Telstra 2011 Annual Report Download - page 74

59
Telstra Corporation Limited and controlled entities
Directors’ Report
We do note, however, that in the last year, the Federal
and State Governments have enacted and/or proposed
a number of legislative reforms which affect our
business operations. We are managing the impact of
these reforms as and when they occur.
Outlook
Over the past year Telstra has recorded a turnaround in
operational results, with strong customer growth, lower
churn, a return to revenue growth and higher market
share in fixed broadband and mobile.
In fiscal 2012, the strategic initiatives will continue to
bear fruit. The year will see productivity and other
benefits from a continuing simplification programme.For
2012, we expect Telstra to return to full year earnings
growth with low single digit revenue growth and low
single digit EBITDA growth on the back of strong second
half performance in fiscal 2011. Capex to sales will
continue to be around 14% of sales with free cashflow
of between $4.5 and $5.0 billion. The NBN is not
expected to have a material impact on Telstra’s financial
results in 2012.
* Guidance assumes wholesale product price stability, and excludes any further
impairments to investments and any proceeds on the sale of businesses.
As announced in November 2010, it is also the
company’s intention to maintain a 28 cent fully franked
dividend for fiscal 2012, subject to the Board’s normal
approval process for dividend declaration and there
being no unexpected material events. The directors
also remain committed to a broader review of capital
management after shareholders have voted on our
proposed participation in the rollout of the NBN and
subject to global financial market conditions.
Events occurring after the end of the financial
year
The directors are not aware of any matter or
circumstance that has arisen since the end of the
financial year that, in their opinion, has significantly
affected or may significantly affect in future years,
Telstra’s operations, the results of those operations or
the state of Telstra’s affairs, other than the following:
• Our 50% jointly controlled entity, FOXTEL,
announced on 11 July 2011 that it had entered
into definitive agreements with AUSTAR and
Liberty Global to acquire all of the issued shares
in AUSTAR. The transaction remains subject to
a number of approvals including from the
Foreign Investment Review Board, ACCC,
AUSTAR minority shareholders and the court.
The transaction will be funded by a combination
of FOXTEL bank debt and shareholder debt
contributions in the form of subordinated
shareholder notes. Our contribution will be up
to $450 million. The final amount will be
determined following the satisfaction of the
conditions precedent.
• On 21 July 2011, we sold our 64.4%
shareholding in Adstream (Aust) Pty Ltd for a
total consideration of $24 million. Payment is
deferred for a period of up to two years and is
subject to commercial rates of interest. The
disposal of our share of net assets of $24 million
will have a minimal profit or loss impact.
• On 6 July 2011, Telstra announced changes to
its organisational structure. Effective 1 August
2011, the entire sales and retail customer
service workforce was unified in a single
business unit, Telstra Customer Sales and
Service, responsible for sales and services to all
segments including consumer, business,
enterprise and government customers. A new
business unit, Applications and Ventures Group,
was also created to invest and partner with
other companies and government agencies to
provide a new range of digital services for
business and consumers, including health and
education sectors.
Details of directors and executives
Changes to the directors of Telstra Corporation Limited
during the financial year and up to the date of this
report were:
• Nora L Scheinkestel was appointed as a
non-executive Director effective 12 August
2010.
Information about our directors and senior executives is
provided as follows and forms part of this report:
• names of directors and details of their
qualifications, experience, special
responsibilities and directorships of other listed
companies are given on pages 62 to 66;
• number of Board and Committee meetings and
attendance by Directors at these meetings is
provided on page 67;
• details of director shareholdings in Telstra are
shown on page 67; and
• details of director and senior executive
remuneration is detailed in the Remuneration
Report on pages 69 to 83.
Company Secretary
The qualifications and experience of our Company
Secretary are detailed on page 66 and form part of this
report.
The current Company Secretary, Carmel Mulhern, has
been appointed the Group General Counsel effective 1
January 2012. Damien Coleman who is currently
General Counsel, Finance and Administration, will
succeed Ms Mulhern in the Company Secretary role on
that date.
Guidance Summary*
Measure Fiscal 2012 Guidance
Total Revenue Low single digit growth
EBITDA Low single digit growth
Capex/sales 14%
Free cashflow $4.5 - $5.0 billion
Dividend 28 cents fully franked