Owner’s Manual

1. Overview

Company Name: Telstra Group Limited

ASX Ticker: TLS (Telstra Corporation Limited: TL1)

Headquarters: Melbourne, Australia

CEO: Vicki Brady

Chair: John Mullen (outgoing), Craig Dunn (incoming)

Industry: Telecommunications

Introduction:

Telstra Group Limited is Australia’s leading telecommunications and technology company, known for its extensive network infrastructure and innovative services. As the country's largest provider of mobile, fixed-line, internet, and digital television services, Telstra plays a crucial role in connecting Australians across urban and rural areas. The company is also a significant player in the Asia-Pacific region, operating the largest subsea cable network and investing heavily in digital infrastructure to support future growth.

2. Recent Financial Performance

Financial Highlights (6 months ending December 31, 2023):

• Total Income: Increased by 5.4%
• EBITDA: Increased by 8.4%, driven by strong performance in the mobile segment and the acquisition of Digicel Pacific.
• Net Profit After Tax (NPAT): Up 13.1% to $2.1 billion.
• Earnings Per Share (EPS): Increased 16% to 16.7 cents per share.
• Dividend: The Board declared a fully franked interim dividend of 9.0 cents per share, a 5.9% increase from the previous year.

Outlook:

Telstra’s FY24 guidance has been reaffirmed, with underlying EBITDA expected to be between $8.2 to $8.3 billion. The company remains committed to reducing costs and maintaining a strong financial position in a challenging economic environment.

3. Strategy and Vision

T25 Strategy:

Telstra is in the second year of its T25 strategy, which is designed to strengthen its competitive advantage and build a "moat" around its core businesses, ensuring long-term sustainable growth. The strategy focuses on:

• Customer Experience: Simplifying products, enhancing digitisation, and delivering superior customer service have led to record highs in customer satisfaction (Episode NPS) and record lows in complaints.
• Network Leadership: Continued investment in network resilience, cybersecurity, and the expansion of 5G and intercity fiber networks are critical to maintaining Telstra’s competitive edge. The company’s leadership in infrastructure, including its extensive subsea cable network, further strengthens its market position.
• Growth and Value: Telstra is focused on improving returns on invested capital (ROIC) and driving growth across its business units, particularly in mobile and infrastructure. The company’s disciplined approach to cost management and investment in cutting-edge technology helps reinforce its market leadership.
• Digital and Regional Inclusion: Telstra is expanding services in regional and remote areas, aiming to bridge the digital divide and ensure nationwide connectivity.

Building a Moat:

Telstra’s ongoing investments in network infrastructure, cybersecurity, and customer experience are designed to create significant barriers to entry for competitors. The company’s leadership in 5G technology and its vast subsea cable network are key components of this moat, ensuring that Telstra remains the provider of choice for consumers and businesses alike.

Challenges:

While Telstra’s mobile business continues to thrive, other segments, particularly Network Applications & Services (NAS) within the Enterprise Fixed business, face challenges due to market trends. The company has initiated a detailed review of its domestic Enterprise business and is taking steps to address these challenges.

4. Business Segments

Mobile:

• Key Driver of Growth: Mobile services remain central to Telstra's strategy, benefiting from ongoing investments in network infrastructure and innovation.
• 5G Expansion: Telstra’s 5G network now covers 85% of Australia’s population, with 41% of mobile traffic using 5G. This expansion solidifies Telstra’s leadership in the mobile market, further strengthening its competitive moat.

Fixed Consumer & Small Business:

• Performance: EBITDA for this segment has more than doubled, reflecting strong demand and effective cost management.
• Future Focus: Continued digitisation and simplification of services to improve customer experience and operational efficiency.

Enterprise Fixed:

• Network Applications & Services (NAS): NAS encompasses a range of technology solutions tailored for business customers, including managed network services, cloud, cybersecurity, data analytics, and IT consulting. These services are designed to help businesses integrate and optimise their IT infrastructure and operations. While NAS has faced challenges due to accelerating negative market trends, it remains a crucial area of focus for Telstra. The company is conducting a thorough review to enhance NAS performance and ensure it meets the evolving needs of enterprise customers.

Infrastructure:

• Growth: The infrastructure business, which includes subsea cables and the intercity fiber network, continues to see strong demand and growth. These assets are central to Telstra’s strategic moat, providing critical connectivity both within Australia and across the Asia-Pacific region.
• Strategic Investments: Telstra is investing in new infrastructure, including additional subsea cables and satellite landing stations, to support future capacity demands. These investments are essential to maintaining Telstra’s competitive edge and securing its position as a leader in digital infrastructure.

5. Corporate Governance

Board of Directors:

Telstra’s board comprises a diverse group of experienced professionals, with a balance of gender and expertise. The board is committed to overseeing Telstra’s strategic direction and ensuring long-term shareholder value.

Sustainability:

Telstra is a leader in sustainability initiatives within the telecommunications sector in Australia. The company is focused on reducing carbon emissions, enhancing digital inclusion, and contributing positively to the communities it serves. These efforts are integral to Telstra's strategy of building a sustainable business that benefits all stakeholders.

6. Contact Information

General Enquiries:

Phone: 03 8647 4838

Email: companysecretary@team.telstra.com

Investor Relations:

Phone: 1800 880 679

Email: investor.relations@team.telstra.com

More Information:

For detailed financial reports, strategy updates, and other investor information, visit Telstra’s

Investor Centre

Introductory email from CEO

Dear valued investors,

I am pleased to present the Owner's Manual for Telstra Group Limited (ASX: TLS), an in-depth guide to our company's strategy, operations, and growth potential.

As Australia's leading telecommunications and technology company, Telstra is dedicated to connecting people, businesses, and communities across the country and beyond. Our commitment to providing reliable, secure, and innovative services, from mobile and fixed-line to digital infrastructure, positions us at the forefront of the industry. We are continually enhancing our network leadership, investing in cutting-edge technology, and building a strong competitive moat that will secure our place in the market for years to come.

This Owner's Manual provides a comprehensive overview of our business segments, including the strong performance of our mobile division, the growth in our infrastructure assets, and our strategic approach to Network Applications & Services (NAS). It also highlights our T25 strategy, which is central to our vision for sustainable growth and long-term shareholder value. Our ongoing investments in network expansion, digitisation, and customer experience are designed to keep Telstra ahead of the curve in an increasingly digital world.

Thank you for your continued support as we drive Telstra forward, building on our legacy and embracing the opportunities of the future.

Sincerely,

Vicki Brady

Chief Executive Officer

Telstra Group Limited

Video script

[Visual: Telstra logo on a clean white background.]

Vicki Brady:

"Welcome, investors, to the Telstra family. As partners in Australia’s leading telecommunications company, you play a crucial role in our journey to connect communities and drive innovation."

[Visual: CEO Vicki Brady in a bright, modern office, smiling at the camera.]

Vicki Brady:

"Hi, I’m Vicki Brady, CEO of Telstra. I’m thrilled to have you with us as we continue to build on our legacy and shape the future of connectivity in Australia."

[Visual: Clips of Telstra’s network infrastructure, like 5G towers and data centers, followed by people using phones and computers.]

Vicki Brady:

"In your Owner's Manual, you’ll find the key points of our strategy—what we’re focusing on to keep Telstra strong and growing."

[Visual: Footage of Telstra employees at work and digital graphics showing growth charts.]

Vicki Brady:

"We’re investing in expanding our 5G network, enhancing our digital infrastructure, and improving customer experiences. These are the building blocks of our success."

[Visual: A simple graphic that highlights ‘Mobile Growth,’ ‘Infrastructure Investment,’ and ‘Network Applications & Services (NAS).’]

Vicki Brady:

"Our mobile services are at the heart of our growth. We’re also leading in digital infrastructure, and our NAS offerings help businesses stay ahead in a digital world."

[Visual: Vicki Brady back in the office, speaking directly to the camera.]

Vicki Brady:

"As an investor, you’re a key part of this journey. Together, we’re driving Telstra’s future—creating value and ensuring we remain the leader in Australian telecommunications."

"Thank you for your continued partnership. We’re excited about what’s next, and we’re glad to have you with us."

[Music fades out as the screen shows Telstra’s contact information and website for more details.]