Tag: telstra-financial-results

What you need to know about our 2020 half-year financial results

Telstra News

Posted on February 13, 2020

7 min read

Here’s what you need to know about our half-year financial results for FY20. 

Financial results

Our half year financial results for FY20, in line with guidance and market expectations, show that our T22 strategy is building value and delivering positive financial momentum.

On a reported basis Total Income1 for the first half decreased 2.8 per cent to $13.4 billion and NPAT decreased 6.4 per cent to $1.2 billion. Reported EBITDA for the first half was $4.8 billion.

Our underlying EBITDA2 decreased 6.6 per cent to $3.9 billion. Underlying EBITDA excluding the in-year nbn headwind3 grew by approximately $90 million, the first time this figure has grown since FY16.

We continue to make further progress in our cost reductions program as part of our T22 strategy, reducing underlying costs by $422 million, or 12.1 per cent. In total, we’ve reduced underlying costs by $1.6 billion and we’re on track to achieve our $2.5 billion net cost reduction target in FY22.

Impact of bushfires

The 2020s started in Australia with devastating bushfires. As well as impacting many of our customers, there has also been a financial impact to our business.

We’ve seen one-off costs related to the bushfires of around $10 million during the first half of FY20 which included assistance to customers, refunds and donations. We also anticipate the total impact of the bushfires on Telstra to be around $50 million.

With lives lost and whole ecosystems changed forever, climate change and environmental footprint must sit at the top of the agenda for all Australian businesses.

We need more urgent action on climate as changing weather patterns deliver more frequent bushfires, floods, droughts and storms, and today more than ever businesses must consider their impact on the environment. We are one of the largest consumers of power in the country – managing our environmental impact is a key priority and we have a significant program of initiatives to do our part.

Strong progress on our T22 strategy

Our T22 strategy to transform our business and radically redesign how we improve our customers’ experience is coming to the end of its second year, and we have made significant progress on our journey.

We have put 1.7 million of our award-winning Telstra Smart Modems in customers’ homes and businesses, with technology that helps our customer support teams and field technicians to remotely diagnose issues and reduce the number of service calls made to premises, further streamlining our customer experience.

Telstra Plus, our loyalty program to reward customers for choosing to be with Telstra, has had a very successful first year with more than 1.2 million members already enjoying the benefits including discounts on the latest devices and accessories. We added our millionth member in November of last year and are well on our way to the next milestone.

We radically reduced the number of Consumer & Small Business plans in market from more than 1800 to just 20, and we have signed up 2.4 million customers to these new simplified plans since their launch in June last year. Our Consumer & Small Business transactions are becoming more digital, too, with customers increasingly choosing to shop online and use 24×7 Live Chat rather than visiting our retail stores.

The same is true for our Enterprise customers, with the number of digital service interactions rising and the radical rationalisation of our Enterprise product set still underway. We’ve reduced active Enterprise products in market by 23 per cent since FY18, and are on track for a 50 per cent reduction by FY21.

Continued customer growth and 5G expansion

We have seen strong growth in customer numbers, particularly in mobile. During this half, we added 137,000 retail postpaid mobile services including 91,000 from Belong, 135,000 retail prepaid mobile services mobiles and 173,000 pre- and postpaid Wholesale services including IoT.

We also continue to rollout our 5G network and now have 5G coverage in selected areas in 32 Australian cities and regional areas.  We are on track to reach our target of 35 cities by the end of FY20.

At CES this year we announced that a quarter of all Android phones we have sold since July 2019 are 5G capable, so there are many customers with devices already set to receive the benefits of our new network. In total, we’ve sold more than 100,000 5G-enabled mobile devices and we look forward to that number continuing to grow.

Shareholder returns and FY20 guidance

Shareholders will receive a total fully franked interim dividend of 8 cents per share, comprising an interim ordinary dividend of 5 cents per share and an interim special dividend of 3 cents per share consistent with our capital management framework and dividend policy.

Telstra reconfirmed guidance for FY204, with Total Income5 in the range of $25.3 to $27.3 billion, underlying EBITDA6 in the range of $7.4 to $7.9 billion, restructuring costs of around $300 million, capital expenditure of $2.9 to $3.3 billion, and free cash flow after operating lease payments7 of $3.3 to $3.8 billion.

After excluding the expected in-year nbn headwind8, which Telstra continues to expect to be in the range of ~$600 million to ~$800 million, underlying EBITDA is expected to grow up to $500 million in FY20.

“We are sitting at an incredibly exciting inflection point – the dawn of the 2020s, the dawn of 5G, and we see significant opportunities in technology, in telecommunications and for Telstra.

“Society is rightly holding business more accountable than ever for our actions and the expectation from all stakeholders today is for responsible business at a time of great change – great change in technology, change in the climate, change in our customers’ expectations of us.

“T22 is positioning us for this new world – as a simpler, more digitally enabled business; with the best network; the right economic model; optionality; a strong balance sheet; and the skills, capabilities, culture and ways of working we need to succeed.” – Andrew Penn, Telstra CEO

More information is available on our Investor Relations website.

Things you need to know

  1. Excluding finance income.
  2. Underlying EBITDA excludes net one-off nbn DA receipts less nbn net C2C, and guidance adjustments including one-off restructuring costs, but includes depreciation of mobile lease right-of-use assets.
  3. Refer to Footnote 8. As at 31 December 2019, the in-year nbn headwind was ~$360 million.
  4. This guidance assumes wholesale product price stability and no impairments in and to investments or property, plant and equipment and intangible assets, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance assumes the nbn rollout and migration in FY20 is broadly in accordance with the nbnTM Corporate Plan 2020. Guidance is provided on the basis of AASB16 Leases and assumes impacts consistent with management estimates and current interpretation of the standard. Capex is measured on an accrued basis and excludes expenditure on spectrum and externally funded capex and capitalised leases under AASB16 Leases.
  5. Excluding finance income.
  6. Underlying EBITDA excludes net one-off nbn DA receipts less nbn net C2C, guidance adjustments including one-off restructuring costs, but includes depreciation of mobile lease right-of-use assets.
  7. FY20 free cashflow defined as operating cash flows less investing cash flows less operating leases (reported in financing cash flow under AASB16 Leases). FY20 free cashflow guidance includes ~$1b working capital increase including from exit of mobile lease plans, remaining outflows from restructuring costs announced in May 2019, and an increase in nbn receivables.
  8. In-year nbn headwind defined as the net negative recurring EBITDA impact on our business based on management best estimates including key input of the nbn Corporate Plan 2020.

A pivotal year: our 2019 financial results show strong progress on T22

Financial Results

Posted on August 15, 2019

4 min read

“FY19 has been a pivotal year for Telstra. Notwithstanding the intense competitive environment and the challenging structural dynamics of our industry, it is a year in which I believe we can start to see the turning point in the fortunes of the company from the changes we have embraced.” 

– Andrew Penn, CEO

Here’s what you need to know about Telstra’s financial results for FY19

Meeting financial guidance and market expectations

On a reported basis Total Income1 decreased 3.6 per cent to $27.8 billion, EBITDA decreased 21.7 per cent to $8.0 billion, and NPAT decreased 39.6 per cent to $2.1 billion. On a guidance basis2 Total Income1 decreased 2.6 per cent to $27.8 billion, EBITDA (excluding restructuring costs) decreased 11.4 per cent to $9.4 billion. Underlying EBITDA3 decreased 11.2 per cent to $7.8 billion.

The largest reason for the decline in EBITDA was the impact of the nbn. To date we estimate the nbn has adversely impacted EBITDA by approximately $1.7 billion since FY16, and we estimate we’re around 50 per cent of the way through the recurring financial impact of the nbn.

We had good momentum in our cost reductions program reducing underlying costs by $456 million in the year, which means we have achieved $1.17 billion in reductions since FY16 and are on track to achieve our $2.5 billion net cost reduction target by FY22.

The dividend

Shareholders will receive a total fully-franked final dividend of 8 cents per share, comprising a final ordinary dividend of 5 cents per share and a final special dividend of 3 cents per share, to be paid on 26 September 2019.

Combined with the total interim dividend paid in February 2019, shareholders will receive a total dividend of 16 cents per share for FY19, taking the total returns paid to shareholders to more than $1.9 billion.

Growth

We continue to grow our customer base, adding more than 378,000 net retail postpaid mobile services and 107,000 net new fixed-line retail bundle and data services. These figures included strong contributions from Belong.

Our Internet of Things business grew by 19.4 per cent in revenue, exceeding industry growth rates. On average 2,000 ‘things’ are being connected to Telstra’s IoT network every day including vehicles, machines, infrastructure, smart meters and a wide array of other sensors.

T22: Delivering more for customers

In just over a year since we announced our T22 strategy – a major transformation enabling us to lead in a rapidly changing environment – we’ve simplified things for our customers and delivered new products and services. 

We radically reduced the number of Consumer & Small Business plans in market – from more than 1800 plans to just 20 – and removed customer pain points, such as excess data charges in Australia on all new plans. By introducing simpler products and providing more ways for customers to self-serve, we reduced calls to our Consumer & Small Business call centres by 22 per cent with nearly 7.7 million fewer calls in FY19.

We launched Telstra Plus, our loyalty program rewarding customers for choosing to be with Telstra and by the end of FY19 more than 770,000 started earning points.

In the past financial year we became the only provider in Australia to commercially launch 5G services, and the first to put 5G devices in the hands of customers. We are rolling out 5G in 10 cities around Australia and expect our 5G coverage to increase in area almost five-fold to reach into at least 35 Australian cities in the next 12 months.

Telstra’s T22 strategy is built on the foundation provided by our strategic investment program announced in 2016 to create networks for the future and digitise the business.

Looking ahead

Although the reported financial trends in FY19 were challenging, underlying trends, excluding the recurring in-year headwind of the nbn, are expected to improve over the course of FY20.

“Returning our business to growth will take time. However, I have great confidence that our strategy can arrest the decline in our earnings and create opportunities for growth.” – Andrew Penn, CEO

Today we are already a very different, much simpler and more customer focussed organisation than a year ago and are well-positioned for the next era – the 2020s.

More information is available on our Investor Relations website. 

1 Excluding finance income.

2 This guidance assumed wholesale product price stability and no impairments to investments or core assets, and excluded any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance also assumed the nbn™ rollout and migration in FY19 was broadly in accordance with the nbn Corporate Plan 2019. The guidance was provided on the basis of AASB15. Capex was measured on an accrued basis and excluded expenditure on spectrum and externally funded capex.

3FY19 Underlying EBITDA excluded net one-off nbn DA receipts less nbn net cost to connect (C2C), and guidance adjustments.

What you need to know about Telstra’s 2019 half-year financial results

Financial Results

Posted on February 14, 2019

4 min read

Here’s what you need to know about Telstra’s financial results for the first half of FY19.

Meeting our financial guidance

On a reported basis, total income was $13.8 billion, down 4.1 per cent, EBITDA was $4.3 billion, down 16.4 per cent, and NPAT was $1.2 billion, down 27.4 per cent. On a guidance basis1 total income was $13.8 billion and EBITDA (excluding restructuring costs) was $4.7 billion. Telstra today reconfirmed FY19 guidance.

Shareholders will receive a total fully franked interim dividend of 8 cents per share, comprising an interim ordinary dividend of 5 cents per share and an interim special dividend of 3 cents per share, consistent with our capital management framework and dividend policy. The interim dividend will be paid on 29 March 2019.

The results cover the period from 1 July 2018 – 31 December 2018, and show solid performance in customer numbers and share in the face of intense competition, as well as strong delivery against our T22 strategy announced in June 2018.

More customers and services

During the half, we added 239,000 additional retail postpaid mobile services, including 115,000 services on Belong. There was also continued positive momentum in IoT with revenue growth of 35.6 per cent. Revenue from mobile grew 2.4 per cent compared to the first half of FY18.

In the fixed-line market, 64,000 net retail bundle and data services were added during the half, including 22,000 from Belong. We also added 308,000 nbn connections, maintaining Telstra’s nbn market share of 51 per cent (excluding satellite).

Making progress on T22

This was the first half-year financial results announcement for Telstra since starting to implement its new T22 strategy, enabling the business to take advantage of future opportunities, building on the investment in networks and digitisation announced in 2016.

We’re making good progress on our T22 strategy, with customers already experiencing a number of benefits.

Almost half a million Telstra mobile customers are already enjoying the benefits of the Peace of Mind data plans we launched in July. For those customers this has removed one of the biggest pain points–fear of excess data charges.

Small business customers are benefiting from new bundles launched in October and Telstra Platinum for Business, a new prioritised IT and support solution, launched in November 2018. These new solutions provide flexibility for small businesses to scale and choose what is right for them.

This half we reduced the number of active consumer and small business plans to 120, well on the path toward our target of having just 20 plans in market by the end of the financial year.

Significant progress has also been made to reduce costs and we remain on track to meet FY19 targets as part of the T22 goal of achieving $2.5 billion net productivity improvement by 2022.

Looking ahead

The growth in Telstra’s mobile business comes as we continue the rollout of our world-leading 5G technology, successfully complete tests in real-world conditions, develop exclusive partnerships with device manufacturers, and put technology in customers’ hands.

5G devices will be available exclusively through Telstra before any other Australian mobile operator when they are released in the first half of calendar year 2019.

CEO Andy Penn said the company remains very positive about Telstra’s prospects for the future.

“Demand for telco products and services continues to grow and telecommunications infrastructure is only going to increase in importance over the next decade,” Mr Penn said.

More information is available on our Investor Relations website.

1. This guidance assumes wholesale product price stability and no impairments to investments or core assets, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance also assumes the nbn™ rollout and migration in FY19 is broadly in accordance with the nbn Corporate Plan 2019. The guidance is provided on the basis of AASB15. Capex is measured on an accrued basis and excludes expenditure on spectrum and externally funded capex. Please refer to the guidance versus reported results reconciliation on page 10 of the Half-year results and operations review lodged with the ASX on 14 February 2019. This reconciliation has been reviewed by our auditors.

The five things to know about Telstra’s 2018 full year financial results

Financial Results

Posted on August 16, 2018

4 min read

This morning Telstra released its financial results for FY18. Here’s what you need to know.

1. Meeting our financial guidance

On a reported basis Telstra increased Total Income by 3.0 per cent, Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) reduced by 5.2 per cent and Net Profit after Tax (NPAT) decreased by 8.9 per cent. This means that our results are in line with guidance.

Shareholders will receive a fully franked final dividend of 11 cents per share, bringing the total dividend for the financial year to 22 cents per share, comprising an ordinary dividend of 15 cents per share and a special dividend of 7 cents per share, in accordance with the dividend policy announced in August 2017.

2. Strong customer growth

We have seen strong subscriber growth, particularly in the second half on the year, adding 342,000 retail mobile customers, 88,000 retail fixed broadband customers, 135,000 retail bundles and 229,000 wholesale mobile services during FY18.

We’ve now increased our customer base in mobiles for 21 consecutive halves, despite intense competitive pressures.

In the nbn market, we added 770,000 connections, reaching a total of 1,946,000 for a market share of 51 per cent (excluding satellite services).

3. Early progress on T22

On 20 June 2018, we announced a new strategy, T22, to lead the Australian market by simplifying our operations and product set, improving customer experience and reducing our cost base.

T22 will deliver six key outcomes covering customer experience, simplification, network superiority, employees, cost reduction and strengthening the balance sheet.

We’ve already made strong early progress on the new strategy, launching new mobile plans with no excess data charges, announcing a new organisational structure, leadership team and operating model. Telstra InfraCo has also been established as a standalone business unit with pro-forma financials provided as part of the financial results.

The new strategy builds on the foundation provided by our up to $3 billion strategic investment in creating the Networks for the Future and digitising the business. We remain on track to realise the benefits of the investment program, with $1.8 billion invested to date, predominantly in Networks for the Future as the company prepares for the launch of 5G.

4. Customer highlights

In the past twelve months we’ve delivered some great new services, products and experiences for our customers.

We held the world’s first 5G data call over 26GHz mmWave spectrum, the first end-to-end call over 3.5GHz spectrum, bringing together the core components from multiple companies required for a real commercial 5G network call. We also established the world’s first 5G-enabled Wi-Fi precinct on the Gold Coast and tested Australia’s first 5G car on the road. Our Sports Live Pass users increased by nearly 1 million to 2.3 million across AFL, NRL and Netball in FY18.

We switched on the 450th mobile base station under the Federal Government’s Mobile Black Spot Program.

We completed an upgrade of the transmission network between Sydney, Melbourne, Brisbane, Adelaide, and Perth, updating it to optical transport technology capable of supporting 8.8Tbps between these CBDs.

And while our Strategic Net Promoter Score (NPS) was flat during FY18, we saw positive movement in the second half. Episode NPS, which measures customers’ assessments of individual interactions with Telstra, improved by five points during FY18.

5. Improving productivity

In June 2018, Telstra announced we would target a further $1 billion annual reduction in underlying core fixed costs by FY22 in addition to the previous stated target of $1.5 billion, meaning underlying core fixed costs will be $2.5 billion per annum lower in FY22 compared with FY16. We expect total costs will be flat or decline in each year from FY18 excluding restructuring costs.

We have delivered against these cost ambitions for the year and are ahead of the run rate required to meet the net productivity target, with underlying core fixed costs declining by 7.0 per cent. For more information on these points and the rest of our financial results, please visit Investor Relations, where you can watch a livestream of our results presentation, read our media release, letter to shareholders, and other material.

Livestream: Telstra FY18 Financial Results

Financial Results

Posted on August 15, 2018

1 min read

Join Telstra CEO Andrew Penn and CFO Warwick Bray LIVE from 9:15-11:30AM (AEST) Thursday 16 August for the announcement of our FY18 financial results.