Spark historical financial information

Spark New Zealand Limited ARBN 050 611 277
Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand


MARKET RELEASE

15 February 2017

Spark historical financial information

In advance of Spark New Zealand Limited’s (“Spark’s”) H1 FY17 interim profit
announcement on Thursday 16 February, Spark has today released restated
historical detailed financials, to assist analysts in recalibrating their models.
Spark has changed its segmental reporting in line with previously announced
structural changes and to align external reporting with the internal structure
used to manage and review the results of the business.
The comparative segmental results have been adjusted to reflect these changes
with no impact on the Spark Group result.


-ENDS-


For media queries, please contact:
Richard Llewellyn
Head of Corporate Communications +64 (0) 27 523 2362

For investor relations queries, please contact:
Dean Werder
GM Finance & Performance +64 (0) 27 259 7176

Spark New Zealand
Group result
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Operating revenues and other gains
1,797 1,734 1,723 1,774
Operating expenses
1,361 1,205 1,266 1,240
Share of associates' and joint ventures' net (losses)
- (3)(2)(3)
EBITDA
436 526 455 531
Depreciation and amortisation expense
224 229 224 222
Net finance expense
12 15 13 15
Net earnings before income tax
200 282 218 294
Tax expense
53 54 60 82
Net earnings for the period
147 228 158 212
EBITDA by business unit
H1 FY15H2 FY15H1 FY16H2 FY16
EBITDA$m$m$m$m
Spark Home, Mobile & Business
352 416 396 406
Spark Digital
192 204 193 218
Spark Connect & Platforms
(189)(174)(181)(159)
Spark Ventures & Wholesale
98 84 63 68
Corporate
(17)(4)(16)(2)
436 526 455 531
Connections
H1 FY15H2 FY15H1 FY16H2 FY16
000's000's000's000's
Mobile connections
2,114 2,178 2,212 2,293
Local service connections
1,350 1,323 1,281 1,251
Broadband connections
674 680 675 675
Dividends
H1 FY15H2 FY15H1 FY16H2 FY16
Cents per
share
Cents per
share
Cents per
share
Cents per
share
Ordinary dividends9.0011.0011.0011.00
Special dividends--1.501.50
9.0011.0012.5012.50

Spark New Zealand
Operating revenues and other gains by business unit
H1 FY15H2 FY15H1 FY16H2 FY16
Operating revenues and other gains$m$m$m$m
Spark Home, Mobile & Business
910 932 971 992
Spark Digital
625 599 607 619
Spark Connect & Platforms
22 19 19 20
Spark Ventures & Wholesale
248 174 121 126
Corporate
47 65 26 41
Eliminations
(55)(55)(21)(24)
1,797 1,734 1,723 1,774
Group operating revenues and other gains
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Operating revenues
Voice
479 401 337 344
Broadband
324 326 339 346
Managed data
110 98 96 92
Mobile
Service revenue
367 376 390 396
Other mobile revenue
137 139 173 175
504 515 563 571
IT services
Traditional IT services
101 103 92 97
Platform IT services
73 86 93 106
Procurement
121 108 137 133
295 297 322 336
Other operating revenue
85 65 66 85
Total operating revenues
1,797 1,702 1,723 1,774
Other gains
- 32 - -
Total operating revenues and other gains
1,797 1,734 1,723 1,774
Wireless broadband revenues and connections are included in broadband revenues and connections.
H1 FY15H2 FY15H1 FY16H2 FY16
Voice revenue by type$m$m$m$m
Landline only221177169166
Calling241209153164
Other voice revenue17151514
479401337344

Spark New Zealand
Financial breakdown by business unit - Spark Home, Mobile & Business
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Operating revenues
Voice
199 190 171 176
Broadband
302 307 320 327
Mobile
389 414 459 464
IT services
1 - - 1
Other operating revenue
17 20 21 24
Internal revenue
2 1 - -
910 932 971 992
Operating expenses
Labour
55 51 56 58
Other operating expenses
484 446 504 510
Internal expenses
19 19 15 18
558 516 575 586
EBITDA
352 416 396 406
EBITDA margin
38.7%44.6%40.8%40.9%
Analysis & KPI's - Spark Home, Mobile & Business
H1 FY15H2 FY15H1 FY16H2 FY16
Voice revenue by type$m$m$m$m
Landline only88858275
Calling103978192
Other voice revenue8889
199190171176
Local serviceH1 FY15H2 FY15H1 FY16H2 FY16
Broadband connections (000)'s
653 659 654 654
Landline only connections (000)'s
232 215 200 194
Total connections (000)'s
885 874 854 848

Spark New Zealand
Financial breakdown by business unit - Spark Digital
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Operating revenues
Voice
112 103 99 98
Broadband
22 19 19 19
Managed data
77 67 69 68
Mobile
107 93 95 97
IT services
290 294 322 334
Other operating revenue
3 2 - -
Internal revenue
14 21 3 3
625 599 607 619
Operating expenses
Labour
121 106 106 104
Other operating expenses
291 274 304 292
Internal expenses
21 15 4 5
433 395 414 401
EBITDA
192 204 193 218
EBITDA margin
30.7%34.1%31.8%35.2%
Analysis & KPI's - Spark Digital
H1 FY15H2 FY15H1 FY16H2 FY16
Voice revenue by type$m$m$m$m
Landline only45413940
Calling64605857
Other voice revenue3221
1121039998
IT services revenue by type
Traditional IT services
971009296
Platform IT services
728693105
Procurement
121108137133
290294322334
Local serviceH1 FY15H2 FY15H1 FY16H2 FY16
Broadband connections (000)'s
21 21 21 21
Total connections (000)'s
69 67 65 62

Spark New Zealand
Financial breakdown by business unit - Spark Connect & Platforms
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Operating revenues
Voice
1 1 1 1
Mobile
2 2 2 2
Other operating revenue
19 16 16 17
22 19 19 20
Operating expenses
Labour
68 64 68 63
Other operating expenses
141 128 132 116
Internal expenses
2 2 1 -
211 194 201 179
Share of associates' and joint ventures' net profits
- 1 1 -
EBITDA
(189)(174)(181)(159)
Analysis & KPI's - Spark Connect & Platforms
H1 FY15H2 FY15H1 FY16H2 FY16
Voice revenue by type$m$m$m$m
Calling1111

Spark New Zealand
Financial breakdown by business unit - Spark Ventures & Wholesale
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Operating revenues
Voice
167 107 66 69
Managed data
33 31 27 24
Mobile
6 6 7 8
IT services
3 1 - 1
Other operating revenue
15 6 3 3
Internal revenue
24 23 18 21
248 174 121 126
Operating expenses
Labour
9 6 6 6
Other operating expenses
138 78 48 49
Internal expenses
3 2 1 1
150 86 55 56
Share of associates' and joint ventures' net (losses)
- (4)(3)(2)
EBITDA
98 84 63 68
EBITDA margin
39.5%48.3%52.1%54.0%
Analysis & KPI's - Spark Ventures & Wholesale
H1 FY15H2 FY15H1 FY16H2 FY16
Voice revenue by type$m$m$m$m
Landline only88514851
Calling73511314
Other voice revenue6554
1671076669
Local serviceH1 FY15H2 FY15H1 FY16H2 FY16
Total connections (000)'s396382362341
Landline only connections (000)'s
1
8982
1
Comparative information for periods prior to H1 FY16 is not available.

Spark New Zealand
Financial breakdown by business unit - Corporate
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Operating revenues and other gains
IT services
1 2 - -
Other operating revenue
31 21 26 41
Other gains
- 32 - -
Internal revenue
15 10 - -
47 65 26 41
Operating expenses
Labour
18 20 16 14
Other operating expenses
36 32 26 28
Internal expenses
10 17 - -
64 69 42 42
Share of associates' and joint ventures' net (losses)
- - - (1)
EBITDA
(17)(4)(16)(2)
Analysis & KPI's - Corporate
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Southern cross dividends
31 22 26 40

Spark New Zealand
Analysis & KPI's - Mobile (Spark Home, Mobile & Business and Spark Digital)
H1 FY15H2 FY15H1 FY16H2 FY16
Mobile revenue
Service revenue - $m
361 371 384 390
Other mobile revenue - $m
1
135 136 170 171
496 507 554 561
Average revenue per user (ARPU) - 6 month active
ARPU - $ per month
29.7728.6129.4728.74
Pay-monthly - $ per month
48.5646.9448.1747.19
Prepaid - $ per month
11.5711.3911.7211.87
Number of mobile connections at period end - 6 month active
Pay-monthly (000)'s
1,018 1,045 1,069 1,091
Prepaid (000)'s
1,092 1,129 1,139 1,198
Internal connections (000)'s
4 4 4 4
Total mobile connections (000)'s
2
2,114 2,178 2,212 2,293
1
Other mobile revenue includes handset sales and mobile interconnect
2
Mobile connections exclude MVNO connections

Spark New Zealand
Group expenses
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Payments to telecommunications operators
Baseband and access charges205 169 162 184
Other intercarrier costs97 73 43 48
Broadband cost of sales140 114 119 120
Field services11 8 10 8
453 364 334 360
Mobile acquisition, procurement and IT services
Mobile cost of sales204 194 229 219
IT services cost of sales164 160 184 177
368 354 413 396
Labour271 247 252 245
Other operating expenses
Direct network costs31 18 38 31
Computer costs37 39 38 36
Accommodation costs48 44 47 45
Advertising, promotions and communication46 32 45 32
Bad debts7 6 11 11
Impairment expense- - - 9
Other100 101 88 75
269 240 267 239
Total operating expenses
1,361 1,205 1,266 1,240
Depreciation and amortisation expense
Depreciation
126 130 126 122
Amortisation
98 99 98 100
224 229 224 222
Net finance expense
Finance income
(14)(13)(9)(9)
Finance expense
26 28 22 24
12 15 13 15
Group FTE's
H1 FY15H2 FY15H1 FY16H2 FY16
FTE permanent
5,297 4,792 5,023 5,241
FTE contractors
321 300 301 328
Total FTE
5,618 5,092 5,324 5,569

Spark New Zealand
Group capital expenditure
H1 FY15H2 FY15H1 FY16H2 FY16
$m$m$m$m
Major programmes
Optical transport network (OTN) and Carrier Ethernet610212
Re-engineering of IT systems29434224
Mobile network57355819
Takanini data centre61---
1538812145
Operating capital expenditure
Southern Cross capacity5-94
Customer growth and retention918186116
968195120
Total major programmes and operating capital expenditure249169216165
Mobile spectrum158--9
Total capital expenditure407169216174
Capital expenditure is presented on an accruals basis.