Telstra : 2022 AGM presentations (PDF, 1.6MB)

11 October 2022

The Manager

Market Announcements Office

Australian Securities Exchange

4th Floor, 20 Bridge Street

SYDNEY NSW 2000

ELECTRONIC LODGEMENT

Dear Sir or Madam

Annual General Meeting presentations

Office of the Company Secretary

Level 41

242 Exhibition Street

MELBOURNE VIC 3000

AUSTRALIA

General Enquiries 03 8647 4838 Facsimile 03 9650 0989

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In accordance with the Listing Rules, I enclose the presentations of the Chairman and Chief Executive Officer, which will be delivered today at the Telstra Corporation Limited 2022 Annual General Meeting.

Authorised for lodgement by:

Sue Laver

Company Secretary

Telstra Corporation Limited

ACN 051 775 556

ABN 33 051 775 556

CHAIRMAN & CEO SPEECH NOTES TELSTRA ANNUAL GENERAL MEETING 11 OCTOBER 2022

JOHN MULLEN - CHAIRMAN

Good morning ladies and gentlemen.

My name is John Mullen and it is my great pleasure to welcome you this morning to Telstra's 2022 Annual General Meeting.

Thank you all for joining us today and for your continued support and investment in Telstra.

Can I start by saying how delighted I am to be back speaking to a roomful of shareholders once again!

This is of course also a hybrid meeting, so a very warm welcome to the many shareholders who have chosen to join us online.

A quorum is present and it is my pleasure to formally declare today's meeting open.

A Notice of Meeting was distributed earlier setting out the business and resolutions to be considered today. I propose to take that Notice as read.

There are a number of items of business on today's agenda and all of them are now being shown on the screen.

SLIDE: ITEMS OF BUSINESS

Voting on items 3 to 5 will be conducted by poll and that poll is now open.

Instructions on how to participate in the poll were distributed earlier but assistance is available at any time, should you need it.

It is important to also point out that following the AGM, after a short break, we will reconvene for a separate Scheme Meeting.

The Scheme Meeting is to seek shareholder approval on the scheme of arrangement, the next step in our proposed corporate restructure.

The restructure was a key component of our T22 strategy and is now a key part of our new T25 strategy, announced last year.

As we will discuss at the Scheme Meeting, the restructure is an important next step in our drive to increase the transparency of our infrastructure assets and to improve management focus on our infrastructure and customer businesses, and consequently provide us more flexibility to create additional value for you, our shareholders.

SLIDE: BOARD OF DIRECTORS

I am pleased to be joined on stage today by all of my fellow Board members, Company Secretary, Sue Laver, and our Chief Financial Officer, Michael Ackland.

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Current directors Craig Dunn and Eelco Blok are also both standing for re-election today and you will hear from each of them shortly.

Sarah Lowe from our auditors Ernst and Young is also here today and I'm sure she would be happy to answer any questions you may have on the conduct of the audit, or on the auditor's report itself.

The senior management team is also present and, in many ways, today marks the end of one era for the company and the beginning of another.

Shortly you will hear from your new CEO, Vicki Brady, whose appointment followed the decision earlier this year by Andy Penn to retire after more than seven years in the role.

Vicki is a highly capable and professional executive, and she could scarcely be better qualified to lead Telstra into this new era.

Vicki was previously Telstra's Chief Financial Officer, as well as before that managing our largest business segment being Consumer and Small Business. As a result, she knows our company inside out, and she has made an enormous contribution to the company already, including through her work in helping develop our new go-to-market plans as part of the T22 strategy.

Vicki also played a key leadership role in the development of the T25 strategy which is going to be critical to the success of the company going forward, and I and the Board believe that she is therefore the ideal person to lead Telstra into its next phase of growth.

Then let me now take the opportunity to offer a special vote of thanks to Andy Penn for his incredible contribution to Telstra.

Andy led the company during a period of significant change and will be remembered for his courage in setting a bold ambition through T22 to deliver a transformed experience for customers, shareholders and employees.

There is no doubt T22 has delivered beyond expectations.

It has also laid the foundations for the T25 strategy and our renewed focus on growth and innovation.

In recent years, Andy not only ensured the successful delivery of our T22 commitments but also provided outstanding leadership during what has truly been an extraordinary time as we have navigated, both as a company and as a nation, through the challenges of the pandemic.

He also built a strong leadership team and perhaps the greatest testament to this was our ability to announce internal successors to the roles of CEO and CFO, and we were thrilled to announce Vicki and Michael in the roles earlier this year.

Without Andy's exemplary leadership Telstra would simply not be in the strong position that it is today. On behalf of the Board and shareholders, I would like to thank Andy for his extraordinary contribution to Telstra and congratulate Vicki on her appointment.

SLIDE: 2022 - SUCCESSFULLY DELIVERING T22

I want to turn now to the company's recent performance, and in particular the successful completion this year of our T22 strategy.

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I think it's fair to say four years ago when we launched T22, Telstra was in a very difficult position.

We had seen the rate of digital adoption accelerate rapidly, along with customer expectations for a seamless digital experience.

We knew we had to respond boldly to the enormous impact the creation of the NBN would have on Telstra.

We knew we had to radically simplify and digitise Telstra and, once and for all, remove the customer pain points that had frustrated our customers and our teams for too long.

We knew all of this when we launched T22 in 2018 and embarked on what has been one of the largest and most ambitious transformations of a telco globally.

The strategy leveraged many of the significant capabilities we had already built through a strategic investment of $3 billion to create the Networks for the Future and to digitise the business.

And this year, I am delighted to report, the past four years of discipline, focus and hard work have paid off and the underlying business of your company grew in FY22, and is now positioned for continued growth.

Our investments in innovation and technology, in digitisation and networks, in improving our customer experiences and ways of working, and our disciplined approach to capital management mean Telstra today is a fundamentally different company with an incredibly bright future.

Vicki will take you through the financial highlights shortly, but I wanted to touch on some of the key achievements under T22.

We have famously reduced the number of in-market products and services for our consumer customers from 1,800 to just 20 and stripped away the lock-in contracts, excess data and other charges that used to frustrate our customers.

Our 5G network is the largest and fastest in the country, covering 80% of the population and it is among the very best globally.

Our total network now covers 99.5% of all Australians and stands at over 2.6 million square kilometres.

We have completely modernised and digitised our systems.

Our direct headcount has been reduced by approximately 8,000 but simultaneously we have recruited 1,500 new hires in software engineering, data analytics, artificial intelligence and cyber security.

Our cyber security capabilities are now considerable, and our teams are working around the clock to protect our networks and our customers from unprecedented levels of malicious activity.

In the last 12 months alone we have blocked more than 1 billion malicious emails and 200 million scam calls. We are currently blocking 1,500 scam texts every single minute.

Another significant change has been to bring our Consumer & Small Business contact centres back on shore.

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I have been a member of the Telstra Board for 14 years and Chairman for the past six and I don't think there has been a single AGM where we have not faced questions from shareholders about off-shore contact centres.

Well, I am delighted to say that those days are over.

Over the past months, we have hired around 2000 new team members across the country so we can answer consumer and small business calls in Australia and create a better customer experience.

Our commitment to hybrid working also means those new team members are located in cities and towns across Australia, including regional hubs like Maryborough, Bunbury and Bathurst.

Thanks to hybrid working, that means the person helping you could be in your state, suburb, town or - who knows - even your street and on any given day, nine out of 10 of our consumer and small business service team choose to work at home.

Another significant change this year concerned our licensee stores, which have all been brought back in-house, and are now Telstra owned and operated.

Almost half of all sales interactions and more than three quarters of all service interactions with Consumer & Small Business customers are now digital.

The benefits of a better system are tangible and the number of calls now coming into Telstra's consumer and small business contact centres have fallen by more than 70 percent.

These improvements are also reflected in our Episode NPS results, which are stronger than ever, improving five points in the last 12 months and 18 points since the T22 program began.

FY22 was also a pivotal year for Telstra financially as we saw the near-final negative transitional effects of the nbn rollout in our reported results and the growing momentum in our underlying performance.

Vicki will talk to our FY22 results in more detail, but it was especially pleasing to be able to increase the total dividend for the first time in a number of years. The increase recognised the confidence of the Board following the success of our T22 strategy and the ambition in our T25 strategy of high teens EPS growth from FY21 - FY25.

Inside the business, the adoption of Agile at scale work practices has transformed our approach to prioritisation and resource allocation so that we are faster to market, more efficient and more customer-focussed.

We also continued to look for opportunities to grow our business and to unlock value from our infrastructure assets.

Last year we finalised a significant transaction with a consortium made up of the Future Fund, Commonwealth Superannuation Corporation and Sunsuper to sell a noncontrolling 49 per cent interest of our InfraCo Towers business for $2.8 billion.

Importantly we retain 51 per cent ownership of the towers business, now called Amplitel, and retain full ownership of the active parts of our network, ensuring we can continue to maintain our network leadership.

Approximately 50 per cent, or $1.35 billion, of net proceeds of this deal was indirectly returned to shareholders during FY22 via an on-market share buy-back.

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