Chorus Limited · NZX:CNU
Chorus — Non-Deal Roadshow (July 2013)
21 slides from Chorus's roadshow presentation, July 2013
Slide 1: Building New Zealand's fibre future
Building New Zealand’s fib e ffuture fibre t e Mark Ratcliffe, Chorus CEO
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements > This presentation may contain forward-looking statements regarding future events and the future financial performance of Chorus, including forward looking statements regarding industry trends, strategies, capital expenditure, the construction of the UFB networ
Slide 3: Chorus [CNU]
Chorus [CNU] > Listed on the NZSX and ASX since Dec 2011 > ~55% NZ ownership > ~700 employees > Supported S t d by b a further f th 2,000 2 000 service company technicians > Busy building urban and rural fibre optic networks in partnership with the Crown
Slide 4: Our access network
Our “access” access network Fibre to the cabinet
Slide 5: NZ fixed line market
NZ fixed line market NZ fixed line connections stable at ~1.8 million NZ fastest growing OECD broadband market in 2012 More than 1 million broadband connections on our network 84% of lines can get 10Mbps to 20Mbps broadband over our copper network UFB available to 100,000+ Broadband connec
Slide 6: Our part in connecting you
Our part in connecting you You contact your service provider about phone or broadband service Retail service provider e g Telecom e.g. Telecom, Vodafone, Vodafone Orcon, Orcon Slingshot They provide phone or broadband service over our network Our technician connects or repairs your service Copper or
Slide 7: Public-private partnership with Government to enhance New Zealand's broadband capability
Public-private partnership with Government to enhance New Zealand’s broadband capability
Slide 8: Building the UFB network
Building the UFB network > Fibre to pass 830,900 830 900 premises by 2020 > Pass ~100,000 premises p.a. > Target g of 149,000 , premises p by y 30 June 2013 > ~44,000 ~44 000 streets to deploy along > use existing fibre and duct network t k where h possible ibl > connection from street to home ‘on d
Slide 9: Dunedin UFB area
Dunedin UFB area > ‘Priority’ ‘P i i ’ premises i (b (businesses, i schools h l and d hospitals) h i l ) to be b completed l d by b 2015
Slide 10: www.chorus.co.nz/network-upgrade-map
www.chorus.co.nz/network-upgrade-map
Slide 11: Fibre: an inter-generational investment
Fibre: an inter-generational investment > The internet accounted for average 3.4% of GDP in 13 countries reviewed in a McKinsey y Global Institute study y (2011) > Alcatel Lucent Lucent’s s Bell Labs (2012) estimated economic impact of building UFB and RBI networks is $5.5 billion GDP growth over 20
Slide 12: Future-proofs NZ for bandwidth demand
Future-proofs Future proofs NZ for bandwidth demand > Bandwidth demand is being fuelled by proliferation of internet- enabled devices ▪ our research shows on average three connectable devices per home: smart phones, tablets, e-readers, internet TVs > Globally, online data traffic is increasing expon
Slide 13: Top 5 reasons to take up fibre
91% 72% Reliability of connection pomie ee — 2) 59% Being able to do bett: faster ot shacitesei 54% Faster upload of files 38% Being able to choose what Leen iy wan nt to watch any device reine TOP 5 REASONS TO TAKE UP FIBRE
Slide 14: Technology shifts don't happen overnight
Technology shifts don’t happen overnight 100% Technology Adoption in New Zealand (% of Households) 90% 80% 70% Dial up & broadband took Dial‐up Cellphones took Pay TV took over 60% 10 years to reach 50% 15 years 20 years 50% Dial‐up & 40% broadband took 3‐ 30% 5 years to reach 20% 20% 10% Sky TV & c
Slide 15: UFB is a huge investment
UFB is a huge investment > The street network alone will cost $1.7 to $1.9 billion ▪ Crown fundingg$$929 million > Chorus provides connections from street to premises ‘on demand’ Chorus could not build UFB without its copper network revenues Revenue $525m 6 months to 31 December 2012 Opex Capex $194
Slide 16: Financial summary
Financial summary 6 months to 31 Dec 2012 Prior 6 months $ $m ( (normalised) li d) $m Operating revenue 525 514 Operating expenses (194) (185) EBITDA 331 329 EBIT 171 168 Net earnings $84m $78m Dividend per share (cps) 10.0 (interim) 14.6 (7 months) Borrowings $1,792m $1,782m
Slide 17: Multiple regulatory processes
Multiple regulatory processes Commerce Commission Government review UBA benchmarking UCLL final pricing process principle > Draft p price of $ $8.93 > Chorus has requested q > In February, y, ICT Minister released in December review based on actual announced industry framework 2012 cost modelling re
Slide 18: UFB cost per premises passed
UFB cost per premises passed > Year 2 expected to cost $2,900 to $3,200 per premises passed > Total cost of communal network est. $1.7 to $1.9 billion 3500 Average CPPP ($) 0 2012 2020 Previous Current
Slide 19: Dividends
Dividends > FY13 dividend guidance of 25 25.5cps 5cps fully imputed subject to no material adverse change in outlook ▪ interim dividend of 10.0 cents per share paid 12 April > Following the 8 February announcement from the Minister, Chorus considers that it has sufficient near term certainty to anno
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Slide 21: Any questions?
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