TELSTRA GROUP LIMITED — Investor Presentation 2011

Mar 28, 2011

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29 March 2011

The Manager

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

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA General Enquiries 08 8308 1721 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Sensis Investor Briefing – media release and presentation

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

1. Sensis media release;

2. A presentation to be delivered by Bruce Akhurst, Chief Executive Officer Sensis, at a Sensis investor briefing to be held today.

Regards

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Carmel Mulhern

Company Secretary

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

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Sensis strategy points to digital as key to future growth

29 March 2011: Sensis CEO Mr Bruce Akhurst today outlined the company’s strategy for long term profitable growth, backed by a new range of digital marketing products and solutions developed to specifically meet the needs of the Australian small business sector. Sensis will help drive even more customers to their businesses by harnessing the power of digital marketing.

“The marketing and advertising environment confronting small businesses today is totally different to what it has been in the past. Gone are the days where a local business owner wanting to advertise their business would simply advertise in the Yellow Pages, paint contact details on their company car and print business cards.

“The explosion of technology and advertising channels, and the popularity of digital devices, has created a complex digital world that small businesses must be part of to ensure they are found by customers looking for their services.

“I am genuinely excited by the direction we’re taking and the long term opportunities available to Sensis and our customers. We will leverage our unique strengths including an extensive, loyal customer base; the capability, knowledge and local on-the-ground presence of our salesforce; unrivalled local business content and our integrated multi-platform publishing capabilities. We will deliver a superior value proposition to our customers that is tailored, frequently adjusted to meet their needs and measured by return-on-investment reporting.”

Mr Akhurst said Sensis had been investing in this business evolution for more than two years now to ensure it was in a position to offer the suite of solutions to solve this digital dilemma for Australian businesses.

“We re-engineered our IT systems and processes to ensure we had the flexibility to remain competitive in the digital world and deliver increased business leads to our customers across the multiple platforms consumers are now searching.

“We have also been busy launching a range of new mobile sites and applications. These have built on our already strong digital position, as Australia’s largest locally owned digital media company. In fact, these new services have helped us grow Yellow Pages digital usage by 50% over the last year[1] .”

Throughout Sensis’ 2011 selling cycle, Yellow Pages customers will have a totally new experience. Key aspects of Sensis’ strategy in 2011 to deliver increased customer value will include:

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• More targeted and simplified bundled customer solutions offering greater value including the Sensis Priority Advertising Network and SiteSmart bundle;

• New product offerings to connect businesses with customers in new ways such as the Yellow Pages iPad app and YellowPagesOffers.com.au;

• More sophisticated tailored reporting mechanisms to ensure small business can measure their performance and return on investment (ROI);

• Extended small businesses presence across digital media through agreements with leading industry players including Google, Bing and Yahoo;

• Increased accessibility of customers content on yellowpages.com.au to developers by launching an application programming interface (API); and

• Bolt on acquisitions to provide customers with more ways to generate leads for their businesses such as the recently acquired Quotify.com.au - one of Australia’s largest providers of request for quote services.

1 Omniture site catalyst avg monthly visits Dec QRT 2010 – Dec QRT 2009

While Mr Akhurst noted the Yellow Pages print directory still had a valuable role to play and would remain a key source of competitive advantage for the company, he acknowledged the business was experiencing trends in line with the industry globally.

“The Yellow Pages print books continue to be used more than 3.4m times per week[2] and continue to be a highly accountable generator of real business leads to our customers, but we recognise the shift to digital is likely to continue.

“Our print directories remain a powerful point of differentiation for advertisers. Sensis’ difference is that we offer advertisers a simple way to be found in many different products and across multiple channels. This includes print, which represents millions of searches every week that are unique to Yellow Pages.

“As we commence our selling cycle for 2011 and execute with excellence, key success factors will include growing customer numbers, uptake in digital products and new bundles sold, and increasing total digital sales and customer satisfaction,” concluded Mr Akhurst.

-ends-

About Sensis:

Sensis helps Australians find, buy and sell. Our integrated network of local search and digital marketing solutions helps make marketing easy and delivers real, measurable business leads to Australian businesses. Sensis’ multichannel network includes Yellow Pages®, White Pages®, the 1234 and 12456 Call Connect voice services, Whereis® digital mapping solutions, the Sensis Digital Media advertising business, and request-for-quote service quotify.com.au. This increasingly diverse network spans print, online, voice, mobile, iPhone, iPad, Android, Telstra’s T-Hub and satellite navigation, and information can also be shared from online to mobile and social networking sites. Sensis helps ensure our advertisers are found by more customers than ever by managing their presence across a growing number of advertising platforms including search engines like Google, Bing and Yahoo!.

For further product and solution information you can also visit:

Yellow Pages advertising hub and customer centre - http://www.yellowadvertising.com.au Yellow Pages® iPad - http://itunes.apple.com/us/app/yellow-pages-australia-for/id424516241 Yellow Pages® Offers - http://www.yellowpagesoffers.com.au Sensis Developer Centre - http://developers.sensis.com.au Sensis® Priority Advertising Network - http://www.sensispriority.com.au Sensis SiteSmart™ – http://www.yellowadvertising.com.au/products/online/sitesmart - Sensis ClickManager™ - http://www.yellowadvertising.com.au/products/online/click manager Quotify - http://www.quotify.com.au Yellow Pages® You Tube Channel: http://www.youtube.com/user/yellowpagesonline?blend=1&ob=5

Media enquiries:

Prue Deniz – 0438 588 460 or Danielle Horan – 0409 861 645

2 Roy Morgan Single Source Australian Sep 2010 – Base: Australians 14+

Page
1

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Marke,ng

Made
Easy™

Sensis’
strategy
in
the
evolving
adver,sing
world Bruce
Akhurst,
Sensis
Chief
Execu,ve
Officer

Disclaimer

These
presenta,ons
include
certain
forward-­‐looking
statements
that
are
based
on
informa,on
and
assump,ons
known
to
date
and
are
subject
to various
risks
and
uncertain,es.
Actual
results,
performance
or
achievements
could
be
significantly
different
from
those
expressed
in,
or
implied
by,
these forward-­‐looking
statements.
Such
forward-­‐looking
statements
are
not
guarantees
of
future
performance
and
involve
known
and
unknown
risks, uncertain,es
and
other
factors,
many
of
which
are
beyond
the
control
of
Sensis,
which
may
cause
actual
results
to
differ
materially
from
those
expressed in
the
statements
contained
in
these
presenta,ons. All
forward-­‐looking
figures
in
this
presenta,on
are
unaudited
and
based
on
A-­‐IFRS.
Certain
figures
may
be
subject
to
rounding
differences.
All
market share
informa,on
in
this
presenta,on
is
based
on
management
es,mates
based
on
internally
available
informa,on
unless
otherwise
indicated. All
amounts
are
in
Australian
Dollars
unless
otherwise
stated.

®
™
Registered
trademark
and
trademark
of
Telstra
Corpora,on
Ltd.
Citysearch®
and
Citysearch
logo
are
registered
trade
marks
of
Citysearch
Australia Pty
Ltd
.
Apple
is
a
trademark
of
Apple
Inc,
registered
in
the
US
and
other
countries.
iPhone
and
iPad
are
trademarks
of
Apple
Inc.
Other
trademarks
are the
property
of
their
respec,ve
owners.

Page
2

Telstra
Corpora,on:
investor.rela,ons@team.telstra.com

1

Page
3

Summary

We
are
now
a
digital-­‐led
business

Already
selling
into
high-­‐growth
digital
opportuni,es

Uniquely
posi,oned
to
drive
adver,ser
ROI
and
long term,
profitable
growth

Local
search
leaders
with
strong
SME
support

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Leading
brands
helping
you
find,
buy
and
sell Well
penetrated
across
most
sectors [1
]
Health
&
Community 48%
Construc,on 42%
Electricity,
Gas
&
Water 40%
Wholesale
trade 40%
Manufacturing 39%
Transport
&
Storage 35%
Personal
&
Other 31%
Property
&
Business 31%
Retail
Trade 31%
Communica,on 25%
Finance
and
Insurance 25%
Accom.,
Cafe,
Restaurant 25%
Educa,on 25%
Mining 22%
Cultural
&
Recrea,onal 20%
Agriculture,
Forestry,
Fishery 9%
1:
Sensis
Business
Index
SME
Adver,sing
Study,
2010
Page
4
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Telstra
Corpora,on:
investor.rela,ons@team.telstra.com

2

Providing

a
highly
valued
service
to
Australia’s
SMEs

“Without
that
Yellow
Pages
adver,sing
our
business
would
stagnate
and
die.
I’ve
done
an
analysis
of
where
people
come
from
and 52%
of
our
new
clients
come
from
Yellow
Pages.” Chris,
Micro
Excava/ons

“I
would
probably
say
in
excess
of
50%
of
my
phone
calls
are
coming
from
Yellow
Pages.” Anthony,
Car
Mobile
Mechanics

“Yellow
Pages
is
an
integral
part
of
our
marke,ng
strategy.
The
return
on
our
investment
is
really
high
and
we
track
all
of
our adver,sing
and
we
know
–
without
a
doubt
–
that
it
works
for
us.” Elizabeth,
City
Clinic
on
Crown

“We
probably
get
at
least
40%
of
our
business
through
Yellow
Pages.” Juman,
SBS
Mobile
Mechanics.

“Yellow
Pages
is
predominately
70%
of
the
new
business
that
I
get
in.
I
couldn’t
be
without
the
Yellow
Pages
for
my
business.” Robert,
All
Hours
Windscreens

“Rela,ve
to
the
amount
the
advert
costs,
it
brings
in
many
many
,mes
the
value
of
the
advert,
so
I
think
its
good
value
for
money.” Peter,
Aesthe/c
Dental

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Page
5
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Industry

impacted
by
digital
growth
and
structural
change

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Print
usage
down
but
remains
powerful [1
]
6,605 [6,802] [6,674] 6,629 6,485
6,155
5,871 5,828
5,630
Dec
08 Mar
09 Jun
09 Sep
09 Dec
09 Mar
10 Jun
10 Sep
10 Dec
10
1:
:
Roy
Morgan
Single
Source
Australia.
Base:
Australians
14+
Last
30
day
unique
users
(,000)
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Cyclical
decline
changed
into
structural
print
decline
1400000
1200000 15.1% 17.5% 19.9% [Digital
]
Share
1000000
800000
600000
400000
200000
0
FY08 FY09 FY10
Yellow
Pages
digital Yellow
Pages
print
Monthly
unique
visits
(,000)
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Page
6

Telstra
Corpora,on:
investor.rela,ons@team.telstra.com

3

We

have
been
preparing
for
this
transi,on…

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Significant
improvements
in
Yellow
Pages®
strike
rates
Latest
iGen
release
unlocking
enormous
poten,al
•
Customer
benefits:
•
Simpler
billing
•
Improved
and
expanded
self
service
•
Improved
proposal
and
order
documenta,on
•
Landing
pages
with
improved
SEO
•
Significant
print
content
improvements
Product
development
,mes
slashed
• Opera,onal
benefits
• SPA
network:
in
produc,on
in
five
weeks
• Easier
to
key
value
packages
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• Less
  clicks
  to
  retrieve
  key
  informa,on

• Improved
  order
  and
  case
  management
  usability

• Yellow
  Offers:
  in
  produc,on
  within
  three
  weeks

• Single
  view
  of
  customer
  fulfillment

• Value
  packages:
  in
  produc,on
  within
  3.5
  months

• Enhanced
  search
  and
  customer
  summary

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Page
7
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And

inves,ng
in
our
products…

• Marke,ng
  made
  Easy™

• Empowerment:

  • Re-­‐design
    the
    way
    we
    work
    with
    customers

• Presence:

  • Extending
    our
    network,
    including:

    • Deeper
      content
      including
      video
      produc,on,
      social
      media
      feeds

    • New
      Yellow
      Pages
      applica,ons,
      such
      as
      iPad
      and
      Offers

    • Web
      site
      crea,on

    • Enhanced
      SEO
      and
      SEM
      capabili,es

    • Applica,ons
      Program
      Interface

    • Quo,fy
      quota,on
      services

• Performance:

  • Benchmark
    new
    repor,ng
    system

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8
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Telstra
Corpora,on:
investor.rela,ons@team.telstra.com

4

Page
9

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The

high
growth
digital
opportunity

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There
is
very
strong
digital
demand
Yellow
Pages®
digital
usage
up
50%
YoY [1
] Even
further
digital
adver,ser
ROI
from
syndica,on [2
]
Monthly
ad
appearances
on
Bing
Local
only
and
Whereis.com
Excep,onal
usage
growth
in
key
digital
segments [3
]
1:
Omniture
SiteCatalyst,
December
2010;
2:
Whereis
data
from
Omniture
SiteCatalyst,
December
2010.
Bing
data
provided
by
Microsop;
3:
Roy
Morgan
Single
Source
Australia.
Base:
Australians
14+
Page
10
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Telstra
Corpora,on:
investor.rela,ons@team.telstra.com

5

However,

today’s
adver,sers
are
facing
a
‘digital
dilemma’

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Digital
media
is
growing
and
fragmen,ng
Fragmenta,on
makes
marke,ng
increasingly
difficult
•
55%
of
businesses
with
the
Internet
have
a
lack
of
exper,se
or
knowledge [1
]
•
62%
of
adver,sers
don’t
measure
ROI [2
]
• Of
them:
• 32%
say
it
is
to
,me
consuming
• 17%
don’t
know
how
• 7%
say
it
is
too
hard
or
there’s
no
accurate
way
•
85%
of
SMEs
don’t
use
social
media [3
]
•
Only
17%
of
SMEs
have
a
digital
strategy [1
]
The
winning
media
providers
posi,on
adver,sers
wherever
buyers
search…
and
make
it
all
simple
and
accountable
1:
Sensis
eBusiness
Report,
2010;
2:
Sensis
Business
Index
Adver,sing
Study,
November
2010;
3:
Sensis
Business
Index
Social
Media
Study,
February
2011
Page
11
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Channels
Rela,onships
A
unique
ability
to
build,
package
and
market
cross-­‐plasorm
solu,ons
Brands
Content
Page
12
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Telstra
Corpora,on:
investor.rela,ons@team.telstra.com

6

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Yellow Pages now a powerful
cross-platform lead generator…
Key to addressing the digital
dilemma
13
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----- Start of picture text -----

A
simple
opera,ng
model
Well
managed
cost
base
Penetra,on:
plenty
of
headroom
for
growth [1
]
Underlying
expenses
(A$m):
FY08
to
FY10
44%
12 42%
39%
-­‐2.2% 7
38
-­‐10.4% 26%
885
862
13%
804
1%
FY08 FY09 FY10
SOHO SME Corporate
Underlying
opex Strategic
opex Penetra,on Wallet
share
1:
Sensis
Business
Index
Adver,sing
Study,
November
2010
14
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Telstra
Corpora,on:
investor.rela,ons@team.telstra.com

7

Page 15

Sensis

Financial
Outlook

• FY11: mid single digit revenue decline and high single digit EBITDA decline • Subject to food impact • Return to organic revenue growth in 3 years • Con,nued relentless focus on cost control • We must move to lower cost opera,ng model Fundamentals Fundamental Today Future Customer numbers   ARPA (print/digital)   Digital sales   Digital customer penetra,on   Value packages sold N/A  Churn  	• FY11: mid single digit revenue decline and high single digit EBITDA decline • Subject to food impact • Return to organic revenue growth in 3 years • Con,nued relentless focus on cost control • We must move to lower cost opera,ng model Fundamentals Fundamental Today Future Customer numbers   ARPA (print/digital)   Digital sales   Digital customer penetra,on   Value packages sold N/A  Churn  	• FY11: mid single digit revenue decline and high single digit EBITDA decline • Subject to food impact • Return to organic revenue growth in 3 years • Con,nued relentless focus on cost control • We must move to lower cost opera,ng model Fundamentals Fundamental Today Future Customer numbers   ARPA (print/digital)   Digital sales   Digital customer penetra,on   Value packages sold N/A  Churn  	• FY11: mid single digit revenue decline and high single digit EBITDA decline • Subject to food impact • Return to organic revenue growth in 3 years • Con,nued relentless focus on cost control • We must move to lower cost opera,ng model Fundamentals Fundamental Today Future Customer numbers   ARPA (print/digital)   Digital sales   Digital customer penetra,on   Value packages sold N/A  Churn  	• FY11: mid single digit revenue decline and high single digit EBITDA decline • Subject to food impact • Return to organic revenue growth in 3 years • Con,nued relentless focus on cost control • We must move to lower cost opera,ng model Fundamentals Fundamental Today Future Customer numbers   ARPA (print/digital)   Digital sales   Digital customer penetra,on   Value packages sold N/A  Churn  
	Fundamental	Today	Future
	Customer numbers		
	ARPA (print/digital)		
	Digital sales		
	Digital customer penetra,on		
	Value packages sold	N/A	
	Churn		

Telstra
Corpora,on:
investor.rela,ons@team.telstra.com

8