P A G E 1

Changes to external reporting

Changes to external reporting from FY24

From FY24 we will update our revenue and product cost reporting

This updated reporting is designed to:

  1. Support external communication of our strategy
  2. Better inform modelling, in particular with regards to data centre operations
  3. Enable simpler comparisons to peers and market data

Principle

Structure disclosures to align with Spark's latest three-year strategy:

  1. Telco: Mobile, Broadband and Voice
  2. Data Centres
  3. IT: IT Products, IT Services, Procurement and Partners
    • IT Products: Cloud, Collaboration, Managed Data and Network
    • IT Services: Service Management and Security
    • Procurement and Partners
  5. High-tech:Qrious, IoT, MATTR
  6. Other

Key Changes

  • Split Data Centres out from Cloud, and split co-location out from Other to create a combined Data Centre category
  • Move Qrious, IoT, and MATTR out of Other and combine into a new category called
    'High-tech'
  • Digital Health Platform to remain under 'Other' with Health revenue to be reported separately as a footnote

S P A R K P A G E 2

Refine Security to focus on cyber security services, by moving network related security

• Split existing Security revenues into Network Security (reported within Managed Data

revenues to Managed Data and Networks

and Networks) and Security

Update KPIs for IT Products and Services where either a) additional information is beneficial

•

To align with peers, update Data Centre KPIs to provide further information on

for modelling or b) modelling is best informed by revenue run-rate rather than volumetric

capacity, utilisation and power efficiency

KPIs

•

Remove existing Cloud, Security and Service Management KPIs

Operating revenue disclosure changes

S P A R K P A G E 3

Current

FY22

FY23

FY22 vs FY23

$m

$m

$m

%

Operating revenues

Mobile

Service revenue

899

980

81

9.0%

Non-service revenue

452

490

38

8.4%

1,351

1,470

119

8.8%

Voice

Access

109

82

(27)

(24.8%)

Calling

138

113

(25)

(18.1%)

Other voice revenue

38

36

(2)

(5.3%)

285

231

(54)

(18.9%)

Broadband 1

639

626

(13)

(2.0%)

Cloud

233

228

(5)

(2.1%)

Managed data and network

205

208

3

1.5%

Collaboration

78

79

1

1.3%

Service management

176

163

(13)

(7.4%)

Security

37

45

8

21.6%

Procurement and partners

538

584

46

8.6%

Other product revenues 2

152

241

89

58.6%

Total operating revenues

3,694

3,875

181

4.9%

Other gains

26

33

7

26.9%

Adjusted operating revenues and other gains

3,720

3,908

188

5.1%

New

FY22

FY23

FY22 vs FY23

$m

$m

$m

%

Operating revenues

Telco

Mobile

Service revenue

899

980

81

9.0%

Non-service revenue

452

490

38

8.4%

Mobile

1,351

1,470

119

8.8%

Voice

285

231

(54)

(18.9%)

Broadband 1

639

626

(13)

(2.0%)

Total Telco

2,275

2,327

52

2.3%

IT products

Cloud

214

208

(6)

(2.8%)

Managed data and network

220

222

2

0.9%

Collaboration

78

79

1

1.3%

Total IT products revenue

512

509

(3)

(0.6%)

IT services

Service management and security

198

194

(4)

(2.0%)

Procurement and partners

538

584

46

8.6%

Total IT Revenue

1,248

1,287

39

3.1%

Data centres

23

24

1

4.3%

High-Tech excl. Health

57

65

8

14.6%

Other product revenues 2

91

172

81

88.6%

Total operating revenues

3,694

3,875

181

4.9%

Other gains

26

33

7

26.9%

Adjusted operating revenues and other gains

3,720

3,908

188

5.1%

Variance

FY22

FY23

FY22 vs FY23

$m

$m

$m Note

-

-

-

-

-

-

-

-

-

(19)

(20)

(1) Removal of Data centres

15

14

(1) Addition of Network Security

-

-

-

22

31

9 Addition of Security (excl. Network security)

Security split into Network security (under Managed data and network) and

(37)

(45)

(8)Other Security (under Service management and security)

-

-

-

23

24

1 Data centres (moved from Cloud) and Co-Location (moved from 'Other')

57

65

8 Qrious, IOT, MATTR moved from 'Other'

Qrious, IOT, MATTR moved to 'High-Tech excl. Health' and Co-location moved to

(61)

(69)

(8)'Data centres'

-

-

-

Group capital expenditure disclosure changes

S P A R K P A G E 4

Current

FY22 FY23 FY22 vs FY23

Maintenance Capex

$m

$m

$m

%

Cloud

15

19

4

26.7%

Converged communications network (CCN)1

22

17

(5)

(22.7%)

International cable construction and capacity

7

25

18

NM

purchases

IT systems

150

116

(34)

(22.7%)

Mobile network1

100

98

(2)

(2.0%)

Core sustain and resiliency

53

69

16

30.2%

Other

7

15

8

NM

Total maintenance capital expenditure excluding

354

359

5

1.4%

spectrum

Growth Capex

5G acceleration

25

42

17

68.0%

Data centres

31

114

83

NM

Total growth capital expenditure excluding

56

156

100

NM

spectrum

Total capital expenditure excluding spectrum

410

515

105

25.6%

New

FY22

FY23

FY22 vs FY23

Maintenance Capex

$m

$m

$m

%

Cloud

15

19

4

26.7%

Fixed network & International cable capacity

68

93

25

36.8%

IT systems

150

116

(34)

(22.7%)

Mobile network

100

98

(2)

(2.0%)

Property

16

23

7

43.8%

Other

5

10

5 100.0%

Total maintenance capital expenditure excluding

354

359

5

1.4%

spectrum

Growth Capex

SA readiness

25

42

17

68.0%

Data centres

31

114

83

NM

Total growth capital expenditure excluding

56

156

100

NM

spectrum

Total capital expenditure excluding spectrum

410

515

105

25.6%

Variance

FY22

FY23

FY22 vs FY23

$m

$m

$mNote

-

-

-

68

93

25

Includes CCN, International cable construction & capacity and Core

sustain and resiliency (less Property-related core sustain)

(22)

(17)

5

Moved to Fixed network & International cable capacity

(7)

(25)

(18)

Moved to Fixed network & International cable capacity

-

-

-

-

-

-

(53)

(69)

(16)

Split into Fixed network & International cable capacity and Property

16

23

7

Retail stores (moved from 'Other') and part of Core sustain resiliency

(2)

(5)

(3)

Removal of retail stores

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Spark New Zealand

Group result - reported

H1 FY21

H2 FY21

H1 FY22

H2 FY22

H1 FY23

H2 FY23

FY22

FY23

FY22 vs FY23

$m

$m

$m

$m

$m

$m

$m

$m

$m

%

Operating revenues and other gains

1,796

1,797

1,890

1,830

2,534

1,957

3,720

4,491

771

20.7%

Operating expenses

(1,296)

(1,178)

(1,352)

(1,218)

(1,492)

(1,277)

(2,570)

(2,769)

(199)

(7.7%)

EBITDAI

500

619

538

612

1,042

680

1,150

1,722

572

49.7%

Finance income

17

17

14

12

16

16

26

32

6

23.1%

Finance expense

(43)

(38)

(37)

(37)

(43)

(56)

(74)

(99)

(25)

(33.8%)

Depreciation and amortisation

(262)

(259)

(257)

(263)

(248)

(256)

(520)

(504)

16

3.1%

Net investment income

-

(1)

(1)

-

(1)

2

(1)

1

2

NM

Net earnings before income tax

212

338

257

324

766

386

581

1,152

571

98.3%

Tax income /(expense)

(65)

(104)

(78)

(93)

71

(88)

(171)

(17)

154

90.1%

Net earnings for the period

147

234

179

231

837

298

410

1,135

725

NM

Capital expenditure excluding spectrum

190

159

218

192

250

265

410

515

105

25.6%

Free cash flows excluding spectrum1

132

352

164

269

115

374

433

489

56

12.9%

Reported EBITDAI margin

27.8%

34.4%

28.5%

33.4%

41.1%

34.7%

30.9%

38.3%

7.4pp

Reported effective tax rate

30.7%

30.8%

30.4%

28.7%

(9.3%)

22.8%

29.4%

1.5%

(27.9pp)

Capital expenditure to operating revenues and

10.6%

8.8%

11.5%

10.5%

9.9%

13.5%

11.0%

11.5%

0.5pp

other gains

Reported basic earnings per share (cents)

8.0

12.5

9.6

12.4

44.7

16.0

21.9

60.7

38.8

NM

Reported diluted earnings per share (cents)

8.0

12.5

9.6

12.4

44.6

16.0

21.9

60.6

38.7

NM

1As reported in H2 FY22 the free cash flow has been redefined from FY23 to minimise the impact of short-term working capital volatility and to support incremental growth capital expenditure. Comparative periods have been updated to reflect the new definition.

Group result - adjusted

Spark's policy is to present 'adjusted EBITDAI' and 'adjusted net earnings' when a financial year includes significant items (such as gains, expenses and impairments) individually greater than $25 million. In the year ended 30 June 2023, the net gain on sale of TowerCo of $583 million together with the subsequent $5 million net gain arising from the dilution of the investment in the Connexa group and the one off provision of $54 million for Spark Sport were deemed significant items to adjust. There were no significant items to adjust for the year ended 30 June 2022.

H1 FY21

H2 FY21

H1 FY22

H2 FY22

H1 FY23

H2 FY23

FY22

FY23

FY22 vs FY23

$m

$m

$m

$m

$m

$m

$m

$m

$m

%

Adjusted operating revenues and other gains

1,796

1,797

1,890

1,830

1,950

1,958

3,720

3,908

188

5.1%

Adjusted operating expenses

(1,296)

(1,178)

(1,352)

(1,218)

(1,440)

(1,275)

(2,570)

(2,715)

(145)

(5.6%)

Adjusted EBITDAI

500

619

538

612

510

683

1,150

1,193

43

3.7%

Finance income

17

17

14

12

16

16

26

32

6

23.1%

Finance expense

(43)

(38)

(37)

(37)

(43)

(56)

(74)

(99)

(25)

(33.8%)

Depreciation and amortisation

(262)

(259)

(257)

(263)

(248)

(256)

(520)

(504)

16

3.1%

Adjusted net investment income

-

(1)

(1)

-

(1)

(3)

(1)

(4)

(3)

NM

Adjusted net earnings before income tax

212

338

257

324

234

384

581

618

37

6.4%

Adjusted income tax expense

(65)

(104)

(78)

(93)

(69)

(116)

(171)

(185)

(14)

(8.2%)

Adjusted net earnings for the period

147

234

179

231

165

268

410

433

23

5.6%

Capital expenditure excluding spectrum

190

159

218

192

250

265

410

515

105

25.6%

Free cash flows excluding spectrum1

132

352

164

269

115

374

433

489

56

12.9%

Adjusted EBITDAI margin

27.8%

34.4%

28.5%

33.4%

26.2%

34.9%

30.9%

30.5%

(0.4pp)

Adjusted effective tax rate

30.7%

30.8%

30.4%

28.7%

29.5%

30.2%

29.4%

29.9%

0.5pp

Capital expenditure to adjusted operating

10.6%

8.8%

11.5%

10.5%

12.8%

13.5%

11.0%

13.2%

2.2pp

revenues and other gains

Adjusted basic earnings per share (cents)

8.0

12.5

9.6

12.4

8.8

14.4

21.9

23.2

1.3

5.9%

Adjusted diluted earnings per share (cents)

8.0

12.5

9.6

12.4

8.8

14.3

21.9

23.1

1.2

5.5%

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Spark New Zealand Ltd. published this content on 17 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 August 2023 20:48:15 UTC.