IT & Managed Services Presentation

Spark Finance Limited
Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand


MARKET RELEASE
24 March 2021

IT & Managed Services Presentation


Spark has today released a presentation on IT and Managed Services along with
expanded financial disclosures to provide additional detail on cloud, security and
service management.

Investors and analysts are invited to attend a presentation on IT& Managed Services
presented by Spark’s Customer Director, Grant McBeath, Product Director, Tessa
Tierney and Finance Director, Stefan Knight.

The Managed Services Presentation will be available via live audio conference and
webcast only, there will be no live audience.

Please note: to ask a question during the allocated Q&A section attendees
will need to dial into the audio conference.

The webcast link can be found on Spark’s Investor Centre Website:
investors.sparknz.co.nz


DATE: Wednesday 24 March 2021
TIME: 08.00 am (AEDT)
10.00 am (NZDT)
If you would like to join via teleconference, please use the following dial-in numbers:
AUDIO CONFERENCE ID: 4965866
INTERNATIONAL DIAL IN: +61 2 8038 5358 (charges apply)
Country Date Time Dial In
Australia 24/03/21 08.00am AEDT 1800 007 094
Hong Kong 24/03/21 05.00am HKT 800 966 885
Japan 24/03/21 06.00am JST 005 3164 0081
New Zealand 24/03/21 10.00am NZDT 0800 660 222
Singapore 24/03/21 05.00am SGT 800 641 1152
UK 23/03/21 9.00pm GMT 0800 0323 241
USA 23/03/21 5.00pm EDT 1800 6518 618


Please note the webcast will be archived and made available for replay on Spark’s
Investor Centre Website investors.sparknz.co.nz
.

Please dial into the teleconference 10 minutes before the start of the presentation.

Authorised by:
Alastair White
GM Capital Markets
- ENDS –

Spark Finance Limited
Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand



For media queries: For investor relations queries:
Lucy Fullarton Alastair White
Corporate Relations Partner GM Capital Markets
+64 (0) 21 070 6197 +64 (0) 21 228 3855

---

SERVICES
PRESENTATION
IT & MANAGED
GRANT MCBEATH| CUSTOMER DIRECTOR
TESSA TIERNEY| PRODUCT DIRECTOR
STEFAN KNIGHT| FINANCE DIRECTOR
WEDNESDAY 24 MARCH 2021

DIVERSIFIED BUSINESS, SUSTAINABLE GROWTH
2
With a long history as Telecom New Zealand, Spark is
synonymous with telecommunications –and the vast majority
of New Zealanders associate Spark with mobile and broadband
services.
•Less well-known is that Spark is a highly diversified business, with ~1/3 of total
group revenues ($1,104m) derived from IT & Managed Services.
•The IT & Managed Services market revenue is valued at ~NZ$6 billion and
expected to grow at ~4-6% CAGR to FY23 as businesses rapidly digitise and
shift to the cloud –spurred in part by the impacts of COVID-19.
•Spark is uniquely positioned in the market to deliver end-to-end products and
services, leveraging market-leading capability across cloud, security and
service management.
EXECUTIVE
•Spark’s growing IT & Managed Services offering
is supported by a highly-valuable infrastructure
asset portfolio, which is unique in the NZ market,
difficult for competitors to replicate, and a
potential driver of additional future value.
•Our scale of relationships, strength of brand,
valuable infrastructure portfolio, exposure to
growing market segments and the supportive
global and local trend towards business
digitisation set us apart from our traditional
competitors.
•We expect IT & Managed Services revenues to
grow at a 5-10% CAGR to FY23 supporting top
line revenue growth and creating long-term value
for shareholders.
SUMMARY:

OVERVIEW
SECTOR
STRATEGY
&
3YEAR

Cloud (including
datacentres)
Security
Service management
(including
professional
services)
ProcurementIT Partners
Managed data
and networks
Collaboration
4
CUSTOMER NEEDS
HOW SPARK DELIVERS
Procurement and partners
Managed data,
networks and services
Cloud, security and services management
WHAT IS
IT & MANAGED SERVICES?
Digital trust,
dataprivacy
and security
solutions
Seamless
‘always on’
connectivity
Remote and
digital
working
solutions
Trusted
advice and
managed
services that
just work
Cost-
effective
technology
sourcing
solutions
High-quality,
nationwide
managed
datacentre
facilities
Access to
global cloud
partners
Local /
regional
support from
IT specialists
Cost
effective and
compliant
cloud
solutions and
applications

5
HOW SPARK DELIVERS
Procurement and partners
Managed data,
networks and services
Cloud (including
datacentres)
Security
Service management
(including
professional
services)
ProcurementIT Partners
Managed data
and networks
Collaboration
Cloud, security and service management
CUSTOMER NEEDS
WHAT IS
IT & MANAGED SERVICES?
Digital trust,
dataprivacy
and security
solutions
Seamless
‘always on’
connectivity
Remote and
digital
working
solutions
Trusted
advice and
managed
services that
just work
Cost-
effective
technology
sourcing
solutions
High-quality,
nationwide
managed
datacentre
facilities
Access to
global cloud
partners
Local /
regional
support from
IT specialists
Cost
effective and
compliant
cloud
solutions and
applications

6
Spark Group Revenue FY20 (~$3.6b)
Managed Data
and Networks,
$212m
Collaboration,
$65m
Procurement &
Partners, $407m
Service Management,
$158m
Security, $37m
Cloud, $225m
Consumer
Revenues, 44%
Other Business
Revenues, 25%
IT & Managed Services,
~$1,104m
31%
IT & MANAGED SERVICES REPRESENT AROUND
REVENUES
1/3 OF GROUP

To be New Zealand’s leading agnostic cloud custodian, bringing the best of private and public cloud
together with our service expertise, supported by ‘always-on’ connectivity.
3-YEAR STRATEGY
7
OUR IT & MANAGED SERVICES
Flexible ‘as-a-service’ solutions that utilise shared
infrastructure
Offering digital business transformation
services
Underpinned by best in class cyber security,
and developing new markets in digital trust
With ‘Hybrid cloud’ capabilities delivering
best of private and public cloud to meet
customer needs
End-to-end client led hybrid-cloud solutions and cloud
transformation support via our unique Leaven proposition
Partnerships with hyperscalersto deliver full suite of public
cloud services
Remote working and business continuity support through
digital workplace solutions and securing customer
environments
Continued investment in people, process and technology to
deliver an exceptional end-to-end managed service offering
HOW WE WILL DELIVER
Foundations provided by an infrastructure asset portfolio which
includes a national fibre backhaul network, mobile sites, data
centres and the managed networks that connect them

THE GROWTH
OPPORTUNITY

(1)
Gartner (February 2019)
•The demand for managed and professional services is also growing as customers look to trusted advisors who can support
their transitions.
•The IT & Managed Services market is expected to grow at ~4-6% CAGR to FY23.
•We expect the majority of market growth will come from the Cloud market, with strong growth in both Public Cloud and the
services that support customers’ digital transformations.
•There will be pricing pressure across IaaS and co-location, but this will be offset by opportunities for continued revenue
growth across this portfolio as the majority of New Zealand businesses are yet to transition to the cloud, with only 25-30%
having currently moved.
•Legacy managed data markets will decline as customers move to new and cheaper technologies, but growth in networking is
expected to offset that decline.
9
Businesses were digitising at pace before COVID-19 –this trend has now accelerated.
By 2025, 80% of enterprises globally will migrate entirely away from on-premise digital storage,
moving to colocation or cloud
(1)
THE MARKET
OPPORTUNITIES
IS GROWING AT PACE PRESENTING
& CHALLENGES

10
SPARK IS
SECURE OUR SHARE
WELL POSITIONED TO
OF THIS GROWTH
•Spark is the only domestic operator who can provide end-to-end IT &
Managed Services that incorporates connectivity and mobility. We are
best placed to help businesses manage this transformation to the cloud and to
continue providing managed and professional services on the other side of it.
•We differentiate by bringing together the best of our services (utilising our
infrastructure assets) and partner offers, combining these with a local service
layer that is not replicated.
•Digitisation and the rapid shift to the cloud is driving demand in areas
where Spark is already a market leader, has established relationships and is
best placed to capture growth.
•Our growing service management offering is supported by a highly-valuable
infrastructure asset portfolio, which is unique in the NZ market and difficult
for competitors to replicate.
•Our investments in 5G, edge compute, network slicing and IoT will create
new use cases and revenue and margin growth opportunities.
To maintain RoIC, we
are focussed on
improving capital and
operating efficiency,
while growing the new
revenue and margin
use cases

11
Satellite
station
Metro & regional
data networks
fibre/wireless
Ownership
stake in 3 sub-
sea cables
1,200 km national
fibre backhaul
network
35 major
network sites
18 Data
Centres
(1)
1,500
mobile sites
OUR GROWTH IS
HIGHLY VALUABLE
UNDERPINNED BY A
INFRASTRUCTURE
ASSET PORTFOLIO
•Increased interestin quality infrastructure assets.
•Spark has a significant infrastructure asset portfolio.
•We continue to review investment and partnership
opportunities that make commercial sense and maintain our
competitive advantage.
•Spark has NZ’s largest and fastest growing set of IoT
networks.
•Our aim is to drive greater capital efficiency, increased
resilience and better experiences for customers.
•We will provide an update on our infrastructure asset
review at our full year results.
(1) Portfolio includes a mix of dedicated tier 3datacentre's, tier 2 facilities and converted exchange buildings.

12
FY20 Market
Revenue ($m)
Spark FY20
Revenue
($m)
Spark FY20
Revenue
Share
Spark FY20
Revenue
Growth
Spark FY21 to FY23
Aspiration -CAGR
Cloud
(including datacentres)
~ $730m$225m~31%6%
Similar rate of growth (but
slower than market growth)
Security~ $350m$37m~11%3%
Similarrate of growth (in
line with market growth)
Service Management
(including professional services)
~$800m$158m~20%16%
Slowerrate of growth (but
faster than market growth)
Procurement and Partners~$2.7bn -$4.0bn$407m~10-15%12%
Similarrate of growth
(faster than market growth)
Collaboration~$250m$65m~26%23%
Slowerrate of growth (in
line with market growth)
Managed Data and Networks~$530m$212m~40%2%
Similarrate of growth
(faster than market growth)
Total IT & Managed Services ~$6bn$1,104m10%
5-10%
(faster than market growth)
Source: IDC NZ 3rdPlatform Heatmap, Cloud, CY4Q19, PWC Data Centre Market Trends (commissioned by Spark) June 2020
Gartner: Forecast: Enterprise Networking Connectivity Growth Trends, Worldwide, 2018 -2023, 2019 Update. Supplemented wit h SME input to scale estimates for NZ market.
We are well positioned to capture growth within the IT & Managed Services market
THE GROWTH
OPPORTUNITY

13
OUR MARGINS
WILL CHANGE
AS THE MARKET EVOLVES
OPPORTUNITIES EXIST TO IMPROVE MARGINS TO OFFSET COMPETITIVE PRESSURE
Procurement and partners
Managed data,
networks and services
Cloud (including
datacentres)
Security
Service management
(including
professional
services)
ProcurementIT Partners
Managed data
and networks
Collaboration
Cloud, security and service management
Contribution Margin of 35-40%
Low labour costs, High
contribution margin,
Higher capex
=
RoICabove WACC
Margin
Attributes
Higher labour costs,
Lower contribution
margin,
Lower capex
=
RoICabove WACC
Gross Margin of around 10%
Primarily a resale business with
low margin and low capex
Gross Margin of around 50%
High margin. Managed Data and
Networks leverages investment in
infrastructure assets
Future Trend
Public cloud will
increase price
pressure, but lower
capex
Potential to improve margin
through standardisation of service
delivery and investment in
automation and smart networks
Current trends to continue
Potential to improve margin
through simplification and greater
levels of automation

14
•Focus on end-to-endproduct and service portfolio beyond cloud to enable the delivery of smart solutions for enterprise and
industry
•Providing support and services onshorewhere our customerslive, work and do business
•Partnerships with hyperscalersto bring our customers the best of public and private cloud through Hybrid offerings
•Proactively collaboratingwith NZ businesses to design and deliver next-generationtechnology innovation, applications and
solutions via 5G lab, Starter Fund and IoT innovation hub
•Stimulating productivity improvements by boosting the smaller end of the market and supporting digital transformation of
SMEs to get their businesses online
The organic growth pipeline and demand for cloud services is attracting hyperscalersto the New
Zealand market. We are managing this risk through the following activities:
RESPONDING TO THE
HYPERSCALE
OPPORTUNITY
Investingin Smart Networks to support NZ’s digital economy (5G, edge computing,
network slicing, IoT) will create new opportunities to grow revenue and offset price
pressure in Cloud

WHY
SPARK?

2013
2014
2015
20162017
2018
2019
2020
Divestment of
Davanti consulting
Revera acquiredGen-irebranded
Takanini Data
Centre Completed
Computer Concepts Ltd
(CCL) acquired
MATTR launched
Reverabusiness integrated
with CCL
Leaven launched
CCL’s networking
divested
Merged Leaven
with CCL
16
Spark Health
brand launched
2004
Purchase of
Gen-i
OUR IT &
MANAGED SERVICES OFFERING
WE HAVE ACTIVELY PURSUEDOPPORTUNITIES &
SUCCESSFULLY SCALED
OVER THE PAST 16 YEARS

WE NOW HAVE A
DIVERSE MULTI-BRAND
New Zealand’s most reliable and
secure technology​ backbone for
business; network,​ connectivity,
security and ICT services​
Tailored and trusted expertise
and support for all modern
managedservice needsin a
multi-cloudworld
Accelerator of cloud
adoption, digital
innovation and​ business
transformation
Solutions for verifiable
data and digital trust
NZ’s largest and fastest growing
set of IoT networks and solutions
IoT
The Spark Group
brings together best
in class expertise
and capabilities to
connect, enable
and transform NZ
business
IT Partners
17
PORTFOLIO...
1
(1) MATTR financial results do not form part of the IT & Managed Services Detailed Financials

PROPOSITIONIDEAL CUSTOMER SIZECHANNEL
Spark Direct
Reliable and secure technology​ backbone for
business; network,​ connectivity, security and ICT
services
Corporate, Enterprise and
Government
(100+ FTE)
Higher-touch national channel with account leads
and embedded solutions, procurement and service
reps
Spark Hubs
Local-like-you, in-person service that can support
the majority of our customer’s technology needs
SME (1-99 FTE)24 owner-operated service hubs locally, nation-wide
Spark IT Partners
Local IT expertise that works as a virtual team with
Spark sales teams
SME (1-99 FTE). Also supports Direct
customers in certain regions
22 Partner IT organisations
Leads generated via Hubs and Direct channels
CCL
Tailored and trusted expertise and support for all IT
& Managed Services needs in a multi-cloud world
100+ FTE
National sales channels with close alignment to
managed services and engineering
Leaven
Consulting business focussed on accelerating cloud
adoption, digital innovation and​ business
transformation
Government and Enterprise, reaching
down into upper corporate
Sold primarily through the CCL and Spark sales
teams
Direct
Business Hubs
IT Partners
Other business MS brands:
(Combined with Revera)
18
WE HAVE THE CAPABILITY TO
SERVE ALLBUSINESS SEGMENTS

19
(1) Portfolio includes a mix of dedicated tier 3datacentre's, tier 2 facilities and converted exchange buildings.
•Significant network investment –over $200m
in FY20 with approximately one third of this
invested in IT & Managed Services and the
remainder in telco networks.
•IT & Managed Services investment is a key
component of over$600m of infrastructure
assets in FY20 (excluding land and buildings)
with the potential to deliver significant value.
INVESTMENT
WITH SIGNIFICANT
DIFFERENTIATION AND
COMPETITIVE ADVANTAGES
#1 Total Number of Datacentres in New Zealand
1
#1 Geographic Reach in New Zealand
1
#1 Connectivity in New Zealand
1

20
•‘One stop shop’ for customers –can provide a more
integrated experience across products and services.
•Extensive telco capability –Managed Data and
Networks, Mobile, Voice, IoT, and leading IaaS and
Hybrid Cloud business.
•Focus on new technology –Internet of Things, data
and analytics, machine learning, digital trust.
•Ability to cross / up-sell from initial product
purchase–building a managed service for a customer.
•Trusted to deliver large, complex programmes.
•Nationwide portfolio of multi-brands and go to market
channels servicing a variety of customer segments from
SME through to Government and Enterprise.
CAPABILITY
WITH SIGNIFICANT
DIFFERENTIATION AND
COMPETITIVE ADVANTAGES

21
•A market-leading IT service provider brand in NZand
leading player across all major customer segments.
•Presence in more than 25 cities and towns with hundreds
of professional service and engineering people across NZ.
•Lived experience: Spark has transformed itself through
separation, re-branding, IT modernisation and the
introduction of Agile ways of working.
•On the ground relationships: close to customers
(important in SME and corporate, local government, health).
•Partnerships with leading cloud providers: Microsoft,
AWS and Google; attractive commercial agreement with
Microsoft to help transition customers to the public cloud.
•Pace to respond faster due to breadth of capability across
country.
•Deep in-country talent pool: less impacted by COVID-19
restrictions than many offshore-based competitors.
LOCAL ADVANTAGE
WITH SIGNIFICANT
DIFFERENTIATION AND
COMPETITIVE ADVANTAGES

22
CHALLENGESOLUTIONRESULTS
•Leaven, the cloud transformation services
business unit of CCL, reviewed Fidelity Life’s
security in Microsoft Azure, applying a three-part
approach –called DevSecOps–to analyse, fix,
and then harden the insurer’s cloud platforms.
•Leaven consultants scanned Fidelity Life’s Azure
environment, identify and address potential
security issues, and put in place best practice
controls to ensure security is “baked into” code
deployment on an ongoing basis.
•Fidelity Life is one year into a five-year
transformation to reimagine life insurance,
employing Microsoft Azure to update the
insurer’s products and services for a new
generation of customer.
•As a financial services provider, security is
paramount, yet the faster pace of modern
software development can be stifled by
traditional approaches to security.
•With multiple vendors developing business
applications in Azure, there were inconsistent
security approaches and standards, creating
potential issues for its infrastructure and
applications, slowing development and inviting
unnecessary risk.
•Fidelity Life can now move more quickly to
deliver software updates, with its Azure-based
architecture now a systemic part of application
development, aligned with the rapid-release
cycles of modern application development.
•Security processes are automated and
managed, supported by continuous reporting
and reviews, reducing customer risk.
•New software features and code are
continuously pushed into production –without
fear of creating security holes –allowing the
organisationto innovate faster.
Financial Services
When Fidelity Life approached Spark looking to strengthen security as part of it’s cloud transformation,
we saw an opportunity to use our multi-brands to deliver a truly innovative solution.
FIDELITY LIFE
CASE STUDY:

PRODUCTS
AND SERVICES

24
HOW SPARK DELIVERS*
Procurement and partners
Managed data,
networks and services
Cloud, security and service management
CUSTOMER NEEDS
IT & MANAGED SERVICES –
PRODUCT & SERVICES
•Managed Security
•Network and
Infrastructure
Security
•Security
Operations Centre
(SOC)
•Private Cloud
•Public cloud
•Hybrid and multi-
cloud
•Cloud IT Services
•Colocation
services
•Hybrid-cloud
management and
cloud migration
support
•Service Desk
•Service
Aggregation
•Modern workplace
•Professional
services
•Business
Transformation
•Hardware and
Software sourcing
•Local IT
specialists
•Business
Networks
•Cloud Managed
Networks
•Collaboration
•Contact Centre
OUR SOLUTIONS
Cloud (including
datacentres)
Security
Service management
(including
professional services
ProcurementIT Partners
Managed data
and networks
Collaboration
Digital trust,
dataprivacy
and security
solutions
Seamless
‘always on’
connectivity
Remote and
digital
working
solutions
Trusted
advice and
managed
services that
just work
Cost-
effective
technology
sourcing
solutions
High-quality,
nationwide
managed
datacentre
facilities
Access to
global cloud
partners
Local /
regional
support from
IT specialists
Cost
effective and
compliant
cloud
solutions and
applications

Market Size
Key competitors
(and partners)
Emerging trends
What's in this category?
Included: IaaS on-demand singleor shared computeand storage as a service. Co-lo: secure rack space,power and cooling forcustomer hardware
Excluded: Software as a Service (SaaS)
•Cloud adoptioncontinues at pace, with increasing popularity of public IaaS
•Customer needs for Cloud Managed and Professional Servicesare growing in response to the shift to cloud
•Globally, investments in hyperscale datacentresare growing rapidly. With the announced NZ entry of Microsoft and
CDC, we anticipate strong local growth in this new category
•Demand for Hybrid Cloud, allowing customers to pick and mix the most suitable components of public and private
cloud for their needs. Increasing demand for local service to support
•Adoption of streaming video and cloud is driving international service providers to seek points of presence and
Caches in local datacentres, and Edge Computeis on the horizon as latency becomes more important
Revenue ~$730m
Key attributes
Spark’s position
Spark Group revenue ~$225m (~31% revenue share)
2000 racks of which 75-80% are contracted
#1 in revenue for domestic cloud1
Primarily hardware with labour required to support transitions.
Market revenue growth of 10-15%
Procurement and partners
Managed data, networks and services
Cloud
Security
Service management
Procurement
IT Partners
Managed data and betworks
Collaboration
Cloud, security and services management
OPPORTUNITY FOR SPARK TO DIFFERENTIATE BASED ON PROVIDING HYBRID CLOUD SERVICES WITH LOCAL FULL-SERVICE SUPPORT
25
INCLUDING DATACENTRES
CLOUD
Market size, share and growth figures reflect management estimates based on external market research validated against local market experience.
(1) PWC Data Centre Market Trends (commissioned by Spark) June 2020 and Spark Finance Team

•Annuity and project revenue
•Forecast market growth of 3-5% CAGR through 2024
•People and hardware centric
•COVID-19has increased the importance of security as companies have rushed to establish secure remote working for their
teams and transition to cloud-based services. 26% of SME’s plan to spend more than they originally planned on security
post-COVID-19 vs. only 7% less than planned
•Virtual networks or Software Defined Wide Area Networks(SD-WAN)provide an opportunity to sell security as an integrated
uplift and achieve broader market penetration of services (including SME)
•Security increasingly focusses beyond traditional physical perimeters with increasing focus on the cloud and remote
working environments
Revenue ~$350m
Spark Group revenue ~$37m
(~11% revenue share)
26
SECURITY
Market SizeKey attributes
Spark’s position
Emerging trends
What's in this category?
IT & Managed Services: Protection of client devices (Endpoint Protection), Firewalls, Security Monitoring, Security Operations (SOC), Denial-of-serviceProtection (DDOS), Secure Connectivity etc.
Professional Services: risk assessments, maturity assessments, solution design, education etc.
Procurement and partners
Managed data, networks and services
Cloud, security and services management
CUSTOMERS ARE LOOKING FOR SECURITY AS AN OUTCOME OF MANAGED SERVICES RATHER A STAND-ALONE SOLUTION.
THUS IT SUPPORTS CROSS-SELL FOR OTHER OPPORTUNITIES
Key competitors
Market size, share and growth figures reflect management estimates based on external market research validated against local market experience.
Cloud
Security
Service management
Procurement
IT Partners
Managed data and networks
Collaboration

•The underlying IT & Managed Services that require management are shifting to the cloud e.g. (Hardware to IaaS and Software
to SaaS) however these services still require support. Service Management teams are evolving to support these services
•Customers want an outcomes-based service managementwrap. Reduced focus on traditional SLAs such as resolution times,
availability etc. with an increasing focus on end-user experience, transparency and process improvement
•Increasing use of AI, automation, robotics, engineering of workflows, orchestration within environments to improve value
orientation and end user experience
Revenue: ~$800m
Spark Group revenues of ~$158m
(~20% share)
•Higher margin, annuity and project revenue
•Forecast market revenue growth of ~3% CAGR through 2024
•People centric
KEY DIFFERENTIATOR FOR SPARK BASED ON LOCAL SCALE AND CAPABILITY
27
SERVICE
Procurement and partners
Managed data, networks and services
Cloud, security and services management
MANAGEMENT
What's in this category?
Included: Service Desk (i.e. outsourcing the customers internal IT support desk), Service Aggregation (provides customers with asingle view of all theirIT providers)
Excluded: the underlying product support desks (unless the customer has paid for dedicated support)
Key competitors
Emerging trends
Market Size
Key attributes
Spark’s position
Market size, share and growth figures reflect management estimates based on external market research validated against local market experience.
Cloud
Security
Service management
Procurement
IT Partners
Managed data and networks
Collaboration

28
OPPORTUNITYSOLUTIONRESULTS
•The client had introduced and developed new
products and services designed to give its
customers (end consumers) more control
over their own consumption.
•This journey was underpinned by a vision of
“digital by default”. Client A wanted to move
away from aging infrastructure, which was
unstable and costly to upkeep, and to keep
ahead of any potential disruption from digital-
first players by redefining its customer
experience.
•This meant establishing a modular IT
operating environment –so Client A could
target its investment and bolt on digital
solutions to launch new products and
services.
•CCL worked with the Client A team on a large-
scale migration to an IaaS platform,
dramatically simplifying the entire IT
environment.
•Cloud platform modularity ensures Client A
can build, park, and share complex multi-
Virtual Machine environments. They can start
small and scale up when the time’s right;
reduce development times; and integrate new
applications and services without disrupting
operations.
•Above the virtual machine monitor
(‘hypervisor’), Spark takes care of IT service
management, including operating systems
monitoring, change controls, patches, and
upgrades.
Client A undertook a large-scale migration of its IT to CCL’s Infrastructure-as-a-Service (IaaS) platform. This was part
of a broader digital transformation programme spearheaded by Spark, to help the client redefine its customer
experience and achieve its vision of “digital by default”.
CLIENT A
CASE STUDY:
•The Cloud services and platform automation
ensures Client A operates at the speed of
business –not the speed of IT.
•With utility capacity and IT platforms
refashioned as cloud services, Client A
regulates IT capacity to suit the pace and
progress of projects and seasons. It also
targets expenditure at testing, development
and innovation –the stuff that directly impacts
customer experience.
•Client A plugs in to CCL’s advanced tools,
platforms, and enterprise-grade technologies
–all tested, approved, and updated
automatically.
•From CAPEX to OPEX: Client A has
effectively removed IT assets from its balance
sheet.

•Lockdown exposed gaps for remote workingresulting in spend to enable and secure environments (licencing, firewalls etc) and
upgrading meeting rooms and other infrastructure to match the superior working from home experience
•Customers are increasingly interested in buying devices as-a-service (i.e. leased, with a per-user-per-month cost) providing flexibility
•Emerging demand for procurement-as-a-service (i.e. inventory held by Spark and devices shipped directly to the end user)
•Hardware and Software are increasingly cloud-hosted (IaaS and SaaS) changing the commercial dynamics. Having practices that
support the underlying services increases likelihood of winning the procurement business
•Emerging demand for Software Asset Management
Revenue: ~$2.7bn -$4.0bn
1
Market Size
Key attributes
Spark’s position
Spark Group revenues of ~$407m
(~10-15% revenue share)
•Non-recurring, lower margin revenue
•Forecasting market revenue growth of ~4% CAGR through
2024
AN AREA WHERE GROWTH HAS BEEN DRIVEN BY COVID-19, AND WHICH SUPPORTS SPARK’S BROADER IT & MANAGED SERVICES OFFERINGS
29
PROCUREMENT
Procurement and partners
Managed data, networks and services
Colocation
IaaS & Public Cloud
Security
Service management /
professional services
Procurement
IT Partners
Managed data and networks
Collaboration
Cloud, security and services management
What's in this category?
Software: (licencing): enterprise software, SaaS: licences for SaaS (o365, Salesforce etc).
Hardware: Devices (including laptops), servers, routers, firewalls etc.
IaaS: licences for IaaS services (e.g. Azure)
Key competitors
Emerging trends
AND PARTNERS
Market size, share and growth figures reflect management estimates based on external market research validated against local market experience.

•Higher margin, annuity revenue.
•Forecasting market revenue growth of 0-2% CAGR through 2024
•Globally traditional WAN revenues are flat as wholesale input costs and device prices fall -a dynamic exacerbated in NZ due
to the success of the UFB network
•SD-WANis expected to experience strong growth(off a small base). SD-WAN’s ability to be delivered using broadband, the
proliferation of bandwidth and improvement in security means broadband is increasingly a viable input for enterprise customers
•Dedicated cloud connectivity expected to grow strongly with the increasing proportion of company IT estates residing in the
cloud
Revenue: ~$530m
Spark Group revenues of ~$212m
(~40% revenue share)
4.9G AND 5G ARE OPENING UP NEW OPPORTUNITIES TO REPLACE FIXED CONNECTIVITY INPUTS I.E. THE BUSINESS EQUIVALENT OF WIRELESS BROADBAND
30
Key competitors Emerging trends
Market Size
Key attributes
Spark’s position
What's in this category?
Includes: WAN (‘Wide Area Network’) LAN (‘Local Area Network’), Dark Fibre, managed services Network Operations Centres(‘NOC’), cloud connectivity, SD-WAN (‘Software Defined
Wide Area Network”) etc.
Excludes: Broadband. Wireless broadband generally only as a backupto fixed connectivity
Procurement and partners
Managed data, networks and services
Colocation
IaaS & Public Cloud
Security
Service management /
professional services
Procurement
IT Partners
Managed data and networks
Collaboration
Cloud, security and services management
DATA &
MANAGED
NETWORKS
Market size, share and growth figures reflect management estimates based on external market research validated against local market experience.

31
Transport
Spark collaborated with VTNZ to deliver an SD-WAN solution for their business that would enable the digital
transformation they were looking for
VTNZ
CASE STUDY:

•Customers continue to migrate off legacy voice solutions to simpler and cheaper cloud solutions. This was accelerated by COVID-19
with the requirement to enable remote working. AnalysysMason found 28% of firms started using collaboration e.g. video
conferencing solutions as a response to COVID-19
•Growing demand for collaboration tools for real-time communications for teams anytime, anywhere, and on any device
•Adoption of modern contact centre solutions to improve customer experience (live chat, chatbots, social media)
Revenue: ~$250m
Spark Group revenues of
~$65m (~26% revenue share)
•Higher margin, annuity revenue
•Forecasting market revenue growth of 10-15%
AN AREA OF GROWTH WITH COVID-19 DRIVING DEMAND FOR FLEXIBLE AND COLLABORATIVE WORKING SOLUTIONS
32
Key competitors
Emerging trends
Market Size
Key attributes
Spark’s position
What's in this category?
Included: Collaboration and communication tools that allow the integration of telephony, messaging (email, voice), VoIP, instant messaging, conferencing services, contact centres and video conferencing
Excluded:Voice revenues, however several Collaboration products will include voice calling integration
Procurement and partners
Managed data, networks and services
Colocation
IaaS & Public Cloud
Security
Service management /
professional services
Procurement
IT Partners
Managed dataCollaboration
Cloud, security and services management
COLLABORATION
Market size, share and growth figures reflect management estimates based on external market research validated against local market experience.

33
A digital workplace designed to support a radical shift in the way Client B works, enabling them
to connect, create, communicate and collaborate from anywhere, anytime.
CLIENT B
CASE STUDY:
CHALLENGESOLUTIONRESULTS
•The solution combines IT Services, Desktop-as-a-
Service, Telecommunications-as-a-Service, and
Revera/CCL Infrastructure as a Service.
•Client B made a bold decision early in
transformation to go cloud only and this remains as
one of the foundational principles of the solution.
•The transformation was built on an Agile-based
implementation programme to deliver the solution
and was completed in 2020.
•Client B had undergone some significant
structural changes, presenting an opportunity to
modernise the existing technology and
channels, to better support its new objectives.
•Spark worked with Client B to create a digital
workplace solution to provide staff with the tools
they needed to work collaboratively, allowing the
primary focus to be on delivering organisational
outcomes.
•Client B now operates on a cloud-based core
application solution including a cloud-based
contact centre.
•Legacy communication systems migrated to
Microsoft Teams, to enhance collaboration for all
users.
•Nationwide audio and video conferencing rollout
for on premise meeting rooms.
•During COVID-19 lockdowns, the Digital
Workplace solution was put to the test. Client B
employees were able to work from home,
including those working in the contact centre.

SUMMARY

35
•Spark is a more diversified business than broadly recognised
•The IT & Managed Services sector is growing strongly both locally
and globally, benefiting from supportive macro trends
•Spark is uniquely positioned in the market to deliver end-to-end
Managed Services
•Our success in this market provides greater earnings resilience and
long-term, sustainable value for our shareholders
SUSTAINABLE
DIVERSIFIED
BUSINESS,
GROWTH

APPENDIX

37
Spark’s end-to-end IT & Managed Services offering is
locally unique and creates competitive advantage
Professionals Services
and Consulting
Service
Management
Procurement
Security
Cloud Services and
Data Centres
Managed Data
and Networks
Submarine Cables
and Transport
Network
Spark’s position
Market trends
•Growing demand for expertise to deliver cloud solutions
•Long term growth opportunities in business
transformation
•Sustained demand for outsourced IT management
•Customer needs shifting in response to cloud adoption
•Increased investment in remote working following
COVID-19
•Executive cyber risk concerns driving demand for security
•Increased focus on security of remote working
environments
•Ongoing shift to the cloud
•Public cloud hyperscale providers signalling interest in NZ
•Big data, AI and ML
(3)
enhancing customer experiences
and operational effectiveness
•Growing adoption of SD-WAN
•Growth of dedicated cloud connectivity
•5G rollout underway
•IoT
(1)
and explosion of connected devices
•Growth of international traffic, driven by cloud and video
•Development of Southern Cross NEXT
•Significant capability in business transformation
•Consulting expertise in data/analytics through
Leaven
•Support customer environments end-to-end, including
growing cloud managed services capability
•Serves customer demand for end-to-end IT
outsourcing
•Effective sell through to higher margin managed
services
•Strength in Government/Enterprise market segment
•Largest Security Operations Centre (SOC) in NZ
•Complementary service to connectivity
•A market leader for onshore private cloud services
(2)
•Hybrid cloud offering via public cloud partnerships
•A market leader for managed data and networks
•Largest ownership stake in submarine cables
•Optical transport network with 800 Gb/s links to
support increasing demand for data
Product
Non-recurring
Lower margin
Non-recurring
Lower margin
Annuity
Higher margin
Annuity
Higher margin
Annuity
Higher margin
Annuity
Higher margin
Annuity
Higher margin
Revenue profile
(1)
Internet of Things
(2)
Market estimates sourced from IDC
(3)
Artificial Intelligence and Machine Learning
37

38
To provide greater insight into Spark’s IT and Managed Servicesportfolio, we
have made a number of improvements to Spark’s disclosures
Updated classification of CCL
solutions and cloud-based telephony
products
1.More granular classification of
CCL products across the IT and
Managed Servicesportfolio, to
more accurately reflect the
composition of client revenues;
and
2.Reclassification of two cloud-
based telephony products to align
with the classification of similar
telephony solutions
Expansion of cloud, security and
service management classification
into three separate classifications
1.Cloud encompassing co-location,
private cloud/Infrastructure-as-a-
Service and public cloud;
2.Security encompassing
standalone security products and
services; and
3.Service management
encompassing a) one-off project
engagements, b) the transition of
clients to ongoing managed
services and c) ongoingmanaged
ICT services including Platform-
as-a-Service and Desktop-as-a-
Service
Introduction of new volume and
average revenue measures
1.Number of Infrastructure-as-a-
Service clients;
2.Number of security clients, plus a
derived average monthly revenue
per client; and
3.Number of service management
clients, plus a derived average
monthly revenue per client
Introduction of two new power
consumption and efficiency
measures for Spark’s dedicated data
centres
1.Power usage effectiveness
(PUE); and
2.Megawatt hours
While the majority of Spark’s cloud
revenues are associated with
dedicated data centres,
approximately one-third of Spark’s
data centre capacity is housed within
multi-purpose locations (e.g.
exchange buildings) where power
consumption for data centre
equipment is unable to be separated
from power consumption for Spark’s
network equipment and/or office
space.
As such these measures these
measures only capture performance
for Spark’s dedicated data centres

39
The resulting impact on Spark’s financial disclosures is summarised below and
is provided in more detail in the accompanying detailed financial workbook
Previous DisclosureUpdated classification
of CCL solutions and
cloud-based telephony
products
Expansion of cloud,
security and service
management
New Disclosure
FY19 ($m) FY20 ($m) YoYFY19 ($m) FY20 ($m) FY19 ($m) FY20 ($m) FY19 ($m) FY20 ($m) YoY
Cloud (including Datacentres) revenue121222521222513
Security revenue363736371
Service Management (including Professional Services) revenue13615813615822
Total cloud, security and service management revenue40044343(16)(23)--38442036
Procurement and partners revenue36540843(1)(1)36440743
Collaboration revenue45527813536512
Managed data and networks revenue197196(1)10162072125
Total IT & Managed Services revenue1,0071,0999215--1,0081,10496
Total Voice revenue2441391(50)(1)(5)--440386(54)
(1) Included: IaaS on-demand singleor shared computeand storage as a service. Co-lo: secure rack space,power and cooling forcustomer hardware. Excluded: Software as a Service (SaaS)
(2) Voice revenue figures included to show the reclassification of some voice revenues into IT & Managed Services revenue

40
Glossary
TermDefinition
Co-location (co-lo)Co-location refers to providing space in datacentres for customers' equipment and servers
DatacentreDatacentres are specialised, centralised facilities where computing and networking equipment is housed
Datacentre Tier (2 or 3)
The tier rating for a datacentre is a certificationrepresenting the resiliency of the datacentre, with 3 being better. Tier 2 has some redundancy
components whileTier 3 hasadditional redundancy and connectivity diversity. There is limited demand for Tier 2 beyond existingcustomers
Edge Compute
Edge Computingis an overarching term for the practice of placing compute andstorageresources closer to the end-user (near the“edge” of the
network), to augment a distant centralcloud. The location of the ‘edge’ varies and can exist in places from regional datacentres, to the base of
cell towers, to the customer’s premises​
Exchange datacentre
Spark owns ~35 exchange facilities which house equipment underpinning Spark'snetwork. In the context of this paper, we refer tothe 'exchange
datacentres' as the 9exchanges that are also being used to host customer colocation equipment
Hybrid Cloud
Hybrid cloudrefers to a mixed computing, storage, and services environment made up of on-premises infrastructure, privatecloudservices, and
a publiccloud—such as Amazon Web Services (AWS) or Microsoft Azure—with orchestration among the various platforms​
Hyperscale cloudHyperscale cloud usually refers toIaaS provided by the largest global players (e.gAWS, Microsoft, Google etc).
IaaS
Infrastructure-as-a-Service, is a form ofcloud computingthat delivers fundamental compute, network, and storage resources to consumers on-
demand, over the internet, and on a pay-as-you-go basis.
MATTRMATTR is a Spark subsidiary that designs tools to address digital trust or verifiable data challenges faced by customers. https://mattr.global/
Private CloudIaaS that is delivered to a customer or group of customers with dedicated underlying infrastructure and platforms
Public CloudIaaS that is delivered using shared (public) infrastuctureand platforms

---

Spark New Zealand
Group result - reported
H1 FY19
H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m$m$m$m%
Operating revenues and other gains1,7541,7791,8241,7991,7961,8241,796(28)(2%)
Operating expenses(1,265)(1,178)(1,324)(1,186)(1,294)(1,324)(1,294)30
2%
EBITDAI489601500613502500502
20%
Finance income181918181718
17(1)
(6%)
Finance expense(40)(45)(46)(48)(43)(46)(43)37%
Depreciation and amortisation expense(245)
(232)(234)
(245)(263)(234)(263)(29)(12%)
Net investment income-
14(1)2-(1)-1100%
Net earnings before income tax222357237340213237213(24)(10%)
Tax expense(69)(101)(70)(80)(65)(70)(65)57%
Net earnings for the period153256167260148167148(19)(11%)
Capital expenditure264153247127192247
192(55)
(22%)
Free cash flows
1081845038811350
11363
NM
Reported EBITDAI margin27.9%
33.8%27.4%34.1%28.0%27.4%28.0%0.6%
Reported effective tax rate31.1%
28.3%29.5%23.5%30.5%29.5%30.5%1.0%
Capital expenditure to operating revenues15.1%8.6%13.5%7.1%10.7%13.5%10.7%(2.8%)
Reported basic and diluted earnings per share (cents)8.314.09.114.18.09.18.0(1.1)(12%)
Gross margin by product
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m
$m$m$m%
Mobile376399405
42440740540720%
Voice1431381231198712387(36)(29%)
Broadband168176175166166175166(9)(5%)
Cloud, security and service management160162173175179
17317963%
Procurement and partners182420
25202020-0%
Managed data, network and services69707068727072
23%
Other product252615332815281387%
Total product gross margin9599959811,010959981
959(22)(2%)
Other gains-15431444
-0%
Total gross margin9591,0109851,041963985963
(22)(2%)
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21

Spark New Zealand
Connections
H1 FY19
H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
000's000's000's000's000's000's000's000's%
Mobile connections
1
2,4642,5152,5002,5192,4312,5002,431
(69)(3%)
Voice connections by type
2
POTS & ISDN356
329288220197288197(91)(32%)
VoIP57
6266738466841827%
Voice over wireless18262624232623(3)(12%)
431417380317304380304(76)(20%)
Broadband connections
Copper296249211186157211
157(54)
(26%)
Fibre273306340367381
340
38141
12%
Wireless129
140141
1561651411652417%
698
695692709703692703112%
1 Mobile connections excluding MVNO connections but including legacy machine to machine and SIM based SmartWatch connections
Group FTE's
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21%
FTE permanent5,1075,1095,1194,9834,9615,119
4,961(158)(3%)
FTE contractors 212167200146121200121
(79)(40%)
Total FTE5,3195,2765,3195,1295,0825,3195,082
(237)(4%)
Dividends
H1 FY20H1 FY21
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21$$$%
Ordinary dividends (cents per share)11.00
11.0012.5012.5012.5012.5012.50-0%
Special dividends (cents per share)1.501.50-
-----NM
12.5012.5012.5012.5012.5012.5012.50
-0%
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21
2
Voice connections include all voice technology types, including POTS, ISDN, VoIP and wireless voice. Voice connections exclude connections
where Spark also provide a bundled broadband service, but include all wholesale voice connections (including those where the underlying
customer has a bundled broadband service).
H1 FY20 v H1 FY21

Spark New Zealand
Group operating revenues and other gains
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m$m$m$m
%
Operating revenues
Mobile
Service revenue403
413425
423
420425420(5)(1%)
Non-service revenue219236228212231228231
31%
622649653635651653651(2)0%
Voice
Access109
10495
85
629562(33)(35%)
Calling87837981717971
(8)(10%)
Other voice revenue29282323212321(2)(9%)
225215197189154197154(43)(22%)
Broadband344341345335337345337(8)(2%)
Cloud, security and service management187197209211217209217
84%
Procurement and partners1911732072002362072362914%
Managed data, network and services12913113414314013414064%
Other operating revenue56
587555577557(18)(24%)
Total operating revenues
1,7541,7641,8201,7681,7921,820
1,792(28)
(2%)
Other gains-15431444-0%
Total operating revenues and other gains1,7541,779
1,8241,7991,7961,8241,796(28)
(2%)
Operating revenues includes revenues from Consumer, Business, Wholesale and other customer segments.
Wireless broadband revenues and connections are included in broadband revenues and connections.
Operating revenues and other gains by customer segment
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
Operating revenues and other gains$m$m$m
$m$m$m$m$m
%
Consumer790
814825757769825769(56)(7%)
Business861851906920940906940344%
Wholesale and other124137119148
113119113(6)(5%)
Eliminations(21)(23)(26)(26)(26)(26)(26)-0%
1,7541,7791,8241,7991,7961,8241,796(28)
(2%)
Finance income
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
Finance income$m
$m$m$m$m$m$m$m
%
Finance lease interest income7776676(1)(14%)
Other interest income111211
12111111-0%
18191818171817(1)(6%)
Net investment income
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
Net investment income$m$m$m$m$m$m$m$m
%
Dividend income-15------NM
Share of associates' and joint ventures' net losses-(1)(1)2-(1)-1100%
-14(1)2-(1)-1100%
Revenue classification changes
Customer segment lineServices providedPrevious customer segmentCurrent customer segment
Internet of thingsBusinessOtherProvision of internet-connected objects
that are able to connect and transfer
data over a wireless network without
human intervention
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21
As part of the ongoing revision of the Agile business model, the management of certain customer segment lines have been reallocated from one
part of the business to another. The details of the key changes and the associated impact on revenue reporting are as follows:

Spark New Zealand
Group operating expenses
H1 FY19
H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m$m$m$m%
Product costs
Mobile246250248211244248244(4)
(2%)
Voice82777470677467
(7)(9%)
Broadband176165170169171170
1711
1%
Cloud, security and service management2735363638363826%
Procurement and partners173
1491871752161872162916%
Managed data, network and services60
61647568646846%
Other product costs31326022296029(31)(52%)
795769839758833839833(6)(1%)
Labour250225267244255267255(12)
(4%)
Other operating expenses
Network support costs37
2435
30433543823%
Computer costs46
47494951495124%
Accommodation costs37
303330323332(1)(3%)
Advertising, promotions and communication47404731444744(3)(6%)
Bad debts66710(1)7(1)(8)NM
Impairment expense5(2)-2----
NM
Other42394732374737(10)(21%)
220184218
184206218206(12)(6%)
Total operating expenses1,2651,1781,3241,1861,2941,3241,294(30)(2%)
Finance expense
Finance expense on debt23252528212521
(4)(16%)
Other interest and finance expense4775676(1)(14%)
Lease interest expense1515151615
1515-0%
Leased customer equipment interest expense2233434
133%
44495052465046
(4)(8%)
Capitalised interest(4)(4)(4)(4)(3)(4)(3)1(25%)
40454648434643(3)(7%)
Depreciation and amortisation expense
Depreciation - property, plant and equipment12811811911412411912454%
Depreciation - right-of-use assets25312836352835725%
Depreciation - leased customer equipment assets9
91512191519427%
Amortisation of intangibles837472
838572851318%
245232234245263234263
2912%
H1 FY20 v H1 FY21

Spark New Zealand
Analysis & KPI's - Mobile
H1 FY19H2 FY19
H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
Mobile revenue by type (Consumer and Business)
$m$m$m$m$m$m
$m$m
%
Mobile service revenue398409421419415421415
(6)(1%)
Mobile non-service revenue
1
20622421619722321622373%
60463363761663863763810%
1816161913
1613
(3)(19%)
Total mobile revenue622649653635651653651
(2)0%
Mobile product costs
3
(246)
(250)(248)(211)(244)(248)(244)42%
Mobile gross margin37639940542440740540720%
Mobile gross margin %60.5%61.5%62.0%66.8%62.5%62.0%62.5%0.5%
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20
H1 FY21
Total mobile revenue by customer segment$m$m$m$m$m$m$m
$m
%
Consumer410443443419438443438(5)(1%)
Business19419019419720019420063%
Wholesale and other18
161619131613(3)(19%)
622649653635651
653651
(2)0%
Average revenue per user (ARPU) - 6 month active
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
Consumer and Business
$ per
month
$ per
month
$ per
month
$ per
month
$ per
month
$ per
month
$ per
month
$ per
month
%
Total ARPU27.5627.57
28.4828.0528.51
28.48
28.510.03 0%
Pay-monthly ARPU42.82
42.4342.8241.1939.9742.8239.97(2.85)(7%)
Prepaid ARPU12.2912.6613.2813.3714.3613.2814.361.08 8%
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
000's000's000's000's000's000's
000's000's
%
Pay-monthly connections1,2251,2511,2871,3301,3551,2871,355
685%
Prepaid connections1,2061,2321,1811,1611,0471,181
1,047(134)(11%)
Internal connections4444444-0%
Total mobile connections2,435
2,4872,4722,4952,4062,4722,406
(66)(3%)
1
Mobile non-service revenue includes handset sales and mobile interconnect.
2
Includes MVNO revenue.
3
Includes handset, interconnect and cellphone tower access costs.
4
Excludes MVNO connections but includes SIM based SmartWatch connections
H1 FY20 v H1 FY21
Wholesale and other customer segment mobile revenue
2
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21
Number of mobile connections at period end - 6 month
active - Consumer and Business
4
H1 FY20 v H1 FY21

Spark New Zealand
Analysis & KPI's - Voice
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
Revenue by type$m$m$m$m$m$m$m$m
%
Access10910495856295
62(33)
(35%)
Calling
878379817179
71(8)
(10%)
Other voice revenue29
2823
23212321(2)(9%)
Total voice revenue225
215197189154197154(43)(22%)
Voice product costs
1
(82)(77)(74)(70)(67)(74)(67)79%
Voice gross margin143
1381231198712387(36)(29%)
Voice gross margin %63.6%
64.2%62.4%63.0%56.5%62.4%56.5%(5.9%)
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
000's000's000's000's000's
000's000's
000's%
POTS and ISDN356
329288
220197288197(91)(32%)
VoIP57
6266738466841827%
Voice over wireless18262624232623(3)(12%)
Total voice connections431417380317304380304(76)(20%)
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
000's000's000's000's000's000's000's
000's%
Consumer10410393495893
58(35)
(38%)
Business177178173169
165
173165(8)(5%)
Wholesale and other150136114
99
8211482(32)(28%)
Total voice connections431
417380317305380305(75)(20%)
1
Includes voice access (baseband), interconnect, and international calling costs.
Analysis & KPI's - Broadband
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m$m$m
$m%
Total broadband revenue344341345335337345337(8)(2%)
Broadband product costs
2
(176)(165)(170)(169)(171)(170)(171)(1)(1%)
Broadband gross margin168176175166166175166(9)(5%)
Broadband gross margin %49%52%51%50%49%51%49%(1%)
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
000's000's000's000's000's000's000's000's%
Copper296249211186157211157
(54)(26%)
Fibre2733063403673813403814112%
Wireless1291401411561651411652417%
Total broadband connections698695692709703
692703112%
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
000's000's000's000's000's
000's000's000's%
Consumer598593587595585587585(2)0%
Business989910010310310010333%
Wholesale and other235111551510NM
Total broadband connections698695692709703692703112%
2
Includes broadband access (UBA/UCLL/Fibre), modem and e-mail platform support costs.
Broadband connections by technology
H1 FY20 v H1 FY21
Broadband connections by segment
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21
Voice connections by type
H1 FY20 v H1 FY21
Voice connections by customer segment
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21

Spark New Zealand
Analysis & KPI's - Cloud, Security and Service Management
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m
$m$m$m$m$m$m$m
%
Cloud revenue10211011111411311111322%
Security revenue2016181919181916%
Service management revenue6571807885808556%
Cloud, security and service management revenue187197209211217209
217
84%
Cloud, security and service management product costs(27)
(35)(36)(36)(38)(36)(38)(2)(6%)
Cloud, security and service management gross margin16016217317517917317963%
Cloud, security and service management gross margin %85.6%82.2%82.8%82.9%82.5%82.8%82.5%(0.3%)
Contribution margin (approximated) %
1
36.4%42.6%34.4%39.3%34.6%34.4%
34.6%0.2%
Cloud KPI'sH1 FY19
H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
H1 FY20 H1 FY20
Number of IaaS clients281288282274264282264(18)(6%)
Power usage effectiveness for dedicated data-centre sites1.511.481.471.501.501.471.50
0.03
2%
Total megawatt hours consumed by dedicated data centre sites each mont2,5992,6452,6872,6362,6172,687
2,617
(70)(3%)
Security KPI'sH1 FY19
H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
H1 FY20 H1 FY20
Number of security clients1,3201,3691,2841,2771,2341,2841,234(50)(4%)
Average monthly revenue per security client2,5251,9482,3362,4802,5662,3362,56623010%
Service management KPI'sH1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20
H1 FY21
H1 FY20 H1 FY20
Number of service management clients726642681730671681671(10)(1%)
Average monthly revenue per service management client14,922
18,43219,57917,80821,11319,57921,1131,5348%
Analysis & KPI's - Procurement and Partners
H1 FY19H2 FY19
H1 FY20H2 FY20H1 FY21
H1 FY20
H1 FY21
$m$m$m$m$m$m$m$m
%
Procurement and partners revenue191173207200236207
2362914%
Procurement and partners product costs(173)(149)(187)(175)(216)(187)(216)(29)(16%)
Procurement and partners gross margin1824
20252020200 0%
Procurement and partners gross margin %9.4%13.9%9.7%12.5%8.5%9.7%8.5%(1.2%)
Analysis & KPI's - Managed data, network and services
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20
H1 FY21
$m$m
$m$m$m$m$m$m
%
Collaboration revenue28253035333033310%
Managed data and networks revenue101106104108107104
10733%
Managed data, network and services revenue129131
13414314013414064%
Managed data, network and services product costs
2
(60)(61)(64)(75)(68)(64)(68)(4)(6%)
Managed data, network and services gross margin697070687270
7223%
Managed data, network and services gross margin %53.5%53.4%52.2%
47.6%51.4%52.2%51.4%(0.8%)
2
Includes wide area network access, international data, network backhaul and videoconferencing platform costs.
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21

Spark New Zealand
Statement of cash flows
H1 FY19
H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m$m$m$m%
Cash flows from operating activities
Cash received from customers 1,770 1,654 1,861 1,733 1,828 1,8611,828(33)
(2%)
Interest receipts 18 17 17 17 16 1716
(1)(6%)
Dividend receipts - 15 - - - -
--
NM
Payments to suppliers and employees (1,314) (1,169) (1,396) (1,101) (1,319)(1,396)(1,319)776%
Payments for income tax (44)
(91) (82)
(58) (118)(82)(118)(36)(44%)
Payments for interest on debt (22)
(23) (26) (26) (23)(26)(23)312%
Payments for interest on leases (13) (17) (14) (16) (16)(14)(16)(2)(14%)
Payments for interest on leased customer equipment
assets
(2) (2) (3) (3) (4)(3)(4)(1)(33%)
Net cash flows from operating activities 393 384 357 546 364 357364
72%
Cash flows from investing activities
Proceeds from sale of property, plant and equipment - 1 13 - - 13-(13)(100%)
Proceeds from sale of business -
- -
23 8 -88NM
Proceeds from long-term investments - 2
- - ---NM
Payments for purchase of businesses - - (11) - - (11)-11100%
Payments for, and advances to, long-term investments (6) - (30) (5) (4)(30)(4)2687%
Payments for purchase of property, plant and
equipment and intangibles
(258) (157) (273) (120) (214)(273)(214)5922%
Payments for capitalised interest (3) (5)
(4) (4) (3)
(4)
(3)125%
Net cash flows from investing activities (267) (159) (305) (106)
(213)
(305)(213)9230%
Cash flows from financing activities
Net proceeds from debt 182
(28) 207 (177) 100 207100
(107)(52%)
Receipts from finance leases 3 3 2
4 2 22-0%
Payments for dividends (229) (230) (229) (230) (167)(229)(167)6227%
Payments for leases (19) (17) (19) (23) (20)(19)(20)(1)(5%)
Payments for leased customer equipment assets (8)
(9) (13) (15) (16)(13)(16)(3)(23%)
Net cash flows from financing activities (71) (281) (52)
(441) (101)(52)(101)(49)(94%)
Net cash flow 55 (56) - (1) 50
-5050NM
Opening cash position 55 110 54 54 53 5453(1)(2%)
Closing cash position 110
54 54 53 103
54103
4991%
H1 FY20 v H1 FY21

Spark New Zealand
Analysis & KPIs - Free cash flows
H1 FY19
H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m$m$m$m%
Net cash flows from operating activities393 384 357 546 364 35736472%
Payments for purchase of property, plant and
equipment and intangibles
(258) (157) (273) (120) (214) (273)(214)5922%
Payments for capitalised interest
(3) (5) (4) (4) (3)
(4)
(3)
125%
Payments for leases(19)
(17)
(19)
(23) (20) (19)(20)(1)(5%)
Payments for leased customer equipment assets(8)
(9)
(13) (15) (16) (13)(16)(3)(23%)
Receipts from finance leases3
3 2 4 2 22-0%
excluding---NM
Dividend receipts- (15) - - - ---NM
Increase/(decrease) in working capital38 99 31 (48) (11) 31(11)(42)
NM
Underlying free cash flow
146 283 81 340 102
8110221
26%
including
(Increase)/decrease in working capital(38)
(99)
(31) 48 11 (31)1142NM
Free cashflow108 184 50 388 113
5011363NM
Analysis & KPIs - Movement in working capital
H1 FY19H2 FY19H1 FY20
H2 FY20H1 FY21H1 FY20
H1 FY21
$m$m$m
$m$m$m$m$m%
EBITDAI 489 601 500 613 502 50050220%
excluding ---NM
Impairments (5)
2 - (2) - --
-NM
Other gains - 15 4
31 4 44-0%
EBITDAI excluding impairments and other gains494
584 496 584 498
4964982
0%
Net cash flows from operating activities 393 384 357 546 364 35736472%
excluding-
--NM
Interest receipts 18 17 17
17 16 1716(1)(6%)
Dividend receipts - 15 - - - ---NM
Payments for income tax (44) (91) (82) (58) (118)(82)(118)(36)(44%)
Payments for interest on debt (22)
(23) (26) (26) (23)(26)(23)312%
Payments for interest on leases (13) (17) (14)
(16) (16)(14)(16)(2)
(14%)
Payments for interest on leased customer equipment
assets
(2) (2) (3) (3) (4)(3)(4)(1)(33%)
Net cash flows from operating activities excluding
dividends, tax and net interest
456 485 465 632 509 465509449%
EBITDAI excluding impairments and other gains 494 584 496 584 498 49649820%
less
Net cash flows from operating activities excluding
dividends, tax and net interest
456 485 465 632 509 465509449%
Increase/(decrease) in working capital38 99 31 (48) (11) 31(11)(42)NM
Cash conversion92%83%94%108%102%94%102%8%
H1 FY20 v H1 FY21
H1 FY20 v H1 FY21

Spark New Zealand
Group capital expenditure
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m$m$m
$m
%
Cloud2610168916
9(7)
(44%)
Converged Communications Network (CCN)20111171511
154
36%
International cable construction and capacity purchases
111-1110
11
NM
IT systems
706273566673
66(7)
(10%)
Mobile network
892992245892
58(34)
(37%)
Core sustain and resiliency36275015345034(16)(32%)
Other12
135
6959480%
Total capital expenditure
264
153247
127192247192(55)(22%)
Analysis & KPI's - Capital expenditure depreciation and amortisation
H1 FY19H2 FY19H1 FY20H2 FY20H1 FY21H1 FY20H1 FY21
$m$m$m$m$m$m$m$m
%
Depreciation - property, plant and equipment128118119114124
11912454%
Depreciation - right-of-use assets
1
913101111
1011110%
Amortisation of intangibles
8374728385
72851318%
Total capital expenditure depreciation and amortisation
220205201
208220201220199%
1
Includes depreciation on capacity right-of-use assets only as these are included within Spark’s definition of capital expenditure.
H1 FY20 v H1 FY21
Capital expenditure is presented on an accruals basis, and includes purchase of property, plant and equipment and intangible assets, capacity
purchases (including Southern Cross) but excludes leased customer equipment assets.
On adoption of NZ IFRS 16 Leases, assets associated with capacity arrangements which were previously
recognised within intangible assets have been reclassified to right-of-use assets. Payments for capacity
purchases remain within Spark’s definition of capital expenditure. Total depreciation on property plant
and equipment, depreciation on capacity right-of-use assets and amortisation of intangibles is reconciled
H1 FY20 v H1 FY21