today we have around 1m 5G devices connected to the Telstra network and our average combined 4G and 5G mobile speeds are faster than our competitors. In fact, we recently achieved a world first 5G peak download speed record on a commercial network using mmWave spectrum of >5Gbps.

Not surprisingly therefore, we continue to lead the market in the major mobile industry network performance benchmarks including umlaut where we ranked #1 for best in test and best in data.

Slide 10 – T22 Strategy scorecard

Before I close, a few of comments on our T22 scorecard.

We have now delivered, or are on track to deliver, over 80 per cent of our T22 scorecard metrics.

Some measures are rated either amber or red and I want to take a moment to explain why.

Firstly, underlying ROIC. As announced at our FY20 results, we will not achieve our T22 ROIC target of greater than 10 per cent in FY23.

I know that is disappointing and I want to reassure shareholders that we are pulling all the levers available to us to improve performance.

As outlined at our investor briefing in November, our new target is 8% and with the ambitions I spoke to earlier, we can see our path to achieving this in FY23.

On NPS, we are on track with Strategic NPS but as I explained earlier we are slightly behind on our Episode NPS results.

The building out of our new technology stacks is also very well progressed but as in any IT project of this scale there are a few things that have right shifted.

However, the Enterprise stack is now live as are the agent-facing components and mobile products in Consumer and Small business.

Product launches onto the new stack have been accelerating in the first half and we expect this to continue in the second enabling us to also accelerate migration of customers.

Active app users have grown by more than 400,000 to 4.4 million. This is below where we had planned but reflects good progress on FY20.

We also need to build more momentum in average services per customer and we are continuing to target increased multi-product holdings through entertainment, mobile assurance and gaming addons.

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Summary

Let me summarise.

The last 12 months have seen us navigate the profound disruptions from COVID. COVID has also highlighted that connectivity has never been more important.

We have seen a huge acceleration in the adoption of digital ways of working and living and these things are also crucial to a fast economic recovery for the country.

It is interesting to reflect on how seamlessly Australians were able to move to working from home, how quickly people adopted digital ways of working and living, and how we were able to support that with the necessary bandwidth, products and services.

None of that happened by accident. It happened for us because in 2016 we knew we would see a further acceleration in the use of technology so we invested $3b to build the networks of the future and completely rebuild our digital environment.

It happened for us because in 2018 we launched our T22 strategy to simplify and further digitise the business.

And it happened for us because we continue to make excellent progress in implementing this strategy.

Those investments are transforming Telstra. We are now less than 18 months from completing T22. We have achieved an extraordinary amount and Telstra today is a leaner, more responsive, and more agile company than it has ever been.

I said in my opening, 2021 is a significant year for Telstra. I know we have more to do, but we have reached an important turning point financially and we look to the rest of the year with great confidence in our ability to deliver our strategic ambitions.

Slide 11 – 2021 priorities

Our key priorities for the next 12 months include:

Firstly, making sure we drive the key operating metrics I highlighted earlier which will be instrumental to delivering the financial turnaround.

Secondly, finishing the job on T22 including the final stages of the digitsation program and the migration of customers at scale to our new technology platforms.

Thirdly, delivering on our Group restructuring plans, including the reorganisation of the company into the three separate entities InfraCo Fixed, InfraCo Towers and Serve Co and the monetisation of towers.

Fourthly, further extending our leadership in 5G and rolling out to 75% of the population by June, and

Finally, further improving our customer service by bringing our retail experience in house and onshore. This means meeting our commitment to answer all inbound calls from our consumer and small business customers in Australia within the next 18 months and commencing the process to bring our licensee stores back in house.

With that we will have truly transformed Telstra through our T22 program and set the company up for success in the digitally driven and exciting future ahead.

We will have built the capabilities to take advantage of the opportunities this presents and we will announce how we will leverage these and what comes after T22 at our Investor Day in November.

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Can I close by acknowledging that the progress we have made is due to the combined efforts of our many dedicated employees. Despite the disruptions and impact on them personally from COVID, every day they have focussed on working for our customers and keeping Australians connected and for that I want to sincerely thank them.

Thank you and with that I will hand over to Vicki before we open for Q&A.

VICKI BRADY – CFO

SLIDE 12 – TELSTRA HALF YEAR 2021 RESULTS

Thanks Andy.

Good morning everyone and thank you for joining us.

I’d like to begin by recognising that I am joining you from the land of the Gadigal people of the Eora nation. I acknowledge their ancient and ongoing connection to this land and their culture. And I welcome any Aboriginal and Torres Straight Islanders joining us today.

SLIDE 13 – INCOME STATEMENT

Turning to the details of our financial performance for 1H21, which you can see on slide 13.

The numbers on the left of this slide are our reported statutory results.

The numbers on the right are ‘Reported Lease adjusted’, which includes depreciation of mobile handset lease expense as opex. This provides a like-for-like year-on-year view, given the exit of mobile lease plans. It is the view we use when managing the business, and which this presentation will focus on.

For 1H21, income was $12 billion, down 10.4 per cent.

On a reported lease adjusted basis, EBITDA declined 11.7 per cent to $4.0 billion. This decline included a $268 million reduction in net one-off nbn receipts, and a $297 million increase in restructuring and other guidance adjustments.

I’m pleased to say that our underlying EBITDA during the first half was in line with our expectations and our FY21 guidance. We are also pleased today to be upgrading our free cashflow guidance.

Underlying EBITDA was down $550 million or 14.2 per cent. The largest two contributors to this decline were an estimated $370 million of in-year nbn headwind, and approximately $170 million of estimated impacts related to COVID-19.

Our estimate for COVID-19 is based on international roaming declines, delayed cost-out, additional customer support and deferred NAS professional services.

If both the in-year nbn headwind and estimated COVID impacts were excluded, underlying EBITDA was broadly flat.

Our total operating expenses declined 9.8 per cent including a $201 million or 6.6 per cent decline in underlying fixed costs.

Depreciation and Amortisation, declined 4.6 per cent, on a reported lease adjusted basis. This is consistent with the expected full year decline of around $300 million due to assets associated with nbn completion and legacy IT assets fully depreciating.

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Net finance costs declined due to lower average borrowing cost, thanks to recent refinancing at lower rates.

Income tax expense declined 60 per cent on a low effective tax rate associated with M&A and asset sales, as existing capital losses were used to offset capital gains. Excluding these one-off factors, our underlying effective tax rate was close to 30 per cent.

Reported NPAT was $1.1 billion, down 2.2 per cent.

SLIDE 14 – INCOME BY PRODUCT

Looking now at income by product, which you can see on slide 14, which reflects the new product reporting framework we announced in January.

Underlying income declined $1.2 billion or 9.8 per cent.

Excluding the in-year nbn headwinds, and lower international roaming fees due to travel restrictions, income declined 6.5 per cent. Of this decline over two-thirds was due to a reduction in hardware.

There is detail in the appendix on each product, but I will touch on the most significant points.

Mobile income declined $645 million in 1H21. This was largely due to hardware revenue – which has minimal impact on EBITDA, and international roaming declines.

Handset and tablet volumes were around 450,000 lower than 1H20. The average price was also lower, helped by the higher Australian dollar.

The reasons for the decline in volumes vs the PCP were:

Firstly, impacts of COVID slowing down sales, including foot traffic in retail stores down around 30 per cent,
Secondly, customers holding handsets for longer,
Thirdly, higher outright purchases through independent retailers, and
• Fourthly, a later release date for the iPhone.

Of these reasons, impacts of COVID on sales and the later iPhone release drove outcomes materially different to our estimates when we set guidance. We anticipate these impacts to continue in the second half.

Profit-generating domestic mobile service revenue, which has been in decline since FY17, was broadly flat excluding international roaming declines.

In postpaid handheld, net adds remained healthy across all segments.

Pleasingly, our lead indicator of postpaid handheld ARPU, Transacting Minimum Monthly Commitment, or TMMC, continued the positive momentum we have seen since 2019 - up by more than $3 in 1H21 vs PCP. We expect a similar increase in 2H vs PCP.

The sustained increased in TMMC as well as pricing changes are flowing through into ARPU.

However, Reported Postpaid handheld ARPU in 1H21 declined 8.6 per cent including a decline of around $140 million in international roaming. Excluding this, ARPU declined 3.2 per cent with uplifts from pricing changes more than offset by the continued downward impacts from:

accounting for new plans which allocate more revenue to hardware,
lower out of bundle excess voice and data fees,
and finally, dilution from a higher mix of Belong customers, despite Belong TMMC and ARPUs growing in 1H21.

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These impacts on ARPU will continue, but the thing that gives us most confidence in the outlook, is the flow through of pricing changes we are now seeing. In prior periods ARPU has had a negative drag from pricing trends, this turned positive in 1H21 and we are confident this will flow through even more strongly in 2H21.

Turning to other mobile categories:

In prepaid handheld, an increase in unique users and voucher value returned the product to growth.
mobile broadband, remained broadly stable sequentially with declines in prepaid offsetting postpaid growth, and
our Wholesale business achieved strong revenue, SIO and EBITDA growth.

In Fixed – Consumer & Small Business, our focus is on improving the long-term economics and customer experience.

Income declined 7.5 per cent in 1H21, impacted by nbn migration, legacy voice and Foxtel from Telstra declines.

However, the decline in income from bundles & data was only 0.6 per cent. This reflects ARPU stabilising, as we hit a turning point thanks to customer migrations to in-market plans no longer being dilutive.

Around 70 per cent of our customers are now on in-market plans, and we are almost 90 per cent through migration of customers within the nbn fixed footprint. We remain focussed on increasing ARPU through differentiation, add-ons and plan mix.

Turning to Fixed – Enterprise, where income declined 6.4 per cent.

Fixed - Enterprise has two main categories:

Firstly, Data & connectivity where revenue was down 7.2 per cent, as we transition from providing virtual private corporate networks, to integrating over-the-Internet technologies, such as SDWAN with Telstra Fibre or NBN access.

Total-SIOs declined as copper exits were not fully offset by growth in NBN services –we are now around 65 per cent through the migration of enterprise services to the nbn. Importantly, Fibre SIOs were stable and ARPU decline slowed, as we focussed on retaining and adding higher-bandwidth SIOs.

Secondly, NAS has been reclassified following the introduction of our new product reporting framework to enhance transparency and align with our strategy.

NAS income declined 6.0 per cent. Single digit growth in Managed Services including security and Cloud Applications, was insufficient to offset structural declines in Calling Applications (including ISDN), as well as Equipment sales and Professional Services.

The result in Fixed – Wholesale, is attributable to legacy products, nbn headwinds, and commercial works declines. The ‘ongoing’ portfolio, which accounts for almost half of the revenue and includes passive infrastructure, grew.

There is other information on Infraco, consistent with Investor day, included in the appendix.

Finally, in Other, our health business continued to scale with revenue growing 17 per cent.

SLIDE 15 – OPERATING EXPENSES

Turning to our operating expenses, which you can see on slide 15.

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We are very pleased to have achieved a significant reduction in costs during 1H21. Total costs declined 9.8 per cent, and underlying costs declined 7.8 per cent.

An increase in nbn payments of $136 million, was more than offset by the productivity gains we achieved.

Other sales costs declined $463 million, on lower hardware costs.

Underlying fixed costs reduced by $201 million, and we are now tracking to achieve a full year

reduction in FY21 of around $450 million.

1H21 productivity was predominantly enabled by simplification and adoption of digital channels, ongoing focus on vendor costs and increased workforce efficiency.

Our proposal to move ahead with job reductions, which we paused until February this year, will deliver a run-rate reduction into FY22.

We have now achieved a $2 billion net reduction in underlying fixed costs since 2016. However, to have a world-leading cost base, we have more work to do. Based on our strong progress to date and outlook, we have lifted our net productivity target from $2.5 billion to $2.7 billion by the end of FY22.

Further reductions in FY22 are expected to be delivered from IT and Network Infrastructure costs, realisation of benefits from digitisation including product simplification, and customer self-service tools, as well as ongoing labour efficiencies.

We anticipate that delivery of this new target will get us to the top-quartile of the global benchmark for full service telcos by the end of FY22.

With the increased cost-target and jobs announcement earlier this month, we expect around $180 million of restructuring costs in FY21.

SLIDE 16 – EBITDA by product

Moving to EBITDA by product, on slide 16.

Mobile EBITDA declined $127 million vs PCP, but would have been broadly flat excluding the international roaming decline.

Mobile EBITDA also returned to growth sequentially in 1H21.

Our mobile business is clearly building positive momentum. We have strong 5G leadership and differentiation; TMMC is up with a higher proportion of customers choosing plans of $65 or higher; digital engagement is increasing; two thirds of mass market postpaid customers are on in-market plans; our loyalty program continues to scale; and we see value accretion across our multiple brands.

These factors give us confidence that mobile EBITDA will grow again sequentially in 2H21. We also expect full year FY21 growth on a PCP basis, and then further growth that will support our FY22 and FY23 financial ambitions.

Fixed - Consumer & Small Business EBITDA declined $230 million. This includes a revenue decline of around $200 million, and an increase of around $130 million in network payments to NBN, partially offset by cost reduction.

Our nbn reseller EBITDA margin was around 5 per cent in 1H21, and our ambition remains to grow this to mid-teens by FY23. Our strategy to achieve this includes a combination of initiatives targeting improvements in gross margin, such as speed tier mix and add on services. along with cost-to-serve reductions and delivery of productivity.

Legacy EBITDA has continued to decline with diseconomies of scale.

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We remain excited by 5G Home Internet opportunities to drive future on-net growth, including through mmWave spectrum increasing capacity.

Turning to Fixed-Enterprise.

Data & connectivity EBITDA declined 15.4 per cent, due to reduced revenue on high-margin products, and largely stable costs. Our Adaptive networks strategy launched during the half is targeted at maximising long-term economics.

NAS EBITDA declined due to reductions in higher-margin legacy calling applications and professional services, along with the announced pause on labour reductions, and one-off costs negating the benefits of cost reductions. This was partly offset by growth in managed services and cloud applications.

We expect NAS EBITDA to be broadly flat vs PCP in 2H21, and then grow in FY22. We remain committed to achieving mid-teens margins from FY22.

Global EBITDA, excluding one-offs in the PCP and in constant currency, grew 2 per cent as cost initiatives, and mix offset the revenue decreases in Data & connectivity and NAS.

The commitments we’ve made about the future financial performance of our products are included on a slide in the appendix.

SLIDE 17 – FREE CASHFLOW

Turning to free cashflow, which you can see on slide 17.

Free cashflow, after operating lease payments, increased close to 90 per cent to $1.9 billion, largely due to working capital improvements.

This improvement reflects reduced hardware revenue, with reduced handset receivables, and improved inventory on lower handset volumes and average rate.

We have also managed our creditors and receivables position to deliver the favourable outcome. Some of the increase also reflects timing.

This means we are tracking ahead of our FY21 free cashflow guidance range, and are lifting the range to between $3.3 and $3.7 billion.

Capex is tracking consistent with guidance.

M&A disposals in the period included the Pitt St exchange property and Telstra’s Velocity network.

We look forward to participating in April’s mmWave spectrum auction, and note that payment terms include the option for five annual instalments rather than all payment upfront.

SLIDE 18 – DIVIDENDS

Moving to dividends, the Board has resolved to pay an interim dividend for 1H21 of 8 cents per share fully franked, including an ordinary dividend of 5 cents per share, and a special dividend of 3 cents per share.

The 1H21 ordinary interim dividend, represents a 125 per cent payout ratio of underlying earnings, but is well supported by cashflow.

The total interim dividend, represent a 60 per cent payout of free cashflow, after operating lease payments, less net finance costs paid.

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The Board understands the importance of dividends to our shareholders, and remains committed to the objectives of the Capital Management Framework.

As stated at last year’s AGM, the Board is prepared to temporarily exceed the Framework’s principle, of paying an ordinary dividend of 70-90 per cent of underlying earnings, in order to maintain the current dividend.

The Board stated it would consider the following factors in determining if it continues to do so:

First, if our ambition for underlying EBITDA of $7.5 to $8.5 billion in FY23 is achievable
Second, if the full-year free cashflow dividend payout ratio remains supportive, and we retain a strong financial position, and
Third, if there are any other factors that would make the payment of the dividend at that level imprudent.

Based on this criteria, the board expects to pay an FY21 fully franked dividend of 16 cents per share.

SLIDE 19 – CAPITAL POSITION

Turning to our capital position, which you can see on slide 19.

Under our T22 strategy we have monetised over $2 billion in assets and our balance sheet and liquidity position remains strong.

Net debt declined around $700 million in 1H21, and we remain within our comfort ranges for all our credit metrics.

We have also updated our Capital Management Framework, consistent with the outlook for capex provided at the November 2020 Investor day. Principle 3 now states: Target capex/sales ratio of ~12 per cent, excluding spectrum, from FY23.

As discussed at Investor day, our revised T22 ROIC target, is for underlying ROIC of around 8 per cent by FY23, with a long-term ambition to grow ROIC.

SLIDE 20 – FY21 GUIDANCE (updated)

Turning now to our revised FY21 guidance, which you can see, along with the assumptions and conditions upon which we have provided them, on slide 20.

FY21 Income guidance is now $22.6 billion to $23.2 billion reducing ~$1.2 billion at the mid-point from prior guidance.

The large majority of the change is due to mobile hardware. I spoke earlier to how differently trading conditions have played out in the first half, compared to our expectations when we set guidance. Our outlook is also a few hundred million dollars lower than prior expectations in Global, largely due to exchange rate outcomes. These changes have minimal impact on EBITDA.

Underlying EBITDA is now expected to be in range of $3.3 billion to $3.6 billion in 2H21, which compares to $3.3 billion in 1H21.

We have therefore narrowed FY21 Underlying EBITDA guidance to be between $6.6 billion to $6.9 billion.

Our Underlying EBITDA guidance continues to assume an in-year nbn headwind, of approximately $700 million.

Due to timing of disconnections, we expect to be at the low-end of the net nbn one-off range.

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The estimated COVID-19 impact in FY21, is unchanged at approximately $400 million.

Free cashflow after operating lease payments, is now upgraded to $3.3 to $3.7 billion, up $450 million at the mid-point.

For clarity, any acquisitions from licensees under our strategy announced today, to transition to full ownership of branded stores, is excluded from guidance free cashflow.

To conclude, 1H21 was an inflection point for the financial performance of our business.

Our underlying results remained challenged, including from ongoing nbn headwinds, legacy declines, and financial impacts of the COVID-19 pandemic.

However, our continued focus on T22 is delivering simpler, better outcomes for our customers and greater productivity, enabling us to increase our cost-out targets.

Product margin improvement is also imminent, and already occurring in mobile.

We see clear positive indicators of an improved financial trajectory, which we expect will return us to underlying EBITDA growth in FY22, and put us on the path to achieving our FY23 financial ambitions.

We therefore look forward with confidence.

Finally, I would like to take this opportunity to add my thanks and recognise our dedicated teams right across Telstra.

We will now hand over to Nathan to take us through Q&A.

[END]

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Half year results and operations review

Half ear results and o erations review y p

Summary financial results	1H21	1H20	Change
	$m	$m	%
Revenue(excludingfinance income)	10,984	12,164	(9.7)
Total income(excludingfinance income)	12,015	13,413	(10.4)
Operatingexpenses	7,943	8,638	(8.0)
Share of netprofit/(loss)from equityaccounted entities	(2)	(2)	n/m
EBITDA	4,070	4,773	(14.7)
Depreciation and amortisation	2,429	2,722	(10.8)
EBIT	1,641	2,051	(20.0)
Net finance costs	307	375	(18.1)
Income tax expense	209	526	(60.3)
Profit for theperiod	1,125	1,150	(2.2)
Profit attributable to equityholders of Telstra	1,098	1,139	(3.6)
Capex1	1,421	1,366	4.0
Free cashflow	2,666	1,520	75.4
Earningsper share(cents)	9.2	9.6	(4.2)

Capex is defined as additions to property, plant and equipment and intangible assets including capital lease additions, excluding expenditure on spectrum, measured on an accrued basis. Capex excludes externally funded capex.

Reported results

Telstra delivered 1H21 results showing the business building momentum towards growth in its underlying business. On a reported basis, total income declined by 10.4 per cent, EBITDA declined by 14.7 per cent and NPAT declined by 2.2 per cent. Underlying EBITDA declined by 14.2 per cent on a guidance basis with the two largest contributors to the decline being the estimated impact from the in-year nbn headwind of $370 million and estimated $170 million impact from COVID-19. Excluding these impacts, underlying EBITDA was broadly flat compared with 1H20. Income tax expense declined 60.3 per cent on a low effective tax rate associated with M&A and asset sales transactions as existing capital losses were used to offset capital gains. Excluding these oneoff impacts, our underlying effective tax rate was close to the statutory rate.

The execution of our T22 strategy continues with more than 80 per cent of the measures used to monitor progress against now delivered or on track for delivery. We reduced underlying fixed costs by $201 million or 6.6 per cent bringing the total underlying fixed cost reductions to around $2.0 billion since FY16 and have now increased our FY22 cost out target from $2.5 billion to $2.7 billion. We exceeded our $2 billion asset monetisation target with proceeds going towards strengthening our balance sheet, and also announced a corporate restructure which will maximise optionality and provide greater flexibility to monetise our passive infrastructure assets, including our towers.

Our multi-brand strategy continued to deliver mobile SIO growth as we added 80,000 retail postpaid handheld mobile services including 22,000 from Belong, 46,000 retail prepaid handheld unique users, and 163,000 Wholesale services in the half. We continue to extend our 5G leadership with more than 50 per cent of the population now covered by our 5G footprint and we will reach more than 75 per cent of the population by the end of June 2021. Today we have around 1,000,000 5G devices on our network.

The Telstra Board resolved to pay a fully franked interim dividend of 8 cents per share, comprising an interim ordinary dividend of 5 cents and an interim special dividend of 3 cents. The Board also expects to pay a fully franked final dividend of 8 cents per share, bringing the total dividend for FY21 to 16 cents per share[1] . Guidance was revised for total income ($23.2b-$25.1b to $22.6b-$23.2b), underlying EBITDA ($6.5b-$7.0b to $6.6b-$6.9b) and free cashflow after operating lease payments ($2.8b-$3.3b to $3.3b-$3.7b).

Other information

Consistent with information presented for internal management reporting purposes, the result of each segment is measured based on its EBITDA contribution which differs from our statutory EBITDA. Refer to Note 2.1.1 in the Financial Report for further detail.

First half performance against our FY21 Executive Variable Remuneration Plan (EVP) metrics is included on page 11. For additional detail on these EVP metrics and targets, refer to pages 73-75 of our 2020 Annual Report available at - https://www.telstra.com.au/aboutus/investors/financial information/reports

Commentary reflects statutory and management accounts reporting.

1 Any return is subject to no unexpected material events, Board discretion having regard to financial and market conditions and maintenance of financial strength and flexibility consistent with Telstra’s capital management framework.

Telstra 2021 half year results | 1

Half year results and operations review

Results on a guidance basis1	Results on a guidance basis1	1H21	1H21	FY21 Guidance	FY21 Guidance	FY21 Guidance
Total income		$11.8b		$22.6b to $23.2b
UnderlyingEBITDA		$3.3b		$6.6b to $6.9b
Net one-off nbn DA receiptslessnbn net cost to connect		$0.5b		$0.7b to $1.0b
Capex		$1.4b		$2.8b to $3.2b
Free cashflowafteroperatinglease payments		$1.9b		$3.3b to $3.7b

Guidance versus reported results1	1H21		1H21		1H21	1H20
	Reported results $m		Adjustments $m		Guidance basis $m	Guidance basis $m
Total income	12,015		(207)		11,808	13,414
UnderlyingEBITDA	4,070		(746)		3,324	3,875
Free cashflow	2,666		(773)		1,893	1,005

This guidance assumes no impairments in and to investments or non-current tangible and intangible assets, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum, and excludes the impacts of Pitt St exchange sale and leaseback. The guidance is based on management best estimates of nbn impacts including input from the nbn Corporate Plan currently published at time of issue of this guidance. Total income excludes finance income. Underlying EBITDA excludes net one-off nbn DA receipts less nbn net cost to connect, one-off restructuring costs and guidance adjustments but includes depreciation of mobile lease right-of-use assets. Capex is measured on an accrued basis and excludes spectrum and guidance adjustments, externally funded capex and capitalised leases. Free cashflow defined as ‘operating cash flows’ less ‘investing cash flows’ less ‘payments for operating lease liabilities’, and excludes spectrum and guidance adjustments. Refer to the Guidance versus reported results schedule. The adjustments within the tables in this schedule have been reviewed by our auditors.

We have updated our Capital Management Framework consistent with the outlook for capex provided at the November 2020 Investor Day. Principle 3 now states: ‘Target capex/sales ratio of ~12 per cent, excluding spectrum, from FY23’.

On 11 February 2021, the Directors of Telstra Corporation Limited resolved to pay a fully franked interim dividend of 8 cents per share, comprising an interim ordinary dividend of 5 cents and an interim special dividend of 3 cents. Shares will trade excluding entitlement to the interim dividend from 24 February 2021 with payment to be made on 26 March 2021.

The interim ordinary dividend represents a 125 per cent payout ratio on 1H21 underlying earnings[1] while the interim special dividend represents a 97 per cent payout ratio of 1H21 net one-off nbn receipts[2] .

The Board is prepared to temporarily exceed our capital management framework principle of paying an ordinary dividend of 70 to 90 per cent of underlying earnings to maintain the dividend at its current level. The Board considers the following factors in determining whether to do so – (1) our ambition of underlying EBITDA of $7.5 billion to $8.5 billion from FY23 onwards is achievable; (2) full year free cash flow dividend payout ratio remains supportive and we retain a strong financial position; and (3) if there are other factors that would make the payment of the dividend at that level imprudent.

Our 1H21 underlying earnings were $494 million while net one-off nbn receipts were $364 million compared with underlying earnings of $727 million and net one-off nbn receipts of $552 million in 1H20.

“underlying earnings” is defined as net profit after tax from continuing operations excluding net one-off nbn receipts (as defined in footnote 2), one-off restructuring costs and guidance adjustments (as defined in footnote 3).
“net one-off nbn receipts” is defined as net nbn one off Definitive Agreement receipts (consisting of PSAA, Infrastructure Ownership and Retraining) less nbn net cost to connect less tax.
Guidance adjustments include impairments in and to investments or non-current tangible and intangible assets, proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum.

Segment performance

We report segment information on the same basis as our internal management reporting structure as at reporting date. Segment comparatives reflect organisational changes that have occurred since the prior reporting period to present a like-for-like view.

Segment total income

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

1H21 1H20
Telstra Consumer and
11% Small Business 11%
7% Telstra Enterprise 8%
0% 0%
Networks and IT
53% 53%
All Other
29% 28%
Telstra InfraCo ex
internal access charges
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Telstra 2021 half year results | 2

Half year results and operations review

Total external income	1H21	1H20	Change
	$m	$m	%
Telstra Consumerand Small Business	6,353	7,141	(11.0)
TelstraEnterprise	3,468	3,773	(8.1)
Networks andIT	11	12	(8.3)
AllOther	827	998	(17.1)
TelstraInfraCoincludinginternalaccess charges	2,042	2,334	(12.5)
Internalaccess charges	(686)	(845)	18.8
Total	12,015	13,413	(10.4)

Telstra Consumer and Small Business

Telstra Consumer and Small Business provides telecommunication products, services and solutions across mobiles, fixed and mobile broadband, telephony and Pay TV/IPTV and digital content to consumer and small business customers in Australia.

Income for Telstra Consumer and Small Business decreased by 11.0 per cent to $6,352 million impacted by a 7.5 per cent decline across fixed products including a 44.8 per cent decline in on-net revenue due to nbn migration and a 14.0 per cent decline in mobility revenue largely due to lower hardware revenue.

Telstra Enterprise

Telstra Enterprise is responsible for sales and contract management for large business, government and global carrier customers in Australia and globally. It also provides product management for advanced technology solutions and services, including data and connectivity and NAS products such as managed network, unified communications, cloud, industry solutions and integrated services.

Income for Telstra Enterprise decreased by 8.1 per cent to $3,468 million impacted by a 6.4 per cent decline across fixed products including a 7.2 per cent decline in data and connectivity income as the decrease in copper services was not fully offset by nbn service growth, and a 14.1 per cent decline in calling applications revenue attributable to declines in ISDN, inbound and fixed line calling products.

Networks and IT

Networks and IT is responsible for the overall planning, design, engineering architecture and construction of Telstra networks, technology and information technology solutions. It primarily supports the revenue generating activities of other segments. Networks and IT income decreased by 8.3 per cent to $11 million.

Telstra InfraCo

Telstra InfraCo is a standalone infrastructure business unit within Telstra. It is responsible for key network assets including data centres and exchanges, our fibre network (including mobile backhaul), mobile towers, international subsea cables, poles, ducts and pipes.

Telstra InfraCo income excluding internal access charges decreased by 8.9 per cent to $1,356 million due to expected declines from Telstra Wholesale legacy fixed products and commercial works for NBN Co. This was partly offset by increased recurring nbn DA receipts in line with the progress of the nbn[TM] network rollout and receipts for access to passive infrastructure, and an increase in wholesale mobility. Including internal access charges, income decreased by 12.5 per cent to $2,042 million.

All Other

Certain items of income and expense relating to multiple reportable segments are recorded by our corporate areas and included in the All Other category. This category also includes Product and Technology Group, Global Business Services (GBS) and Telstra Health. Income decreased by 17.1 per cent mainly due to declines in Per Subscriber Address Amount (PSAA) receipts and ISA ownership receipts in line with the progress of the nbn[TM] network rollout.

Product performance

Product income breakdown

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1H21 Mobile 1H20
3% Fixed - C&SB 8% 1%
4% [6%] 3%
Fixed - Enterprise
6% 6%
39% Fixed - Wholesale 40%
6% 7%
Global
Recurring nbn DA
16% One-off nbn DA and 15%
connection
Other
20% 20%
----- End of picture text -----

Telstra 2021 half year results | 3

Half year results and operations review

Product income	1H21	1H21	1H20	1H20	Change	Change
	$m		$m		%
Mobile	4,710		5,355		(12.0)
Fixed–C&SB	2,426		2,623		(7.5)
Fixed– Enterprise	1,852		1,978		(6.4)
Fixed– Wholesale	770		952		(19.1)
Global	755		846		(10.8)
Recurringnbn DA	452		432		4.6
One-off nbn DA& connection	658		1,039		(36.7)
Other	392		188		n/m
Total	12,015		13,413		(10.4)

EBITDA contribution margins1	1H21 %	2H20 %		1H20 %		FY20 %
Mobile	37.0	33.7		34.9		34.3
Fixed – C&SB	6.4	7.4		14.7		11.2
Fixed – Enterprise	23.2	28.1		27.8		28.0
Fixed – Wholesale	48.4	50.7		45.3		47.9
Global	21.7	22.3		21.4		21.9
Recurring nbn DA	94.7	93.9		93.8		93.8
Net one-off nbn DA less nbn net cost to connect	79.0	77.5		75.8		76.6

The data in this table includes adjustments to historic numbers to reflect changes in product hierarchy.

On a reported basis, total income (excluding finance income) declined by 10.4 per cent to $12,015 million. On a guidance basis, total income (excluding finance income) was $11,808 million. Competitive pressure, legacy product and service declines, and the nbn[TM] network rollout continued to negatively impact income. International roaming revenue loss due to international travel restrictions and customer initiatives in response to COVID-19 also contributed to a decline in revenue. The decline has been partly offset by positive signs in mobile with continued growth in customer services and an increase in postpaid Transacting Minimum Monthly Commitment (TMMC).

More detail on each of the products are outlined below on a reported basis unless otherwise stated, presented in accordance with our new product reporting framework which was announced to the market on 13 January 2021. The restated product reporting framework is the result of a review to drive simplicity and better alignment with how we go to market, our T22 strategy and our financial ambitions.

Mobile

Mobile income declined by 12.0 per cent to $4,710 million largely due to lower hardware volumes (-$500 million) and international roaming declines (~-$150 million). Retail services in operation (SIO) increased by 254,000 in the half bringing the total to 19.0 million. We now have 8.6 million postpaid handheld retail SIOs, an increase of 80,000 in the half including 22,000 from Belong.

Postpaid handheld revenue decreased by 6.2 per cent to $2,352 million as net adds were offset by an 8.6 per cent ARPU decline from $50.31 to $45.99. Excluding the international roaming decline, ARPU decreased by 3.2 per cent as a $3+ TMMC improvement in 1H21 compared with 1H20 and pricing changes were offset by out of bundle revenue decline, accounting for new plans which allocate more revenue to hardware, and dilution from Belong customer mix.

Prepaid handheld revenue increased by 4.1 per cent to $404 million as unique users increased by 82,000 over the past 12 months (46,000 increase in the half). ARPU increased from $19.20 to $20.89 and the average voucher size stabilised.

Mobile broadband revenue decreased by 2.8 per cent to $316 million as an increase in ARPU was offset by a 119,000 reduction in SIOs over the past 12 months (97,000 decline in the half) including a reduction in prepaid customer services. Revenue stabilised from 2H20 to 1H21 as more people worked and studied from home.

Internet of Things (IoT) and other revenue increased by 2.4 per cent to $127 million while increasing SIOs by 456,000 in the half. Growth in carriage was offset by managed services decline.

Wholesale revenue increased 22.1 per cent to $127 million. Wholesale SIOs increased by 163,000 in the half bringing the total to 1.7 million as Mobile Virtual Network Operators (MVNO) plans on the Telstra mobile network continued to rise in popularity.

Hardware, interconnect and other revenue decreased by 27.4 per cent to $1,384 million largely due to lower handset sales.

Mobile EBITDA contribution margin increased by 2.1 percentage points to 37.0 per cent largely due to lower hardware revenue which is lower percentage margin than mobile services revenue.

Telstra 2021 half year results | 4

Half year results and operations review

Fixed – Consumer and Small Business (C&SB)

Fixed – C&SB income declined by 7.5 per cent to $2,426 million impacted by nbn migration along with declines in legacy voice and Foxtel from Telstra. C&SB bundles and standalone data SIOs declined by 53,000 including 11,000 additions from Belong in the half, bringing the total to 3,656,000.

We continue to lead the nbn market with a total of 3.4 million nbn connections, an increase of 196,000 in the half. Our nbn market share is now 46 per cent (excluding satellite) with the migration to nbn now almost 90 per cent complete. The Telstra Smart Modem is now being utilised by 79 per cent of our fixed data consumer base, providing a better experience on the nbn with strong Wi-Fi connectivity and mobile back up.

On-net fixed revenue, which is revenue from services on the Telstra network, decreased by 44.8 per cent to $462 million while off-net fixed revenue, which is revenue from services for which we are a reseller, increased by 18.2 per cent to $1,470 million as customers continue to migrate on to the nbn[TM] network.

Consumer content and services revenue declined by 10.2 per cent to $342 million due to lower Foxtel from Telstra SIOs despite growth in gaming.

Business apps and services revenue declined by 5.1 per cent to $94 million due to legacy product decline partly offset by growth in IP voice and video calling, and professional services .

Interconnect, payphones and E000 revenue declined by 6.5 per cent to $58 million mainly due to ongoing payphone usage and inbound calling services decline.

Fixed – C&SB EBITDA contribution margin declined by 8.3 percentage points to 6.4 per cent due to high margin revenue reduction and growing network payments to NBN Co, partly offset by fixed cost reduction.

Fixed – Enterprise

Fixed – Enterprise income decreased by 6.4 per cent to $1,852 million reflecting declines in data and connectivity income and NAS income.

Data and connectivity income declined by 7.2 per cent to $563 million. While the fibre SIO base has been retained, the copper SIO decline was not fully offset by nbn SIO growth.

NAS income decreased by 6.0 per cent to $1,289 million due to a decline in legacy calling applications including ISDN, and fewer lower margin equipment sales.

Within NAS, calling applications revenue declined by 14.1 per cent to $366 million due to ISDN, inbound and fixed line calling products. This was partly offset by growth in unified communications and collaboration product growth.

Managed services revenue increased by 6.5 per cent to $328 million as more network customers attached cyber security services and from growth in cloud based applications.

Professional services revenue decreased by 5.2 per cent to $181 million due to the completion of large strategic contracts, partly offset by growth in professional services relating to mobile and IoT.

Cloud applications revenue increased by 6.7 per cent to $127 million from partner cloud products including AWS and Microsoft, enabling attachment to managed services.

Equipment sales revenue declined by 19.1 per cent to $157 million from a general deferral of hardware spend due to market conditions resulting from COVID-19 and a shift to cloud based technologies.

Fixed – Enterprise EBITDA contribution margin declined by 4.6 percentage points to 23.2 per cent. Data and connectivity EBITDA contribution margin declined by 5.7 percentage points to 58.6 per cent reflecting reduced revenue on a constant cost base. NAS EBITDA contribution margin declined by 3.9 percentage points to 7.8 per cent due to reductions in higher margin legacy calling applications and professional services, announced pause on labour reductions, and one-off costs, partly offset by growth in managed services and cloud applications.

Fixed – Wholesale

Fixed – Wholesale income declined by 19.1 per cent to $770 million impacted by ongoing migration to the nbn, partly offset by growth in ongoing products including Telstra fibre.

Data and connectivity revenue decreased by 6.4 per cent to $176 million reflecting an ongoing SIO reduction in enterprise grade copper products and price competition in wideband fibre products.

Legacy calling and fixed revenue declined by 34.4 per cent to $225 million due to the continued legacy fixed product SIO decline as the nbn migration continues.

Commercial and recoverable works revenue declined by 12.4 per cent to $369 million as the nbn[TM] network rollout nears completion.

Fixed – Wholesale EBITDA contribution margin increased by 3.1 percentage points to 48.4 per cent due to strong cost out performance despite a decline in revenue.

Global

Global represents the international business of Telstra Enterprise. Income declined by 6.9 per cent in constant currency (CC) terms due to the continued move away from low margin legacy voice.

Fixed legacy voice revenue decreased by 20.9 per cent (CC) due to continued market decline and strategic focus on profitable revenue.

Data and connectivity revenue declined by 3.8 per cent (CC) however excluding one off benefits from early customer contract terminations in 1H20, was largely flat due to growth in capacity in the Wholesale segment.

NAS and other revenue decreased by 4.7 per cent (CC) due to a reduction in low margin customer premises equipment (CPE) sales, and a decline in professional services.

Global EBITDA contribution margin increased by 0.3 percentage points to 21.7 per cent reflecting cost initiatives and sales mix

Telstra 2021 half year results | 5

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offsetting revenue declines.

Recurring nbn DA

Recurring nbn DA income includes infrastructure services across ducts, racks and backhaul provided to NBN Co. Income increased by 4.6 per cent to $452 million reflecting the nbn[TM] network rollout.

One-off nbn DA & connection

One-off nbn DA & connection income includes receipts from NBN Co for disconnecting customers from our legacy network, and oneoff income we receive from customers to connect to the nbn[TM] network. Income decreased by 36.7 per cent to $658 million as migration to the nbn nears completion.

Other

Other product income includes Telstra Health and corporate adjustments. Corporate adjustments include items not related to products such as impact of bond rate movements on leave provisions. Income increased by $204 million to $392 million mainly due to a gain on sale and leaseback of the Pitt Street exchange property and other M&A transactions, and 16.6 per cent revenue growth in Telstra Health.

Expense performance

Total operating expenses declined by 8.0 per cent to $7,943 million on a reported basis and declined by 9.8 per cent to $8,056 million on a reported lease adjusted basis in part due to the 6.6 per cent or $201 million reduction in underlying fixed costs from our productivity program and a $138 million decrease in restructuring costs associated with T22 initiatives.

Sales costs, which are direct costs associated with revenue and customer growth, decreased by 7.3 per cent to $4,134 million due to a $463 million decline in other sales costs as a result of lower hardware costs, partly offset by a $136 million increase in nbn access payments. Other fixed costs decreased by 13.5 per cent while one-off nbn DA and nbn cost to connect declined by 45.0 per cent in line with the progress of the nbn[TM] network rollout. On an underlying basis, total operating expenses declined by 7.8 per cent as underlying fixed cost reduction exceeded increased nbn access payments.

In June 2018, we announced we would target a $2.5 billion annual reduction in underlying fixed costs by FY22 compared with restated underlying fixed costs of ~$7.9 billion in base year FY16. We have now achieved approximately $2.0 billion of annual cost out since FY16 and increased our FY22 target by $200 million to $2.7 billion.

Operating expenses1	Operating expenses1
			1H20 $m	Change
		1H21
		$m
				$m		%

Sales costs		_4,134 _	_4,461 _		(327)	(7.3)
- nbnpayments		960	824		136	16.5
-other		3,174	3,637		(463)	(12.7)
Fixed costs		3,690	4,022		(332)	(8.3)
-underlying2		2,851	3,052		(201)	(6.6)
-other3		839	970		(131)	(13.5)
Underlying		7,824	8,483		(659)	(7.8)
One-off nbn DAandnbncost to connect		138	251		(113)	(45.0)
Restructuring		60	198		(138)	(69.7)
Otherguidance adjustments4		34	-		34	n/m
Reported lease adjusted5		8,056	8,932		(876)	(9.8)
Lease adjustments6		(113)	(294)		181	n/m
Reported		7,943	8,638		(695)	(8.0)
	$8,483m $7,824m +$136m -$463m -$131m +$138m -$201m -6.6% cost out -7.8% Underlying basis			$8,056m +$60m +$34m Restructuring Other guidance adjustments 1H21 reported lease adjusted -9.8% Reported lease adjusted basis 4
	1H20 underlying Sales costs - nbn payments Sales costs - other Fixed costs - underlying Fixed costs - other 1H21 underlying One-off nbn DA and nbn cost to connect 2 3

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Sales and fixed costs exclude costs associated with one-off nbn DA and nbn cost to connect.
Fixed costs - underlying was ~$7.9b in FY16 on a restated basis and targeted to decline by our net cost productivity target of $2.7b by FY22. Underlying fixed costs are costs excluding other fixed costs (as defined in footnote 3.
Fixed costs - other includes items supporting revenue growth including relevant NAS costs, mobile handset lease, and product impairment.
Other guidance adjustments include M&A transactions.
‘Reported lease adjusted’ includes all mobile handset leases as operating expenses, and all rent/other leases below EBITDA.
Refer to note 7 of the Guidance versus reported results schedule.

Our progress on achieving our productivity target is reported through the above operating expenses table. The detail below provides commentary on the operating expenses as disclosed in our statutory accounts.

Operating expenses on a reported basis	1H21	1H20	Change
	$m	$m	%
Labour	2,033	2,170	(6.3)
Goods and services purchased	4,208	4,622	(9.0)
Net impairment losses on financial assets	78	80	(2.5)
Other expenses	1,624	1,766	(8.0)
Total	7,943	8,638	(8.0)

Labour

Total labour expenses decreased by 6.3 per cent or $137 million to $2,033 million. Salary and associated costs increased by $72 million due to higher headcount including the additional FTE recruited to assist with customer service to support our COVID-19 response. Labour substitution costs declined by $142 million from a reduction in labour outsourcing which was partly due to our COVID-19 response as a portion of our labour substitution headcount shifted to be permanent. Employee redundancy costs decreased by $66 million due to the extension of our pause on job reductions in response to COVID-19.

Total FTE increased by 1.3 per cent or 367 to 28,637 including our COVID-19 response. FTE decreased by 1.1 per cent or 322 in the six months to December 2020.

Goods and services purchased

Total goods and services purchased decreased by 9.0 per cent or $414 million to $4,208 million.

Cost of goods sold, which includes mobile handsets and accessories, tablets, cellular Wi-Fi, broadband modems and other fixed hardware decreased by 22.9 per cent or $428 million to $1,440 million mainly due to lower handset and NAS equipment sales in 1H21.

Network payments increased by 3.6 per cent or $55 million to $1,582 million, including a $136 million increase in nbn access payments as customers migrate across to nbn services. Offshore network payments were $104 million lower mainly due to an associated decrease in revenue from a decline in voice and network traffic.

Other goods and services purchased declined by 3.3 per cent or $41 million to $1,186 million mainly due to a reduction in Foxtel service fees as a result of a decline in Foxtel from Telstra subscribers.

Net impairment losses on financial assets

Total net impairment losses on financial assets decreased by 2.5 per cent or $2 million to $78 million.

Other expenses

Total other expenses decreased by 8.0 per cent or $142 million to $1,624 million.

Service contracts and other agreements expenses declined by 11.2 per cent or $77 million to $611 million due to productivity and cost reduction programs. Impairment losses (excluding net losses on financial assets) increased by 96.4 per cent or $53 million to $108 million largely due to a $34 million impairment loss for our Sensis investment classified as held for sale at 31 December 2020. Other expenses decreased by 11.5 per cent or $118 million to $905 million primarily due to a $105 million decline in general and administrative costs.

Depreciation and amortisation

Depreciation and amortisation decreased by 10.8 per cent or $293 million to $2,429 million including a $171m decrease in depreciation of right-of-use assets. Review of asset service lives during 1H21 resulted in no change in depreciation expense and a $34 million decrease in amortisation expense.

Foreign currency impacts

For the purposes of reporting our consolidated results, the translation of foreign operations denominated in foreign currency to Australian dollars decreased our expenses by $31 million across labour, goods and services purchased, and other expenses. This foreign exchange impact was offset by a $36 million sales revenue decrease resulting in an unfavourable EBITDA contribution of $5 million.

Net finance costs

Net finance costs decreased by 18.1 per cent or $68 million to $307 million due to a $107 million reduction in interest on gross debt offset by $39 million net increase in other financing items largely relating to contracts with customers as set out in note 4.2.4. The reduction in interest on gross debt came from lower borrowing costs of $91 million and lower lease interest cost of $16 million. Lower borrowing costs reflect a reduction in average gross borrowing cost from 4.8 per cent to 3.8 per cent and lower debt on issue.

Telstra 2021 half year results | 7

Half year results and operations review

Financial position

inancial position
Summary statement of cash flows	1H21	1H20	Change
	$m	$m	%
Net cashprovided by operating activities	3,443	2,733	26.0
Net cashusedin investing activities	(777)	(1,213)	35.9
-Capitalexpenditure (beforeinvestments)	(1,597)	(1,507)	(6.0)
-Other investing cash flows	820	294	n/m
Free cashflow	2,666	1,520	75.4
Net cashusedin financing activities	(1,836)	(1,389)	(32.2)
Netincrease/(decrease)incashand cashequivalents	830	131	n/m
Cashand cashequivalents at the beginning ofthe period	499	604	(17.4)
Effects ofexchangerate changes oncashand cashequivalents	(34)	2	n/m
Cashand cashequivalents at the end ofthe period	1,295	737	75.7

Capital expenditure and cash flow

Free cashflow generated from operating and investing activities was $2,666 million representing an increase of $1,146 million or 75.4 per cent. It was positively impacted by a $1,379 million improvement in working capital due to reduced handset receivables, and improved inventory and creditors positions, and a $408 million inflow from the sale and leaseback of the Pitt Street exchange property and other M&A transactions. This was partly offset by a $522 million decline in reported lease adjusted EBITDA largely due to a $268 million decline in net one-off nbn DA receipts and a $230 million decline in Fixed – C&SB EBITDA.

Net cash provided by operating activities increased by 26.0 per cent or $710 million to $3,443 million mainly due to a $2,175 million decrease in payments to suppliers and employees, partly offset by a $1,467 million decline in receipts from customers.

Net cash used in investing activities decreased by 35.9 per cent or $436 million to $777 million primarily due to a $289 million increase in proceeds from sale and leaseback and a $140 million increase in proceeds from sale of businesses.

Net cash used in financing activities increased by 32.2 per cent or $447 million to $1,836 million. This was largely due to $698 million in proceeds from the sale of units in a controlled trust in 1H20 and a $238 million increase in repayment of borrowings, partly offset by a $279 million increase in proceeds from borrowings.

Our accrued capital expenditure for the year on a guidance basis was $1,421 million or 13.3 per cent of sales revenue.

On a guidance basis free cashflow after operating lease payments was $1,893 million. Performance against guidance has been adjusted for free cashflow associated with the sale and leaseback of the Pitt Street exchange property (-$282 million), M&A (-$126 million), operating lease payments (-$396 million) and spectrum ($31 million).

Debt issuance	$m	Debt repayments	$m
Bilateral loan facilities	700	10 year AUDbond	(500)
Proceeds undersale andleasebacktransaction1	414	Bilateral loan facility	(100)
Other loans	15	Private placements	(145)
		Other loans	(59)
		Short term commercial paper and revolving bank facilities (net)	(443)
Total	1,129	Total	1,129

Treated as a financial liability under accounting standards.

Debt position

Our gross debt position was $17,405 million comprising borrowings of $15,108 million, lease liabilities of $3,355 million less $1,058 million in net derivative assets. Gross debt increased by 0.4 percent or $62 million since 30 June 2020 due to a net increase in lease liabilities of $57 million and other non-cash increases of $123 million, partly offset by a cash reduction of $118 million in borrowings. Cash reduction in borrowings comprises debt issuance and proceeds from sale and leaseback of $1,129 million less debt repayments of $1,247 million.

Net debt decreased by 4.4 per cent or $734 million to $16,110 million reflecting an increase in cash holdings of $796 million and the increase in gross debt.

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Half year results and operations review

Financial settings	1H21 Actual	FY21 Comfort zone
Debt servicing1	2.0x	1.5xto2.0x
Gearing2	51.5%	50% to70%
Interest cover3	13.6x	>7x

Debt servicing ratio is calculated as net debt/EBITDA (comfort zone recalibrated in 1H20 to reflect adoption of AASB16).
Gearing ratio is calculated as net debt/total net debt plus equity.
Interest cover is calculated as EBITDA/net interest on borrowings.

We remain within our comfort zones for our credit metrics. Our debt servicing is 2.0 times (30 June 2020: 1.9 times), gearing ratio is at 51.5 per cent (30 June 2020: 52.7 per cent) and interest cover is 13.6 times (30 June 2020: 11.7 times).

Summary statement of financial position	31 Dec 2020	30 Jun 2020	Change
	$m	$m	%
Current assets	7,385	6,534	13.0
Non-current assets	35,978	37,869	(5.0)
Total assets	43,363	44,403	(2.3)
Current liabilities	9,622	10,094	(4.7)
Non-current liabilities	18,556	19,162	(3.2)
Total liabilities	28,178	29,256	(3.7)
Net assets	15,185	15,147	0.3
Total equity	15,185	15,147	0.3
Return on average assets (%)	7.6	8.0	(0.4)pp
Return on average equity (%)	15.2	12.5	2.7pp

Statement of financial position

Our balance sheet remains in a strong position with net assets of $15,185 million.

Current assets increased by 13.0 per cent to $7,385 million. Cash and cash equivalents increased by $796 million including proceeds from business and asset sales while derivative financial assets increased by $325 million largely from reclassification to current asset for instruments maturing within the next 12 months. This was partly offset by a $531 million decline in trade and other receivables and contract assets.

Non-current assets declined by 5.0 per cent to $35,978 million. Derivative financial assets decreased by $920 million due to a reclassification to current assets of instruments maturing with the next 12 months and foreign currency and other valuation impacts, property, plant and equipment declined by $495 million mainly due to depreciation expenses, and intangible assets decreased by $299 million mainly due to amortisation expense partly offset by software asset additions.

Current liabilities declined by 4.7 per cent to $9,622 million. Trade and other payables declined by $436 million mainly due to a $227 million decline in accrued capital expenditure while current tax payables decreased by $155 million as a result of payments of prior year tax provisions. This was partly offset by a $95 million increase in liabilities classified as held for sale relating to our Sensis investment.

Non-current liabilities declined by 3.2 per cent to $18,556 million. Borrowings decreased by $776 million largely from reclassification to current liabilities of debt maturing within the next 12 months, foreign currency and other valuation impacts partly offset by increases from bilateral loan facilities and proceeds from the sale and leaseback of the Pitt Street exchange property. This was partly offset by a $143 million increase in lease liabilities.

Telstra 2021 half year results | 9

Half year results and operations review

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This schedule details adjustments made to the reported results for the current and comparative periods to reflect the performance of the business on the basis on which we provided guidance to the market, which is EBITDA on an underlying basis and assumes no impairments in and to investments or non-current tangible and intangible assets, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum, and excludes the impacts of Pitt St exchange sale and leaseback. The guidance is based on management best estimates of nbn impacts including input from the nbn Corporate Plan currently published at time of issue of this guidance. Underlying EBITDA excludes net one-off nbn DA receipts less nbn net C2C, one-off restructuring costs and guidance adjustments but includes depreciation of mobile lease right-of-use assets. Free cashflow defined as ‘operating cash flows’ less ‘investing cash flows’ less ‘payments for operating lease liabilities’, and excludes spectrum and guidance adjustments. The following adjustments provide a detailed reconciliation from reported to guidance results for each guidance measure:

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	1H20	1H21		1H20	1H21		1H20	1H21
	$m	$m		$m	$m		$m	$m

Reported Total Income	13,413	12,015	Reported EBITDA	4,773	4,070	Reported Free Cashflow	1,520	2,666
Adjustments
M&A adjustment1	1	(105)	M&A adjustment1	1	(105)	M&A adjustment1	0	(126)
Sensis impairment2	n/a	n/a	Sensis impairment2	0	34	Sensis impairment2	0	0
Pitt St sale and leaseback3	n/a	(102)	Pitt St sale and leaseback3	0	(102)	Pitt St sale and leaseback3	0	(282)
Restructuring costs4	n/a	n/a	Restructuring costs4	183	60	Restructuring costs4	n/a	n/a
Net one-off NBN receipts5	n/a	n/a	Net one-off NBN receipts5	(788)	(520)	Net one-off NBN receipts5	n/a	n/a
Spectrum payments6	n/a	n/a	Spectrum payments6	n/a	n/a	Spectrum payments6	33	31
Lease7	n/a	n/a	Lease7	(294)	(113)	Lease7	(548)	(396)
Guidance Total Income	13,414	11,808	Guidance Underlying EBITDA	3,875	3,324	Guidance Free Cashflow	1,005	1,893

The adjustments set out in the above tables have been reviewed by our auditor for consistency with the guidance basis as set out on this page.

Note:

1 Adjustments relating to acquisition and disposals of controlled entities, joint ventures, associates and other investments and any associated net gains or losses and contingent consideration. During 1H21 we disposed of our e-commerce platform business, our FTTP Velocity business and acquired Epicon IT Solutions Pty Ltd (including its wholly owned subsidiary, Service Potential Pty Ltd) and Epicon Software Pty Ltd. 1H20 includes adjustments relating to the disposal of our investment in Chief Entertainment Pty Ltd.
2 Adjustment related to impairment loss for our Sensis investment that is classified as held for sale at 31 December 2020.
3 Adjustment relating to the sale and leaseback transaction of the Pitt Street exchange property.
4 Adjustments for the strategic focus (T22 program) to improve customer experience, simplify structure and cut costs, in addition to our normal business as usual redundancies for the period.
5 Adjustments for net one-off nbn receipts which is defined as net nbn one off Definitive Agreement receipts (consisting of PSAA, Infrastructure Ownership and Retraining) less nbn net cost to connect.
6 Adjustment relating to the impact on free cashflow associated with our spectrum purchases and renewals for the period including: - $28m for renewal of spectrum licences in the 900 MHz band
payments for spectrum and apparatus licences in various spectrum bands
7 Adjustment for EBITDA impact for depreciation of mobile lease right-of-use assets. Adjustment for Free Cashflow impact of lease payments related to leases classified as operating leases prior to transition to AASB 16: 'Leases' (i.e. before 1 July 2019) and to any new leases accounted for after 1 July 2019.

n/a Adjustment is not relevant to the respective guidance measure.

Telstra 2021 half year results | 10

Half year results and operations review

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First half performance against FY21 EVP Performance Measures and Targets:

Performance Measure	Performance Measure	Performance Measure	Metric	Weighting	FY20	FY21*	FY21*	FY21*	1H21
					Baseline^	Threshold	Target	Max	Actual
Financial 60% of total weighting	Total Income
			Telstra External Income (excluding	15.0%	$26,161m				$11,808m
			finance income)

	Underlying EBITDA
			Underlying EBITDA is Earnings
			Before Interest, Tax, Depreciation &
			Amortisation, excludes net one-off DA i l C2C			Above	Approx.	At or above
			nbn recepts ess nbn net , one-off restructuring costs and	15.0%	$7,409m	bottom end of	Midpoint of	top end of	$3,324m
			guidance adjustments but includes			Market	Market	Market
			depreciation of mobile lease right of			Guidance*	Guidance*	Guidance*
			use assets

	Free Cash Flow (FCF)
			Free Cashflow excluding M&A and
			spectrum plus operating lease d i fii	15.0%	$3,415m				$1,893m
			payments (reporte n nancng cash flow under AASB 16)

	Net Opex Reduction		Year-on-year reduction in operating non-Direct Variable Cost (DVC) expenses	15.0%	$615m	$350m	$400m	$500m
									$201m

Strategic, Customer & Transformation 40% of total weighting	Episode NPS		Improvement in our Episode NPS	10%	+23	+30	+32	+34

									+26


		Active Enterprise Products	TE Number of Active Plans, the target provides progress toward our T22 reduction of 50% by FY21	5%	422	328	308	268
									341


	Product	Services on in-market plans	Consumer and Small Business Fixed and Postpaid services on in- market plans	5%	4.86m	7.7m	8.2m	8.6m
	Portfolio
	Simplification

									7.58m

	Digital Engagement	Digital Delivery	Sale transactions through digital channels. The 35% target is the average of Q4 FY21 not an average of performance for the year.	5%	30.3%	33.5%	35.0%	45.0%
									39.8%

		Telstra Connect	Active Telstra Enterprise customers on Telstra Connect in the last 3 months of FY21	5%	6,610	6,840	7,100	9,000
									5,954

	People Capability & Engagement**		Top-line sustainable employee engagement score	10%	83	80	83	84
									80

^ For FY21 targets, the baseline refers to FY20 results calculated on the same basis as the metric definition.

Market Guidance means guidance for FY21 as set out in Telstra’s ASX announcement dated 13 August 2020.

** The calculation of our People Capability and Engagement metric is based on asking our employees a series of engagement questions to help us understand how we are tracking against other global high performing companies. The questions for these engagement surveys are provided by an external service provider. For the second half of FY21 we will transition to a new service provider. However, it is expected that the FY21 target and performance range will remain the same as there is equivalence between the global high performing norm under both the current and new service provider engagement questions, ensuring that the same level of engagement is required for the metric to be satisfied and we continue to target a top-quartile sustainable employment score.

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Results of operations

	2020 2019 Change Change $M $M $M % Half-year ended 31 December	2020 2019 $M $M Lease adjustments (i) Half-year ended 31 December	2020 2019 Change Change $M $M $M % Reported lease adjusted (i) Half-year ended 31 December
Revenue (excluding finance income) Other income (ii) Total income (excluding finance income) Labour Goods and services purchased Net impairment losses on financial assets Other expenses Operating expenses Share of net (loss)/profit from joint ventures and associated entities Earnings before interest, income tax expense, depreciation and amortisation (EBITDA) Depreciation and amortisation Earnings before interest and income tax expense (EBIT) Finance income Finance costs Net finance costs Profit before income tax expense Income tax expense Profit for the period *Attributable to:* Equity holders of Telstra Entity Non-controlling interests Effective tax rate on operations EBITDA margin on revenue EBIT margin on revenue *Earnings per share (cents per share)* Basic (iii) Diluted (iii)	10,984 12,164 (1,180) (9.7) 1,031 1,249 (218) (17.5) 12,015 13,413 (1,398) (10.4) 2,033 2,170 (137) (6.3) 4,208 4,622 (414) (9.0) 78 80 (2) (2.5) 1,624 1,766 (142) (8.0) 7,943 8,638 (695) (8.0) (2) (2) - - 7,945 8,640 (695) (8.0) 4,070 4,773 (703) (14.7) 2,429 2,722 (293) (10.8) 1,641 2,051 (410) (20.0) 29 108 (79) (73.1) 336 483 (147) (30.4) 307 375 (68) (18.1) 1,334 1,676 (342) (20.4) 209 526 (317) (60.3) 1,125 1,150 (25) (2.2) 1,098 1,139 (41) (3.6) 27 11 16 n/m 1,125 1,150 (25) (2.2) 15.7% 31.4% (15.7) pp 37.1% 39.2% (2.1) pp 14.9% 16.9% (2.0) pp cents cents Change cents Change % 9.2 9.6 (0.4) (4.2) 9.2 9.6 (0.4) (4.2)	- - - -	10,984 12,164 (1,180) (9.7) 1,031 1,249 (218) (17.5) 12,015 13,413 (1,398) (10.4) 2,033 2,170 (137) (6.3) 4,208 4,622 (414) (9.0) 78 80 (2) (2.5) 1,737 2,060 (323) (15.7) 8,056 8,932 (876) (9.8) (2) (2) - - 8,058 8,934 (876) (9.8) 3,957 4,479 (522) (11.7) 2,316 2,428 (112) (4.6) 1,641 2,051 (410) (20.0) 29 108 (79) (73.1) 336 483 (147) (30.4) 307 375 (68) (18.1) 1,334 1,676 (342) (20.4) 209 526 (317) (60.3) 1,125 1,150 (25) (2.2)
		- -
		- - - - - - 113 294
		113 294 - -
		113 294
		(113) (294) (113) (294)
		- - - - - -
		- -
		- - - -
		- -

(i) From 1 July 2019 we have adopted AASB 16: 'Leases'. 'Reported Lease adjusted' provides a view of our mobile handset leases (Telstra as a lessee) which for

management reporting purposes are treated as part of operating performance results. In particular, 1H21 and FY20 has been adjusted to include the reported depreciation of mobile handsets right-of-use assets in EBITDA.

(ii) Other income includes gains and losses on asset and investment sales (including assets transferred under the nbn Definitive Agreements), income from government grants under the Telstra Universal Service Obligation Performance Agreement, Mobile Blackspot Government program and other individually immaterial contracts, income from nbnTM network disconnection fees, subsidies and other miscellaneous items.

(iii) Basic and diluted earnings per share are impacted by the effect of shares held in trust by Telstra Growthshare Trust (Growthshare) and by the Telstra Employee Share Ownership Plan Trust II (TESOP99).

n/m = not meaningful

Total income

Total income
	2020 2019 Change Change $M $M $M % Half-year ended 31 December
Mobile Postpaid handheld Prepaid handheld Mobile broadband Internet of Things (IoT) Mobile wholesale Other Total mobile services Hardware Mobile interconnect Media, Telstra Plus & other Total Mobile Fixed - C&SB On-net fixed Off-net fixed Consumer content & services Business applications & services Interconnect, payphones & E000 Total Fixed - C&SB Fixed - Enterprise Data & connectivity Calling applications Managed services & maintenance Professional services Cloud applications Equipment sales Other Total NAS Total Fixed - Enterprise Fixed - Wholesale Data & connectivity Legacy calling & fixed Commercial & recoverable works Total Fixed - Wholesale Global Fixed (legacy voice) Data & IP NAS & other Total Global Recurring nbn DA Other product income One-off nbn DA & connection Total income	2,352 2,508 (156) (6.2) 404 388 16 4.1 316 325 (9) (2.8) 118 116 2 1.7 127 104 23 22.1 9 8 1 12.5 3,326 3,449 (123) (3.6) 1,242 1,741 (499) (28.7) 150 120 30 25.0 (8) 45 (53) n/m 4,710 5,355 (645) (12.0) 462 837 (375) (44.8) 1,470 1,244 226 18.2 342 381 (39) (10.2) 94 99 (5) (5.1) 58 62 (4) (6.5) 2,426 2,623 (197) (7.5) 563 607 (44) (7.2) 366 426 (60) (14.1) 328 308 20 6.5 181 191 (10) (5.2) 127 119 8 6.7 157 194 (37) (19.1) 130 133 (3) (2.3) 1,289 1,371 (82) (6.0) 1,852 1,978 (126) (6.4) 176 188 (12) (6.4) 225 343 (118) (34.4) 369 421 (52) (12.4) 770 952 (182) (19.1) 105 140 (35) (25.0) 488 532 (44) (8.3) 162 174 (12) (6.9) 755 846 (91) (10.8) 452 432 20 4.6 392 188 204 n/m 658 1,039 (381) (36.7) 12,015 13,413 (1,398) (10.4)

Total income

2020
2019
Change
Change
$M
$M
$M
%
Half-year ended 31 December

Mobile
Postpaid handheld
Prepaid handheld
Mobile broadband
Internet of Things (IoT)
Mobile wholesale
Other
Total mobile services
Hardware
Mobile interconnect
Media, Telstra Plus & other
Total Mobile
Fixed - C&SB
On-net fixed
Off-net fixed
Consumer content & services
Business applications & services
Interconnect, payphones & E000
Total Fixed - C&SB
Fixed - Enterprise
Data & connectivity
Calling applications
Managed services & maintenance
Professional services
Cloud applications
Equipment sales
Other
Total NAS
Total Fixed - Enterprise
Fixed - Wholesale
Data & connectivity
Legacy calling & fixed
Commercial & recoverable works
Total Fixed - Wholesale
Global
Fixed (legacy voice)
Data & IP
NAS & other
Total Global
Recurring nbn DA
Other product income
One-off nbn DA & connection
Total income

2,352
2,508
(156)
(6.2)
404
388
16
4.1
316
325
(9)
(2.8)
118
116
2
1.7
127
104
23
22.1
9
8
1
12.5
3,326
3,449
(123)
(3.6)
1,242
1,741
(499)
(28.7)
150
120
30
25.0
(8)
45
(53)
n/m
4,710
5,355
(645)
(12.0)
462
837
(375)
(44.8)
1,470
1,244
226
18.2
342
381
(39)
(10.2)
94
99
(5)
(5.1)
58
62
(4)
(6.5)
2,426
2,623
(197)
(7.5)
563
607
(44)
(7.2)
366
426
(60)
(14.1)
328
308
20
6.5
181
191
(10)
(5.2)
127
119
8
6.7
157
194
(37)
(19.1)
130
133
(3)
(2.3)
1,289
1,371
(82)
(6.0)
1,852
1,978
(126)
(6.4)
176
188
(12)
(6.4)
225
343
(118)
(34.4)
369
421
(52)
(12.4)
770
952
(182)
(19.1)
105
140
(35)
(25.0)
488
532
(44)
(8.3)
162
174
(12)
(6.9)
755
846
(91)
(10.8)
452
432
20
4.6
392
188
204
n/m
658
1,039
(381)
(36.7)
12,015
13,413
(1,398)
(10.4)

Total expenses

Total expenses
	2020 2019 Change Change $M $M $M % Half-year ended 31 December
Salary and associated costs Other labour expenses Labour substitution Employee redundancy Total labour Cost of goods sold Network payments Other Total goods and services purchased Net impairment losses on financial assets Service contracts and other agreements Impairment losses (excluding net losses on financial assets) Other Total other expenses Total operating expenses Property Plant & Equipment Right of Use assets Depreciation Amortisation of intangible assets Total depreciation and amortisation	1,662 1,590 72 4.5 107 108 (1) (0.9) 199 341 (142) (41.6) 65 131 (66) (50.4) 2,033 2,170 (137) (6.3) 1,440 1,868 (428) (22.9) 1,582 1,527 55 3.6 1,186 1,227 (41) (3.3) 4,208 4,622 (414) (9.0) 78 80 (2) (2.5) 611 688 (77) (11.2) 108 55 53 96.4 905 1,023 (118) (11.5) 1,624 1,766 (142) (8.0) 7,943 8,638 (695) (8.0) 1,308 1,397 (89) (6.4) 378 549 (171) (31.1) 1,686 1,946 (260) (13.4) 743 776 (33) (4.3) 2,429 2,722 (293) (10.8)

2020
2019
Change
Change
$M
$M
$M
%
Half-year ended 31 December

Salary and associated costs
Other labour expenses
Labour substitution
Employee redundancy
Total labour
Cost of goods sold
Network payments
Other
Total goods and services purchased
Net impairment losses on financial assets
Service contracts and other agreements
Impairment losses (excluding net losses on financial assets)
Other
Total other expenses
Total operating expenses
Property Plant & Equipment
Right of Use assets
Depreciation
Amortisation of intangible assets
Total depreciation and amortisation

1,662
1,590
72
4.5
107
108
(1)
(0.9)
199
341
(142)
(41.6)
65
131
(66)
(50.4)
2,033
2,170
(137)
(6.3)
1,440
1,868
(428)
(22.9)
1,582
1,527
55
3.6
1,186
1,227
(41)
(3.3)
4,208
4,622
(414)
(9.0)
78
80
(2)
(2.5)
611
688
(77)
(11.2)
108
55
53
96.4
905
1,023
(118)
(11.5)
1,624
1,766
(142)
(8.0)
7,943
8,638
(695)
(8.0)
1,308
1,397
(89)
(6.4)
378
549
(171)
(31.1)
1,686
1,946
(260)
(13.4)
743
776
(33)
(4.3)
2,429
2,722
(293)
(10.8)

Statement of Financial Position

Statement of Financial Position
	31 Dec 20 30 Jun 20 Change Change $M $M $M % As at
*Current assets* Cash and cash equivalents Trade and other receivables and contract assets Deferred contract costs Inventories Derivative financial assets Current tax receivables Prepayments Assets classified as held for sale Total current assets *Non-current assets* Trade and other receivables and contract assets Deferred contract costs Inventories Investments - accounted for using the equity method Investments - other Property, plant and equipment Right-of-use assets Intangible assets Derivative financial assets Deferred tax assets Defined benefit asset Total non-current assets Total assets *Current liabilities* Trade and other payables Employee benefits Other provisions Lease liabilities Borrowings Derivative financial liabilities Current tax payables Contract liabilities and other revenue received in advance Liabilities classified as held for sale Total current liabilities *Non-current liabilities* Other payables Employee benefits Other provisions Lease liabilities Borrowings Derivative financial liabilities Deferred tax liabilities Defined benefit liabilities Contract liabilities and other revenue received in advance Total non-current liabilities Total liabilities Net assets *Equity* Share capital Reserves Retained profits Equity available to Telstra Entity shareholders Non-controlling interests Total equity Gross debt Net debt EBITDA interest cover (times) (i) Net debt to EBITDA ROA - Return on average assets ROE - Return on average equity ROI - Return on average investment ROIC - Return on invested capital Gearing ratio (net debt to capitalisation)	1,295 499 796 n/m 4,590 5,121 (531) (10.4) 99 82 17 20.7 461 418 43 10.3 472 147 325 n/m 4 2 2 100.0 291 265 26 9.8 173 - 173 n/m 7,385 6,534 851 13.0 1,425 1,428 (3) (0.2) 1,346 1,354 (8) (0.6) 26 28 (2) (7.1) 881 897 (16) (1.8) 15 21 (6) (28.6) 21,004 21,499 (495) (2.3) 2,950 3,030 (80) (2.6) 7,113 7,412 (299) (4.0) 1,091 2,011 (920) (45.7) 58 66 (8) (12.1) 69 123 (54) (43.9) 35,978 37,869 (1,891) (5.0) 43,363 44,403 (1,040) (2.3) 3,544 3,980 (436) (11.0) 714 727 (13) (1.8) 118 124 (6) (4.8) 525 611 (86) (14.1) 2,818 2,763 55 2.0 81 54 27 50.0 69 224 (155) (69.2) 1,658 1,611 47 2.9 95 - 95 n/m 9,622 10,094 (472) (4.7) 7 4 3 75.0 164 127 37 29.1 135 143 (8) (5.6) 2,830 2,687 143 5.3 12,290 13,066 (776) (5.9) 424 320 104 32.5 1,512 1,605 (93) (5.8) 8 8 - - 1,186 1,202 (16) (1.3) 18,556 19,162 (606) (3.2) 28,178 29,256 (1,078) (3.7) 15,185 15,147 38 0.3 4,426 4,451 (25) (0.6) (59) 5 (64) n/m 10,134 10,017 117 1.2 14,501 14,473 28 0.2 684 674 10 1.5 15,185 15,147 38 0.3 17,405 17,343 62 0.4 16,110 16,844 (734) (4.4) 13.6 11.7 1.9 16.2 2.0 1.9 0.1 5.3 7.6% 8.0% (0.4) pp 15.2% 12.5% 2.7 pp 10.4% 11.0% (0.6) pp 8.7% 7.6% 1.1 pp 51.5% 52.7% (1.2) pp

31 Dec 20
30 Jun 20
Change
Change
$M
$M
$M
%
As at

Current assets
Cash and cash equivalents
Trade and other receivables and contract assets
Deferred contract costs
Inventories
Derivative financial assets
Current tax receivables
Prepayments
Assets classified as held for sale
Total current assets
Non-current assets
Trade and other receivables and contract assets
Deferred contract costs
Inventories
Investments - accounted for using the equity method
Investments - other
Property, plant and equipment
Right-of-use assets
Intangible assets
Derivative financial assets
Deferred tax assets
Defined benefit asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Employee benefits
Other provisions
Lease liabilities
Borrowings
Derivative financial liabilities
Current tax payables
Contract liabilities and other revenue received in advance
Liabilities classified as held for sale
Total current liabilities
Non-current liabilities
Other payables
Employee benefits
Other provisions
Lease liabilities
Borrowings
Derivative financial liabilities
Deferred tax liabilities
Defined benefit liabilities
Contract liabilities and other revenue received in advance
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained profits
Equity available to Telstra Entity shareholders
Non-controlling interests
Total equity
Gross debt
Net debt
EBITDA interest cover (times) (i)
Net debt to EBITDA
ROA - Return on average assets
ROE - Return on average equity
ROI - Return on average investment
ROIC - Return on invested capital
Gearing ratio (net debt to capitalisation)

1,295
499
796
n/m
4,590
5,121
(531)
(10.4)
99
82
17
20.7
461
418
43
10.3
472
147
325
n/m
4
2
2
100.0
291
265
26
9.8
173
-
173
n/m
7,385
6,534
851
13.0
1,425
1,428
(3)
(0.2)
1,346
1,354
(8)
(0.6)
26
28
(2)
(7.1)
881
897
(16)
(1.8)
15
21
(6)
(28.6)
21,004
21,499
(495)
(2.3)
2,950
3,030
(80)
(2.6)
7,113
7,412
(299)
(4.0)
1,091
2,011
(920)
(45.7)
58
66
(8)
(12.1)
69
123
(54)
(43.9)
35,978
37,869
(1,891)
(5.0)
43,363
44,403
(1,040)
(2.3)
3,544
3,980
(436)
(11.0)
714
727
(13)
(1.8)
118
124
(6)
(4.8)
525
611
(86)
(14.1)
2,818
2,763
55
2.0
81
54
27
50.0
69
224
(155)
(69.2)
1,658
1,611
47
2.9
95
-
95
n/m
9,622
10,094
(472)
(4.7)
7
4
3
75.0
164
127
37
29.1
135
143
(8)
(5.6)
2,830
2,687
143
5.3
12,290
13,066
(776)
(5.9)
424
320
104
32.5
1,512
1,605
(93)
(5.8)
8
8
-
-
1,186
1,202
(16)
(1.3)
18,556
19,162
(606)
(3.2)
28,178
29,256
(1,078)
(3.7)
15,185
15,147
38
0.3
4,426
4,451
(25)
(0.6)
(59)
5
(64)
n/m
10,134
10,017
117
1.2
14,501
14,473
28
0.2
684
674
10
1.5
15,185
15,147
38
0.3
17,405
17,343
62
0.4
16,110
16,844
(734)
(4.4)
13.6
11.7
1.9
16.2
2.0
1.9
0.1
5.3
7.6%
8.0%
(0.4) pp
15.2%
12.5%
2.7 pp
10.4%
11.0%
(0.6) pp
8.7%
7.6%
1.1 pp
51.5%
52.7%
(1.2) pp

(i) EBITDA interest cover equals EBITDA to net interest.

n/m = not meaningful

Statement of Cash Flows

Statement of Cash Flows
	2020 2019 Change Change $M $M $M % Half-year ended 31 December
*Cash flows from operating activities* Receipts from customers (inclusive of goods and services tax (GST)) Payments to suppliers and employees (inclusive of GST) Government grants received for operating activities Net cash generated by operations Income taxes paid Net cash provided by operating activities *Cash flows from investing activities* Payments for property, plant and equipment Payments for intangible assets Capital expenditure (before investments) Payments for businesses and shares in controlled entities (net of cash acquired) Payments for joint ventures and associated entities Total capital expenditure (including investments) Proceeds from sale of property, plant and equipment Proceeds from sale and leaseback Proceeds from sale of businesses Proceeds from sale of other investments Distributions received from equity accounted investments Receipts of the principal portion of finance lease receivables Government grants received for investing activities Interest received Net cash used in investing activities Operating cash flows less investing cash flows *Cash flows from financing activities* Proceeds from borrowings Repayment of borrowings Payments for the principal portion of lease liabilities Purchase of shares for employee share plans Finance costs paid Dividends paid to non-controlling interests Dividends paid to equity holders of Telstra Entity Proceeds from the sale of units in a controlled trust Other Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the period	13,634 15,101 (1,467) (9.7) (9,892) (12,067) 2,175 18.0 157 143 14 9.8 3,899 3,177 722 22.7 (456) (444) (12) (2.7) 3,443 2,733 710 26.0 (1,096) (1,178) 82 7.0 (501) (329) (172) (52.3) (1,597) (1,507) (90) (6.0) (21) (1) (20) n/m - (19) 19 n/m (1,618) (1,527) (91) (6.0) 159 181 (22) (12.2) 289 - 289 n/m 140 - 140 n/m 153 20 133 n/m 9 40 (31) (77.5) 69 44 25 56.8 11 15 (4) (26.7) 11 14 (3) (21.4) (777) (1,213) 436 35.9 2,666 1,520 1,146 75.4 1,338 1,059 279 26.3 (1,456) (1,218) (238) (19.5) (403) (538) 135 25.1 (34) (22) (12) (54.5) (314) (413) 99 24.0 (16) (7) (9) n/m (951) (951) - - - 698 (698) n/m - 3 (3) n/m (1,836) (1,389) (447) (32.2) 830 131 699 n/m 499 604 (105) (17.4) (34) 2 (36) n/m 1,295 737 558 75.7

2020
2019
Change
Change
$M
$M
$M
%
Half-year ended 31 December

Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax (GST))
Payments to suppliers and employees (inclusive of GST)
Government grants received for operating activities
Net cash generated by operations
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Capital expenditure (before investments)
Payments for businesses and shares in controlled entities (net of cash acquired)
Payments for joint ventures and associated entities
Total capital expenditure (including investments)
Proceeds from sale of property, plant and equipment
Proceeds from sale and leaseback
Proceeds from sale of businesses
Proceeds from sale of other investments
Distributions received from equity accounted investments
Receipts of the principal portion of finance lease receivables
Government grants received for investing activities
Interest received
Net cash used in investing activities
Operating cash flows less investing cash flows
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Payments for the principal portion of lease liabilities
Purchase of shares for employee share plans
Finance costs paid
Dividends paid to non-controlling interests
Dividends paid to equity holders of Telstra Entity
Proceeds from the sale of units in a controlled trust
Other
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period

13,634
15,101
(1,467)
(9.7)
(9,892)
(12,067)
2,175
18.0
157
143
14
9.8
3,899
3,177
722
22.7
(456)
(444)
(12)
(2.7)
3,443
2,733
710
26.0
(1,096)
(1,178)
82
7.0
(501)
(329)
(172)
(52.3)
(1,597)
(1,507)
(90)
(6.0)
(21)
(1)
(20)
n/m
-
(19)
19
n/m
(1,618)
(1,527)
(91)
(6.0)
159
181
(22)
(12.2)
289
-
289
n/m
140
-
140
n/m
153
20
133
n/m
9
40
(31)
(77.5)
69
44
25
56.8
11
15
(4)
(26.7)
11
14
(3)
(21.4)
(777)
(1,213)
436
35.9
2,666
1,520
1,146
75.4
1,338
1,059
279
26.3
(1,456)
(1,218)
(238)
(19.5)
(403)
(538)
135
25.1
(34)
(22)
(12)
(54.5)
(314)
(413)
99
24.0
(16)
(7)
(9)
n/m
(951)
(951)
-
-
-
698
(698)
n/m
-
3
(3)
n/m
(1,836)
(1,389)
(447)
(32.2)
830
131
699
n/m
499
604
(105)
(17.4)
(34)
2
(36)
n/m
1,295
737
558
75.7

n/m = not meaningful

Average Revenue per Unit (ARPU) ($)

Average Revenueper Unit(ARPU) ($)
Dec 2020 Jun 2020 Dec 2019 $ $ $ Mobile Postpaid handheld 45.99 47.53 50.31 Prepaid handheld 20.89 19.05 19.20 Mobile broadband 16.93 16.58 16.81 Fixed - C&SB C&SB bundle and standalone data 75.40 75.37 76.72 C&SB standalone fixed voice 45.82 48.96 51.60 Fixed - Enterprise Data & connectivity 471.52 475.26 484.05 Half-year ended	Change Change $ % (4.32) (8.6) 1.69 8.8 0.12 0.7 (1.32) (1.7) (5.78) (11.2) (12.53) (2.6) Dec 20 vs Dec 19	Change Change $ % Dec 20 vs Jun 20
		(1.54) (3.2) 1.84 9.7 0.35 2.1 0.03 0.0 (3.14) (6.4) (3.74) (0.8)

Note: Statistical data represents management’s best estimates

Services in operation (000s)

Services in operation(000s)
	Dec 2020 Jun 2020 Dec 2019 000s 000s 000s 8,564 8,484 8,381 3,134 3,319 3,426 3,061 3,158 3,180 4,240 3,784 3,482 30 30 28 19,029 18,775 18,497 1,713 1,550 1,376 2,462 2,416 2,380 3,656 3,709 3,654 554 692 871 579 632 678 195 203 208 393 719 1,168 33 35 37 Half-year ended	Change Change 000s % 183 2.2 (292) (8.5) (119) (3.7) 758 21.8 2 7.1 532 2.9 337 24.5 82 3.4 2 0.1 (317) (36.4) (99) (14.6) (13) (6.3) (775) (66.4) (4) (10.8) Dec 20 vs Dec 19	Change Change 000s % Dec 20 vs Jun 20
Mobile Postpaid handheld retail Prepaid handheld retail Mobile broadband (data cards) Internet of Things (IoT) Satellite Total retail mobile Total wholesale mobile Prepaid handheld retail unique users Fixed - C&SB C&SB bundles and standalone data C&SB standalone voice Foxtel from Telstra Fixed - Enterprise Data & connectivity Fixed - Wholesale Fixed legacy Data & connectivity			80 0.9 (185) (5.6) (97) (3.1) 456 12.1 - -
			254 1.4
			163 10.5 46 1.9 (53) (1.4) (138) (19.9) (53) (8.4) (8) (3.9) (326) (45.3) (2) (5.7)

Note: Statistical data represents management’s best estimates

Workforce

Dec 2020 Jun 2020 Dec 2019 000s 000s 000s Employee data Full time staff equivalents incl. contractor/agency labour 28,637 28,959 28,270 Half-year ended	Change Change 000s % 367 1.3 Dec 20 vs Dec 19	Change Change 000s % Dec 20 vs Jun 20
		(322) (1.1)

Note: Statistical data represents management’s best estimates

Segment information from operations

Segment information from operations
	2020 2019 Change $M $M % 6,353 7,141 (11.0) 3,468 3,773 (8.1) 11 12 (8.3) 827 998 (17.1) 10,659 11,924 (10.6) 2,042 2,334 (12.5) (686) (845) 18.8 12,015 13,413 (10.4) Total income Half-year ended 31 December	2020 2019 Change $M $M % EBITDA contribution Half-year ended 31 December
Telstra Consumer and Small Business Telstra Enterprise Networks and IT All Other Telstra excluding Telstra InfraCo Telstra InfraCo Internal access charges Total Telstra segments Operating lease expenses for all but mobile handset leases Depreciation of mobile handsets right-of-use assets Telstra Group EBITDA		2,375 2,642 (10.1) 1,465 1,595 (8.2) (741) (814) 9.0 (68) 63 n/m 3,031 3,486 (13.1) 1,450 1,362 6.5 (524) (369) (42.0) 3,957 4,479 (11.7) - - n/m 113 294 (61.6) 4,070 4,773 (14.7)

C&SB, Enterprise and Wholesale underlying income and fully allocated EBITDA

	2020 2019 Change $M $M % 3,848 4,475 (14.0) 2,426 2,623 (7.5) - 4 n/m 6,274 7,102 (11.7) 732 775 (5.5) 1,852 1,978 (6.4) 15 25 (40.0) 755 846 (10.8) 3,354 3,624 (7.5) 133 108 23.1 770 952 (19.1) 448 427 4.9 5 2 n/m 1,356 1,489 (8.9) 166 145 14.5 11,150 12,360 (9.8) Half-year ended 31 December Total income	2020 2019 Change $M $M % EBITDA contribution Half-year ended 31 December
Mobile Fixed - C&SB Other Telstra Consumer and Small Business Mobile Fixed - Enterprise Other Global Telstra Enterprise Mobile Fixed - Wholesale Recurring nbn DA Other InfraCo Other Underlying		1,353 1,484 (8.8) 155 385 (59.7) (3) - n/m 1,505 1,869 (19.5) 300 312 (3.8) 430 550 (21.8) 10 15 (33.3) 164 181 (9.4) 904 1,058 (14.6) 92 76 21.1 373 431 (13.5) 424 400 6.0 (12) (12) - 877 895 (2.0) 38 53 (28.3) 3,324 3,875 (14.2)

Note: C&SB, Enterprise, InfraCo external exclude any off-one nbn DA and connection, and guidance adjustments attributable. Enterprise Global excludes inter-segment revenue. InfraCo is external and excludes internal access charges.

Product profitability - EBITDA ($M)

	Dec 2020 Dec 2019 Change % 1,743 1,870 (6.8) 155 385 (59.7) 330 390 (15.4) 100 160 (37.5) 430 550 (21.8) 373 431 (13.5) 164 181 (9.4) 428 405 5.7 31 53 (41.5) 3,324 3,875 (14.2) 520 788 (34.0) (60) (183) 67.2 173 (1) n/m 3,957 4,479 (11.7) Half-year ended
Mobiles Fixed - C&SB - Data & connectivity - NAS Fixed - Enterprise Fixed - Wholesale Global Recurring nbn DA Other Underlying Net one-off nbn DA less nbn net C2C Restructuring Other guidance adjustments Reported lease adjusted

Note: Product margins represent management's best estimates and are based on lease adjusted figures

Product profitability - EBITDA margins %

Productprofitability - EBITDA margins %
	Dec 2020 Dec 2019 Half-year ended
Mobiles Fixed - C&SB - Data & connectivity - NAS Fixed - Enterprise Fixed - Wholesale Global Recurring nbn DA Other Underlying Net one-off nbn DA less nbn net C2C Restructuring Other guidance adjustments Reported lease adjusted	37.0% 34.9% 6.4% 14.7% 58.6% 64.3% 7.8% 11.7%
	23.2% 27.8%
	48.4% 45.3% 21.7% 21.4% 94.7% 93.8% 16.8% 30.5%
	29.8% 31.4%
	79.0% 75.8% - - - -
	32.9% 33.4%

Note: Product margins represent management's best estimates and are based on lease adjusted figures

Telstra Corporation Limited Half-year comparison - Reported lease adjusted (i) Half-year 31 December 2020

Half 1	Half 2	Full year	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP
Dec-17	Jun-18	Jun-18	Dec-18 Growth	Jun-19 Growth	Jun-19 Growth	Dec-19 Growth	Jun-20 Growth	Jun-20 Growth	Dec-20 Growth

2,570 493 416 84 90 6 3,659 1,382 106 89	2,574 465 367 105 99 6 3,616 1,464 106 86	5,144 958 783 189 189 12 7,275 2,846 212 175	2,615 1.8% 448 (9.1%) 350 (15.9%) 106 26.2% 99 10.0% 7 16.7% 3,625 (0.9%) 1,531 10.8% 112 5.7% 80 (10.1%)	2,567 (0.3%) 381 (18.1%) 323 (12.0%) 118 12.4% 102 3.0% 8 33.3% 3,499 (3.2%) 1,621 10.7% 112 5.7% 69 (19.8%)	5,182 0.7% 829 (13.5%) 673 (14.0%) 224 18.5% 201 6.3% 15 25.0% 7,124 (2.1%) 3,152 10.8% 224 5.7% 149 (14.9%)	2,508 (4.1%) 388 (13.4%) 325 (7.1%) 116 9.4% 104 5.1% 8 14.3% 3,449 (4.9%) 1,741 13.7% 120 7.1% 45 (43.8%)	2,405 (6.3%) 385 1.0% 315 (2.5%) 127 7.6% 117 14.7% (16) n/m 3,333 (4.7%) 1,313 (19.0%) 137 22.3% (8) n/m	4,913 (5.2%) 773 (6.8%) 640 (4.9%) 243 8.5% 221 10.0% (8) n/m 6,782 (4.8%) 3,054 (3.1%) 257 14.7% 37 (75.2%)


									2,352 (6.2%)
									404 4.1%
									316 (2.8%)
									118 1.7%
									127 22.1%
									9 12.5%
									3,326 (3.6%)
									1,242 (28.7%)
									150 25.0%
									(8) n/m
5,236	5,272	10,508	5,348 2.1%	5,301 0.6%	10,649 1.3%	5,355 0.1%	4,775 (9.9%)	10,130 (4.9%)	4,710 (12.0%)
1,697 670 422 100 87	1,476 778 399 97 85	3,173 1,448 821 197 172	1,264 (25.5%) 972 45.1% 390 (7.6%) 90 (10.0%) 78 (10.3%)	1,062 (28.0%) 1,092 40.4% 375 (6.0%) 93 (4.1%) 69 (18.8%)	2,326 (26.7%) 2,064 42.5% 765 (6.8%) 183 (7.1%) 147 (14.5%)	837 (33.8%) 1,244 28.0% 381 (2.3%) 99 10.0% 62 (20.5%)	616 (42.0%) 1,351 23.7% 346 (7.7%) 94 1.1% 53 (23.2%)	1,453 (37.5%) 2,595 25.7% 727 (5.0%) 193 5.5% 115 (21.8%)
									462 (44.8%)
									1,470 18.2%
									342 (10.2%)
									94 (5.1%)
									58 (6.5%)
2,976	2,835	5,811	2,794 (6.1%)	2,691 (5.1%)	5,485 (5.6%)	2,623 (6.1%)	2,460 (8.6%)	5,083 (7.3%)	2,426 (7.5%)
692 528 310 214 78 221 111 1,462	674 499 314 335 83 411 124 1,766	1,366 1,027 624 549 161 632 235 3,228	656 (5.2%) 485 (8.1%) 305 (1.6%) 218 1.9% 94 20.5% 226 2.3% 124 11.7% 1,452 (0.7%)	625 (7.3%) 461 (7.6%) 331 5.4% 275 (17.9%) 111 33.7% 356 (13.4%) 138 11.3% 1,672 (5.3%)	1,281 (6.2%) 946 (7.9%) 636 1.9% 493 (10.2%) 205 27.3% 582 (7.9%) 262 11.5% 3,124 (3.2%)	607 (7.5%) 426 (12.2%) 308 1.0% 191 (12.4%) 119 26.6% 194 (14.2%) 133 7.3% 1,371 (5.6%)	586 (6.2%) 402 (12.8%) 326 (1.5%) 236 (14.2%) 127 14.4% 306 (14.0%) 145 5.1% 1,542 (7.8%)	1,193 (6.9%) 828 (12.5%) 634 (0.3%) 427 (13.4%) 246 20.0% 500 (14.1%) 278 6.1% 2,913 (6.8%)
									563 (7.2%)
									366 (14.1%)
									328 6.5%
									181 (5.2%)
									127 6.7%
									157 (19.1%)
									130 (2.3%)
									1,289 (6.0%)
2,154	2,440	4,594	2,108 (2.1%)	2,297 (5.9%)	4,405 (4.1%)	1,978 (6.2%)	2,128 (7.4%)	4,106 (6.8%)	1,852 (6.4%)
196 571 631	205 520 559	401 1,091 1,190	200 2.0% 463 (18.9%) 539 (14.6%)	201 (2.0%) 407 (21.7%) 509 (8.9%)	401 - 870 (20.3%) 1,048 (11.9%)	188 (6.0%) 343 (25.9%) 421 (21.9%)	179 (10.9%) 281 (31.0%) 460 (9.6%)	367 (8.5%) 624 (28.3%) 881 (15.9%)
									176 (6.4%)
									225 (34.4%)
									369 (12.4%)
1,398	1,284	2,682	1,202 (14.0%)	1,117 (13.0%)	2,319 (13.5%)	952 (20.8%)	920 (17.6%)	1,872 (19.3%)	770 (19.1%)
151 452 165	167 471 178	318 923 343	144 (4.6%) 491 8.6% 168 1.8%	202 21.0% 512 8.7% 188 5.6%	346 8.8% 1,003 8.7% 356 3.8%	140 (2.8%) 532 8.4% 174 3.6%	139 (31.2%) 543 6.1% 197 4.8%	279 (19.4%) 1,075 7.2% 371 4.2%
									105 (25.0%)
									488 (8.3%)
									162 (6.9%)
768	816	1,584	803 4.6%	902 10.5%	1,705 7.6%	846 5.4%	879 (2.5%)	1,725 1.2%	755 (10.8%)
304 247 1,308	338 491 974	642 738 2,282	374 23.0% 177 (28.3%) 992 (24.2%)	410 21.3% 167 (66.0%) 1,124 15.4%	784 22.1% 344 (53.4%) 2,116 (7.3%)	432 15.5% 188 6.2% 1,039 4.7%	442 7.8% 179 7.2% 965 (14.1%)	874 11.5% 367 6.7% 2,004 (5.3%)	452 4.6%
									392 n/m
									658 (36.7%)
14,391	14,450	28,841	13,798 (4.1%)	14,009 (3.1%)	27,807 (3.6%)	13,413 (2.8%)	12,748 (9.0%)	26,161 (5.9%)	12,015 (10.4%)
2,699 3,989 103 2,473	2,508 4,349 87 2,414	5,207 8,338 190 4,887	2,722 0.9% 4,382 9.9% 88 (14.6%) 2,124 (14.1%)	2,557 2.0% 4,756 9.4% 96 10.3% 2,660 10.2%	5,279 1.4% 9,138 9.6% 184 (3.2%) 4,784 (2.1%)	2,170 (20.3%) 4,622 5.5% 80 (9.1%) 2,060 (3.0%)	1,888 (26.2%) 4,485 (5.7%) 122 27.1% 2,018 (24.1%)	4,058 (23.1%) 9,107 (0.3%) 202 9.8% 4,078 (14.8%)

									2,033 (6.3%)
									4,208 (9.0%)
									78 (2.5%)
									1,737 (15.7%)
9,264 (31)	9,358 9	18,622 (22)	9,316 0.6% 1 n/m	10,069 7.6% 11 22.2%	19,385 4.1% 12 n/m	8,932 (4.1%) (2) n/m	8,513 (15.5%) (303) n/m	17,445 (10.0%) (305) n/m	8,056 (9.8%)
									(2) -
5,096 2,219	5,101 2,251	10,197 4,470	4,483 (12.0%) 2,366 6.6%	3,951 (22.5%) 2,366 5.1%	8,434 (17.3%) 4,732 5.9%	4,479 (0.1%) 2,428 2.6%	3,932 (0.5%) 2,416 2.1%	8,411 (0.3%) 4,844 2.4%	3,957 (11.7%)
									2,316 (4.6%)
2,877 296	2,850 292	5,727 588	2,117 (26.4%) 352 18.9%	1,585 (44.4%) 342 17.1%	3,702 (35.4%) 694 18.0%	2,051 (3.1%) 375 6.5%	1,516 (4.4%) 396 15.8%	3,567 (3.6%) 771 11.1%	1,641 (20.0%)
									307 (18.1%)
2,581 889	2,558 693	5,139 1,582	1,765 (31.6%) 559 (37.1%)	1,243 (51.4%) 344 (50.4%)	3,008 (41.5%) 903 (42.9%)	1,676 (5.0%) 526 (5.9%)	1,120 (9.9%) 431 25.3%	2,796 (7.0%) 957 6.0%	1,334 (20.4%)
									209 (60.3%)
1,692	1,865	3,557	1,206 (28.7%)	899 (51.8%)	2,105 (40.8%)	1,150 (4.6%)	689 (23.4%)	1,839 (12.6%)	1,125 (2.2%)

(i) From 1 July 2019 we have adopted AASB 16: 'Leases' on a prospective basis, i.e. no restatement of the comparative period. 1H21 and FY20 has been adjusted to include the reported depreciation of mobile handsets right-of-use assets

in EBITDA because for management reporting purposes these expenses are treated as part of operating performance results. Given different accounting treatment of leases in FY20 compared to FY19,

to provide a like-for-like view of our mobile handset leases (Telstra as a lessee) for illustrative purposes FY19 has been adjusted to exclude proforma operating lease expense and implied interest in the capitalised lease liability of all but mobile handset leases from operating expenses, D&A, finance costs and income tax expense. FY18 has not been adjusted.

(ii) Includes bundles and data, standalone voice, hardware, Telstra Plus, TUSOPA, business data & connectivity and other one-off revenue.

(iii) Includes guidance adjustments. Guidance adjustments include impairments in and to investments or non-current tangible and intangible assets, proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. n/m = not meaningful

	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2020
Summary management reported half-yearly data Selected statistical data Mobile Total retail mobile SIOs (thousands) Postpaid handheld mobile SIOs (thousands) Belong postpaid handheld mobile SIOs (thousands) (i) Mobile broadband (data cards) SIOs (thousands) Prepaid mobile handheld unique users (thousands) (ii) Internet of Things (IoT) SIOs (thousands) Total wholesale mobile SIOs (thousands) Average postpaid handheld revenue per user per month ($) Average prepaid handheld revenue per user per month ($) Average mobile broadband revenue per user per month ($) nbnTM premise connections Bundles and standalone data (thousands) Belong (thousands) Voice only (thousands) Total nbnTM premise connections (thousands) Fixed - C&SB C&SB bundles and standalone data SIOs (thousands) Belong fixed data SIOs (thousands) (iii) C&SB standalone voice SIOs (thousands) Foxtel from Telstra (thousands) Average C&SB bundle and standalone data revenue per user per month ($) Average C&SB standalone fixed voice revenue per user per month ($) Fixed - Enterprise Data & connectivity SIOs (thousands) Average data & connectivity revenue per user per month ($) Fixed - Wholesale Fixed legacy SIOs (thousands) Data & connectivity SIOs (thousands) Labour Telstra FTEs incl contractor/agency
	Half 1	Half 2	Full Year	Half 1 PCP	Half 2 PCP	Full Year PCP	Half 1 PCP	Half 2 PCP	Full Year PCP	Half 1 PCP
	Dec-17	Jun-18	Jun-18	Dec-18 Growth	Jun-19 Growth	Jun-19 Growth	Dec-19 Growth	Jun-20 Growth	Jun-20 Growth	Dec-20 Growth

	17,609 7,692 21 3,964 2,432 2,346 862 56.15 22.70 17.58 1,304 92 234 1,630 3,451 180 1,710 799 81.78 51.35 3,060 37 34,115	17,716 7,866 67 3,893 2,294 2,571 973 55.12 22.36 15.58 1,573 110 263 1,946 3,519 203 1,494 790 80.11 51.48 2,638 39 34,624	17,716 7,866 67 3,893 2,294 2,571 973 55.55 22.75 16.69 1,573 110 263 1,946 3,519 203 1,494 790 80.67 51.26 2,638 39 34,624	17,956 2.0% 8,105 5.4% 182 n/m 3,723 (6.1%) 2,234 (8.1%) 2,832 20.7% 1,098 27.4% 54.58 (2.8%) 22.54 (0.7%) 15.32 (12.9%) 1,844 41.4% 132 43.5% 278 18.8% 2,254 38.3% 3,585 3.9% 225 25.0% 1,277 (25.3%) 772 (3.4%) 79.56 (2.7%) 51.36 0.0% 2,221 (27.4%) 39 5.4% 31,419 (7.9%)	18,338 3.5% 8,244 4.8% 248 n/m 3,627 (6.8%) 2,245 (2.1%) 3,132 21.8% 1,203 23.6% 52.34 (5.0%) 19.38 (13.3%) 14.65 (6.0%) 2,149 36.6% 176 60.0% 280 6.5% 2,605 33.9% 3,627 3.1% 254 25.1% 1,061 (29.0%) 730 (7.6%) 76.69 (4.3%) 51.97 1.0% 1,671 (36.7%) 38 (2.6%) 29,769 (14.0%)	18,338 3.5% 8,244 4.8% 248 n/m 3,627 (6.8%) 2,245 (2.1%) 3,132 21.8% 1,203 23.6% 53.61 (3.5%) 20.76 (8.7%) 14.92 (10.6%) 2,149 36.6% 176 60.0% 280 6.5% 2,605 33.9% 3,627 3.1% 254 25.1% 1,061 (29.0%) 730 (7.6%) 78.25 (3.0%) 51.64 0.7% 1,671 (36.7%) 38 (2.6%) 29,769 (14.0%)	18,497 3.0% 8,381 3.4% 339 86.3% 3,180 (14.6%) 2,380 6.5% 3,482 23.0% 1,376 25.3% 50.31 (7.8%) 19.20 (14.8%) 16.81 9.7% 2,452 33.0% 240 81.8% 272 (2.2%) 2,964 31.5% 3,654 1.9% 298 32.4% 871 (31.8%) 678 (12.2%) 76.72 (3.6%) 51.60 0.5% 208 n/m 484.05 n/m 1,168 (47.4%) 37 (5.1%) 28,270 (10.0%)	18,775 2.4% 8,484 2.9% 402 62.1% 3,158 (12.9%) 2,416 7.6% 3,784 20.8% 1,550 28.8% 47.53 (9.2%) 19.05 (1.7%) 16.58 13.2% 2,711 26.2% 298 69.3% 216 (22.9%) 3,225 23.8% 3,709 2.3% 333 31.1% 692 (34.8%) 632 (13.4%) 75.37 (1.7%) 48.96 (5.8%) 203 n/m 475.26 n/m 719 (57.0%) 35 (7.9%) 28,959 (2.7%)	18,775 2.4% 8,484 2.9% 402 62.1% 3,158 (12.9%) 2,416 7.6% 3,784 20.8% 1,550 28.8% 48.96 (8.7%) 19.46 (6.3%) 16.62 11.4% 2,711 26.2% 298 69.3% 216 (22.9%) 3,225 23.8% 3,709 2.3% 333 31.1% 692 (34.8%) 632 (13.4%) 75.90 (3.0%) 50.25 (2.7%) 203 n/m 481.44 n/m 719 (57.0%) 35 (7.9%) 28,959 (2.7%)


										19,029 2.9%
										8,564 2.2%
										424 25.1%
										3,061 (3.7%)
										2,462 3.4%
										4,240 21.8%
										1,713 24.5%
										45.99 (8.6%)
										20.89 8.8%
										16.93 0.7%

										2,895 18.1%
										332 38.3%
										194 (28.7%)
										3,421 15.4%

										3,656 0.1%
										344 15.4%
										554 (36.4%)
										579 (14.6%)
										75.40 (1.7%)
										45.82 (11.2%)

										195 (6.3%)
										471.52 (2.6%)

										393 (66.4%)
										33 (10.8%)

										28,637 1.3%

(i) Included in postpaid handheld mobile SIOs.

(ii) Defined as the three month rolling average of monthly active prepaid users. (iii) Included in C&SB bundles and standalone data SIOs. n/m = not meaningful


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AI assistant

TELSTRA GROUP LIMITED — Interim / Quarterly Report 2021

65927_rns_2021-02-10_56a2511b-6e48-46da-92e7-1e6b432c6081.pdf

11 February 2021

Office of the Company Secretary

ELECTRONIC LODGEMENT

ANDREW PENN – CEO

Slide 1 – Half year results 2021 - Andrew Penn Telstra CEO

Slide 2 – Financial headlines

Slide 3 – Operating highlights

Slide 4 – Underlying EBITDA growth ambition

Slide 5 – Underlying EBITDA growth drivers

Slide 6 – Underlying EBITDA – reducing headwinds

Slide 7 –T22 strategy – Progress [Pillar 1]

Slide 8 – T22 strategy – Progress Pillar 2 [InfraCo]

Slide 9 –T22 strategy – Progress [Pillars 3-4 and networks]

Slide 10 – T22 Strategy scorecard

Summary

Slide 11 – 2021 priorities

VICKI BRADY – CFO

SLIDE 12 – TELSTRA HALF YEAR 2021 RESULTS

SLIDE 13 – INCOME STATEMENT

SLIDE 14 – INCOME BY PRODUCT

SLIDE 15 – OPERATING EXPENSES

SLIDE 16 – EBITDA by product

SLIDE 17 – FREE CASHFLOW

SLIDE 18 – DIVIDENDS

SLIDE 19 – CAPITAL POSITION

SLIDE 20 – FY21 GUIDANCE (updated)

Half ear results and o erations review y p

Reported results

Other information

Segment performance

Segment total income

Telstra Consumer and Small Business

Telstra Enterprise

Networks and IT

Telstra InfraCo

All Other

Product performance

Product income breakdown

Mobile

Fixed – Consumer and Small Business (C&SB)

Fixed – Enterprise

Fixed – Wholesale

Global

Recurring nbn DA

One-off nbn DA & connection

Other

Expense performance

Labour

Goods and services purchased

Net impairment losses on financial assets

Other expenses

Depreciation and amortisation

Foreign currency impacts

Net finance costs

Financial position

Capital expenditure and cash flow

Debt position

Statement of financial position

Note:

First half performance against FY21 EVP Performance Measures and Targets:

Total income

Average Revenue per Unit (ARPU) ($)

Services in operation (000s)

Workforce

Segment information from operations

C&SB, Enterprise and Wholesale underlying income and fully allocated EBITDA

Product profitability - EBITDA ($M)

Product profitability - EBITDA margins %

Telstra Corporation Limited Half-year comparison - Reported lease adjusted (i) Half-year 31 December 2020

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TELSTRA GROUP LIMITED Interim / Quarterly Report 2021


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