General Announcement::Telstra 2021 Annual General Meeting presentations

12 October 2021	Office of the Company Secretary
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ELECTRONIC LODGEMENT
Dear Sir or Madam
Annual General Meeting presentations

In accordance with the Listing Rules, I enclose the presentations of the Chairman and Chief Executive Officer, which will be delivered today at the virtual Telstra Corporation Limited 2021 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

12 OCTOBER 2021

JOHN MULLEN - CHAIRMAN

SLIDE: JOHN MULLEN - CHAIRMAN

Good morning ladies and gentlemen.

My name is John Mullen and it is my pleasure to welcome you this morning to Telstra's 2021 Annual General Meeting.

I would like to start by thanking you all for your continued support and investment in Telstra at a time when COVID continues to have a profound effect on our lives, our society and the economy.

All of us have been impacted in one way or another and I hope you and your families are in good health, good spirits, and are remaining safe through the challenges of this unprecedented pandemic.

We would have preferred today's meeting to have been in-person but, with travel for all of us virtually impossible, we think connecting online is the best solution at a time when few things are far from normal.

With a quorum present it is my pleasure to formally declare today's meeting open.

A Notice of Meeting was distributed earlier which set out the business and resolutions to be considered today and 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 shown on the screen now.

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 and assistance is available at any time, should you need it.

SLIDE: BOARD OF DIRECTORS

Joining us from various locations across Australia and around the world are all of my fellow Board members, your CEO Andy Penn, CFO Vicki Brady and the senior management team.

Current directors Roy Chestnutt and Niek Jan van Damme are also both standing for re-election today and you will hear from them a little later this morning.

Also joining us online is Andrew Price from our auditors Ernst and Young. I'm sure Andrew would be happy to answer any questions you may have on the conduct of the audit, or on the auditor's report itself.

SLIDE: 2021

I don't think there can be any debate that this has been another tumultuous year, a year of lockdowns, restrictions and great uncertainty

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We are proud that through all of this Telstra has remained focussed on our employees' and customers' needs, and on supporting our country as we have navigated through challenging and largely uncharted waters.

Despite the extraordinary circumstances, we continued to deliver on our ambitious transformation strategy and the company finished the year in a strong position.

Let me look back briefly on the 2021 financial year.

Despite the challenges, we delivered results in line with guidance and we saw the focus and discipline on T22 pay off in a sustainable way across the business.

The year represented a turning point in our financial trajectory. Telstra is building financial momentum and we are very pleased to be able to say that we are confident our underlying business will return to full-year growth in FY22.

We have confidence because we see strong performance in our mobile business, continued discipline on our cost reduction target, green shoots in some of our growth businesses and a diminishing impact from the nbn.

Andy will take you through the financials shortly, but we have many achievements to be proud of this year, including the significant progress made on our transformational T22 strategy.

Launched just over three years ago, T22 is a strategy to radically simplify and digitise the business; to reduce frustrating customer pain points and the legacy systems and processes that were slowing us down; to introduce new Agile ways of working; and to further extend our network leadership, including leading in 5G.

We promised a lot, and I'm sure many investors and market observers were waiting to see how we would go.

Well, I really believe that management has done an excellent job and the transformation of Telstra has truly been an overwhelming success.

We have delivered the great majority of what we said we would and, three years into what has been one of the largest and most ambitious transformations by a telco globally, Telstra is now a vastly different company.

Let me take you through just how different.

We have radically simplified our business including reducing the number of Consumer & Small Business in market plans from 1800 to just 20;

Our workforce is one-third smaller and we have removed on average more than four layers of management;

We have delivered cost reductions of $2.3 billion and are on track to deliver our T22 productivity target of $2.7 billion;

We have repositioned our investments in Foxtel and Telstra Ventures and improved the performance of our health business which is now strategically very well positioned for the future;

We have successfully established InfraCo and we are progressing our corporate restructure. The restructure of Telstra with a new holding company and four key subsidiaries - InfraCo Fixed, Amplitel or InfraCo Towers, Telstra Ltd or ServeCo and Telstra International - is the key final step in our T22 commitment to establish a standalone Infrastructure business to drive performance and set up optionality post the roll out of the NBN.

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We are seeking to implement this restructure through a shareholder and Court approved scheme of arrangement. All steps in the restructure process are progressing well and we are optimistic of finalising the restructure before the end of T22 with the scheme meeting now likely to be early next year.

We have monetised over $2 billion of assets, further strengthened our balance sheet and we have completed the $2.8bn towers deal from which we have announced an on-market share buy-back of up to $1.35bn.

The Amplitel sale price and multiple together with the speed at which the sale closed shows the quality of the InfraCo assets. InfraCo Fixed is over six times larger than Amplitel on an income and EBITDA basis, and while it is more complex in nature, InfraCo Fixed is a very strategic portfolio.

One of the most critical measures of progress for any business is how customer service is improving.

It continues to be the number one focus for Telstra.

During T22 we have reduced the number of calls to our contact centres dramatically.

When we started in 2018 we were receiving 35.8 million calls and this year that is down to 11.5 million

- a reduction of more than two-thirds.

And when Consumer and Small Business customers do need to contact us they will be able to call us and have their call answered by an Australian contact centre service representative or visit a local expert in our Telstra owned store network.

We are on track to have all in-bound calls from our Consumer and Small Business customers answered in Australia by June next year.

We have transformed how we serve our customers.

More than 70% of Consumer and Small Business service interactions are now delivered digitally up from 40% in FY18.

In our Enterprise business it is a similar story with 28% of customer service interactions delivered digitally, up from 12% last year.

We have done a lot, but we still have more to do.

While our objective is to provide an exceptional customer experience the reality is Telstra is simply too big and too complex to ever be 100% perfect in this regard.

Telstra handles hundreds of millions of data and mobile connections every day through a complex array of technologies that work exceptionally well and are exceptionally reliable.

And yet, at this scale, if even a tiny fraction of these go wrong, it still impacts a very large number of people.

As Chairman, I receive a lot of complaints and I respond to every complaint personally, so I am very aware of how upsetting a service failure can be.

It is these types of frustrations and pain points that have driven our determination under T22 to radically simplify and streamline the business and digitise our interactions with customers to the greatest extent possible.

While all customer related metrics are showing strong improvement, we absolutely recognise and accept that there are still too many failures and continuing and enhancing these improvements remain a core component of the T25 strategy that you will hear more about shortly.

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Another source of organisational pride for us this year has been the way the company has responded to the challenge of COVID. Throughout this very difficult period we have continued to provide a range of support measures for our people, including paid pandemic leave, wellbeing support, and COVIDSafe workplaces.

In India and the Philippines, where the pandemic has been particularly devastating, we have provided accommodation for workers, and assistance with medical expenses and vaccinations.

We've also provided $28 million in COVID relief packages for our customers and brought forward $500 million of capex from the second half of financial year 21 into the first half to help the nation's economic response.

As the pandemic and its impacts have evolved, so has our response.

When COVID first hit we were one of the first to move our 25,000 plus team members to work from home, the first to offer paid pandemic leave and we kept the more vulnerable members of our frontline teams out of harm's way by moving them into suitable alternative roles.

We have also continued to lead in flexible working and have taken the concept to the next level by giving individuals choice with where, when and how they work. And more recently we've been doing our bit to encourage our people and our customers to get vaccinated - to keep ourselves and others safe and to get us on a pathway out of the severe lockdowns so many of us are facing.

The unifying thread in all of our T22 achievements is that they are things we committed to do, and they are things we have done.

As I said earlier, the 2021 financial year was also significant because it marked a turning point in Telstra's financial performance.

Every year for the last four years we have had to face the very real challenge of the financial headwinds associated with the transfer of a material part of our business to the nbn.

Each year we have had to start the year with our EBITDA going backwards by up to $800 million at the same time as we were operating in an increasingly competitive markets, markets disrupted by new technologies and facing significant structural change.

The reality is that Telstra has lost over $6 billion of profit in the last decade or so, predominantly from the impact of the nbn but also the loss of voice revenues, sms revenues, global roaming and other pressures, and this has had an inevitable impact on earnings, dividends and our share price.

There are few precedents in corporate Australia for an impact or a challenge of this magnitude.

But with the nbn roll out now complete you can finally see the company coming out of the shadow of the nbn.

Investors will be able to see the strength of our underlying performance, and the turning point we have reached.

But with T22 now virtually complete our focus is now shifting to what comes next.

Last month we announced our ambitious new T25 strategy.

It is a strategy designed to accelerate growth from our core business, and to scale our new businesses; to further enhance the customer experience; to capitalise on the establishment of InfraCo and create a more contemporary structure for the future.

If T22 was a strategy of necessity, T25 is a strategy for growth and I would now like to give shareholders a sense for its direction.

SLIDE: OUR STRATEGY: T25

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